EXHIBIT 10.25
ABLE TELCOM HOLDING CORP.
--------------------
SECURITIES PURCHASE AGREEMENT
DATED AS OF JANUARY 6, 1998
$10,000,000 12% SENIOR SUBORDINATED NOTES DUE JANUARY 6, 2005
409,505 WARRANTS TO PURCHASE COMMON STOCK
TABLE OF CONTENTS
PAGE
1. PURCHASE AND SALE OF SECURITIES...................................... 1
1.1 Issue of Securities by the Company............................. 1
1.2 The Closing.................................................... 2
1.3 Original Issue Discount........................................ 2
2. WARRANTIES AND REPRESENTATIONS OF THE COMPANY........................ 3
2.1 Nature of Business............................................. 3
2.2 Financial Statements; Debt; Material Adverse Change............ 3
2.3 Subsidiaries and Affiliates.................................... 4
2.4 Title to Properties............................................ 4
2.5 Taxes.......................................................... 5
2.6 Pending Litigation............................................. 5
2.7 Corporate Organization and Authority........................... 6
2.8 Charter Instruments, Other Agreements.......................... 6
2.9 Restrictions on the Company.................................... 6
2.10 Compliance with Law............................................ 7
2.11 Pension Plans.................................................. 7
2.12 Environmental Compliance....................................... 8
2.13 Due Authorization; Enforceability.............................. 9
2.14 Governmental Consent to Sale of Purchased Securities........... 9
2.15 Xxxx-Xxxxx-Xxxxxx Compliance................................... 10
2.16 No Defaults.................................................... 10
2.17 Private Offering of Purchased Securities....................... 10
2.18 Use of Proceeds................................................ 11
2.19 Capitalization................................................. 11
2.20 Solvency....................................................... 12
2.21 Full Disclosure................................................ 13
3. REPRESENTATIONS OF THE PURCHASER..................................... 13
3.1 Purchase for Investment........................................ 13
3.2 ERISA.......................................................... 13
4. CLOSING CONDITIONS................................................... 15
4.1 Opinions of Counsel............................................ 15
4.2 Warranties and Representations True; Compliance................ 15
4.3 Officers' Certificates......................................... 16
4.4 Legality....................................................... 16
4.5 Financing Documents............................................ 16
4.6 Reservation of Shares.......................................... 16
4.7 Certain Consents and Actions................................... 16
4.8 Private Placement Numbers...................................... 17
4.9 Fees and Expenses.............................................. 17
4.10 Other Purchasers............................................... 17
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TABLE OF CONTENTS (CONT.)
PAGE
4.11 Proceedings Satisfactory....................................... 17
5. INTERPRETATION OF THIS AGREEMENT..................................... 17
5.1 Terms Defined.................................................. 17
5.2 Other Definitions.............................................. 20
5.3 Section Headings and Table of Contents and Construction........ 20
5.4 Governing Law.................................................. 20
6. MISCELLANEOUS........................................................ 21
6.1 Communications................................................. 21
6.2 Reproduction of Documents...................................... 21
6.3 Survival....................................................... 21
6.4 Successors and Assigns......................................... 22
6.5 Amendment and Waiver........................................... 22
6.6 Expenses....................................................... 22
6.7 Waiver of Jury Trial; Consent to Jurisdiction; Etc............. 22
6.8 Indemnification of Each Purchaser.............................. 23
6.9 Entire Agreement............................................... 24
6.10 Execution in Counterpart....................................... 24
Annex 1 -- Information as to Purchasers
Annex 2 -- Payment Instructions at Closing; Address of Company for
Notices
Annex 3 -- Information as to Company
Exhibit 1.1(a) -- Form of Note Agreement
Exhibit 1.1(b) -- Form of Warrant Agreement
Exhibit 4.1(a) -- Form of Opinion of Company Counsel
Exhibit 4.1(b) -- Form of Opinion of Purchasers' Counsel
Exhibit 4.3(a) -- Form of Officers' Certificate
Exhibit 4.3(b) -- Form of Secretary's Certificate
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ABLE TELCOM HOLDING CORP.
SECURITIES PURCHASE AGREEMENT
$10,000,000 12% SENIOR SUBORDINATED NOTES DUE JANUARY 6, 2005
409,505 WARRANTS TO PURCHASE COMMON STOCK
Dated as of January 6, 1998
[SEPARATELY ADDRESSED TO EACH OF THE
PURCHASERS LISTED ON ANNEX 1 HERETO]
Ladies and Gentlemen:
ABLE TELCOM HOLDING CORP. (together with any successors and assigns who
become such in accordance herewith, the "COMPANY"), a Florida corporation,
hereby agrees with you as set forth below.
1. PURCHASE AND SALE OF SECURITIES.
1.1 ISSUE OF SECURITIES BY THE COMPANY.
(A) ISSUE OF NOTES. The Company will authorize the issue of Ten
Million Dollars ($10,000,000) in aggregate principal amount of its twelve
percent (12%) Senior Subordinated Notes due January 6, 2005 (all such
notes, whether initially issued, or issued in exchange or substitution
for, any such note, in each case in accordance with the Note Agreement,
collectively, the "NOTES"). The Notes shall be issued pursuant to a Note
Agreement (as may be amended, restated or otherwise modified from time to
time, the "NOTE AGREEMENT") in the form of Exhibit 1.1(a). The Notes shall
be in the form of Attachment A to the Note Agreement, and shall have the
terms as provided in the Note Agreement and in the Notes.
(B) ISSUE OF WARRANTS. The Company will authorize the issue of an
aggregate of four hundred nine thousand five hundred five (409,505)
Warrants (the "WARRANTS") to purchase shares of Common Stock. The Warrants
shall be issued pursuant to a Warrant Agreement (as may be amended,
restated or otherwise modified from time to time, the "WARRANT AGREEMENT")
in the form of Exhibit 1.1(b). The certificates representing the Warrants
(the "WARRANT CERTIFICATES") shall be in the form of Attachment A to the
Warrant Agreement, and the Warrants shall have the terms
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provided in the Warrant Certificates and the Warrant Agreement.
1.2 THE CLOSING.
(A) PURCHASE AND SALE OF PURCHASED SECURITIES. The Company hereby
agrees to sell to you and you hereby agree to purchase from the Company,
in accordance with the provisions hereof, the aggregate principal amount
of Notes set forth below your name on Annex 1 and the aggregate amount of
Warrants set forth below your name on Annex 1, at an aggregate purchase
price for such Notes and Warrants equal to one hundred percent (100%) of
the principal amount of Notes to be purchased.
(B) THE CLOSING. The closing (the "CLOSING") of the sale of the
Purchased Securities will be held at 10:00 a.m., local time, on January 6,
1998, or such other time and date as the Other Purchasers, the Company and
you shall agree (the "CLOSING DATE"), at the office of Xxxx & Xxxxxx, a
Professional Corporation, Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
At the Closing:
(i) the Company will deliver to you one or more Notes (if any,
as set forth below your name on Annex 1), in the denominations
indicated on Annex 1, in the aggregate principal amount of your
purchase, dated the Closing Date and registered in the name of the
holder indicated on Annex 1; and
(ii) the Company will deliver to you one or more Warrant
Certificates (if any, as set forth below your name on Annex 1),
representing the number of Warrants indicated on such Annex 1 and
registered in the name of the holder indicated on Annex 1;
against payment by federal funds wire transfer in immediately available
funds of the purchase price therefor, as directed by the Company on Annex
2, which shall be an account at a bank located in the United States of
America.
(C) OTHER PURCHASERS. Contemporaneously with the execution and
delivery hereof, the Company is entering into a separate Securities
Purchase Agreement identical (except for the name and signature of the
purchaser) to this Agreement (this Agreement and such other separate
Securities Purchase Agreements, each as from time to time amended or
modified, being herein sometimes referred to as the "SECURITIES PURCHASE
AGREEMENTS") with each other purchaser (individually, an "OTHER
PURCHASER," and collectively, the "OTHER PURCHASERS") listed on Annex 1,
providing for the sale to each Other Purchaser of the Purchased Securities
set forth below its name on such Annex. The sales of the Purchased
Securities to you and to each Other Purchaser are separate sales.
1.3 ORIGINAL ISSUE DISCOUNT. You and the Company agree that any original
issue
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discount attributable, as a result of the delivery of the Warrants, to any Note
issued by the Company in accordance with the terms and conditions of this
Agreement is less than the product of:
(a) one-quarter of one percent (0.25%) of the stated redemption
price at maturity (as such term is defined in Section 1273(a) of the IRC)
of such Note; MULTIPLIED BY
(b) the number of complete years to maturity of such Note.
You and the Company agree to use the foregoing for all United States federal,
state and local income tax purposes with respect to the transactions
contemplated by the Financing Documents. You and the Company acknowledge that
such original issue discount represents the Fair Market Value of such Warrants
as of the Closing Date.
2. WARRANTIES AND REPRESENTATIONS OF THE COMPANY
To induce you to enter into this Agreement and to purchase and pay for the
Purchased Securities to be delivered to you at the Closing, the Company warrants
and represents, as of the Closing Date, as follows:
2.1 NATURE OF BUSINESS. The Offering Memorandum describes correctly in all
material respects the general nature of the business and principal Properties
and assets of the Company.
2.2 FINANCIAL STATEMENTS; DEBT; MATERIAL ADVERSE CHANGE.
(A) FINANCIAL STATEMENTS. The Company has provided you with the
financial statements of the Company contained in the Offering Memorandum
(and those described on PART 2.2(A) OF ANNEX 3). Such financial statements
present fairly in all material respects the financial position of the
Company and the Subsidiaries on a consolidated basis as of the respective
dates specified in such Part and the results of their consolidated
operations and cash flows for the respective periods so specified in
conformity with GAAP applied on a consistent basis throughout the periods
involved, except that the unaudited financial statements contained therein
are subject to year-end adjustments and do not reflect the footnotes
thereto. You confirm that you have received and have had an opportunity to
review the Offering Memorandum and the financial statements, if any,
listed on PART 2.2(A) OF ANNEX 3.
(B) DEBT. PART 2.2(B) OF ANNEX 3 lists all Debt of the Company and
the Subsidiaries as of the Closing Date, both before and after giving
effect to the transactions contemplated by the Financing Documents, and
provides the following information with respect to each item of such Debt:
the obligor, each guarantor thereof and each other Person similarly liable
in respect thereof, the holder thereof, the
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outstanding amount, the current portion of the outstanding amount, the
final maturity, required sinking fund payments, and a description of the
collateral securing such Debt.
(C) LIENS. PART 2.2(C) OF ANNEX 3 lists all Liens securing Debt of
the Company and the Subsidiaries in existence as of the Closing Date, both
before and after giving effect to the transactions contemplated by the
Financing Documents, and provides the following information with respect
to each Lien: the holder thereof, the outstanding amount of the Debt
secured by such Lien and a description of the collateral.
(D) CONTINGENT OBLIGATIONS. There are no Guaranties or other
contingent obligations in respect of which disclosure is required, or for
which provision is required to be made, in the consolidated financial
statements of the Company and the Subsidiaries in accordance with GAAP,
other than those so disclosed, and for which such provision has been made,
in the financial statements referred to in Section 2.2(a).
(E) MATERIAL ADVERSE CHANGE. Since October 31, 1996, there has been
no change in the business, operations, profits, financial condition,
Properties or business prospects of the Company and the Subsidiaries,
except changes that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(F) PROJECTIONS. The Company has delivered to you projected
financial statements of the Company contained in the Offering Memorandum
(collectively, the "PROJECTIONS"). The assumptions used in preparation of
the Projections were reasonable when made and continue to be reasonable.
Such Projections have been prepared in good faith, have a reasonable basis
and represent the good faith opinion of the Company as to the projected
results of the operations of the Company and the Subsidiaries. No material
facts have occurred since the preparation of the Projections that would
cause the Projections, taken as a whole, not to be reasonably attainable,
and the Company and the Subsidiaries do not have, on the Closing Date, any
material obligations (whether accrued, matured, absolute, actual,
contingent or otherwise) that are not reflected in the Projections.
(G) INVESTMENTS. PART 2.2(G) OF ANNEX 3 lists all Investments of the
Company and the Subsidiaries outstanding on the Closing Date which, but
for clause (h) of the definition of Restricted Investments, would be
classified as Restricted Investments in accordance with the provisions of
the Note Agreement.
2.3 SUBSIDIARIES AND AFFILIATES.
(A) OWNERSHIP OF SUBSIDIARIES. PART 2.3(A) OF ANNEX 3 sets forth for
each Subsidiary:
(i) its full legal name;
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(ii) its jurisdiction of incorporation or organization;
(iii) the percentage of the Voting Stock of which is held by
the Company and each other Subsidiary.
(B) AFFILIATES. PART 2.3(B) OF ANNEX 3 sets forth the name of each
Affiliate (other than members of the families of officers and directors of
the Company) and the nature of the affiliation of such Affiliate.
2.4 TITLE TO PROPERTIES.
(A) GENERAL. Each of the Company and the Subsidiaries has good and
marketable title to all of the Property reflected in the most recent
balance sheet referred to in Section 2.2(a) (except as sold or otherwise
disposed of in the ordinary course of business), free from Liens not
otherwise permitted by provisions of the Note Agreement. Each of the
Company and the Subsidiaries has maintained and kept, or caused to be
maintained and kept, its respective properties in good repair, working
order and condition (ordinary wear and tear excepted), so that the
business to be carried on in connection therewith may be properly
conducted at all times.
(B) LEASES. All leases to which any of the Company and the
Subsidiaries purport to be a party are valid and subsisting and are in
full force and effect, except for such failures to be valid and subsisting
that, in the aggregate for all such failures, could not reasonably be
expected to have a Material Adverse Effect. Each such lease grants to the
Company or the Subsidiary party thereto the right to the quiet enjoyment
of the premises leased thereunder during the term thereof.
(C) INTELLECTUAL PROPERTY. Each of the Company and the Subsidiaries
owns, possesses or has the right to use all of the licenses, permits,
franchises, patents, copyrights, trademarks, service marks and trade names
necessary for the present and currently planned future conduct of its
business, without any known conflict with the rights of others, except for
such failures to own, possess, or have the right to use, that, in the
aggregate for all such failures, could not reasonably be expected to have
a Material Adverse Effect.
2.5 TAXES.
(A) RETURNS FILED; TAXES PAID. All tax returns required to be filed
by the Company, any Subsidiary and each other Person with which the
Company or any Subsidiary files or has filed a consolidated return in any
jurisdiction have in fact been filed on a timely basis. All taxes,
assessments, fees and other governmental charges upon the Company and any
such Person, and upon any of their respective Properties, income or
franchises, that are due and payable have been paid, except for such
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failures to pay that, in the aggregate for all such Persons, could not
reasonably be expected to have a Material Adverse Effect. The Company
knows of no proposed additional tax assessment against it or any such
Person that could reasonably be expected to have a Material Adverse
Effect.
(B) BOOK PROVISIONS ADEQUATE. The amount of the liability for taxes
reflected in each of the statements of financial condition referred to in
Section 2.2(a) is in each case an adequate provision for taxes as of the
dates of such statements of financial condition (including, without
limitation, any payment due pursuant to any tax sharing agreement) as are
or may become payable by any one or more of the Company and the other
Persons consolidated with the Company in such financial statements in
respect of all tax periods ending on or prior to such dates.
2.6 PENDING LITIGATION.
(A) PENDING LITIGATION. There are no proceedings, actions or
investigations pending or threatened, against or affecting the Company or
any of the Subsidiaries in any court or before any Governmental Authority
or arbitration board or tribunal that, in the aggregate for all such
proceedings, actions and investigations, could reasonably be expected to
have a Material Adverse Effect.
(B) NO VIOLATIONS. Neither the Company nor any Subsidiary is in
violation of any judgment, order, writ, injunction or decree of any court,
Governmental Authority, arbitration board or tribunal that, in the
aggregate for all such violations, could reasonably be expected to have a
Material Adverse Effect.
2.7 CORPORATE ORGANIZATION AND AUTHORITY.
Each of the Company and each Subsidiary:
(a) is a corporation duly incorporated, validly existing and in
good standing under the laws of its state or other jurisdiction of
incorporation;
(b) has all corporate power and authority necessary to own and
operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and other
governmental authorizations necessary to own and operate its Properties
and to carry on its business as now conducted and as presently proposed to
be conducted, except where the failure to have such licenses,
certificates, permits, franchises and other governmental authorizations,
in the aggregate for all such failures, could not reasonably be expected
to have a Material Adverse Effect; and
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(d) has duly qualified or has been duly licensed, and is authorized
to do business and is in good standing, as a foreign corporation, in each
state in the United States of America and in each other jurisdiction where
it is required to do so, except where the failure to be so qualified or
licensed and authorized and in good standing, in the aggregate for all
such failures, could not reasonably be expected to have a Material Adverse
Effect.
2.8 CHARTER INSTRUMENTS, OTHER AGREEMENTS.
Neither the Company nor any Subsidiary is in violation in any respect of:
(a) any term of any charter instrument or bylaw; or
(b) any term in any agreement or other instrument to which it is a
party or by which it or any of its Property may be bound, except for such
violations that, in the aggregate for all such violations, could not
reasonably be expected to have a Material Adverse Effect.
2.9 RESTRICTIONS ON THE COMPANY.
Neither the Company nor any Subsidiary:
(a) is a party to any contract or agreement, or subject to any
charter or other corporate restriction that, in the aggregate for all such
contracts, agreements, and charter and corporate restrictions, is
reasonably likely to have a Material Adverse Effect;
(b) is a party to any contract or agreement that restricts its right
or ability to incur Debt or to issue Rights of the Company, as the case
may be, other than the Financing Documents and the agreements listed on
PART 2.9(B) OF ANNEX 3, none of which, after giving effect to the
obtaining of the consent referred to in Section 4.7(a) and the giving of
the notice and expiration of the eleven (11) days referred to in Section
4.7(b), restricts the issuance and sale of the Notes or the Warrants or
the execution and delivery of, or compliance with this Agreement or the
other Financing Documents by the Company; and
(c) has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its Property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
the provisions of the Note Agreement.
True, correct and complete copies of each of the agreements, if any, listed on
PART 2.9(B) OF ANNEX 3 have been provided to you.
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2.10 COMPLIANCE WITH LAW.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, except for
such violations that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
2.11 PENSION PLANS.
(A) OPERATION OF PLANS; LIABILITIES. The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred
any liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the IRC relating to employee benefit plans (as defined
in section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or
in the imposition of any Lien on any of the rights, Properties or assets
of the Company or any ERISA Affiliate, in either case pursuant to Title I
or IV of ERISA or to such penalty or excise tax provisions or to section
401(a)(29) or 412 of the IRC, other than such liabilities or Liens as
individually or in the aggregate would not have a Material Adverse Effect.
(B) RELATIONSHIP OF BENEFIT LIABILITIES TO PLAN ASSETS. The present
value of the aggregate benefit liabilities under each of the Plans (other
than Multiemployer Plans), determined as of the end of such Plan's most
recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets
of such Plan allocable to such benefit liabilities. The term "BENEFIT
LIABILITIES" has the meaning specified in section 4001 of ERISA and the
terms "CURRENT VALUE" and "PRESENT VALUE" have the meaning specified in
section 3 of ERISA.
(C) WITHDRAWAL LIABILITIES. The Company and its ERISA Affiliates
have not incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans, other than such liabilities as
individually or in the aggregate would not have a Material Adverse Effect.
(D) POSTRETIREMENT BENEFIT OBLIGATIONS. The expected postretirement
benefit obligation (determined as of the last day of the Company's most
recently ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the
IRC) of the Company will not have a Material Adverse Effect.
(E) PROHIBITED TRANSACTIONS. The execution and delivery of the
Financing
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Documents and the issuance and sale of the Purchased Securities hereunder
will not involve any transaction that is subject to the prohibitions of
section 406 of ERISA or in connection with which a tax could be imposed
pursuant to section 4975(c)(1)(A)-(D) of the IRC. The representation by
the Company in the foregoing sentence is made in reliance upon and subject
to the accuracy of your representation in Section 3.2 as to the Sources of
the funds used to pay the purchase price of the Purchased Securities to be
purchased by you.
(F) FOREIGN PENSION PLANS. The Company does not have or maintain,
and is not required to contribute to, any Foreign Pension Plan.
2.12 ENVIRONMENTAL COMPLIANCE.
(A) COMPLIANCE -- Except as disclosed on PART 2.12(A) OF ANNEX 3,
each of the Company and the Subsidiaries is in compliance with all
Environmental Protection Laws in effect in each jurisdiction where it is
presently doing business or is located, other than any non-compliance
which could not reasonably be expected to have a Material Adverse Effect.
(B) LIABILITY -- Except as disclosed on PART 2.12(B) OF ANNEX 3,
neither the Company nor any Subsidiary has incurred any liability under
any Environmental Protection Law that, individually or in the aggregate,
could be reasonably expected to have a Material Adverse Effect.
(C) NOTICES -- Except as disclosed on PART 2.12(C) OF ANNEX 3,
neither the Company nor any Subsidiary has received any:
(i) written notice from any Governmental Authority by which
any of its present or previously-owned or leased real Properties has
been designated, listed, or identified in any manner by any
Governmental Authority charged with administering or enforcing any
Environmental Protection Law as a hazardous substance disposal or
removal site, "Super Fund" clean-up site, or candidate for removal
or closure pursuant to any Environmental Protection Law;
(ii) written notice of any Lien arising under or in connection
with any Environmental Protection Law that has attached to any
revenues of, or to, any of its owned or leased real Properties; or
(iii) summons, citation, notice, directive, letter, or other
written communication from any Governmental Authority concerning any
intentional or unintentional action or omission by the Company or
any Subsidiary in connection with its ownership or leasing of any
real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise
disposing of any hazardous substance into the environment resulting
9
in any material violation of any Environmental Protection Law;
which, in any such case, relates to or makes reference to an event or
condition which could reasonably be expected to have a Material Adverse
Effect.
2.13 DUE AUTHORIZATION; ENFORCEABILITY.
(A) SALE OF PURCHASED SECURITIES IS LEGAL AND AUTHORIZED. The
issuance, sale and delivery of the Notes and the Warrants by the Company,
the execution and delivery by the Company of the Financing Documents and
compliance by the Company with all of the provisions of the Financing
Documents:
(i) is within the corporate powers of the Company; and
(ii) is legal and does not conflict with, result in any breach
of any of the provisions of, constitute a default under, or result
in the creation of any Lien upon any Property of the Company under
the provisions of:
(A) any agreement, charter instrument, bylaw or other
instrument to which the Company is a party or by which the
Company is or may be bound;
(B) any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company
or any of its Property; or
(C) any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any of its
Property.
(B) OBLIGATIONS ARE ENFORCEABLE. The Company has duly authorized by
all necessary action on its part each of the Financing Documents. Each of
the Financing Documents has been executed and delivered by one or more
duly authorized officers of the Company, and constitutes a legal, valid
and binding obligation of the Company, enforceable in accordance with its
terms, except that:
(i) the enforceability thereof may be limited by applicable
bankruptcy, reorganization, arrangement, insolvency, moratorium, or
other similar laws affecting the enforceability of creditors' rights
generally and subject to the availability of equitable remedies; and
(ii) rights to indemnity and contribution contained therein
may be limited by applicable law or public policy.
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2.14 GOVERNMENTAL CONSENT TO SALE OF PURCHASED SECURITIES.
(a) Neither the nature of the Company nor of any of its businesses
or Properties, nor any relationship between the Company and any other
Person, nor any circumstance in connection with the offer, issuance, sale
or delivery of the Notes or the Warrants and the execution and delivery of
any Financing Document, nor the performance of the obligations of the
Company thereunder, is such as to require a consent, approval or
authorization of, or pre-filing, registration or qualification with, any
Governmental Authority on the part of the Company as a condition thereto,
except for such consents, approvals, authorizations, pre-filings,
registrations and qualifications described on PART 2.14(A) OF ANNEX 3, all
of which have been obtained on or prior to the Closing Date.
(b) Each of the issuance and sale of the Notes and the Warrants, the
incurrence of the Debt and the other obligations represented thereby, the
execution and delivery of the Financing Documents and the performance of
the obligations of the Company hereunder and thereunder, by the Company:
(i) is not subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act of
1935, as amended, the Transportation Acts of the United States of
America (49 U.S.C.), as amended, or the Federal Power Act, as
amended; and
(ii) does not violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to the
Company.
2.15 XXXX-XXXXX-XXXXXX COMPLIANCE.
The Warrants are "convertible voting securities" as such term is defined
in 16 C.F.R. '801.1(f)(2) which do not entitle the Purchasers to presently vote
in respect of the election of directors of the Company. Assuming that,
notwithstanding the fact that the Warrants are not currently exercisable on the
Closing Date, the Warrants were all exercised on the Closing Date, the
Purchasers as a group would not hold (as such term is defined in 16 C.F.R.
'801.1(c)) on the Closing Date either:
(a) fifteen percent (15%) or more of the total number of shares of
the Common Stock of the Company; or
(b) Common Stock having a Fair Market Value of Fifteen Million
Dollars ($15,000,000) or more.
2.16 NO DEFAULTS.
No event has occurred and no condition exists that, upon the execution and
delivery of
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the Financing Documents and the issuance and sale of the Purchased Securities,
would constitute a Default or an Event of Default.
2.17 PRIVATE OFFERING OF PURCHASED SECURITIES.
(A) NUMBER OF OFFEREES. Neither the Company, Bank of America (the
only agent, broker or dealer retained by the Company in connection with
the sale of the Purchased Securities) nor any other Person acting on
behalf of the Company has offered any of the Purchased Securities or any
Security of the Company similar to either the Notes or the Warrants for
sale to, or solicited offers to buy any thereof from, or otherwise
approached or negotiated with respect thereto with, any prospective
purchaser, other than the number of institutional "accredited investors"
(as defined in Regulation D under the Securities Act) (including you) set
forth on PART 2.17(A) OF ANNEX 3, each of whom was offered all or a
portion of the Purchased Securities at private sale for investment.
(B) CONDUCT OF SALE. Neither the Company, Bank of America nor any
Person acting on behalf of the Company in connection with the transactions
contemplated by the Financing Documents (including, without limitation,
the offering and sale of the Purchased Securities) has engaged in any
conduct or entered into any agreements or understandings so as to subject
the transactions contemplated by the Financing Documents to the
registration provisions of section 5 of the Securities Act, the provisions
of the Trust Indenture Act of 1939, as amended, or the registration,
qualification or other similar provisions of any securities or "blue sky"
law of any applicable state.
2.18 USE OF PROCEEDS.
(A) USE OF PROCEEDS. The Company shall apply the proceeds from the
sale of the Purchased Securities as specified on PART 2.18(A) OF ANNEX 3.
(B) MARGIN REGULATIONS. None of the transactions contemplated in any
of the Financing Documents (including, without limitation, the use of the
proceeds from the sale of the Purchased Securities) violates, will violate
or will result in a violation of section 7 of the Exchange Act, or any
regulation issued pursuant thereto, including, without limitation,
Regulation G, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Chapter II.
(C) ABSENCE OF FOREIGN OR ENEMY STATUS. Neither the sale of the
Purchased Securities nor the use of proceeds from the sale thereof will
result in a violation of any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended), or any ruling issued thereunder or any enabling legislation or
Presidential Executive Order in connection therewith.
12
2.19 CAPITALIZATION.
(A) CAPITALIZATION. PART 2.19(A) OF ANNEX 3 correctly sets forth,
after giving effect to the issuance of the Purchased Securities and the
consummation of all other transactions contemplated by this Agreement on
the Closing Date:
(i) the authorized and outstanding shares of the Capital
Stock, Rights and other Securities of the Company (specifying the
type, class or series of all such Capital Stock and other Securities
and whether such Capital Stock and other Securities are voting or
non-voting) and, in the case of any Rights, the number of shares of
Common Stock into which such Rights are currently exercisable or
convertible;
(ii) for all such shares of Capital Stock, Rights and other
Securities of the Company, descriptions of the terms thereof; and
(iii) all obligations (contingent or otherwise) of the Company
to repurchase or otherwise acquire or retire any shares of Capital
Stock or Rights of the Company.
All such outstanding shares of Capital Stock have been duly authorized and
validly issued and are fully paid and non-assessable. Except as set forth
in PART 2.19(A) OF ANNEX 3, there are no preemptive rights, subscription
rights, or other contractual rights similar in nature to preemptive rights
with respect to any Capital Stock of the Company; and none of such rights
restricts the issuance and sale of the Warrants, the exercise of the
Warrants or issuance of Common Stock thereupon or the execution and
delivery of, or compliance with this Agreement or the other Financing
Documents by the Company.
(B) RESERVATION OF COMMON STOCK. The Company has authorized and
unissued, and has reserved for issuance, a sufficient number of shares of
Common Stock to permit, after giving effect to the transactions
contemplated by the Financing Documents, the exercise of all of the
Warrants and all other Rights (including, without limitation, the Series A
Preferred Stock and Series A Warrants) exercisable or convertible into
Common Stock. Each share of Common Stock reserved for issuance upon
exercise of the Warrants, when issued, will be fully paid and
nonassessable, free and clear of any Lien created by the Company or any
Subsidiary and not subject to any preemptive rights, subscription rights,
right of first refusal or similar rights in favor of any other Person
(including, without limitation, the initial purchasers or holders of the
Series A Preferred Stock).
(C) STOCKHOLDERS AGREEMENTS. Other than the Warrant Agreement and as
specified on PART 2.19(C) OF ANNEX 3, there is no other agreement or
understanding known to the Company between or among any holders of the
Capital Stock or Rights of
13
the Company regarding the Capital Stock of the Company. The Company has
provided you with true,accurate and complete copies of all agreements
referred to in PART 2.19(C) OF ANNEX 3.
2.20 SOLVENCY.
(A) ASSETS GREATER THAN LIABILITIES. The fair value of the business
and assets of the Company (and of the Company and the Subsidiaries, on a
consolidated basis) exceeds, as of and after giving effect to the
transactions consummated on the Closing Date, the liabilities of the
Company (including, without limitation, the Notes and all other Debt of
the Company (and, as the case may be, of the Company and the Subsidiaries,
on a consolidated basis)) as of such time.
(B) MEETING LIABILITIES. After giving effect to the transactions
contemplated by the Financing Documents, the Company (and the Company and
the Subsidiaries, on a consolidated basis):
(i) will not be engaged in any business or transaction, or
about to engage in any business or transaction, for which the
Company (or, as the case may be, the Company and the Subsidiaries,
on a consolidated basis) has unreasonably small assets or capital
(within the meaning of the Uniform Fraudulent Transfer Act, the
Uniform Fraudulent Conveyance Act and section 548 of the Federal
Bankruptcy Code); and
(ii) will be able to pay its debts as they mature.
(C) INTENT. The Company is entering into the Financing Documents
with no intent to hinder, delay, or defraud either current creditors or
future creditors of the Company.
2.21 FULL DISCLOSURE.
Neither the statements made in this Agreement, the Offering Memorandum,
the financial statements referred to in Section 2.2, nor any other written
statement furnished by or on behalf of the Company to you in connection with the
negotiation or the closing of the sale of the Purchased Securities, taken as a
whole, contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein and herein, taken as a whole,
not misleading. There is no fact that the Company has not disclosed to you in
writing that has had or, so far as the Company can now reasonably foresee, could
reasonably be expected to have, a Material Adverse Effect.
3. REPRESENTATIONS OF THE PURCHASER
3.1 PURCHASE FOR INVESTMENT.
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You represent to the Company that you are a financially sophisticated
institutional investor that is experienced in financial matters and you are
purchasing the Purchased Securities listed on Annex 1 below your name for your
own account, or for the account of one or more separate accounts maintained by
you, for investment and with no present intention of, or view to, distributing
such Purchased Securities or any part thereof except in compliance with the
Securities Act, but without prejudice to your right at all times to:
(a) sell or otherwise dispose of all or any part of the Purchased
Securities under a registration statement filed under the Securities Act,
or in a transaction exempt from the registration requirements of such Act,
including a transaction pursuant to Rule 144A; and
(b) have control over the disposition of all of your assets to the
fullest extent required by any applicable law.
It is understood that, in making the representations set out in Section
2.13(a) and Section 2.14, the Company is relying, to the extent applicable, upon
your representation as aforesaid.
3.2 ERISA.
You represent that at least one of the following statements is an accurate
representation as to each source of funds (a "SOURCE") to be used by you to pay
the purchase price of the Purchased Securities:
(A) GENERAL ACCOUNT -- you are an insurance company and the Source
is an "insurance company general account," as such term is defined in DOL
Prohibited Transaction Class Exemption 95-60 (issued July 12, 1995) ("PTCE
95-60"), and there is no employee benefit plan, treating as a single plan
all plans maintained by the same employer (and affiliates thereof as
defined in section V(a)(1) of PTCE 95-60) or by the same employee
organization, with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such
plan, exceeds 10% of the total reserves and liabilities of such general
account as determined under PTCE 95-60 (exclusive of separate account
liabilities) plus surplus, as set forth in the National Association of
Insurance Commissioners Annual Statement filed with your state of
domicile; or
(B) SEPARATE ACCOUNT -- the Source is a separate account:
(I) 10% POOLED SEPARATE ACCOUNT -- that is an insurance
company pooled separate account, within the meaning of DOL
Prohibited Transaction Class Exemption 90-1 (issued January 29,
1990), and to the extent that there are any plans whose assets in
such separate account exceed ten percent (10%)
15
of the assets of such separate account, you have disclosed the names
of such plans to the Company in writing; or
(II) IDENTIFIED PLAN ASSETS -- that is comprised of employee
benefit plans identified by you in writing and with respect to which
the Company hereby warrants and represents that, as of the Closing
Date, neither the Company nor any ERISA Affiliate is a "party in
interest" (as defined in section 3 of ERISA) or a "disqualified
person" (as defined in section 4975 of the Code) with respect to any
plan so identified; or
(III) GUARANTIED SEPARATE ACCOUNT -- that is maintained solely
in connection with fixed contractual obligations of an insurance
company, under which any amounts payable, or credited, to any
employee benefit plan having an interest in such account and to any
participant or beneficiary of such plan (including an annuitant) are
not affected in any manner by the investment performance of the
separate account (as provided by 29 CFR '2510.3-101(h)(1)(iii)); or
(C) QPAM -- the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of section V(c)(1) of the
QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed twenty percent (20%) of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control" in section
V(e) of the QPAM Exemption) owns a five percent (5%) or more interest in
the Company and:
(i) the identity of such QPAM; and
(ii) the names of all employee benefit plans whose assets are
included in such investment fund
have been disclosed to the Company in writing; or
(D) GOVERNMENTAL PLANS -- the Source is a governmental plan; or
(E) IDENTIFIED PLANS -- the Source is one or more employee benefit
plans, or a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to the Company
in writing; or
16
(F) EXEMPT PLANS -- the Source does not include assets of any
employee benefit plan, other than a plan exempt from the coverage of
ERISA.
As used in this Section 3.2, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN" and "SEPARATE ACCOUNT" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
It is understood that, in making the representations set out in Section
2.13(a), Section 2.14 and Section 2.11(e), the Company is relying, to the extent
applicable, upon your representation as aforesaid.
4. CLOSING CONDITIONS
Your obligations under this Agreement, including, without limitation, the
obligation to purchase and pay for the Purchased Securities, are subject to the
following conditions precedent, and the failure by the Company to satisfy all
such conditions shall relieve you, at your election, of all such obligations.
4.1 OPINIONS OF COUNSEL.
You shall have received from
(a) Holland & Knight, LLP, special counsel for the Company; and
(b) Xxxx & Xxxxxx, your special counsel;
closing opinions, each dated as of the Closing Date, and substantially in the
respective forms set forth in Exhibit 4.1(a) and Exhibit 4.1(b) and as to such
other matters as you may reasonably request. This Section 4.1 shall constitute
direction by the Company to such counsel named in Section 4.1(a) to deliver such
closing opinion to you.
4.2 WARRANTIES AND REPRESENTATIONS TRUE; COMPLIANCE.
(A) WARRANTIES AND REPRESENTATIONS TRUE. The warranties and
representations contained in Section 2 shall be true on the Closing Date
with the same effect as though made on and as of that date.
(B) COMPLIANCE WITH THIS AGREEMENT AND FINANCING DOCUMENTS. The
Company shall have performed and complied with all agreements and
conditions contained herein and in the other Financing Documents that are
required to be performed or complied with by the Company on or prior to
the Closing Date, and such performance and compliance shall remain in
effect on the Closing Date.
4.3 OFFICERS' CERTIFICATES.
17
You shall have received:
(A) OFFICERS' CERTIFICATE -- a certificate dated the Closing Date
and signed (on behalf of the Company) by two (2) Senior Officers of the
Company, substantially in the form of Exhibit 4.3(a); and
(B) SECRETARY'S CERTIFICATE -- a certificate dated the Closing Date
and signed (on behalf of the Company) by the Secretary or an Assistant
Secretary of the Company, substantially in the form of Exhibit 4.3(b).
4.4 LEGALITY.
The Notes and the Warrants shall on the Closing Date qualify as a legal
investment for you under applicable insurance law (without regard to any
"basket" or "leeway" provisions), and the acquisition thereof shall not subject
you to any penalty or other onerous condition pursuant to any such law or
regulation, and you shall have received such evidence as you may reasonably
request to establish compliance with this condition.
4.5 FINANCING DOCUMENTS.
(A) NOTE AGREEMENT; NOTES. The Company shall have executed and
delivered to each Purchaser the Note Agreement. The Company shall have
issued to each such Purchaser Notes in the respective principal amounts
set forth below such Purchaser's name on Annex 1.
(B) WARRANT AGREEMENT. The Company shall have executed and delivered
to each Purchaser the Warrant Agreement. The Company shall have issued to
each such Purchaser Warrants in the respective amounts set forth below
such Purchaser's name on Annex 1.
4.6 RESERVATION OF SHARES. The shares of Common Stock issuable upon
exercise of each Warrant shall have been duly authorized and reserved for
issuance.
4.7 CERTAIN CONSENTS AND ACTIONS.
(A) SENIOR AGENT. The Senior Agent and the Company shall have
executed and delivered to you and each of the Other Purchasers a letter,
in form and substance acceptable to you, consenting to the transactions
contemplated by the Financing Documents, permitting the Company to incur
and have outstanding the indebtedness and all other obligations in respect
of the Note Agreement, the Warrant Agreement and the Notes, the issuance
and sale of the Notes and the Warrants and the issuance of Common Stock to
the holders of the Warrants upon exercise of the Warrants, and waiving any
default or event of default which might have occurred by virtue of the
18
execution and delivery of this Agreement and the other Financing
Documents.
(B) SERIES A INVESTORS. The Company has given notice to each of the
Series A Investors of its intended offering to you and the Other
Purchasers of the Warrants, and of the shares of Common Stock issuable
upon exercise of the Warrants, as required by section 5 of the Series A
Purchase Agreement, offering to sell all or a portion of such Warrants and
Common Stock to the Series A Investors. At least eleven (11) days has
elapsed since the receipt by each such Series A Investor of such notice,
and no Series A Investor has accepted such offer. You, each Other
Purchaser and your special counsel shall have received a certificate,
executed by a Senior Officer of the Company, attesting to such facts and
attaching a copy of such notice.
4.8 PRIVATE PLACEMENT NUMBERS.
The Company shall have obtained or caused to be obtained private placement
numbers for the Notes and the Warrants from the CUSIP Service Bureau of Standard
& Poor's, a division of XxXxxx-Xxxx, Inc. and you shall have been informed of
such private placement numbers. The Company shall have informed the Purchasers
in writing of the CUSIP number for the Common Stock.
4.9 FEES AND EXPENSES.
All fees and disbursements required to be paid pursuant to Section 6.6
shall have been paid in full.
4.10 OTHER PURCHASERS.
None of the Other Purchasers shall have failed to execute and deliver a
Note Agreement, the Warrant Agreement or any other Financing Document to be
executed and delivered by it, or to accept delivery of or make payment for the
Purchased Securities.
4.11 PROCEEDINGS SATISFACTORY.
All proceedings taken in connection with the issuance and sale of the
Purchased Securities and all documents and papers relating thereto shall be
satisfactory to you and your special counsel. You and your special counsel shall
have received copies of such documents and papers as you or they may reasonably
request in connection therewith or in connection with your special counsel's
closing opinion, all in form and substance satisfactory to you and your special
counsel.
5. INTERPRETATION OF THIS AGREEMENT
5.1 TERMS DEFINED.
19
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
AGREEMENT, THIS -- means this Securities Purchase Agreement, as it may be
amended, restated or otherwise modified from time to time.
CLOSING -- Section 1.2(b).
CLOSING DATE -- Section 1.2(b).
COMPANY -- has the meaning specified in the introductory sentence.
ENVIRONMENTAL PROTECTION LAW -- means any law, statute or regulation
enacted by any Governmental Authority in connection with or relating to the
protection or regulation of the environment, including, without limitation,
those laws, statutes and regulations regulating the disposal, removal,
production, storing, refining, handling, transferring, processing or
transporting of Hazardous Materials and any applicable orders, decrees or
judgments issued by any court of competent jurisdiction in connection with any
of the foregoing.
FINANCING DOCUMENTS -- means and includes this Agreement, the identical
Securities Purchase Agreements executed by the Other Purchasers, the Note
Agreement, the Notes, the Warrant Agreement, the Warrants, the Warrant
Certificates and the other agreements, certificates and instruments to be
executed pursuant to the terms of each of the foregoing, as each may be amended,
restated or otherwise modified from time to time.
GOVERNMENTAL AUTHORITY -- means:
(a) the government of:
(i) the United States of America and any state or other
political subdivision thereof; or
(ii) any other jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that asserts
any jurisdiction over the conduct of the affairs of, or the Property
of, the Company or any such Subsidiary; and
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
HAZARDOUS MATERIAL -- means all or any of the following:
(a) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable Environmental Protection Laws as
"hazardous substances",
20
"hazardous materials", "hazardous wastes", "toxic substances" or any other
formulation intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, "TLCP toxicity" or "EP toxicity";
(b) oil, petroleum or petroleum derived substances, natural gas,
natural gas liquids or synthetic gas and drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources;
(c) any flammable substances or explosives or any radioactive
materials;
(d) asbestos or urea formaldehyde in any form; and
(e) dielectric fluid containing levels of polychlorinated biphenyls
in excess of fifty parts per million.
NOTE AGREEMENT -- Section 1.1(a).
NOTES -- Section 1.1(a).
OTHER PURCHASERS -- Section 1.2(c).
PROJECTIONS -- Section 2.2(f).
PTCE 95-60 C Section 3.2(a).
PURCHASED SECURITIES -- means the Notes and the Warrants to be purchased
by the Purchasers pursuant to Section 1.2 of this Agreement.
PURCHASERS -- means you and the Other Purchasers.
QPAM EXEMPTION -- means Prohibited Transaction Class Exemption 84-14
issued by the DOL.
RULE 144A -- means Rule 144A promulgated under the Securities Act, 17
C.F.R. '230.144A, as such rule may be amended from time to time.
SECURITIES PURCHASE AGREEMENT -- Section 1.2(c).
SERIES A INVESTORS C means Credit Suisse First Boston Corporation and
Silverton International Fund Limited.
SERIES A PREFERRED STOCK C means the Series A Convertible Preferred Stock,
par
21
value $.10 per share, of the Company.
SERIES A PURCHASE AGREEMENT C means the Series A Preferred Stock Purchase
Agreement, dated as of December 20, 1996, among the Company and the Series A
Investors.
SERIES A WARRANTS - means the warrants to purchase shares of Common Stock
issued to the purchasers of the Series A Preferred Stock in connection with the
issuance of the Series A Preferred Stock.
SOURCE -- Section 3.2.
WARRANT AGREEMENT -- Section 1.1(b).
WARRANT CERTIFICATES -- Section 1.1(b).
WARRANTS -- Section 1.1(b).
5.2 OTHER DEFINITIONS.
The following terms shall have the respective meanings ascribed to such
terms in the Note Agreement:
Affiliate Lien
Bank of America Material Adverse Effect
Capital Stock Multiemployer Plan
Common Stock Offering Memorandum
Debt Person
Default Plan
DOL Property
ERISA Restricted Investment
ERISA Affiliate Rights
Event of Default Securities Act
Exchange Act Security
Fair Market Value Senior Agent
Foreign Pension Plan Senior Officer
GAAP Subsidiary
Investments Voting Stock
IRC
5.3 SECTION HEADINGS AND TABLE OF CONTENTS AND CONSTRUCTION.
(A) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The titles of the
Sections of this Agreement and the Table of Contents of this Agreement
appear as a matter of convenience only, do not constitute a part hereof
and shall not affect the
22
construction hereof. The words "herein," "hereof," "hereunder" and
"hereto" refer to this Agreement as a whole and not to any particular
Section or other subdivision. References to Sections are, unless otherwise
specified, references to Sections of this Agreement. References to Annexes
and Exhibits are, unless otherwise specified, references to Annexes and
Exhibits attached to this Agreement.
