Exhibit 10.7

 

EXECUTION COPY

 

NOTE PURCHASE AGREEMENT

 

 

Dated as of November 22, 2005

 

By and Between

 

Navtech Systems Support Inc.

 

And

 

The Purchasers Referred to Herein

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

Section 1.

Definitions

 

1A.

Definitions

 

 

 

 

Section 2.

Authorization and Closing

 

2A.

Authorization, Purchase and Sale of the Notes

 

2B.

The Closing

 

 

 

 

Section 3.

Conditions of Each Purchaser’s Obligations at the Closing

 

3A.

Representations and Warranties

 

3B.

Compliance with Covenants

 

3C.

Consents and Approvals

 

3D.

[Reserved]

 

3E.

Registration Rights Agreement

 

3F.

Parent Guaranty and Subsidiary Guaranty

 

3G.

Sale of Notes and Warrants to Each Other Purchaser

 

3H.

Consummation of EAG Acquisition

 

3I.

Equity Investment

 

3J.

No Material Adverse Effect

 

3K.

Closing Documents

 

3L.

Proceedings

 

3M.

Company Counsel Opinions

 

3N.

Commitment Fees; Closing Expenses

 

 

 

 

Section 4.

Covenants

 

4A.

[Reserved.]

 

4B.

Restrictive Covenants

 

4C.

Affirmative Covenants

 

4D.

Financial Statements and Other Information

 

4E.

Use of Proceeds

 

4F.

Financial Covenants

 

4G.

[Reserved].

 

4H.

[Reserved].

 

4I.

Joinder of Additional Subsidiaries

 

4J.

Subordination Agreements

 

 

 

 

Section 5.

Nature of Restricted Securities; Transfer of Restricted Securities; General
Transfer Procedure

 

5A.

General Provisions

 

5B. [a05-20900_1ex10d7.htm#a5b_LegendRemoval_050223]

Legend Removal [a05-20900_1ex10d7.htm#a5b_LegendRemoval_050223]

 

 

 

 

Section 6. [a05-20900_1ex10d7.htm#Section6_RepresentationsAndWarran_050225]

Representations and Warranties of the Company
[a05-20900_1ex10d7.htm#Section6_RepresentationsAndWarran_050225]

 

6A. [a05-20900_1ex10d7.htm#a6a_OrganizationAndPower_050230]

Organization and Power [a05-20900_1ex10d7.htm#a6a_OrganizationAndPower_050230]

 

6B. [a05-20900_1ex10d7.htm#a6b_CapitalStockAndRelatedMatters_050233]

Capital Stock and Related Matters
[a05-20900_1ex10d7.htm#a6b_CapitalStockAndRelatedMatters_050233]

 

 

i

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6C. [a05-20900_1ex10d7.htm#a6c_SubsidiariesInvestments_050236]

Subsidiaries; Investments
[a05-20900_1ex10d7.htm#a6c_SubsidiariesInvestments_050236]

 

6D. [a05-20900_1ex10d7.htm#a6d_AuthorizationNoncontravention_050253]

Authorization; Non-contravention
[a05-20900_1ex10d7.htm#a6d_AuthorizationNoncontravention_050253]

 

6E. [a05-20900_1ex10d7.htm#a6e_AbsenceOfUndisclosedLiabiliti_050256]

Absence of Undisclosed Liabilities
[a05-20900_1ex10d7.htm#a6e_AbsenceOfUndisclosedLiabiliti_050256]

 

6F. [a05-20900_1ex10d7.htm#a6f_NoMaterialAdverseChange_050300]

No Material Adverse Change
[a05-20900_1ex10d7.htm#a6f_NoMaterialAdverseChange_050300]

 

6G. [a05-20900_1ex10d7.htm#a6g_AbsenceOfCertainDevelopments_050303]

Absence of Certain Developments
[a05-20900_1ex10d7.htm#a6g_AbsenceOfCertainDevelopments_050303]

 

6H. [a05-20900_1ex10d7.htm#a6h_TaxMatters_050323]

Tax Matters [a05-20900_1ex10d7.htm#a6h_TaxMatters_050323]

 

6I. [a05-20900_1ex10d7.htm#a6i_LitigationEtc_050325]

Litigation, etc [a05-20900_1ex10d7.htm#a6i_LitigationEtc_050325]

 

6J. [a05-20900_1ex10d7.htm#a6j_Brokerage_050328]

Brokerage [a05-20900_1ex10d7.htm#a6j_Brokerage_050328]

 

6K. [a05-20900_1ex10d7.htm#a6k_ComplianceWithLaws_050330]

Compliance with Laws [a05-20900_1ex10d7.htm#a6k_ComplianceWithLaws_050330]

 

6L. [a05-20900_1ex10d7.htm#a6l_Assets_050334]

Assets [a05-20900_1ex10d7.htm#a6l_Assets_050334]

 

6M. [a05-20900_1ex10d7.htm#a6m_RealProperty_050353]

Real Property [a05-20900_1ex10d7.htm#a6m_RealProperty_050353]

 

6N. [a05-20900_1ex10d7.htm#a6n_ContractsAndCommitments__050404]

Contracts and Commitments.
[a05-20900_1ex10d7.htm#a6n_ContractsAndCommitments__050404]

 

6O. [a05-20900_1ex10d7.htm#a6o_IntellectualPropertyRights_050408]

Intellectual Property Rights
[a05-20900_1ex10d7.htm#a6o_IntellectualPropertyRights_050408]

 

6P. [a05-20900_1ex10d7.htm#a6p_Insurance_050451]

Insurance [a05-20900_1ex10d7.htm#a6p_Insurance_050451]

 

6Q. [a05-20900_1ex10d7.htm#a6q_EmployeeBenefits__050817]

Employee Benefits [a05-20900_1ex10d7.htm#a6q_EmployeeBenefits__050817]

 

6R. [a05-20900_1ex10d7.htm#a6r_Employees__050827]

Employees [a05-20900_1ex10d7.htm#a6r_Employees__050827]

 

6S. [a05-20900_1ex10d7.htm#a6s_EnvironmentalAndSafetyMatters_050839]

Environmental and Safety Matters.
[a05-20900_1ex10d7.htm#a6s_EnvironmentalAndSafetyMatters_050839]

 

6T. [a05-20900_1ex10d7.htm#a6t_AffiliatedTransactions_050843]

Affiliated Transactions
[a05-20900_1ex10d7.htm#a6t_AffiliatedTransactions_050843]

 

6U. [a05-20900_1ex10d7.htm#a6u_CustomersAndSuppliers__050845]

Customers and Suppliers
[a05-20900_1ex10d7.htm#a6u_CustomersAndSuppliers__050845]

 

6V. [a05-20900_1ex10d7.htm#a6v_AccountsReceivable_050908]

Accounts Receivable [a05-20900_1ex10d7.htm#a6v_AccountsReceivable_050908]

 

6W. [a05-20900_1ex10d7.htm#a6w_GovernmentalConsents_050911]

Governmental Consents [a05-20900_1ex10d7.htm#a6w_GovernmentalConsents_050911]

 

6X. [a05-20900_1ex10d7.htm#a6x_RepresentationsAndWarrantiesO_050915]

Representations and Warranties of SAS in the Acquisition Agreement
[a05-20900_1ex10d7.htm#a6x_RepresentationsAndWarrantiesO_050915]

 

6Y. [a05-20900_1ex10d7.htm#a6y_Disclosure_050918]

Disclosure [a05-20900_1ex10d7.htm#a6y_Disclosure_050918]

 

 

 

 

Section 7. [a05-20900_1ex10d7.htm#Section7_RedemptionOfTheNotes_050927]

Redemption of the Notes
[a05-20900_1ex10d7.htm#Section7_RedemptionOfTheNotes_050927]

 

7A. [a05-20900_1ex10d7.htm#a7a_MandatoryRedemption_050935]

Mandatory Redemption [a05-20900_1ex10d7.htm#a7a_MandatoryRedemption_050935]

 

7B. [a05-20900_1ex10d7.htm#a7b_OptionalRedemption__050937]

Optional Redemption [a05-20900_1ex10d7.htm#a7b_OptionalRedemption__050937]

 

7C. [a05-20900_1ex10d7.htm#a7c_SpecialRedemptions__051022]

Special Redemptions. [a05-20900_1ex10d7.htm#a7c_SpecialRedemptions__051022]

 

7D. [a05-20900_1ex10d7.htm#a7d_RedemptionPayments_051047]

Redemption Payments [a05-20900_1ex10d7.htm#a7d_RedemptionPayments_051047]

 

7E. [a05-20900_1ex10d7.htm#a7e_NoticeOfRedemption_051051]

Notice of Redemption [a05-20900_1ex10d7.htm#a7e_NoticeOfRedemption_051051]

 

7F. [a05-20900_1ex10d7.htm#a7f_InterestAfterRedemptionDate_051054]

Interest After Redemption Date
[a05-20900_1ex10d7.htm#a7f_InterestAfterRedemptionDate_051054]

 

7G. [a05-20900_1ex10d7.htm#a7g_TaxGrossup_051059]

Tax Gross-Up [a05-20900_1ex10d7.htm#a7g_TaxGrossup_051059]

 

7H. [a05-20900_1ex10d7.htm#a7h_TaxGrossupAdjustments_051112]

Tax Gross-Up Adjustments
[a05-20900_1ex10d7.htm#a7h_TaxGrossupAdjustments_051112]

 

 

 

 

Section 8. [a05-20900_1ex10d7.htm#Section8_PutRight__051113]

Put Right [a05-20900_1ex10d7.htm#Section8_PutRight__051113]

 

8A. [a05-20900_1ex10d7.htm#a8a_PutEvents_051115]

Put Events [a05-20900_1ex10d7.htm#a8a_PutEvents_051115]

 

8B. [a05-20900_1ex10d7.htm#a8b_ObligationAfterNotice_051121]

Obligation After Notice [a05-20900_1ex10d7.htm#a8b_ObligationAfterNotice_051121]

 

8C. [a05-20900_1ex10d7.htm#a8c_Closing_051123]

Closing [a05-20900_1ex10d7.htm#a8c_Closing_051123]

 

8D. [a05-20900_1ex10d7.htm#a8d_ProhibitionsOnPayment_051134]

Prohibitions on Payment [a05-20900_1ex10d7.htm#a8d_ProhibitionsOnPayment_051134]

 

8E. [a05-20900_1ex10d7.htm#a8e_PutPrice_051138]

Put Price [a05-20900_1ex10d7.htm#a8e_PutPrice_051138]

 

 

 

 

Section 9. [a05-20900_1ex10d7.htm#Section9_EventsOfDefault__051141]

Events of Default [a05-20900_1ex10d7.htm#Section9_EventsOfDefault__051141]

 

9A. [a05-20900_1ex10d7.htm#a9a_Definition_051143]

Definition [a05-20900_1ex10d7.htm#a9a_Definition_051143]

 

9B. [a05-20900_1ex10d7.htm#a9b_ConsequencesOfEventsOfDefault_051216]

Consequences of Events of Default Under the Notes
[a05-20900_1ex10d7.htm#a9b_ConsequencesOfEventsOfDefault_051216]

 

 

ii

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Section 10. [a05-20900_1ex10d7.htm#Section10_Miscellaneous__051800]

Miscellaneous [a05-20900_1ex10d7.htm#Section10_Miscellaneous__051800]

 

10A. [a05-20900_1ex10d7.htm#a10a_CommitmentFeesExpenses__051801]

Commitment Fees; Expenses
[a05-20900_1ex10d7.htm#a10a_CommitmentFeesExpenses__051801]

 

10B. [a05-20900_1ex10d7.htm#a10b_RemediesSurvivalOfRepresenta_051808]

Remedies; Survival of Representations, Warranties and Covenants; Indemnification
[a05-20900_1ex10d7.htm#a10b_RemediesSurvivalOfRepresenta_051808]

 

10C. [a05-20900_1ex10d7.htm#a10c_PurchasersRepresentationsLeg_051818]

Purchaser’s Representations; Legends
[a05-20900_1ex10d7.htm#a10c_PurchasersRepresentationsLeg_051818]

 

10D. [a05-20900_1ex10d7.htm#a10d_EntireAgreement_051934]

Entire Agreement [a05-20900_1ex10d7.htm#a10d_EntireAgreement_051934]

 

10E. [a05-20900_1ex10d7.htm#a10e_SuccessorsAndAssigns_051937]

Successors and Assigns [a05-20900_1ex10d7.htm#a10e_SuccessorsAndAssigns_051937]

 

10F. [a05-20900_1ex10d7.htm#a10f_Counterparts_051940]

Counterparts [a05-20900_1ex10d7.htm#a10f_Counterparts_051940]

 

10G. [a05-20900_1ex10d7.htm#a10g_DescriptiveHeadingsInterpret_051944]

Descriptive Headings; Interpretation
[a05-20900_1ex10d7.htm#a10g_DescriptiveHeadingsInterpret_051944]

 

10H. [a05-20900_1ex10d7.htm#a10h_NoticesBusinessDays_051948]

Notices; Business Days [a05-20900_1ex10d7.htm#a10h_NoticesBusinessDays_051948]

 

10I. [a05-20900_1ex10d7.htm#a10i_ConsentToAmendmentsAndWaiver_052051]

Consent to Amendments and Waivers
[a05-20900_1ex10d7.htm#a10i_ConsentToAmendmentsAndWaiver_052051]

 

10J. [a05-20900_1ex10d7.htm#a10j_Severability_052055]

Severability [a05-20900_1ex10d7.htm#a10j_Severability_052055]

 

10K. [a05-20900_1ex10d7.htm#a10k_Construction_052059]

Construction [a05-20900_1ex10d7.htm#a10k_Construction_052059]

 

10L. [a05-20900_1ex10d7.htm#a10l_IncorporationOfAnnexesSchedu_052116]

Incorporation of Annexes, Schedules and Exhibits
[a05-20900_1ex10d7.htm#a10l_IncorporationOfAnnexesSchedu_052116]

 

10M. [a05-20900_1ex10d7.htm#a10m_RegisteredHoldersOwnership_052119]

Registered Holders; Ownership
[a05-20900_1ex10d7.htm#a10m_RegisteredHoldersOwnership_052119]

 

10N. [a05-20900_1ex10d7.htm#a10n_GoverningLaw_052124]

GOVERNING LAW [a05-20900_1ex10d7.htm#a10n_GoverningLaw_052124]

 

10O. [a05-20900_1ex10d7.htm#a10o_JurisdictionAndVenue_052140]

JURISDICTION AND VENUE [a05-20900_1ex10d7.htm#a10o_JurisdictionAndVenue_052140]

 

10P. [a05-20900_1ex10d7.htm#a10p_WaiverOfRightToJuryTrial_052144]

WAIVER OF RIGHT TO JURY TRIAL
[a05-20900_1ex10d7.htm#a10p_WaiverOfRightToJuryTrial_052144]

 

10Q. [a05-20900_1ex10d7.htm#a10q_Confidentiality_052148]

Confidentiality [a05-20900_1ex10d7.htm#a10q_Confidentiality_052148]

 

10R. [a05-20900_1ex10d7.htm#a10r_ConsiderationForNotes_052206]

Consideration for Notes
[a05-20900_1ex10d7.htm#a10r_ConsiderationForNotes_052206]

 

 

iii

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NOTE PURCHASE AGREEMENT

 

NOTE PURCHASE AGREEMENT, dated as of November 22, 2005 (this “Agreement”), by
and among Navtech Systems Support Inc., an Ontario corporation (the “Company”),
and the Persons listed on Annex 1 attached hereto (the “Purchasers”).  Unless
otherwise indicated herein, capitalized terms used in this Agreement have the
meanings set forth in Section 1.

 

WHEREAS, the Purchasers have agreed to purchase, and the Company has agreed to
issue and sell to the Purchasers, Notes of the Company; and

 

WHEREAS, pursuant to a Warrant Agreement, dated as of the date hereof, the
Purchasers have agreed to purchase, and the Parent has agreed to issue and sell
to the Purchasers, Warrants of the Parent.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

Section 1.               Definitions.

 

1A.          Definitions.  For the purposes of this Agreement, the following
terms have the meanings set forth below:

 

“ABRY” means ABRY Mezzanine Partners, L.P.

 

“Accounts Receivable” has the meaning set forth in Section 6V.

 

“Accrued Amount” means, for any Note at any time, the principal amount of such
Note, plus all accrued and unpaid interest thereon.

 

“Acquisition Agreement” means that certain Securities Purchase Agreement, dated
as of the date hereof, by and among EAG Holdco, the Parent and SAS, as in effect
on the date hereof.

 

“Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person, where
“control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership of voting
securities, contract or otherwise.

 

“Agreement” has the meaning set forth in the preamble of this Agreement.

 

“Articles” means the Certificate of Incorporation of the Company, as amended,
modified, restated, superseded or replaced from time to time.