(B) CONSTRUCTION. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
5.4 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
6. MISCELLANEOUS
6.1 COMMUNICATIONS.
(A) METHOD; ADDRESS. All communications hereunder shall be in
writing and shall be delivered either by nationwide overnight courier or
by facsimile transmission (confirmed by delivery by nationwide overnight
courier sent on the day of the sending of such facsimile transmission).
Communications to the Company shall be addressed as set forth on Annex 2,
or at such other address of which the Company shall have notified each
Purchaser. Communications to the Purchasers shall be addressed as set
forth on Annex 1.
(B) WHEN GIVEN. Any communication addressed and delivered as herein
provided shall be deemed to be received when actually delivered to the
address of the addressee (whether or not delivery is accepted) or received
by the telecopy machine of the recipient. Any communication not so
addressed and delivered shall be ineffective.
(C) SERVICE OF PROCESS. Notwithstanding the foregoing provisions of
this Section 6.1, service of process in any suit, action or proceeding
arising out of or relating to this Agreement or any document, agreement or
transaction contemplated hereby shall be delivered in the manner provided
in Section 6.7(c).
6.2 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, consents, waivers and modifications that may hereafter be executed,
documents received by
23
you at the closing of your purchase of the Purchased Securities (except the
Purchased Securities themselves), and financial statements, certificates and
other information previously or hereafter furnished to any Purchaser, may be
reproduced by the Company or any Purchaser by any photographic, photostatic,
microfilm, micro-card, miniature photographic, digital or other similar process
and each Purchaser may destroy any original document so reproduced. Any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Company or such
Purchaser in the regular course of business) and any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence. Nothing in this Section 6.2 shall prohibit the Company or any
Purchaser from contesting the accuracy or validity of any such reproduction.
6.3 SURVIVAL.
All warranties, representations, certifications and covenants made by the
Company herein or in any certificate or other instrument delivered by or on
behalf of the Company hereunder shall be considered to have been relied upon by
you and shall survive the delivery to you of the Purchased Securities regardless
of any investigation made by you or on your behalf. All statements in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to the terms hereof shall constitute warranties and representations by
the Company hereunder.
6.4 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of the Purchasers and their successors and
assigns, and shall be enforceable by any such Purchaser, successor or assignee
whether or not an express assignment of rights hereunder shall have been made by
you or your successor or assign. Anything contained in this Section 6.4
notwithstanding, the Company may not assign any of its respective rights, duties
or obligations hereunder or under any of the other Financing Documents without
the prior written consent of all Purchasers.
6.5 AMENDMENT AND WAIVER.
This Agreement may be amended, and the observance of any term hereof may
be waived, with (and only with) the written consent of the Company and you.
6.6 EXPENSES.
Whether or not the Notes and the Warrants are sold, the Company shall pay,
at the Closing (if the Notes and the Warrants are sold, and otherwise upon
receipt of any statement or invoice therefor), all reasonable fees, expenses and
costs incurred by you relating hereto, including, without limitation, the
statement presented at the Closing by your special counsel for
24
reasonable fees and disbursements incurred in connection herewith, each
additional statement for reasonable fees and disbursements (promptly upon
receipt thereof) of your special counsel rendered after the Closing in
connection with the issuance of the Notes and the Warrants, and all expenses
incurred by you or on your behalf or the Company's behalf in complying with each
of the conditions to the Closing set forth in Section 4. Whether or not the
Notes and the Warrants are sold, the Company shall pay, and shall hold you
harmless against, all fees due and owing Bank of America in connection with the
offering of the Notes and the Warrants and any and all investment banking
services rendered in connection therewith, including, without limitation, those
set forth in the letter agreement dated as of August 18, 1997 between the
Company and Bank of America.
6.7 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC.
(A) WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED
HEREBY.
(B) CONSENT TO JURISDICTION. ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OF THE DOCUMENTS, AGREEMENTS
OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE
OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS
AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY MAY BE BROUGHT
BY A PARTY IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK CITY, NEW
YORK, OR ANY NEW YORK STATE COURT LOCATED IN NEW YORK CITY, NEW YORK AS
SUCH PARTY MAY IN ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE IN PERSONAM JURISDICTION OF
EACH SUCH COURT, AND EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES AND
AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE
IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN ADDITION, EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY
BROUGHT IN ANY SUCH COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
25
(C) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES THAT
PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE
ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE EXTENT
PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING
TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
HEREUNDER OR UNDER ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY. RECEIPT
OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A
DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY
COMMERCIAL DELIVERY SERVICE.
(D) OTHER FORUMS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF ANY PURCHASER TO SERVE ANY WRITS, PROCESS OR SUMMONSES IN
ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER THE
COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER, AS MAY BE
PERMITTED BY APPLICABLE LAW.
6.8 INDEMNIFICATION OF EACH PURCHASER.
From and at all times after the date of this Agreement, and in addition to
all of your other rights and remedies against the Company, the Company agrees to
indemnify and hold harmless you and each of your directors, officers, employees,
agents, investment advisors and affiliates against any and all claims (whether
valid or not), losses, damages, liabilities, costs and expenses of any kind or
nature whatsoever (including, without limitation, reasonable attorneys' fees,
costs and expenses), incurred by or asserted against you or any such director,
officer, employee, agent, investment advisor or affiliate, from and after the
date hereof, whether direct, indirect or consequential, as a result of or
arising from or in any way relating to any suit, action or proceeding (including
any inquiry or investigation) by any Person, whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any Person under any
statute or regulation, including, but not limited to, any federal or state
securities laws, or under any common law or equitable cause or otherwise,
arising from or in connection with the negotiation, preparation, execution,
performance or enforcement of this Agreement or the other Financing Documents or
any transactions contemplated herein or therein, or any of the transactions
contemplated hereunder, whether or not you or any such director, officer,
employee, agent, investment advisor or affiliate is a party to any such action,
proceeding or suit or the target of any such inquiry or investigation; PROVIDED,
HOWEVER, that no indemnified party shall have the right to be indemnified
hereunder for any liability resulting from the willful misconduct or gross
negligence of such indemnified party or breach by such indemnified party of its
own representations, warranties or other obligations under this Agreement. All
of your foregoing losses, damages, costs and expenses shall be payable as and
when incurred upon the demand of the indemnified party. The obligations of the
Company and your rights under
26
this Section 6.8 shall survive the termination of this Agreement To the extent
but solely to the extent which you or any of your directors, officers,
employees, agents, investment advisors and affiliates actually has received
payment in cash on behalf of the Company under any liability insurance policy
maintained by the Company, the Company shall not be required to make payment of
such amount, but shall remain fully liable in respect of any excess over such
amount actually received.
6.9 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.10 EXECUTION IN COUNTERPART.
This Agreement may be executed in two or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.
[Remainder of page intentionally blank. Next page is signature page.]
27
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding among
us in accordance with its terms.
Very truly yours,
ABLE TELCOM HOLDING CORP.
By:____________________________
Name:
Title:
Accepted:
[SEPARATELY EXECUTED BY EACH
OF THE FOLLOWING PURCHASERS]
28
ANNEX 1
INFORMATION AS TO PURCHASERS
===============================================================================
PURCHASER NAME XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
===============================================================================
Name in which Note and XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
Warrants are Registered
===============================================================================
Note Registration Number; R-1: $2,000,000
Principal Amount of Note R-2: $4,500,000
Warrant Certificate WR-1: 81,901 Warrants
Registration Number; WR-2: 184,277 Warrants
Number of Warrants
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Investment Accounting Division T-10
===============================================================================
Other Instructions Signature Page Format:
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
By___________________________
Name:
Title:
===============================================================================
Instructions re: Delivery Law Department of Purchaser
of Note and Warrant
Certificate
===============================================================================
Tax Identification Number 00-0000000
===============================================================================
Annex 1-1
ANNEX 1
INFORMATION AS TO PURCHASERS (CONT.)
===============================================================================
PURCHASER NAME XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
===============================================================================
Name in which Note and XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
Warrants are Registered
===============================================================================
Note Registration Number; R-3: $500,000
Principal Amount of Note
Warrant Certificate WR-3: 20,475 Warrants
Registration Number;
Number of Warrants
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Securities Accounting Division T-10
===============================================================================
Other Instructions Signature Page Format:
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
By___________________________
Name:
Title:
===============================================================================
Instructions re: Delivery Law Department of Purchaser
of Note and Warrant
Certificate
===============================================================================
Tax Identification Number 00-0000000
===============================================================================
Annex 1-2
ANNEX 1
INFORMATION AS TO PURCHASERS (CONT.)
===============================================================================
PURCHASER NAME SIGNATURE 1A (CAYMAN), LTD.
===============================================================================
Name in which Note and XXXXXXX & CO
Warrants are Registered
===============================================================================
Note Registration Number; R-4: $3,000,000
Principal Amount of Note
Warrant Certificate WR-4: 122,852 Warrants
Registration Number;
Number of Warrants
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company,
Portfolio Advisor
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Bond and Corporate Finance Group, T-57
===============================================================================
Other Instructions Signature Page Format:
SIGNATURE 1A (CAYMAN), LTD.
By: Xxxx Xxxxxxx Mutual Life Insurance
Company, Portfolio Advisor
By:___________________________
Name:
Title:
===============================================================================
Instructions re: Delivery Bankers Trust Company, as Indenture Trustee
of Note and Warrant for Signature 1A (Cayman), Ltd. Account #98016
Certificate 00 Xxxx Xxxxxx, 0xx Xxxxx, Window 00
Xxx Xxxx, Xxx Xxxx 00000
===============================================================================
Tax Identification Number None
===============================================================================
Annex 1-3
ANNEX 2
PAYMENT INSTRUCTIONS AT CLOSING;
ADDRESS OF COMPANY FOR NOTICES;
PAYMENT INSTRUCTIONS AT CLOSING:
Suntrust Bank, South Florida, N.A.
ABA # 000000000 f/b/o Able Telcom Holding Corp.
Account # 0417006228490
ADDRESS OF COMPANY FOR NOTICES:
0000 Xxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Chief Executive Officer
and President
Xxxxx X. Xxx, Xx.
Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
Annex 2-1
ANNEX 3
INFORMATION AS TO COMPANY
[Separately provided by the Company]
Annex 3-1
EXHIBIT 1.1(A)
[FORM OF NOTE AGREEMENT]
ABLE TELCOM HOLDING CORP.
NOTE AGREEMENT
DATED AS OF JANUARY 6, 1998
$10,000,000 12% SENIOR SUBORDINATED NOTES DUE JANUARY 6, 2005
TABLE OF CONTENTS
(NOT PART OF AGREEMENT)
PAGE
----
1. PAYMENTS............................................................. 1
1.1 Interest Payment............................................... 1
1.2 Required Principal Payments.................................... 1
1.3 Optional Principal Payments.................................... 1
1.4 Special Optional Principal Payments............................ 3
1.5 Offer to Pay Upon Change in Control............................ 3
1.6 Delivery of Notes in Payment of Warrant Purchase Price......... 7
1.7 Payments Among Noteholders..................................... 7
1.8 Notation of Notes on Payment................................... 7
1.9 No Other Payments of Principal; Acquisition of Notes........... 8
1.10 Manner of Payments............................................. 8
2. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................ 9
2.1 Registration of Notes.......................................... 9
2.2 Exchange of Notes.............................................. 9
2.3 Replacement of Notes........................................... 9
2.4 Issuance Taxes................................................. 10
2.5 Registrar...................................................... 10
3. GENERAL COVENANTS.................................................... 11
3.1 Payment of Taxes and Claims.................................... 11
3.2 Maintenance of Properties; Corporate Existence; etc............ 11
3.3 Payment of Notes and Maintenance of Office..................... 12
3.4 Pension Plans.................................................. 12
3.5 Private Offering............................................... 13
4. FINANCIAL COVENANTS.................................................. 13
4.1 Mergers and Consolidations..................................... 13
4.2 Disposition of Assets, Restricted Subsidiary Stock............. 14
4.3 Liens.......................................................... 18
4.4 Net Worth...................................................... 21
4.5 Fixed Charge Coverage.......................................... 21
4.6 Total Debt..................................................... 21
4.7 Senior Debt.................................................... 21
4.8 Restricted Payments and Restricted Investments................. 21
4.9 Seniority to Future Subordinated Debt.......................... 23
4.10 Designation of Subsidiaries.................................... 23
4.11 Line of Business............................................... 24
4.12 Transactions with Affiliates................................... 24
5. REPORTING COVENANTS.................................................. 24
5.1 Financial and Business Information............................. 24
5.2 Officer's Certificates......................................... 28
5.3 Accountants' Certificates...................................... 28
Exhibit 1.1(a)-i
TABLE OF CONTENTS (Continued)
(NOT PART OF AGREEMENT)
5.4 Inspection..................................................... 28
6. EVENTS OF DEFAULT.................................................... 29
6.1 Events of Default.............................................. 29
6.2 Default Remedies............................................... 31
6.3 Annulment of Acceleration of Notes............................. 32
7. SUBORDINATION........................................................ 33
7.1 General........................................................ 33
7.2 Insolvency..................................................... 33
7.3 Proofs of Claim................................................ 33
7.4 Acceleration of Senior Debt.................................... 34
7.5 Payment Default in Respect of Senior Debt...................... 34
7.6 Significant Nonpayment Default in Respect of Senior Debt....... 34
7.7 Standstill..................................................... 35
7.8 Turnover of Payments........................................... 36
7.9 Subordination Unaffected by Certain Events..................... 36
7.10 Waiver and Consent............................................. 37
7.11 Reinstatement of Subordination................................. 37
7.12 Obligations Not Impaired....................................... 37
7.13 Payment of Senior Debt; Subrogation............................ 37
7.14 Reliance of Holders of Senior Debt............................. 38
7.15 Identity of Holders of Senior Debt............................. 38
7.16 Amendments to Senior Credit Facility........................... 38
8. INTERPRETATION OF THIS AGREEMENT..................................... 38
8.1 Terms Defined.................................................. 38
8.2 Accounting Principles.......................................... 62
8.3 Directly or Indirectly......................................... 63
8.4 Section Headings and Table of Contents and Construction........ 63
8.5 Governing Law.................................................. 64
8.6 General Interest Provisions.................................... 64
9. MISCELLANEOUS........................................................ 65
9.1 Communications................................................. 65
9.2 Reproduction of Documents...................................... 66
9.3 Survival; Entire Agreement..................................... 66
9.4 Successors and Assigns......................................... 66
9.5 Amendment and Waiver........................................... 67
9.6 Expenses....................................................... 68
9.7 Waiver of Jury Trial; Consent to Jurisdiction; Etc............. 69
9.8 Execution in Counterpart....................................... 70
Annex 1 -- Addresses of Purchasers
Exhibit 1.1(a)-ii
Annex 2 -- Address of Company; Name and Address of Note Registrar
Attachment A -- Form of Note
Exhibit 1.1(a)-iii
NOTE AGREEMENT
NOTE AGREEMENT, dated as of January 6, 1998, among ABLE TELCOM HOLDING
CORP., a Florida corporation (together with its successors and assigns, the
"COMPANY"), and XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY, XXXX XXXXXXX
VARIABLE LIFE INSURANCE COMPANY and SIGNATURE 1A (CAYMAN), LTD. (together with
their respective successors and assigns, the "PURCHASERS").
RECITALS
WHEREAS, pursuant to the Securities Purchase Agreement, the Purchasers
have agreed to purchase from the Company, and the Company has agreed to sell to
the Purchasers, Ten Million Dollars ($10,000,000) in aggregate principal amount
of the Notes; and
WHEREAS, the Company and the Purchasers wish to enter into this
Agreement to govern the terms of the Notes;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties to this Agreement hereby agree as follows:
1. PAYMENTS
1.1 INTEREST PAYMENT.
Interest on the Notes shall be computed and paid in the manner and on the
dates provided in the Notes.
1.2 REQUIRED PRINCIPAL PAYMENTS.
The Company shall pay, and there shall become due and payable, Five
Million Dollars ($5,000,000) in principal amount of the Notes on January 6, 2004
at one hundred percent (100%) of the principal amount paid, together with
interest accrued thereon to the date of payment. The entire principal of the
Notes remaining outstanding on January 6, 2005, together with interest accrued
thereon, shall become due and payable on such date. The payment required to be
made on January 6, 2004 and the payment required to be made at maturity on
January 6, 2005 are each hereinafter referred to as a "REQUIRED PRINCIPAL
PAYMENT."
Exhibit 1.1(a)-1
1.3 OPTIONAL PRINCIPAL PAYMENTS.
(a) OPTIONAL PRINCIPAL PAYMENTS WITH PREPAYMENT COMPENSATION AMOUNT.
The Company may pay the principal amount of the Notes in whole or in part,
on any date in multiples of Five Hundred Thousand Dollars ($500,000) (or,
if the aggregate outstanding principal amount of the Notes is less than
Five Hundred Thousand Dollars ($500,000) at such time, then such principal
amount), together with:
(i) an amount equal to the Prepayment Compensation Amount due
at such time in respect of the principal amount of the Notes being
so paid; and
(ii) interest on such principal amount then being paid accrued
to the payment date.
(b) NOTICE OF OPTIONAL PAYMENT. The Company will give notice of any
optional payment of the Notes pursuant to this Section 1.3 to each holder
of Notes not less than thirty (30) days nor more than sixty (60) days
before the specified payment date, stating:
(i) the specified payment date;
(ii) that such payment is to be made pursuant to this Section
1.3;
(iii) the principal amount of each Note to be paid on such
date;
(iv) the interest to be paid on each such Note, accrued to the
specified payment date;
(v) the amounts and the due dates of the then remaining
Required Principal Payments determined after giving effect to such
payment; and
(vi) if such payment is made prior to January 6, 2001, the
calculation (with details) of an estimated Standard Prepayment
Compensation Amount, if any (calculated as if the date of such
notice was the date of payment), due in connection with such
payment; and, if such payment is made on or after January 6, 2001,
the Modified Prepayment Compensation Amount in connection with such
payment.
Notice of payment having been so given, the aggregate principal amount of
the Notes to be paid stated in such notice, together with the Prepayment
Compensation Amount determined as of the specified payment date, if any,
and interest thereon accrued to the specified payment date, shall become
due and payable on the specified payment date. If such payment is due
prior to January 6, 2001, then, two (2) Business Days prior to the making
of such payment, the Company shall deliver to each holder of Notes by
facsimile transmission (confirmed by nationwide overnight courier) a
certificate of a Senior Financial Officer specifying the details of the
calculation of the Standard
Exhibit 1.1(a)-2
Prepayment Compensation Amount as of the specified payment date, and
including a copy of the source of interest rate information used in the
calculation thereof.
(c) EFFECT OF PARTIAL PAYMENTS ON REQUIRED PAYMENTS. Each partial
payment of the principal of the Notes made pursuant to this Section 1.3
shall be applied against and reduce the then remaining Required Principal
Payments in the inverse order of the due dates of such payments.
1.4 SPECIAL OPTIONAL PRINCIPAL PAYMENTS.
(a) OPTIONAL PRINCIPAL PAYMENT UPON A LIQUIDITY EVENT. In the event,
at any time after January 6, 2001, of the occurrence of the Liquidity
Event, the Company may pay all, but not less than all, of the principal
amount of the Notes, together with interest on such principal amount then
being paid pursuant to this Section 1.4(a), accrued to the payment date,
but without the payment of a Prepayment Compensation Amount.
(b) NOTICE OF SPECIAL OPTIONAL PAYMENT. The Company will give notice
of any special optional payment of the Notes pursuant to this Section 1.4
to each holder of Notes within thirty (30) days following the occurrence
of such Liquidity Event and not less than thirty (30) days nor more than
sixty (60) days before the specified payment date, stating:
(i) the specified payment date;
(ii) that such payment is to be made pursuant to this Section
1.4;
(iii) the principal amount of each Note to be paid on such
date;
(iv) the interest to be paid on each such Note, accrued to the
specified payment date; and
(v) the calculation (with details) of the Realizable IRR
(calculated as of the specified payment date), as calculated by the
Company in good faith, in connection with such payment.
Notice of payment having been so given, the aggregate principal amount of
all Notes, together with and interest thereon accrued to the specified
payment date, shall become due and payable on the specified payment date.
(c) DETERMINATION OF REALIZABLE IRR. In the event that any holder of
Notes shall disagree with the calculation of the Realizable IRR set forth
by the Company in the notice given pursuant to Section 1.4(b), such
holder, by notice to the Company in writing given at least ten (10) days
prior to the payment date specified in the notice given pursuant to
Section 1.4(b), may demand that the Company obtain a calculation of the
Realizable IRR by a Valuation Agent, the fees and expenses of such
Valuation Agent to be borne by the Company. In the event that any holder
makes such a demand, the calculation of the Realizable IRR by the
Valuation Agent shall be conclusive in the
Exhibit 1.1(a)-3
absence of manifest error.
1.5 OFFER TO PAY UPON CHANGE IN CONTROL.
(a) NOTICE OF CHANGE IN CONTROL NOTICE EVENT. In the event of the
obtaining of knowledge of a Change in Control Notice Event by any Senior
Officer (including, without limitation, via the receipt of notice of a
Change in Control Notice Event from any holder of Notes), the Company
will, within five (5) Business Days after the occurrence of such event,
give notice of such Change in Control Notice Event to each holder of
Notes. Each such notice shall:
(i) be dated the date of the sending of such notice;
(ii) be executed by a Senior Officer;
(iii) refer to this Section 1.5; and
(iv) specify, in reasonable detail, the nature and date of the
Change in Control Notice Event.
(b) OFFER IN RESPECT OF A CHANGE IN CONTROL. In the event of a
Change in Control, the Company will, within five (5) Business Days after
the occurrence of such event (or, in the case of any Change in Control the
consummation or finalization of which would involve any action of the
Company, at least thirty (30) days prior to such Change in Control), give
notice of such Change in Control to each holder of Notes. Such notice
shall contain an irrevocable separate offer to each holder of Notes to pay
all, but not less than all, of the principal of, and interest and
Prepayment Compensation Amount, if any, on the Notes held by such holder
on a date (the "CHANGE IN CONTROL PAYMENT DATE") specified in such notice
that is not less than twenty (20) days and not more than thirty (30) days
after the date of such notice. Each such notice shall:
(i) be dated the date of the sending of such notice;
(ii) be executed by a Senior Officer;
(iii) specify, in reasonable detail, the nature and date of
the Change in Control;
(iv) specify the Change in Control Payment Date;
(v) specify the principal amount of each Note outstanding;
(vi) specify the interest that would be due on each Note
offered to be paid, accrued to the Change in Control Payment Date;
and
(vii) if the Change in Control Payment Date is prior to
January 6, 2001, the calculation (with details) of an estimated
Standard Prepayment
Exhibit 1l1(a)-4
Compensation Amount, if any (calculated as if the date of such
notice was the date of payment), due in connection with such
payment; and, if such Change in Control Payment Date is on or after
January 6, 2001, the Modified Prepayment Compensation Amount in
connection with such payment.
If the Company shall not have received a written response to such notice
from any holder of Notes within ten (10) Business Days after the date of
posting of such notice to such holder of Notes, then the Company shall
immediately send a second notice to each such holder of Notes.
(c) ACCEPTANCE, REJECTION. Each holder of Notes shall have the
option to accept or reject such offered payment. In order to reject such
offered payment, a holder of Notes shall cause a notice of such rejection
to be delivered to the Company at least five (5) days prior to the Change
in Control Payment Date. A failure to reject in writing such written offer
of payment as provided in this Section 1.5(c), or a written acceptance of
such offered prepayment, shall be deemed to constitute an acceptance of
such offer.
(d) DEFERRAL OF OBLIGATION TO PURCHASE. The obligation of the
Company to purchase Notes pursuant to the offers required by Section
1.5(b) and accepted or deemed accepted in accordance with Section 1.5(c)
is subject to the occurrence of the Change in Control in respect of which
such offers and acceptances shall have been made. In the event that such
Change in Control does not occur prior to the Change in Control Payment
Date in respect thereof, such purchase shall be deferred until and shall
be made on the date on which such Change in Control occurs or, if the
Company determines that efforts to effect such Change in Control have
ceased or have been abandoned, then such offer, acceptances and obligation
to purchase shall be deemed to have been rescinded. The Company shall keep
each holder of Notes reasonably and timely informed of:
(i) any such deferral of the date of purchase;
(ii) the date on which such Change in Control and the purchase
are expected to occur; and
(iii) any determination by the Company that efforts to effect
such Change in Control have ceased or been abandoned.
(e) PAYMENT. The offered payment shall be made at one hundred
percent (100%) of the principal amount of the Notes to be prepaid,
together with interest and Prepayment Compensation Amount, if any, on such
Notes, accrued to and determined as of the Change in Control Payment Date.
In the event that such Change of Control Payment Date is prior to January
6, 2001, two (2) Business Days prior to the making of such payment, the
Company shall deliver to each holder of Notes by facsimile transmission a
certificate of a Senior Financial Officer specifying:
(i) the details of the calculation of the Standard Prepayment
Exhibit 1.1(a)-5
Compensation Amount as of the specified payment date, and including
a copy of the source of interest rate information used in such
calculation; and
(ii) the amounts and the due dates of the then remaining
Required Principal Payments determined after giving effect to such
payment.
(f) EFFECT OF PARTIAL REPURCHASES ON REQUIRED PAYMENT. At the time
of the making of any partial repurchase of Notes pursuant to this Section
1.5, an amount equal to the principal amount of the Notes so repurchased
shall be applied against and reduce each of the then remaining Required
Principal Payments by a percentage equal to the quotient of:
(i) the aggregate principal amount of the Notes so paid;
DIVIDED BY
(ii) the aggregate principal amount of the Notes outstanding
immediately prior to such payment.
(g) CIRCUMSTANCES PERMITTING REPURCHASE OF NOTES AT PAR UPON A
CHANGE IN CONTROL. In the event that:
(i) the Change in Control giving rise to the rights of the
holders of the Notes under this Section 1.5 shall include the
purchase by a Control Person (entirely for cash) of:
(A) all Warrants remaining outstanding;
(B) all shares of Common Stock having been issued upon
the exercise of any Warrants and remaining held by the holders
who held such Warrants at the time of exercise;
(C) all Able International Warrants, if any, remaining
outstanding and remaining held by the holders who held the
Warrants in respect of which the Able International Warrants
were issued;
(D) all shares of Able International Stock having been
issued either:
(I) upon exercise of the Able International
Warrants; or
(II) in the Able International Spinoff in respect
of shares of Common Stock having been issued upon
exercise of any of the Warrants prior to the Able
International Spinoff;
and, in either case, remaining held by the holders who held
the Warrants in respect of which the Able International
Warrants or shares of Able International Stock, as the case
may be, were issued;
Exhibit 1.1(a)-6
contemporaneously with such Change in Control; and
(ii) such purchase, when combined with the prepayment of all
of the Notes at par, would provide each of the holders of the Notes,
as a group and in the aggregate, with a Realized IRR of at least
twenty-two and fifty one-hundredths percent (22.50%) PER ANNUM in
respect of their investment in the Notes and the Warrants;
the Company shall offer to repurchase the Notes as otherwise provided in
this Section 1.5, except that:
(A) the Company shall not be required to pay the
Prepayment Compensation Amount, if any, that would otherwise
be payable in respect of such repurchase of Notes pursuant to
this Section 1.5; and
(B) the notice required by Section 1.5(b) in connection
with such repurchase shall:
(I) certify that the Prepayment Compensation
Amount, if any, otherwise payable in respect of such
offer to repurchase the Notes is not required pursuant
to this Section 1.5(g); and
(II) provide the calculation (with details) of the
Realized IRR (calculated as of the Change in Control
Prepayment Date), as calculated by the Company in good
faith, in connection with such repurchase.
In the event that any holder of Notes shall disagree with the calculation
of the Realized IRR set forth by the Company in the notice given pursuant
to Section 1.5(b) (as modified by this Section 1.5(g)), such holder, by
notice to the Company in writing given at least ten (10) days prior to the
payment date specified in the notice given pursuant to Section 1.5(b), may
demand that the Company obtain a calculation of the Realized IRR by a
Valuation Agent. In the event that any holder makes such a demand, the
calculation of the Realized IRR by the Valuation Agent shall be conclusive
in the absence of manifest error.
1.6 DELIVERY OF NOTES IN PAYMENT OF WARRANT PURCHASE PRICE.
The Warrant Agreement provides that a holder of Warrants may tender Notes
in partial or complete payment of the purchase price for the shares of Common
Stock issued upon exercise of the Warrants. Promptly following the receipt of
any Note so tendered, the Registrar shall notify the Company in writing as
promptly as practicable (but in no event later than the next Business Day) of
such receipt and of the amount of the Note which the holder thereof requested to
apply to the payment of the purchase price of the shares issuable upon exercise
of the Warrants. The Registrar shall promptly cancel and retire such surrendered
Exhibit 1.1(a)-7
Note (and no such Note shall be reissued), and shall issue to the holder thereof
a new Note in the principal amount of such tendered Note remaining after
deduction of the principal amount thereof applied to payment of the purchase
price for the shares of Common Stock. For purposes of Rule 144 under the
Securities Act, 17 C.F.R. '230.144, the Company and you agree that a tender of
Notes in payment of the exercise price in respect of the Warrants shall not be
deemed a prepayment of the Notes, but rather a conversion of such Notes,
pursuant to the terms of the Warrant Agreement and the Warrants, into Common
Stock.
1.7 PAYMENTS AMONG NOTEHOLDERS.
If at the time any payment of the principal of the Notes made pursuant to
Section 1.2 or Section 1.3 is due there is more than one Note outstanding, the
aggregate principal amount of each such required or optional partial payment of
the Notes shall be allocated among the Notes at the time outstanding pro rata in
proportion to the respective unpaid principal amounts of all such outstanding
Notes.
1.8 NOTATION OF NOTES ON PAYMENT.
Upon any partial payment of a Note, the holder of such Note may (but shall
not be required to), at its option:
(a) surrender such Note to the Company pursuant to Section 2.2 in
exchange for a new Note in a principal amount equal to the principal
amount remaining unpaid on the surrendered Note;
(b) make such Note available to the Company for notation thereon of
the portion of the principal so paid; or
(c) xxxx such Note with a notation thereon of the portion of the
principal so paid.
In case the entire principal amount of any Note is paid, such Note shall be
surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of the paid principal amount of any Note.
1.9 NO OTHER PAYMENTS OF PRINCIPAL; ACQUISITION OF NOTES.
Except for payments of principal made in accordance with this Section 1,
the Company may not make any payment of principal in respect of the Notes. The
Company will not, and will not permit any Subsidiary or any Affiliate to,
directly or indirectly, acquire or make any offer to acquire any Notes.
Exhibit 1.1(a)-8
1.10 MANNER OF PAYMENTS.
(a) MANNER OF PAYMENT. The Company shall pay all amounts payable
with respect to each Note (without any presentment of such Notes and
without any notation of such payment being made thereon) by crediting, by
federal funds bank wire transfer, the account of the holder thereof in any
bank in the United States of America as may be designated in writing by
such holder, or in such other manner as may be reasonably directed or to
such other address in the United States of America as may be reasonably
designated in writing by such holder. Annex 1 shall be deemed to
constitute notice, direction or designation (as appropriate) by the
Purchaser to the Company with respect to payments to be made to the
Purchaser as aforesaid. In the absence of such written direction, all
amounts payable with respect to each Note shall be paid by check mailed
and addressed to the registered holder of such Note at the address shown
in the register maintained by the Company pursuant to Section 2.1.
(b) PAYMENTS DUE ON HOLIDAYS. If any payment due on, or with respect
to, any Note shall fall due on a day other than a Business Day, then such
payment shall be made on the first Business Day following the day on which
such payment shall have so fallen due; PROVIDED that if all or any portion
of such payment shall consist of a payment of interest, for purposes of
calculating such interest, such payment shall be deemed to have been
originally due on such first following Business Day, such interest shall
accrue and be payable to (but not including) the actual date of payment,
and the amount of the next succeeding interest payment shall be adjusted
accordingly.
(c) PAYMENTS, WHEN RECEIVED. Any payment to be made to the holders
of Notes hereunder or under the Notes shall be deemed to have been made on
the Business Day such payment actually becomes available at such holder's
bank prior to the close of business of such bank, PROVIDED that interest
for one day at the non-default interest rate of the Notes shall be due on
the amount of any such payment that actually becomes available to such
holder at such holder's bank after 12:00 noon (local time of such bank).
2. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
2.1 REGISTRATION OF NOTES.
The Company will cause a Registrar appointed under Section 2.5 to maintain
a register for the registration and transfer of Notes. The register shall be
maintained at the office therefor maintained pursuant to Section 3.3. The name
and address of each holder of one or more Notes, each transfer thereof made in
accordance with Section 2.2 and the name and address of each transferee of one
or more Notes shall be registered in such register by the Registrar. The Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary, other than in accordance
with Section 2.2.
Exhibit 1.1(a)-9
2.2 EXCHANGE OF NOTES.
(a) EXCHANGE OF NOTES. Upon surrender of any Note at the office of
the Registrar maintained pursuant to Section 3.3, duly endorsed or
accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or such holder's attorney duly authorized
in writing, the Company will execute and cause the Registrar to deliver,
at the Company's expense (except as provided in Section 2.2(b)), a new
Note or Notes in exchange therefor, in an aggregate principal amount equal
to the unpaid principal amount of the surrendered Note. Each such new Note
shall be registered in the name of such Person as such holder may request
and shall be substantially in the form of Attachment A. Each such new Note
shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. Each such
new Note shall carry the same rights to unpaid interest and interest to
accrue that were carried by the Note so exchanged or transferred. Notes
shall not be transferred in denominations of less than One Hundred
Thousand Dollars ($100,000), PROVIDED that a holder of Notes may transfer
its entire holding of Notes regardless of the principal amount of such
holder's Notes.
(b) COSTS. The Company will pay the cost of delivering to or from
such holder's home office or custodian bank from or to the Registrar,
insured to the reasonable satisfaction of such holder, the surrendered
Note and any Note issued in substitution or replacement for the
surrendered Note. The Registrar may require payment of a sum sufficient to
cover any stamp tax or governmental charge (other than the Florida excise
tax on documents imposed pursuant to FLA. STAT. '201.08, if any, which, if
imposed, shall be paid by the Company) imposed in respect of any such
transfer of Notes.
2.3 REPLACEMENT OF NOTES.
Upon receipt by the Registrar from the registered holder of a Note of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Note (which evidence shall be, in the case of an
institutional investor, notice from such institutional investor of such loss,
theft, destruction or mutilation), and:
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company; PROVIDED, HOWEVER, that if the
holder of such Note is a Purchaser, an institutional investor or a
nominee, the unsecured agreement of indemnity of such Purchaser or
institutional investor (but not of any nominee therefor) shall be deemed
to be satisfactory; or
(b) in the case of mutilation, upon surrender and cancellation
thereof;
the Company at its own expense will execute and will cause the Registrar to
deliver, in lieu thereof, a replacement Note, dated and bearing interest from
the date to which interest shall have been paid on such lost, stolen, destroyed
or mutilated Note or dated the date of such
Exhibit 1.1(a)-10
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
2.4 ISSUANCE TAXES.
The Company will pay all taxes (if any) due (but not, in any event, income
taxes) in connection with and as the result of the initial issuance and sale of
the Notes and in connection with any modification, waiver or amendment of this
Agreement or the Notes and shall save each holder of Notes harmless without
limitation as to time against any and all liabilities with respect to all such
taxes. The Company shall also pay and hold each holder of Notes harmless against
the Florida excise tax on documents imposed by FLA. STAT. '201.08 or any
successor provision, should any such tax be determined to be due in respect of
the Notes. The Company shall pay any stamp tax, documentary stamp tax or other
similar tax, if any, imposed in connection with the initial issuance and sale of
the Notes. The Company shall pay and hold each holder of Notes harmless against
any and all fees imposed by the Registrar, including, without limitation, any
fee imposed in connection with any transfer, exchange, conversion pursuant to
Section 1.6 or replacement of any Note.
2.5 REGISTRAR.
The Company shall designate (by its direction on Annex 2 hereto or
otherwise as provided in writing to each holder of Notes) a registrar (a
"REGISTRAR") (which may be, but need not be, the Company, a Subsidiary or
Affiliate) to maintain the register of Notes on its behalf as required pursuant
Section 2.1 and otherwise perform the functions set forth in this Section 2. In
the event the Company appoints a Person other than the Company as Registrar, the
Company shall enter into an appropriate agency agreement with such Registrar in
form and scope, and containing such indemnity provisions as are, acceptable to
the Required Holders and the Registrar. Such agency agreement shall implement
the provisions of this Section 2. The Company initially appoints the Registrar
indicated on Annex 2, and shall notify each holder of Notes in writing of the
appointment of any change in the identity or address of any Registrar not less
than thirty (30) days prior to such change taking effect. Notwithstanding any
other provision of this Agreement or any such agency agreement to the contrary,
as between the Company and each holder of Notes, no appointment of any Registrar
shall relieve the Company of any of its obligations under this Section 2, and
the Company shall remain, as between the Company and each holder of Notes,
liable for any act or failure to act on the part of any Registrar as fully as if
the Company had itself so acted or omitted to act.
3. GENERAL COVENANTS
The Company covenants that on and after the Closing Date and so long as
any of the Notes shall be outstanding:
3.1 PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each Restricted Subsidiary to, pay before
they become delinquent:
(a) all taxes, assessments and governmental charges or levies
imposed
Exhibit 1.1(a)-11
upon it or its Property; and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, landlords and other like Persons that, if unpaid,
might result in the creation of a statutory, regulatory or common law Lien
upon its Property;
PROVIDED, that items of the foregoing description need not be paid so long as
such items are being actively contested in good faith and by appropriate
proceedings and reasonable book reserves in accordance with GAAP have been
established and maintained with respect thereto.
3.2 MAINTENANCE OF PROPERTIES; CORPORATE EXISTENCE; ETC.
The Company will, and will cause each Restricted Subsidiary to:
(a) PROPERTY -- maintain its Property in good condition, ordinary
wear and tear and obsolescence excepted, and make all necessary renewals,
replacements, additions, betterments and improvements thereto; PROVIDED,
HOWEVER, that this Section 3.2(a) shall not prevent the Company or any
Restricted Subsidiary from discontinuing the operation and the maintenance
of any of its Properties if such discontinuance is desirable in the
conduct of its business and such discontinuance could not reasonably be
expected to have a Material Adverse Effect;
(b) INSURANCE -- maintain, with financially sound and reputable
insurers, insurance with respect to its Property and business against such
casualties and contingencies, of such types and in such amounts as is
customary in the case of corporations of established reputations engaged
in the same or a similar business and similarly situated;
(c) FINANCIAL RECORDS -- keep proper books of record and account, in
which full and correct entries shall be made of all dealings and
transactions of or in relation to the Properties and business thereof, and
which will permit the production of financial statements in accordance
with GAAP;
(d) CORPORATE EXISTENCE AND RIGHTS -- do or cause to be done all
things necessary to preserve and keep in full force and effect its
corporate existence, corporate rights (charter and statutory) and
corporate franchises except as permitted by Section 4.1; and
(e) COMPLIANCE WITH LAW -- comply with all laws, ordinances and
governmental rules and regulations to which it is subject (including,
without limitation, any environmental protection law) and obtain all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its Properties and the
conduct of its business except for such violations and failures to obtain
that, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
Exhibit 1.1(a)-12
3.3 PAYMENT OF NOTES AND MAINTENANCE OF OFFICE.
The Company will punctually pay, or cause to be paid, the principal of and
interest (and Prepayment Compensation Amount, if any) on, the Notes, as and when
the same shall become due according to the terms hereof and of the Notes, and
will maintain:
(a) an office at the address of the Company provided in Annex 2
where notices, presentations and demands in respect hereof or the Notes
may be made upon it; and
(b) an office at the address of the Registrar provided in Annex 2
where Notes may be presented for transfer or exchange.
Each such office will be maintained at such address until thirty (30) days after
such time as the Company notifies the holders of the Notes of any change of
location of such office, which office will in any event be located within the
United States of America. The Company agrees to indemnify and hold harmless each
holder against any damages sustained as a result of its failure to promptly
notify each holder in writing of any change in the identity or office of the
Registrar.
3.4 PENSION PLANS.
(a) COMPLIANCE. The Company will, and will cause each ERISA
Affiliate to, at all times with respect to each Pension Plan, comply with
all applicable provisions of ERISA and the IRC, except for such failures
to comply that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
(b) PROHIBITED ACTIONS. The Company will not, and will not permit
any ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as such term is
defined in section 406 of ERISA or section 4975 of the IRC) or
"reportable event" (as such term is defined in section 4043 of
ERISA) that could result in the imposition of a tax or penalty;
(ii) incur with respect to any Plan any "accumulated funding
deficiency" (as such term is defined in section 302 of ERISA),
whether or not waived;
(iii) terminate any Plan in a manner that could result in the
imposition of a Lien on the Property of the Company or any
Restricted Subsidiary pursuant to section 4068 of ERISA or the
creation of any liability under section 4062 of ERISA;
(iv) fail to make any payment required by section 515 of
ERISA;
Exhibit 1.1(a)-13
(v) incur any withdrawal liability under Title IV of ERISA
with respect to any Multiemployer Plan or any liability as a result
of the termination of any Multiemployer Plan; or
(vi) incur any liability or suffer the existence of any Lien
on the Property of the Company or any ERISA Affiliate, in either
case pursuant to Title I or Title IV of ERISA or pursuant to the
penalty or excise tax or security provisions of the IRC;
if the aggregate amount of the taxes, penalties, funding deficiencies,
interest, amounts secured by Liens, and other liabilities in respect of
any of the foregoing at any time could reasonably be expected to have a
Material Adverse Effect.
(c) FOREIGN PENSION PLANS. The Company will, and will cause each
Restricted Subsidiary to, at all times, comply in all material respects
with all laws, regulations and orders applicable to the establishment,
operation, administration and maintenance of all Foreign Pension Plans,
and pay when due all premiums, contributions and any other amounts
required by applicable Foreign Pension Plan documents or applicable laws,
except where the failure to comply with such laws, regulations and orders,
and to make such payments, in the aggregate for all such failures, could
not reasonably be expected to have a Material Adverse Effect.
3.5 PRIVATE OFFERING.
The Company will not, and will not permit any Person acting on its behalf
to, offer the Notes or any part thereof or any similar securities for issue or
sale to, or solicit any offer to acquire any of the same from, any Person so as
to bring the issuance and sale of the Notes within the provisions of section 5
of the Securities Act.
4. FINANCIAL COVENANTS
4.1 MERGERS AND CONSOLIDATIONS.
The Company will not, nor will it permit any Restricted Subsidiary to,
merge with or into or consolidate with any other Person, permit any other Person
to merge or consolidate with or into it or sell all or substantially all of its
Property to any other Person; PROVIDED, HOWEVER, that the foregoing restriction
does not apply to the merger or consolidation of the Company with another
corporation or sale of all or substantially all of the Property of the Company
to any other Person if:
(a) the corporation that results from such merger or consolidation
or to which all or substantially all of the Property of the Company is
sold (the "SURVIVING CORPORATION"), if other than the Company, is
organized under the laws of, and conducts substantially all of its
business and has substantially all of its Properties within, the United
States of America or any jurisdiction or jurisdictions thereof;
(b) if the Company is not the Surviving Corporation, the due and
punctual
Exhibit 1.1(a)-14
payment of the principal of and Prepayment Compensation Amount, if any,
and interest on all of the Notes, according to their tenor, and the due
and punctual performance and observance of all the covenants in the Notes,
this Agreement and each other Financing Document to be performed or
observed by the Company, are expressly assumed by the Surviving
Corporation pursuant to such assumption agreements and instruments in such
forms as shall be approved by the Required Holders, and the Company causes
to be delivered to each holder of Notes an opinion, satisfactory in form
and substance to the Required Holders, of independent counsel to the
effect that such agreements and instruments are enforceable in accordance
with their terms; and
(c) immediately prior to, and immediately after the consummation of
the transaction, and after giving effect thereto:
(i) no Default or Event of Default exists or would exist;
and
(ii) the Surviving Corporation would be permitted by the
provisions of Section 4.6 and Section 4.7 to incur at least One
Dollar ($1.00) of additional Adjusted Debt which is not subordinated
to the Subordinated Debt, assuming that the financial ratios set
forth in Section 4.6 and Section 4.7 were recalculated on a Pro
Forma Combined Basis as of the last day of the fiscal quarter of the
Surviving Corporation then most recently ended.
Notwithstanding the foregoing:
(A) a Restricted Subsidiary may merge into the Company so long as
the Company is the Surviving Corporation;
(B) a Restricted Subsidiary may merge into a Wholly-Owned Restricted
Subsidiary, so long as the Wholly-Owned Restricted Subsidiary is the
Surviving Corporation; and
(C) a Restricted Subsidiary may merge with or into or consolidate
with, or Transfer all or substantially all of its Property to, any Person
other than the Company or a Restricted Subsidiary so long as such Transfer
complies in all respects with each provision of Section 4.2.
4.2 DISPOSITION OF ASSETS, RESTRICTED SUBSIDIARY STOCK.
(a) DISPOSITION OF ASSETS. The Company will not, and will not permit
any Restricted Subsidiary to, sell, lease as lessor, transfer or otherwise
dispose of any Property (collectively, "TRANSFERS"), except:
(i) Transfers of inventory and of obsolete or worn out assets,
in each case in the ordinary course of business of the Company or
such Restricted Subsidiary;
(ii) Transfers of all or any portion of the Property of Able
Exhibit 1.1(a)-15
International;
(iii) Transfers from the Company to a Wholly-Owned Restricted
Subsidiary;
(iv) Transfers from a Restricted Subsidiary to the Company or
a Wholly-Owned Restricted Subsidiary;
(v) Transfers arising solely out of Sale-Leaseback
Transactions; and
(vi) any other Transfer at any time of any Property to a
Person for an Acceptable Consideration if the conditions specified
in each of the following clauses (A), (B) and (C) would be satisfied
with respect to such Transfer:
(A) the SUM of:
(I) the book value of such Property at the time of
Transfer; PLUS
(II) the aggregate book value of all other
Property Transferred (other than in Transfers referred
to in the foregoing clauses (i), (ii), (iii), (iv) and
(v) of this Section 4.2 (collectively, "EXCLUDED
TRANSFERS")) after the December 31 immediately preceding
the date of such Transfer;
would not exceed fifteen percent (15%) of Consolidated Total
Assets measured as of such immediately preceding December 31;
(B) the SUM of:
(I) the current book value of such Property at the
time of Transfer; PLUS
(II) the aggregate book value of each other asset
Transferred (other than in Excluded Transfers) after the
Closing Date;
would not exceed forty percent (40%) of Consolidated Total
Assets measured as of such immediately preceding December 31;
and
(C) immediately before and after the consummation of the
Transfer, and after giving effect thereto, no Default or Event
of Default would exist;
PROVIDED, HOWEVER, that any Transfer of Property shall be excluded
for purposes of the foregoing clauses (A) and (B) to the extent
that, within one hundred eighty (180) days after such Transfer, the
proceeds of such Transfer, net of
Exhibit 1.1(a)-16
reasonable and ordinary transaction costs and expenses incurred and
actually paid in connection with such Transfer, are applied by the
Company or such Restricted Subsidiary to:
(y) purchase productive tangible Property for use in the
conduct of the business of the Company and the Restricted
Subsidiaries as such businesses were conducted on the Closing
Date; or
(z) pay, prior to its scheduled maturity, a principal
amount of Debt of the Company or any Restricted Subsidiary
(other than Debt owing to an Affiliate or Debt subordinate to
the Subordinated Notes), equal to the amount of such proceeds;
and, in connection with any such payment, the Company shall
pay all accrued interest thereon and any premium or make-whole
amount required to be paid in connection therewith.
(b) DISPOSITION OF DOMESTIC RESTRICTED SUBSIDIARY STOCK. The Company
will not, and will not permit any Restricted Subsidiary to, sell or
otherwise dispose of any shares of the stock or Rights of a Domestic
Restricted Subsidiary (such stock and Rights herein called "RESTRICTED
SUBSIDIARY STOCK"), nor will any Domestic Restricted Subsidiary issue,
sell or otherwise dispose of any shares of, or Rights to purchase shares
of, its own Domestic Restricted Subsidiary Stock; PROVIDED, HOWEVER, that
the foregoing restrictions do not apply to:
(i) Transfers by the Company or a Restricted Subsidiary of
shares of Restricted Subsidiary Stock to the Company or a
Wholly-Owned Restricted Subsidiary;
(ii) the issuance by a Domestic Restricted Subsidiary of
shares of its own Restricted Subsidiary Stock to the Company or a
Wholly-Owned Restricted Subsidiary;
(iii) the issuance by a Domestic Restricted Subsidiary of
directors' qualifying shares;
(iv) the issuance by a Domestic Restricted Subsidiary of
shares of its own Restricted Subsidiary Stock in the form of a
dividend payable in such shares, or the other issuance by a
Restricted Subsidiary of shares of its own Restricted Subsidiary
Stock; PROVIDED, HOWEVER, that, in each case, the Company's direct
or indirect percentage ownership of no class of the Voting Stock or
of any other Restricted Subsidiary Stock of such Domestic Restricted
Subsidiary is decreased as a result of such issuance;
(v) the Transfer of all of the Restricted Subsidiary Stock of
a Domestic Restricted Subsidiary owned by the Company and its other
Restricted Subsidiaries if:
Exhibit 1.1(a)-17
(A) such Transfer satisfies the requirements of
Section 4.2(a)(vi);
(B) in connection with such Transfer, the entire
Investment (whether represented by stock, Debt, claims or
otherwise) of the Company and its other Restricted
Subsidiaries in such Domestic Restricted Subsidiary is
Transferred to a Person other than the Company or a Restricted
Subsidiary not being simultaneously disposed of; and
(C) the Domestic Restricted Subsidiary being disposed of
has no continuing Investment in any other Restricted
Subsidiary not being simultaneously disposed of or in the
Company.
For purposes of determining the book value of assets constituting
Restricted Subsidiary Stock being Transferred as provided in clause (v)
above, such book value shall be deemed to be the aggregate book value of
the assets of the Restricted Subsidiary that shall have issued such
Restricted Subsidiary Stock.
(c) DISPOSITION OF ABLE INTERNATIONAL STOCK. The Company will not,
and will not permit any Domestic Restricted Subsidiary to, sell or
otherwise dispose of any shares of the stock or Rights of Able
International (such stock and Rights herein called "ABLE INTERNATIONAL
STOCK"), nor will Able International issue, sell or otherwise dispose of
any shares of, or Rights to purchase shares of, its own Able International
Stock; PROVIDED, HOWEVER, that the foregoing restrictions do not apply to:
(i) Transfers by the Company or a Domestic Restricted
Subsidiary of shares of Able International Stock to the Company or a
Wholly-Owned Restricted Subsidiary;
(ii) the issuance by Able International of shares of its own
Able International Stock to the Company or a Wholly-Owned Restricted
Subsidiary;
(iii) the issuance by a Able International of directors'
qualifying shares;
(iv) the dividend or distribution by the Company of shares of
Able International Stock to all holders of its Common Stock (and to
the extent required pursuant to the Charter, to the holders of the
Series A Preferred Stock), and the Transfer of warrants to purchase
shares of Able International Stock to the holders of the Warrants in
respect of such dividend or distribution, as required by Section 3.8
of the Warrant Agreement, so long as after giving effect to all such
transactions the remaining interest of the Company and the Domestic
Restricted Subsidiaries in Able International does not exceed twenty
percent (20%) of the aggregate equity interest in Able
International;
(v) the issuance by Able International of shares of its own
Able International Stock or the Transfer by the Company or any
Domestic Restricted Subsidiary of shares of Able International
Stock, so long as the Company shall
Exhibit 1.1(a)-18
retain direct or indirect ownership at all times of not less than
eighty percent (80%) of the Voting Stock of Able International; or
(vi) the Transfer of the Able International Stock owned by the
Company and the Domestic Restricted Subsidiaries for an Acceptable
Consideration if:
(A) such Able International Stock is Transferred to a
Person other than the Company or a Domestic Restricted
Subsidiary not being simultaneously disposed of;
(B) the remaining interest of the Company and the
Domestic Restricted Subsidiaries in Able International does
not exceed twenty percent (20%) of the aggregate equity
interest in Able International; and
(C) Able International has no continuing Investment in
any Domestic Restricted Subsidiary not being simultaneously
disposed of or in the Company.
(d) RESTRICTED SUBSIDIARY MERGERS AND CONSOLIDATIONS. A merger or
consolidation of a Domestic Restricted Subsidiary in which a Person other
than the Company or a Wholly-Owned Restricted Subsidiary shall be the
Surviving Corporation shall be deemed to be a disposition of the
Restricted Subsidiary Stock of such Domestic Restricted Subsidiary and
shall be subject to Section 4.2(b). A merger or consolidation of Able
International in which a Person other than the Company or a Wholly-Owned
Restricted Subsidiary shall be the Surviving Corporation shall be deemed
to be a disposition of Able International Stock and shall be subject to
Section 4.2(c).
4.3 LIENS.
(a) NEGATIVE PLEDGE. The Company will not, and will not permit any
Restricted Subsidiary to, cause or permit, or agree or consent to cause or
permit in the future (upon the happening of a contingency or otherwise),
any of their Property, whether now owned or hereafter acquired, at any
time to be subject to a Lien except:
(i) CLOSING DATE LIENS --
(A) Liens in existence on the Closing Date and described
in PART 2.2(c) OF ANNEX 3;
(ii) ORDINARY COURSE BUSINESS LIENS --
(A) PERFORMANCE BONDS -- Liens incurred or deposits made
in the ordinary course of business:
(I) in connection with workers' compensation,
Exhibit 1.1(a)-19
unemployment insurance, social security and other like
laws; and
(II) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases,
statutory obligations, surety and performance bonds (of
a type other than set forth in Section 4.3(a)(iii)) and
other similar obligations not incurred in connection
with the borrowing of money, the obtaining of advances
or the payment of the deferred purchase price of
Property;
(B) REAL ESTATE -- Liens in the nature of reservations,
exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other similar
title exceptions or encumbrances affecting real property;
PROVIDED, HOWEVER, that such exceptions and encumbrances do
not in the aggregate materially detract from the value of said
Properties or materially interfere with the use of such
Properties in the ordinary conduct of the business of the
Company and the Subsidiaries; and
(C) TAXES, ETC. -- Liens securing taxes, assessments or
governmental charges or levies or the claims or demands of
materialmen, mechanics, carriers, warehousemen, vendors,
landlords and other like Persons; PROVIDED, HOWEVER, that the
payment thereof is not required by Section 3.1;
(iii) JUDICIAL LIENS -- Liens arising from judicial
attachments and judgments, securing appeal bonds or supersedeas
bonds, and arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit or any other
instrument serving a similar purpose); PROVIDED, HOWEVER, that the
execution or other enforcement of such Liens is effectively stayed,
that the claims secured thereby are being actively contested in good
faith and by appropriate proceedings, that adequate reserves have
been made against such claims and that the aggregate amount so
secured will not at any time exceed Two Million Dollars
($2,000,000);
(iv) INTERGROUP LIENS -- Liens on Property of a Restricted
Subsidiary; PROVIDED, HOWEVER, that such Liens secure only
obligations owing to the Company or a Wholly-Owned Restricted
Subsidiary;
(v) ACQUISITION/PURCHASE MONEY LIENS -- any Lien (x) on
Property acquired or constructed by the Company or any Restricted
Subsidiary or leased by the Company or any Restricted Subsidiary as
lessee under any Capital Lease; or (y) existing on Property owned by
any Person (other than an Unrestricted Subsidiary) at the time such
Person became a Restricted Subsidiary or merges or consolidates with
the Company (including, without limitation, by means of a Capital
Lease); PROVIDED, HOWEVER, that such Lien:
(A) (I) secures Debt incurred to pay all or a portion of
the
Exhibit 1.1(a)-20
related purchase price or construction costs of such
Property or the Capital Stock of any acquired Restricted
Subsidiary and no other Debt; PROVIDED, FURTHER, that
such purchase price or construction costs shall not
exceed the aggregate purchase price or construction
costs, or both, thereof;
(II) is created contemporaneously with, or within
one hundred twenty (120) days of, such acquisition or
construction;
(III) encumbers only Property so purchased,
constructed or acquired after the Closing Date; and
(IV) is not, after the creation thereof, extended
to any other Property; or
(B) (I) existed on Property of any Person at the time of
acquisition thereof by the Company or a Restricted
Subsidiary or at the time such Person is merged or
consolidated into or with the Company or a Restricted
Subsidiary (whether or not the Debt secured thereby is
assumed by the Company or such Restricted Subsidiary);
PROVIDED, FURTHER, that such Debt does not exceed the
acquisition cost of such Property, as determined at the
date of the acquisition thereof; and
(II) shall not extend to or cover any Property
other than the Property subject to such Lien at the time
of any such acquisition;
and PROVIDED FURTHER that, in the case of each of clause (A) and
clause (B) above, immediately prior to the incurrence of, and after
giving effect to the incurrence of, any Debt secured by the Liens
referred to in such clauses, no Default or Event of Default exists
or would exist; and
(vi) OTHER LIENS -- Liens on the Property of the Company or
any Restricted Subsidiary securing either
(A) Senior Debt in existence on the Closing Date; or
(B) any other Debt of the Company or any Restricted
Subsidiary, which Liens are not otherwise permitted by
clauses (i) through (v), inclusive, of this Section
4.3(a), so long as, immediately prior to, and
immediately after giving effect to the incurrence of
such Debt, no Default or Event of Default exists or
would exist.
(b) EQUAL AND RATABLE LIEN; EQUITABLE LIEN. In case any Property
shall be subjected to a Lien in violation of Section 4.3(a), the Company
will forthwith make or cause
Exhibit 1.1(a)-21
to be made, to the fullest extent permitted by applicable law, provision
whereby the Notes will be secured equally and ratably as to such Property
with all other obligations secured thereby pursuant to such agreements and
instruments as shall be approved by the Required Holders, and the Company
will promptly cause to be delivered to each holder of a Note an opinion of
independent counsel satisfactory to the Required Holders to the effect
that such agreements and instruments are enforceable in accordance with
their terms, and in any event the Notes shall have the benefit, to the
full extent that, and with such priority as, the holders of Notes may be
entitled under applicable law, of an equitable Lien on such Property (and
any proceeds thereof) securing the Notes. Such violation of Section 4.3(a)
will constitute an Event of Default hereunder, whether or not any such
provision is made or any equitable Lien is created pursuant to this
Section 4.3(b).
(c) CONSTRUCTION. Nothing in this Section 4.3 shall be construed to
permit the incurrence or existence of any Debt not otherwise permitted by
this Agreement. Nothing in this Agreement that permits the incurrence or
existence of any Debt shall be construed to permit the incurrence or
existence of a Lien securing such Debt unless such Lien is permitted by
Section 4.3(a).
4.4 NET WORTH.
The Company will not at any time permit Consolidated Net Worth to be less
than an amount equal to the sum of:
(a) Ten Million Dollars ($10,000,000); PLUS
(b) for each fiscal quarter of the Company ending after July 31,
1997, the greater of:
(i) Zero Dollars ($0); and
(ii) fifty percent (50%) of Consolidated Net Income determined
in respect of such fiscal quarter.
4.5 FIXED CHARGE COVERAGE.
The Company will not at any time permit the Consolidated Fixed Charge
Coverage Ratio for a period consisting of any four (4) out of the five (5) then
most recently ended fiscal quarters of the Company, measured as at the end of
the most recently ended fiscal quarter of the Company, to be less than one
hundred sixty percent (160%).
4.6 TOTAL DEBT.
The Company will not at any time permit Consolidated Adjusted Debt
outstanding at such time to be more than four hundred percent (400%) of
Consolidated EBITDA determined in respect of the then most recently ended period
of four (4) fiscal quarters of the Company.
Exhibit 1.1(a)-22
4.7 SENIOR DEBT.
The Company will not at any time permit Consolidated Senior Debt
outstanding at such time to be more than three hundred fifty percent (350%) of
Consolidated EBITDA determined in respect of the then most recently ended period
of four (4) fiscal quarters of the Company.
4.8 RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS.
(a) LIMIT ON RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS. The
Company will not, nor will it permit any Restricted Subsidiary to, at any
time, declare or make or incur any liability to declare or make any
Restricted Payment or make or authorize, or permit any Subsidiary to make
or authorize, any Restricted Investment unless, immediately after giving
effect to the proposed Restricted Payment or Restricted Investment:
(i) the sum of
(A) the aggregate amount of Restricted Investments
existing on the Closing Date, together with the aggregate
amount of Restricted Investments made since the Closing Date
(valued in each case at acquisition cost); PLUS
(B) the aggregate amount of Restricted Payments made
during the period commencing on the Closing Date and ending on
the date of, and after giving effect to, such proposed
Restricted Payment or Restricted Investment;
would not exceed an amount equal to the sum of:
(I) One Million Dollars ($1,000,000); PLUS
(II) fifty percent (50%) of Consolidated Net
Income in respect of the period beginning on August 1,
1997 and ending on the last day of the calendar month
then most recently ended (or MINUS one hundred percent
(100%) of Consolidated Net Income for such period if
Consolidated Net Income for such period is a loss); PLUS
(III) the aggregate amount of net cash proceeds
received by the Company from the sale of any class of
Capital Stock of the Company made after the Closing
Date; PLUS
(IV) the aggregate amount of net cash proceeds
received after the Closing Date by the Company or any
Subsidiary from the sale or liquidation, or as a result
of the final maturity, of any Restricted Investment; and
Exhibit 1.1(a)-23
(ii) no Default or an Event of Default would exist.
(b) OTHER MATTERS. For the purpose of making computations under
Section 4.8(a):
(i) Restricted Investments made solely by issuance of
Common Stock of the Company; and
(ii) Restricted Payments consisting solely of dividend
payments required to be made pursuant to the provisions of section
A.2.(a) of Article III of the Charter, on the Series A Preferred
Stock at a time at which no Default or Event of Default shall be
continuing;
shall in each case be excluded (but dividends or distributions in respect
of the Series A Preferred Stock pursuant to the provisions of section
A.2.(b) or section A.2.(c) of Article III of the Charter shall in each
case be included). Any Person that becomes a Restricted Subsidiary after
the Closing Date shall be deemed to have made, at the time it becomes a
Restricted Subsidiary, all Restricted Investments of such Person existing
immediately after it becomes a Restricted Subsidiary.
(c) SERIES A PREFERRED STOCK REDEMPTIONS. Any and each redemption of
the Series A Preferred Stock by the Company or any Subsidiary shall be
deemed to be a Restricted Payment made on the date of such redemption;
PROVIDED, HOWEVER, that the Company shall be permitted to effect:
(i) a redemption of shares of the Series A Preferred Stock to
the extent the Company is required to so do pursuant to the
provisions of section A.8.(a) of Article III of the Charter; and
(ii) any redemption of shares of Series A Preferred Stock
expressly permitted pursuant to the provisions of section A.8.(b) of
Article III of the Charter;
notwithstanding the fact that such redemption would otherwise violate the
provisions of Section 4.8(a), so long as no Event of Default shall be
continuing at the time such payment is to be made. For the avoidance of
doubt, all such payments in respect of such redemptions of the Series A
Preferred Stock shall be given effect for purposes of Section 4.8(a)(i)(B)
in connection with the making of any and all Restricted Payments and
Restricted Investments made after the date of such redemption.
4.9 SENIORITY TO FUTURE SUBORDINATED DEBT.
The Company shall not incur, create, assume or Guaranty any Debt which is
subordinated in right of payment to any other Debt of the Company unless such
Debt is also subordinated in right of payment, on the same terms, to the
obligations of the Company in respect of the Notes and this Agreement. The
Company shall not incur, create, assume or
Exhibit 1.1(a)-24
Guaranty any Debt owing to any Subsidiary or any Affiliate unless such Debt is
subordinated in right of payment, on terms acceptable to the Required Holders,
to the obligations of the Company in respect of the Notes and this Agreement.
4.10 DESIGNATION OF SUBSIDIARIES.
(a) RIGHT OF DESIGNATION. Subject to the following sentence, each of
the Subsidiaries designated as a Restricted Subsidiary on Annex 3 shall be
a Restricted Subsidiary so long as it shall continue to satisfy the
requirements of the definition of Restricted Subsidiary. Subject to the
satisfaction of the requirements of Section 4.10(b), the Company shall
have the right to designate as a Restricted Subsidiary any Subsidiary
which, following such designation, would meet the definition of a
"Restricted Subsidiary," and to designate any Restricted Subsidiary as an
Unrestricted Subsidiary, by delivering to each holder of Notes a writing,
signed by a Senior Officer, so designating such Subsidiary. Any Subsidiary
not designated as a Restricted Subsidiary shall be deemed to be an
Unrestricted Subsidiary.
(b) DESIGNATION CRITERIA.
(i) No Subsidiary shall at any time after the Closing Date be
designated as a Restricted Subsidiary unless:
(A) such Subsidiary at such time meets all of the
requirements of being a Restricted Subsidiary as set forth in
the definition thereof (other than clause (a) of such
definition);
(B) immediately before and after, and after giving
effect to such designation, no Default or Event of Default
exists or would exist; and
(C) such Subsidiary shall not previously have been
designated as a Restricted Subsidiary on more than one (1)
other occasion.
(ii) No Restricted Subsidiary shall at any time after the
Closing Date be designated as an Unrestricted Subsidiary unless:
(A) immediately after, and after giving effect to such
designation, no Default or Event of Default exists or would
exist; and
(B) immediately prior to such designation, such
Restricted Subsidiary being so designated does not own,
directly or indirectly, any Capital Stock of any Restricted
Subsidiary not being simultaneously designated as an
Unrestricted Subsidiary.
(c) CONSEQUENCE OF DESIGNATION. By designating a Subsidiary as an
Unrestricted Subsidiary, the Company shall be deemed to have made an
Investment in
Exhibit 1.1(a)-25
such Subsidiary in an amount equal to the Fair Market Value of its
Investment in such Subsidiary on the date of such designation.
(d) EFFECTIVENESS. Any designation under this Section 4.10 that
satisfies all of the conditions set forth in this Section 4.10 shall
become effective, for purposes of this Agreement, on the day that notice
thereof shall have been delivered by the Company to each holder of Notes
in accordance with Section 9.1.
4.11 LINE OF BUSINESS.
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business if, as a result, the general nature of the business in
which the Company and the Restricted Subsidiaries, taken as a whole, would then
be engaged would be substantially changed from the general nature of the
business in which the Company and the Restricted Subsidiaries, taken as a whole,
are engaged on the Closing Date as described in the Offering Memorandum.
4.12 TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any transaction, including, without limitation, the purchase, sale,
lease or exchange of Property or the rendering of any service, with any
Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate.
5. REPORTING COVENANTS
5.1 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes:
(a) QUARTERLY FINANCIAL STATEMENTS -- as soon as practicable after
the end of each quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such fiscal year),
and in any event within forty-five (45) days thereafter:
(i) a consolidated balance sheet as at the end of such
quarter; and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal
year ending with such quarter;
for the Company and the Restricted Subsidiaries, setting forth in each
case, in comparative form, the financial statements for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP
Exhibit 1.1(a)-26
applicable to quarterly financial statements generally, and certified as
complete and correct by a Senior Financial Officer, and accompanied by the
certificate required by Section 5.2; PROVIDED, that delivery of copies of
the Company's Quarterly Report on Form 10-Q filed with the SEC within the
time period specified above shall be deemed to satisfy the requirements of
this Section 5.1(a) so long as such Quarterly Report contains or is
accompanied by the information specified in this Section 5.1(a);
(b) ANNUAL FINANCIAL STATEMENTS -- as soon as practicable after the
end of each fiscal year of the Company, and in any event within one
hundred twenty (120) days thereafter:
(i) a consolidated balance sheet as at the end of such year;
and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows for such year;
for the Company and the Restricted Subsidiaries, setting forth, in
comparative form, the financial statement for the previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP, and
accompanied by:
(A) an audit report thereon of independent certified public
accountants of recognized national standing, which report shall
state without qualification (including, without limitation,
qualifications related to the scope of the audit, the compliance of
the audit with generally accepted auditing standards, or the ability
of the Company or a material subsidiary thereof to continue as a
going concern), that such financial statements have been prepared
and are in conformity with GAAP; and
(B) the certificates required by Section 5.2 and Section 5.3;
PROVIDED, that delivery of the Company's Annual Report on Form 10-K for
such fiscal year filed with the SEC within the time period specified above
shall be deemed to satisfy the requirements of this Section 5.1(b) so long
as such Annual Report contains or is accompanied by the reports and other
information otherwise specified in this Section 5.1(b);
(c) SEC AND OTHER REPORTS -- promptly upon their becoming available,
and in any event within fifteen (15) days thereafter:
(i) each financial statement, report, notice or proxy
statement sent by the Company to stockholders generally;
(ii) each regular or periodic report (including, without
limitation, each Form 10-K, Form 10-Q and Form 8-K), any
registration statement which shall have become effective, and each
final prospectus and all amendments thereto filed by the Company or
any Restricted Subsidiary with the SEC; and
(iii) all press releases and other statements made available
by the
Exhibit 1.1(a)-27
Company or any Restricted Subsidiary to the public concerning
material developments in the business of the Company or the
Restricted Subsidiaries;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- within two (2) Business
Days of becoming aware:
(i) of the existence of any condition or event which
constitutes a Default or an Event of Default; or
(ii) that the holder of any Note, or of any Debt, shall have
given notice or taken any other action with respect to a claimed
Default, Event of Default or default or event of default;
a notice specifying the nature of the claimed Default, Event of Default or
default or event of default and the notice given or action taken (if any)
by such holder and what action the Company is taking or proposes to take
with respect thereto;
(e) ERISA --
(i) within two (2) Business Days of becoming aware of the
occurrence of any "reportable event" (as such term is defined in
section 4043 of ERISA) for which notice thereof has not been waived
pursuant to regulations of the DOL or "prohibited transaction" (as
such term is defined in section 406 of ERISA or section 4975 of the
IRC) in connection with any Plan or any trust created thereunder, a
notice specifying the nature thereof, what action the Company is
taking or proposes to take with respect thereto, and, when known,
any action taken by the Internal Revenue Service, the DOL or the
PBGC with respect thereto; and
(ii) prompt notice of and, where applicable, a description of:
(A) any notice from the PBGC in respect of the
commencement of any proceedings pursuant to section 4042 of
ERISA to terminate any Plan or for the appointment of a
trustee to administer any Plan, and any distress termination
notice delivered to the PBGC under section 4041 of ERISA in
respect of any Plan, and any determination of the PBGC in
respect thereof;
(B) the placement of any Multiemployer Plan in
reorganization status under Title IV of ERISA, any
Multiemployer Plan becoming "insolvent" (as such term is
defined in section 4245 of ERISA) under Title IV of ERISA, or
the whole or partial withdrawal of the Company or any ERISA
Affiliate from any Multiemployer Plan and the withdrawal
liability incurred in connection therewith; or
(C) the occurrence of any event, transaction or
condition that could result in the incurrence of any liability
of the Company or any
Exhibit 1.1(a)-28
ERISA Affiliate or the imposition of a Lien on the Property of
the Company or any ERISA Affiliate, in either case pursuant to
Title I or Title IV of ERISA or pursuant to the penalty or
excise tax or security provisions of the IRC;
PROVIDED, HOWEVER, that the Company shall not be required to deliver any
such notice at any time when the aggregate amount of the actual or
potential liability of the Company and the Restricted Subsidiaries in
respect of all such events at such time could not reasonably be expected
to have a Material Adverse Effect;
(f) AUDITOR'S REPORTS -- each report or management letter submitted
to the Company or any Restricted Subsidiary by independent accountants in
connection with any annual, interim or special audit made of the books of
the Company or any Subsidiary;
(g) ACTIONS, PROCEEDINGS -- promptly after the commencement of any
action or proceeding relating to the Company or any Subsidiary in any
court or before any governmental authority or arbitration board or
tribunal as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, is reasonably likely to
have a Material Adverse Effect, a notice specifying the nature and period
of existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(h) OTHER CREDITORS -- promptly upon the reasonable request of any
holder of Notes, copies of any statement, report or certificate furnished
to any holder of Debt to the extent that the information contained in such
statement, report or certificate has not already been delivered to each
holder of Notes;
(i) RULE 144A -- promptly upon the request of any holder of Notes,
information required to permit the holder to comply with 17 C.F.R.
'230.144A, as amended from time to time, in connection with a transfer of
any Note; and
(j) REQUESTED INFORMATION -- with reasonable promptness, such other
data and information as from time to time may be reasonably requested by
any holder of Notes.
5.2 OFFICER'S CERTIFICATES.
Each set of financial statements delivered to each holder of Notes
pursuant to Section 5.1(a) or Section 5.1(b) shall be accompanied by a
certificate of a Senior Financial Officer, setting forth:
(a) COVENANT COMPLIANCE -- the financial information (including
detailed calculations) required in order to establish whether the Company
was in compliance with the requirements of Section 4 (in each case where
such Section imposes numerical financial requirements) as of the end of
the period covered by the financial statements then being furnished
(including with respect to such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage,
Exhibit 1.1(a)-29
as the case may be, permissible under the terms of such Section, and the
calculation of the amount, ratio or percentage then in existence); and
(b) EVENT OF DEFAULT -- a statement that the signer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision or authority, a review of the transactions and conditions of
the Company and the Subsidiaries from the beginning of the accounting
period covered by the income statements being delivered therewith to the
date of the certificate and that such review shall not have disclosed the
existence during such period of any condition or event that constitutes a
Default or an Event of Default or, if any such condition or event existed
or exists, specifying the nature and period of existence thereof and what
action the Company shall have taken or proposes to take with respect
thereto.
5.3 ACCOUNTANTS' CERTIFICATES.
Each set of annual financial statements delivered pursuant to Section
5.1(b) shall be accompanied by a certificate of the accountants who were engaged
to audit such financial statements, stating that they have reviewed this
Agreement and stating further, whether, in making their audit, such accountants
have become aware of any condition or event that then constitutes a Default or
an Event of Default, and, if such accountants are aware that any such condition
or event then exists, specifying the nature and period of existence thereof.
5.4 INSPECTION.
The Company will permit the representatives of each holder of Notes to
visit and inspect any of the Properties of the Company or any of the Restricted
Subsidiaries, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the finances and affairs of the Company
and the Restricted Subsidiaries) all at such reasonable times and as often as
may be reasonably requested. At all times during which there exists a Default or
Event of Default, expenses incurred by the holders of the Notes in connection
with this Section 5.4 shall be paid in accordance with Section 9.6.
6. EVENTS OF DEFAULT
6.1 EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" exists at any time if any of the following both
occurs and is continuing thereafter for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or otherwise):
(a) PAYMENTS ON NOTES --
(i) PRINCIPAL OR PREPAYMENT COMPENSATION AMOUNT PAYMENTS --
the Company fails to make any payment of principal or Prepayment
Exhibit 1.1(a)-30
Compensation Amount on any Note on or before the date such payment
is due; or
(ii) INTEREST PAYMENTS -- the Company fails to make any
payment of interest on any Note on or before five (5) Business Days
after the date such payment is due;
(b) OTHER DEFAULTS --
(i) FINANCIAL COVENANT DEFAULTS -- the Company or any
Restricted Subsidiary fails to comply with any provision of Section
4; or
(ii) OTHER DEFAULTS -- the Company or any Restricted
Subsidiary fails to comply with any other provision hereof, and such
failure continues for more than thirty (30) days after such failure
shall first become known to any Senior Officer;
(c) WARRANTIES OR REPRESENTATIONS -- any warranty, representation or
other statement by or on behalf of the Company contained in the Securities
Purchase Agreement or any other Financing Document, in any written
amendment, supplement, modification or waiver with respect to any
Financing Document or in any instrument furnished in compliance herewith
or in reference hereto, shall have been false or misleading in any
material respect when made;
(d) ACCELERATION OF DEBT --
(i) the Company or any Restricted Subsidiary fails to make,
when due, at maturity or otherwise, any payment or payments in an
amount aggregating in excess of One Million Dollars ($1,000,000) in
respect of any Debt; or
(ii) any event shall occur or any condition shall exist in
respect of Debt, or under any agreement securing or relating to such
Debt:
(A) as a result of which the maturity of such Debt, or a
portion thereof, is accelerated; or
(B) that permits any one or more of the holders thereof
or a trustee therefor to require the Company or any Restricted
Subsidiary to repurchase such Debt from the holders thereof,
and any such trustee or holder exercises such option;
PROVIDED that the aggregate amount of all obligations in respect of
all such Debt exceeds at such time One Million Dollars ($1,000,000);
(e) INSOLVENCY --
Exhibit 1.1(a)-31
(i) INVOLUNTARY BANKRUPTCY PROCEEDINGS --
(A) a receiver, liquidator, custodian or trustee of the
Company or any Restricted Subsidiary, or of all or any
substantial part of the Property of either, is appointed by
court order and such order remains in effect for more than
sixty (60) days; or an order for relief is entered with
respect to the Company or any Restricted Subsidiary, or the
Company or any Restricted Subsidiary is adjudicated a bankrupt
or insolvent;
(B) all or any substantial part of the Property of the
Company or any Restricted Subsidiary is sequestered by court
order and such order remains in effect for more than sixty
(60) days; or
(C) a petition is filed against the Company or any
Restricted Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter
in effect, and is not dismissed within sixty (60) days after
such filing;
(ii) VOLUNTARY PETITIONS -- the Company or any Restricted
Subsidiary files a voluntary petition in bankruptcy or seeks relief
under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, or consents to
the filing of any petition against it under any such law; or
(iii) ASSIGNMENTS FOR BENEFIT OF CREDITORS, ETC. -- the
Company or a Restricted Subsidiary makes an assignment for the
benefit of its creditors, or admits in writing its inability, or
fails, to pay its debts generally as they become due, or consents to
the appointment of a receiver, liquidator or trustee of the Company
or a Restricted Subsidiary or of all or a substantial part of its
Property; or
(f) UNDISCHARGED FINAL JUDGMENTS -- a final, non-appealable judgment
or final, non-appealable judgments for the payment of money aggregating in
excess of One Million Dollars ($1,000,000) is or are outstanding against
one or more of the Company and the Restricted Subsidiaries and any one of
such judgments shall have been outstanding for more than sixty (60) days
from the date of its entry and shall not have been discharged in full or
stayed.
6.2 DEFAULT REMEDIES.
(a) ACCELERATION OF MATURITY OF NOTES.
(i) ACCELERATION ON EVENT OF DEFAULT.
(A) AUTOMATIC. If any Event of Default specified in
Section 6.1(e) shall exist, all of the Notes at the time
outstanding shall automatically
Exhibit 1.1(a)-32
become immediately due and payable together with interest
accrued thereon and, to the extent permitted by law, the
Prepayment Compensation Amount at such time with respect to
the principal amount of such Notes, without presentment,
demand, protest or notice of any kind, all of which are hereby
expressly waived.
(B) BY ACTION OF HOLDERS. Subject to Section 7.7, if any
Event of Default other than those specified in Section 6.1(a)
shall exist, the Required Holders may exercise any right,
power or Remedy permitted to such holder or holders by law,
and shall have, in particular, without limiting the generality
of the foregoing, the right to declare the entire principal
of, and all interest accrued on, all the Notes then
outstanding to be, and such Notes shall thereupon become,
forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived, and the Company shall forthwith pay to the
holder or holders of all the Notes then outstanding the entire
principal of, and interest accrued on, the Notes and, to the
extent permitted by law, the Prepayment Compensation Amount at
such time with respect to such principal amount of such Notes.
(ii) ACCELERATION ON PAYMENT DEFAULT. Subject to Section 7.7,
during the existence of an Event of Default described in Section
6.1(a), and irrespective of whether the Notes then outstanding shall
have become due and payable pursuant to Section 6.2(a)(i)(B), any
holder of Notes who or which shall have not consented to any waiver
with respect to such Event of Default may, at his or its option, by
notice in writing to the Company, declare the Notes then held by
such holder to be, and such Notes shall thereupon become, forthwith
due and payable together with all interest accrued thereon, without
any presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, and the Company shall forthwith
pay to such holder the entire principal of and interest accrued on
such Notes and, to the extent permitted by law, the Prepayment
Compensation Amount at such time with respect to such principal
amount of such Notes.
(b) VALUABLE RIGHTS. The Company acknowledges, and the parties
hereto agree, that the right of each holder to maintain its investment in
the Notes free from repayment by the Company (except as herein
specifically provided for) is a valuable right and that the provision for
payment of a Prepayment Compensation Amount by the Company in the event
that the Notes are prepaid or are accelerated as a result of an Event of
Default is intended to provide compensation for the deprivation of such
right under such circumstances.
(c) OTHER REMEDIES. During the existence of an Event of Default and
irrespective of whether the Notes then outstanding shall become due and
payable pursuant to Section 6.2(a), and irrespective of whether any holder
of Notes then outstanding shall otherwise have pursued or be pursuing any
other rights or Remedies, subject to Section 7.7, any holder of Notes may
proceed to protect and enforce its rights hereunder
Exhibit 1.1(a)-33
and under such Notes by exercising such Remedies as are available to such
holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any
agreement contained herein or in aid of the exercise of any power granted
herein; PROVIDED, HOWEVER, that the maturity of such holder's Notes may be
accelerated only in accordance with Section 6.2(a).
(d) NONWAIVER; REMEDIES CUMULATIVE. No course of dealing on the part
of any holder of Notes nor any delay or failure on the part of any holder
of Notes to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and Remedies. All rights
and Remedies of each holder of Notes hereunder and under applicable law
are cumulative to, and not exclusive of, any other rights or Remedies any
such holder of Notes would otherwise have.
(e) SUBORDINATION. The rights of the holders of the Notes to receive
payments in respect of this Agreement and the Notes, and to exercise any
Remedies, solely as between the holders of the Notes and the holders of
the Senior Debt, shall be subject in all respects to the provisions of
Section 7; PROVIDED, HOWEVER, that all such rights shall remain
unconditional and absolute as between the holders of the Notes and the
Company.
6.3 ANNULMENT OF ACCELERATION OF NOTES.
If a declaration is made pursuant to Section 6.2(a)(i)(B), then and in
every such case, the holders of sixty-six and two-thirds percent (66b%) in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by any one or more of the Company, any Restricted Subsidiary, any
Affiliate or Able International) may, by written instrument filed with the
Company, rescind and annul such declaration, and the consequences thereof;
PROVIDED, HOWEVER, that at the time such declaration is annulled and rescinded:
(a) no judgment or decree shall have been entered for the payment of
any moneys due on or pursuant hereto or the Notes;
(b) all arrears of interest upon all of the Notes and all of the
other sums payable hereunder and under the Notes (except any principal of,
or interest or Prepayment Compensation Amount on, the Notes which shall
have become due and payable by reason of such declaration under Section
6.2(a)(i)(B)) shall have been duly paid or waived (it being understood
that any such waiver is given without prejudice to the right of any
individual holder which has not joined in such waiver to accelerate the
Notes held by such holder pursuant to Section 6.2(a)(ii)); and
(c) each and every other Default and Event of Default shall have
been waived pursuant to Section 9.5 or otherwise made good or cured;
and PROVIDED FURTHER that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
7. SUBORDINATION
Exhibit 1.1(a)-34
7.1 GENERAL.
The Subordinated Debt is subordinate and junior in right of payment to all
Senior Debt to the extent provided in this Section 7.
7.2 INSOLVENCY.
In the event of:
(a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding
relating to the Company, its creditors or its Property;
(b) any proceeding for the liquidation, dissolution or other
winding-up of the Company, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings;
(c) any assignment by the Company for the benefit of creditors; or
(d) any other marshalling of the assets of the Company;
all Senior Debt shall first be paid in full, in cash or cash equivalents, before
any payment or distribution, whether in cash, Securities or other Property,
shall be made to any holder of any Subordinated Debt on account of any
Subordinated Debt. Any payment or distribution, whether in cash, Securities or
other Property (other than Securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this Section 7 with respect to
Subordinated Debt, to the payment of all Senior Debt at the time outstanding and
to any Securities issued in respect thereof under any such plan of
reorganization or readjustment), which would otherwise (but for this Section 7)
be payable or deliverable in respect of Subordinated Debt shall be paid or
delivered directly to the holders of Senior Debt in accordance with the
priorities then existing among such holders until all Senior Debt shall have
been paid in full, in cash or cash equivalents.
7.3 PROOFS OF CLAIM.
If any holder of Subordinated Debt does not file a proper claim or proof
of debt therefor prior to ten (10) days before the expiration of the time to
file such claim or proof, then the Senior Agent is hereby authorized and
empowered (but not obligated) as the agent and attorney-in-fact for such holder
for the specific and limited purpose set forth in this paragraph, to file such
claim or proof for or on behalf of such holder; PROVIDED, HOWEVER, that the
Senior Agent shall have, prior to taking any such action, given fifteen (15)
days prior written notice (which notice may be given up to sixty (60) days prior
to the expiration of the time to file such claim) to such holder of Subordinated
Debt that they intend to file such claim or proof of debt. In no event may the
Senior Agent or any holder of the Senior Debt vote any claim on behalf of any
holder of the Subordinated Debt, and such agency and appointment of
attorney-in-fact
Exhibit 1.1(a)-35
shall not extend to any such right to vote any such claim.
7.4 ACCELERATION OF SENIOR DEBT.
In the event that, as a consequence of any Senior Payment Default or any
Significant Non-Payment Default, the holders of any Senior Debt, or any trustee
or agent acting on behalf of any such holders, accelerate the maturity of such
Senior Debt or demand that the Company repurchase the same, then, and in each
such case, no direct or indirect payment (in cash, Property or Securities or by
set-off or otherwise) shall be made or agreed to be made on account of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any redemption, retirement, purchase, prepayment or other acquisition or
payment of any Subordinated Debt until such time as such Senior Debt has been
paid in full in cash or cash equivalents.
The Company shall give prompt written notice to each holder of
Subordinated Debt of its knowledge of the acceleration of the Maturity of any
Senior Debt.
7.5 PAYMENT DEFAULT IN RESPECT OF SENIOR DEBT.
If:
(a) the Company shall default in the payment of any principal of or
premium, if any, or interest on any Senior Debt (a "SENIOR PAYMENT
DEFAULT") when the same becomes due and payable, whether at maturity or at
a date fixed for prepayment or otherwise; and
(b) the Company receives from the Senior Agent written notice (a
"PAYMENT DEFAULT NOTICE") of the happening of such Senior Payment Default
stating that such notice is a payment blockage notice pursuant to this
Section 7.5;
then no direct or indirect payment (in cash, Property or Securities or by
set-off or otherwise) shall be made or agreed to be made on account of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any redemption, retirement, purchase, prepayment or other acquisition or
payment of any Subordinated Debt unless and until such Senior Payment Default
shall have been cured or waived or otherwise shall have ceased to exist.
The Company shall give prompt written notice to each holder of
Subordinated Debt of its receipt of any Payment Default Notice under this
Section 7.5.
7.6 SIGNIFICANT NONPAYMENT DEFAULT IN RESPECT OF SENIOR DEBT.
If:
(a) any Significant Nonpayment Default shall have occurred; and
(b) the Company receives from the Senior Agent written notice (a
Exhibit 1.1(a)-36
"NONPAYMENT DEFAULT NOTICE") of the happening of such Significant
Nonpayment Default, stating that such notice is a payment blockage notice
pursuant to Section 7.6 of this Agreement;
then no direct or indirect payment (in cash, property or Securities or by
set-off or otherwise) shall be made or agreed to be made for or on account of
any Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in
respect of any redemption, retirement, repurchase, prepayment, purchase or other
acquisition or payment of any Subordinated Debt, for a period (each, a "PAYMENT
BLOCKAGE PERIOD") commencing on the date the Nonpayment Default Notice is
delivered to the Company and ending on the Payment Blockage Period Termination
Date; PROVIDED, HOWEVER, that:
(i) only one such Payment Blockage Period may arise in any
period of three hundred sixty (360) consecutive days;
(ii) no more than three (3) Payment Blockage Periods may be
instituted pursuant to this Section 7.6; and
(iii) no Payment Blockage Period may be imposed as a result of
any Significant Nonpayment Default which served as the basis for or
was continuing during a previous Payment Blockage Period.
All payments in respect of Subordinated Debt postponed during any Payment
Blockage Period shall be immediately due and payable upon the termination
thereof (together with such additional interest as is provided for herein and in
the Notes for late payment of principal, Prepayment Compensation Amount and
interest).
The Company shall give prompt written notice to each holder of
Subordinated Debt of its receipt of any Nonpayment Default Notice under this
Section 7.6.