 

“Board of Directors” means the board of directors of the Parent.

 

--------------------------------------------------------------------------------

 

“By-laws” means the by-laws of the Company, as amended, modified, restated,
superseded or replaced from time to time.

 

“Cambridge Information Group Preferred Stock” means the Series A Convertible
Participating Preferred Stock of the Parent, $0.01 par value per share.

 

“Capital Lease(s)” means any lease of any property (whether real, personal or
mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.

 

“Change of Control” shall be deemed to occur (a) upon the consummation of a
transaction, whether in a single transaction or in a series of related
transactions, pursuant to which a Person or group (as that term is used in
Section 13(d)(3) of the Exchange Act) of Persons acquire assets constituting all
or substantially all of the assets of the Company Group, (b) if a Person or
group of Persons (other than Cambridge Information Group, Inc.) becomes the
beneficial owner (whether by merger, consolidation, reorganization, redemption,
transfer or issuance of equity securities or otherwise) of securities of the
Parent (or any surviving or resulting corporation) representing more than 50% of
the combined voting power of the outstanding securities of the Parent (or such
surviving or resulting corporation) ordinarily having the right to vote in the
election of directors, (c) if a majority of the members of the Board of
Directors are not a sufficient number to control and direct the operations and
affairs of the Parent or (d) if the Parent ceases to be the beneficial owner
(whether by merger, consolidation, reorganization, redemption, transfer or
issuance of equity securities or otherwise) of securities of the Company (or any
surviving or resulting corporation) representing 100% of the combined voting
power of the outstanding securities of the Company (or such surviving or
resulting corporation) ordinarily having the right to vote in the election of
directors.

 

“Claim” means any action, claim, lawsuit, demand, suit, charge, complaint,
inquiry, hearing, investigation, notice of a violation or noncompliance,
litigation, proceeding, arbitration, appeals or other dispute, whether civil,
criminal, administrative or otherwise.

 

“Closing” has the meaning set forth in Section 2B.

 

“Closing Date” has the meaning set forth in Section 2B.

 

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Section 4980B of the Code and of any similar state Law.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commitment Fee Amount” has the meaning set forth in Section 10A.

 

“Commitment Letter” has the meaning set forth in Section 10D.

 

“Common Stock” means the Parent’s common stock, par value $0.001 per share, and
any shares of any class of the Parent hereafter authorized which is not limited
to a fixed sum with respect to the rights of the holders thereof to participate
in dividends or in the distribution of assets upon any liquidation, dissolution
or winding up of the Parent.

 

2

--------------------------------------------------------------------------------

 

“Common Stock Equivalents” means any capital or securities (other than Options)
directly or indirectly convertible into or exchangeable for Common Stock.

 

“Company Group” means the Parent, Company and its Subsidiaries (which, for the
avoidance of doubt and unless expressly stated otherwise, shall include (i) EAG
following the acquisition thereof by the Company or any Affiliate thereof and
(ii) any Subsidiary that becomes party hereto in accordance with Section 4I);
provided that the “Company Group” shall not include EAG for purposes of Sections
3J and 6 herein.

 

“Company Intellectual Property Rights” has the meaning set forth in Section
6O(i).

 

“Company Software” has the meaning set forth in Section 6O(i).

 

“Consolidated” means, as applied to the Company and its Subsidiaries,
consolidated in accordance with GAAP.

 

“Consolidated EBITDA” means, for any 12-month period, the Consolidated earnings
of the Company Group for such period before any provision for (i) interest
expense paid in cash for such period and (ii) amounts in respect of depreciation
and amortization for such period, minus (x) income Taxes for such period paid or
required to be paid in cash within one (1) year and minus (y) distributions and
one time gains during such period, plus any non-recurring extraordinary
expenses, the exclusion of which from the calculation of operating income has
not been objected to by the Company Group’s independent auditors or the addition
of which the Majority Noteholders have approved for purposes of computing
Consolidated EBITDA, all of the foregoing determined on a Consolidated basis in
accordance with GAAP; provided that for purposes of calculating Consolidated
EBITDA hereunder, any income or losses associated with foreign exchange rates
and any expenses associated with the issuance or exercise of any stock option,
warrant or similar Equity Security issued by the Company Group shall be
disregarded.

 

“Debt Security” means any note, bond, debenture or other instrument or security
evidencing Indebtedness.

 

“EAG” means European Aeronautical Group AB, a limited liability company with its
registered address STOOV, S-19587 Stockholm, Sweden, a company duly organized
and registered under the Laws of Sweden, reg. no. 556278-5864.

 

“EAG Holdco” means Navtech (Sweden) A.B.

 

“Employee Benefit Plan” means any “employee benefit plan” (as such term is
defined in Section 3(3) of ERISA and whether or not such plan is subject to
ERISA) and any other employee benefit plan, program or arrangement of any kind.

 

“Environmental, Health, and Safety Requirements” means all federal, state,
provincial, territorial and local or municipal Laws concerning public health and
safety, worker health and safety, occupational health and safety, product
liability, pollution, or protection or preservation of the environment,
including all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing,

 

3

--------------------------------------------------------------------------------

 

processing, discharge, release, threatened release, control, or cleanup of any
hazardous materials, substances, or wastes, as such requirements are enacted and
in effect on the Closing Date.

 

“Equity Security” means (i) any capital stock or other equity security, or
ownership interests (including limited liability company, partnership and joint
venture interests), (ii) any security directly or indirectly convertible into or
exchangeable for any capital stock or other equity security or security
containing any profit participation features, (iii) any warrants, options or
other rights, directly or indirectly, to subscribe for or to purchase any
capital stock, other equity security or security containing any profit
participation features or directly or indirectly to subscribe for or to purchase
any security directly or indirectly convertible into or exchangeable for any
capital stock or other equity security or security containing profit
participation features, and (iv) any stock appreciation rights, phantom stock
rights or other similar rights.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Event of Default” has the meaning set forth in Section 9A.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar Law then in force and the rules and regulations promulgated thereunder.

 

“Fiscal Quarter” means a fiscal quarter of the Company ending on the last day of
January, April, July or October of any Fiscal Year.

 

“Fiscal Year” means a fiscal year of the Company ending on October 31 of any
calendar year.

 

“GAAP” means United States generally accepted accounting principles as in effect
from time to time, applied on a consistent basis.

 

“Governmental Entity” means any agency, division, subdivision, group or office
of the United States of America or Canada, any state, province, territory or
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government,
including any court.

 

“Guarantee” means any guarantee of the payment or performance of any
Indebtedness or other obligation and any other arrangement whereby credit is
extended to one obligor on the basis of any promise of such Person, whether that
promise is expressed in terms of an obligation to pay the Indebtedness of such
obligor, to provide reimbursement, or to purchase an obligation owed by such
obligor, or to purchase goods and services from such obligor pursuant to a
take-or-pay contract, or to maintain the capital, working capital, solvency or
general financial condition of such obligor, whether or not any such arrangement
is listed in the balance sheet of such Person, or referred to in a footnote
thereto, but shall not include endorsements of items for deposit or collection
in the Ordinary Course of Business; and the term “Guaranteed” shall have a
correlative meaning.

 

“Increase Period” has the meaning set forth in Section 9B(iv).

 

4

--------------------------------------------------------------------------------

 

“Incur” means, with respect to any Indebtedness or other Liability of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and “Incurrence,” “Incurred” and “Incurring” shall have meanings
correlative to the foregoing).  The accrual of interest, the accretion or
amortization of original issue discount and, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, will
not be deemed to be an Incurrence of Indebtedness.

 

“Indebtedness” of a Person means at a particular time, without duplication, (i)
any indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness of such Person for borrowed money, (ii) any indebtedness evidenced
by any Debt Security of such Person, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which such Person is
liable, (other than trade payables and other current Liabilities Incurred in the
Ordinary Course of Business), (iv) any commitment by which such Person assures a
creditor against loss (including contingent reimbursement obligations with
respect to letters of credit), (v) any Indebtedness of other obligation of any
other Person Guaranteed in any manner by such Person (including Guarantees in
the form of an agreement to repurchase or reimburse), (vi) such Person’s
obligations under Capital Leases, (vii) any obligation secured by a Lien on such
Person’s assets or (viii) such Person’s redemption, repurchase or similar
obligations in respect of any Equity Security that has a scheduled maturity,
repurchase or redemption date, or the holder of which could require the issuer
to repurchase, redeem (other than by reason of a Change of Control), prior to
the date that is six (6) months after the Scheduled Redemption Date (the amount
of which obligations at such time shall be the amount that such person would be
required to pay if such maturity, redemption, repurchase or similar event were
to occur at such time).

 

“Indemnitees” has the meaning set forth in Section 10B.

 

“Intellectual Property Rights” means all (i) patents, patent applications and
patent disclosures; (ii) trademarks, service marks, trade dress, trade names,
logos, slogans, corporate names, Internet domain names and registrations and
applications for registration thereof, together with all of the goodwill
associated therewith (and all translations, adaptations, derivations and
combinations of the foregoing); (iii) copyrights (registered or unregistered)
and copyrightable works and registrations and applications for registration
thereof; (iv) mask works and registrations and applications for registration
thereof; (v) software (including source code and executable code), firmware,
data, databases and documentation thereof; (vi) trade secrets and other
confidential information (including ideas, formulas, compositions, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
know-how, algorithms, financial models, manufacturing and production processes
and techniques, research and development information, customer accounts,
identifying information regarding customers, drawings, specifications, designs,
plans, proposals, technical data, financial and marketing plans and customer and
supplier lists and information); (vii) domain names, (viii) other intellectual
property or proprietary rights; and (ix) copies and tangible embodiments thereof
(in whatever form or medium).

 

“Interest Rate Trigger Event” has the meaning set forth in Section 9B(iv).

 

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“Investment” as applied to any Person means (i) any direct or indirect purchase
or other acquisition by such Person of any Debt Securities, Equity Securities,
obligations or instruments of any other Person and (ii) any capital
contribution, loan or advance by such Person to any other Person.

 

“Junior Securities” means any Equity Securities or Debt Securities of any member
of the Company Group other than Senior Debt.

 

“Knowledge” means, with respect to any Person, the actual knowledge of the chief
executive officer, president or chief financial officer of such Person (after
making reasonable inquiry with respect to the particular matter in question),
and shall include, with respect to the Knowledge of the Company Group, David
Strucke and Gordon Heard so long as they are the chief executive officer,
president or chief financial officer (as applicable) of the Company or Parent.

 

“Latest Balance Sheet” has the meaning set forth in Section 2E(a)(ii) of the
Warrant Agreement.

 

“Laws” means all constitutions, statutes, laws, codes, ordinances, regulations,
rules, orders, judgments, writs, injunctions, acts or decrees of any
Governmental Entity.

 

“Leased Real Property” means all leasehold or subleasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures
or other interest in real property held by any member of the Company Group.

 

“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral) pursuant to which any member of the Company Group holds or is
permitted to use or occupy any Leased Real Property, including the right to all
security deposits and other amounts and instruments deposited by or on behalf of
such member of the Company Group thereunder.

 

“Legal Requirement” means any requirement arising under any action, Law, treaty,
determination or direction of an arbitrator or Governmental Entity.

 

“Leverage Ratio” has the meaning set forth in Section 4F(i).

 

“Liability” means any liability, loss, expense or obligation of whatever kind or
nature (whether known or unknown, whether assert or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability or obligation for
Taxes.

 

“Lien” means, with respect to any Person, any mortgage, pledge, restriction,
security interest, hypothec, encumbrance, option, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in
the nature thereof), any sale of receivables with recourse against such Person,
any filing or agreement to file a financing statement as debtor under the
Uniform Commercial Code or any similar statute (other than to reflect ownership
by a third party of property leased to such Person under a lease which is not in
the nature of a conditional sale or title retention agreement), or any
subordination arrangement in

 

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favor of another Person (other than any subordination arising in the Ordinary
Course of Business).

 

“Line of Credit” has the meaning set forth in Section 4F(iii).

 

“Losses” has the meaning set forth in Section 10B.

 

“Malicious Code” has the meaning set forth in Section 6O(v).

 

“Majority Noteholders” means, at any time, the holders of a majority of the
principal amount of the Notes outstanding at such time.

 

“Material Adverse Effect” means a material and adverse effect upon the business,
operations, assets, liabilities or financial condition of the Company Group
(excluding EAG, for purposes of Sections 3J and 6), taken as a whole.

 

“Material Contracts” has the meaning set forth in Section 6N.

 

“90 Day Period” has the meaning set forth in Section 9B(iv).

 

“Notes” has the meaning set forth in Section 2A(i).

 

“Officer’s Certificate” means, with respect to any Person, a certificate of such
Person signed on such Person’s behalf by such Person’s president, its chief
financial officer or of any other officer of such Person whose responsibilities
extend to the subject matter of such certificate.

 

“Optional Redemption Date” means November 22, 2007.

 

“Options” means any rights, warrants or options directly or indirectly to
subscribe for or purchase Common Stock or Common Stock Equivalents.

 

“Ordinary Course of Business” means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and frequency)
of the Person in question.

 

“Parent” means Navtech, Inc., a Delaware corporation.

 

“Parent Guaranty” has the meaning set forth in Section 3F.

 

“Permitted Investments” means investments in (a) direct obligations of the
United States, Canada, France, the United Kingdom, Sweden or any other country
that is a member of the European Union or the Organization for Economic
Cooperation and Development (the “OECD”) or any agency thereof, or obligations
guaranteed by the United States, Canada, France, the United Kingdom, Sweden or
any other OECD country, or any agency thereof, in each case maturing within one
year from the date of acquisition thereof, so long as such investments are
consistent with investment policies approved by the Board of Directors, (b)
commercial paper maturing within one year from the date of creation thereof
rated at least A1 or the equivalent by

 

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Standard & Poor’s Corporation or P1 or the equivalent by Moody’s Investors
Service, Inc. at the time of the acquisition thereof, (c) deposits maturing
within one year from the date of creation thereof with, including certificates
of deposit issued by, any Lender or any office located in the United States,
Canada, France, the United Kingdom, Sweden or any other OECD country, or any
other bank or trust company which at the time of the acquisition thereof (i) is
organized under the Laws of the United States (or any state thereof), Canada,
France, the United Kingdom, Sweden or any other OECD country, (ii) has capital,
surplus and undivided profits aggregating at least $500,000,000 (as of the date
of such bank’s or trust company’s most recent financial reports) and (iii) has a
short-term deposit rating of no lower than A-1 or P-1, as such rating is set
forth from time to time, by Standard & Poor’s Corporation or Moody’s Investors
Service, Inc., respectively, (d) deposits in money market funds investing
exclusively in investments described in clauses (a), (b) or (c) hereinabove and
having a rating in the highest or second highest investment category granted
thereby by a nationally recognized credit rating agency at the time of
acquisition and (e) any other short-term investments of cash not then needed for
the Company Group’s operations and made in accordance with investment policies
approved by the Board of Directors.

 

“Permitted Liens” means (i) Liens with respect to Taxes not yet due and payable
or which are being contested in compliance with Section 4C(vi); (ii) deposits or
pledges made in connection with, or to secure payment or performance of, bids,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds, utilities or similar services, workers’ compensation,
unemployment insurance, old age pensions or other social security obligations;
(iii) carriers’, warehousemen’s, mechanics’, materialmen’s, contractors’ and
other like Liens imposed by Law securing payment for amounts not yet due and
payable or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established in accordance with
GAAP; (iv) purchase money Liens and Liens securing rental payments under Capital
Lease arrangements; (v) judgment Liens in respect of judgments that do not
constitute an Event of Default under Section 9A; (vi) easements, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by
Law or arising in the Ordinary Course of Business; (vii) Liens described on the
“Assets Schedule”; (viii) Liens securing Senior Debt Incurred in accordance with
Section 4F(i); (ix) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any property
or asset of any Person that becomes a Subsidiary after the date hereof prior the
time such Person becomes a Subsidiary, provided that such acquisition is
permitted under this Agreement and such Lien is not created in contemplation of
such Person becoming a Subsidiary or such acquisition, (x) leases of the
properties of the Company or any Subsidiary entered into in the Ordinary Course
of Business, (xi) Liens on property that is the subject of and are incurred in
connection with the conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company or any Subsidiary
in the Ordinary Course of Business, (xii) bankers’ Liens, rights of setoff and
other similar Liens existing solely with respect to cash and cash equivalents on
deposit in one or more accounts maintained by the Company or any Subsidiary, in
each case granted in the Ordinary Course of Business in favor of the bank or
banks with which such accounts are maintained, (xiii) licenses of Intellectual
Property Rights granted by the Company or any Subsidiary in the Ordinary Course
of Business, (xiv) Liens in existence on the Closing Date and set forth on the
“Permitted Liens Schedule”, and (xv) extensions, renewals and replacements of
any of the foregoing.