7.7 STANDSTILL.
Notwithstanding anything contained in this Agreement or any other
Financing Document to the contrary, for so long as any amount is outstanding
under a Senior Credit Facility, no holder of any Subordinated Debt may exercise
any Remedies in respect thereof (and no acceleration or purported acceleration
pursuant to Section 6.2(a)(i)(B) or Section 6.2(a)(ii) shall become effective)
during any period (a "STANDSTILL PERIOD") commencing on the first date the
holders of the Subordinated Debt, but for the provisions of this Section 7,
would have been entitled to accelerate the maturity of the Subordinated Debt
pursuant to Section 6.2(a)(i)(B) or Section 6.2(a)(ii) and ending upon the
earliest of:
(a) the date which is:
(i) if any Event of Default described in Section 6.1(a) has
occurred and is continuing, ninety (90) days; and
(ii) if no Event of Default described in Section 6.1(a) has
occurred or is
Exhibit 1.1(a)-37
continuing, one hundred twenty (120) days;
in each case, after the commencement of such Standstill Period;
(b) the date that any holder of any Senior Debt commences the
exercise of any Remedies in respect of such Debt; and
(c) the first date upon which any of the Events of Default described
in Section 6.1(e) shall have occurred and be continuing beyond any period
of grace specified therein; and, in such event, the automatic acceleration
of the Notes contemplated in respect of such Event of Default pursuant to
Section 6.2(a)(i)(A) shall occur immediately upon the termination of the
Standstill Period.
7.8 TURNOVER OF PAYMENTS.
If:
(a) any payment or distribution shall be paid to or collected or
received by any holders of Subordinated Debt in contravention of any of
the terms of this Section 7; and
(b) the Senior Agent shall have notified the holders of Subordinated
Debt of the facts by reason of which such payment or collection or receipt
so contravenes this Section 7 or constituted a Significant Nonpayment
Default;
then such holders of Subordinated Debt will deliver such payment or
distribution, to the extent necessary to pay all such Senior Debt in full, in
cash or cash equivalents, to the Senior Agent, on behalf of the holders of the
Senior Debt, and, until so delivered, the same shall be held in trust by such
holders of Subordinated Debt as the property of the holders of such Senior Debt.
If any amount is delivered to the Senior Agent pursuant to this Section 7.8,
whether or not such amounts have been applied to the payment of Senior Debt, and
the outstanding Senior Debt shall thereafter be paid in full, in cash or cash
equivalents, by the Company or otherwise other than pursuant to this Section
7.8, the holders of Senior Debt shall return to such holders of Subordinated
Debt an amount equal to the amount delivered to such holders of Senior Debt
pursuant to this Section 7.8, so long as after the return of such amounts the
Senior Debt shall remain paid in full, in cash or cash equivalents.
7.9 SUBORDINATION UNAFFECTED BY CERTAIN EVENTS.
The rights set forth in this Section 7 of the holders of the Senior Debt
as against each holder of Subordinated Debt shall remain in full force and
effect without regard to, and shall not be impaired by:
(a) any act or failure to act on the part of the Company;
(b) any extension or indulgence in respect of any payment or
prepayment of the Senior Debt or any part thereof or in respect of any
other amount payable to any
Exhibit 1.1(a)-38
holder of Senior Debt;
(c) any amendment, modification, restatement, refinancing or waiver
of, or addition or supplement to, or deletion from, or compromise,
release, consent or other action in respect of, any of the terms of any
Senior Debt or any other agreement relating to any Senior Debt, other than
such as would cause all or any portion of such Debt to fail to meet the
definition of "Senior Debt;"
(d) any exercise or non-exercise by any holder of Senior Debt of any
right, power, privilege or remedy under or in respect of any Senior Debt
or Subordinated Debt or any waiver of any such right, power, privilege or
remedy or any default in respect of any Senior Debt or the Subordinated
Debt, any dealing with or action against any collateral security therefor
or any receipt by any holder of Senior Debt of any security, or any
failure by any holder of Senior Debt to perfect a security interest in, or
any release by any such holder of Senior Debt of, any security for the
payment of any Senior Debt;
(e) any merger or consolidation of the Company or any of its
Subsidiaries into or with any of its Subsidiaries or into or with any
Person, or any Transfer of any or all of the Property of the Company or
any of its Subsidiaries to any other Person; or
(f) the absence of any notice to, or knowledge of, any holder of
Subordinated Debt of the existence or occurrence of any of the matters or
events set forth in the foregoing clauses (a) through (e).
7.10 WAIVER AND CONSENT.
Each holder of Subordinated Debt waives any and all notices of the
acceptance of the provisions of this Section 7 or of the creation, renewal,
extension or accrual, now or at any time in the future, of any Senior Debt.
7.11 REINSTATEMENT OF SUBORDINATION.
The obligations of each holder of Subordinated Debt under the provisions
set forth in this Section 7 shall continue to be effective, or be reinstated, as
the case may be, as to any payment in respect of any Senior Debt that is
rescinded or must otherwise be returned by the holder of such Senior Debt upon
the occurrence or as a result of any bankruptcy or judicial proceeding, all as
though such payment had not been made.
7.12 OBLIGATIONS NOT IMPAIRED.
Nothing contained in this Section 7 shall impair, as between the Company
and any holder of Subordinated Debt, the obligation of the Company to pay to
such holder the principal thereof and Prepayment Compensation Amount, if any,
and interest thereon as and when the same shall become due and payable in
accordance with the terms thereof and to comply with each and every provision of
the Notes and this Agreement or prevent any holder of any Subordinated Debt from
exercising all rights, powers and remedies otherwise permitted by
Exhibit 1.1(a)-39
applicable law or under this Agreement, all subject to the rights of the holders
of the Senior Debt to receive cash, Securities or other Property otherwise
payable or deliverable to the holders of Subordinated Debt.
7.13 PAYMENT OF SENIOR DEBT; SUBROGATION.
Upon the payment in full of all Senior Debt, the holders of Subordinated
Debt shall be subrogated to all rights of any holder of Senior Debt to receive
any further payments or distributions applicable to the Senior Debt until the
Subordinated Debt shall have been paid in full, and such payments or
distributions received by the holders of Subordinated Debt by reason of such
subrogation, of cash, Securities or other Property which otherwise would be paid
or distributed to the holders of Senior Debt, shall, as between the Company and
its creditors other than the holders of Senior Debt, on the one hand, and the
holders of Subordinated Debt, on the other hand, be deemed to be a payment by
the Company on account of Senior Debt and not on account of Subordinated Debt.
7.14 RELIANCE OF HOLDERS OF SENIOR DEBT.
Each holder of Subordinated Debt by its acceptance thereof shall be deemed
to acknowledge and agree that the foregoing subordination provisions are, and
are intended to be, an inducement to and a consideration of each holder of any
Senior Debt, whether such Senior Debt was created or acquired before or after
the creation of Subordinated Debt, to acquire and hold, or to continue to hold,
such Senior Debt, and such holder of Senior Debt shall be deemed conclusively to
have relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt. Each such holder of Senior Debt is
intended to be, and is, a third party beneficiary of this Section 7. Each holder
of Subordinated Debt acknowledges and agrees that the provisions set forth in
this Section 7 shall be enforceable against such Persons by the holders of the
Senior Debt. Notwithstanding anything contained in this Agreement or any other
Financing Document to the contrary, none of the provisions of this Section 7
(including, without limitation, this Section 7.14) may, directly or indirectly,
be amended, modified, supplemented or waived without the prior written consent
of the Senior Agent, on behalf of the holders of the Senior Debt.
7.15 IDENTITY OF HOLDERS OF SENIOR DEBT.
Upon the request of any holder of Subordinated Debt, the Company shall
deliver to such holder a list of all holders of Senior Debt outstanding at such
time, providing the name and address of each such holder of Senior Debt and the
principal amount of Senior Debt held by each such holder; PROVIDED, HOWEVER,
that, if any holder of Senior Debt shall have appointed an agent or other
representative with respect to the Senior Debt held by it, the Company may
provide the name and address of such agent or representative in lieu of the name
and address of such holder of Senior Debt.
7.16 AMENDMENTS TO SENIOR CREDIT FACILITY.
Notwithstanding the other provisions of this Section 7, no amendment to or
refinancing, replacement or refunding of the Senior Debt or any agreement or
instrument related thereto
Exhibit 1.1(a)-40
shall be effective as to the holders of the Subordinated Debt or be entitled to
the benefits of this Section 7 without the consent of each holder of Notes to
the extent that such amendment would directly restrict the right, power or
obligation of the Company or any Subsidiary to make scheduled payments in
respect of the Subordinated Debt in any manner which is not specifically set
forth in one or more of the Senior Credit Agreements, as in effect on the
Closing Date.
8. INTERPRETATION OF THIS AGREEMENT
8.1 TERMS DEFINED.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
ABLE INTERNATIONAL -- means Able Telcom International, Inc., a Florida
corporation, together with all other Property of the Company or any Subsidiary
relating solely to the NeuroLAMA operations or technology.
ABLE INTERNATIONAL SPINOFF -- means and includes:
(a) any payment or making of any dividend in, or making of any
distribution of, any shares of Able International Stock to the
stockholders of the Company in respect of the Common Stock; or
(b) any reclassification of the Common Stock in any manner or other
similar arrangement such that shares of Able International Stock are
issued to or deemed issued to the Company's stockholders.
ABLE INTERNATIONAL STOCK -- Section 4.2(c).
ABLE INTERNATIONAL WARRANTS -- means the warrants to purchase shares of
Able International Stock, if any, issued to the holders of the Warrants pursuant
to the provisions of Section 3.8 of the Warrant Agreement in connection with an
Able International Spinoff.
ACCEPTABLE CONSIDERATION -- means, with respect to any Transfer of any
asset of the Company or any Restricted Subsidiary, cash consideration,
promissory notes or such other consideration (or any combination of the
foregoing) as represents the Fair Market Value of such asset and has been
approved by the Board of Directors.
ADJUSTED DEBT -- with respect to any Person, means, without duplication,
the liabilities of such Person with respect to:
(A) BORROWED MONEY -- borrowed money;
(B) SECURED LIABILITIES -- borrowed money secured by any Lien
existing on Property owned by such Person (whether or not such liabilities
have been assumed);
Exhibit 1.1(a)-41
(C) CAPITAL LEASES -- Capital Leases of such Person; and
(D) GUARANTEES -- any Guaranty of such Person of any obligation or
liability of another Person of obligations of the type listed in clause
(a) through clause (d) of this definition of Adjusted Debt.
Adjusted Debt shall not include letters of credit, surety bonds or similar
instruments. Unless the context otherwise requires, "Adjusted Debt" means
Adjusted Debt of the Company or of a Restricted Subsidiary.
AFFILIATE -- means and includes, at any time, each Person (other than a
Domestic Restricted Subsidiary):
(a) that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the
Company;
(b) that beneficially owns or holds five percent (5%) or more of any
class of the Voting Stock of the Company;
(c) five percent (5%) or more of the Voting Stock (or in the case of
a Person that is not a corporation, five percent (5%) or more of the
equity interest) of which is beneficially owned or held by the Company; or
(d) that is an officer or director of the Company or that is an
Initial Manager Affiliate;
at such time; PROVIDED, HOWEVER, that none of the Purchasers nor any affiliate
of any Purchaser shall be deemed to be an "Affiliate," and no Person holding any
one or more of the Notes or Warrants shall be deemed to be an "Affiliate" solely
by virtue of the ownership of such securities. As used in this definition:
CONTROL -- means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
AGREEMENT, THIS -- and references thereto shall mean this Note Agreement
as it may from time to time be amended or supplemented.
ANNEX 3 -- means Annex 3 to the Securities Purchase Agreement.
APPLICABLE INTEREST LAW -- means any present or future law (including,
without limitation, the laws of the State of New York and the United States of
America) which has application to the interest and other charges pursuant to
this Agreement and the Notes.
BANK OF AMERICA -- means Bank of America National Trust & Savings
Association.
BOARD OF DIRECTORS -- means, at any time, the board of directors of the
Company or
Exhibit 1.1(a)-42
any committee thereof that, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.
BUSINESS DAY -- means a day other than a Saturday, a Sunday or a day on
which banks in the State of New York are required or permitted by law (other
than a general banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed.
CAPITAL LEASE -- means, at any time, a lease with respect to which the
lessee is required to recognize the acquisition of an asset and the incurrence
of a liability in accordance with GAAP.
CAPITAL STOCK -- means any class of preferred, common or other capital
stock, share capital or similar equity interest of a Person including, without
limitation, any partnership interest in any partnership or limited partnership
and any membership interest in any limited liability company.
CHANGE IN CONTROL -- means, at any time, the acquisition or holding by a
Control Person of beneficial ownership of twenty-five percent (25%) or more of
the Voting Stock of the Company outstanding at such time, regardless of the
manner in which such acquisition is effected (including, without limitation,
through a purchase of Common Stock, a merger, consolidation or sale of all or
substantially all of the Property of the Company, regardless of whether such
transaction is permitted hereunder).
CHANGE IN CONTROL NOTICE EVENT -- means
(a) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control; or
(b) the making of any written offer by any person (as such term is
used in Section 13(d) and Section 14(d)(2) of the Exchange Act as in
effect on the Closing Date) or related persons constituting a group (as
such term is used in Rule 13d-5 under the Exchange Act as in effect on the
Closing Date) to the holders of the Common Stock which offer, if accepted
by the requisite number of such holders, would result in a Change in
Control.
CHANGE IN CONTROL PAYMENT DATE -- Section 1.5(b).
CHARTER -- means the Articles of Incorporation of the Company, as amended,
as in effect on the date of this Agreement.
CLOSING DATE -- means the date any Notes are first sold.
CLOSING PRICE -- means, on any date of determination with respect to any
share of common stock of any Person, the quotient of:
(a) the sum, for each Trading Date during the period of one hundred
eighty (180) consecutive calendar days ending on such date of
determination (or, if in
Exhibit 1.1(a)-43
connection with a determination of the Closing Price of the Able
International Stock only, the Able International Spinoff shall have
happened less than one hundred eighty (180) days prior to such date of
determination, then the sum, for each Trading Date during the period since
the Able International Spinoff and ending on such date of determination),
of:
(i) the last sale price, regular way, on each such Trading
Date or, if no such sale takes place on any such Trading Date, the
average of the closing bid and asked prices on such Trading Date, in
each case as officially reported on the principal national
securities exchange on which such common stock is then listed or
admitted to trading; and
(ii) if such common stock is not then listed or admitted to
trading on any national securities exchange, but is listed on the
NASDAQ National Market or the NASDAQ SmallCap Market, as the case
may be, the last trading price of such common stock on each such
Trading Date as reported by NASDAQ, or if there shall have been no
trading on any such Trading Date, the average of the reported
closing bid and asked prices on such Trading Date as shown by
NASDAQ;
DIVIDED BY
(b) the number of Trading Dates in such period referred to in clause
(a) of this definition.
As used in this definition:
NASDAQ -- means the NASDAQ Stock Market, Inc., a subsidiary of the
NASD.
NASDAQ NATIONAL MARKET -- has the meaning ascribed thereto in Rule
4200(r) of the NASDAQ.
NASDAQ SMALLCAP MARKET -- has the meaning ascribed thereto in Rule
4200(t) of the NASDAQ.
TRADING DATE -- means, with respect to any national securities
exchange, the NASDAQ National Market or the NASDAQ SmallCap Market, a day
on which such securities exchange or market is open for trading.
COMMON STOCK -- means the Common Stock, par value $.001 per share, of the
Company.
COMPANY -- the introductory paragraph.
CONSOLIDATED ADJUSTED DEBT -- means, at any time, an amount equal to
Adjusted Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis at such time.
Exhibit 1.1(a)-44
CONSOLIDATED DEPRECIATION EXPENSE C means, for any period, the amount of
depreciation and amortization expense of the Company and the Restricted
Subsidiaries, determined on a consolidated basis for such period, but only to
the extent included in the determination of Consolidated Net Income for such
period.
CONSOLIDATED EBITDA -- means, for any period, the sum of:
(a) Consolidated Net Income; PLUS
(b) Consolidated Interest Expense; PLUS
(c) Consolidated Tax Expense; PLUS
(d) Consolidated Depreciation Expense;
in each case determined in respect of such period.
CONSOLIDATED FIXED CHARGE COVERAGE RATIO -- means, for any period, the
ratio of Consolidated Net Income Available for Fixed Charges to Consolidated
Fixed Charges, determined in each case in respect of such period.
CONSOLIDATED FIXED CHARGES C means, for any period, an amount equal to the
sum of:
(a) Consolidated Interest Expense; PLUS
(b) Consolidated Rental Expense;
determined in respect of such period.
CONSOLIDATED INTEREST EXPENSE -- means, for any period, the amount of
interest accrued on, or with respect to, interest bearing obligations of the
Company and the Restricted Subsidiaries, including, without limitation,
amortization of debt discount, imputed interest on Capital Leases and interest
on the Notes, determined on a consolidated basis for such period, but only to
the extent included in the determination of Consolidated Net Income for such
period.
CONSOLIDATED NET INCOME -- means, for any period, net income of the
Company and the Restricted Subsidiaries determined on a consolidated basis for
such period, but excluding:
(a) any gain or net loss (net of any tax effect) arising from the
sale of capital assets or any write-up or write-down of assets, other than
in the ordinary course of business;
(b) earnings or losses of any Person (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary shall have
an ownership interest
Exhibit 1.1(a)-45
unless such net earnings shall have actually been received by the Company
or such Restricted Subsidiary in the form of cash distributions;
(c) any portion of the net earnings of any Restricted Subsidiary
that for any reason is unavailable for payment of dividends to the Company
or any other Restricted Subsidiary or that cannot be freely converted into
United States dollars;
(d) any gain or loss arising from the acquisition of any Securities
of the Company or any Restricted Subsidiary;
(e) proceeds of any life insurance policy;
(f) reversal of any extraordinary, unusual or nonrecurring
contingency reserves not created during such period;
(g) other extraordinary gains or losses; and
(h) other than, in each case below, in connection with a calculation
being made for purposes of Section 4.1 or clause (b)(iii)(C) of the
definition of "Senior Debt" contained in this Section 8.1 (in which case,
earnings or losses of the Person or Persons being combined with the
Company shall be included as indicated therein and in the definition of
"Pro Forma Combined Basis" contained in this Section 8.1):
(i) earnings or losses of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary;
(ii) earnings or losses of any Person, substantially all the
assets of which have been acquired in any manner, realized by such
other Person prior to the date of such acquisition; and
(iii) the earnings or losses of any Person to which assets of
the Company shall have been sold, transferred or disposed of, or
into which the Company shall have merged, prior to the date of such
transaction.
CONSOLIDATED NET INCOME AVAILABLE FOR FIXED CHARGES -- means, with respect
to any period, without duplication, the sum of:
(a) Consolidated Net Income for such period; PLUS
(b) Consolidated Tax Expense for such period; PLUS
(c) Consolidated Fixed Charges for such period.
CONSOLIDATED NET WORTH -- means, at any time, the Net Worth of the Company
and the Restricted Subsidiaries determined on a consolidated basis at such time;
PROVIDED, HOWEVER, that there shall be deducted from the determination of
Consolidated Net Worth, at any time, an amount equal to the greater of:
Exhibit 1.1(a)-46
(a) Zero Dollars ($0), and
(b) the difference of:
(i) to the extent included in the calculation of the Net Worth
of the Company and the Restricted Subsidiaries, the book value at
such time of all Restricted Investments made by the Company and the
Restricted Subsidiaries subsequent to the Closing Date; MINUS
(ii) One Million Dollars ($1,000,000).
CONSOLIDATED RENTAL EXPENSE -- means, for any period, an amount equal to
Operating Rental Expense of the Company and the Restricted Subsidiaries,
determined on a consolidated basis for such period, but only to the extent
included in the determination of Consolidated Net Income for such period.
CONSOLIDATED SENIOR DEBT -- means, at any time, the amount of Adjusted
Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis at such time, excluding therefrom:
(a) the aggregate principal amount of Notes remaining outstanding at
such time; and
(b) the aggregate amount of all Adjusted Debt which is by its terms
validly and expressly subordinated to the Subordinated Debt.
CONSOLIDATED TAX EXPENSE -- means, for any period, the amount of tax
expense of the Company and the Restricted Subsidiaries in respect of federal and
state taxes imposed on or measured by income or excess profits, to the extent,
but only to the extent, included in the determination of Consolidated Net Income
for such period.
CONSOLIDATED TOTAL ASSETS -- means, at any time, an amount equal to the
book value of all assets of the Company and the Restricted Subsidiaries,
determined on a consolidated basis at such time.
CONTROL PERSON -- means
(a) any person (as such term is used in Section 13(d) and Section
14(d)(2) of the Exchange Act as in effect on the Closing Date); or
(b) related Persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the Closing Date);
PROVIDED, HOWEVER, that an Initial Manager Affiliate or a group constituted
entirely of Initial Manager Affiliates shall not be a Control Person so long as,
after giving effect to such event which would (if such Initial Manager Affiliate
or group of Initial Manager Affiliates were deemed
Exhibit 1.1(a)-47
to be Control Persons) otherwise have constituted a Change of Control, at least
a majority of the Initial Managers at such time remain engaged by the Company in
capacities commensurate with those of one or more of the Initial Managers
immediately prior to such event.
DEBT -- with respect to any Person, means, without duplication, the
liabilities of such Person with respect to:
(A) BORROWED MONEY -- borrowed money;
(B) DEFERRED PURCHASE PRICE OF PROPERTY -- the deferred purchase
price of Property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such Property);
(C) SECURED LIABILITIES -- borrowed money secured by any Lien
existing on Property owned by such Person (whether or not such liabilities
have been assumed);
(D) CAPITAL LEASES -- Capital Leases of such Person;
(E) LETTERS OF CREDIT -- letters of credit or instruments serving a
similar function issued or accepted by banks and other financial
institutions for the account of such Person (whether or not representing
obligations for borrowed money), other than undrawn trade letters of
credit and undrawn performance bonds in the ordinary course of business;
(F) SWAPS -- Swaps of such Person; and
(G) GUARANTEES -- any Guaranty of such Person of any obligation or
liability of another Person of obligations of the type listed in clause
(a) through clause (f) of this definition of Debt.
As used in this definition,
SWAPS -- means, with respect to any Person, obligations with respect
to interest rate swaps and currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency, except that if any agreement relating to such
obligation provides for the netting of amounts payable by and to such
Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the
amount of such obligations shall be the net amount thereof. The aggregate
net obligation of Swaps at any time shall be the aggregate amount of the
obligations of such Person under all Swaps assuming all such Swaps had
been terminated by such Person as of the end of the then most recently
ended fiscal quarter of such Person. If such net aggregate obligation
shall be an amount owing to such Person, then the amount shall be deemed
to be Zero Dollars ($0)
Exhibit 1.1(a)-48
Unless the context otherwise requires, "Debt" means Debt of the Company or of a
Restricted Subsidiary.
DEFAULT -- means any event which, with the giving of notice or the passage
of time, or both, would become an Event of Default.
DOL -- means the United States Department of Labor and any successor
agency.
DOMESTIC RESTRICTED SUBSIDIARY C means and includes each Restricted
Subsidiary other than Able International.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA AFFILIATE -- means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
EVENT OF DEFAULT -- Section 6.1.
EXCHANGE ACT -- means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations of the SEC thereunder.
EXCLUDED TRANSFERS -- Section 4.2(a)(vi)(A)(II).
FAIR MARKET VALUE -- means, with respect to any Property, the sale value
of such Property that would be realized in an arm's-length sale at such time
between an informed and willing buyer, and an informed and willing seller, under
no compulsion to buy or sell, respectively.
FINANCING DOCUMENTS -- means and includes this Agreement, the Securities
Purchase Agreement, the Notes, the Warrant Agreement, the Warrant certificates
and the other agreements, certificates and instruments to be executed pursuant
to the terms of each of the foregoing, as each may be amended, restated or
otherwise modified from time to time.
FOREIGN PENSION PLAN -- means any plan, fund or other similar program:
(a) established or maintained outside of the United States of
America by the Company or any Restricted Subsidiary primarily for the
benefit of the employees (substantially all of whom are aliens not
residing in the United States of America) of the Company or such
Restricted Subsidiary, which plan, fund or other similar program provides
for retirement income for such employees or results in a deferral of
income for such employees in contemplation of retirement; and
(b) not otherwise subject to ERISA.
GAAP -- means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and
Exhibit 1.1(a)-49
the Financial Accounting Standards Board and in such statements, opinions and
pronouncements of such other entities with respect to financial accounting of
for-profit entities as shall be accepted by a substantial segment of the
accounting profession in the United States.
GUARANTY -- means with respect to any Person (for the purposes of this
definition, the "GUARANTOR") any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person (the "PRIMARY OBLIGOR") in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by the Guarantor:
(a) to purchase such indebtedness or obligation or any Property
constituting security therefor;
(b) to advance or supply funds
(i) for the purchase or payment of such indebtedness,
dividend or obligation; or
(ii) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary Obligor
or otherwise to advance or make available funds for the purchase or
payment of such indebtedness, dividend or obligation;
(c) to lease Property or to purchase securities or other Property or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to make
payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or obligation
of the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty, in connection with any
computation of indebtedness or other liability:
(i) in each case where the obligation that is the subject of such
Guaranty is in the nature of indebtedness for money borrowed it shall be
assumed that the amount of the Guaranty is the amount of the direct
obligation then outstanding; and
(ii) in each case where the obligation that is the subject of such
Guaranty is not in the nature of indebtedness for money borrowed it shall
be assumed that the amount of the Guaranty is the amount (if any) of the
direct obligation that is then due.
INITIAL MANAGER AFFILIATE -- means and includes:
(a) any Initial Manager;
Exhibit 1.1(a)-50
(b) any spouse, child, lineal descendant or sibling of an Initial
Manager;
(c) a trust for the sole benefit of one or more of the spouse,
children or lineal descendants of one or more of the Initial Managers, so
long as any Person described in clause (a) or (b) above has the right to
control such trust;
(d) upon the death or incompetency of any Initial Manager, the
executor, administrator, conservator or other personal representative of
the person or Property of such Initial Manager; and
(e) a corporation, partnership, limited liability company or other
similar business entity directly or indirectly controlled by one or more
of the Initial Managers.
INITIAL MANAGERS -- means and includes Xxxxx X. Xxxx, Xxxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxx, Xx.,
Xxxxxxxx Xxxxx and Xxxx Xxxxxx.
INVESTMENTS -- means all investments, made in cash or by delivery of
Property, by the Company and the Subsidiaries:
(a) in any Person, whether by acquisition of stock, Debt or other
obligation or Security, or by loan to, advance to or capital contribution
in, or otherwise to, such Person; or
(b) in any Property.
"Investment" does not include any issuance of Capital Stock or Debt of the
Company or any Restricted Subsidiary, or of any other obligation or Security, to
any other Person, or any loan from, Guaranty of obligations of, or advance from
or capital contribution from any other Person.
IRC -- means the Internal Revenue Code of 1986, together with all rules
and regulations promulgated pursuant thereto, as amended from time to time.
LIEN -- means any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property (for purposes of this
definition, the "OWNER"), whether such interest is based on the common law,
statute or contract, and includes but is not limited to:
(a) the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes, and the filing of any financing statement
under the Uniform Commercial Code of any jurisdiction, or an agreement to
give any of the foregoing;
(b) reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting real Property;
Exhibit 1.1(a)-51
(c) stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements affecting the Owner's rights in
stock owned by the Owner; and
(d) any interest in any Property held by the Owner evidenced by a
conditional sale agreement, Capital Lease or other arrangement pursuant to
which title to such Property has been retained by or vested in some other
Person for security purposes.
The term "Lien" does not include negative pledge clauses in loan agreements and
equal and ratable security clauses in loan agreements.
LIQUIDITY EVENT -- means the conclusion of any period of one hundred
eighty (180) consecutive days during which period both:
(a) the average daily trading volume of the Common Stock shall have
exceeded twenty thousand (20,000) shares; and
(b) the Closing Price of the Common Stock shall have been sufficient
to provide the holders of the Notes, as a group and in the aggregate, a
Realizable IRR of at least twenty-two and fifty one-hundredths percent
(22.50%) PER ANNUM in respect of their investment in the Notes and the
Warrants.
MATERIAL ADVERSE EFFECT -- means, with respect to any event or
circumstance (either individually or in the aggregate with all other events and
circumstances), an effect caused thereby or resulting therefrom that would be
materially adverse as to, or in respect of:
(a) the business, operations, profits, financial condition,
Properties or business prospects of the Company and the Restricted
Subsidiaries, taken as a whole;
(b) the ability of the Company to perform its obligations under any
Financing Document; or
(c) the validity or enforceability of any of the Financing
Documents.
MAXIMUM LEGAL RATE OF INTEREST -- means the maximum rate of interest that
a holder of Notes may from time to time legally charge the Company by agreement
and in regard to which the Company would be prevented successfully from raising
the claim or defense of usury under the Applicable Interest Law as now or
hereafter construed by courts having appropriate jurisdiction.
MODIFIED PREPAYMENT COMPENSATION AMOUNT -- means, with respect to Prepaid
Principal and the date the payment thereof is due, an amount equal to the
applicable percentage set out below of the Prepaid Principal:
Exhibit 1.1(a)-52
===============================================================================
IF PREPAYMENT OCCURS DURING
THE PERIOD SPECIFIED BELOW: PERCENTAGE OF PREPAID PRINCIPAL:
===============================================================================
From and including January 6, 2001 5.00%
to and including January 5, 2002
===============================================================================
From and including January 6, 2002 3.00%
to and including January 5, 2003
===============================================================================
From and including January 6, 2003 1.00%
to and including January 5, 2004
===============================================================================
On or after January 6, 2004 0.00%
===============================================================================
MULTIEMPLOYER PLAN -- means any "multiemployer plan" (as defined in
section 3(37) of ERISA) in respect of which the Company or any ERISA Affiliate
is an "employer" (as such term is defined in section 3 of ERISA).
NET WORTH -- means, with respect to any Person, at any time, the
stockholders' equity of such Person as would be reflected on a balance sheet of
such Person prepared in accordance with GAAP at such time; PROVIDED, HOWEVER,
that minority interests shall not be included in Net Worth of any Person.
NONPAYMENT DEFAULT NOTICE -- Section 7.6(b).
NOTE -- means and includes each 12% Senior Subordinated Note due January
6, 2005 issued pursuant to this Agreement.
OFFERING MEMORANDUM -- means the confidential offering memorandum, dated
October 1997, of Bank of America relating to the offering of the Notes and the
Warrants of the Company, together with all exhibits thereto.
OPERATING LEASE -- means, with respect to any Person, any lease other than
a Capital Lease.
OPERATING RENTAL EXPENSE -- means, for any Person for any period, all
fixed payments which the lessee is required to make by the terms of any
Operating Lease during such period but shall not include amounts required to be
paid in respect of maintenance, repairs, income taxes, property taxes,
insurance, assessments or other similar charges or additional rentals (in excess
of fixed minimums) based upon a percentage of gross receipts.
PAYMENT BLOCKAGE PERIOD -- Section 7.6.
PAYMENT BLOCKAGE PERIOD TERMINATION DATE -- means, with respect to any
Significant Nonpayment Default, the earliest of:
(a) the date one hundred eighty (180) days after the earlier of:
Exhibit 1.1(a)-53
(i) the date upon which the Nonpayment Default Notice was
given; and
(ii) the date that any Standstill Period arising out of such
Significant Nonpayment Default commenced;
(b) the date on which such Significant Nonpayment Default shall have
been cured or waived in writing or shall have ceased to exist;
(c) the date such Payment Blockage Period shall have been terminated
by written notice to the Company from the Senior Agent;
(d) the date of the repayment in full in cash or cash equivalents of
the Senior Debt; and
(e) the date on which any holder or holders of the Senior Debt
exercise any Remedies.
PAYMENT DEFAULT NOTICE -- Section 7.5(b).
PBGC -- means the Pension Benefit Guaranty Corporation, or any other
Person succeeding to the duties thereof.
PERSON -- means an individual, partnership, corporation, limited liability
company, joint venture, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
PLAN -- means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
PREPAID PRINCIPAL -- means any portion of the principal amount of the
Notes being paid for any reason (including, without limitation, acceleration,
optional payment or mandatory payment required because of the occurrence of a
contingency) prior to its regularly scheduled maturity date.
PREPAYMENT COMPENSATION AMOUNT -- at any time, means:
(a) if such time is prior to January 6, 2001, the Standard
Prepayment Compensation Amount; and
(b) if such time is on or after January 6, 2001, the Modified
Prepayment Compensation Amount.
PRO FORMA COMBINED BASIS -- means, with respect to any merger,
consolidation or
Exhibit 1.1(a)-54
sale of all or substantially all of the Property of the Company, the measurement
of any financial test or ratio assuming:
(a) such merger, consolidation or sale of all or substantially all
of the Property of the Company, and all related transactions (including,
without limitation, the incurrence of any Debt in connection with any such
transaction), occurred on the first day of the relevant measuring period
of such financial ratio or test;
(b) that any such Debt incurred in connection with such transaction
which bears interest at a floating rate bore interest throughout such
period at the rate in effect on the date of such transaction; and
(c) that "Consolidated Adjusted Debt," "Consolidated Senior Debt,"
"Consolidated Net Income," "Consolidated Interest Expense," "Consolidated
Tax Expense" and "Consolidated Depreciation Expense" are measured, rather
than for the Company and the Restricted Subsidiaries on a consolidated
basis, for both:
(i) the Person with or into which the Company merges or
consolidates or to which it Transfers all or substantially all of
its Property, and those subsidiaries of such Person which, had they
been Subsidiaries of the Company, would be Restricted Subsidiaries,
on a consolidated basis; and
(ii) the Company and the Restricted Subsidiaries, on a
consolidated basis; on a combined basis.
PROPERTY -- means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
PURCHASERS -- the introductory paragraph.
REALIZABLE IRR -- means, at any time in connection with a Liquidity Event,
that internal rate of return in respect of the Notes and the Warrants at such
time, calculated in accordance with generally accepted financial practice, such
calculation to be made based on the following assumptions:
(a) the entire principal of all the Notes is paid in full at par
immediately upon the occurrence of such Liquidity Event, together with all
interest accrued thereon;
(b) the holders of the Notes at such time purchased their Notes and
Warrants at the Closing;
(c) all Warrants (whether or not previously exercised) are
exercised, and the shares of Common Stock resulting therefrom (whether or
not previously sold) are sold immediately upon the occurrence of such
Liquidity Event for cash at a price per share of Common Stock issuable
upon exercise thereof equal to the Closing Price of the
Exhibit 1.1(a)-55
Common Stock, and the proceeds of such sale are received by the holders of
the Notes and included in the determination of such internal rate of
return; and
(d) in the event that the Able International Spinoff occurs, that
all Able International Warrants (whether actually received or which would
have been received had the holders of all Warrants continued to hold such
Warrants unexercised until the time of the Liquidity Event) are exercised,
and the shares of Able International Stock are sold immediately upon the
occurrence of such Liquidity Event for cash at a price per share of common
stock of Able International equal to the Closing Price of the Able
International Stock, and the proceeds of such sale are received by the
holders of the Notes and included in the determination of such internal
rate of return.
REALIZED IRR -- means, at any time in connection with a Change in Control,
that actual internal rate of return in respect of:
(a) the actual payment of the Notes at par value pursuant to Section
1.5(g);
(b) the actual payment made by the holders of the Warrants upon
exercise thereof, as of the actual date of exercise;
(c) the actual payment received by the holders of any shares of
Common Stock issued upon exercise of the Warrants upon the sale of such
Common Stock;
(d) in the event that the Able International Spinoff has occurred:
(i) the actual payment made by the holders of the Able
International Warrants upon exercise thereof, as of the actual date
of exercise; and
(ii) the actual payment received by the holders of any shares
of Able International Stock received either upon exercise of the
Able International Warrants or in the Able International Spinoff in
respect of shares of Common Stock issued upon exercise of any
Warrants, in either case, upon the sale of such shares of Able
International Stock; and
(d) the repurchase of all Warrants, Able International Warrants,
shares of Common Stock and shares of Able International Stock which the
Company is required to repurchase pursuant to Section 1.5(g)(i), on the
Change in Control Payment Date;
calculated in accordance with generally accepted financial practice, such
calculation to be made based on the assumption that the holders of the Notes at
such time purchased their Notes and Warrants at the Closing and that the holders
of the Warrants are the holders of the Notes.
REGISTRAR -- Section 2.5.
Exhibit 1.1(a)-56
REMEDIES -- means and includes, with respect to any Debt (including,
without limitation, the Senior Debt and the Subordinated Debt):
(a) the acceleration of the maturity of any of such Debt;
(b) the exercise of any put right or other similar right to require
the Company or any Subsidiary to repurchase any of such Debt prior to the
stated maturity thereof;
(c) the collection or commencement of proceedings against the
Company, any Subsidiary or any other Person obligated on such Debt or any
of their respective Property, to enforce or collect any of such Debt;
(d) taking possession of or foreclosing upon (whether by judicial
proceedings or otherwise) any Liens or other collateral security for such
Debt; or causing a marshalling of any Property of the Company or any
Subsidiary;
(e) the making of a demand in respect of any Guaranty given by the
Company or any Subsidiary of such Debt;
(f) exercising any other remedies with respect to such Debt or any
claim with respect thereto; or
(g) the taking of any action against the Company, any Subsidiary or
any other Person obligated on or for such Debt, or any of their respective
assets, pursuant to the terms of the agreements governing such Debt.
REQUIRED HOLDERS -- means, at any time, the holders of not less than
fifty-one percent (51%) in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by any one or more of the Company, any Restricted
Subsidiary, any Affiliate or Able International).
REQUIRED PRINCIPAL PAYMENT -- Section 1.2.
RESTRICTED INVESTMENT -- means, at any time, all Investments except the
following:
(a) Property (including, without limitation, real Property and
interests therein) to be used in the ordinary course of business and
current assets arising from the sale of goods and services in the ordinary
course of business of the Company and the Subsidiaries;
(b) Investments in one or more Restricted Subsidiaries or any
corporation (including, without limitation, any corporation acquired by
the Company or any Restricted Subsidiary) that concurrently with such
Investment becomes a Restricted Subsidiary;
(c) Investments in direct obligations of the United States of
America, any
Exhibit 1.1(a)-57
agency thereof or obligations guaranteed by the United States of America,
so long as such obligations are backed by the full faith and credit of the
United States of America; PROVIDED that such obligations mature within
three (3) years from the date of acquisition thereof;
(d) Investments in any obligation of any state or municipality
thereof given either of the two (2) highest ratings by at least one credit
rating agency of recognized national standing and maturing within three
(3) years from the date of acquisition;
(e) Investments in certificates of deposit or banker's acceptances
either:
(i) issued by Bank of America; or
(ii) given one (1) of the two (2) highest ratings by at least
one credit rating agency of recognized national standing, issued by
a bank or trust company organized under the laws of the United
States of America or any state thereof having capital, surplus and
undivided profits aggregating at least Two Hundred Fifty Million
Dollars ($250,000,000);
and, in either case, maturing within one (1) year from the date of
acquisition;
(f) Investments in money market mutual funds that invest solely in
so-called "money market" instruments maturing not more than one year after
the acquisition thereof and given one of the two (2) the highest ratings
by at least one credit rating agency of recognized national standing;
(g) Investments in commercial paper given either of the two (2)
highest ratings by at least one credit rating agency of recognized
national standing and maturing not more than two hundred seventy (270)
days from the date of creation thereof;
(h) Investments in any Person to which Able International Stock, or
all or substantially all of the Property of Able International, is
Transferred or contributed, but solely to the extent made by contribution
of, or in consideration of, Able International Stock or Property of Able
International, and no Property of the Company or any Domestic Restricted
Subsidiary;
(i) equity Investments in Able International, to the extent that the
interest of the Company and the Domestic Restricted Subsidiaries in Able
International does not exceed twenty percent (20%) of the aggregate equity
interest in Able International (it being understood that no Investment in
Able International shall be a Restricted Investment at any time during
which Able International is a Restricted Subsidiary); and
(j) Investments after the Closing Date in an aggregate amount not to
exceed Two Million Five Hundred Thousand Dollars ($2,500,000) in
Subsidiaries or other business entities created or organized by the
Company solely for the purpose of leasing, owning or marketing products of
Able International.
Exhibit 1.1(a)-58
Investments shall be valued at cost less any net return of capital through the
sale or liquidation thereof or other return of capital thereon.
RESTRICTED PAYMENT -- means and includes:
(a) any dividend or other distribution, direct or indirect, on
account of any shares of Capital Stock or Rights of the Company
(including, without limitation, the Common Stock), now or hereafter
outstanding, except a dividend payable solely in shares of Common Stock of
the Company or (subject to compliance with Section 4.2) in Capital Stock
of Able International;
(b) any dividend or other distribution, direct or indirect, on
account of any shares of Capital Stock or Rights of any Restricted
Subsidiary, now or hereafter outstanding, except:
(i) a dividend payable solely in shares of common stock
of such Restricted Subsidiary; or
(ii) to the extent that such dividend or distribution is,
directly or indirectly, payable to the Company;
(c) any redemption, retirement, purchase or other acquisition,
direct or indirect, of any shares of Capital Stock or Rights of the
Company now or hereafter outstanding (other than, in the case of Rights,
the retirement of such rights by virtue of the exercise or conversion
thereof into Common Stock);
(d) any redemption, retirement, purchase or other acquisition,
direct or indirect, of any shares of Capital Stock or Rights of any
Restricted Subsidiary now or hereafter outstanding, except to the extent
that such redemption, retirement, purchase or other acquisition is made
from, and the payment in respect of such redemption, retirement, purchase
or other acquisition is paid, directly or indirectly, to the Company; and
(e) any payment, whether in respect of principal, premium, interest,
fees, expenses or otherwise, in respect of, or any redemption, retirement,
purchase or other acquisition, direct or indirect, of, any Debt owed by
the Company to any Affiliate.
RESTRICTED SUBSIDIARY -- means, at any time, a Subsidiary:
(a) that as of the Closing Date has been designated on Annex 3 as a
"Restricted Subsidiary" or, after the Closing Date and pursuant to Section
4.10, has been designated as a "Restricted Subsidiary";
(b) organized under the laws of the United States of America or any
jurisdiction thereof, Canada, any nation which is a member of the European
Economic Community or any nation in Latin America;
Exhibit 1.1(a)-59
(c) that conducts substantially all of its business and has
substantially all of its tangible Property within the United States of
America, Canada, any nation of the European Common Market or any nation in
Latin America; and
(d) at least fifty percent (50%) (by number of votes) of each class
of the Voting Stock of which, and (other than in the case of Able
International) one hundred percent (100%) of all of the stock and equity
Securities (except for Voting Stock that is not in any manner preferred in
payments of dividends or liquidation) of which, is legally and
beneficially owned by any one or more of the Company and its Wholly-Owned
Restricted Subsidiaries;
at such time.
RESTRICTED SUBSIDIARY STOCK -- Section 4.2(b).
RIGHT -- means and includes:
(a) any warrant (including, without limitation, any Warrant) or any
option (including, without limitation, employee stock options) to acquire
Common Stock;
(b) any right issued to holders of the Common Stock, or any class
thereof, permitting the holders thereof to subscribe to shares of Common
Stock or Rights (pursuant to a rights offering or otherwise);
(c) any right to acquire Common Stock pursuant to the provisions of
any Security (including, without limitation, the Series A Preferred Stock)
convertible or exchangeable into Common Stock; and
(d) any similar right permitting the holder thereof to subscribe for
or purchase shares of Common Stock.
SALE-LEASEBACK TRANSACTIONS -- means transactions or series of related
transactions in which the Company or a Restricted Subsidiary sells any of its
Property to any Person (other than to the Company or to a Restricted Subsidiary)
and concurrently with, or within one hundred and eighty (180) days after, such
sale or transfer, rents or leases such Property so sold from such Person.
SEC -- means, at any time, the Securities and Exchange Commission or any
other federal agency at such time administering the Securities Act.
SECURITIES ACT -- means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
SECURITIES PURCHASE AGREEMENT -- means, collectively, each of the
Securities Purchase Agreements, dated as of January 6, 1998, between the Company
and each of the Purchasers, relating to the offering and sale of the Notes and
the Warrants.
Exhibit 1.1(a)-60
SECURITY -- means "security" as defined by section 2(1) of the Securities
Act.
SENIOR AGENT -- means, for so long as any Senior Credit Agreement remains
outstanding, Sun Trust Bank, South Florida, and thereafter, any one agent or
lender in respect of the Senior Credit Facility, or representative of either,
designated in writing to each holder of Notes by the predecessor Senior Agent
and the Company as being the "Senior Agent".
SENIOR CREDIT AGREEMENT -- means and includes:
(a) the Term Loan, Revolving Credit and Security Agreement, dated
November 29, 1995, among the Company, the Subsidiaries named therein and
Sun Trust Bank, South Florida, N.A., as amended to the date hereof and as
thereafter amended in compliance with the provisions of Section 7.16;
(b) the Term Loan and Security Agreement, dated December 1996, among
the Company, the Subsidiaries named therein and Sun Trust Bank, South
Florida, N.A., as amended in compliance with the provisions of Section
7.16; and
(c) the Term Loan and Security Agreement, dated July 1997, among the
Company, the Subsidiaries named therein and Sun Trust Bank, South Florida,
as amended in compliance with the provisions of Section 7.16.