 

8

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“Person” means an individual, a partnership, a corporation, a limited or
unlimited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or any other similar entity or
organization or a Governmental Entity.

 

“Potential Event of Default” means any event or circumstance that, with the
passage of time or the giving of notice, or both, would constitute an Event of
Default.

 

“Public Reports” has the meaning set forth in Section 2F(a) of the Warrant
Agreement.

 

“Purchasers” has the meaning set forth in the preamble of this Agreement.

 

“Put Notice” has the meaning set forth in Section 8A of this Agreement.

 

“Redemption Date” as to any Note means the date specified in the notice of any
redemption at the Company’s option or at the holder’s option or the applicable
date specified herein in the case of any other redemption; provided, that no
such date shall be the Redemption Date for such Note for purposes of Section 7F
unless the Accrued Amount of such Note (and any required premium with respect
thereto, as Section 7 or Section 9B may require), is actually paid in full on
such date, and if not so paid in full, the Redemption Date shall be the date on
which such amount is fully paid.

 

“Redemption Notice Date” has the meaning set forth in Section 7C.

 

“Registration Rights Agreement” means that certain Registration Rights
Agreement, dated as of the Closing Date, by and among the Parent, the Series A
Investors (as defined therein) party thereto and the Purchasers, in the form of
Exhibit B to the Warrant Agreement, as amended, modified, restated, superseded
or replaced from time to time.

 

“Rule 144” means Rule 144 adopted by the SEC under the Securities Act (as such
rule may be amended from time to time) or any similar rule or regulation
hereafter adopted by the SEC.

 

“Sarbanes-Oxley Act” has the meaning set forth in Section 2F(b) of the Warrant
Agreement.

 

“SAS” means SAS AB, a limited liability company with its registered office at
SE-195 87 Stockholm, a company duly organized and registered under the Laws of
Sweden, reg. no. 556606-8499.

 

“Scheduled Redemption Date” has the meaning set forth in Section 7A.

 

“SEC” means the Securities and Exchange Commission and any Governmental Entity
succeeding to the functions thereof.

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
Law then in force and the rules and regulations promulgated thereunder.

 

9

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“Senior Debt” means any Indebtedness permitted to be incurred pursuant to the
terms hereof (including in compliance with the covenants set forth in Section
4F) and as to which the Purchasers execute a Subordination Agreement.

 

“Subordination Agreement” has the meaning set forth in Section 4J.

 

“Subsidiary” means, with respect to any Person, any corporation, limited or
unlimited liability company, partnership, association or other business entity
of which (i) if a corporation or an unlimited liability company, a majority of
the total voting power of capital entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof. 
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.  Unless otherwise specified, “Subsidiary” means a Subsidiary of the
Company; provided that EAG shall not be deemed a “Subsidiary” for purposes of
Sections 3J and  6 herein.

 

“Subsidiary Guaranty” has the meaning set forth in Section 3F.

 

“Tax” or “Taxes” means federal, state, provincial, county, local, foreign or
other income, gross receipts, ad valorem, franchise, profits, goods and
services, sales or use, transfer, registration, excise, utility, environmental,
communications, real or personal property, capital stock, income, license,
payroll, wage or other withholding, employment, unemployment, social security,
severance, stamp, occupation, alternative or add-on minimum, estimated and other
taxes of any kind whatsoever (including deficiencies, penalties, additions to
tax, and interest on or in respect of, or in lieu of or for non-collection of,
such taxes) whether disputed or not and including any obligations to indemnify
or otherwise assume or succeed to the Tax Liability of any other Person.

 

“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

 

“Tranche A Notes” has the meaning set forth in Section 2A(i).

 

“Tranche B Notes” has the meaning set forth in Section 2A(i).

 

“Transaction Agreements” means this Agreement, the Notes, the Warrant Agreement,
the Warrants, the Registration Rights Agreement, the Parent Guaranty, the
Subsidiary Guaranty and all other agreements, certificates and instruments
executed and delivered in favor of any holders of the Notes by the Parent or the
Company or any of its Subsidiaries or any other Person in connection with this
Agreement.

 

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“Triggering Event” has the meaning set forth in Section 8A.

 

“Triggering Event Value” means, with respect to any share of Underlying Common
Stock, the amount to which a holder of such share of Underlying Common Stock
would be entitled upon a liquidation of the Parent, assuming that (a) all
Options and Common Stock Equivalents that are then in the money at the valuation
described in clause (b)(i) below are exercised, converted or exchanged in full,
and (b) the aggregate amount to be distributed upon such liquidation is an
amount equal to the sum of (i) the aggregate amount that a willing,
fully-informed purchaser would pay a willing, fully-informed seller or sellers
for 100% of the outstanding Equity Securities of the Parent in a single
purchase, as determined by an independent appraiser experienced in valuing
companies such as the Parent jointly selected by the Parent and the holders of a
majority of the Underlying Common Stock and (ii) the aggregate amount of the
exercise price or other consideration payable upon the exercise, conversion or
exchange of all such in-the-money Options and Common Stock Equivalents.  The
determination of the appraiser described in clause (b)(i) above shall be made
without the application of any discount for any holder’s minority position or
lack of liquidity and shall be final and binding upon the parties, and the fees
and expenses of such appraiser shall be borne by the Parent.

 

“Underlying Common Stock” means (i) the Common Stock issued or issuable upon
exercise of the Warrants, and (ii) any Common Stock issued or issuable with
respect to the securities referred to in clause (i) above by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.  For purposes
of the Transaction Agreements, any Person who holds any Warrants shall be deemed
to be the holder of the Underlying Common Stock issuable upon the exercise of
such Warrants regardless of any restriction or limitation on the exercise of
such Warrants and such Underlying Common Stock shall be deemed to be in
existence and outstanding, and such Person shall be entitled to exercise the
rights of a holder of such Underlying Common Stock hereunder.  All Underlying
Common Stock held by Persons who are Affiliates of each other shall be
aggregated for purposes of meeting any threshold tests under any Transaction
Agreement.

 

“Warrants” has the meaning set forth in the Warrant Agreement.

 

“Wholly-Owned Subsidiary” means, with respect to any Person, a Subsidiary of
which all of the outstanding capital or other ownership interests are owned by
such Person or another Wholly-Owned Subsidiary of such Person.

 

Section 2.               Authorization and Closing.

 

2A.          Authorization, Purchase and Sale of the Notes.

 

(I)            THE COMPANY HAS DULY AUTHORIZED THE ISSUANCE AND SALE, PURSUANT
TO THE TERMS OF THIS AGREEMENT, OF ITS 9.0% SENIOR SUBORDINATED NOTES DUE 2011
IN AN AGGREGATE PRINCIPAL AMOUNT OF $6.0 MILLION AND CONTAINING THE TERMS AND
CONDITIONS AND IN SUBSTANTIALLY THE FORM SET FORTH IN EXHIBIT D ATTACHED HERETO
(THE “TRANCHE A NOTES”) AND ITS 12.5% SENIOR SUBORDINATED NOTES DUE 2011 IN AN
AGGREGATE PRINCIPAL AMOUNT OF $15.0 MILLION AND CONTAINING THE TERMS AND
CONDITIONS AND IN SUBSTANTIALLY THE FORM SET

 

11

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FORTH IN EXHIBIT E ATTACHED HERETO (THE “TRANCHE B NOTES” AND, TOGETHER WITH THE
TRANCHE A NOTES, THE “NOTES”).

 

(II)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, AT THE
CLOSING, THE COMPANY SHALL ISSUE AND SELL TO EACH PURCHASER AND EACH PURCHASER
SHALL PURCHASE FROM THE COMPANY:  (I) A TRANCHE A NOTE IN THE PRINCIPAL AMOUNT
SET FORTH OPPOSITE SUCH PURCHASER’S NAME ON ANNEX 1 ATTACHED HERETO UNDER THE
HEADING “TRANCHE A NOTES” AND (II) A TRANCHE B NOTE IN THE PRINCIPAL AMOUNT SET
FORTH OPPOSITE SUCH PURCHASER’S NAME ON ANNEX 1 ATTACHED HERETO UNDER THE
HEADING “TRANCHE B NOTES”.

 

2B.          The Closing.  The closing of the issuance, sale and purchase of the
Notes (the “Closing”) under this Agreement shall take place at the offices of
Kirkland & Ellis LLP, located at Citigroup Center, 153 East 53rd Street, New
York, New York 10022 commencing at 9:00 a.m. local time on November 22, 2005 or
on such other date as the parties hereto may mutually determine in writing (the
“Closing Date”).  At the Closing, the Company shall deliver to each Purchaser
the Notes to be purchased by such Purchaser, dated the date of the Closing and
registered in such Purchaser’s or its nominee’s name, in each case against
payment by such Purchaser to the Company by wire transfer of immediately
available funds of the aggregate principal amount of such Notes.

 

Section 3.               Conditions of Each Purchaser’s Obligations at the
Closing.  The obligation of each Purchaser to purchase and pay for the Notes to
be sold to such Purchaser at the Closing shall be subject to the fulfillment at
or prior to the Closing of each of the following conditions, any and all of
which may be waived in whole or in part in writing by such Purchaser to the
extent permitted by applicable Law:

 

3A.          Representations and Warranties.  The representations and warranties
contained in Section 6 (i) that are not qualified as to materiality shall be
true and correct in all material respects and (ii) that are qualified as to
materiality shall be true and correct in all respects, in each case at and as of
the Closing as though then made and as though the Closing Date was substituted
for the date of this Agreement throughout such representations and warranties
(except to the extent that such representations and warranties expressly relate
to an earlier date).

 

3B.          Compliance with Covenants.  Each member of the Company Group shall
have duly performed or complied with, in all material respects, all of the
covenants, obligations and conditions required to be performed or complied with
by it under the terms of the Transaction Agreements on, prior to, or at the
Closing and shall be in compliance with, in all material respects, all of the
covenants, obligations and conditions to be complied with under the terms
thereof at the Closing.

 

3C.          Consents and Approvals.  Each member of the Company Group shall
have made all filings and shall have obtained and delivered to each Purchaser
all permits, authorizations, consents and approvals of any Governmental Entity
and/or third party required to be obtained by such member of the Company Group
to consummate the transactions contemplated to be consummated at the Closing by
this Agreement and the other Transaction Agreements.

 

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3D.          [Reserved].

 

3E.           Registration Rights Agreement.  The Registration Rights Agreement
shall have been executed and delivered by each party thereto and shall be in
full force and effect.

 

3F.           Parent Guaranty and Subsidiary Guaranty.  The (i) Parent Guaranty,
dated as of the Closing Date, by and among the Parent and the Purchasers and
containing the terms and conditions and in substantially the form set forth in
Exhibit G-1 attached hereto (the “Parent Guaranty”) and (ii) Subsidiary
Guaranty, dated as of the Closing Date, by and among the Purchasers and each
Subsidiary party thereto and containing the terms and conditions and in
substantially the form set forth in Exhibit G-2 attached hereto (the “Subsidiary
Guaranty”) shall have been executed and delivered by each party thereto and
shall be in full force and effect.

 

3G.          Sale of Notes and Warrants to Each Other Purchaser. 
Contemporaneously with the Closing, (i) the Company shall issue and sell to each
other Purchaser the Notes to be purchased by such other Purchaser under this
Agreement and (ii) the Parent shall issue to each Purchaser the Warrants to be
issued to such Purchaser under the Warrant Agreement.

 

3H.          Consummation of EAG Acquisition.  The conditions set forth in the
Acquisition Agreement shall have been satisfied (without giving effect to any
waiver thereof that has not been consented to by the Purchasers), and Navtech
(Sweden) A.B. shall have consummated (or shall consummate simultaneously with
the Closing) the acquisition of the shares of capital stock of EAG on the terms
set forth in the Acquisition Agreement.

 

3I.            Equity Investment.  The Persons set forth on the attached
Schedule 3I shall have purchased (or shall purchase simultaneously with the
Closing) the Cambridge Information Group Preferred Stock in the amounts set
forth on the attached Schedule 3I for an aggregate purchase price of not less
than $3.5 million on terms and pursuant to documentation in form and substance
reasonably satisfactory to the Purchasers, and the proceeds of such shares shall
be used by the Company in connection with the acquisition of EAG.

 

3J.           No Material Adverse Effect.  No fact, event, circumstance, change,
development or occurrence shall have occurred which has had or could reasonably
be expected to have a Material Adverse Effect.

 

3K.          Closing Documents.  The Company shall have delivered to each
Purchaser all of the following documents:

 

(I)            AN OFFICER’S CERTIFICATE OF THE COMPANY, DATED THE CLOSING DATE,
STATING THAT EACH OF THE CONDITIONS SPECIFIED ABOVE IN SECTION 3A THROUGH
SECTION 3C, SECTION 3H, SECTION 3I, AND SECTION 3J IS SATISFIED IN ALL RESPECTS;

 

(II)           COPIES OF ALL FILINGS, PERMITS, AUTHORIZATIONS, CONSENTS AND
APPROVALS OF ANY GOVERNMENTAL ENTITY AND/OR THIRD PARTY (IF ANY) REQUIRED IN
CONNECTION WITH THE CONSUMMATION AT THE CLOSING OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS;

 

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(III)          A CERTIFICATE OF EACH OF THE PARENT’S AND THE COMPANY’S SECRETARY
OR ASSISTANT SECRETARY, DATED THE CLOSING DATE, CERTIFYING AS TO THE CONSTATING
DOCUMENTS, BY-LAWS AND RESOLUTIONS ATTACHED THERETO AND OTHER CORPORATE
PROCEEDINGS RELATING TO THE AUTHORIZATION, EXECUTION AND DELIVERY OF THE
TRANSACTION AGREEMENTS; AND

 

(IV)          SUCH OTHER DOCUMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR THE OTHER TRANSACTION AGREEMENTS AS ANY PURCHASER OR ITS
SPECIAL COUNSEL MAY REASONABLY REQUEST.

 

3L.           Proceedings.  All corporate and other proceedings taken or
required to be taken by any member of the Company Group in connection with the
transactions contemplated hereby and by the other Transaction Agreements to be
consummated at or prior to the Closing and all documents incident thereto shall
be reasonably satisfactory in form and substance to each Purchaser and its
special counsel.

 

3M.         Company Counsel Opinions.  Each Purchaser shall have received an
executed copy of an opinion of Choate, Hall & Stewart LLP and of Cassels Brock &
Blackwell LLP, each dated the Closing Date.

 

3N.          Commitment Fees; Closing Expenses.  The Company shall have paid the
Commitment Fee Amount payable at the Closing and reimbursed each Purchaser for
the reasonable fees and expenses incurred by such Purchaser as of the Closing
Date, in each case as provided in Section 10A.

 

Section 4.               Covenants.  Except as otherwise set forth herein, the
covenants set forth in this Section 4 shall remain in full force so long as any
Note remains outstanding.

 

4A.          [Reserved.]