SENIOR CREDIT FACILITY -- means and includes:
(a) each Senior Credit Agreement; and
(b) any one revolving credit agreement or similar agreement
permitting the Company, subject to the conditions therein, to obtain loans
or advances of cash, trade credits (including without limitation, letters
of credit or bankers acceptances) or both which agreement has refinanced,
renewed or replaced the Senior Debt governed by the terms of a Senior
Credit Facility which both the Company and the Senior Agent under the
predecessor Senior Credit Facility (or, if no such other agreement is then
in effect, by the Company) have designated in writing to each holder of
Notes as being the "Senior Credit Facility;" provided, HOWEVER, that, by
making such designation, the predecessor Senior Credit Facility shall
cease to be the Senior Credit Facility (but any Debt outstanding or
incurred thereunder shall continue to be Senior Debt for so long as such
Debt meets the definition thereof).
SENIOR DEBT -- means and includes all obligations, liabilities and
indebtedness of the Company now or hereafter existing, whether fixed or
contingent, and whether for principal, interest (including interest accruing
after the filing of a petition under the Bankruptcy Code, to the extent
allowed), fees, expenses, indemnification or otherwise, in respect of:
(a) the Senior Credit Agreement, in a principal amount not exceeding
the maximum commitments thereunder provided for on the Closing Date
hereof; and
Exhibit 1.1(a)-61
(b) any other Debt of the Company (including, without limitation,
additional Debt under a Senior Credit Facility); PROVIDED, HOWEVER, that
"Senior Debt" shall not include:
(i) Debt that, by its terms or the terms of any ancillary
agreement with the holders of such Debt, is expressed to be
subordinated in right of payment to any other Debt of the Company or
any Subsidiary;
(ii) Debt owing to the Company, any Affiliate or any
Subsidiary; or
(iii) any such other Debt the incurrence or creation thereof
would have caused the Company not to be in compliance with any
provision of Section 4, if the financial ratio tests set forth in
each of Section 4.4 through Section 4.7, inclusive, were tested
immediately after, and after giving effect to, the incurrence of
such Debt, assuming that:
(A) the entire amount of such Debt was included in both
Consolidated Adjusted Debt and Consolidated Senior Debt and
was considered outstanding in computing Consolidated Net Worth
as of the date of incurrence thereof;
(B) for purposes of computing Consolidated Interest
Expense for any relevant period, the entire amount of such
Debt was incurred as of the first day of such period, remained
outstanding throughout such period and bore interest at the
rate in effect on the date of determination; and
(C) in the event that such Debt is incurred in
connection with any acquisition (whether by purchase of
capital stock or all or substantially all of the assets, or by
merger or consolidation) of any Person, that "Consolidated
Adjusted Debt," "Consolidated Senior Debt," "Consolidated Net
Income," "Consolidated Interest Expense," "Consolidated Tax
Expense" and "Consolidated Depreciation Expense" are measured,
rather than for the Company and the Restricted Subsidiaries on
a consolidated basis, for both:
(I) the acquired Person and those of its
subsidiaries which, had they been Subsidiaries of the
Company, would be Restricted Subsidiaries, on a
consolidated basis; and
(II) the Company and the Restricted Subsidiaries,
on a consolidated basis;
on a combined basis.
SENIOR FINANCIAL OFFICER -- means any one of the chief financial officer,
the treasurer
Exhibit 1.1(a)-62
and the principal accounting officer of the Company.
SENIOR OFFICER -- means any one of the chairman of the board of directors,
the president, the chief executive officer, the chief operating officer and the
chief financial officer of the Company.
SENIOR PAYMENT DEFAULT -- Section 7.5(a).
SERIES A PREFERRED STOCK -- means the Series A Convertible Preferred
Stock, par value $.10 per share, of the Company.
SIGNIFICANT NONPAYMENT DEFAULT -- means and includes:
(a) an event of default under the Senior Credit Facility in respect
of the failure of the Company to comply with any material negative
covenant or any financial covenant in respect of the Senior Credit
Facility, without giving effect to any amendment or modification thereof,
or portion of any such amendment or modification, which would have the
effect of making such covenant in any way more restrictive upon the
Company; and
(b) an event of default in respect of the Senior Credit Facility
arising out of any Event of Default in respect of this Agreement.
STANDARD PREPAYMENT COMPENSATION AMOUNT -- means, with respect to Prepaid
Principal and the date the payment thereof is due (the "PAYMENT Date") an amount
equal to the excess (if any) of the Present Value of the Prepaid Cash Flows over
the amount of such Prepaid Principal, determined in respect of such Prepaid
Principal as of such Payment Date. As used in this definition:
PRESENT VALUE OF THE PREPAID CASH FLOWS -- means the sum of the
present values of the then remaining scheduled payments of principal and
interest that would have been payable in respect of such Prepaid Principal
but that are no longer payable as a result of the early payment of such
Prepaid Principal. In determining such present values:
(i) the amount of interest accrued through and including the
day immediately preceding such Payment Date on such Prepaid
Principal since the scheduled interest payment date immediately
preceding such Payment Date shall be deducted from the first of such
payments of interest; and
(ii) a discount rate PER ANNUM equal to the Make-Whole
Discount Rate determined with respect to such Prepaid Principal and
such Payment Date DIVIDED by two (2), and a discount period of six
(6) months of thirty (30) days each, shall be used.
MAKE-WHOLE DISCOUNT RATE -- means the sum of:
Exhibit 1.1(a)-63
(i) two (2) percent (2.00%) PER ANNUM; PLUS
(ii) the PER ANNUM percentage rate (rounded to the nearest
three (3) decimal places) equal to the bond equivalent yield to
maturity derived from the Bloomberg Rate, or if the Bloomberg Rate
is not then available, the Applicable H.15 Rate, determined as of
the date that is two (2) Business Days prior to such Payment Date.
APPLICABLE H.15 -- means, at any time, the United States Federal
Reserve Statistical Release H.15(519) then most recently published and
available to the public, or if such publication is not available, then any
other source of current information in respect of interest rates on
securities of the United States of America that is generally available
and, in the judgment of the Required Holders, provides information
reasonably comparable to the H.15(519) report.
APPLICABLE H.15 RATE -- means, at any time, the then most current
annual yield to maturity of the hypothetical United States Treasury
obligation listed in the Applicable H.15 with a Treasury Constant Maturity
(as such term is defined in such Applicable H.15) equal to the Weighted
Average Life to Maturity of such Prepaid Principal. If no such United
States Treasury obligation with a Treasury Constant Maturity corresponding
exactly to such Weighted Average Life to Maturity is listed, then the
yields for the two (2) then most current hypothetical United States
Treasury obligations with Treasury Constant Maturities most closely
corresponding to such Weighted Average Life to Maturity (one (1) with a
longer maturity and one (1) with a shorter maturity, if available) shall
be calculated pursuant to the immediately preceding sentence and the
Make-Whole Discount Rate shall be interpolated or extrapolated from such
yields on a straight-line basis.
BLOOMBERG RATE -- means the PER ANNUM yield reported on the
Bloomberg Financial Markets System at 10:00 a.m. (New York time) on the
second (2nd) Business Day preceding such Payment Date for United States
government securities having a maturity (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of such Prepaid
Principal. Page USD shall be used as the source of such yields, or if not
then available, such other screen available on the Bloomberg Financial
Markets System as shall, in the opinion of the Required Holders, provide
equivalent information.
TREASURY CONSTANT MATURITY -- has the meaning specified in the
Applicable H.15.
WEIGHTED AVERAGE LIFE TO MATURITY -- means the number of years
(calculated to the nearest one-twelfth (1/12th)) obtained by DIVIDING the
Remaining Dollar-Years of such Prepaid Principal by such Prepaid
Principal, determined as of such Payment Date.
REMAINING DOLLAR-YEARS -- means the result obtained by:
(a) MULTIPLYING, in the case of each then remaining scheduled
Exhibit 1.1(a)-64
payment of principal that would have been payable in respect of
Prepaid Principal but is no longer payable as a result of the
payment of such Prepaid Principal;
(i) an amount equal to such scheduled payment of
principal; by
(ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such Payment Date and
the date such scheduled principal payment would be due if such
Prepaid Principal had not been so prepaid; and
(b) calculating the sum of each of the products obtained in
the preceding subsection (a).
STANDSTILL PERIOD -- Section 7.7.
SUBSIDIARY -- means a corporation of which the Company owns, directly or
indirectly, more than fifty percent (50%) (by number of votes) of each class of
Voting Stock.
SUBORDINATED DEBT -- means and includes all obligations, liabilities and
indebtedness of the Company now or hereafter existing, whether fixed or
contingent, and whether for principal, interest (including interest accruing
after the filing of a petition under the Bankruptcy Code, to the extent
allowed), fees, expenses, indemnification or otherwise, in respect of this
Agreement and the Notes.
SURVIVING CORPORATION -- Section 4.1(a).
TRANSFERS -- Section 4.2(a).
UNRESTRICTED SUBSIDIARY -- means any Subsidiary that is not a Restricted
Subsidiary.
VALUATION AGENT -- means a firm of independent certified public
accountants, an investment banking firm or a securities rating service (which
firm or service shall own no Securities of, and shall not be an Affiliate,
Subsidiary or a related Person of, the Company) of recognized national standing
retained by the Company and reasonably acceptable to the Required Holders.
VOTING STOCK -- means , with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time any stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency), and, in the case of the Company, shall include the Common Stock.
Except as otherwise provided, references herein to "Voting Stock" shall mean
Voting Stock of the Company.
WARRANT -- means each warrant to purchase Common Stock issued pursuant to
the
Exhibit 1.1(a)-65
Warrant Agreement; PROVIDED, HOWEVER, that, for purposes of the definitions of
"Realizable IRR" and "Realized IRR" set forth in Section 8.1, the term
"Warrants" shall include all warrants to purchase Able International Stock
issued pursuant to the provisions of Section 3.8 of the Warrant Agreement, with
the effect that any cash flows (actual or hypothetical) derived from such
warrants to purchase Able International Stock shall be included in the
calculation of Realizable IRR and Realized IRR.
WARRANT AGREEMENT -- means the Warrant Agreement, dated as of January 6,
1998 among the Company and the Purchasers, pursuant to which the Warrants were
issued.
WHOLLY-OWNED RESTRICTED SUBSIDIARY -- means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity Securities (except
directors' qualifying shares) and Voting Stock of which are owned by any one or
more of the Company and the Company's other Wholly-Owned Restricted Subsidiaries
at such time.
8.2 ACCOUNTING PRINCIPLES.
(a) GENERALLY. Unless otherwise provided herein, all financial
statements delivered in connection herewith will be prepared in accordance
with GAAP. Where the character or amount of any asset or liability or item
of income or expense, or any consolidation or other accounting computation
is required to be made for any purpose hereunder, it shall be done in
accordance with GAAP; PROVIDED, HOWEVER, that if any term defined herein
includes or excludes amounts, items or concepts that would not be included
in or excluded from such term if such term were defined with reference
solely to GAAP, such term will be deemed to include or exclude such
amounts, items or concepts as set forth herein.
(b) CONSOLIDATION. Whenever accounting amounts of a group of Persons
are to be determined "on a consolidated basis" it shall mean that, as to
balance sheet amounts to be determined as of a specific time, the amount
that would appear on a consolidated balance sheet of such Persons prepared
as of such time, and as to income statement amounts to be determined for a
specific period, the amount that would appear on a consolidated income
statement of such Persons prepared in respect of such period, in each case
with all transactions among such Persons eliminated, and prepared in
accordance with GAAP except as otherwise required hereby.
(c) CURRENCY. With respect to any determination, consolidation or
accounting computation required hereby, any amounts not denominated in the
currency in which this Agreement specifies shall be converted to such
currency in accordance with the requirements of GAAP (as such requirements
relate to such determination, consolidation or computation) and, if no
such requirements shall exist, converted to such currency in accordance
with normal banking procedures, at the closing rate as reported in THE
WALL STREET JOURNAL published most recently as of the date of such
determination, consolidation or computation or, if no such quotation shall
then be available, as quoted on such date by any bank or trust company
reasonably acceptable to the Required Holders.
Exhibit 1.1(a)-66
8.3 DIRECTLY OR INDIRECTLY.
Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
8.4 SECTION HEADINGS AND TABLE OF CONTENTS AND CONSTRUCTION.
(a) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The titles of the
Sections of this Agreement and the Table of Contents of this Agreement
appear as a matter of convenience only, do not constitute a part hereof
and shall not affect the construction hereof. The words "herein,"
"hereof," "hereunder" and "hereto" refer to this Agreement as a whole and
not to any particular Section or other subdivision. References to Sections
are, unless otherwise specified, references to Sections of this Agreement.
References to Annexes and Exhibits are, unless otherwise specified,
references to Annexes and Exhibits attached to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
8.5 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. IN
ADDITION, THE PARTIES HERETO SELECT, TO THE EXTENT THEY MAY LAWFULLY DO SO, THE
INTERNAL LAWS OF THE STATE OF NEW YORK AS THE APPLICABLE INTEREST LAW.
8.6 GENERAL INTEREST PROVISIONS.
(a) INTEREST IN RESPECT OF THE NOTES. It is the intention of the
Company and the Purchasers to conform strictly to the Applicable Interest
Law. Accordingly, it is agreed that, notwithstanding any provisions to the
contrary in this Agreement or in the Notes, the aggregate of all interest,
and any other charges or consideration constituting interest under the
Applicable Interest Law that is taken, reserved, contracted for, charged
or received pursuant to this Agreement or the Notes shall under no
circumstances exceed the maximum amount of interest allowed by the
Applicable Interest Law. If any such excess interest is ever charged,
received or collected on account of or relating to this Agreement and the
Notes (including any charge or amount which is not denominated as
"interest" but is legally deemed to be interest under Applicable Interest
Law), then in such event:
(i) the provisions of this Section 8.6 shall govern and
control;
Exhibit 1.1(a)-67
(ii) the Company shall not be obligated to pay the amount of
such interest to the extent that it is in excess of the maximum
amount of interest allowed by the Applicable Interest Law;
(iii) any excess shall be deemed a mistake and cancelled
automatically and, if theretofore paid, shall be credited to the
principal amount of the Notes by the holders thereof, and if the
principal balance of the Notes is paid in full, any remaining excess
shall be forthwith paid to the Company; and
(iv) the effective rate of interest shall be automatically
subject to reduction to the Maximum Legal Rate of Interest.
If at any time thereafter, the Maximum Legal Rate of Interest is
increased, then, to the extent that it shall be permissible under the
Applicable Interest Law, the Company shall forthwith pay to the holders of
the Notes, on a PRO RATA basis, all amounts of such excess interest that
the holders of the Notes would have been entitled to receive pursuant to
the terms of this Agreement and the Notes had such increased Maximum Legal
Rate of Interest been in effect at all times when such excess interest
accrued. To the extent permitted by the Applicable Interest Law, all sums
paid or agreed to be paid to the holders of the Notes for the use,
forbearance or detention of the indebtedness evidenced thereby shall be
amortized, prorated, allocated and spread throughout the full term of the
Notes.
(b) EFFECT OF ISSUANCE OF NOTES TOGETHER WITH WARRANTS. The Company
and the Purchasers agree, to the extent permitted by the Applicable
Interest Law, that, for purposes of computing the interest in respect of
the Notes under the Applicable Interest Law:
(i) the aggregate purchase price of the Notes shall equal the
difference of:
(A) Ten Million Dollars; and
(B) the amount of original issue discount attributable
to the Notes in respect of the issuance of the Warrants
together with the Notes;
(ii) the amount of original issue discount attributable to the
Notes in respect of the issuance of the Warrants shall be deemed to
be the purchase price of the Warrants;
(iii) the Warrants and the Notes shall be deemed to have been
separately issued for the respective purchase prices set forth
above; and
(iv) no portion of the return, if any, to the holders of the
Warrants in respect of their investment therein shall be deemed to
be interest in respect of the Notes.
Exhibit 1.1(a)-68
9. MISCELLANEOUS
9.1 COMMUNICATIONS.
(a) METHOD; ADDRESS. All communications hereunder or under the Notes
shall be in writing and shall be delivered either by nationwide overnight
courier or by facsimile transmission (confirmed by delivery by nationwide
overnight courier sent on the day of the sending of such facsimile
transmission). Communications to the Company shall be addressed as set
forth on Annex 2, or at such other address of which the Company shall have
notified each holder of Notes. Communications to the holders of the Notes
shall be addressed as set forth on Annex 1 by such holder, or at such
other address of which such holder shall have notified the Company (and
the Company shall record such address in the register for the registration
and transfer of Notes maintained pursuant to Section 2.1).
(b) WHEN GIVEN. Any communication addressed and delivered as herein
provided shall be deemed to be received when actually delivered to the
address of the addressee (whether or not delivery is accepted) or received
by the telecopy machine of the recipient. Any communication not so
addressed and delivered shall be ineffective.
(c) SERVICE OF PROCESS. Notwithstanding the foregoing provisions of
this Section 9.1, service of process in any suit, action or proceeding
arising out of or relating to this agreement or any document, agreement or
transaction contemplated hereby, or any action or proceeding to execute or
otherwise enforce any judgment in respect of any breach hereunder or under
any document or agreement contemplated hereby, shall be delivered in the
manner provided in Section 9.7(c).
9.2 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, consents, waivers and modifications that may hereafter be executed,
documents received by any holder at the closing of its purchase of the Notes
(except the Notes themselves and Warrants), and financial statements,
certificates and other information previously or hereafter furnished to any
holder of Notes, may be reproduced by the Company or any holder of Notes by any
photographic, photostatic, microfilm, micro-card, miniature photographic,
digital or other similar process and each holder of Notes may destroy any
original document so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by the Company or such holder of Notes in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. Nothing in this
Section 9.2 shall prohibit the Company or any holder of Notes from contesting
the accuracy or validity of any such reproduction.
9.3 SURVIVAL; ENTIRE AGREEMENT.
All warranties, representations, certifications and covenants contained
herein, in the
Exhibit 1.1(a)-69
Securities Purchase Agreement or in any certificate or other instrument
delivered hereunder shall be considered to have been relied upon by the other
parties hereto and shall survive the delivery to any holder of Notes regardless
of any investigation made by or on behalf of any party hereto. All statements in
any certificate or other instrument delivered pursuant to the terms hereof or of
the Securities Purchase Agreement shall constitute warranties and
representations hereunder. All obligations hereunder (other than payment of the
Notes, but including, without limitation, reimbursement obligations in respect
of costs, expenses and fees) shall survive the payment of the Notes and the
termination hereof. Subject to the preceding sentence, this Agreement, the Notes
and the other Financing Documents embody the entire agreement and understanding
among the Company and the Purchasers, and supersede all prior agreements and
understandings, relating to the subject matter hereof.
9.4 SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder whether or not an express assignment to
such holder of rights hereunder shall have been made by any predecessor holder.
Anything contained in this Section 9.4 notwithstanding, but subject to Section
4.1, the Company may not assign any of its respective rights, duties or
obligations hereunder or under any of the other Financing Documents without the
prior written consent of all holders of Notes. For purposes of the avoidance of
doubt, any holder of a Note shall be permitted to pledge or otherwise xxxxx x
Xxxx in and to such Note (including, without limitation, pledging such Note to a
trustee for the benefit of certain secured noteholders pursuant to documents
relating to the financing of such holder or to one or more banks or other
institutions providing financing in connection with the purchase by such holder
of such Note); PROVIDED, HOWEVER, that any such pledgee or holder of a Lien
shall not be considered a holder hereunder until it shall have foreclosed upon
such Note in accordance with applicable law and informed the Company, in
writing, of the same.
9.5 AMENDMENT AND WAIVER.
(a) REQUIREMENTS. This Agreement may be amended, and the observance
of any term hereof may be waived, with (and only with) the written consent
of the Company and the Required Holders; PROVIDED, HOWEVER, that no such
amendment or waiver shall, without the written consent of the holders of
all Notes (exclusive of Notes held by the Company, any Subsidiary or any
Affiliate) at the time outstanding;
(i) change the amount or time of any prepayment or payment of
principal or Prepayment Compensation Amount or the rate or time of
payment of interest;
(ii) amend or waive the provisions of Section 6.1, Section
6.2, Section 6.3 or Section 7, or amend or waive any defined term to
the extent used therein;
(iii) amend or waive the definition of "Required Holders" or
otherwise amend the percentage of Notes required to be held by
holders of Notes
Exhibit 1.1(a)-70
consenting to any action under this Agreement;
(iv) amend or waive this Section 9.5 or amend or waive any
defined term to the extent used herein.
The holder of any Note may specify that any such written consent executed
by it shall be effective only with respect to a portion of the Notes held
by it (in which case it shall specify, by dollar amount, the aggregate
principal amount of Notes with respect to which such consent shall be
effective) and in the event of any such specification such holder shall be
deemed to have executed such written consent only with respect to the
portion of the Notes so specified.
No amendment, supplement or modification of the provisions of
Section 7, or any defined term to the extent used therein, shall be
effective as to any holder of Senior Debt who has not consented to such
amendment, supplement or modification.
(b) SOLICITATION OF NOTEHOLDERS.
(i) SOLICITATION. Each holder of the Notes (irrespective of
the amount of Notes then owned by it) shall be provided by the
Company with all material information provided by the Company to any
other holder of Notes with respect to any proposed waiver or
amendment of any of the provisions hereof or the Notes. Executed or
true and correct copies of any amendment or waiver effected pursuant
to the provisions of this Section 9.5 shall be delivered by the
Company to each holder of outstanding Notes forthwith following the
date on which such amendment or waiver becomes effective.
(ii) PAYMENT. The Company shall not, nor shall any Restricted
Subsidiary or Affiliate, directly or indirectly, pay or cause to be
paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of
Notes as consideration for or as an inducement to the entering into
by any holder of Notes of any waiver or amendment of any of the
provisions hereof or of the Notes unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to the holders of all Notes then outstanding.
(iii) SCOPE OF CONSENT. Any amendment or waiver made pursuant
to this Section 9.5 by a holder of Notes that has transferred or has
agreed to transfer its Notes to the Company, any Restricted
Subsidiary or any Affiliate and has provided or has agreed to
provide such amendment or waiver as a condition to such transfer
shall be void and of no force and effect except solely as to such
holder, and any amendments effected or waivers granted that would
not have been or would not be so effected or granted but for such
amendment or waiver (and the amendments or waivers of all other
holders of Notes that were acquired under the same or similar
conditions) shall be void and of no force and effect, retroactive to
the date such amendment or waiver initially took or takes effect,
except solely as to such holder.
Exhibit 1.1(a)-71
(c) BINDING EFFECT. Except as provided in Section 9.5(b)(iii), any
amendment or waiver consented to as provided in this Section 9.5 shall
apply equally to all holders of Notes and shall be binding upon them and
upon each future holder of any Note and upon the Company whether or not
such Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon.
9.6 EXPENSES.
(a) AMENDMENTS AND WAIVERS. The Company shall pay when billed the
reasonable costs and expenses (including reasonable attorneys' fees)
incurred by the holders of the Notes in connection with the consideration,
negotiation, preparation or execution of any amendments, waivers,
consents, standstill agreements and other similar agreements with respect
to this Agreement or any other Financing Document (whether or not any such
amendments, waivers, consents, standstill agreements or other similar
agreements are executed).
(b) RESTRUCTURING AND WORKOUT, INSPECTIONS. At any time when the
Company and the holders of Notes are conducting restructuring or workout
negotiations in respect hereof, or a Default or Event of Default exists,
the Company shall pay when billed the reasonable costs and expenses
(including reasonable attorneys' fees and the fees of professional
advisors) incurred by the holders of the Notes in connection with the
assessment, analysis or enforcement of any rights or remedies that are or
may be available to the holders of Notes, including, without limitation,
in connection with inspections made pursuant to Section 5.4; PROVIDED,
HOWEVER, that at all other times inspections will be at the expense of the
inspecting holder of Notes.
(c) COLLECTION. If the Company shall fail to pay when due any
principal of, or Prepayment Compensation Amount or interest on, any Note,
the Company shall pay to each holder of Notes, to the extent permitted by
law, such amounts as shall be sufficient to cover the costs and expenses,
including but not limited to reasonable attorneys' fees, incurred by such
holder in collecting any sums due on such Note.
9.7 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC.
(a) WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED
HEREBY.
(b) CONSENT TO JURISDICTION. ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OF THE DOCUMENTS, AGREEMENTS
OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE
OR OTHERWISE ENFORCE ANY
Exhibit 1.1(a)-72
JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS AGREEMENT OR ANY DOCUMENT OR
AGREEMENT CONTEMPLATED HEREBY MAY BE BROUGHT BY SUCH PARTY IN ANY FEDERAL
DISTRICT COURT LOCATED IN NEW YORK CITY, NEW YORK, OR ANY NEW YORK STATE
COURT LOCATED IN NEW YORK CITY, NEW YORK AS SUCH PARTY MAY IN ITS SOLE
DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE
IN PERSONAM JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING
BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY
CLAIM THAT IT IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH
COURT. IN ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT, AGREEMENT OR
TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH COURT, AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES THAT
PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE
ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE EXTENT
PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING
TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
HEREUNDER OR UNDER ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY. RECEIPT
OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A
DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY
COMMERCIAL DELIVERY SERVICE.
(d) OTHER FORUMS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF ANY HOLDER OF NOTES TO SERVE ANY WRITS, PROCESS OR
SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
JURISDICTION OVER THE COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH
OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.
Exhibit 1.1(a)-73
9.8 EXECUTION IN COUNTERPART.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.
[Remainder of page intentionally blank. Next page is signature page.]
Exhibit 1.1(a)-74
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by one of its duly authorized
officers or representatives.
ABLE TELCOM HOLDING CORP.
By:______________________________
Name:
Title:
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By:______________________________
Name:
Title:
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By:______________________________
Name:
Title:
SIGNATURE 1A (CAYMAN), LTD.
By: Xxxx Xxxxxxx Mutual Life Insurance
Company, Portfolio Advisor
By:______________________________
Title:
ANNEX 1
ADDRESSES OF PURCHASERS
===============================================================================
PURCHASER NAME XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
===============================================================================
Name in which Notes are XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
Registered
===============================================================================
Note Registration Numbers; R-1: $2,000,000
Principal Amounts of Notes R-2: $4,500,000
===============================================================================
Payments on Account of
Notes
Method Federal Funds Wire Transfer
Account Information BankBoston
ABA No.: 000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account No.: 541-55417
For the Account of: Xxxx Xxxxxxx Mutual Life
Insurance Company
Private Placement Collection
Account
===============================================================================
Accompanying Information Name of Company: ABLE TELCOM HOLDING CORP.
Description of
Security: 12% Senior Subordinated Notes
due January 6, 2005
PPN: 003712 A* 7
Due Date and Application (as among principal,
premium and interest) of the payment being made:
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company
Related to Payments 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Investment Accounting Division T-10
===============================================================================
Address for All Other Xxxx Xxxxxxx Mutual Life Insurance Company
Notices 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Bond and Corporate Finance Group, T-57
===============================================================================
Other Instructions Signature Page Format:
Annex 0-0
XXXXX 0
XXXXXXXXX XX XXXXXXXXXX (Xxxx.)
===============================================================================
PURCHASER NAME XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
===============================================================================
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
By___________________________
Name:
Title:
===============================================================================
Tax Identification Number 00-0000000
===============================================================================
Annex 0-0
XXXXX 0
XXXXXXXXX XX XXXXXXXXXX (Xxxx.)
===============================================================================
PURCHASER NAME XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
===============================================================================
Name in which Note is XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
Registered
===============================================================================
Note Registration Number; R-3: $500,000
Principal Amount of Note
===============================================================================
Payments on Account of Note
Method
Federal Funds Wire Transfer
Account Information
BankBoston
ABA No.: 000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account No.: 541-55417
For the Account of: Xxxx Xxxxxxx Mutual Life
Insurance Company
Private Placement Collection
Account
===============================================================================
Accompanying Information Name of Company: ABLE TELCOM HOLDING CORP.
Description of
Security: 12% Senior Subordinated Notes
due January 6, 2005
PPN: 003712 A* 7
Due Date and Application (as among principal,
premium and interest) of the payment being made:
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company
Related to Payments 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Investment Accounting Division T-10
===============================================================================
Address for All Other Xxxx Xxxxxxx Mutual Life Insurance Company
Notices 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Bond and Corporate Finance Group, T-57
===============================================================================
Other Instructions Signature Page Format:
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
Annex 1-3
ANNEX 1
ADDRESSES OF PURCHASERS (Cont.)
===============================================================================
PURCHASER NAME XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
===============================================================================
By___________________________
Name:
Title:
===============================================================================
Tax Identification Number 00-0000000
===============================================================================
Annex 0-0
XXXXX 0
XXXXXXXXX XX XXXXXXXXXX(Xxxx.)
===============================================================================
PURCHASER NAME SIGNATURE 1A (CAYMAN), LTD.
===============================================================================
Name in which Note is XXXXXXX & CO
Registered
===============================================================================
Note Registration Number; R-4: $3,000,000
Principal Amount of Note
===============================================================================
Payments on Account of Note
Method
Federal Funds Wire Transfer
Account Information
Bankers Trust Company
ABA No.: 000-000-000
Account No.: 00-000-000
For further credit to: Bankers Trust Company, as
Indenture Trustee for
Signature 1A (Cayman), Ltd.,
Account #98016
===============================================================================
Accompanying Information Name of Company: ABLE TELCOM HOLDING CORP.
Description of
Security: 12% Senior Subordinated Notes
due January 6, 2005
PPN: 003712 A* 7
Due Date and Application (as among principal,
premium and interest) of the payment being made:
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company,
Related to Payments Portfolio Advisor
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Bond and Corporate Finance Group, T-57
===============================================================================
Address for All Other Xxxx Xxxxxxx Mutual Life Insurance Company,
Notices Portfolio Advisor
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Bond and Corporate Finance Group, T-57
===============================================================================
Other Instructions Signature Page Format:
Annex 0-0
XXXXX 0
XXXXXXXXX XX XXXXXXXXXX (Xxxx.)
==============================================================================
PURCHASER NAME SIGNATURE 1A (CAYMAN), LTD.
===============================================================================
SIGNATURE 1A (CAYMAN), LTD.
By: Xxxx Xxxxxxx Mutual Life Insurance
Company, Portfolio Advisor
By___________________________
Name:
Title:
===============================================================================
Tax Identification Number None
===============================================================================
Annex 1-6
ANNEX 2
ADDRESS OF COMPANY;
NAME AND ADDRESS OF NOTE REGISTRAR
ADDRESS OF COMPANY FOR NOTICES:
0000 Xxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Chief Executive Officer
and President
Xxxxx X. Xxx, Xx.
Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
NAME AND ADDRESS FOR REGISTRAR OF NOTES AND LOCATION OF NOTE REGISTER:
First Union National Bank
Corporate Trust Department
CT 5845
00 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
Vice President and
Managing Director
Telephone: 000-000-0000
Facsimile: 000-000-0000
Annex 2-1
ATTACHMENT A
[FORM OF NOTE]
ABLE TELCOM HOLDING CORP.
12% SENIOR SUBORDINATED NOTE DUE JANUARY 6, 2005
No. R-______
PPN: 003712 A* 7
$_______________ [Date of Issuance]
ABLE TELCOM HOLDING CORP. (together with its successors, the "Company"), a
Florida corporation, for value received, hereby promises to pay to
_______________________ or registered assigns the principal sum of
_____________________ DOLLARS ($________) on January 6, 2005, and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal balance hereof from the date of this Note at the rate of
twelve percent (12%) PER ANNUM, in arrears, semi-annually on January 6 and July
6 in each year, commencing on the later of July 6, 1998 and the payment date
next succeeding the date hereof, until the principal amount hereof shall become
due and payable; and to pay on demand interest on any overdue principal
(including any overdue partial payment of principal and principal payable at the
maturity hereof) and Prepayment Compensation Amount, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest (the due
date of such payments to be determined without giving effect to any grace
period), at a rate PER ANNUM equal to the lesser of (a) the highest rate allowed
by applicable law and (b) the greater of (i) fourteen percent (14%), and (ii)
two percent (2%) over the rate of interest publicly announced from time to time
by Xxxxxx Guaranty Trust Company of New York in New York, New York as its "base"
or "prime" rate.
Payments of principal, Prepayment Compensation Amount, if any, and
interest shall be made in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts to the registered holder hereof at the address shown in the register
maintained by the Company for such purpose, in the manner provided in the Note
Agreement (defined below).
This Note is one of an issue of Notes of the Company issued in an
aggregate principal amount limited to Ten Million Dollars ($10,000,000) pursuant
to the Note Agreement (as may be amended, restated or otherwise modified from
time to time, the "Note Agreement"), dated as of January 6, 1998, between the
Company and each of the purchasers listed on Annex 1 thereto. The holder of this
Note is entitled to the benefits of the Note Agreement. This Note is subject to
the terms of the Note Agreement, and such terms are incorporated herein by
reference. Capitalized terms used herein and not defined herein have the
meanings specified in the Note Agreement.
As provided in the Note Agreement, this Note is subject to prepayment, in
whole or in part, in certain cases without a Prepayment Compensation Amount and
in other cases with a Prepayment Compensation Amount, on the terms and subject
to the conditions set forth in the
Attachment A-1
Note Agreement. The holder of this Note, on the terms and subject to the
conditions set forth in the Note Agreement, may elect to have the Company prepay
the entire principal amount of this Note (together with any applicable
Prepayment Compensation Amount) in connection with a Change of Control. All of
the principal of this Note (together with any applicable Prepayment Compensation
Amount) may, under certain circumstances, be declared due and payable in the
manner and with the effect provided in the Note Agreement.
This Note is a registered Note and is transferable only by surrender at
that office of the Company or the Registrar, as the case may be, specified in
the Note Agreement, duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of this Note or its attorney
duly authorized in writing.
The obligations evidenced by this Note are subordinated to the Senior Debt
on the terms provided in the Note Agreement.
THIS NOTE AND THE NOTE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
ABLE TELCOM HOLDING CORP.
By:________________________________
Name:
Title:
Attachment A-2
EXHIBIT 1.1(B)
[FORM OF WARRANT AGREEMENT]
ABLE TELCOM HOLDING CORP.
WARRANT AGREEMENT
DATED AS OF JANUARY 6, 1998
409,505 WARRANTS TO PURCHASE COMMON STOCK
TABLE OF CONTENTS
(NOT PART OF AGREEMENT) PAGE
1. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES................. 1
1.1 Form of Warrant Certificates................................... 1
1.2 Execution of Warrant Certificates; Registration Books.......... 1
1.3 Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Lost or Stolen Warrant Certificates.............. 2
1.4 Subsequent Issuance of Warrant Certificates.................... 2
1.5 Effect of Issuance in Registered Form.......................... 3
2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE...................... 3
2.1 Exercise of Warrants........................................... 3
2.2 Issuance of Common Stock....................................... 5
2.3 Unexercised Warrants........................................... 5
2.4 Cancellation and Destruction of Warrant Certificates........... 5
2.5 Notice of Expiration Date...................................... 6
2.6 Fractional Shares.............................................. 6
3. AGREEMENTS OF THE COMPANY............................................ 6
3.1 Reservation of Common Stock.................................... 6
3.2 Common Stock To Be Duly Authorized and Issued, Fully Paid
and Nonassessable.............................................. 6
3.3 Transfer Taxes................................................. 6
3.4 Common Stock Record Date....................................... 7
3.5 Rights in Respect of Common Stock.............................. 7
3.6 CUSIP Number................................................... 7
3.7 Right of Action................................................ 7
3.8 Right to Receive Distribution of Able International Warrants... 7
3.9 Provisions Concerning the Registrar............................ 10
3.10 Survival....................................................... 10
4. ANTIDILUTION ADJUSTMENTS............................................. 10
4.1 Mechanical Adjustments......................................... 10
4.2 Stock Dividends, Subdivisions and Combinations................. 10
4.3 Dividends and Distributions.................................... 11
4.4 Repurchases of Common Stock or Rights.......................... 11
4.5 Issuances of Additional Common Stock or Rights................. 12
4.6 Expiration of Rights........................................... 13
4.7 Able International Spinoff..................................... 14
4.8 Consolidation; Merger; Sale; Reclassification.................. 14
4.9 De Minimis Changes in Purchase Price........................... 14
4.10 Adjustment of Number of Shares Issuable Pursuant to Warrants... 15
Exhibit 1.1(b)-i
TABLE OF CONTENTS (continued)
(NOT PART OF AGREEMENT) PAGE
4.11 Miscellaneous.................................................. 15
4.12 Other Securities............................................... 15
4.13 Additional Agreements of the Company........................... 16
5. REPORTING COVENANTS.................................................. 17
5.1 Financial and Business Information............................. 17
5.2 Information Concerning Antidilution Adjustments................ 18
6. REGISTRATION RIGHTS.................................................. 19
6.1 Shelf Registration............................................. 19
6.2 Incidental Registration........................................ 20
6.3 Companies Registration......................................... 22
6.4 Registration Procedures........................................ 22
6.5 Reasonable Investigation....................................... 25
6.6 Registration Expenses.......................................... 26
6.7 Indemnification; Contribution.................................. 26
6.8 Holdback Agreements; Registration Rights to Others............. 29
6.9 Other Registration of Common Stock............................. 29
6.10 Availability of Information.................................... 29
7. INTERPRETATION OF THIS AGREEMENT..................................... 30
7.1 Certain Defined Terms.......................................... 30
7.2 Descriptive Headings........................................... 44
7.3 Governing Law.................................................. 44
8. MISCELLANEOUS........................................................ 44
8.1 Expenses....................................................... 44
8.2 Amendment and Waiver........................................... 45
8.3 Directly or Indirectly......................................... 45
8.4 Survival of Representations and Warranties; Entire Agreement... 45
8.5 Successors and Assigns......................................... 46
8.6 Notices........................................................ 46
8.7 Satisfaction Requirement....................................... 46
8.8 Severability................................................... 46
8.9 Counterparts................................................... 47
8.10 Waiver of Jury Trial; Consent to Jurisdiction; Etc............. 47
Annex 1 C.....Addresses of Purchasers
Annex 2 C.....Address of Company; Name and Address of Note Registrar
Attachment A......C Form of Warrant Certificate
Exhibit 1.1(b)-ii
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of January 6, 1998, among ABLE TELCOM HOLDING
CORP., a Florida corporation (together with its successors and assigns, the
"COMPANY") and each of the Purchasers named on Annex 1 hereto (together with
their respective successors and assigns, the "PURCHASERS").
AGREEMENT
In consideration of the premises and the mutual agreements set forth
herein, the parties to this Agreement hereby agree as follows:
1. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES
1.1 FORM OF WARRANT CERTIFICATES. The warrant certificates (individually,
a "WARRANT CERTIFICATE" and, collectively, the "WARRANT CERTIFICATES")
evidencing the Warrants, and the forms of assignment and of election to purchase
shares to be attached to such certificates, shall be substantially in the form
set forth in Attachment A hereto and may have such letters, numbers or other
marks of identification or designation as may be required to comply with any law
or with any rule or regulation of any governmental authority, stock exchange or
self-regulatory organization. Each Warrant Certificate shall be dated the date
of issuance thereof by the Company, either upon initial issuance or upon
transfer or exchange, and on its face shall initially entitle the holder thereof
to purchase a number of shares of Common Stock equal to the number of Warrants
specified on the face of such Warrant Certificate at a price per share equal to
the Purchase Price, but the number of such shares and the Purchase Price shall
be subject to adjustment as provided herein.
1.2 EXECUTION OF WARRANT CERTIFICATES; REGISTRATION BOOKS
(a) EXECUTION OF WARRANT CERTIFICATES. The Warrant Certificates shall
be executed on behalf of the Company by an officer of the Company
authorized by the Board of Directors. In case the officer of the Company
who shall have signed any Warrant Certificate shall cease to be such an
officer of the Company before issuance and delivery by the Company of such
Warrant Certificate, such Warrant Certificate nevertheless may be issued
and delivered with the same force and effect as though the individual who
signed such Warrant Certificate had not ceased to be such an officer of
the Company, and any Warrant Certificate may be signed on behalf of the
Company by any individual who, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this
Agreement any such individual was not such an officer.
(b) REGISTRATION BOOKS. The Company will keep or cause to be kept at
its office maintained at the address of the Company set forth in Section
8.6 hereof or at such other office of the Company in the United States of
America of which the Company shall have given notice to each holder of
Warrant Certificates, books for
Exhibit 1.1(b)-1
registration and transfer of the Warrant Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of
the Warrant Certificates, the registration number and the number of
Warrants evidenced on its face by each of the Warrant Certificates and the
date of each of the Warrant Certificates.
1.3 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
CERTIFICATES; LOST OR STOLEN WARRANT CERTIFICATES
(a) TRANSFER, SPLIT UP, ETC. Any Warrant Certificate, with or
without other Warrant Certificates, may be transferred, split up, combined
or exchanged for another Warrant Certificate or Warrant Certificates,
entitling the registered holder or Transferee thereof to purchase a like
number of shares of Common Stock as the Warrant Certificate or Warrant
Certificates surrendered then entitled such registered holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange
any Warrant Certificate shall make such request in writing delivered to
the Company, and shall surrender the Warrant Certificate or Warrant
Certificates to be transferred, split up, combined or exchanged at the
office of the Company referred to in Section 1.2(b) hereof, whereupon the
Company shall deliver promptly to the Person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested.
(b) LOSS, THEFT, ETC. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate (which evidence shall
be, in the case of any Purchaser or another institutional investor, notice
from such institutional investor of such ownership (or of ownership by
such institutional investor's nominee) and such loss, theft, destruction
or mutilation), and:
(i) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company; PROVIDED, HOWEVER, that if
the holder of such Warrant Certificate is an institutional investor
or a Purchaser, or a nominee of an institutional investor or a
Purchaser, such Purchaser's or institutional investor's own
unsecured agreement of indemnity shall be deemed to be satisfactory;
or
(ii) in the case of mutilation, upon surrender and
cancellation thereof;
the Company at its own expense will execute and deliver, in lieu thereof,
a new Warrant Certificate, dated the date of such lost, stolen, destroyed
or mutilated Warrant Certificate and of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate.
1.4 SUBSEQUENT ISSUANCE OF WARRANT CERTIFICATES. Subsequent to the
original issuance, no Warrant Certificates shall be issued except:
(a) Warrant Certificates issued upon any transfer, combination,
split up or exchange of Warrants pursuant to Section 1.3(a) hereof;
Exhibit 1.1(b)-2
(b) Warrant Certificates issued in replacement of mutilated,
destroyed, lost or stolen Warrant Certificates pursuant to Section 1.3(b)
hereof; and
(c) Warrant Certificates issued pursuant to Section 2.3 hereof upon
the partial exercise of any Warrant Certificate to evidence the
unexercised portion of such Warrant Certificate.
1.5 EFFECT OF ISSUANCE IN REGISTERED FORM. Every holder of a Warrant
Certificate by accepting the same consents and agrees with the Company and with
every other holder of a Warrant Certificate that:
(a) the Warrant Certificates are transferable only on the registry
books of the Company if surrendered at the office of the Company referred
to in Section 1.2(b) hereof, duly endorsed or accompanied by an instrument
of transfer (in the form attached hereto) and payment of any applicable
transfer tax or stamp tax; and
(b) the Company may deem and treat the Person in whose name each
Warrant Certificate is registered as the absolute owner thereof and of the
Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificates made by anyone other than the Company)
for all purposes whatsoever, and the Company shall not be affected by any
notice to the contrary.
2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE
2.1 EXERCISE OF WARRANTS.
(a) MANNER OF EXERCISE. At any time and from time to time on or
after the Effective Date and prior to the Expiration Date, the holder of
any Warrant Certificate may exercise the Warrants evidenced thereby, in
whole or in part (but not, in the case of any exercise in part, to the
extent that such exercise would result in the issuance of the lesser of
(x) one hundred (100) whole shares of Common Stock, and (y) such lesser
number of shares as is issuable by virtue of exercise of all Warrants
evidenced by such Warrant Certificate), by surrender of such Warrant
Certificate, with an election to purchase (a form of which is attached to
each Warrant Certificate) attached thereto duly executed, to the Company
at its office referred to in Section 1.2(b) hereof, together with payment
of the Purchase Price for each share of Common Stock with respect to which
the Warrants are then being exercised. Such Purchase Price shall be
payable either:
(i) in cash pursuant to Section 2.1(b) hereof;
(ii) by a tender of Notes pursuant to Section 2.1(c) hereof;
(iii) by a tender of cash pursuant Section 2.1(b) hereof and
Notes pursuant to Section 2.1(c) hereof; or
(iv) by delivery of Warrant Certificates pursuant to Section
2.1(d) hereof.
Exhibit 1.1(b)-3
(b) PAYMENT IN CASH. Upon exercise of any Warrants, the holder of a
Warrant Certificate may pay the Purchase Price (and shall pay the excess
of the Purchase Price for the Warrants being exercised over the amounts so
deemed to be paid by tender of Notes pursuant to Section 2.1(c)) in cash
or by certified or official bank check payable to the order of the Company
or by wire transfer of immediately available funds to the account of the
Company.
(c) PAYMENT IN NOTES. The holder of a Warrant Certificate may use a
principal amount of Notes to pay the Purchase Price of any Warrants
represented by such Warrant Certificate in accordance with the following
provisions. In order to use a principal amount of Notes to pay the
Purchase Price of any Warrants, the holder of a Warrant Certificate shall:
(i) deliver such Warrant Certificate to the Company in
accordance with Section 2.1(a), and the appropriate box indicating
the method of payment of the Purchase Price checked; and
(ii) deliver such Note to the Registrar with a notice
indicating what portion of the Note the holder thereof wishes to
apply to the Purchase Price.
In such event, such holder shall be deemed to have paid that portion of
the Purchase Price equal to one hundred percent (100%) of the principal of
such Note which the holder has directed the Registrar to accept as payment
of the Purchase Price. The Company shall cause the Registrar to promptly
notify the Company of the receipt of such Note in accordance with the
provisions of the Note Agreement, and to cancel and not reissue such Note.
To the extent that the principal amount of such tendered Note is greater
than the amount of the Purchase Price paid by surrender thereof, the
Registrar shall deliver a new Note to the tendering holder thereof, in
accordance with the provisions of the Note Agreement, in the principal
amount equal to the amount not so applied to payment of the Purchase
Price. At the time of the issuance of the shares of Common Stock pursuant
to the exercise of the Warrants of any holder, the Company shall pay all
accrued and unpaid interest on the principal amount of any Note of such
holder cancelled pursuant to this Section 2.1(c) up to but excluding the
date of such issuance. For purposes of Rule 144 under the Securities Act,
17 C.F.R. '230.144, the Company and the Purchasers agree that a tender of
the principal of any Notes in payment of the exercise price in respect of
the Warrants shall not be deemed a prepayment of the Notes, but rather a
conversion of such Notes, pursuant to the terms of the Notes, the Note
Agreement, this Agreement and the Warrants, into Common Stock.
(d) NET EXERCISE. In the event that any holder of Warrant
Certificates delivers such Warrant Certificates to the Company and
notifies the Company in writing that such holder intends to exercise all,
or any portion of, the Warrants represented by such Warrant Certificates
to satisfy its obligation to pay the Purchase Price in respect thereof by
virtue of the provisions of this Section 2.1(d), such holder shall become
entitled to receive, instead of the number of shares of Common Stock such
holder would have
Exhibit 1.1(b)-4
received had the Purchase Price been paid pursuant to Section 2.1(b) or
Section 2.1(c) hereof, a number of shares of Common Stock in respect of
the exercise of such Warrants equal to the product of:
(i) the number of shares of Common Stock issuable upon such
exercise of such Warrant Certificate (or, if only a portion of such
Warrant Certificate is being exercised, issuable upon the exercise
of such portion); MULTIPLIED BY
(ii) the quotient of:
(A) the difference of:
(I) the Market Price per share of Common Stock at
the time of such exercise; MINUS
(II) the Purchase Price per share of Common Stock
at the time of such exercise;
DIVIDED BY
(B) the Market Price per share of Common Stock at the
time of such exercise.
The Company shall not be required to issue fractional shares by virtue of
this Section 2.1(d), but shall pay the exercising holder cash in lieu of
such fractional share in accordance with Section 2.6 hereof. For purposes
of Rule 144 under the Securities Act, 17 C.F.R. '230.144, the Company and
the Purchasers agree that the exercise of any Warrants in accordance with
this Section 2.1(d) shall be deemed to be a conversion of such Warrants,
pursuant to the terms of this Agreement and the Warrants, into Common
Stock.
2.2 ISSUANCE OF COMMON STOCK. Upon timely receipt of a Warrant
Certificate, with the form of election to purchase duly executed, accompanied by
payment to the Company or by delivery of Notes to the Registrar of the Purchase
Price for each of the shares to be purchased in the manner provided in Section
2.1(a) hereof and an amount equal to any applicable transfer tax (if not payable
by the Company as provided in Section 3.3 hereof), the Company shall thereupon
promptly cause certificates representing the number of whole shares of Common
Stock then being purchased to be delivered to or upon the order of the
registered holder of such Warrant Certificate, registered in such name or names
as may be designated by such holder, and, promptly after such receipt deliver
the cash, if any, to be paid in lieu of fractional shares pursuant to Section
2.6 hereof to or upon the order of the registered holder of such Warrant
Certificate.
2.3 UNEXERCISED WARRANTS. In case the registered holder of any Warrant
Certificate shall exercise less than all the Warrants evidenced thereby, a new
Warrant Certificate evidencing Warrants equal in number to the number of
Warrants remaining unexercised shall be issued by the Company to the registered
holder of such Warrant
Exhibit 1.1(b)-5
Certificate or to its duly authorized assigns.
2.4 CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES. All Warrant
Certificates surrendered to the Company for the purpose of exercise, exchange,
substitution or transfer shall be cancelled by it, and no Warrant Certificates
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall cancel and retire any other
Warrant Certificates purchased or acquired by the Company otherwise than upon
the exercise thereof.
2.5 NOTICE OF EXPIRATION DATE. All Warrants that have not been exercised
or purchased in accordance with the provisions of this Agreement shall expire
and all rights of holders of such Warrants shall terminate and cease on the
Expiration Date. The Company agrees to notify each holder of Warrants, not less
than forty-five (45) days but not more than one hundred twenty (120) days, prior
to the Expiration Date in writing, of the Expiration Date and that, on the
Expiration Date, all Warrants remaining unexercised shall expire and all rights
of holders of such Warrants shall terminate and cease.
2.6 FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares of Common Stock upon the exercise of any Warrant. Upon the
exercise of any Warrant, there shall be paid to the holder thereof, in lieu of
any fractional share of Common Stock resulting therefrom, an amount of cash
equal to the product of:
(a) the fractional amount of such share; TIMES
(b) the Market Price, as determined on the Trading Day immediately
prior to the date of exercise of such Warrant.
3. AGREEMENTS OF THE COMPANY
3.1 RESERVATION OF COMMON STOCK. The Company covenants and agrees that it
will at all times cause to be reserved and kept available out of its authorized
and unissued shares of Common Stock such number of shares of Common Stock as
will be sufficient to permit the exercise in full of all Warrants issued
hereunder and all other Rights exercisable for or convertible into Common Stock.
3.2 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID AND
NONASSESSABLE. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon the exercise of any Warrants, at the time of delivery of the certificates
representing such shares, shall be duly and validly authorized and issued and
shall be fully paid and nonassessable, free of any preemptive rights in favor of
any Person in respect of such issuance and free of any Lien created by, or
arising out of actions of, the Company, any Subsidiary or any Affiliate.
3.3 TRANSFER TAXES. The Company covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the initial issuance or delivery of:
Exhibit 1.1(b)-6
(a) each Warrant Certificate;
(b) each Warrant Certificate issued in exchange for any other
Warrant Certificate pursuant to Section 1.3(a) or Section 2.3 hereof; and
(c) each share of Common Stock issued upon the exercise of any
Warrant.
The Company shall not, however, be required to:
(i) pay any transfer tax that may be payable in respect of the
transfer or delivery of certificates representing Warrants or shares of
Common Stock in a name other than that of the registered holder of the
certificate surrendered for exercise, conversion, transfer or exchange
(any such tax being payable by the holder of such certificate at the time
of surrender); or
(ii) issue or deliver any such certificates referred to in the
foregoing clause (i) until any such tax referred to in the foregoing
clause (i) shall have been paid.
3.4 COMMON STOCK RECORD DATE. Each Person in whose name any certificate
for shares of Common Stock is issued upon the exercise of Warrants shall for all
purposes be deemed to have become the holder of record of the Common Stock
represented thereby on, and such certificate shall be dated, the date upon which
the Warrant Certificate evidencing such Warrants was duly surrendered with an
election to purchase attached thereto duly executed and payment of the aggregate
Purchase Price (and any applicable transfer taxes, if payable by such Person)
was made.
3.5 RIGHTS IN RESPECT OF COMMON STOCK. Except as otherwise set forth
herein, prior to the exercise of the Warrants evidenced thereby, the holder of a
Warrant Certificate shall not be entitled to any rights of a stockholder in the
Company with respect to shares for which the Warrants shall be exercisable,
including, without limitation, the right to vote in respect of any matter upon
which the holders of Common Stock may vote or the right to receive dividends or
other distributions and, except as expressly set forth herein, shall not be
entitled to receive any notice of any proceedings of the Company. Prior to the
exercise of the Warrants evidenced thereby, the holders of the Warrant
Certificates shall not have any obligation or any liability as stockholders of
the Company, whether such obligation or liabilities are asserted by the Company
or by creditors of the Company.
3.6 CUSIP NUMBER. The Company covenants and agrees to maintain:
(a) a private placement number in respect of the Warrants; and
(b) a CUSIP number in respect of the Common Stock;
in each case, from the CUSIP Service Bureau of Standard & Poor's, a division of
XxXxxx-Xxxx, Inc.
3.7 RIGHT OF ACTION. All rights of action in respect of the Warrants are
vested in the
Exhibit 1.1(b)-7
respective registered holders of the Warrant Certificates, and any
registered holder of any Warrant Certificate, without the consent of the holder
of any other Warrant Certificate, may, on its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, its right to
exercise the Warrants evidenced by such Warrant Certificate in the manner
provided in such Warrant Certificate and in this Agreement.
3.8 RIGHT TO RECEIVE DISTRIBUTION OF ABLE INTERNATIONAL WARRANTS.
(a) RIGHT TO RECEIVE ABLE INTERNATIONAL WARRANTS. In the event of an
Able International Spinoff, the Company shall, or shall cause Able
International to, distribute to each Person who was a registered holder of
Warrants on the date of the Able International Spinoff such holder's
ratable share (based on the number of Warrants held by such holder on the
date of the Able International Spinoff) of an aggregate number of warrants
to purchase common stock of Able International (the "ABLE INTERNATIONAL
WARRANTS") equal to the Able International Warrant Number. The
distribution of the Able International Warrants shall occur on a date
fixed by the Company which is not later than five (5) Business Days after
the Spinoff Calculation Date. The Able International Warrants shall:
(i) be immediately exercisable on the date of issuance
thereof;
(ii) expire on the later of the Expiration Date and the date
forty-five (45) days after the issuance thereof;
(iii) each represent (subject to adjustment as provided in the
Able International Warrant Agreement) the right to purchase one (1)
validly issued, fully paid and non-assessable Able International
Share at a purchase price (subject to adjustment as provided in the
Able International Warrant Agreement) equal to the Able
International Warrant Purchase Price, payable (as set forth in the
Able International Warrant Agreement) in cash, in Notes or in Able
International Warrants (but not in Warrants); and
(iv) otherwise have terms and provisions substantially
identical to those of the Warrants.
(b) NOTICE OF DECLARATION. In the event of an Able International
Spinoff, the Company shall give written notice thereof to each holder of
Warrants (or former holder of Warrants) entitled to receive a distribution
of the Able International Warrants, within five (5) days after the
declaration of the dividend or distribution or the announcement of such
reclassification or other similar arrangement giving rise to such Able
International Spinoff, which notice shall:
(i) provide a detailed description of the Able
International Spinoff;
(ii) state the date the Able International Spinoff will occur;
Exhibit 1.1(b)-8
(iii) state the Spinoff Calculation Date;
(iv) explain that the Able International Warrant Number and
the Able International Warrant Purchase Price shall be determined as
of the Spinoff Calculation Date;
(v) state the date fixed for distribution of the Able
International Warrants;
(vi) state the aggregate number of Able International Shares
to be distributed, dividended, issued or deemed issued per share of
Common Stock;
(vii) state the number of shares of Common Stock into which
each Warrant is then exercisable; and
(viii) describe the right described in Section 3.8(a).
(c) ABLE INTERNATIONAL WARRANT AGREEMENT. On or prior to the date of
the Able International Spinoff, the Company shall cause Able International
to enter into a warrant agreement (the "ABLE INTERNATIONAL WARRANT
AGREEMENT") to govern the terms of the Able International Warrants. The
terms and provisions of the Able International Warrant Agreement shall be
substantially identical to those set forth in this Warrant Agreement,
including, without limitation, substantially identical antidilution
provisions and agreements of Able International as contained herein with
respect to the Company, and shall be in form acceptable to those holders
of Warrants (or former holders of Warrants) entitled to receive a
distribution of the majority of the Able International Warrants. The
Company shall also cause to be delivered to each such holder or former
holder an opinion, satisfactory in form and substance to those holders of
Warrants (or former holders of Warrants) entitled to receive a
distribution of the majority of the Able International Warrants, of
independent counsel to the effect that such warrant agreement and the
certificates representing the Able International Warrants to be issued
thereunder are enforceable in accordance with their terms, that upon
payment of the purchase price therefor the Able International common stock
to be issued upon exercise thereof shall be validly issued, fully paid and
non-assessable, free and clear of any lien or encumbrance created by the
Company or Able International, and as to such other matters as are
customarily addressed in connection with an issuance of warrants as such
holders may reasonably request.
(d) NOTICE OF DISTRIBUTION. Two (2) Business Days following the
Spinoff Calculation Date, the Company shall, or shall cause Able
International to, provide a written notice to each holder of Warrants (or
former holder of Warrants) entitled to receive a distribution of the Able
International Warrants, which notice shall:
(i) state the date fixed for distribution of the Able
International Warrants;
(ii) state the Able International Warrant Number and the Able
Exhibit 1.1(b)-9
International Warrant Purchase Price, together with a detailed
calculation of each;
(iii) provide a detailed calculation of the Market
Capitalization of the Company, the Market Capitalization of Able
International, the Market Capitalization Percentage of the Company
and the Market Capitalization Percentage of Able International;
(iv) provide a detailed calculation of the Pre-Spinoff
Ownership Percentage; and
(v) state the number of Able International Warrants being
issued to each such holder.
The Company shall, or shall cause Able International to, distribute the
Able International Warrants to each holder of Warrants (or former holder
of Warrants) entitled to receive a distribution of the Able International
Warrants on the date fixed therefor.
(e) DIVIDENDS PAID PARTLY IN ABLE INTERNATIONAL SHARES. For purposes
of this Section 3.8 and Section 4 hereof, any dividend or distribution
declared or paid partly in Able International Shares and partly in Common
Stock, other Securities or other Property shall be deemed to be an Able
International Spinoff subject to the provisions of this Section 3.8 to the
extent made in Able International Shares and a separate dividend of Common
Stock, other Securities or Property subject to the provisions of Section 4
hereof to the extent payable in Property other than Able International
Shares.
3.9 PROVISIONS CONCERNING THE REGISTRAR. The Company will cause a
Registrar appointed under section 2.5 of the Note Agreement to maintain a
register for the registration and transfer of Notes, which office shall be
maintained in the United States of America. In the event the Company appoints a
Registrar other than the Company, the Company shall enter into an appropriate
agency agreement with such Registrar in form and scope, and containing such
indemnity provisions as are, acceptable to the Required Warrantholders. Such
agency agreement shall be such as to permit the implementation of the provisions
of Section 2.1(c). The Company initially appoints the Registrar indicated on
Annex 2, and shall notify each holder of Warrants in writing of any change in
the identity or address of any Registrar not less than thirty (30) days prior to
such change taking effect. Notwithstanding any other provision of this Agreement
or any such agency agreement to the contrary, as between the Company and each
holder of Warrants, no appointment of any Registrar shall relieve the Company of
any of its obligations under Section 2, and the Company shall remain, as between
the Company and each holder of Warrants, liable for any act or failure to act on
the part of any Registrar as fully as if the Company had itself so acted or
omitted to act. The Company agrees to indemnify and hold harmless each holder
against any damages sustained as a result of its failure to promptly notify each
holder in writing of any change in the identity or office of the Registrar.
3.10 SURVIVAL. The agreements of the Company contained in this Section 3
shall survive the exercise of and the expiration of the Warrants.
Exhibit 1.1(b)-10
4. ANTIDILUTION ADJUSTMENTS
4.1 MECHANICAL ADJUSTMENTS. The number of shares of Common Stock
purchasable upon the exercise of each Warrant, and the Purchase Price, shall be
subject to adjustment as set forth in this Section 4.
4.2 STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In the event that the
Company shall, on or after the date hereof:
(a) pay a dividend in shares of Additional Common Stock or make a
distribution in shares of Additional Common Stock;
(b) reclassify by subdivision its outstanding shares of Common Stock
into a greater number of shares; or
(c) reclassify by combination its outstanding shares of Common Stock
into a smaller number of shares;
then, and in each such case, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision or
combination shall be adjusted to that price determined by multiplying the
Purchase Price in effect immediately prior to such event by the quotient of:
(i) the total number of outstanding shares of Common Stock
immediately prior to such event; DIVIDED BY
(ii) the total number of outstanding shares of Common Stock
immediately after such event.
An adjustment made pursuant to this Section 4.2 shall become effective on the
effective date of such event.
4.3 DIVIDENDS AND DISTRIBUTIONS. In the event that the Company shall make
or pay any dividend of, or distribute to holders of shares of Common Stock
(including, without limitation, any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation)
shares of capital stock (other than Common Stock, which shall be subject to
Section 4.2, and other than Able International Shares, which shall be subject to
Section 3.8) or rights, warrants or options exercisable into such capital stock
(other than Rights, which shall be subject to Section 4.5, and other than Able
International Shares, which shall be subject to Section 3.8), other Securities,
evidences of its indebtedness or any of its Property (other than cash dividends
payable out of current net income or retained earnings), then, in each case, the
Purchase Price in effect after the record date in respect of which such stock,
rights, warrants, options, other Securities, indebtedness or Property were
dividended or distributed shall be adjusted by multiplying the Purchase Price in
effect immediately prior to such record date by the quotient of:
Exhibit 1.1(b)-11
(a) the difference of:
(i) the Reference Price on such record date; MINUS
(ii) the quotient of:
(A) the then fair value (as determined by the Valuation
Agent, whose determination, if so made, shall be conclusive)
of the shares of stock, rights, warrants, options, other
Securities, evidences of indebtedness or Property so
dividended or distributed; DIVIDED BY
(B) the number of shares of Common Stock outstanding on
the record date;
DIVIDED BY
(b) the Reference Price on such record date.
Such adjustment shall be made whenever any such dividend or distribution is
made, and shall become effective on the date of such dividend or distribution.
4.4 REPURCHASES OF COMMON STOCK OR RIGHTS. In the event that the Company
shall repurchase, redeem, retire or otherwise acquire shares of Common Stock or
Rights for a Consideration Per Share greater than the Market Price in effect on
the date of such repurchase, redemption, retirement or acquisition, then the
Purchase Price in effect immediately after such event shall be adjusted by
multiplying the Purchase Price in effect immediately prior to such event by the
quotient of:
(a) the difference of:
(i) the product of:
(A) the number of shares of Common Stock (calculated on
a Fully Diluted Basis) immediately prior to such event;
MULTIPLIED BY
(B) the Market Price in effect immediately prior to such
event;
MINUS
(ii) the Aggregate Consideration Paid;
DIVIDED BY
(b) the product of:
(i) the Market Price in effect immediately prior to such
event; MULTIPLIED BY
Exhibit 1.1(b)-12
(ii) the difference of:
(A) the number of shares of Common Stock (calculated on
a Fully Diluted Basis) immediately prior to such event; MINUS
(B) the number of shares of Common Stock (or initially
issuable pursuant to such Rights) so repurchased, redeemed,
retired or otherwise acquired.
In the event that any of the Aggregate Consideration Paid consists of
Property other than cash, the value of such Property for purposes of computing
the Aggregate Consideration Paid shall be determined by the Valuation Agent as
of a date not more than thirty (30) days prior to the date of determination
thereof and shall be set forth in a written certificate of the Valuation Agent
which shall be delivered to the holders of the Warrants in the manner
contemplated by Section 8.6.
4.5 ISSUANCES OF ADDITIONAL COMMON STOCK OR RIGHTS. In the event that the
Company shall issue or sell shares of Additional Common Stock or Rights
(excluding Excluded Securities) for no consideration or at a Consideration Per
Share lower than the Reference Price in effect on the date of such issuance or
sale, then the Purchase Price in effect immediately after such event shall be
adjusted by multiplying the Purchase Price in effect immediately prior to such
event by the quotient of:
(a) the sum of:
(i) the number of shares of Common Stock outstanding
immediately prior to such event; PLUS
(ii) the quotient of:
(A) the Aggregate Consideration Receivable; DIVIDED
BY
(B) the Reference Price;
in each case immediately prior to such event;
DIVIDED BY
(b) the sum of:
(i) the number of shares of Common Stock outstanding
immediately prior to such event; PLUS
(ii) the number of shares of Additional Common Stock so issued
or sold (or initially issuable pursuant to such Rights).
Exhibit 1.1(b)-13
In the event that any of the Aggregate Consideration Receivable consists
of Property other than cash, the value of such Property for purposes of
computing the Aggregate Consideration Receivable shall be determined by the
Valuation Agent as of a date not more than thirty (30) days prior to the date of
determination thereof and shall be set forth in a written certificate of the
Valuation Agent which shall be delivered to the holders of the Warrants in the
manner contemplated by Section 8.6.
4.6 EXPIRATION OF RIGHTS. Upon the expiration of any Rights in respect of
the issuance of which adjustment was made pursuant to Section 4.5, without the
exercise thereof, the Purchase Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall, upon such expiration, be
readjusted and shall thereafter be such Purchase Price and such number of shares
of Common Stock as would have been had such Purchase Price and such number of
shares of Common Stock been originally adjusted (or had the original adjustment
not been required, as the case may be) as if:
(a) the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the exercise of such
Rights; and
(b) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all of such Rights, whether or not exercised;
PROVIDED that no such readjustment shall have the effect of increasing the
Purchase Price by an amount in excess of the amount of the reduction
initially made in respect of the issuance, sale, or grant of such Rights.
4.7 ABLE INTERNATIONAL SPINOFF. In the event of an Able International
Spinoff, the Purchase Price of the Warrants in effect immediately prior to the
Spinoff Calculation Date shall be adjusted, effective on the Spinoff Calculation
Date, by multiplying the Purchase Price of the Warrants in effect immediately
prior to the Spinoff Calculation Date by the Market Capitalization Percentage of
the Company, calculated as of the Spinoff Calculation Date.
4.8 CONSOLIDATION; MERGER; SALE; RECLASSIFICATION. In the event that
there shall be:
(a) any consolidation of the Company with, or merger of the Company
with or into, another corporation (other than a merger in which the
Company is the surviving corporation and that does not result in any
reclassification or change of shares of Common Stock outstanding
immediately prior to such merger);
(b) any sale or conveyance to another corporation of the Property of
the Company substantially as an entirety; or
(c) any reclassification of the Common Stock that results in the
issuance of other Securities of the Company;
then, in each such case, lawful provision shall be made as a part of the terms
of such
Exhibit 1.1(b)-14
transaction so that the holders of Warrants shall thereafter have the
right to purchase the number and kind of shares of stock, other Securities,
cash, Property and Rights receivable upon such consolidation, merger, sale,
conveyance or reclassification by a holder of such number of shares of Common
Stock as the holder of a Warrant would have had the right to acquire upon the
exercise of such Warrant immediately prior to such consolidation, merger, sale,
conveyance or reclassification, at the Purchase Price then in effect, and,
without further action on the part of any Person, each Warrant will thereafter
represent the right to receive, upon payment of the Purchase Price, such shares
of stock, other Securities, cash, Property and Rights as are so receivable. The
Company agrees that, as a condition of proceeding with such consolidation,
merger or sale, it shall cause the Person surviving such merger or consolidation
or the Person to whom such sale or conveyance is made, as the case may be, at
the time of such consolidation, merger or sale, to expressly assume the due and
punctual observance and performance of each and every provision of this
Agreement and all obligations and liabilities of the Company hereunder (subject
to the foregoing sentence), in each case, pursuant to such agreements and
instruments as are reasonably acceptable to the Required Warrantholders.
4.9 DE MINIMIS CHANGES IN PURCHASE PRICE. No adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Purchase Price; PROVIDED that any
adjustments that, at the time of the calculation thereof, are less than one
percent (1%) of the Purchase Price at such time and by reason of this Section
4.9 are not required to be made at such time shall be carried forward and added
to any subsequent adjustment or adjustments for purposes of determining whether
such subsequent adjustment or adjustments, as so supplemented, exceed the one
percent (1%) amount set forth in this Section 4.9 and, if any such subsequent
adjustment, as so supplemented or otherwise, should exceed such one percent (1%)
amount, all adjustments deferred prior thereto and not previously made shall
then be made. In any case, all such adjustments being carried forward pursuant
to this Section 4.9 shall be given effect upon the exercise of any Warrants by
any holder thereof for purposes of determining the Purchase Price thereof. All
calculations shall be made to the nearest cent ($0.01).
4.10 ADJUSTMENT OF NUMBER OF SHARES ISSUABLE PURSUANT TO WARRANTS. Upon
each adjustment of the Purchase Price as a result of any calculations made
pursuant to Section 4.2, Section 4.3, Section 4.4, Section 4.5 or Section 4.13,
each Warrant outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of shares of Common Stock (calculated to the nearest share) obtained
by multiplying the number of shares of Common Stock covered by such Warrant
immediately prior to such adjustment by the quotient of:
(a) the Purchase Price in effect immediately prior to such
adjustment; DIVIDED BY
(b) the Purchase Price in effect immediately after such adjustment.
All Warrants originally issued by the Company hereunder shall, subsequent to any
adjustment made to the Purchase Price hereunder, evidence the right to purchase,
at the adjusted Purchase Price, the number of shares of Common Stock determined
to be purchasable from
Exhibit 1.1(b)-15
time to time hereunder upon exercise of such Warrants, all subject to further
adjustment as provided herein. Each such adjustment shall be valid and binding
upon the Company and the holders of Warrants irrespective of whether the Warrant
Certificates theretofore and thereafter issued express the Purchase Price per
share of Common Stock and the number of shares of Common Stock that were
expressed upon the initial Warrant Certificates issued hereunder.
4.11 MISCELLANEOUS.
(a) Adjustments shall be made pursuant to this Section 4
successively whenever any of the events referred to in Section 4.2 through
Section 4.8, inclusive, shall occur.
(b) If any Warrant shall be exercised subsequent to the record date
for any of the events referred to in Section 4.2 through Section 4.8,
inclusive, but prior to the effective date thereof, appropriate
adjustments shall be made immediately after such effective date so that
the holder of such Warrant on such record date shall have received, in the
aggregate, the kind and number of shares of Common Stock or other
Securities or Property that it would have owned or been entitled to
receive on such effective date had such Warrant been exercised prior to
such record date.
(c) Shares of Common Stock owned by or held for the account of the
Company or any Subsidiary shall not, for purposes of the adjustments set
forth in this Section 4, be deemed outstanding.
4.12 OTHER SECURITIES. In the event that at any time, as a result of an
adjustment made pursuant to this Section 4, each holder of Warrants shall become
entitled to purchase any Securities of the Company other than shares of Common
Stock, the number or amount of such other Securities so purchasable and the
Purchase Price of such Securities shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions contained in Section 4.2 through Section 4.8, inclusive, hereof, and
all other relevant provisions of this Section 4 that are applicable to shares of
Common Stock shall be applicable to such other Securities.
4.13 ADDITIONAL AGREEMENTS OF THE COMPANY. The Company covenants and
agrees that:
(a) The Company shall not, by amendment to its Charter as in effect
on the date hereof, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, liquidation, issuance or sale of
Securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, or which would have the effect of circumventing
or avoiding the provisions of this Section 4, but shall at all times in
good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such actions as may be necessary or
appropriate in order to protect the rights of the holders of the Warrant
Certificates against dilution or other impairment.
(b) Before taking any action that would result in an adjustment to the
then
Exhibit 1.1(b)-16
current Purchase Price to a price that would be below the then current par
value of Common Stock issuable upon exercise of any Warrant, the Company
will take or cause to be taken any and all necessary corporate or other
action that may be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon
payment of such Purchase Price as so adjusted.
(c) The Company agrees that it will not amend the provisions of any
Rights (other than the Warrants), including, without limitation, the
Series A Preferred Stock or the Series A Warrants, or make any adjustment
thereto (other than pursuant to antidilution provisions applicable to such
Rights by the terms thereof, as such provisions are in effect on the
Closing Date) so as to reduce the Consideration Per Share applicable
thereto, increase the number of shares issuable upon exercise thereof or
otherwise change the economic terms (such as the purchase price, exercise
price, conversion price or conversion ratio) thereof. If the Company shall
amend the provisions of any Rights (other than the Warrants), including,
without limitation, the Series A Preferred Stock or the Series A Warrants,
or make any adjustment thereto (either in violation of this Section
4.13(c) or pursuant to any antidilution provision) so as to reduce the
Consideration Per Share applicable thereto, increase the number of shares
issuable upon exercise thereof or otherwise change the economic terms
(such as the purchase price, exercise price, conversion price or
conversion ratio) thereof, then the Company shall make appropriate
adjustment, as nearly as practical to those that would be required by the
provisions of Section 4.2 through Section 4.5, inclusive, most nearly
analogous to the effect of such amendment, to the Purchase Price, and,
pursuant to Section 4.10, to the number of shares of Common Stock issuable
upon exercise of the Warrants, as shall be fair and equitable, such
adjustment to be determined by the Valuation Agent. The making of any such
adjustment pursuant to the second sentence of this Section 4.13(c) shall
not cure any breach of this agreement resulting from the failure of the
Company to comply with the first sentence of this Section 4.13(c), and
each holder of Warrants shall retain any and all legal rights it may have
in respect of such breach notwithstanding the making of such adjustment.
(d) In the event that any of the events described in any of Section
4.2 through Section 4.5, inclusive, give rise to an adjustment to the
purchase, exercise or conversion price or conversion ratio, or number of
shares of Common Stock issuable upon conversion or exercise, of any Rights
(other than the Warrants), including, without limitation, the Series A
Preferred Stock and the Series A Warrants, then the adjustments provided
for in Section 4.2 through Section 4.5, inclusive, in respect of such
event shall give effect both to the event giving rise to such adjustment
under this Agreement and to all such adjustments made in respect of such
other Rights; PROVIDED, HOWEVER, that no such adjustment shall duplicate
any adjustment required to be made in respect thereof by virtue of the
provisions of Section 4.13(c).
5. REPORTING COVENANTS
Exhibit 1.1(b)-17
5.1 FINANCIAL AND BUSINESS INFORMATION
The Company shall deliver to each holder of Warrants:
(a) QUARTERLY FINANCIAL STATEMENTS -- as soon as practicable after
the end of each quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such fiscal year),
and in any event within forty-five (45) days thereafter:
(i) a consolidated balance sheet as at the end of such
quarter; and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal
year ending with such quarter;
for the Company and the Subsidiaries, setting forth in each case, in
comparative form, the financial statements for the corresponding periods
in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements
generally, and certified as complete and correct by the chief financial
officer of the Company; PROVIDED, that delivery of copies of the Company's
Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission within the time period specified above shall be deemed to
satisfy the requirements of this Section 5.1(a) so long as such Quarterly
Report contains or is accompanied by the information specified in this
Section 5.1(a);
(b) ANNUAL FINANCIAL STATEMENTS -- as soon as practicable after the
end of each fiscal year of the Company, and in any event within one
hundred twenty (120) days thereafter:
(i) a consolidated balance sheets as at the end of such
year; and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows for such year;
for the Company and the Subsidiaries, setting forth in comparative form,
the financial statement for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and accompanied by an audit
report thereon of independent certified public accountants of recognized
national standing, which report shall state without qualification
(including, without limitation, qualifications related to the scope of the
audit, the compliance of the audit with generally accepted auditing
standards, or the ability of the Company or a material subsidiary thereof
to continue as a going concern), that such financial statements have been
prepared and are in conformity with GAAP; PROVIDED, that the delivery of
the Company's Annual Report on Form 10-K for such fiscal year filed with
the Securities and Exchange Commission within the time period specified
above shall be deemed to satisfy the requirements of this Section 5.1(b)
so long as such Annual Report contains or is accompanied by the reports
and other information
Exhibit 1.1(b)-18
otherwise specified in this Section 5.1(b);
(c) SEC AND OTHER REPORTS -- promptly upon their becoming available:
(i) each financial statement, report, notice or proxy
statement sent by the Company or any Subsidiary to stockholders
generally; and
(ii) each regular or periodic report (including, without
limitation, each Form 10-K, Form 10-Q and Form 8-K), and each
amendment thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission (and any successor agency);
(d) RULE 144A -- promptly upon the request of any holder of
Warrants, information required to comply with 17 C.F.R. '230.144A, as
amended from time to time, in connection with any transfer or proposed
transfer of any Warrants; and
(e) REQUESTED INFORMATION -- with reasonable promptness, such other
data and information as from time to time may be requested by any holder
of Warrants.
5.2 INFORMATION CONCERNING ANTIDILUTION ADJUSTMENTS.
(a) NOTICE OF ADJUSTMENT. Whenever the number of shares of Common
Stock issuable upon the exercise of Warrants is adjusted or the Purchase
Price in respect thereof is adjusted, as herein provided, the Company
shall promptly give to each holder of Warrants notice of such adjustment
or adjustments and shall promptly deliver to each holder of Warrants a
certificate of the chief financial officer of the Company setting forth:
(i) the number of shares of Common Stock issuable upon the
exercise of each Warrant and the Purchase Price of such shares after
such adjustment;
(ii) a brief statement of the facts requiring such adjustment;
and
(iii) the computation by which such adjustment was made.
(b) ANNUAL CERTIFICATE. So long as any Warrant is outstanding,
within one hundred twenty (120) days of the end of each fiscal year of the
Company, the Company shall deliver to each holder of Warrants a
certificate of the chief financial officer of the Company setting forth:
(i) the number of shares of Common Stock issuable upon the
exercise of each Warrant and the Purchase Price of such shares as of
the end of such fiscal year;
(ii) a brief statement of the facts requiring each adjustment,
if any, required to be made in such fiscal year; and
Exhibit 1.1(b)-19
(iii) the computation by which each such adjustment was made.
(c) CONFIRMATION BY ACCOUNTANTS. At the request of a holder of
Warrants, a certificate of the chief financial officer pursuant to Section
5.2(a) or Section 5.2(b) shall be confirmed by a certificate from the
independent certified public accountants of the Company.
(d) NOTICES OF CERTAIN EVENTS. Whenever the Company shall publicly
announce the authorization of any Notice Event, the Company shall, not
less than fifteen (15) days prior to the record date with respect to such
event (or, if no record date for the same shall be fixed, not less than
fifteen (15) days prior to the occurrence of such Notice Event), give to
each holder of Warrants, written notice of such event setting forth any
change in the number of shares of Common Stock the Company estimates will
be issuable upon the exercise of each Warrant, the estimated Purchase
Price after any adjustment required to be made hereunder and a brief
statement of the facts requiring such adjustment and the computation by
which the Company expects such adjustment will be made. Notwithstanding
the foregoing, no failure of the Company to give any such notice shall
affect the validity of the action taken unless such failure was in bad
faith.
6. REGISTRATION RIGHTS
6.1 SHELF REGISTRATION.
(a) FILING AND EFFECTIVENESS. On or prior to the Shelf Filing Date,
the Company will file a single "shelf" registration statement (the "SHELF
REGISTRATION") on form S-3 or such other appropriate form pursuant to Rule
415 under the Securities Act or any similar rule that may be adopted by
the SEC with respect to dispositions of all of the Registrable Securities
in such manner or manners specified by the holders thereof. The Company
agrees to cause the Shelf Registration to be declared effective as
promptly as is practicable after such filing (and in any event, prior to
the Shelf Effective Date) and agrees to keep the Shelf Registration
effective (and to take any and all other actions necessary in order to
permit public resale of the Registrable Securities covered by the Shelf
Registration) for a period (the "SHELF EFFECTIVE PERIOD") beginning on the
date such Shelf Registration shall first be declared effective under the
Securities Act and ending upon the earlier to occur of January 1, 2000 and
such date as no Registrable Securities shall remain, subject to the terms
and conditions set forth in this Agreement. The Company further agrees, if
necessary, to supplement or make amendments to such Shelf Registration, if
required by the registration form utilized by the Company for the Shelf
Registration or by the instructions applicable to such registration form
or by the Securities Act, and the Company agrees to furnish to the holders
of the Registrable Securities covered by the Shelf Registration copies of
any such supplement or amendment prior to its being used or filed with the
SEC.
(b) APPROVAL OF SHELF REGISTRATION. If the Requisite Holders shall
have approved the filing of any Shelf Registration as provided in Section
6.4(a), but any holder of
Exhibit 1.1(b)-20
Registrable Securities objects to such filing on the grounds that the
disclosure contained in the Shelf Registration contains any misstatement
of a material fact or omits to state a fact required to be stated therein
or necessary to make the statements therein not misleading, then such
holder shall have the right, in its sole discretion, to withdraw from the
Shelf Registration. If the Company receives notice of such withdrawal from
any holder wishing to withdraw from the Shelf Registration, then the
Company shall not name such holder in the registration statement or, in
the case of withdrawal in connection with any amendment or supplement to a
registration statement in which such holder is already named, shall amend
such registration statement to delete references to such holder, and to
withdraw the Registrable Securities of such holder, from the registration
statement. The Shelf Registration shall not be considered effective with
respect to any such withdrawing holder.
(c) SELECTION OF UNDERWRITERS. If any offering pursuant to the Shelf
Registration is in the form of an underwritten offering, the underwriters
of such offering shall be one or more underwriting firms of recognized
standing selected by the Requisite Holders and reasonably acceptable to
the Company. In the event of an underwritten offering pursuant to the
Shelf Registration, no securities of the Company (other than the
Registrable Securities) shall be included in any such offering without the
prior written consent of all holders of Registrable Securities
participating in such offering.
(d) ACCELERATION OF REQUIREMENT TO FILE SHELF REGISTRATION. In the
event that the Company becomes aware that any event described in clause
(b), clause (c) or clause (d) of the definition of "Effective Date" will
or will be likely to occur on or before the Shelf Effective Date, then,
and in each such case, the Company shall file the Shelf Registration as
soon as possible, and, in any event, on or before the date which is thirty
(30) days after the Company becoming aware of any such occurrence, and
shall use its diligent best efforts to cause the Shelf Registration to be
declared effective under the Securities Act as soon after such filing as
is practicable.
Exhibit 1.1(b)-21
6.2 INCIDENTAL REGISTRATION.
(a) FILING OF REGISTRATION STATEMENT. If the Company at any time
proposes to register any of its Common Stock (an "INCIDENTAL
REGISTRATION") under the Securities Act (other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor forms
thereto, in connection with an offer made solely to existing Security
holders or employees of the Company), for sale in a Public Offering, it
will each such time give prompt written notice to all holders of
Registrable Securities of its intention to do so, which notice shall be
given to all such holders at least thirty (30) Business Days prior to the
date that a registration statement relating to such registration is
proposed to be filed with the SEC. Upon the written request of any such
holder to include its shares under such registration statement (which
request shall be made within fifteen (15) Business Days after the receipt
of any such notice and shall specify the Registrable Securities intended
to be disposed of by such holder), the Company will use its best efforts
to effect the registration of the offering and sale of all Registrable
Securities that the Company has been so requested to register by such
holder; PROVIDED, HOWEVER, that if, at any time after giving written
notice of its intention to register any Common Stock and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register
such Common Stock, the Company may, at its election, give written notice
of such determination to each such holder and, thereupon, shall be
relieved of its obligation to register any Registrable Securities of such
holders in connection with such registration.
(b) SELECTION OF UNDERWRITERS. Notice of the Company's intention to
register such Common Stock shall designate the proposed underwriters of
such offering (which shall be one or more underwriting firms of recognized
standing) and shall contain the Company's agreement to use its best
efforts, if requested to do so, to arrange for such underwriters to
include in such underwriting the Registrable Securities that the Company
has been so requested to register pursuant to this Section 6.2, it being
understood that the holders of Registrable Securities shall have no right
to select different underwriters for the disposition of their Registrable
Securities.
(c) PRIORITY ON INCIDENTAL REGISTRATIONS. If the managing
underwriter shall advise the Company in writing (with a copy to each
holder of Registrable Securities requesting sale) that, in such
underwriter's opinion, the number of shares of Common Stock requested to
be included in such Incidental Registration exceeds the number that can be
sold in such offering within a price range acceptable to the Company (such
writing to state the basis of such opinion and the approximate number of
shares of Common Stock that may be included in such offering without such
effect), the Company will include in such Incidental Registration, to the
extent of the number of shares of Common Stock that the Company is so
advised can be sold in such offering:
(i) in the case of any registration initiated by the Company
for the purpose of selling Securities for its own account:
(A) FIRST, Securities that the Company proposes to issue
and
Exhibit 1.1(b)-22
sell for its own account; and
(B) SECOND, Registrable Securities requested to be sold
by the holders thereof pursuant to this Section 6.2 and all
Common Stock proposed to be registered by the Other
Stockholders, PRO RATA among such holders on the basis of the
number of shares requested to be so registered by such
holders; and
(ii) in the case of a registration initiated by any Other
Stockholder pursuant to demand or required registration rights in
favor of such Other Stockholder:
(A) FIRST, shares of Common Stock requested to be sold
by the Other Stockholders requesting such Registration;
(B) SECOND, Registrable Securities requested to be sold
by the holders thereof pursuant to this Section 6.2 and all
Common Stock proposed to be registered by the Other
Stockholders (other than those referred to in Section
6.2(c)(ii)(A)), PRO RATA among such holders on the basis of
the number of shares requested to be so registered by such
holders; and
(C) THIRD, shares that the Company proposes to issue and
sell for its own account.
6.3 COMPANIES REGISTRATION. If the Securities Act (whether by statutory
amendment, amendment of the rules and regulations thereunder or both) is amended
after the date hereof to provide for a Companies Registration Scheme, and the
Company is or becomes eligible to participate in the Companies Registration
Scheme, then the Company, promptly following the request of the Required
Holders, shall use its reasonable best efforts to register promptly under the
Companies Registration Scheme so as to facilitate the resale under the
registration statement contemplated by such Companies Registration Scheme of the
Registrable Securities in accordance with the method or methods of distribution
contemplated by the Holders.