 

4B.          Restrictive Covenants.  The Company will not, and will not permit
its Subsidiaries to, take any of the following actions without the prior
authorization and approval of the Majority Noteholders:

 

(I)            SELL, LEASE OR OTHERWISE DISPOSE OF, (A) MORE THAN FIVE PERCENT
OF THE CONSOLIDATED ASSETS OF THE COMPANY GROUP IN THE AGGREGATE DURING ANY
FISCAL YEAR OR (B) MORE THAN TEN PERCENT OF THE CONSOLIDATED ASSETS OF THE
COMPANY GROUP IN THE AGGREGATE (IN EACH CASE COMPUTED ON THE BASIS OF BOOK
VALUE, DETERMINED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED, OR FAIR VALUE,
AS REASONABLY DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS), UNLESS THE
NET PROCEEDS OF SUCH SALE, LEASE OR DISPOSITION ARE USED TO REPAY SENIOR DEBT
OR, SUBJECT TO APPLICABLE SUBORDINATION AGREEMENTS, TO REDEEM NOTES PURSUANT TO
SECTION 7A OR 7B; PROVIDED, THAT THE COMPANY GROUP MAY SELL, LEASE OR OTHERWISE
DISPOSE OF (A) OBSOLETE OR WORN OUT PROPERTY OR ASSETS, WHETHER NOW OWNED OR
HEREAFTER ACQUIRED, IN THE ORDINARY COURSE OF BUSINESS, (B) INVENTORY IN THE
ORDINARY COURSE OF BUSINESS, (C) PROPERTY OF ANY MEMBER OF THE COMPANY GROUP TO
ANY OTHER MEMBER OF THE COMPANY GROUP WHICH IS A WHOLLY OWNED SUBSIDIARY, (D)
PROPERTY OF THE COMPANY OR ANY SUBSIDIARY TO THE EXTENT PERMITTED BY SECTIONS
4B(II) AND 4B(IV), (E) NON-EXCLUSIVE LICENSES OF INTELLECTUAL PROPERTY RIGHTS IN
THE ORDINARY COURSE OF BUSINESS

 

14

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AND (F) PROPERTY OF THE COMPANY GROUP TO HOLDERS OF SENIOR DEBT TO THE EXTENT
REQUIRED UNDER THE SENIOR DEBT DOCUMENTS;

 

(II)           DIRECTLY OR INDIRECTLY DECLARE OR PAY ANY DIVIDENDS OR INTEREST
OR MAKE ANY DISTRIBUTIONS UPON, OR REDEEM, REPURCHASE OR OTHERWISE ACQUIRE, ANY
JUNIOR SECURITIES OF ANY MEMBER OF THE COMPANY GROUP, EXCEPT FOR:  (1) DEFERRED
PURCHASE PRICE PAYMENTS TO SAS IN ACCORDANCE WITH THE ACQUISITION AGREEMENT, (2)
DISTRIBUTIONS OR REDEMPTIONS PAID BY A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY TO
THE COMPANY OR ANOTHER WHOLLY-OWNED SUBSIDIARY OF THE COMPANY, (3) REDEMPTIONS
OF THE NOTES, WARRANTS OR UNDERLYING COMMON STOCK IN ACCORDANCE WITH THE
TRANSACTION AGREEMENTS, (4) DIVIDENDS PAID BY THE PARENT TO HOLDERS OF SERIES A
PREFERRED STOCK OF THE PARENT AT A RATE NOT TO EXCEED 5% PER ANNUM, (5)
DISTRIBUTIONS BY THE COMPANY TO THE PARENT TO ENABLE THE PARENT TO PAY THE
DIVIDENDS REFERRED TO IN CLAUSE (4) OF THIS PARAGRAPH AND MISCELLANEOUS EXPENSES
IN AN AGGREGATE AMOUNT THAT, TOGETHER WITH THE AGGREGATE AMOUNT OF ALL PAYMENTS
DESCRIBED IN CLAUSE (4), DOES NOT EXCEED $250,000 DURING ANY FISCAL YEAR, (6)
DIVIDENDS WITH RESPECT TO THE CAPITAL STOCK OF ANY MEMBER OF THE COMPANY GROUP
PAYABLE SOLELY IN ADDITIONAL SHARES OF CAPITAL STOCK OF THE SAME TYPE AND (7)
REDEMPTIONS OR REPURCHASES OF EQUITY SECURITIES OF PARENT WHICH DO NOT REQUIRE
ANY MEMBER OF THE COMPANY GROUP TO TRANSFER ANY CONSIDERATION (WHETHER CASH OR
OTHERWISE) OTHER THAN NOMINAL CONSIDERATION IN CONNECTION WITH SUCH REDEMPTION
OR REPURCHASE, OR WHICH ARE EFFECTED THROUGH A CASHLESS EXERCISE, IN EACH CASE
MADE PURSUANT TO AND IN ACCORDANCE WITH STOCK OPTION PLANS OR OTHER BENEFIT
PLANS APPROVED BY THE BOARD OF DIRECTORS FOR MANAGEMENT OR EMPLOYEES OF THE
COMPANY GROUP UPON THE TERMINATION OF EMPLOYMENT OF A DIRECTOR, OFFICER OR
EMPLOYEE OF THE COMPANY GROUP, SO LONG AS, IN EACH CASE DESCRIBED IN CLAUSE (4)
AND (5) ABOVE, BOTH BEFORE AND AFTER GIVING EFFECT TO SUCH PAYMENT, NO EVENT OF
DEFAULT OR POTENTIAL EVENT OF DEFAULT IS IN EXISTENCE; PROVIDED THAT, WITH
RESPECT TO REDEMPTIONS OR REPURCHASES OF EQUITY SECURITIES OF THE COMPANY MADE
PURSUANT TO CLAUSE (7) ABOVE, ANY AMOUNTS PAID BY ANY MEMBER OF THE COMPANY
GROUP IN CONNECTION WITH SUCH REDEMPTIONS OR REPURCHASES SHALL BE DEEMED TO HAVE
BEEN PAID FROM THE PROCEEDS OF INDEBTEDNESS INCURRED BY THE COMPANY IN ORDER TO
FINANCE SUCH REDEMPTIONS OR REPURCHASES FOR PURPOSES OF SECTION 4F(I);

 

(III)          MAKE ANY GUARANTEE FOR THE BENEFIT OF, OR INVESTMENT IN, ANY
PERSON (INCLUDING ANY GUARANTEE BY THE COMPANY OR ANY IF ITS SUBSIDIARIES OF ANY
INDEBTEDNESS OF PARENT), EXCEPT FOR (1) REASONABLE ADVANCES BY MEMBERS OF THE
COMPANY GROUP TO EMPLOYEES OF THE COMPANY GROUP IN THE ORDINARY COURSE OF
BUSINESS, (2) PERMITTED INVESTMENTS, (3) INVESTMENTS IN ANY WHOLLY-OWNED
SUBSIDIARY OF THE COMPANY, (4) ANY GUARANTEE OF THE NOTES OR ANY INDEBTEDNESS OF
ANOTHER MEMBER OF THE COMPANY GROUP (OTHER THAN THE PARENT) INCURRED IN
COMPLIANCE WITH SECTION 4F(I); (5) OPERATING DEPOSIT ACCOUNTS IN INSTITUTIONS
DESCRIBED IN CLAUSE (C) OF THE DEFINITION OF PERMITTED INVESTMENT, (6) HEDGING
AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS WITH RESPECT TO THE
COMPANY’S OR ANY SUBSIDIARY’S FINANCIAL PLANNING AND NOT FOR SPECULATIVE
PURPOSES, (7) INVESTMENTS CONSISTING OF SECURITY DEPOSITS WITH UTILITIES AND
OTHER LIKE PERSONS MADE IN THE ORDINARY COURSE OF BUSINESS, (8) INVESTMENTS
CONSUMMATED TO FINANCE AN ACQUISITION PERMITTED UNDER SECTION 4B(VII) AND (9)
ADDITIONAL INVESTMENTS UP TO BUT NOT EXCEEDING $100,000 IN THE AGGREGATE IN ANY
FISCAL YEAR;

 

15

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(IV)          MERGE, AMALGAMATE OR CONSOLIDATE WITH ANY PERSON (OTHER THAN (1)
TO THE EXTENT PERMITTED UNDER SECTION 4B(VII), SO LONG AS THE RIGHTS,
OBLIGATIONS AND RESPONSIBILITIES OF THE COMPANY OR APPLICABLE SUBSIDIARY
CONTINUE IN THE NEWLY-FORMED ENTITY, (2) IN A MERGER, AMALGAMATION OR
CONSOLIDATION INVOLVING ONLY WHOLLY-OWNED SUBSIDIARIES OF THE COMPANY OR (3) IN
A MERGER, AMALGAMATION OR CONSOLIDATION IN WHICH THE RIGHTS, OBLIGATIONS AND
RESPONSIBILITIES OF THE COMPANY OR APPLICABLE SUBSIDIARY CONTINUE IN THE
NEWLY-FORMED ENTITY);

 

(V)           EXCEPT TO THE EXTENT EXPRESSLY PERMITTED UNDER THIS SECTION 4B,
ESTABLISH OR ACQUIRE ANY SUBSIDIARY, OTHER THAN A WHOLLY-OWNED SUBSIDIARY OF THE
COMPANY, OR CAUSE OR PERMIT ANY SUBSIDIARY TO CEASE TO BE A WHOLLY-OWNED
SUBSIDIARY OF THE COMPANY;

 

(VI)          ENTER INTO, AMEND, MODIFY OR SUPPLEMENT, ANY AGREEMENT,
TRANSACTION, COMMITMENT OR ARRANGEMENT WITH ANY OF SUCH PERSON’S AFFILIATES
(OTHER THAN THE COMPANY OR ANOTHER SUBSIDIARY), EXCEPT (1) IN THE ORDINARY
COURSE OF BUSINESS AND ON ARMS-LENGTH TERMS WITH PERSONS OTHER THAN ROBERT
SNYDER AND HIS AFFILIATES AND (2) ARRANGEMENTS SOLELY BETWEEN OR AMONG MEMBERS
OF THE COMPANY GROUP;

 

(VII)         ACQUIRE OR ENTER INTO AN AGREEMENT TO ACQUIRE, OR PERMIT ANY
SUBSIDIARY TO ACQUIRE OR ENTER INTO AN AGREEMENT TO ACQUIRE, ANY INTEREST IN ANY
COMPANY OR BUSINESS (WHETHER BY A PURCHASE OF ASSETS, PURCHASE OF STOCK, MERGER,
AMALGAMATION, CONSOLIDATION OR OTHERWISE) OR ENTER INTO ANY JOINT VENTURE, IN
EACH CASE INVOLVING AN AGGREGATE CONSIDERATION (INCLUDING THE ASSUMPTION OF
LIABILITIES) EXCEEDING $4.0 MILLION IN THE AGGREGATE DURING ANY FISCAL YEAR
(INCLUDING IN THE CALCULATION OF THE AMOUNT OF ANY ACQUISITIONS FOR THE PURPOSE
OF THIS SECTION 4B(VII), THE AMOUNT OF ANY ACQUISITIONS MADE BY PARENT IN
ACCORDANCE WITH SECTION 3.3(V) OF THE PARENT GUARANTY DURING SUCH FISCAL YEAR);

 

(VIII)        ENGAGE TO ANY MATERIAL EXTENT IN ANY BUSINESS OTHER THAN
BUSINESSES OF THE TYPE CONDUCTED BY THE COMPANY AND THE SUBSIDIARIES ON THE DATE
OF THIS AGREEMENT AND BUSINESSES REASONABLY RELATED THERETO;

 

(IX)           BECOME SUBJECT TO (INCLUDING BY WAY OF AMENDMENT TO OR
MODIFICATION OF) ANY AGREEMENT OR INSTRUMENT WHICH BY ITS TERMS WOULD (UNDER ANY
CIRCUMSTANCES) RESTRICT (1) THE RIGHT OF ANY MEMBER OF THE COMPANY GROUP TO MAKE
LOANS OR ADVANCES OR PAY INTEREST TO, TRANSFER PROPERTY TO, OR REPAY ANY AMOUNTS
OWED TO ANY OTHER MEMBER OF THE COMPANY GROUP OR ANY PURCHASER OR (2) THE
ABILITY OF ANY MEMBER OF THE COMPANY GROUP TO PERFORM THE MATERIAL PROVISIONS OF
THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION AGREEMENTS (INCLUDING PROVISIONS
RELATING TO THE REDEMPTION OF THE NOTES AND REPAYMENT OF THE PRINCIPAL AMOUNT
OF, AND INTEREST ON, THE NOTES); PROVIDED THAT THE FOREGOING SHALL NOT APPLY TO
(A) RESTRICTIONS AND CONDITIONS IMPOSED BY LAW, THE TRANSACTION AGREEMENTS OR
THE ACQUISITION AGREEMENT, (B) CUSTOMARY RESTRICTIONS AND CONDITIONS CONTAINED
IN AGREEMENTS RELATING TO THE SALE OR DISPOSITION OF A SUBSIDIARY PENDING SUCH
SALE OR DISPOSITION, PROVIDED SUCH RESTRICTIONS AND CONDITIONS APPLY ONLY TO THE
SUBSIDIARY THAT IS TO BE SOLD OR DISPOSED AND SUCH SALE OR DISPOSITION IS
PERMITTED HEREUNDER, (C) RESTRICTIONS OR CONDITIONS IMPOSED BY THE LENDER(S)
UNDER ANY AGREEMENT

 

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GOVERNING ANY SENIOR DEBT AND (D) CUSTOMARY PROVISIONS IN LEASES AND OTHER
CONTRACTS RESTRICTING THE ASSIGNMENT THEREOF;

 

(X)            IN THE CASE OF THE COMPANY ONLY, EFFECT A RECAPITALIZATION OR
REORGANIZATION IN ANY FORM OF TRANSACTION INTO A LIMITED LIABILITY COMPANY, A
PARTNERSHIP OR ANY OTHER NON-CORPORATE ENTITY, OR OTHERWISE BECOME, AN ENTITY
THAT IS TREATED AS A PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES;

 

(XI)           CHANGE ITS FISCAL YEAR;

 

(XII)          INCUR ANY SENIOR DEBT THAT IS SUBORDINATED TO OTHER SENIOR DEBT,
OTHER THAN SECOND-LIEN SENIOR INDEBTEDNESS HAVING CUSTOMARY TERMS FOR
INDEBTEDNESS OF SUCH TYPE AND THAT IS SUBORDINATED ONLY TO FIRST-LIEN
INDEBTEDNESS THAT IS INCURRED CONTEMPORANEOUSLY WITH SUCH SECOND-LIEN
INDEBTEDNESS OR THAT REFINANCES OR REPLACES SUCH FIRST-LIEN INDEBTEDNESS; OR

 

(XIII)         GRANT OR PERMIT ANY LIEN ON ANY OF ITS ASSETS, OTHER THAN
PERMITTED LIENS.

 

4C.          Affirmative Covenants.  The Company will, and will cause its
Subsidiaries to, take all of the following actions, unless otherwise waived with
the prior authorization and approval of the Majority Noteholders:

 

(I)            MAINTAIN AND KEEP THEIR RESPECTIVE PROPERTIES IN GOOD REPAIR,
WORKING ORDER AND CONDITION (OTHER THAN ORDINARY WEAR AND TEAR), SO THAT THE
BUSINESS CARRIED ON IN CONNECTION THEREWITH MAY BE PROPERLY CONDUCTED AT ALL
TIMES, PROVIDED THAT THIS SECTION 4C(I) SHALL NOT PREVENT THE COMPANY OR ANY
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 THE COMPANY HAS CONCLUDED THAT SUCH DISCONTINUANCE COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(II)           APPLY FOR AND MAINTAIN WITH FINANCIALLY SOUND AND REPUTABLE
INSURANCE COMPANIES ADEQUATE INSURANCE COVERING RISKS OF SUCH TYPES AND IN SUCH
AMOUNTS AS ARE CUSTOMARY FOR COMPANIES OF SIMILAR SIZE ENGAGED IN SIMILAR LINES
OF BUSINESS;

 

(III)          AT ALL TIMES MAINTAIN AND PRESERVE THE COMPANY’S CORPORATE
EXISTENCE;

 

(IV)          EXCEPT TO THE EXTENT PERMITTED UNDER SECTION 4B, THE COMPANY WILL
AT ALL TIMES MAINTAIN AND PRESERVE THE CORPORATE OR LIMITED LIABILITY COMPANY
EXISTENCE OF EACH SUBSIDIARY AND ALL RIGHTS AND FRANCHISES OF THE COMPANY AND
ITS SUBSIDIARIES UNLESS, IN THE GOOD FAITH JUDGMENT OF THE COMPANY, THE
TERMINATION OF OR FAILURE TO MAINTAIN AND PRESERVE SUCH SUBSIDIARY’S CORPORATE
OR LIMITED LIABILITY COMPANY EXISTENCE, OR SUCH RIGHTS OR FRANCHISES, COULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(V)           PAY AND DISCHARGE WHEN PAYABLE ALL AMOUNTS OWED BY THE COMPANY TO
THE HOLDERS OF NOTES AND PERFORM AND COMPLY WITH EVERY COVENANT, TERM AND

 

17

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CONDITION APPLICABLE TO THE NOTES, IN EACH CASE IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS;

 

(VI)          PAY AND DISCHARGE ALL TAXES IMPOSED BY GOVERNMENTAL ENTITIES UPON
ITS PROPERTIES OR UPON THE INCOME OR PROFITS THEREFROM, TO THE EXTENT SUCH TAXES
HAVE BECOME DUE AND PAYABLE AND BEFORE THEY HAVE BECOME DELINQUENT, PROVIDED
THAT NEITHER THE COMPANY NOR ANY SUBSIDIARY NEED PAY ANY SUCH TAXES IF (I) THE
AMOUNT, APPLICABILITY OR VALIDITY THEREOF IS CONTESTED BY THE COMPANY OR SUCH
SUBSIDIARY ON A TIMELY BASIS IN GOOD FAITH AND IN APPROPRIATE PROCEEDINGS, AND
THE COMPANY OR A SUBSIDIARY HAS ESTABLISHED ADEQUATE RESERVES THEREFOR IN
ACCORDANCE WITH GAAP ON THE BOOKS OF THE COMPANY OR SUCH SUBSIDIARY OR (II) THE
NONPAYMENT OF ALL SUCH TAXES IN THE AGGREGATE COULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT; AND

 

(VII)         COMPLY WITH ALL APPLICABLE LAWS OF ALL GOVERNMENTAL ENTITIES, IN
EACH CASE TO THE EXTENT THAT FAILURE TO SO COMPLY COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