6.4 REGISTRATION PROCEDURES. The Company will use its best efforts to
effect each Registration, and to cooperate with the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and the Company will as expeditiously as possible:
(a) subject, in the case of an Incidental Registration, to the
proviso to Section 6.2(a), prepare and file with the SEC the registration
statement and use its best efforts to cause the Registration to become
effective; PROVIDED, HOWEVER, that:
(i) before the initial filing of any registration statement,
the Company will furnish to the holders of the Registrable
Securities covered by such registration statement, their counsel,
and the underwriters, if any, and their
Exhibit 1.1(b)-23
counsel, copies of all such documents proposed to be filed at least
ten (10) days prior thereto, which documents will be subject to the
reasonable review, within such ten (10) day period, of such holders,
their counsel and the underwriters; and
(ii) before filing any prospectus or any amendments or
supplements to any registration statement or prospectus, the Company
will furnish to the holders of the Registrable Securities covered by
such registration statement, their counsel, and the underwriters, if
any, and their counsel, copies of all such documents proposed to be
filed a reasonable period of time (in light of the nature of the
amendments or changes contained therein, which shall in every event
be at least one (1) day and shall never be required to be more than
ten (10) days) prior thereto, which documents will be subject to the
reasonable review, within such period, of such holders, their
counsel and the underwriters;
and the Company will not file any registration statement or amendment
thereto or any prospectus or any supplement thereto (including such
documents incorporated by reference) to which the Requisite Holders shall
reasonably object within any such review period;
(b) subject, in the case of an Incidental Registration, to the
proviso to Section 6.2(a), prepare and file with the SEC such amendments
and post-effective amendments to any registration statement and any
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement; and cause the
prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Securities
Act;
(c) furnish to each holder of Registrable Securities included in
such Registration and the underwriter or underwriters, if any, without
charge, at least one signed copy of the registration statement and any
post-effective amendment thereto, upon request, and such number of
conformed copies thereof and such number of copies of the prospectus
(including each preliminary prospectus and each prospectus filed under
Rule 424 under the Securities Act), any amendments or supplements thereto
and any documents incorporated by reference therein, as such holder or
underwriter may reasonably request in order to facilitate the disposition
of the Registrable Securities being sold by such holder (it being
understood that the Company consents to the use of the prospectus and any
amendment or supplement thereto by each holder of Registrable Securities
covered by such registration statement and the underwriter or
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by the prospectus or any amendment or
supplement thereto);
(d) notify each holder of the Registrable Securities of any stop
order or other order suspending the effectiveness of any registration
statement, issued or threatened by the SEC in connection therewith, and
take all reasonable actions required to prevent
Exhibit 1.1(b)-24
the entry of such stop order or to remove it or obtain withdrawal of it at
the earliest possible moment if entered;
(e) if requested by the managing underwriter or underwriters, if
any, or any holder of Registrable Securities in connection with any sale
pursuant to a registration statement, promptly incorporate in a prospectus
supplement or post-effective amendment such information relating to such
underwriting as the managing underwriter or underwriters, if any, or such
holder reasonably requests to be included therein; and make all required
filings of such prospectus supplement or post-effective amendment as soon
as practicable after being notified of the matters incorporated in such
prospectus supplement or post-effective amendment;
(f) on or prior to the date on which a Registration is declared
effective, use its best efforts to register or qualify, and cooperate with
the holders of Registrable Securities included in such Registration, the
underwriter or underwriters, if any, and their counsel, in connection with
any necessary registration or qualification of the Registrable Securities
covered by such Registration for offer and sale under the securities or
"blue sky" laws of each state and other jurisdiction of the United States
as any such holder or the managing underwriter, if any, reasonably
requests in writing; use its best efforts to keep each such registration
or qualification effective, including through new filings, or amendments
or renewals, during the period such registration statement is required to
be kept effective; and do any and all other acts or things necessary or
advisable to enable the disposition in all such jurisdictions reasonably
requested of the Registrable Securities covered by such Registration;
PROVIDED, HOWEVER, that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service
of process in any such jurisdiction where it is not then so subject;
(g) in connection with any sale pursuant to a Registration,
cooperate with the holders of Registrable Securities and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends)
representing shares of Common Stock to be sold under such Registration,
and enable such share certificates to be in such denominations and
registered in such names as the managing underwriter or underwriters, if
any, or such holders may request;
(h) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or
authorities within the United States and having jurisdiction over the
Company or any Subsidiary as may reasonably be necessary to enable the
seller or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities;
(i) enter into such agreements (including underwriting agreements in
customary form) and take such other actions as the Requisite Holders shall
reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities;
Exhibit 1.1(b)-25
(j) use its best efforts to obtain:
(i) at the time of effectiveness of each Registration, a
"comfort letter" from the Company's independent certified public
accountants covering such matters of the type customarily covered by
"cold comfort letters" as the Requisite Holders and the underwriters
reasonably request; and
(ii) at the time of any underwritten sale pursuant to the
registration statement, a "bring-down comfort letter," dated as of
the date of such sale, from the Company's independent certified
public accountants covering such matters of the type customarily
covered by comfort letters as the Requisite Holders and the
underwriters reasonably request;
(k) use its best efforts to obtain, at the time of effectiveness of
each Incidental Registration and at the time of any sale pursuant to each
Registration, an opinion or opinions, favorable to the Requisite Holders
in form and scope, from counsel for the Company in customary form;
(l) notify each seller of Registrable Securities covered by such
Registration, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and promptly prepare, file with the SEC
and furnish to such seller or holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers or prospective purchasers
of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they are
made;
(m) otherwise comply with all applicable rules and regulations of
the SEC, and make generally available to its security holders (as
contemplated by Section 11(a) under the Securities Act) an earnings
statement satisfying the provisions of Rule 158 under the Securities Act
no later than ninety (90) days after the end of the twelve (12) month
period beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the registration statement,
which statement shall cover said twelve (12) month period;
(n) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by each Registration from
and after a date not later than the effective date of such Registration;
and
(o) obtain and maintain the registration of the Common Stock under
either section 12(b) or section 12(g) of the Exchange Act; and use its
best efforts to cause all Registrable Securities covered by each
Registration to be approved for listing subject to notice of issuance,
prior to the date of first sale of such Registrable Securities pursuant
Exhibit 1.1(b)-26
to such Registration, on:
(i) either the New York Stock Exchange, Inc., the American
Stock Exchange or the NASDAQ National Market; and
(ii) each other securities exchange, if any, on which the
Common Stock is then listed.
The Company may require each holder of Registrable Securities that will be
included in such Registration to, and each such holder shall promptly following
any request, furnish the Company with such information in respect of such holder
and its Registrable Securities that will be included in such Registration as the
Company may reasonably request in writing and as is required by applicable laws
or regulations.
6.5 REASONABLE INVESTIGATION. The Company shall:
(a) give the holders of Registrable Securities, their underwriters,
if any, and their respective counsel and accountants the opportunity to
participate in the preparation of the registration statement, each
prospectus included therein or filed with the SEC and each amendment
thereof or supplement thereto;
(b) give each such holder and underwriter reasonable opportunities
to discuss the business of the Company with its officers, counsel and the
independent public accountants who have certified its financial
statements;
(c) make available for inspection by any holder of Registrable
Securities included in any Registration, any underwriter participating in
any disposition pursuant to any Registration, and any attorney, accountant
or other agent retained by any such holder or underwriter, all financial
and other records, pertinent corporate documents and properties of the
Company; and
(d) cause the Company's officers, directors and employees to supply
all information reasonably requested by any such Person in connection with
such Registration;
in each such case, as shall be reasonably necessary, in the opinion of such
holder or such underwriter, to enable it to conduct a "reasonable investigation"
within the meaning of section 11(b)(3) of the Securities Act and to satisfy the
requirement of reasonable care imposed by section 12(a)(2) of the Securities
Act.
6.6 REGISTRATION EXPENSES. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities.
6.7 INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify, to
the fullest extent permitted by law, each holder of Registrable
Securities, its officers,
Exhibit 1.1(b)-27
directors and agents, if any, and each Person, if any, who controls such
holder within the meaning of section 15 of the Securities Act, against all
losses, claims, damages, liabilities (or proceedings in respect thereof)
and expenses (under the Securities Act or common law or otherwise), joint
or several, resulting from any violation by the Company of the provisions
of the Securities Act or any untrue statement or alleged untrue statement
of a material fact contained in any registration statement or prospectus
(and as amended or supplemented if amended or supplemented) or any
preliminary prospectus or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein (in the case of any prospectus, in light of
the circumstances under which they were made) not misleading, except to
the extent that such losses, claims, damages, liabilities (or proceedings
in respect thereof) or expenses are caused by any untrue statement or
alleged untrue statement contained in, or by any omission or alleged
omission from, information concerning any holder furnished in writing to
the Company by such holder expressly for use therein. If the offering
pursuant to any registration statement provided for under this Section 6
is made through underwriters, no action or failure to act on the part of
such underwriters (whether or not such underwriter is an Affiliate of any
holder of Registrable Securities) shall affect the obligations of the
Company to indemnify any holder of Registrable Securities or any other
Person pursuant to the preceding sentence. If the offering pursuant to any
registration statement provided for under this Section 6 is made through
underwriters, the Company agrees, to the extent required by such
underwriters, to enter into an underwriting or other agreement providing
for indemnity of such underwriters, their officers, directors and agents,
if any, and each Person, if any, who controls such underwriters within the
meaning of section 15 of the Securities Act to the same extent as
hereinbefore provided with respect to the indemnification of the holders
of Registrable Securities; PROVIDED that the Company shall not be required
to indemnify any such underwriter, or any officer or director of such
underwriter or any Person who controls such underwriter within the meaning
of section 15 of the Securities Act, to the extent that the loss, claim,
damage, liability (or proceedings in respect thereof) or expense for which
indemnification is claimed results from such underwriter's failure to send
or give a copy of an amended or supplemented final prospectus to the
Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of
the sale of Registrable Securities to such Person if such statement or
omission was corrected in such amended or supplemented final prospectus
prior to such written confirmation and the underwriter was provided with
such amended or supplemented final prospectus.
(b) INDEMNIFICATION BY THE HOLDERS. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder, severally and not jointly, shall
indemnify, to the fullest extent permitted by law, the Company, each
underwriter (if the underwriter so requires) and their respective
officers, directors and agents, if any, and each Person, if any, who
controls the Company or such underwriter within the meaning of section 15
of the Securities Act, against any losses, claims, damages, liabilities
(or proceedings in respect thereof) and expenses resulting from any untrue
statement or alleged untrue statement of a material fact or any omission
or alleged omission of a material fact required to be stated in the
Exhibit 1.1(b)-28
registration statement or prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or necessary to make the
statements therein (in the case of any prospectus, in light of the
circumstances under which they were made) not misleading, but only to the
extent that such untrue statement is contained in or such omission is from
information so concerning a holder furnished in writing by such holder
expressly for use therein; PROVIDED, HOWEVER, that such holder's
obligations hereunder shall be limited to an amount equal to the proceeds
to such holder of the Registrable Securities sold pursuant to such
registration statement.
(c) CONTROL OF DEFENSE. Any Person entitled to indemnification under
the provisions of this Section 6.7 shall give prompt written notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and unless in such indemnified party's reasonable judgment
a conflict of interest between such indemnified and indemnifying parties
may exist in respect of such claim, permit such indemnifying party to
assume the defense of such claim, with counsel reasonably satisfactory to
the indemnified party; and if such defense is so assumed, such
indemnifying party shall not enter into any settlement without the consent
of the indemnified party if such settlement attributes liability to the
indemnified party and such indemnifying party shall not be subject to any
liability for any settlement made without its consent (which shall not be
unreasonably withheld); and any underwriting agreement entered into with
respect to any registration statement provided for under this Section 6
shall so provide. In the event an indemnifying party shall not be
entitled, or elects not, to assume the defense of a claim, such
indemnifying party shall not be obligated to pay the fees and expenses of
more than one counsel or firm of counsel for all parties indemnified by
such indemnifying party in respect of such claim, unless in the reasonable
judgment of any such indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties
in respect to such claim.
(d) CONTRIBUTION. If for any reason the foregoing indemnity is
unavailable, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses,
claims, damages, liabilities or expenses:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand
and the indemnified party on the other; or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in such
proportion as is appropriate to reflect not only the relative
benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the
indemnifying party and the indemnified party as well as any other
relevant equitable considerations.
Notwithstanding the foregoing, no holder of Registrable Securities shall
be required to contribute any amount in excess of the amount such holder
would have been required to pay to an indemnified party if the indemnity
under Section 6.7(b) hereof was available.
Exhibit 1.1(b)-29
No Person guilty of fraudulent misrepresentation (within the meaning of
section 11(f) of the Securities Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation.
The obligation of any Person to contribute pursuant to this Section 6.7
shall be several and not joint.
(e) ADVANCEMENT OF EXPENSES. An indemnifying party shall make
payments of all amounts required to be made pursuant to the foregoing
provisions of this Section 6.7 to or for the account of the indemnified
party from time to time promptly upon receipt of bills or invoices
relating thereto or when otherwise due or payable. Without limiting the
generality of the foregoing, each indemnifying party, as an interim
measure during the pendency of any claim, action, investigation, inquiry
or proceeding arising out of or based upon any matter or subject for which
indemnity (or contribution in lieu thereof) would be available to any
indemnified party under any provision of this Section 6.7, shall promptly
reimburse each indemnified party, as often as invoiced therefor (but in no
event more often than monthly), for all reasonable legal or other expenses
incurred in connection with the investigation or defense of any such
claim, action, investigation, inquiry or proceeding, notwithstanding the
absence of any judicial determination as to the propriety or
enforceability of the indemnifying party's obligation to reimburse the
indemnified party for such expenses and notwithstanding the possibility
that the obligations to pay such expenses might later have been held to be
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement is held to be improper, the indemnified party agrees
to promptly return the amount so advanced to the indemnifying party,
together with interest, compounded monthly, at the prime rate (or other
commercial lending rate for borrowers of the highest credit standing)
listed from time to time in The Wall Street Journal which represents the
base rate on corporate loans posted by a substantial majority of the
nation's thirty (30) largest banks. Any such interim reimbursement
payments which are not made to the indemnified party within thirty (30)
days of a request therefor shall bear interest at such prime rate from the
date of such request to the extent such reimbursement payments are
ultimately determined to be proper obligations of the indemnifying party.
To the extent required by any underwriter in connection with the execution
of any underwriting agreement pursuant to which the holders of Registrable
Securities shall be selling any shares of Common Stock, the Company shall
agree to advancement of the expenses of such underwriter to at least the
same extent as provided in this Section 6.7(e).
(f) SURVIVAL. The indemnity and contribution agreements contained in
this Section 6.7 shall remain in full force and effect regardless of any
investigation made by or on behalf of a participating holder of
Registrable Securities, its officers, directors, agents or any Person, if
any, who controls such holder as aforesaid, and shall survive the transfer
of such Securities by such holder.
6.8 HOLDBACK AGREEMENTS; REGISTRATION RIGHTS TO OTHERS.
(a) In connection with each underwritten sale of Registrable
Securities, the Company agrees, and each holder of Registrable Securities
by acquisition of such Registrable Securities agrees, to enter into
customary holdback agreements concerning sale or distribution of
Registrable Securities and other equity Securities of the
Exhibit 1.1(b)-30
Company, except, in the case of any holder of Registrable Securities, to
the extent that such holder is prohibited by applicable law or exercise of
fiduciary duties from agreeing to withhold Registrable Securities from
sale or is acting in its capacity as a fiduciary or investment adviser.
Without limiting the scope of the term "fiduciary," a holder shall be
deemed to be acting as a fiduciary or an investment adviser if its actions
or the Registrable Securities proposed to be sold are subject to the
Employee Retirement Income Security Act of 1974, as amended, or the
Investment Company Act of 1940, as amended, or if such Registrable
Securities are held in a separate account under applicable insurance law
or regulation.
(b) If the Company shall at any time after the date hereof provide
to any holder of any Securities of the Company rights with respect to the
registration of such Securities under the Securities Act:
(i) such rights shall not be in conflict with or adversely
affect any of the rights provided in this Section 6 to the holders
of Registrable Securities; and
(ii) if such rights are provided on terms or conditions more
favorable to such holder than the terms and conditions provided in
this Section 6, the Company will provide (by way of amendment to
this Section 6 or otherwise) such more favorable terms or conditions
to the holders of Registrable Securities.
6.9 OTHER REGISTRATION OF COMMON STOCK. If any shares of Common Stock
required to be reserved for purposes of exercise of Warrants or conversion of
any class of Common Stock into any other class of Common Stock require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act) before such shares may be issued upon
conversion, the Company will, at its expense and as expeditiously as possible,
use its best efforts to cause such shares to be duly registered or approved, as
the case may be.
6.10 AVAILABILITY OF INFORMATION. At any time that any class of the Common
Stock is registered under section 12(b) or section 12(g) of the Exchange Act,
the Company will comply with the reporting requirements of sections 13 and 15(d)
of the Exchange Act (whether or not it shall be required to do so pursuant to
such Sections) and will comply with all other public information reporting
requirements of the SEC from time to time in effect. In addition, the Company
shall file such reports and information, and shall make available to the public
and to the holders of Registrable Securities such information, as shall be
necessary to permit such holders to offer and sell Registrable Securities
pursuant to the provisions of Rules 144 promulgated under the Securities Act.
The Company will also cooperate with each such holder in supplying such
information as may be necessary for such holder to complete and file any
information reporting forms presently or hereafter required by the SEC as a
condition to the availability of an exemption from the registration provisions
of the Securities Act in connection with the sale of any Registrable Securities.
7. INTERPRETATION OF THIS AGREEMENT
7.1 CERTAIN DEFINED TERMS. For the purpose of this Agreement, the
following terms
Exhibit 1.1(b)-31
shall have the meanings set forth below or set forth in the Section hereof
following such term:
ABLE INTERNATIONAL C means Able Telcom International, Inc., a Florida
corporation.
ABLE INTERNATIONAL SHARES C means and includes:
(a) shares of the Common Stock, par value $1.00 per share, of
Able International;
(b) any warrant, option or other right to acquire any shares
descried in clause (a) above;
(c) any right to acquire any of such shares pursuant to the
provisions of any Security convertible or exchangeable into shares of such
stock;
(d) any similar right permitting the holder thereof to subscribe for
or purchase shares of such stock; and
(e) any capital stock, partnership or membership interest or other
similar equity interest or any other Security into which any such shares
shall have been reclassified or recapitalized, for which such shares have
been exchanged or which have been issued to the former holders of such
shares in respect of any merger or consolidation of Able International or
transfer of all or substantially all of its Property.
ABLE INTERNATIONAL SPINOFF - means and includes:
(a) any payment or making of any dividend in, or making of any
distribution of, any Able International Shares to the stockholders of the
Company in respect of the Common Stock; or
(b) any reclassification of the Common Stock in any manner or other
similar arrangement such that Able International Shares are issued to or
deemed issued to the Company's stockholders.
ABLE INTERNATIONAL WARRANT AGREEMENT C Section 3.8(c).
ABLE INTERNATIONAL WARRANT NUMBER C means, at any time, with respect to
any Able International Spinoff, the quotient of:
(a) the product of:
(i) the Pre-Spinoff Ownership Percentage; MULTIPLIED BY
(ii) the aggregate number of Able International Shares,
calculated as of the Spinoff Calculation Date on a Fully Diluted
Basis (but prior to giving effect to the issuance of the Able
International Warrants);
Exhibit 1.1(b)-32
DIVIDED BY
(b) the difference of:
(i) one hundred percent (100%); MINUS
(ii) the Pre-Spinoff Ownership Percentage.
ABLE INTERNATIONAL WARRANT PURCHASE PRICE C means, on any date of
determination, with respect to any Able International Spinoff, the quotient of:
(a) the product of:
(i) the Market Capitalization Percentage of Able International
as of such date; MULTIPLIED BY
(ii) the number of Warrants outstanding on such date;
MULTIPLIED BY
(iii) the Purchase Price on such date prior to giving effect
to any adjustment in the Purchase Price (including, without
limitation, that required by Section 4.7) resulting from the Able
International Spinoff;
DIVIDED BY
(b) the Able International Warrant Number.
ABLE INTERNATIONAL WARRANTS C Section 3.8(a).
ADDITIONAL COMMON STOCK C means Common Stock, including treasury shares,
issued after the date hereof, except Common Stock issued upon the exercise of
any one or more Warrants.
AFFILIATE C means, at any time, a Person (other than a Subsidiary or the
Purchasers):
(a) that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the
Company;
(b) that beneficially owns or holds five percent (5%) or more of any
class of the Voting Stock of the Company; or
(c) five percent (5%) or more of the Voting Stock (or in the case of
a Person that is not a corporation, five percent (5%) or more of the
equity interest) of which is beneficially owned or held by the Company or
any Subsidiary;
at such time.
As used in this definition,
Exhibit 1.1(b)-33
CONTROL C means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
AGGREGATE CONSIDERATION PAID C means, in the case of a repurchase,
redemption, retirement or acquisition of shares of Common Stock, the aggregate
amount paid by the Company in connection therewith and, in the case of a
repurchase, redemption, retirement or acquisition of Rights, the sum of:
(a) the aggregate amount paid by the Company for such Rights; PLUS
(b) the aggregate consideration or premiums stated in such Rights to
be payable for the shares of Common Stock covered thereby.
For purposes of clause (a) above, in the event of the repurchase,
redemption, retirement or acquisition of any Rights together with other
Securities or obligations of the Company or any other Person in which the
purchase price for the Rights and such other Securities or obligations is
expressed as a single purchase price (including, without limitation, upon the
issuance or sale of Preferred Stock or debt Securities which are convertible
into Common Stock), the aggregate amount paid by the Company for such Rights
shall include only the portion of such single purchase price attributable to
such Rights, and not the portion attributable to such other Securities or
obligations. The portion of such purchase price attributable to such Rights in
such case shall be equal to the product of:
(i) such single purchase price; MULTIPLIED BY
(ii) the quotient of:
(A) the fair market value (as determined by the Valuation
Agent) of such Right, independent of the value of such other
Securities or obligations (computed using the Black-Scholes option
pricing model or such other pricing model as the Valuation Agent
determines is appropriate, and applying such reasonable assumptions
concerning price variances with respect to the Common Stock and such
other variables as the Valuation Agent considers appropriate);
DIVIDED BY
(B) the fair market value (as determined by the Valuation
Agent) of such Right together with such other Securities or
obligations (computed using such methodology and making such
assumptions as the Valuation Agent determines is appropriate).
AGGREGATE CONSIDERATION RECEIVABLE C means, in the case of an issuance or
sale of shares of Additional Common Stock, the aggregate amount paid to the
Company in connection therewith and, in the case of an issuance or sale of
Rights, or any amendment thereto, the sum of:
Exhibit 1.1(b)-34
(a) the aggregate amount paid to the Company for such Rights; PLUS
(b) the aggregate consideration or premiums stated in such Rights to
be payable for the shares of Additional Common Stock covered thereby;
in each case without deduction for any fees, expenses, placement fees or
underwriters discounts.
For purposes of clause (a) above, in the event of the issuance or sale of
any Rights together with other Securities or obligations of the Company or any
other Person in which the purchase price for the Rights and such other
Securities or obligations is expressed as a single purchase price (including,
without limitation, upon the issuance or sale of Preferred Stock or debt
Securities which are convertible into Common Stock), the aggregate amount paid
to the Company for such Rights shall include only the portion of such single
purchase price attributable to such Rights, and not the portion attributable to
such other Securities or obligations. The portion of such purchase price
attributable to such Rights in such case shall be equal to the product of:
(i) such single purchase price; MULTIPLIED BY
(ii) the quotient of:
(A) the fair market value (as determined by the Valuation
Agent) of such Right, independent of the value of such other
Securities or obligations (computed using the Black-Scholes option
pricing model or such other pricing model as the Valuation Agent
determines is appropriate, and applying such reasonable assumptions
concerning price variances with respect to the Common Stock and such
other variables as the Valuation Agent considers appropriate);
DIVIDED BY
(B) the fair market value (as determined by the Valuation
Agent) of such Right together with such other Securities or
obligations (computed using such methodology and making such
assumptions as the Valuation Agent determines is appropriate).
AGREEMENT, THIS C means this Warrant Agreement, as it may be from time to
time amended or supplemented.
BOARD OF DIRECTORS C means the board of directors of the Company or any
committee thereof that, in the instance, shall have the lawful power to exercise
the power and authority of such board of directors.
BUSINESS DAY C means a day other than a Saturday, a Sunday or a day on
which banks in the State of New York are required or permitted by law (other
than a general banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed.
CHARTER C means the Articles of Incorporation of the Company, as amended.
Exhibit 1.1(b)-35
CLOSING PRICE C means, on any date with respect to any share of common
stock of any Person:
(a) the last sale price, regular way, on such date or, if no such
sale takes place on such date, the average of the closing bid and asked
prices on such date, in each case as officially reported on the principal
national securities exchange on which such common stock is then listed or
admitted to trading; and
(b) if such common stock is not then listed or admitted to trading
on any national securities exchange, but is listed on the NASDAQ National
Market or the NASDAQ SmallCap Market, as the case may be, the last sale
price of such common stock on such date as reported by NASDAQ, or if there
shall have been no sale on such date, the average of the reported closing
bid and asked prices on such date as shown by NASDAQ.
When used in this Agreement without reference to a particular Person or common
stock, "Closing Price" means the Closing Price of the Common Stock.
COMMON STOCK C means the Common Stock, par value $.001 per share, of the
Company.
COMPANIES REGISTRATION SCHEME C means an amendment or amendment to the
Securities Act (whether by statutory amendment, amendment of the rules and
regulations thereunder or both), such as, without limitation, as proposed in the
Report of the Advisory Committee on the Capital Formation and Regulatory
Processes of the Securities and Exchange Commission, dated July 24, 1996,
pursuant to which:
(a) issuers of Securities are permitted to register all issuances of
securities on an integrated company registration statement; and
(b) under the provisions of such amendment, such registration could
cover the reoffering or resale by the holders thereof of shares of Common
Stock issued upon the exercise of the Warrants, if any, outstanding at
such time.
COMPANY C shall have the meaning specified in the introductory paragraph
hereof.
CONSIDERATION PER SHARE C means, with respect to shares of Common Stock or
Rights, the quotient of:
(a) the Aggregate Consideration Paid (in the case of a repurchase,
redemption, retirement or other acquisition for value of Common Stock or
Rights) or the Aggregate Consideration Receivable (in the case of an
issuance or sale of Common Stock or Rights by the Company), as the case
may be, in respect of such shares of Common Stock or such Rights; DIVIDED
BY
(b) the total number of such shares of Common Stock or, in the case
of
Exhibit 1.1(b)-36
Rights, the total number of shares of Common Stock into which such Rights
are exercisable or convertible.
EFFECTIVE DATE C means the earliest to occur of:
(a) January 6, 1999;
(b) any merger, consolidation, amalgamation or similar combination
of the Company with or into any other Person (other than a merger,
consolidation, amalgamation or similar combination in which the Company is
the surviving corporation and in which the stockholders of the Company
retain the Common Stock held by them immediately prior to the occurrence
of such event);
(c) the sale, conveyance or transfer of all or substantially all of
the Property of the Company to any other Person or group of Persons; and
(d) the fixing or establishment of a record date for determination
of the holders of the Common Stock entitled to receive any distribution of
cash, Securities or other Property to the holders of the Common Stock in
connection with a transaction described in clause (b) or clause (c) above.
EXCHANGE ACT C means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
EXCLUDED SECURITIES C means and includes:
(a) shares of Common Stock or Rights issued in any of the
transactions described in Section 4.2 through Section 4.8, inclusive,
hereof, and in respect of which an adjustment has been made pursuant to
such Section;
(b) shares of Common Stock issuable upon exercise of the Warrants or
any other Rights (including, without limitation, the Series A Preferred
Stock and the Series A Warrants) outstanding on the date hereof;
(c) shares of Common Stock issued to the public in a bona fide
public offering registered under the Securities Act to Persons other than:
(i) Affiliates;
(ii) employees of the Company; or
(iii) existing holders of Common Stock or Rights;
PROVIDED, HOWEVER, that a bona fide public offering sold through an
underwriter and held open to the public generally shall not fail to meet
the requirements of this clause (c) merely by virtue of the fact that one
or more Affiliates, employees or existing holders of Common Stock or
Rights may have been purchasers from the underwriters therein
Exhibit 1.1(b)-37
so long as no pre-existing arrangement or agreement to so purchase shares
in connection with such offering was in existence or in effect;
(d) shares of Common Stock issued as the consideration in a
transaction involving a bona fide acquisition by the Company of another
Person (whether by acquisition of capital stock of such Person or all or
substantially all of the Property of such Person, or by merger or
consolidation of such Person into the Company or any Subsidiary) so long
as the economic terms of such acquisition were negotiated at arm's length
and so long as neither such Person nor the Person or Persons to whom such
Common Stock is issued are:
(i) Affiliates;
(ii) employees of the Company; or
(iii) existing holders of Common Stock or Rights;
PROVIDED, HOWEVER, that in the event that the acquired Person is a
corporation the common stock of which is registered under either section
12(b) or section 12(g) of the Exchange Act, the issuance of shares of
Common Stock to all stockholders of the acquired Person in a bona fide
acquisition shall not fail to meet the requirements of this clause (d)
merely by virtue of the fact that one or more Affiliates, employees or
existing holders of Common Stock or Rights may have been the beneficial
owners (as such term is defined in Rule 13d-3 under the Exchange Act, 17
C.F.R. '240.13d-3) of five percent (5%) or less of the common stock of
such acquired Person and so long as no pre-existing arrangement or
agreement to so issue shares in connection with such offering was in
existence or in effect; and
(e) Rights consisting of employee stock options, and shares of
Common Stock issued upon exercise of such Rights, issued to employees,
consultants or independent contractors of the Company pursuant to any
stock option plan approved by the Board of Directors at any time, so long
as, and to the extent that:
(i) the aggregate number of shares of Common Stock issuable
upon exercise of such stock options (whether or not then currently
exercisable) at such time, together with all shares of Common Stock
previously issued upon exercise of such stock options, does not
exceed at any time ten percent (10%) of the number of shares of
Common Stock on a Fully Diluted Basis at such time;
(ii) no other holder of any Rights or any other Securities of
the Company shall have the right to any preemptive, subscription or
similar right in respect of such issuance; and
(i) in the case of options granted after December 31, 1997,
such options are granted with an exercise price not less than the
Market Price thereof as of the date of the grant.
Exhibit 1.1(b)-38
EXPIRATION DATE C means January 6, 2003.
FAIR VALUE -- means, with respect to any share of common stock of any
Person at any time, the quotient of:
(a) the difference of:
(i) the sum of:
(A) the fair salable value of such Person as a going
concern, giving effect to all Property thereof and subject to
all liabilities thereof, that would be realized in an arm's
length sale between an informed and willing buyer and an
informed and willing seller, under no compulsion to buy or
sell, respectively, as of a date that is within fifteen (15)
days of the date as of which the determination is to be made,
determined by agreement among the holders of the Warrants and
the Company and, if, in the Company's view after reasonable
negotiation no such agreement can be reached, by the Valuation
Agent, such determination in either case to be made without
regard to the absence of a liquid or ready market for such
common stock; PLUS
(B) the aggregate exercise or conversion price of all
Valuable Rights of such Person (including, without limitation,
Valuable Rights of such Person in respect of any shares of
Preferred Stock convertible at such time into shares of common
stock of such Person) in existence and remaining unexercised
on such date;
MINUS
(ii) if there shall then exist any outstanding shares of
Preferred Stock (other than Preferred Stock convertible at such time
into shares of common stock of such Person, which shares represent
Valuable Rights of such Person at such time), the aggregate
liquidation preference of (or, if less, the aggregate price, if any,
at which such Person could elect to redeem) such shares of Preferred
Stock (together with all accrued and unpaid dividends thereon);
DIVIDED BY
(b) the sum of:
(i) the total number of shares of common stock of such Person
then outstanding; PLUS
(ii) the aggregate number of shares of common stock of such
Person issuable in respect of all Valuable Rights of such Person
(including, without limitation, Valuable Rights of such Person in
respect of any shares of Preferred Stock convertible at such time
into shares of common stock of such
Exhibit 1.1(b)-39
Person) at such time.
FULLY DILUTED BASIS C means, with respect to any calculation of the number
of shares of common stock of any Person at any time, the sum of:
(a) the number of shares of common stock of such Person outstanding
at such time; PLUS
(b) the aggregate number of shares of common stock of such Person
issuable upon the exercise, conversion or exchange, as the case may be, of
all Rights of such Person outstanding at such time, regardless of whether
such Rights of such Person are then exercisable, convertible or
exchangeable and, with respect to any Rights of such Person, regardless of
whether the consideration given up by the holder of such Right of such
Person in connection with the exercise, conversion or exchange thereof
would exceed the value of the common stock of such Person received upon
such exercise, conversion or exchange.
GAAP -- means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
INCIDENTAL REGISTRATION C Section 6.2 hereof.
INITIAL PURCHASE PRICE C means eight dollars and twenty-five cents ($8.25)
per share.
INITIATING HOLDERS C means, at any time, the holders (other than the
Company or any Affiliate thereof) of at least fifty-one percent (51%) (by number
of shares) of the Registrable Securities at such time (excluding any Registrable
Securities held directly or indirectly by the Company or any Affiliate thereof).
LIEN -- means any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property (for purposes of this
definition, the "Owner"), whether such interest is based on the common law,
statute or contract, and includes but is not limited to:
(a) the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes, and the filing of any financing statement
under the Uniform Commercial Code of any jurisdiction, or an agreement to
give any of the foregoing;
(b) reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting real Property;
Exhibit 1.1(b)-40
(c) stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements affecting the Owner's rights in
stock owned by the Owner; and
(d) any interest in any Property held by the Owner evidenced by a
conditional sale agreement, capitalized lease or other arrangement
pursuant to which title to such Property has been retained by or vested in
some other Person for security purposes.
The term "Lien" does not include negative pledge clauses in loan agreements and
equal and ratable security clauses in loan agreements.
MARKET CAPITALIZATION C means, with respect to any Person, at any time of
determination, the product of:
(a) the Market Price of the common stock of such Person at such time
of determination; MULTIPLIED BY
(b) the number of shares of the common stock of such Person
outstanding at such time.
MARKET CAPITALIZATION PERCENTAGE C means, with respect to any Person, at
any time of determination, the quotient of:
(a) the Market Capitalization of such Person as of the Spinoff
Calculation Date; DIVIDED BY
(b) the sum of:
(i) the Market Capitalization of Able International as
of the Spinoff Calculation Date; PLUS
(ii) the Market Capitalization of the Company as of the
Spinoff Calculation Date.
MARKET PRICE C means, per share of common stock of any Person, as of any
date of determination, the arithmetic mean of the daily Closing Prices of such
common stock for the twenty (20) consecutive Trading Days before such date of
determination; PROVIDED that if such common stock is then neither listed or
admitted to trading on any national securities exchange, the NASDAQ National
Market or the NASDAQ SmallCap Market, then "Market Price" means the Fair Value
of one share of such common stock, as determined by the Valuation Agent as of
the date of determination. When used in this Agreement without reference to a
particular Person or common stock, "Market Price" means the Market Price of the
Common Stock.
NASD - means the National Association of Securities Dealers, Inc.
NASDAQ - means the NASDAQ Stock Market, Inc., a subsidiary of the NASD.
Exhibit 1.1(b)-41
NASDAQ NATIONAL MARKET C has the meaning ascribed thereto in Rule 4200(r)
of the NASDAQ.
NASDAQ SMALLCAP MARKET C has the meaning ascribed thereto in Rule 4200(t)
of the NASDAQ.
NOTE AGREEMENT C means the Note Agreement, dated as of the date hereof,
among the Company and the Purchasers, pursuant to which the Notes were issued.
NOTES C means the 12% Senior Subordinated Notes due January 6, 2005 issued
pursuant to the Securities Purchase Agreement and the Note Agreement.
NOTICE EVENT C means any event that would require an adjustment in the
Purchase Price pursuant to Section 4 hereof.
OTHER STOCKHOLDERS C means and includes, at any time, all holders of
Securities of the Company at such time (other than the holders of Registrable
Securities).
PERSON C means an individual, partnership, corporation, limited liability
company, joint venture, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
PREFERRED STOCK C means and includes, with respect to any Person, all
capital stock of such Person of any class (including, without limitation, in the
case of the Company, the Series A Preferred Stock) which is preferred as to
payment upon a liquidation or dissolution of such Person or both, over the
common stock of such Person.
PRE-SPINOFF OWNERSHIP PERCENTAGE C means, with respect to any Able
International Spinoff, the quotient, expressed as a percentage, of:
(a) the number of shares of Common Stock issuable immediately prior
to the Able International Spinoff upon exercise of all Warrants remaining
outstanding at such time; DIVIDED BY
(b) the aggregate number of shares of Common Stock at such time
calculated on a Fully Diluted Basis.
PROPERTY C means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
PUBLIC OFFERING C shall mean any sale of Common Stock in a transaction
either registered under, or requiring registration under, section 5 of the
Securities Act.
PURCHASE PRICE C means, prior to any adjustment pursuant to Section 4 of
this Agreement, the Initial Purchase Price and thereafter, the Initial Purchase
Price as thereafter successively adjusted and readjusted from time to time.
Exhibit 1.1(b)-42
PURCHASERS C shall have the meaning specified in the introductory
paragraph hereof.
REFERENCE PRICE C means, per share of Common Stock, as of any date of
determination, the Market Price as of such date.
REGISTRABLE SECURITIES C means, at any time:
(a) any shares of Common Stock that have been issued upon the
exercise of any Warrant;
(b) any shares of Common Stock into which such shares of Common
Stock shall have been converted at any time; and
(c) any shares of Common Stock that are issuable upon the exercise
of the Warrants or the conversion of Common Stock referred to in clause
(a) or clause (b) above.
For purposes of Section 6 hereof and the definitions of "Initiating Holders" and
"Requisite Holders" herein, holders of Warrants at any time shall be deemed to
be holders of Registrable Securities described in clauses (b) and (c) of this
definition that are at such time issuable upon exercise in full of such
Warrants, whether or not such holders are then entitled so to exercise such
Warrants pursuant to the terms thereof.
As to any particular Registrable Securities once issued, such Securities
shall cease to be Registrable Securities:
(i) when a registration statement with respect to the sale of such
Securities shall have become effective under the Securities Act and such
Securities shall have been disposed of in accordance with such
registration statement;
(ii) when they shall have been distributed to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act;
(iii) when they shall have been otherwise transferred and subsequent
disposition of them shall not require registration or qualification under
the Securities Act or any similar state law then in force; or
(iv) when they shall have ceased to be outstanding or (with respect
to Registrable Securities described in clause (c) of this definition)
issuable upon exercise of the Warrants.
REGISTRAR - means the Registrar of the Notes, as provided in section 2.5
of the Note Agreement.
REGISTRATION - means the Shelf Registration and each Incidental
Registration.
Exhibit 1.1(b)-43
REGISTRATION EXPENSES -- means all expenses incident to the Company's
performance of or compliance with Section 6.1 through Section 6.5, inclusive,
including, without limitation:
(a) all registration and filing fees;
(b) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities);
(c) expenses of printing certificates for the Registrable Securities
in a form eligible for deposit with Depositary Trust Company;
(d) messenger and delivery expenses;
(e) internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties);
(f) fees and disbursements of counsel for the Company and its
independent certified public accountants (including the expenses of any
management review, cold comfort letters or any special audits required by
or incident to such performance and compliance);
(g) securities acts liability insurance (if the Company elects to
obtain such insurance);
(h) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration;
(i) fees and expenses of other Persons retained by the Company; and
(j) fees and expenses of counsel for holders of Registrable
Securities, selected by the Requisite Holders;
but not including any underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities or fees and expenses of more than one
counsel representing the holders of Registrable Securities or any other selling
expenses, discounts or commissions incurred in connection with the sale of
Registrable Securities.
REQUIRED WARRANTHOLDERS -- means, at any time, the holders of at least
fifty-one percent (51%) of all Warrants outstanding (excluding any Warrants
directly or indirectly held by the Company, any Subsidiary or any Affiliate) at
such time.
REQUISITE HOLDERS -- means, with respect to any registration or proposed
registration of Registrable Securities pursuant to Section 6 hereof, any holder
or holders (other than the Company or any Affiliate or Subsidiary) holding at
least fifty-one percent (51%) of the shares of Registrable Securities (excluding
any shares of Registrable Securities directly or indirectly held by the Company
or any Affiliate or Subsidiary) to be so registered.
Exhibit 1.1(b)-44
RIGHT -- means and includes, with respect to any Person:
(a) any warrant (including, without limitation, in the case of the
Company, any Warrant) or any option (including, without limitation,
employee stock options) to acquire common stock of such Person;
(b) any right issued to holders of the common stock of such Person,
or any class thereof, permitting the holders thereof to subscribe to
shares of additional common stock or additional Rights of such Person
(pursuant to a rights offering or otherwise);
(c) any right to acquire common stock of such Person pursuant to the
provisions of any Security (including, without limitation, in the case of
the Company, the Series A Preferred Stock) convertible or exchangeable
into common stock of such Person; and
(d) any similar right permitting the holder thereof to subscribe for
or purchase shares of common stock of such Person.
References in this Agreement to a Right or Rights of a Person means a Right or
Rights, regardless of whether or not issued by such Person, relating to the
common stock of such Person. When used in this Agreement without reference to a
particular Person, "Right" means a Right of the Company.
SECURITIES PURCHASE AGREEMENT -- means the Securities Purchase Agreement,
dated as of the date hereof, between the Company and the Purchaser, relating to
the offering and sale of the Notes and the Warrants.
SEC -- means, at any time, the Securities and Exchange Commission or any
other federal agency at such time administering the Securities Act.
SECURITIES ACT -- means the Securities Act of 1933, as amended.
SECURITY -- shall have the meaning specified in section 2(1) of the
Securities Act.
SERIES A PREFERRED STOCK -- means the Series A Convertible Preferred
Stock, par value $.10 per share, of the Company.
SERIES A WARRANTS - means the warrants to purchase shares of the Common
Stock issued to the purchasers of the Series A Preferred Stock in connection
with the issuance of the Series A Preferred Stock.
SHELF EFFECTIVE DATE -- means January 6, 1999, or such earlier date as
would be required by Section 6.1(d).
SHELF EFFECTIVE PERIOD -- Section 6.1(a).
Exhibit 1.1(b)-45
SHELF FILING DATE -- means October 6, 1998, or such earlier date as would
be required by Section 6.1(d).
SHELF REGISTRATION -- Section 6.1(a).
SPINOFF CALCULATION DATE -- means, with respect to any Able International
Spinoff, the thirtieth (30th) Trading Day following the consummation of such
Able International Spinoff.
SUBSIDIARY -- means, at any time, each corporation, association, limited
liability company or other business entity which qualifies as a subsidiary of
the Company that is properly included in a consolidated financial statement of
the Company and its subsidiaries in accordance with GAAP at such time.
TRADING DAY -- means a day on which the New York Stock Exchange, Inc., the
American Stock Exchange, the NASDAQ National Market and the NASDAQ SmallCap
Market are open for trading.
TRANSFEREE -- means any registered transferee of all or any part of any
one or more Warrant Certificates acquired by the Purchasers under this
Agreement.
VALUABLE RIGHT -- means, with respect to any Person at any time, a Right
of such Person, the effective conversion, exercise or purchase price of which on
the date of determination is less than the Market Price of the common stock of
such Person in respect of the shares of such common stock issuable upon
conversion, exercise or purchase pursuant to such Right of such Person on such
date.
VALUATION AGENT -- means a firm of independent certified public
accountants, an investment banking firm or appraisal firm (which firm shall own
no Securities of, and shall not be an Affiliate, Subsidiary or a related Person
of, the Company) of recognized national standing retained by the Company and
reasonably acceptable to the Required Warrantholders.
VOTING STOCK -- means, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time any stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency), and, in the case of the Company, shall include the Common Stock.
WARRANT C shall mean each Warrant to purchase shares of the Common Stock
issued pursuant to this Agreement.
WARRANT CERTIFICATE C Section 1.1.
7.2 DESCRIPTIVE HEADINGS. The descriptive headings of the several Sections
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
Exhibit 1.1(b)-46
7.3 GOVERNING LAW. THIS AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
8. MISCELLANEOUS
8.1 EXPENSES. The Company agrees to pay, and save the Purchasers and any
Transferees harmless against liability for the payment of, all out-of-pocket
expenses (including, without limitation, the reasonable fees and disbursements
of special counsel for the Purchasers and any Transferee) arising in connection
with the transactions herein contemplated, including, without limitation:
(a) the cost, if any, of complying with Section 3.6 hereof;
(b) any subsequent proposed modification of, or proposed consent
requested or initiated by or on behalf of the Company under, this
Agreement, the Warrant Certificates or the Warrants, whether or not such
proposed modification shall be effected or proposed consent granted
(including, without limitation, all document production and duplication
charges and the reasonable fees and expenses of one special counsel
engaged by the holders of Warrants in connection therewith); and
(c) the enforcement of (or determination of whether or how to
enforce) any rights under this Agreement, the Warrant Certificates or the
Warrants or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or
the transactions contemplated hereby or by reason of the Purchasers' or
any Transferee's having acquired any Warrant Certificate, including,
without limitation, the reasonable fees and expenses of one special
counsel engaged by the holders of the Warrants and incurred by the holders
of the Warrants and the costs and expenses incurred in any bankruptcy case
involving the Company or any Subsidiary.
The obligations of the Company under this Section 8.1 shall survive the transfer
of any Warrant Certificate or portion thereof or interest therein by any
Purchaser or any Transferee and the exercise or expiration of any Warrant.
8.2 AMENDMENT AND WAIVER. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with and only with the
written consent of the Company and:
(a) in the case of Section 1 through Section 5, Section 7.2, Section
7.3 or Section 8 hereof (other than this Section 8.2), or of any term
defined in Section 7.1 to the extent used therein, the written consent of
the Required Warrantholders;
(b) the provisions of Section 6 hereof, and of any term defined in
Section 7.1 hereof as used in Section 6 hereof, may be amended, modified
or supplemented only by a writing duly executed by or on behalf of the
Initiating Holders and the Company;
Exhibit 1.1(b)-47
PROVIDED, HOWEVER, that compliance by the Company with the provisions of
Section 6 hereof, with respect to any particular registration, may be
waived by the Requisite Holders; and
(c) in the case of this Section 8.2, or of any term defined in
Section 7.1 to the extent used herein, the written consent of all holders
of Warrants then outstanding and all other Registrable Securities then
outstanding (excluding any Warrants and any Registrable Securities
directly or indirectly held by the Company, any Subsidiary or any
Affiliate);
PROVIDED, HOWEVER, that:
(i) no such amendment or waiver of any of the provisions of this
Agreement pertaining to the Purchase Price or the number or kind of shares
of Common Stock that may be purchased upon exercise of each Warrant; and
(ii) no change delaying the occurrence of the Effective Date or
accelerating the occurrence of the Expiration Date;
shall be effective as to the holder of any Warrant unless consented to in
writing by such holder.