4D.          Financial Statements and Other Information.  So long as any Notes
remain outstanding, the Company shall deliver, whether or not the Parent is then
required to file reports with the SEC pursuant to the terms of the Exchange Act,
to each holder of Notes:

 

(I)            AS SOON AS AVAILABLE BUT IN ANY EVENT WITHIN 45 DAYS AFTER THE
END OF EACH CALENDAR MONTH IN EACH FISCAL YEAR, UNAUDITED CONSOLIDATING AND
CONSOLIDATED STATEMENTS OF INCOME, CASH FLOWS AND STOCKHOLDERS’ EQUITY OF THE
COMPANY GROUP FOR SUCH MONTH AND FOR THE PERIOD FROM THE BEGINNING OF THE FISCAL
YEAR TO THE END OF SUCH MONTH, AND UNAUDITED CONSOLIDATING AND CONSOLIDATED
BALANCE SHEETS OF THE COMPANY GROUP AS OF THE END OF SUCH MONTH, SETTING FORTH
IN EACH CASE COMPARISONS TO THE COMPANY GROUP’S ANNUAL BUDGET AND TO THE
CORRESPONDING PERIOD IN THE PRECEDING FISCAL YEAR, AND ALL SUCH ITEMS SHALL (A)
BE PREPARED IN ACCORDANCE WITH GAAP, SUBJECT TO THE ABSENCE OF FOOTNOTE
DISCLOSURES AND TO NORMAL YEAR-END ADJUSTMENTS, (B) IN THE CASE OF SUCH ITEMS
DELIVERED AT ANY TIME PRIOR TO THE SECOND ANNIVERSARY OF THE CLOSING DATE,
INCLUDE SEPARATE STATEMENTS FOR EACH OF THE COMPANY GROUP AND EAG AND (C) BE
CERTIFIED ON THE PARENT’S BEHALF BY AN AUTHORIZED OFFICER OF THE PARENT;

 

(II)           AS SOON AS AVAILABLE BUT IN ANY EVENT WITHIN 45 DAYS AFTER THE
END OF EACH FISCAL QUARTER IN EACH FISCAL YEAR, UNAUDITED CONSOLIDATING AND
CONSOLIDATED STATEMENTS OF INCOME, CASH FLOWS AND STOCKHOLDERS’ EQUITY OF THE
COMPANY GROUP FOR SUCH FISCAL QUARTER AND FOR THE PERIOD FROM THE BEGINNING OF
THE FISCAL YEAR TO THE END OF SUCH FISCAL QUARTER, AND UNAUDITED CONSOLIDATED
BALANCE SHEETS OF THE COMPANY GROUP AS OF THE END OF FISCAL QUARTER, SETTING
FORTH IN EACH CASE COMPARISONS TO THE COMPANY GROUP’S ANNUAL BUDGET AND TO THE
CORRESPONDING PERIOD IN THE PRECEDING FISCAL YEAR, AND ALL SUCH ITEMS SHALL (A)
BE PREPARED IN ACCORDANCE WITH GAAP, SUBJECT TO THE ABSENCE OF FOOTNOTE
DISCLOSURES AND TO NORMAL YEAR-END ADJUSTMENTS, (B) IN THE CASE OF SUCH ITEMS
DELIVERED AT ANY TIME PRIOR TO THE SECOND ANNIVERSARY OF THE CLOSING DATE,
INCLUDE SEPARATE STATEMENTS FOR EACH OF THE COMPANY GROUP AND EAG, (C) BE
CERTIFIED ON THE PARENT’S BEHALF BY AN AUTHORIZED OFFICER OF THE PARENT AND
(D) ACCOMPANIED BY A COMPLIANCE CERTIFICATE EXECUTED ON THE PARENT’S BEHALF BY
AN AUTHORIZED OFFICER OF THE

 

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PARENT (X) CERTIFYING COMPLIANCE WITH THE PROVISIONS OF SECTION 4F(I) AS OF EACH
INCURRENCE OF INDEBTEDNESS DURING SUCH FISCAL QUARTER AND (Y) CERTIFYING AND
DEMONSTRATING IN REASONABLE DETAIL COMPLIANCE WITH THE PROVISIONS OF SECTION
4F(II) AS OF THE END OF SUCH FISCAL QUARTER; PROVIDED THAT DELIVERY WITHIN THE
TIME PERIOD SPECIFIED HEREINABOVE OF COPIES OF THE PARENT’S QUARTERLY REPORT ON
FORM 10-QSB PREPARED IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH FORM 10-QSB AND
FILED WITH THE SEC SHALL BE DEEMED TO SATISFY THE REQUIREMENTS OF THIS PARAGRAPH
(II); PROVIDED FURTHER THAT, NOTWITHSTANDING THE FOREGOING PROVISO, THE COMPANY
SHALL BE REQUIRED TO PROVIDE TO THE PURCHASERS THE CERTIFICATES DESCRIBED IN
CLAUSES (C) AND (D) ABOVE.

 

(III)          WITHIN 90 DAYS AFTER THE END OF EACH FISCAL YEAR, UNAUDITED
CONSOLIDATING AND AUDITED CONSOLIDATED STATEMENTS OF INCOME, CASH FLOWS AND
STOCKHOLDERS’ EQUITY OF THE COMPANY GROUP FOR SUCH FISCAL YEAR, AND UNAUDITED
CONSOLIDATING AND AUDITED CONSOLIDATED BALANCE SHEETS OF THE COMPANY GROUP AS OF
THE END OF SUCH FISCAL YEAR, SETTING FORTH IN EACH CASE COMPARISONS TO THE
COMPANY’S ANNUAL BUDGET AND TO THE PRECEDING FISCAL YEAR, AND ALL SUCH ITEMS
SHALL (A) BE PREPARED IN ACCORDANCE WITH GAAP, (B) IN THE CASE OF SUCH ITEMS
DELIVERED AT ANY TIME PRIOR TO THE SECOND ANNIVERSARY OF THE CLOSING DATE,
INCLUDE SEPARATE STATEMENTS FOR EACH OF THE COMPANY GROUP AND EAG AND (C) BE
ACCOMPANIED BY (1) WITH RESPECT TO THE CONSOLIDATED PORTIONS OF SUCH STATEMENTS,
AN OPINION CONTAINING NO MATERIAL EXCEPTIONS OR QUALIFICATIONS (EXCEPT FOR
QUALIFICATIONS REGARDING SPECIFIED CONTINGENT LIABILITIES) BY DELOITTE & TOUCHE,
LLP OR OTHER INDEPENDENT ACCOUNTING FIRM OF RECOGNIZED NATIONAL STANDING AND
(2) A COPY OF SUCH FIRM’S ANNUAL MANAGEMENT LETTER TO THE PARENT; PROVIDED THAT
DELIVERY WITHIN THE TIME PERIOD SPECIFIED HEREINABOVE OF COPIES OF THE PARENT’S
ANNUAL REPORT ON FORM 10-KSB PREPARED IN COMPLIANCE WITH THE REQUIREMENTS OF
SUCH FORM 10-KSB AND FILED WITH THE SEC SHALL BE DEEMED TO SATISFY THE
REQUIREMENTS OF THIS PARAGRAPH (III); PROVIDED FURTHER THAT, NOTWITHSTANDING THE
FOREGOING PROVISO, THE COMPANY SHALL BE REQUIRED TO PROVIDE TO THE PURCHASERS
THE DOCUMENTS DESCRIBED IN CLAUSE (C) ABOVE.

 

(IV)          PROMPTLY UPON RECEIPT THEREOF, ANY ADDITIONAL REPORTS, MANAGEMENT
LETTERS OR OTHER DETAILED INFORMATION CONCERNING SIGNIFICANT ASPECTS OF ANY
MEMBER OF THE COMPANY GROUP’S OPERATIONS OR FINANCIAL AFFAIRS GIVEN TO ANY
MEMBER OF THE COMPANY GROUP BY ITS INDEPENDENT ACCOUNTANTS (AND NOT OTHERWISE
CONTAINED IN OTHER MATERIALS PROVIDED HEREUNDER);

 

(V)           AT LEAST 5 DAYS BUT NOT MORE THAN 90 DAYS PRIOR TO THE BEGINNING
OF EACH FISCAL YEAR, AN ANNUAL BUDGET PREPARED ON A MONTHLY BASIS FOR THE
COMPANY GROUP FOR SUCH FISCAL YEAR (DISPLAYING ANTICIPATED STATEMENTS OF INCOME
AND CASH FLOWS AND BALANCE SHEETS), AND PROMPTLY UPON PREPARATION THEREOF, ANY
OTHER SIGNIFICANT BUDGETS PREPARED BY THE COMPANY GROUP AND ANY REVISIONS OF
SUCH ANNUAL OR OTHER BUDGETS, IN EACH CASE IN SUBSTANTIALLY THE SAME FORM AND
CONTAINING SUBSTANTIALLY THE TYPES OF INFORMATION AS DELIVERED TO THE PURCHASERS
PRIOR TO THE CLOSING, AND IN THE CASE OF SUCH BUDGETS OR REVISIONS THEREOF
DELIVERED AT ANY TIME PRIOR TO THE SECOND ANNIVERSARY OF THE CLOSING DATE,
INCLUDING SEPARATE BUDGETS OR REVISIONS THEREOF FOR EACH OF THE COMPANY GROUP
AND EAG, AND WITHIN 30 DAYS AFTER ANY MONTHLY PERIOD IN WHICH THERE IS A
MATERIAL ADVERSE DEVIATION FROM THE ANNUAL BUDGET, AN OFFICER’S CERTIFICATE
EXPLAINING THE

 

19

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DEVIATION AND WHAT ACTIONS THE COMPANY GROUP HAS TAKEN AND PROPOSES TO TAKE WITH
RESPECT THERETO;

 

(VI)          AT ANY TIME THAT THE ABRY DIRECTOR (AS DEFINED IN THE WARRANT
AGREEMENT) IS NOT A MEMBER OF THE BOARD OF DIRECTORS, PROMPTLY FOLLOWING THE
TRANSMISSION THEREOF, COPIES OF ALL FINANCIAL STATEMENTS, PROXY STATEMENTS,
REPORTS AND ANY OTHER GENERAL WRITTEN COMMUNICATIONS WHICH THE PARENT SENDS TO
ITS STOCKHOLDERS GENERALLY OR BOARD OF DIRECTORS AND COPIES OF ALL PROSPECTUSES
AND DISCLOSURE DOCUMENTS, IF ANY, WHICH IT FILES, OR ANY OF ITS OFFICERS OR
MANAGERS FILE WITH RESPECT TO THE COMPANY GROUP, WITH THE SEC OR WITH ANY
SECURITIES EXCHANGE ON WHICH ANY OF ITS SECURITIES ARE THEN LISTED, AND COPIES
OF ALL PRESS RELEASES AND OTHER STATEMENTS MADE AVAILABLE GENERALLY BY THE
PARENT TO THE PUBLIC CONCERNING MATERIAL DEVELOPMENTS IN THE COMPANY GROUP’S
BUSINESSES; AND

 

(VII)         AS PROMPTLY AS PRACTICABLE, SUCH OTHER INFORMATION AND FINANCIAL
DATA CONCERNING ANY MEMBER OF THE COMPANY GROUP AS ANY SUCH HOLDER MAY
REASONABLY REQUEST.

 

Documents required to be delivered pursuant to this Section 4D may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date on which the Company delivers such documents electronically.  Each of
the financial statements referred to in subparagraph (i), (ii) and (iii) shall
be prepared in accordance with GAAP and shall fairly present in all material
respects the financial position of the companies being reported upon as of the
dates and for the periods stated therein, subject in the case of the unaudited
financial statements to changes resulting from normal year-end adjustments.

 

4E.           Use of Proceeds.  The Company shall, and shall cause each other
member of the Company Group to, use the proceeds from the sale of the Notes and
the Warrants only to consummate the acquisition of EAG and to pay related fees
and expenses incurred in connection with this Agreement, the other Transaction
Agreements, and the transactions contemplated hereby and thereby.

 

4F.           Financial Covenants.  So long as any Note remains outstanding:

 

(I)            LEVERAGE RATIO.  SUBJECT TO SECTION 4F(III), THE COMPANY SHALL
NOT, AND SHALL NOT PERMIT ANY OTHER MEMBER OF THE COMPANY GROUP TO, INCUR ANY
INDEBTEDNESS AFTER THE DATE HEREOF IF, AFTER GIVING EFFECT TO THE INCURRENCE OF
SUCH INDEBTEDNESS, THE RATIO OF (X) THE AGGREGATE OUTSTANDING AMOUNT OF
INDEBTEDNESS OF THE COMPANY GROUP DETERMINED ON A CONSOLIDATED BASIS (INCLUDING,
FOR THE PURPOSES OF THIS SECTION 4F, AND WITHOUT DUPLICATION, THE ACCRUED AMOUNT
OF THE NOTES THEN OUTSTANDING AND ANY CONTINGENT OR DEFERRED PURCHASE PRICE
PAYABLE BY ANY MEMBER OF THE COMPANY GROUP PURSUANT TO THE ACQUISITION
AGREEMENT) TO (Y) CONSOLIDATED EBITDA FOR THE FOUR FISCAL QUARTERS ENDING ON THE
LAST DAY OF THE THEN-MOST-RECENTLY-ENDED FISCAL QUARTER (OR, FOR PURPOSES OF
SECTION 4F(II), ENDING ON THE LAST DAY OF THE FISCAL QUARTER IN QUESTION) (THE
“LEVERAGE RATIO” AT SUCH TIME) WOULD BE GREATER THAN (A) FOR ANY INCURRENCE OF
INDEBTEDNESS IN THE FISCAL YEAR ENDING OCTOBER 31, 2006, 3.0 TO 1.0, (B) FOR ANY
INCURRENCE OF INDEBTEDNESS IN THE FISCAL YEAR ENDING OCTOBER 31, 2007, 2.25 TO
1.0, AND

 

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(C) FOR ANY INCURRENCE IN THE FISCAL YEAR ENDING OCTOBER 31, 2008 OR THEREAFTER,
1.75 TO 1.0.

 

(II)           MAXIMUM LEVERAGE RATIO.  THE COMPANY SHALL NOT PERMIT THE
LEVERAGE RATIO FOR THE LAST DAY OF ANY FISCAL QUARTER TO EXCEED THE MAXIMUM
LEVERAGE RATIO SPECIFIED BELOW FOR SUCH FISCAL QUARTER:

 

Fiscal Quarter ending:

 

Leverage Ratio

January 31, 2006

 

7.0 to 1.0

April 30, 2006

 

6.35 to 1.0

July 31, 2006

 

5.65 to 1.0

October 31, 2006

 

4.9 to 1.0

January 31, 2007

 

4.5 to 1.0

April 30, 2007

 

4.2 to 1.0

July 31, 2007

 

3.9 to 1.0

October 31, 2007

 

3.3 to 1.0

January 31, 2008 and thereafter

 

2.5 to 1.0

 

(III)          NOTWITHSTANDING THE PROVISIONS OF SECTION 4F(I) ABOVE, AT ANY
TIME THE INCURRENCE OF INDEBTEDNESS BY ANY MEMBER OF THE COMPANY GROUP WOULD
VIOLATE THE PROVISIONS OF SECTION 4F(I) ABOVE, THE COMPANY MAY INCUR
INDEBTEDNESS PURSUANT TO A SINGLE LINE OF CREDIT OR SIMILAR FACILITY
CONSTITUTING SENIOR DEBT (SUCH FACILITY, THE “LINE OF CREDIT”) UP TO AN AMOUNT
NOT TO EXCEED $250,000, INCLUDING IN THE CALCULATION OF SUCH $250,000 LIMIT, ALL
AMOUNTS THEN OUTSTANDING UNDER SUCH LINE OF CREDIT; PROVIDED THAT, AFTER GIVING
EFFECT TO THE INCURRENCE OF SUCH INDEBTEDNESS UNDER THE LINE OF CREDIT, THE
LEVERAGE RATIO WOULD NOT EXCEED THE MAXIMUM LEVERAGE RATIO PERMITTED BY SECTION
4F(II) FOR THE THEN MOST RECENTLY ENDED FISCAL QUARTER.  ANY INDEBTEDNESS
OUTSTANDING UNDER THE LINE OF CREDIT SHALL BE DEEMED TO BE OUTSTANDING FOR ALL
PURPOSES UNDER THIS SECTION 4F.  FOR THE AVOIDANCE OF DOUBT, THE COMPANY MAY NOT
HAVE MORE THAN ONE LINE OF CREDIT OUTSTANDING AT ANY GIVEN TIME.

 

(IV)          FOR PURPOSES OF CALCULATING CONSOLIDATED EBITDA OR THE LEVERAGE
RATIO UNDER THIS AGREEMENT:

 

(A)           ANY PERSON THAT IS A SUBSIDIARY OF THE PARENT ON THE DATE OF
DETERMINATION (OR WOULD BECOME A SUBSIDIARY OF THE PARENT ON SUCH DATE OF
DETERMINATION IN CONNECTION WITH THE MATTER THAT REQUIRES THE DETERMINATION OF
SUCH CONSOLIDATED EBITDA) WILL BE DEEMED TO HAVE BEEN A SUBSIDIARY OF THE PARENT
AT ALL TIMES DURING THE RELEVANT FISCAL QUARTER PERIOD;

 

(B)           ANY PERSON THAT IS NOT A SUBSIDIARY OF THE PARENT ON SUCH DATE OF
DETERMINATION (OR WOULD CEASE TO BE A SUBSIDIARY OF THE PARENT ON SUCH DATE OF
DETERMINATION IN CONNECTION WITH THE MATTER THAT REQUIRES THE DETERMINATION OF
SUCH CONSOLIDATED EBITDA) WILL BE DEEMED NOT TO HAVE BEEN A SUBSIDIARY OF THE
PARENT AT ANY TIME DURING THE RELEVANT FISCAL QUARTER PERIOD; AND

 

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(C)           ANY MEMBER OF THE COMPANY GROUP SHALL HAVE IN ANY MANNER (X)
ACQUIRED AN OPERATING BUSINESS (INCLUDING THROUGH AN ACQUISITION OF AN OPERATING
BUSINESS OR THE COMMENCEMENT OF ACTIVITIES CONSTITUTING SUCH AN OPERATING
BUSINESS) OR (Y) DISPOSED OF AN OPERATING BUSINESS (INCLUDING BY WAY OF A SALE
OF ASSETS OR THE TERMINATION OR DISCONTINUANCE OF ACTIVITIES CONSTITUTING SUCH
AN OPERATING BUSINESS) DURING THE RELEVANT FISCAL QUARTER PERIOD OR AFTER THE
END OF SUCH PERIOD AND ON OR PRIOR TO THE RELEVANT DATE OF DETERMINATION, SUCH
CALCULATION WILL BE MADE ON A PRO FORMA BASIS AS IF, IN THE CASE OF AN
ACQUISITION OF OR THE COMMENCEMENT OF ACTIVITIES CONSTITUTING SUCH OPERATING
BUSINESS, ALL SUCH TRANSACTIONS HAD BEEN CONSUMMATED ON THE FIRST DAY OF SUCH
FOUR FISCAL QUARTER PERIOD AND, IN THE CASE OF A SALE OF ASSETS OR TERMINATION
OR DISCONTINUANCE OF ACTIVITIES CONSTITUTING SUCH OPERATING BUSINESS, ALL SUCH
TRANSACTIONS HAD BEEN CONSUMMATED PRIOR TO THE FIRST DAY OF SUCH PERIOD.

 

4G.          [Reserved].

 

4H.          [Reserved].

 

4I.            Joinder of Additional Subsidiaries.  At any time following the
Closing, if the Company establishes or acquires a new Subsidiary, the Company
shall cause such Subsidiary to execute and deliver to the Purchasers a joinder
to the Subsidiary Guaranty, in form and substance reasonably satisfactory to the
Purchasers.

 

4J.           Subordination Agreements.  So long as any Notes remain
outstanding, if the Company at any time after the Closing authorizes the
Incurrence of Senior Debt in accordance with and as permitted under the terms of
this Agreement, the holders of Notes then outstanding shall negotiate in good
faith and enter into a subordination agreement with respect to such Senior Debt
(each such agreement, a “Subordination Agreement”) in form and substance
reasonably satisfactory to such holders of Notes.

 

Section 5.               Nature of Restricted Securities; Transfer of Restricted
Securities; General Transfer Procedure.

 

5A.          General Provisions.

 

(I)            EACH PURCHASER ACKNOWLEDGES AND AGREES THAT THE NOTES IT IS
PURCHASING ARE CHARACTERIZED AS “RESTRICTED SECURITIES” UNDER THE FEDERAL
SECURITIES LAWS INASMUCH AS THEY ARE BEING ACQUIRED FROM THE COMPANY IN A
TRANSACTION NOT INVOLVING A PUBLIC OFFERING AND THAT UNDER SUCH LAWS SUCH
SECURITIES MAY BE RESOLD WITHOUT REGISTRATION UNDER THE SECURITIES ACT ONLY IN
CERTAIN LIMITED CIRCUMSTANCES AS SET FORTH IN THIS SECTION 5.  IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES OR AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE NOTES MUST BE HELD
INDEFINITELY.  IN THIS CONNECTION, SUCH PURCHASER REPRESENTS THAT IT IS FAMILIAR
WITH RULE 144, AS PRESENTLY IN EFFECT, AND UNDERSTANDS THE RESALE LIMITATIONS
IMPOSED THEREBY AND BY THE SECURITIES ACT, INCLUDING THE RULE 144 CONDITION THAT
CURRENT INFORMATION ABOUT THE PARENT BE AVAILABLE TO THE PUBLIC.

 

(II)           THE NOTES ARE TRANSFERABLE ONLY PURSUANT TO (A) PUBLIC OFFERINGS
REGISTERED UNDER THE SECURITIES ACT, (B) RULE 144 OR RULE 144A ADOPTED BY THE
SEC UNDER

 

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THE SECURITIES ACT OR ANY SIMILAR RULE OR REGULATION HEREAFTER ADOPTED BY THE
SEC IF THE EXEMPTION FROM REGISTRATION UNDER SUCH RULE IS AVAILABLE AND (C) ANY
OTHER LEGALLY AVAILABLE MEANS OF TRANSFER.

 

5B.          Legend Removal.  If the Notes become eligible for sale pursuant to
Rule 144(k) adopted by the SEC under the Securities Act (as such rule may be
amended from time to time) or any similar rule or regulation hereafter adopted
by the SEC or an effective registration statement under the Securities Act, the
Company shall, upon the request of the holder of such securities, remove the
legend set forth in Section 10C(ii) of this Agreement from the certificates for
such securities.

 

Section 6.               Representations and Warranties of the Company.  As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Notes hereunder, the Company hereby represents and warrants to each of the
Purchasers that the statements contained in this Section 6 are correct and
complete as of the date hereof (or as of the date as of which they are made, in
the case of any representation or warranty which specifically relates to an
earlier date) and will be correct and complete as of the Closing Date.

 

6A.          Organization and Power.  The Company is a corporation duly
organized, validly existing and in good standing under the Laws of the Province
of Ontario, Canada and is qualified to do business in every jurisdiction in
which the failure to so qualify might reasonably be expected to have a Material
Adverse Effect.  The Company has the corporate power and authority and all
material licenses, permits and authorizations necessary to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.  The copies of the
Articles and By-laws which have been furnished to Kirkland & Ellis LLP reflect
all amendments made thereto at any time prior to the date of this Agreement and
are true, correct and complete.  The minute books (containing the records of
meetings of the stockholders, the board of directors, and any committees of the
board of directors), the stock certificate books, and the stock record books for
each member of the Company Group are correct and complete in all material
respects.  No member of the Company Group is in default under or in violation of
any provision of its formation documents or by-laws in any material respect.

 

6B.          Capital Stock and Related Matters.  All of the issued and
outstanding Equity Securities of the Company are owned by the Parent, free and
clear of any Lien (other than Permitted Liens), and not subject to any option or
right to purchase any such shares.

 

6C.          Subsidiaries; Investments.  Except as set forth on the attached
“Subsidiary Schedule”, and except for the acquisition of securities of EAG as
contemplated by the Acquisition Agreement, no member of the Company Group owns
or holds any Equity Securities in any other Person or any rights to acquire any
such Equity Securities other than Permitted Investments.  Each Subsidiary is
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation.  Each Subsidiary possesses all requisite
corporate power and authority and all licenses, permits and authorizations
necessary to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to carry on its
businesses as now being conducted and as presently proposed to be conducted and
is qualified to do business in every jurisdiction in which its ownership or
lease

 

23

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of property or the conduct of business requires it to qualify, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.  Except as set forth on the attached “Subsidiary
Schedule,” all of the outstanding Equity Securities of each Subsidiary are
validly issued, fully paid and nonassessable, and all such shares are owned by a
member of the Company Group, free and clear of any Lien and not subject to any
option or right to purchase any such shares, other than Permitted Liens.

 

6D.          Authorization; Non-contravention.  The execution, delivery and
performance of this Agreement and the other Transaction Agreements to which the
Company or any Subsidiary is a party and the issuance of the Notes have been
duly authorized by applicable member of the Company Group.  This Agreement and
the other Transaction Agreements to which the Company or any Subsidiary is a
party each constitutes a valid and binding obligation of the Company and such
Subsidiaries, enforceable against the Company and such Subsidiaries in
accordance with their respective terms, except as may be limited by the
equitable remedies of specific performance, other equitable remedies or
principles or Laws governing creditors’ rights generally.  Neither the execution
and the delivery of this Agreement or any other Transaction Agreement nor the
consummation of the transactions contemplated hereby or thereby (including the
issuance of the Notes), (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
Government Entity to which the Company or any Subsidiary is subject, except to
the extent that such violation could not reasonably be expected to have a
Material Adverse Effect, or any provision of the constitutive documents or
by-laws of the Company or any Subsidiary, or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, or create
in any party the right to accelerate, terminate, or cancel, any material and
written agreement, contract, lease, license or instrument to which the Company
or any Subsidiary is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Lien upon any of its
assets, other than Permitted Liens).  No member of the Company Group is required
to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any Government Entity or any other Person for it to
consummate the transactions contemplated by this Agreement or any other
Transaction Agreement, except for such as have been made or obtained and except
as may be required by applicable Laws.

 

6E.           Absence of Undisclosed Liabilities.  No member of the Company
Group has any known Liability other than Liabilities set forth on the Latest
Balance Sheet or arising in the Ordinary Course of Business since the date
thereof, except for Liabilities for transaction costs and expenses in connection
with the Acquisition Agreement, the Transaction Agreements and the transactions
contemplated thereby.

 

6F.           No Material Adverse Change.  Except as set forth on the “No
Material Adverse Effect Schedule” or as disclosed in the Public Reports, since
July 31, 2005, there has been no Material Adverse Effect.  As of the date of
this Agreement, no Event of Default or Potential Event of Default has occurred
and is continuing.

 

6G.          Absence of Certain Developments.  Except as expressly contemplated
by this Agreement or as set forth on the attached “Developments Schedule,” since
the date of the Latest Balance Sheet, no member of the Company Group has
operated its business or engaged in

 

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any material transaction other than in the Ordinary Course of Business, except
for the Acquisition Agreement, the Transaction Agreements and the transactions
contemplated thereby.

 

6H.          Tax Matters.  Each member of the Company Group has filed all
material Tax Returns required to be filed under applicable Laws, and has paid
all Taxes imposed by Governmental Entities upon its properties or upon the
income or profits therefrom, to the extent such Taxes have become due and
payable and before they have become delinquent, except to the extent that (i)
the amount, applicability or validity thereof is contested by a member of the
Company Group on a timely basis in good faith and in appropriate proceedings,
and such member of the Company Group has established adequate reserves therefor
in accordance with GAAP on the books of such member of the Company Group, or
(ii) the nonpayment of all such Taxes in the aggregate could not reasonably be
expected to have a Material Adverse Effect.  To the Company’s Knowledge, there
are no Liens for Taxes (other than Permitted Liens) upon any of the assets of
any member of the Company Group.  Each member of the Company Group has withheld
and paid over to the appropriate taxing authority all Taxes which it is or was
required to withhold from amounts paid or owing to any employee, stockholder,
creditor or other third party.

 

6I.            Litigation, etc.  Except as set forth on the attached “Litigation
Schedule,” or as described in Item 103 of any Public Reports, there are no
Claims pending or, to the Company’s Knowledge (which, for purposes of this
Section 6I, shall not require or include any inquiry), threatened against or
affecting any member of the Company Group at law or in equity, or before or by
any Governmental Entity (including any Claim with respect to the transactions
contemplated by this Agreement and the other Transaction Agreements), that could
reasonably be expected to have or result in a Material Adverse Effect.  No
member of the Company Group is subject to any judgment, order or decree of any
court or other Governmental Entity (other than any such item that is not in
effect as of the Closing Date and that could not reasonably be expected to have
a Material Adverse Effect).

 

6J.           Brokerage.  Except as set forth on the attached “Brokerage
Schedule,” there are no claims for brokerage commissions, finders’ fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement binding upon any member of the
Company Group.  The Company Group shall pay, and hold each Purchaser harmless
against, any Liability (including attorneys fees and out-of-pocket expenses)
arising in connection with any such claim.

 

6K.          Compliance with Laws.  No member of the Company Group has violated
or is in violation of any Law, and no member of the Company Group has received
written notice of any such violation from a Government Entity, which violation
could reasonably be expected to have a Material Adverse Effect.

 

6L.           Assets.  Except as set forth on the attached “Assets Schedule” or
as described in the Public Reports, each member of the Company Group has good
and sufficient title to, or a valid leasehold interest in, the material
properties and assets (other than real property) used by it, located on its
premises or shown on the Latest Balance Sheet or acquired by them thereafter,
free and clear of all Liens, except for properties and assets (other than real
property) sold or otherwise disposed of in the Ordinary Course of Business since
the date of the Latest Balance Sheet and except for Permitted Liens.  Each
member of the Company Group

 

25

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owns, or has a valid leasehold interest in, all assets necessary for the conduct
of its business as presently conducted and as presently proposed to be
conducted, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

6M.         Real Property.

 

(I)            LEASED REAL PROPERTY.  THE COMPANY HAS MADE AVAILABLE TO
PURCHASERS A TRUE AND COMPLETE COPY OF EACH WRITTEN LEASE DOCUMENT.  EXCEPT AS
SET FORTH IN THE “REAL PROPERTY SCHEDULE”, WITH RESPECT TO EACH OF SUCH WRITTEN
LEASES: (A) THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
DO NOT REQUIRE THE CONSENT OF ANY OTHER PARTY TO SUCH LEASE, AND WILL NOT RESULT
IN A BREACH OF OR DEFAULT UNDER SUCH LEASE; (B) SUCH MEMBER OF THE COMPANY
GROUP’S POSSESSION AND QUIET ENJOYMENT OF THE LEASED REAL PROPERTY UNDER SUCH
LEASE HAS NOT BEEN DISTURBED, AND TO THE COMPANY’S ACTUAL KNOWLEDGE, THERE ARE
NO MATERIAL DISPUTES WITH RESPECT TO SUCH LEASE; (C) THE OTHER PARTY TO SUCH
LEASE IS NOT AN AFFILIATE OF, AND OTHERWISE DOES NOT HAVE ANY ECONOMIC INTEREST
IN, ANY MEMBER OF THE COMPANY GROUP; AND (D) NO MEMBER OF THE COMPANY GROUP HAS
COLLATERALLY ASSIGNED OR GRANTED ANY OTHER SECURITY INTEREST IN SUCH LEASE OR
ANY INTEREST THEREIN.

 

(II)           COMPANY REAL PROPERTY.  THE LEASED REAL PROPERTY COMPRISE ALL OF
THE REAL PROPERTY USED IN, OR OTHERWISE RELATED TO, THE BUSINESS OF THE COMPANY
GROUP.

 

6N.          Contracts and Commitments.All of the contracts, agreements and
instruments required to be set forth as an exhibit to the Public Reports (the
“Material Contracts”) are valid, binding and enforceable in accordance with
their respective terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other Laws affecting
creditors’ rights generally and except insofar as the availability of equitable
remedies may be limited by applicable Laws.  Each member of the Company Group
has performed all material obligations required to be performed by it under the
Material Contracts to which it is a party and is not in material default under
or in material breach of nor has Knowledge of any claim of material default or
material breach under any such contract; no event has occurred which with the
passage of time or the giving of notice or both would result in a material
default, breach or event of noncompliance by any member of the Company Group
under any Material Contract to which it is a party.  The Company has no actual
knowledge of any breach or anticipated breach by the other party to any Material
Contract to which any member of the Company Group is a party.

 

6O.          Intellectual Property Rights.