8.3 DIRECTLY OR INDIRECTLY. Where any provision in this Agreement refers
to any action to be taken by any Person, or that such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person, including actions taken by or on behalf of any
partnership in which such Person is a general partner.
8.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein and in the Securities Purchase
Agreement in connection herewith shall survive the execution and delivery of
this Agreement and the Warrant Certificates, the transfer by any Purchaser of
any Warrant Certificate or portion thereof or interest therein and the exercise
or expiration of any Warrant, and may be relied upon by the Purchasers or any
Transferee, regardless of any investigation made at any time by or on behalf of
such Purchaser or Transferee. Subject to the preceding sentence, this Agreement
and the Warrant Certificates embody the entire agreement and understanding among
the Company and the Purchasers, and supersede all prior agreements and
understandings, relating to the subject matter hereof.
8.5 SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not. Notwithstanding the foregoing sentence, and other than in a transaction
contemplated by Section 4.7, the Company may not assign any of its rights,
duties or obligations hereunder or under the Warrants without the prior written
consent of all holders of the Warrants then outstanding.
8.6 NOTICES. All communications hereunder or under the Warrants shall be
in
Exhibit 1.1(b)-48
writing and shall be delivered either by national overnight courier or by
facsimile transmission (confirmed by delivery by national overnight courier sent
on the day of the sending of such facsimile transmission), and shall be
addressed to the following addresses:
(a) if to a Purchaser, at its address set forth on Annex 1 to this
Agreement, or at such other address as such Purchaser shall have specified
to the Company in writing;
(b) if to any other holder of any Warrant Certificate, addressed to
such other holder at such address as such other holder shall have
specified to the Company in writing or, if any such other holder shall not
have so specified an address to the Company, then addressed to such other
holder in care of the last holder of such Warrant Certificate that shall
have so specified an address to the Company; and
(c) if to the Company, at the address set forth on Annex 2 to this
Agreement, or at such other address as the Company shall have specified to
each holder of Warrants in writing.
Any communication addressed and delivered as herein provided shall be deemed to
be received when actually delivered to the address of the addressee (whether or
not delivery is accepted) or received by the telecopy machine of the recipient.
Any communication not so addressed and delivered shall be ineffective.
8.7 SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to the Purchasers or to any holder or holders of
Warrant Certificates, the determination of such satisfaction shall, unless
specifically required herein in any instance to be "reasonable" or words to
similar effect, be made by such Purchasers, holder or holders, as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the Person
or Persons making such determination.
8.8 SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
8.10 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC.
(a) WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT,
Exhibit 1.1(b)-49
THE WARRANTS OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS
CONTEMPLATED HEREBY.
(b) CONSENT TO JURISDICTION. ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE WARRANTS OR ANY OF THE
DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR
PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY
BREACH UNDER THIS AGREEMENT, THE WARRANTS OR ANY DOCUMENT OR AGREEMENT
CONTEMPLATED HEREBY MAY BE BROUGHT BY SUCH PARTY IN ANY FEDERAL DISTRICT
COURT LOCATED IN NEW YORK CITY, NEW YORK, OR ANY NEW YORK STATE COURT
LOCATED IN NEW YORK CITY, NEW YORK AS SUCH PARTY MAY IN ITS SOLE
DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE
IN PERSONAM JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING
BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY
CLAIM THAT IT IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH
COURT. IN ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT, AGREEMENT OR
TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH COURT, AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES THAT
PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE
ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE EXTENT
PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE WARRANTS OR
ANY DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY ACTION
OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF
ANY BREACH HEREUNDER OR UNDER ANY DOCUMENT OR AGREEMENT CONTEMPLATED
HEREBY. RECEIPT OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS
EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL
SERVICE OR ANY COMMERCIAL DELIVERY SERVICE.
Exhibit 1.1(b)-50
(d) OTHER FORUMS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF ANY PURCHASER TO SERVE ANY WRITS, PROCESS OR SUMMONSES IN
ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER THE
COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER, AS MAY BE
PERMITTED BY APPLICABLE LAW.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; NEXT PAGE IS A SIGNATURE PAGE.]
Exhibit 1.1(b)-51
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by one of its duly authorized officers or
representatives.
ABLE TELCOM HOLDING CORP.
By:_____________________________
Name:
Title:
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By:_____________________________
Name:
Title:
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By:_____________________________
Name:
Title:
SIGNATURE 1A (CAYMAN), LTD.
By: Xxxx Xxxxxxx Mutual Life Insurance
Company, Portfolio Advisor
By:_____________________________
Title:
ANNEX 1
ADDRESSES OF PURCHASERS
===============================================================================
PURCHASER NAME XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
===============================================================================
Name in which Warrant XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
Certificates are Registered
===============================================================================
Warrant Certificate WR-1: 81,901 Warrants
Registration Numbers; WR-2: 184,277 Warrants
Number of Warrants
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Investment Accounting Division T-10
===============================================================================
Other Instructions Signature Page Format:
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
By___________________________
Name:
Title:
===============================================================================
Tax Identification Number 00-0000000
===============================================================================
Annex 0-0
XXXXX 0
XXXXXXXXX XX XXXXXXXXXX (XXXX.)
===============================================================================
PURCHASER NAME XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
===============================================================================
Name in which Warrant XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
Certificate is Registered
===============================================================================
Warrant Certificate WR-3: 20,475 Warrants
Registration Number;
Number of Warrants
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Investment Accounting Division T-10
===============================================================================
Other Instructions Signature Page Format:
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
By___________________________
Name:
Title:
===============================================================================
Tax Identification Number 00-0000000
===============================================================================
Annex 0-0
XXXXX 0
XXXXXXXXX XX XXXXXXXXXX (XXXX.)
===============================================================================
PURCHASER NAME SIGNATURE 1A (CAYMAN), LTD.
===============================================================================
Name in which Warrant XXXXXXX & CO
Certificate is Registered
===============================================================================
Warrant Certificate WR-4: 122,852 Warrants
Registration Number;
Number of Warrants
===============================================================================
Address for Notices Xxxx Xxxxxxx Mutual Life Insurance Company,
Portfolio Advisor
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Investment Accounting Division T-10
===============================================================================
Other Instructions Signature Page Format:
SIGNATURE 1A (CAYMAN), LTD.
By: Xxxx Xxxxxxx Mutual Life Insurance
Company, Portfolio Advisor
By___________________________
Name:
Title:
===============================================================================
Tax Identification Number None
===============================================================================
Annex 1-3
ANNEX 2
ADDRESS OF COMPANY
NAME AND ADDRESS OF NOTE REGISTRAR
ADDRESS OF COMPANY FOR NOTICES AND LOCATION OF WARRANT REGISTER:
0000 Xxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Chief Executive Officer
and President
Xxxxx X. Xxx, Xx.
Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
NAME AND ADDRESS FOR REGISTRAR OF NOTES AND LOCATION OF NOTE REGISTER:
First Union National Bank
Corporate Trust Department
CT 5845
00 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
Vice President and
Managing Director
Telephone: 000-000-0000
Facsimile: 000-000-0000
Annex 2-1
ATTACHMENT A
[FORM OF WARRANT CERTIFICATE]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD EXCEPT
IN A TRANSACTION REGISTERED UNDER SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.
WARRANT CERTIFICATE
ABLE TELCOM HOLDING CORP.
No. WR-___ __________ Warrants
Date: ________
PPN: 003712 2* 6
This Warrant Certificate certifies that ___________________, or registered
assigns, is the registered holder of ___________ (________) Warrants. Each
Warrant entitles the owner thereof to purchase at any time on or after the
Effective Date and on or prior to the Expiration Date, one (1) fully paid and
nonassessable share of Common Stock, par value $.001 per share (the "Common
Stock"), of ABLE TELCOM HOLDING CORP., a Florida corporation (together with its
successors and assigns, the "Company"), at a Purchase Price (subject to
adjustment as provided therein) of eight dollars and twenty-five cents ($8.25)
per share upon presentation and surrender of this Warrant Certificate with a
form of election to purchase duly executed and delivery to the Company of the
payment of the Purchase Price in the manner set forth in the Warrant Agreement.
The number of shares of Common Stock that may be purchased upon exercise of each
Warrant and the Purchase Price are the number and the Purchase Price as of the
date hereof, and are subject to adjustment as referred to below.
The Warrants are issued pursuant to the Warrant Agreement (as it may from
time to time be amended or supplemented, the "Warrant Agreement"), dated as of
January 6, 1998, among the Company and the investors named therein, and are
subject to all of the terms, provisions and conditions thereof, which Warrant
Agreement is hereby incorporated herein by reference and made a part hereof and
to which Warrant Agreement reference is hereby made for a full description of
the rights, obligations, duties and immunities of the Company and the holders of
the Warrant Certificates. Capitalized terms used, but not defined, herein have
the respective meanings ascribed to them in the Warrant Agreement.
As provided in the Warrant Agreement, the Purchase Price and the number of
shares of Common Stock that may be purchased upon the exercise of the Warrants
evidenced by this Warrant Certificate are, upon the happening of certain events,
subject to modification and adjustment. Except as otherwise set forth in, and
subject to, the Warrant Agreement, the Effective Date of this Warrant
Certificate is January 6, 1999, and the Expiration Date of this Warrant
Certificate is January 6, 2003.
Attachment A-1
This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time (but not, in the case
of any exercise in part, as to a fractional Warrant). If this Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of Warrants not exercised. This Warrant Certificate, with or without
other Warrant Certificates, upon surrender in the manner set forth in the
Warrant Agreement, may be exchanged for another Warrant Certificate or Warrant
Certificates of like tenor evidencing Warrants entitling the holder to purchase
a like aggregate number of shares of Common Stock as the Warrants evidenced by
the Warrant Certificate or Warrant Certificates surrendered shall have entitled
such holder to purchase.
Except as expressly set forth in the Warrant Agreement, no holder of this
Warrant Certificate shall be entitled to vote or receive dividends or be deemed
for any purpose the holder of shares of Common Stock or of any other Securities
of the Company that may at any time be issued upon the exercise hereof, nor
shall anything contained in the Warrant Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a holder of a share
of Common Stock in the Company or any right to vote upon any matter submitted to
holders of shares of Common Stock at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of Securities, change of par value, consolidation,
merger, conveyance, or otherwise), or to receive dividends or subscription
rights, or otherwise, until the Warrant or Warrants evidenced by this Warrant
Certificate shall have been exercised as provided in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED
BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
WITNESS the signature of a proper officer of the Company as of the date
first above written.
-------------------------------------
ABLE TELCOM HOLDING CORP.
By:
Name:
Title:
Attachment A-2
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfers unto
-------------------------------------------------------------------------------
(Please print name and address of transferee.)
the accompanying Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint:
-------------------------------------------------------------------------------
attorney, to transfer the accompanying Warrant Certificate on the books of the
Company with full power of substitution.
Dated: ____________________, ________.
[HOLDER]
By________________________________
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.
Attachment A-3
[FORM OF ELECTION TO PURCHASE]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO EXERCISE THE WARRANT CERTIFICATE)
To ABLE TELCOM HOLDING CORP.:
The ____ undersigned _____ hereby ____ irrevocably ____ elects ____ to
____ exercise ______________________________ Warrants represented by the
accompanying Warrant Certificate to purchase the shares of Common Stock issuable
upon the exercise of such Warrants and requests that certificates for such
shares be issued in the name of:
--------------------------------------------------------------------------------
(Please print name and address.)
-----------------------------------------------------------
(Please insert social security or other identifying number.)
If such number of Warrants shall not be all the Warrants evidenced by the
accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address.)
-----------------------------------------------------------
(Please insert social security or other identifying number.)
Attachment A-4
The undersigned is paying the Purchase Price for the shares of Common Stock to
be issued on exercise of the foregoing Warrants:
[ ] in cash pursuant to Section 2.1(a)(i) of the Warrant Agreement;
[ ] in Notes (as defined in the Warrant Agreement) pursuant to Section
2.1(a)(ii) of the Warrant Agreement;
[ ] in cash in the amount of $____________ and a principal amount of
Notes equal to $___________ pursuant to Section 2.1 (a)(iii) of the
Warrant Agreement; or
[ ] by net exercise of the Warrants being exercised pursuant to Section
2.1(a)(iv) of the Warrant Agreement.
Dated: __________________, ______.
[HOLDER]
By__________________________________
NOTICE
The signature to the foregoing Election to Purchase must correspond to the
name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.
Attachment A-5
EXHIBIT 4.1(A)
FORM OF OPINION OF COMPANY COUNSEL
[LETTERHEAD OF HOLLAND & KNIGHT LLP]
[Closing Date]
To each of the Purchasers Listed on Annex 1 hereto
Re: ABLE TELCOM HOLDING CORP. C
12% SENIOR SUBORDINATED NOTES DUE JANUARY 6, 2005
WARRANTS TO PURCHASE COMMON STOCK
Ladies and Gentlemen:
Reference is made to the several separate Securities Purchase Agreements
(collectively, the "Securities Purchase Agreement"), each dated as of January 6,
1998, between Able Telcom Holding Corp. (the "Company"), a Florida corporation,
and each of the Purchasers named therein (the "Purchasers") which provides,
among other things, for the issuance and sale by the Company of its 12% Senior
Subordinated Notes due January 6, 2005, in the aggregate principal amount of Ten
Million Dollars ($10,000,000), together with warrants (the "Warrants") to
purchase four hundred nine thousand five hundred five (409,505) shares of the
Common Stock, $.001 par value, of the Company (the "Common Stock"). Capitalized
terms used herein, and not defined herein, have the respective meanings ascribed
to them in the Securities Purchase Agreement or, if not defined therein, in the
Note Agreement.
We have acted as special counsel to the Company and the Subsidiaries in
connection with the transactions contemplated by the Securities Purchase
Agreement. This opinion is delivered to you pursuant to Section 4.1(a) of the
Securities Purchase Agreement. In acting as such counsel, we have examined:
(a) the Securities Purchase Agreement;
(b) the Note Agreement;
(c) the Company's 12% Senior Subordinated Notes due January 6, 2005,
dated the date hereof, in the form of Attachment A to the Note Agreement
and in the respective principal amounts, registered in the respective
names and with the respective registration numbers set forth on Annex 1 to
the Securities Purchase Agreement (the "Notes");
Exhibit 4.1(a)-1
(d) the Warrant Agreement;
(e) the Warrant Certificates, dated the date hereof, in the form of
Attachment A to the Warrant Agreement and representing the respective
numbers of Warrants, registered in the respective names and with the
respective registration numbers set forth on Annex 1 to the Securities
Purchase Agreement (the "Warrant Certificates");
(f) a copy of the certificate of incorporation of the Company,
together with all amendments and restatements through and including
January 2, 1998, certified by the Secretary of State of the State of
Florida (the "Charter");
(g) copies of the certificates of incorporation or similar charter
documents of each of the Subsidiaries;
(h) the bylaws and minute books of the Company and each of the
Subsidiaries;
(i) a specimen certificate representing shares of the Common Stock;
(j) the documents executed and delivered by the Company in
connection with the transactions contemplated by the Securities Purchase
Agreement, the Note Agreement and the Warrant Agreement;
(k) a letter to Holland & Knight and Xxxx & Xxxxxx from BancAmerica
Xxxxxxxxx Xxxxxxxx describing the manner of the offering of the Notes and
the Warrants (the "Offeree Letter"); and
(l) originals, or copies certified or otherwise identified to our
satisfaction, of such other documents, records, instruments and
certificates of public officials as we have deemed necessary or
appropriate to enable us to render this opinion.
The documents referenced in clause (a) through clause (e), inclusive, above are
hereinafter referred to collectively as the "Transaction Documents."
In rendering our opinion, we have assumed that all signatures (other than
signatures of officers and directors of the Company) are genuine, that all
documents submitted to us as originals are genuine, that all copies submitted to
us conform to the originals, that all natural Persons have legal capacity, and
as to documents executed by or on behalf of Persons other than the Company and
the Subsidiaries, that each such Person executing documents had the power to
enter into and perform its obligations under such documents, and that such
documents have been duly authorized, executed and delivered by, and are binding
upon and enforceable against, such Persons. We have no actual knowledge of any
information that would indicate that our assumptions are invalid.
In rendering our opinion, we have relied, to the extent we deem necessary
and proper, on:
Exhibit 4.1(a)-2
(i) warranties and representations as to certain factual matters
contained in the Securities Purchase Agreement;
(ii) the Offeree Letter; and
(iii) a Certificate signed by a Senior Officer of the Company.
We have no actual knowledge of any material inaccuracies in any of the facts
contained in the documents listed in items (i), (ii), or (iii).
With respect to our opinions expressed below relating to the valid
existence and good standing or active status of the Company and the Domestic
Subsidiaries, we have relied, without independent investigation, upon the
certificates of good standing or active status issued by the secretary or
department of state of the jurisdiction of incorporation.
Our opinion is based upon the laws of the State of Florida and United
States federal law as in effect as of the date of this letter.
This opinion is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As consequence, it is subject to a number of qualifications, exceptions,
definitions, limitations on coverage, and other limitations, all as more
particularly described in the Accord, and this opinion should be read in
conjunction therewith. The Bankruptcy and Insolvency Exception, the Equitable
Principles Limitation, and the Other Common Qualifications, as such terms are
defined in the Accord, apply to the opinion expressed in paragraph 3 below.
The phrase "Primary Lawyer Group," as used in the Accord, is hereby
modified, for purposes of applying the Accord to this opinion, to mean the
lawyers in this firm who have given substantive legal attention to
representation of the Company in connection with the transactions herein
contemplated.
Based on the foregoing, we are of the following opinions:
1. Each of the Company and each Domestic Subsidiary is a corporation
incorporated, validly existing and in good standing under the laws of its
respective state of incorporation and has all requisite corporate power and
authority to carry on its business and own its Property.
2. The Company has the requisite corporate power and authority to execute
and deliver each of the Transaction Documents and to perform its obligations set
forth therein and to offer, issue and sell the Notes and the Warrants in
accordance with the provisions of the Securities Purchase Agreement.
3. Each of the Transaction Documents has been duly authorized by all
necessary corporate action on the part of the Company (no action on the part of
the holders of any class of Capital Stock of the Company being required in
respect thereto), has been executed and
Exhibit 4.1(a)-3
delivered by duly authorized officers of the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
4. The execution and delivery of the Transaction Documents, the issuance
and sale of the Notes and the Warrants by the Company, the issuance and sale of
the Common Stock issuable upon exercise of the Warrants, and the performance by
the Company of its obligations under the Transaction Documents will not conflict
with, constitute a violation of, result in a breach of any provision of,
constitute a default under, or result in the creation or imposition of any Lien
(other than Liens permitted by the Note Agreement) upon any of their respective
Properties pursuant to:
(a) the articles or certificate of incorporation or bylaws of
the Company or any Domestic Subsidiary;
(b) any applicable statute, rule or regulation to which the Company
or any Domestic Subsidiary is subject; or
(c) any agreement or instrument to which the Company or any
Subsidiary is a party or by which any of its respective Properties may be
bound and which is listed as an Exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1996 or in any of the
Company's Quarterly Reports on Form 10-Q for any quarterly period ending
after October 31, 1996 (collectively, the "Material Agreements").
5. All consents, approvals and authorizations of, and all designations,
declarations, filings, registrations, qualifications and recordations with,
Governmental Authorities required of the Company have been obtained in
connection with the execution and delivery of each of the Transaction Documents,
the offer, issuance, sale and delivery of the Notes and the Warrants by the
Company and the use of the proceeds thereof.
6. Under existing law:
(a) the offering, issuance and sale of the Notes and the Warrants to
you under the circumstances contemplated by the Transaction Documents are
not subject to the registration requirements of the Securities Act or the
"Blue Sky" laws of the State of Florida;
(b) the Company is not required to qualify an indenture with respect
to the Notes under the Trust Indenture Act of 1939, as amended; and
(c) assuming no change in existing law, the issuance and sale of
shares of the Common Stock to you upon exercise of the Warrants in
compliance with the provisions of the Warrant Agreement and the Warrants
do not require registration of such Common Stock under the Securities Act
or the "Blue Sky" laws of the State of Florida; provided, however, that we
express no opinion regarding the resale by you of any Notes, Warrants or
Common Stock.
7. Neither the issuance of the Notes and the Warrants nor the intended use
of the
Exhibit 4.1(a)-4
proceeds of the Notes and the Warrants (as set forth in Section 2.18 of the
Securities Purchase Agreement) will violate Regulations G, T or X of the Federal
Reserve Board.
8. The Company is not:
(a) an "investment company" within the meaning of the Investment
Company Act of 1940, as amended; or
(b) to our knowledge, a "holding company" or an "affiliate" of a
"holding company," or a "subsidiary company" of a "holding company," or a
"public utility" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
9. The Company has reserved for issuance a sufficient number of shares of
Common Stock to permit the exercise of all the Warrants. All shares of Common
Stock issuable upon exercise of the Warrants, when so issued in compliance with
the terms of the Warrants and the Charter, (i) will be duly authorized, validly
issued, fully paid and non-assessable, and (ii) will be free of any preemptive
rights and free and clear of any Liens created by the Company or any Subsidiary,
which rights or Liens arise under the Charter or any Material Agreement
(assuming for purposes of this paragraph that the Charter and the Material
Agreements have not been amended in any respect since the date of this letter).
10. The authorized capital stock of the Company consists of:
(a) Twenty-five million (25,000,000) shares of Common Stock, of
which four hundred nine thousand five hundred five (409,505) shares have
been reserved for issuance upon exercise of the Warrants; and
(b) One Million (1,000,000) shares of preferred stock, One Thousand
Two Hundred (1,200) shares of which have been designated "Series A
Convertible Preferred Stock".
All opinions herein contained with respect to the enforceability of
documents and instruments are qualified to the extent that:
(a) the availability of equitable remedies, including without
limitation, specific enforcement and injunctive relief, is subject to the
discretion of the court before which any proceedings therefor may be
brought;
(b) the enforceability of certain terms provided in the Transaction
Documents may be limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or similar laws affecting the
enforcement of creditors' rights generally as at the time in effect, and
general principles of equity and the discretion of a court in granting
equitable remedies (whether enforceability is considered in a proceeding
at law or in equity); and
(c) rights to indemnification and contribution thereunder may be
limited by
Exhibit 4.1(a)-5
applicable law or public policy.
Our opinions set forth above are rendered as of the date of this letter
and we undertake no obligation to amend or update our opinions in the event of
changes in the law or the pertinent facts referred to herein.
We acknowledge that this opinion is being issued at the request of the
Company pursuant to Section 4.1(a) of the Securities Purchase Agreement and we
agree that you and your successors and assigns may rely hereon in connection
with the consummation of the transactions contemplated by the Transaction
Documents. We further acknowledge that Xxxx & Xxxxxx may rely on the opinions
expressed herein for the sole purpose of rendering their opinion to be rendered
pursuant to Section 4.1(b) of the Securities Purchase Agreement.
Very truly yours,
Exhibit 4.1(a)-6
ANNEX 1
ADDRESSEES
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxx Xxxxxxx Variable Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Signature 1A (Cayman), Ltd.
c/o Xxxx Xxxxxxx Mutual Life Insurance Company,
Portfolio Advisor
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Exhibit 4.1(a)-7
EXHIBIT 4.1(B)
FORM OF OPINION OF PURCHASERS' COUNSEL
[LETTERHEAD OF XXXX & XXXXXX]
[Closing Date]
To The Persons Named on Annex 1 hereto
Re: ABLE TELCOM HOLDING CORP. C
12% SENIOR SUBORDINATED NOTES DUE JANUARY 6, 2005
409,505 WARRANTS TO PURCHASE COMMON STOCK
Ladies and Gentlemen:
Reference is made to the several separate Securities Purchase Agreements
(collectively, the "SECURITIES PURCHASE AGREEMENT"), each dated as of January 6,
1998, between Able Telcom Holding Corp. (the "COMPANY"), a Florida corporation,
and each of the Purchasers named therein (the "Purchasers") which provides,
among other things, for the issuance and sale by the Company of the 12% Senior
Subordinated Notes due January 6, 2005 of the Company, in the aggregate
principal amount of Ten Million Dollars ($10,000,000), together with four
hundred nine thousand five hundred five (409,505) warrants (the "WARRANTS") to
purchase shares of the Common Stock, $.001 par value, of the Company (the
"COMMON STOCK"). Capitalized terms used herein, and not defined herein, have the
respective meanings ascribed to them pursuant to the terms of the Securities
Purchase Agreement or, if not defined therein, in the Note Agreement.
We have acted as special counsel to the Purchasers in connection with the
transactions contemplated by the Securities Purchase Agreement. This opinion is
delivered to you pursuant to Section 4.1(b) of the Securities Purchase
Agreement. In acting as such counsel, we have examined:
(a) the Securities Purchase Agreement;
(b) the Note Agreement;
(c) the Company's 12% Senior Subordinated Notes due January 6, 2005,
dated the date hereof, in the form of Attachment A to the Note Agreement
and in the respective principal amounts, registered in the respective
names and with the respective registration numbers set forth on Annex 1 to
the Securities Purchase Agreement (the "NOTES");
(d) the Warrant Agreement;
Exhibit 4.1(b)-1
(e) the Warrant Certificates, dated the date hereof, in the form of
Attachment A to the Warrant Agreement and representing the respective
numbers of Warrants, registered in the respective names and with the
respective registration numbers set forth on Annex 1 to the Securities
Purchase Agreement (the "WARRANT CERTIFICATES");
(f) a certificate of two Senior Officers of the Company, dated the
date hereof, as provided for in Section 4.3(a) of the Securities Purchase
Agreement;
(g) a certificate of the Secretary of the Company, dated the date
hereof, as provided for in Section 4.3(b) of the Securities Purchase
Agreement, attaching as exhibits and certifying as true and correct:
(i) a copy of the certificate of incorporation of the Company,
together with all amendments and restatements through and including
January 2, 1998, certified by the Secretary of State of the State of
Florida (the "CHARTER");
(ii) the bylaws of the Company (the "BYLAWS"); and
(iii) resolutions of the board of directors of the Company
authorizing its participation in the transactions contemplated by
the Securities Purchase Agreement;
(h) the opinion of Holland & Knight, special counsel to the Company,
dated the date hereof;
(i) a letter to Holland & Knight and Xxxx & Xxxxxx from BancAmerica
Xxxxxxxxx Xxxxxxxx describing the manner of the offering of the Notes and
the Warrants (the "OFFEREE LETTER"); and
(j) originals, or copies certified or otherwise identified to our
satisfaction, of such other documents, records, instruments and
certificates of public officials as we have deemed necessary or
appropriate to enable us to render this opinion.
The documents referenced in clause (a) through clause (e), inclusive, above are
hereinafter referred to collectively as the "TRANSACTION DOCUMENTS."
In rendering our opinion, we have assumed that all signatures are genuine,
that all documents submitted to us as originals are genuine, that all copies
submitted to us conform to the originals, that all natural Persons have legal
capacity, and as to documents executed by or on behalf of Persons other than the
Company, that each such Person executing documents had the power to enter into
and perform its obligations under such documents, and that such documents have
been duly authorized, executed and delivered by, and are binding upon and
enforceable against, such Persons.
Exhibit 4.1(b)-2
In rendering our opinion, we have relied, to the extent we deem necessary
and proper, on:
(i) warranties and representations as to certain factual matters
contained in the Securities Purchase Agreement;
(ii) the Offeree Letter; and
(iii) said opinion of Holland & Knight with respect to matters
governed by the laws of the State of Florida and the due organization,
valid existence, good standing or active status and power and authority
of, and the authorization, execution and delivery of documents by, the
Company (except that we have reviewed the certificate referred to above in
clause (g) above and the attachments thereto), and this opinion is subject
to the same assumptions and qualifications as are contained in or
incorporated into such opinion; based on such investigation as we have
deemed appropriate, said opinion is satisfactory in form and scope to us,
and, in our opinion, the Purchasers and we are justified in relying
thereon.
Based on the foregoing, we are of the following opinions:
1. The Company is a corporation incorporated, validly existing and in good
standing or active status under the laws of the State of Florida.
2. The Company has the requisite corporate power and authority to execute
and deliver each of the Transaction Documents, to perform its obligations set
forth therein and to offer, issue and sell the Notes and the Warrants in
accordance with the provisions of the Securities Purchase Agreement.
3. Each of the Transaction Documents has been duly authorized by all
necessary corporate action on the part of the Company, has been executed and
delivered by duly authorized officers of the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its respective terms.
4. The execution and delivery of the Transaction Documents, the issuance
and sale of the Notes and the Warrants by the Company, the issuance and sale of
the Common Stock issuable upon exercise of the Warrants (assuming such exercise
took place on the date hereof), and the performance by the Company of its
obligations under the Transaction Documents will not conflict with, constitute a
violation of, result in a breach of any provision of, constitute a default
under, or result in the creation or imposition of any Lien (other than Liens
permitted by the Note Agreement) upon any of their respective Properties
pursuant to the Charter or the Bylaws.
5. No consent, approval or authorization of, or designation, declaration,
filing, registration, qualification or recordation with, any federal
Governmental Authorities of the United States of America or Governmental
Authorities of the State of New York is required under the federal laws of the
United States of America or the laws of the State of New York on the part of the
Company in connection with the execution and delivery of each of the Transaction
Documents and the offer, issuance, sale and delivery of the Notes and the
Exhibit 4.1(b)-3
Warrants on the date hereof.
6. Under existing law:
(a) neither the Notes nor the Warrants are subject to the
registration requirements under the Securities Act in connection with the
offering and sale of the Notes and the Warrants under the circumstances
contemplated by the Transaction Documents;
(b) the Company is not required to qualify an indenture with respect
to the Notes under the Trust Indenture Act of 1939, as amended; and
(c) assuming no change in existing law, the issuance and sale of
shares of the Common Stock to you upon exercise of the Warrants in
compliance with the provisions of the Warrant Agreement and the Warrants,
does not require registration of such Common Stock under the Securities
Act; PROVIDED, HOWEVER, that we express no opinion regarding the resale by
you of any Notes, Warrants or Common Stock.
All opinions herein contained with respect to the enforceability of
documents and instruments are qualified to the extent that:
(a) the availability of equitable remedies, including without
limitation, specific enforcement and injunctive relief, is subject to the
discretion of the court before which any proceedings therefor may be
brought;
(b) the enforceability of certain terms provided in the Transaction
Documents may be limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or similar laws affecting the
enforcement of creditors' rights generally as at the time in effect, and
general principles of equity and the discretion of a court in granting
equitable remedies (whether enforceability is considered in a proceeding
at law or in equity); and
(c) rights to indemnification and contribution thereunder may be
limited by applicable law or public policy.
Other than in reliance upon the aforementioned opinion of Holland &
Knight, we express no opinion as to the law of any jurisdiction other than the
federal law of the United States of America and the laws of the State of New
York.
This opinion is delivered to you pursuant to Section 4.1(b) of the
Securities Purchase Agreement. Subsequent holders of the Notes and Warrants may
rely on this opinion as if it were addressed to them.
Very truly yours,
Exhibit 4.1(b)-4
ANNEX 1
ADDRESSEES
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxx Xxxxxxx Variable Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Signature 1A (Cayman), Ltd.
c/o Xxxx Xxxxxxx Mutual Life Insurance Company,
Portfolio Advisor
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Exhibit 4.1(b)-5
EXHIBIT 4.3(A)
FORM OF OFFICERS' CERTIFICATE
ABLE TELCOM HOLDING CORP.
CERTIFICATE OF OFFICERS
We, [________________] and [_______________], each hereby certify that we
are, respectively, the [______________] and the [_____________] of ABLE TELCOM
HOLDING CORP., a Florida corporation (the "COMPANY"), and that, as such, we have
access to its corporate records and are familiar with the matters herein
certified, and we are authorized to execute and deliver this Certificate in the
name and on behalf of the Company, and further certify (in the name of and on
behalf of the Company and not in our individual capacity) that:
1. This Certificate is being delivered pursuant to Section 4.3(a) of the
separate Securities Purchase Agreements (collectively, the "SECURITIES PURCHASE
AGREEMENT"), each dated as of January 6, 1998, between the Company and each of
the purchasers listed on Annex 1 thereto (collectively, the "PURCHASERS"). The
terms used in this Certificate and not defined herein have the respective
meanings specified in the Securities Purchase Agreement.
2. The warranties and representations contained in Section 2 of the
Securities Purchase Agreement are true on the date hereof with the same effect
as though made on and as of the date hereof.
3. The Company has performed and complied with all agreements and
conditions contained in the Securities Purchase Agreement that are required to
be performed or complied with by the Company before or at the date hereof.
4. [__________________], ____ from [________ __, 199_] (DATE OF
RESOLUTIONS TO SELL PURCHASED SECURITIES) to the date hereof, inclusive, has
been and is the duly elected, qualified and acting [Assistant] Secretary of the
Company, and the signature appearing on the Certificate of [Assistant] Secretary
dated the date hereof and delivered to the Purchasers contemporaneously herewith
is his genuine signature.
IN WITNESS WHEREOF, we have executed this Certificate in the name and on
behalf of the Company on [_________ ___, 199_]. (CLOSING DATE)
ABLE TELCOM HOLDING CORP.
--------------------------------
By:
Name:
Title:
Exhibit 4.3(a)-1
Name:
Title:
Exhibit 4.3(a)-2
EXHIBIT 4.3(B)
FORM OF SECRETARY'S CERTIFICATE
ABLE TELCOM HOLDING CORP.
CERTIFICATE OF [ASSISTANT] SECRETARY
I, [____________], hereby certify that I am the duly elected, qualified
and acting [Assistant] Secretary of ABLE TELCOM HOLDING CORP., a Florida
corporation (the "COMPANY"), and that, as such, I have access to its corporate
records and am familiar with the matters herein certified, and I am authorized
to execute and deliver this certificate in the name and on behalf of the
Company, and further certify (in the name and on behalf of the Company and not
in my individual capacity) as follows:
1. This certificate is being delivered pursuant to Section 4.3(b) of the
separate Securities Purchase Agreements (collectively, the "SECURITIES PURCHASE
AGREEMENT"), each dated as of January 6, 1998, between the Company and each of
the purchasers listed on Annex 1 thereto (collectively, the "PURCHASERS"). The
terms used in this certificate and not defined herein have the respective
meanings specified in the Securities Purchase Agreement.
2. Attached hereto as Attachment A is a true and correct copy of
resolutions, and the preamble thereto, adopted by the Board of Directors of the
Company on [_________ __, 199_], (DATE OF RESOLUTIONS TO SELL PURCHASED
SECURITIES) and such resolutions and preamble set forth in Attachment A hereto
were duly adopted by said Board of Directors and are in full force and effect on
and as of the date hereof, not having been amended, altered or repealed, and
such resolutions are filed with the records of the Board of Directors.
3. The documents listed below were executed and delivered by the Company
pursuant to and in accordance with the resolutions set forth in Attachment A
hereto and said documents as executed are substantially in the form submitted to
and approved by the Board of Directors of the Company as aforementioned:
(a) the Securities Purchase Agreement;
(b) the Note Agreement;
(c) the Notes;
(d) the Warrant Agreement; and
(e) the Warrant Certificates.
4. Attached hereto as Attachment B is a true, correct and complete copy of
the bylaws of the Company as in full force and effect on and as of the date
hereof, which bylaws were last amended by the Board of Directors of the Company
on, and have been in full effect
Exhibit 4.3(b)-1
in said form at all times from [_________ __, 199_] (DATE OF RESOLUTIONS TO SELL
PURCHASED SECURITIES) to the date hereof, inclusive, without modification or
amendment in any respect.
5. Each of the following named persons is and has been a duly elected,
qualified and acting officer of the Company holding the office or offices set
forth below opposite such person's name from prior to [_________ __, 199_] (DATE
OF RESOLUTIONS TO SELL PURCHASED SECURITIES) to the date hereof, inclusive:
[List Only Officers Executing Documents]
Name Office Signature
[Chairman of the Board] /s/_____________________________
[President] /s/_____________________________
[Vice President] /s/_____________________________
[Director] /s/_____________________________
6. The signature appearing opposite the name of each such person set forth
above is such person's genuine signature.
7. Attached hereto as Attachment C is a Certificate of Good Standing
issued with respect to the Company by the Secretary of State of Florida.
8. Attached hereto as Attachment D is a true, correct and complete copy of
the Company's Articles of Incorporation, and each amendment thereto, certified
by the Secretary of State of Florida.
9. Attached hereto as Attachment E is a true, correct and complete
specimen certificate representing shares of Common Stock.
10. There have been no amendments or supplements to, or restatements of,
the Company's Articles of Incorporation since [__________ __, 199_]. (DATE
PRECEDING DATE OF COPY CERTIFIED BY SEC. OF STATE)
Exhibit 4.3(b)-2
IN WITNESS WHEREOF, I have hereunto set my hand on [________ __, 199_].
(CLOSING DATE)
ABLE TELCOM HOLDING CORP.
[Assistant] Secretary
Exhibit 4.3(b)-3
ATTACHMENT A
ABLE TELCOM HOLDING CORP.
BOARD OF DIRECTORS
RESOLUTIONS ADOPTED
WHEREAS, there has been submitted to this Board a draft of the form of
Securities Purchase Agreement (together with all annexes, exhibits and schedules
thereto, the "Securities Purchase Agreement"), to be entered into separately by
the Company and each of the purchasers listed on Annex 1 thereto (together with
any affiliate of any thereof, the "Purchasers") pursuant to which (a) the
Purchasers will purchase from the Company the aggregate principal amount of
$10,000,000 of the Company's 12% Senior Subordinated Notes due January 6, 2005
(collectively, the "Notes") and (b) the Company will sell and the Purchasers
will purchase, subject to the terms and conditions of the Securities Purchase
Agreement, four hundred nine thousand five hundred five (409,505) warrants
(collectively, the "Warrants") to purchase four hundred nine thousand five
hundred five (409,505) shares of the Company's Common Stock, par value $.001 per
share (collectively, the "Common Stock");
WHEREAS, this Board has reviewed in detail and discussed the terms and
provisions of the Securities Purchase Agreement, the Note Agreement, including
the form of the Note specified therein, and the Warrant Agreement, including the
form of the Warrant Certificate specified therein; and
WHEREAS, on the basis of its review of the Securities Purchase Agreement,
the Note Agreement, including the form of the Note specified therein, and the
Warrant Agreement, including the form of the Warrant Certificate specified
therein, and of the principal terms and provisions of the transactions provided
for therein, this Board deems it advisable and in the best interest of the
Company that the transactions provided in the Securities Purchase Agreement, the
Note Agreement and the Warrant Agreement be consummated substantially in
accordance with the provisions of such documents; and
WHEREAS, terms used in these preambles and resolutions and not herein
defined shall have the respective meanings ascribed to them in the Securities
Purchase Agreement;
NOW THEREFORE, BE IT RESOLVED, that the form of, and each of the terms and
provisions contained in, the Securities Purchase Agreement, the Note Agreement
and the Warrant Agreement are hereby authorized and approved in each and every
respect; and each and every transaction effected or to be effected pursuant to
and substantially in accordance with the terms of the Securities Purchase
Agreement, the Note Agreement and the Warrant Agreement, including, but not
limited to, each specific transaction that is described, authorized and approved
in these resolutions, is hereby authorized and approved in each and every
respect;
RESOLVED, that the Company enter into a Securities Purchase Agreement with
each of the Purchasers or any affiliate thereof; and that each of the Chairman
of the Board, the
Exhibit 4.3(b)-4
President, any Vice President, any Director and each other officer of the
Company (each an "Authorized Officer") is hereby severally authorized to execute
and deliver, in the name and on behalf of the Company, the Securities Purchase
Agreement, substantially in the form thereof presented to this Board and
heretofore approved, with such changes therein as shall be approved by the
officer executing and delivering the same, such approval to be evidenced
conclusively by such execution and delivery; and
RESOLVED, that the Company borrow from the Purchasers an aggregate amount
of funds as provided in the Securities Purchase Agreement, such indebtedness to
be evidenced by the Notes, in the amounts and upon the terms and conditions
provided for in the Securities Purchase Agreement; and that each of the
Authorized Officers is hereby severally authorized to execute and deliver the
Notes, in the name and on behalf of the Company, substantially in the form
thereof presented to this Board and heretofore approved, with such changes
therein as shall be approved by the officer or officers executing and delivering
the same, such approval to be evidenced conclusively by such execution and
delivery; and
RESOLVED, that the Company enter into a Note Agreement with each of the
Purchasers or any affiliate thereof; and that each of the Authorized Officers is
hereby severally authorized to execute and deliver, in the name and on behalf of
the Company, the Note Agreement, substantially in the form thereof presented to
this Board and heretofore approved, with such changes therein as shall be
approved by the officer executing and delivering the same, such approval to be
evidenced conclusively by such execution and delivery; and
RESOLVED, that the Company enter into a Warrant Agreement with each of the
Purchasers or any affiliate thereof; and that each of the Authorized Officers is
hereby severally authorized to execute and deliver, in the name and on behalf of
the Company, the Warrant Agreement, substantially in the form thereof presented
to this Board and heretofore approved, with such changes therein as shall be
approved by the officer executing and delivering the same, such approval to be
evidenced conclusively by such execution and delivery; and
RESOLVED, that the Company issue to the Purchasers an aggregate of four
hundred nine thousand five hundred five (409,505) Warrants, upon the terms and
conditions provided for in the Securities Purchase Agreement and the Warrant
Agreement, each Warrant representing the right to purchase initially, upon the
terms and subject to the conditions set forth in the Warrant Agreement, one
share of Common Stock, subject to adjustment as provided in the Warrant
Agreement; that said Warrants shall be evidenced by Warrant Certificates of the
Company to be issued to the Purchasers, to be dated the date of issue, and to be
substantially in the form attached to the Warrant Agreement as Attachment A; and
that each of the Authorized Officers is hereby severally authorized to execute
and deliver such Warrant Certificates, in the name and on behalf of the Company,
substantially in the form thereof presented to this Board and heretofore
approved, with such changes therein as shall be approved by the officer
executing and delivering the same, such approval to be evidenced conclusively by
such execution and delivery; and
RESOLVED, that there is hereby reserved, for issuance pursuant to the
Warrants, four
Exhibit 4.3(b)-5
hundred nine thousand five hundred five (409,505) shares of authorized and
unissued Common Stock, which shares shall not be issued for any other purpose;
and
RESOLVED, that the Company will at all times cause to be reserved and kept
available out of its authorized and unissued shares of Common Stock such number
of shares of Common Stock as will be sufficient to permit the exercise in full
of all Warrants; and
RESOLVED, that this Board hereby authorizes each of the Authorized
Officers, severally, to execute and deliver for and on behalf of the Company the
certificates required by the Securities Purchase Agreement; and
RESOLVED, that the Authorized Officers and any person or persons
designated and authorized so to act by any Authorized Officer are hereby each
severally authorized to do and perform or cause to be done and performed, in the
name and on behalf of the Company, all other acts, to pay or cause to be paid,
on behalf of the Company, all related costs and expenses and to execute and
deliver or cause to be executed and delivered such other notices, requests,
demands, directions, consents, approvals, orders, applications, agreements,
instruments, certificates, undertakings, supplements, amendments, further
assurances or other communications of any kind, under the corporate seal of the
Company or otherwise and in the name of and on behalf of the Company or
otherwise, as he, she or they may deem necessary, advisable or appropriate to
effect the intent of the foregoing Resolutions or to comply with the
requirements of the instruments approved and authorized by the foregoing
Resolutions, including but not limited to the Securities Purchase Agreement, the
Note Agreement, the Notes, the Warrant Agreement and Warrant Certificates; and
RESOLVED, that any acts of any Authorized Officer of the Company and of
any person or persons designated and authorized to act by any Authorized Officer
of the Company, which acts would have been authorized by the foregoing
Resolutions, are hereby severally ratified, confirmed, approved and adopted as
the acts of the Company; and
RESOLVED, that each of the Secretary and each Assistant Secretary of the
Company is hereby severally authorized and empowered to certify to the passage
of the foregoing Resolutions under the seal of the Company or otherwise.
Exhibit 4.3(b)-6
ATTACHMENT B
Bylaws of the Company
[Separately provided by the Company]
Exhibit 4.3(b)-7
ATTACHMENT C
Certificate of Good Standing of the Company
[Separately provided by the Company]
Exhibit 4.3(b)-8
ATTACHMENT D
Articles of Incorporation of the Company
[Separately provided by the Company]
Exhibit 4.3(b)-9
ATTACHMENT E
Specimen Certificate of Common Stock
[Separately provided by the Company]
Exhibit 4.3(b)-10