 

(I)            THE ATTACHED “INTELLECTUAL PROPERTY SCHEDULE” CONTAINS A COMPLETE
AND ACCURATE LIST AS OF THE CLOSING DATE OF (1) ALL OF THE FOLLOWING OWNED OR
EXCLUSIVELY LICENSED BY ANY MEMBER OF THE COMPANY GROUP: (A) PATENTED OR
REGISTERED INTELLECTUAL PROPERTY RIGHTS, (B) PENDING PATENT APPLICATIONS AND
APPLICATIONS FOR REGISTRATION OF ANY INTELLECTUAL PROPERTY RIGHTS, AND (C)
MATERIAL TRADE NAMES AND MATERIAL UNREGISTERED TRADEMARKS OR SERVICE MARKS; AND
(2) ALL MATERIAL COMPUTER SOFTWARE OWNED OR DISTRIBUTED BY ANY MEMBER OF THE
COMPANY GROUP (“COMPANY SOFTWARE”).  THE COMPANY GROUP OWNS ALL RIGHT, TITLE AND
INTEREST IN AND TO, OR HAS THE RIGHT TO USE PURSUANT TO AN AGREEMENT

 

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SET FORTH ON THE “INTELLECTUAL PROPERTY SCHEDULE”, ALL INTELLECTUAL PROPERTY
RIGHTS USED IN, OR TO THE COMPANY’S KNOWLEDGE NECESSARY FOR, THE OPERATION OF
THE BUSINESSES OF THE COMPANY GROUP AS NOW CONDUCTED AND PRESENTLY PROPOSED TO
BE CONDUCTED OR WHICH ARE PURPORTED TO BE OWNED BY THE COMPANY GROUP, FREE AND
CLEAR OF ALL LIENS (TOGETHER WITH ALL OTHER INTELLECTUAL PROPERTY RIGHTS OWNED
BY THE COMPANY GROUP, THE “COMPANY INTELLECTUAL PROPERTY RIGHTS”).  EXCEPT AS
SET FORTH ON THE “INTELLECTUAL PROPERTY SCHEDULE”, THE COMPANY GROUP HAS NOT
LICENSED ANY COMPANY INTELLECTUAL PROPERTY RIGHTS TO ANY PERSON EXCEPT ON A
NON-EXCLUSIVE BASIS IN THE ORDINARY COURSE OF BUSINESS.  THE COMPANY GROUP HAS
DELIVERED TO THE PURCHASERS TRUE, CORRECT AND COMPLETE COPIES OF THE CUSTOMER
AGREEMENTS WITH THE COMPANY GROUP’S CURRENT TOP TWENTY FIVE CUSTOMERS
(DETERMINED BY AGGREGATE REVENUE PAID TO THE COMPANY GROUP BY THE CUSTOMER AS OF
JULY 31, 2005).

 

(II)           THE COMPANY SOFTWARE IS NOT SUBJECT TO ANY “COPYLEFT” OR OTHER
OBLIGATION OR CONDITION (INCLUDING ANY OBLIGATION OR CONDITION UNDER ANY “OPEN
SOURCE” LICENSE SUCH AS THE GNU PUBLIC LICENSE, LESSER GNU PUBLIC LICENSE, OR
MOZILLA PUBLIC LICENSE) THAT PURPORTS TO (X) REQUIRE, OR CONDITION THE USE OR
DISTRIBUTION OF SUCH SOFTWARE, ON THE DISCLOSURE, LICENSING, OR DISTRIBUTION OF
ANY SOURCE CODE FOR ANY PORTION OF SUCH SOFTWARE OR (Y) OTHERWISE IMPOSE ANY
LIMITATION, RESTRICTION, OR CONDITION ON THE RIGHT OR ABILITY OF ANY MEMBER OF
THE COMPANY GROUP TO USE, LICENSE OR DISTRIBUTE ANY SOFTWARE OWNED OR
DISTRIBUTED BY ANY MEMBER OF THE COMPANY GROUP.

 

(III)          EXCEPT AS SET FORTH ON THE “INTELLECTUAL PROPERTY SCHEDULE”, (A)
THERE ARE NO CURRENTLY PENDING OR THREATENED OR UNRESOLVED CLAIMS AGAINST ANY
MEMBER OF THE COMPANY GROUP THAT WERE EITHER MADE WITHIN THE PAST SIX (6) YEARS
OR ARE PRESENTLY PENDING CONTESTING THE VALIDITY, USE, OWNERSHIP OR
ENFORCEABILITY OF ANY COMPANY INTELLECTUAL PROPERTY RIGHTS OWNED BY ANY MEMBER
OF THE COMPANY GROUP, AND, TO THE COMPANY’S KNOWLEDGE, THERE IS NO REASONABLE
BASIS FOR SUCH CLAIM, (B) TO THE COMPANY’S KNOWLEDGE, THE COMPANY GROUP HAS NOT
INFRINGED, MISAPPROPRIATED OR OTHERWISE CONFLICTED WITH, AND THE OPERATION OF
THE BUSINESSES OF THE COMPANY GROUP AS NOW CONDUCTED AND PRESENTLY PROPOSED TO
BE CONDUCTED DO NOT AND WILL NOT INFRINGE, MISAPPROPRIATE, OR CONFLICT WITH, ANY
INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER PERSONS, AND THE COMPANY GROUP HAS NOT
RECEIVED ANY NOTICES REGARDING ANY OF THE FOREGOING (INCLUDING ANY DEMANDS OR
OFFERS TO LICENSE ANY INTELLECTUAL PROPERTY RIGHTS FROM ANY PERSON), AND THE
COMPANY GROUP IS NOT AWARE OF ANY FACTS OR CIRCUMSTANCES THAT INDICATE A
LIKELIHOOD OF ANY OF THE FOREGOING, AND (C) TO THE COMPANY’S KNOWLEDGE, NO
PERSON HAS INFRINGED, MISAPPROPRIATED OR OTHERWISE CONFLICTED WITH ANY OF THE
COMPANY INTELLECTUAL PROPERTY RIGHTS.  THE COMPANY GROUP HAS TAKEN ALL
REASONABLY NECESSARY ACTION TO MAINTAIN AND PROTECT ALL OF THE COMPANY
INTELLECTUAL PROPERTY RIGHTS.  ALL COMPANY INTELLECTUAL PROPERTY RIGHTS SHALL BE
OWNED OR AVAILABLE FOR USE BY THE MEMBER(S) OF THE COMPANY GROUP, AS APPLICABLE,
IMMEDIATELY AFTER THE CLOSING ON TERMS AND CONDITIONS SUBSTANTIALLY SIMILAR TO
THOSE UNDER WHICH SUCH MEMBER(S) OF THE COMPANY GROUP OWNED OR USED SUCH
INTELLECTUAL PROPERTY RIGHTS IMMEDIATELY PRIOR TO CLOSING.

 

(IV)          EXCEPT AS SET FORTH ON THE “INTELLECTUAL PROPERTY SCHEDULE”, (A)
ONLY THE OBJECT CODE RELATING TO ANY COMPANY SOFTWARE HAS BEEN DISCLOSED TO ANY
THIRD PARTY (EXCEPT TO A SOURCE CODE ESCROW AGENT FOR THE BENEFIT OF CUSTOMERS
IN THE ORDINARY

 

27

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COURSE OF BUSINESS);AND (B) NO PERSON HAS ASSERTED ANY RIGHT TO ACCESS ANY
SOURCE CODE FOR ANY COMPANY SOFTWARE, INCLUDING, WITHOUT LIMITATION, PURSUANT TO
A SOURCE CODE ESCROW AGREEMENT.  NO SOURCE CODE LICENSED TO ANY PERSON AS
DISCLOSED ON THE “INTELLECTUAL PROPERTY SCHEDULE” IS MATERIAL TO THE CURRENT
BUSINESSES OF THE COMPANY GROUP.

 

(V)           TO THE COMPANY’S KNOWLEDGE, ALL PRODUCTS OF THE COMPANY GROUP (AND
ALL PARTS THEREOF) ARE FREE OF ANY DISABLING CODES OR INSTRUCTIONS AND ANY “BACK
DOOR,” “TIME BOMB,” “TROJAN HORSE,” “WORM,” “DROP DEAD DEVICE,” “VIRUS” OR OTHER
SOFTWARE ROUTINES OR HARDWARE COMPONENTS THAT PERMIT UNAUTHORIZED ACCESS OR THE
UNAUTHORIZED DISABLEMENT OR ERASURE OF SUCH PRODUCT (OR PARTS THEREOF) OR DATA
OR OTHER SOFTWARE OF USERS OF THE COMPANY GROUP’S PRODUCTS OR THE SOFTWARE
OWNED, DISTRIBUTED OR MAINTAINED BY THE COMPANY GROUP (COLLECTIVELY, “MALICIOUS
CODE”) AND THE COMPANY GROUP USES COMMERCIALLY REASONABLE EFFORTS TO INSURE THAT
ITS PRODUCTS ARE FREE OF SUCH MALICIOUS CODE.  THE COMPANY GROUP IS IN
POSSESSION OF THE SOURCE AND OBJECT CODE FOR ALL SOFTWARE OWNED BY THE COMPANY
AND, TO THE EXTENT NECESSARY FOR THE CONDUCT OF THE BUSINESSES OF THE COMPANY
GROUP AS NOW CONDUCTED AND PRESENTLY PROPOSED TO BE CONDUCTED, FOR ALL THIRD
PARTY SOFTWARE INCORPORATED INTO ANY COMPANY GROUP PRODUCTS, AND COPIES OF ALL
OTHER MATERIAL RELATED THERETO, EXCEPT FOR THOSE MATERIALS WHERE COMPANY GROUP’S
FAILURE TO POSSESS SUCH MATERIALS WOULD NOT BE REASONABLY EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

(VI)          EXCEPT AS SET FORTH ON THE “INTELLECTUAL PROPERTY SCHEDULE,” ALL
PAST AND PRESENT EMPLOYEES OF, AND CONSULTANTS TO, THE COMPANY GROUP HAVE
ENTERED INTO AGREEMENTS PURSUANT TO WHICH SUCH EMPLOYEE OR CONSULTANT AGREES TO
PROTECT THE CONFIDENTIAL INFORMATION OF THE COMPANY GROUP AND ASSIGN (AND/OR,
WITH RESPECT TO CONSULTANTS, GRANT A PERPETUAL LICENSE SUFFICIENT TO ENABLE THE
COMPANY GROUP TO CONDUCT THEIR BUSINESSES AS NOW CONDUCTED AND PRESENTLY
PROPOSED TO BE CONDUCTED) TO THE COMPANY GROUP, AS APPLICABLE, ALL INTELLECTUAL
PROPERTY RIGHTS AUTHORED, DEVELOPED OR OTHERWISE CREATED BY SUCH EMPLOYEE OR
CONSULTANT IN THE COURSE OF HIS OR HER RELATIONSHIP WITH THE COMPANY GROUP,
WITHOUT ANY RESTRICTIONS OR OBLIGATIONS ON THE USE OF ANY SUCH INTELLECTUAL
PROPERTY RIGHTS ASSIGNED TO ANY MEMBER OF THE COMPANY GROUP, AND/OR WITH RESPECT
TO SUCH INTELLECTUAL PROPERTY RIGHTS LICENSED TO ANY MEMBER OF THE COMPANY
GROUP, SUBJECT ONLY TO COMMERCIALLY REASONABLE AND CUSTOMARY RESTRICTIONS AND
OBLIGATIONS.

 

(VII)         THE COMPANY GROUP IS IN COMPLIANCE WITH ANY PRIVACY POLICIES OR
SIMILAR POLICIES, PROGRAMS OR OTHER NOTICES AND ALL APPLICABLE LAWS THAT CONCERN
THE COMPANY GROUP’S USE, DISCLOSURE, RETENTION OR PROTECTION OF PERSONAL
INFORMATION.

 

6P.           Insurance.  The attached “Insurance Schedule” lists each insurance
policy maintained by the Company Group with respect to their properties, assets
and businesses (other than insurance relating to employee benefits) on the
Closing Date, and each such policy is in full force and effect as of such date. 
No member of the Company Group is in default with respect to its obligations
under any insurance policy maintained by it, except to the extent that such
default could not reasonably be expected to have a Material Adverse Effect.

 

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6Q.          Employee Benefits.

 

(I)            NO MEMBER OF THE COMPANY GROUP HAS ANY OBLIGATION TO CONTRIBUTE
TO (OR ANY OTHER LIABILITY, INCLUDING CURRENT OR POTENTIAL WITHDRAWAL LIABILITY,
WITH RESPECT TO) ANY “MULTI-EMPLOYER PLAN” (AS DEFINED IN SECTION 3(37) OF ERISA
AND WHETHER OR NOT SUCH PLAN IS SUBJECT TO ERISA), OR ANY “DEFINED BENEFIT PLAN”
(AS DEFINED IN SECTION 3(35) OF ERISA), WHETHER OR NOT TERMINATED.

 

(II)           NO MEMBER OF THE COMPANY GROUP MAINTAINS OR HAS ANY OBLIGATION TO
CONTRIBUTE TO (OR ANY OTHER LIABILITY WITH RESPECT TO) ANY PLAN OR ARRANGEMENT
WHETHER OR NOT TERMINATED, WHICH PROVIDES MEDICAL, HEALTH, LIFE INSURANCE,
DENTAL, SICKNESS, ACCIDENT, DISABILITY, RETIREMENT, SAVINGS OR OTHER
WELFARE-TYPE BENEFITS FOR CURRENT OR FUTURE RETIRED OR TERMINATED EMPLOYEES
(EXCEPT FOR LIMITED CONTINUED MEDICAL BENEFIT COVERAGE REQUIRED TO BE PROVIDED
UNDER COBRA).

 

(III)          EXCEPT AS SET FORTH ON THE “EMPLOYEE BENEFITS SCHEDULE” OR AS
DESCRIBED IN THE PUBLIC REPORTS, ON THE CLOSING DATE NO MEMBER OF THE COMPANY
GROUP MAINTAINS, CONTRIBUTES TO OR HAVE ANY LIABILITY UNDER (OR WITH RESPECT TO)
ANY EMPLOYEE PLAN WHICH IS A “DEFINED CONTRIBUTION PLAN” (AS DEFINED IN SECTION
3(34) OF ERISA AND WHETHER OR NOT SUCH PLAN IS SUBJECT TO ERISA), WHETHER OR NOT
TERMINATED.

 

(IV)          EXCEPT AS SET FORTH ON THE “EMPLOYEE BENEFITS SCHEDULE” OR
DESCRIBED IN THE PUBLIC REPORTS, ON THE CLOSING DATE NO MEMBER OF THE COMPANY
GROUP MAINTAINS, CONTRIBUTES TO OR HAS ANY LIABILITY UNDER (OR WITH RESPECT TO)
ANY EMPLOYEE BENEFIT PLAN PROVIDING BENEFITS TO CURRENT OR FORMER EMPLOYEES,
INCLUDING ANY BONUS PLAN, PLAN FOR DEFERRED COMPENSATION, EMPLOYEE HEALTH OR
OTHER WELFARE BENEFIT PLAN OR OTHER ARRANGEMENT, WHETHER OR NOT TERMINATED.

 

(V)           THE EMPLOYEE BENEFIT PLANS OF THE COMPANY GROUP AND ALL RELATED
TRUSTS, INSURANCE CONTRACTS AND FUNDS HAVE BEEN MAINTAINED, FUNDED AND
ADMINISTERED IN ACCORDANCE WITH THEIR TERMS AND HAVE COMPLIED IN FORM AND IN
OPERATION IN ALL MATERIAL RESPECTS WITH THE APPLICABLE REQUIREMENTS OF ERISA,
THE CODE AND OTHER APPLICABLE LAWS.  THE REQUIREMENTS OF COBRA HAVE BEEN MET IN
ALL MATERIAL RESPECTS WITH RESPECT TO EACH EMPLOYEE BENEFIT PLAN WHICH IS AN
“EMPLOYEE WELFARE BENEFIT PLAN” (AS SUCH TERM IS DEFINED IN SECTION 3(1) OF
ERISA) WHICH IS SUBJECT TO COBRA.

 

(VI)          EACH OF THE EMPLOYEE BENEFIT PLANS WHICH IS INTENDED TO BE
QUALIFIED UNDER SECTION 401(A) OF THE CODE HAS RECEIVED A FAVORABLE
DETERMINATION FROM THE INTERNAL REVENUE SERVICE THAT SUCH EMPLOYEE BENEFIT PLAN
IS QUALIFIED UNDER SECTION 401(A) OF THE CODE, AND THERE ARE NO CIRCUMSTANCES
WHICH COULD REASONABLY BE EXPECTED TO ADVERSELY AFFECT THE QUALIFIED STATUS OF
ANY SUCH EMPLOYEE BENEFIT PLAN.  ALL SUCH EMPLOYEE BENEFIT PLAN HAVE BEEN OR
WILL BE TIMELY AMENDED FOR THE REQUIREMENTS OF THE TAX LEGISLATION COMMONLY
KNOWN AS “GUST” AND HAVE BEEN OR WILL BE SUBMITTED TO THE INTERNAL REVENUE
SERVICE FOR A FAVORABLE DETERMINATION LETTER WITHIN THE REMEDIAL AMENDMENT
PERIOD PRESCRIBED BY GUST.

 

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6R.          Employees.  With respect to the business of the Company Group:

 

(I)            TO THE KNOWLEDGE OF THE COMPANY, NO EXECUTIVE (OTHER THAN DEREK
DAWSON) OF THE COMPANY GROUP (1) HAS ANY PRESENT INTENTION TO TERMINATE HIS OR
HER EMPLOYMENT, OR (2) IS A PARTY TO ANY CONFIDENTIALITY, NON-COMPETITION,
PROPRIETARY RIGHTS OR OTHER SUCH AGREEMENT BETWEEN SUCH EXECUTIVE AND ANY PERSON
THAT WOULD BE MATERIAL TO THE PERFORMANCE OF SUCH EXECUTIVE’S EMPLOYMENT DUTIES,
OR THE ABILITY OF ANY MEMBER OF THE COMPANY GROUP TO CONDUCT THE BUSINESS OF
SUCH MEMBER;

 

(II)           EXCEPT AS SET FORTH ON THE ATTACHED “EMPLOYEES SCHEDULE” NO LABOR
ORGANIZATION OR GROUP OF EMPLOYEES HAS FILED ANY APPLICATION FOR CERTIFICATION
OR REPRESENTATION PETITION OR MADE ANY WRITTEN OR ORAL DEMAND FOR RECOGNITION;

 

(III)          TO THE KNOWLEDGE OF THE COMPANY (WHICH, FOR PURPOSES OF THIS
SECTION 6R, SHALL NOT REQUIRE OR INCLUDE ANY INQUIRY), NO UNION ORGANIZING OR
DECERTIFICATION EFFORTS ARE UNDERWAY OR THREATENED AND NO OTHER QUESTION
CONCERNING REPRESENTATION EXISTS; AND

 

(IV)          NO LABOR STRIKE, WORK STOPPAGE, SLOWDOWN, OR OTHER MATERIAL LABOR
DISPUTE HAS OCCURRED, AND NONE IS UNDERWAY OR, TO THE KNOWLEDGE OF THE COMPANY
(WHICH, FOR PURPOSES OF THIS SECTION 6R, SHALL NOT REQUIRE OR INCLUDE ANY
INQUIRY), THREATENED.

 

6S.           Environmental and Safety Matters.

 

(I)            THE COMPANY GROUP IS IN COMPLIANCE WITH ENVIRONMENTAL, HEALTH,
AND SAFETY REQUIREMENTS, EXCEPT FOR SUCH NON-COMPLIANCE AS COULD NOT REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(II)           THE COMPANY GROUP HAS NOT RECEIVED ANY WRITTEN NOTICE, REPORT OR
OTHER INFORMATION IN WRITING REGARDING (A) ANY ACTUAL OR ALLEGED MATERIAL
VIOLATION BY ANY MEMBER OF THE COMPANY GROUP OF ENVIRONMENTAL, HEALTH, AND
SAFETY REQUIREMENTS, OR (B) ANY MATERIAL LIABILITIES (WHETHER ACCRUED, ABSOLUTE,
CONTINGENT, UNLIQUIDATED OR OTHERWISE), INCLUDING ANY INVESTIGATORY, REMEDIAL OR
CORRECTIVE OBLIGATIONS, RELATING TO THE COMPANY GROUP OR THEIR FACILITIES
ARISING UNDER ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS, EXCEPT FOR SUCH
NON-COMPLIANCE AS COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.

 

6T.          Affiliated Transactions.  Except as set forth on the attached
“Affiliated Transactions Schedule” and except as described in the Public
Reports, as of the Closing Date, no officer, director or Affiliate of any member
of the Company Group is a party to any material written agreement, contract,
commitment or transaction with any member of the Company Group or has any
material interest in any property used by any member of the Company Group.

 

6U.          Customers and Suppliers.

 

(I)            THE “CUSTOMERS SCHEDULE” LISTS THE 20 LARGEST CUSTOMERS OF THE
COMPANY GROUP (ON A CONSOLIDATED BASIS) FOR EACH OF THE TWO MOST RECENT FISCAL
YEARS

 

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AND SETS FORTH OPPOSITE THE NAME OF EACH SUCH CUSTOMER THE PERCENTAGE OF
CONSOLIDATED NET SALES ATTRIBUTABLE TO SUCH CUSTOMER.

 

(II)           THE “SUPPLIERS SCHEDULE” LISTS THE 10 LARGEST SUPPLIERS OF THE
COMPANY GROUP (ON A CONSOLIDATED BASIS) FOR EACH OF THE TWO MOST RECENT FISCAL
YEARS AND SETS FORTH OPPOSITE THE NAME OF EACH SUCH SUPPLIER THE AMOUNT OF
PRE-TAX EXPENDITURES ATTRIBUTABLE TO SUCH SUPPLIER DURING THE PERIODS SPECIFIED
IN THE SUPPLIERS SCHEDULE.

 

(III)          SINCE THE DATE OF THE LATEST BALANCE SHEET, NO SUPPLIER LISTED ON
THE “SUPPLIERS SCHEDULE” HAS INDICATED IN WRITING THAT IT SHALL STOP, OR
MATERIALLY DECREASE THE RATE OF, SUPPLYING MATERIALS, PRODUCTS OR SERVICES TO
THE COMPANY GROUP, AND (EXCEPT AS DISCLOSED ON THE CUSTOMER SCHEDULE) NO
CUSTOMER LISTED ON THE “CUSTOMER SCHEDULE” HAS INDICATED IN WRITING THAT IT
SHALL STOP, OR MATERIALLY DECREASE THE RATE OF, BUYING MATERIALS, PRODUCTS OR
SERVICES FROM THE COMPANY GROUP.

 

6V.          Accounts Receivable.  Except as set forth on the attached “Accounts
Receivable Schedule”, all accounts receivable and other receivables, billed and
unbilled, and all negotiable instruments, or other instruments and chattel
paper, as are payable to the Company Group (collectively, the “Accounts
Receivable”) have arisen in the Ordinary Course of Business in bona fide
transactions.

 

6W.         Governmental Consents.  No material permit, consent, approval or
authorization of, or declaration to or filing with, any Governmental Entity is
required in connection with the execution, delivery and performance by each
member of the Company Group of this Agreement and the other Transaction
Agreements to which such member of the Company Group is a party, except for such
as have been obtained and except for filings required by applicable securities
Laws.

 

6X.          Representations and Warranties of SAS in the Acquisition
Agreement.  To the Company’s actual knowledge, the representations and
warranties of SAS contained in Article 2 of the Acquisition Agreement are true
and correct as of the date hereof.

 

6Y.          Disclosure.  This Agreement, the other Transaction Agreements and
the exhibits, schedules, certificates and other documents prepared by or on
behalf of the Company and delivered on or before the date hereof to any
Purchaser in connection with the transactions contemplated hereby and thereby,
taken as a whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements contained therein,
in the light of circumstances under which they were made, not misleading;
provided, that with respect to projected financial information, the Company
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.  There is no fact known to
the Company that could reasonably be expected to have a Material Adverse Effect
that has not been set forth herein or in the Public Reports, other documents,
certificates and other writings delivered to the Purchasers by or on behalf of
the Company specifically for use in connection with the transactions
contemplated by the Transaction Agreements.

 

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Section 7.               Redemption of the Notes

 

7A.          Mandatory Redemption.  On the sixth anniversary of the Closing Date
(the “Scheduled Redemption Date”), the Company shall redeem all outstanding
Notes at a price for each Note equal to its Accrued Amount.

 

7B.          Optional Redemption.

 

(I)            ON OR AFTER THE CLOSING DATE AND PRIOR TO THE SECOND ANNIVERSARY
THEREOF, THE COMPANY MAY REDEEM THE TRANCHE A NOTES AT ANY TIME IN WHOLE, OR
FROM TIME TO TIME IN PART, IN AGGREGATE PRINCIPAL AMOUNTS OF NOT LESS THAN
$500,000 AND IN INCREMENTS OF $100,000, AT A REDEMPTION PRICE EQUAL TO THE
ACCRUED AMOUNT AS OF THE DATE OF SUCH REDEMPTION OF THE TRANCHE A NOTES TO BE
REDEEMED.  AT ANY TIME FOLLOWING THE OPTIONAL REDEMPTION DATE, THE COMPANY MAY
REDEEM, IN WHOLE AND NOT IN PART, ALL TRANCHE A NOTES THEN OUTSTANDING (TOGETHER
WITH ALL TRANCHE B NOTES THEN OUTSTANDING, PURSUANT TO SECTION 7B(II)), AT A
PRICE FOR EACH TRANCHE A NOTE EQUAL TO THE ACCRUED AMOUNT FOR SUCH TRANCHE A
NOTE MULTIPLIED BY THE APPLICABLE PERCENTAGE SET FORTH IN SECTION 7B(II) BELOW
FOR THE DATE OF REDEMPTION.

 

(II)           NO TRANCHE B NOTE MAY BE REDEEMED AT THE ELECTION OF THE COMPANY
PRIOR TO THE OPTIONAL REDEMPTION DATE.  AT ANY TIME FOLLOWING THE OPTIONAL
REDEMPTION DATE, THE COMPANY MAY REDEEM, IN WHOLE AND NOT IN PART, ALL TRANCHE B
NOTES THEN OUTSTANDING (TOGETHER WITH ALL TRANCHE A NOTES THEN OUTSTANDING,
PURSUANT TO SECTION 7B(I)), AT A PRICE FOR EACH TRANCHE B NOTE EQUAL TO THE
ACCRUED AMOUNT FOR SUCH TRANCHE B NOTE MULTIPLIED BY THE APPLICABLE PERCENTAGE
BELOW FOR THE DATE OF REDEMPTION:

 

Date of Redemption

 

Percentage of Accrued Amount

After the second, and up to and including the third, anniversary of the Closing
Date

 

105%

After the third, and up to and including the fourth, anniversary of the Closing
Date

 

103%

After the fourth, and up to and including the fifth, anniversary of the Closing
Date

 

101%

Thereafter

 

100%

 

7C.          Special Redemptions.

 

(I)            IF A CHANGE OF CONTROL OCCURS OR THE COMPANY OR THE PARENT
OBTAINS KNOWLEDGE THAT A CHANGE OF CONTROL IS PROPOSED TO OCCUR, THE COMPANY
SHALL GIVE PROMPT WRITTEN NOTICE OF SUCH ACTUAL OR PROPOSED CHANGE OF CONTROL
DESCRIBING IN REASONABLE DETAIL THE MATERIAL TERMS AND DATE OF CONSUMMATION
THEREOF TO EACH HOLDER OF NOTES, BUT IN ANY EVENT SUCH NOTICE SHALL NOT BE GIVEN
LATER THAN THIRTY DAYS PRIOR TO THE OCCURRENCE OF SUCH CHANGE OF CONTROL, AND
THE COMPANY SHALL GIVE EACH HOLDER OF NOTES PROMPT WRITTEN NOTICE OF ANY
MATERIAL CHANGE IN THE TERMS OR TIMING OF SUCH TRANSACTION.  ANY HOLDER OF NOTES
MAY REQUIRE THE COMPANY TO REDEEM ALL OR ANY PORTION OF THE NOTES OWNED BY SUCH
HOLDER AT A PRICE FOR EACH NOTE EQUAL TO (A) 110% OF THE ACCRUED AMOUNT

 

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THEREOF AS OF THE DATE OF SUCH REDEMPTION OF THE NOTES TO BE REDEEMED,  IF THE
CHANGE OF CONTROL OCCURS AT ANY TIME PRIOR TO AND INCLUDING THE SECOND
ANNIVERSARY OF THE CLOSING DATE AND (B) THE ACCRUED AMOUNT THEREOF AS OF THE
DATE OF SUCH REDEMPTION FOR EACH NOTE TO BE REDEEMED, MULTIPLIED BY THE
APPLICABLE PERCENTAGE SET FORTH IN SECTION 7B(II) ABOVE FOR THE DATE UPON WHICH
SUCH CHANGE OF CONTROL OCCURS (REGARDLESS OF THE DATE UPON WHICH SUCH REDEMPTION
OCCURS), BY GIVING WRITTEN NOTICE TO THE COMPANY OF SUCH ELECTION PRIOR TO THE
LATER OF (X) 21 DAYS AFTER RECEIPT OF THE COMPANY NOTICE AND (Y) FIVE DAYS PRIOR
TO THE CONSUMMATION OF THE CHANGE OF CONTROL (THE “REDEMPTION NOTICE DATE”). 
THE COMPANY SHALL GIVE PROMPT WRITTEN NOTICE OF ANY SUCH ELECTION TO ALL OTHER
HOLDERS OF NOTES WITHIN FIVE DAYS AFTER THE RECEIPT THEREOF, AND EACH SUCH
HOLDER SHALL HAVE UNTIL THE LATER OF (A) SUCH DATE WHICH IS AS SOON AS
PRACTICABLE FOLLOWING THE OCCURRENCE OF THE CHANGE OF CONTROL OR (B) TEN DAYS
AFTER RECEIPT OF SUCH SECOND NOTICE TO REQUEST REDEMPTION PURSUANT TO THIS
SECTION 7C(I) (BY GIVING WRITTEN NOTICE TO THE COMPANY) OF ALL OR ANY PORTION OF
THE NOTES OWNED BY SUCH HOLDER.

 

(II)           UPON RECEIPT OF SUCH ELECTION(S), THE COMPANY SHALL BE OBLIGATED
TO REDEEM THE NOTES SPECIFIED THEREIN ON THE OCCURRENCE OF THE CHANGE OF
CONTROL.  IF ANY PROPOSED CHANGE OF CONTROL DOES NOT OCCUR, ALL REQUESTS FOR
REDEMPTION IN CONNECTION THEREWITH SHALL BE AUTOMATICALLY RESCINDED, OR IF THERE
HAS BEEN A MATERIAL CHANGE IN THE TERMS OR THE TIMING OF THE TRANSACTION, ANY
HOLDER OF NOTES MAY RESCIND SUCH HOLDER’S REQUEST FOR REDEMPTION BY GIVING
WRITTEN NOTICE OF SUCH RESCISSION TO THE COMPANY.

 

(III)          REDEMPTIONS MADE PURSUANT TO THIS SECTION 7C SHALL NOT RELIEVE
THE COMPANY OF ITS OBLIGATION TO REDEEM NOTES THAT REMAIN OUTSTANDING ON THE
SCHEDULED REDEMPTION DATE PURSUANT TO SECTION 7A ABOVE.

 

7D.          Redemption Payments.  For each Note which is to be redeemed
pursuant to this Agreement, the Company shall be obligated on the Redemption
Date to pay to the holder thereof (upon surrender by such holder at the
Company’s principal office of the instrument evidencing such Note) an amount in
immediately available funds as determined under this Section 7.

 

7E.           Notice of Redemption.  The Company shall give written notice of
any redemption of any Notes pursuant to Section 7B to each record holder thereof
not more than 60 days nor less than 5 days prior to the date on which such
redemption is to be made.

 

7F.           Interest After Redemption Date.  No Note shall be entitled to any
interest accruing after the Redemption Date for such Note.  On such date, all
rights of the holder of such Note shall cease, and such Note shall no longer be
deemed to be outstanding.

 

7G.          Tax Gross-Up.  All payments to be made by the Company under this
Agreement or any Note shall be made without set-off or counterclaim and without
deduction for or on account of any present or future Tax (excluding capital
Taxes and Taxes imposed on or measured by the net income of the holder of a Note
by the jurisdictions under the Laws of which such holder is organized or carries
on business or any political subdivisions thereof) unless the Company is
compelled by law to make payments subject to such Tax.  In such event, the
Company shall:

 

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(I)            PAY TO THE HOLDER OF THE NOTE, FOR THE ACCOUNT OF SUCH HOLDER,
SUCH ADDITIONAL AMOUNTS AS MAY BE NECESSARY TO ENSURE THAT THE HOLDER OF THE
NOTE RECEIVES A NET AMOUNT EQUAL TO THE FULL AMOUNT WHICH WOULD HAVE BEEN
RECEIVABLE UNDER THIS AGREEMENT OR ANY NOTE HAD THE PAYMENT NOT BEEN MADE
SUBJECT TO SUCH TAX; AND

 

(II)           SEND TO THE HOLDER OF THE NOTE SUCH CERTIFICATES OR CERTIFIED
COPIES OF RECEIPTS AS SUCH HOLDER SHALL REASONABLY REQUIRE AS PROOF OF THE
PAYMENT BY THE COMPANY OF ANY SUCH TAXES PAYABLE BY THE COMPANY.

 

7H.          Tax Gross-Up Adjustments.  The Company shall not be required to pay
any additional amounts pursuant to Section 7G after an assignment of a Note by a
Purchaser if immediately before the assignment, the Purchaser was not entitled
to receive amounts under Section 7G.

 

Section 8.               Put Right.

 

8A.          Put Events.  At any time after (i) the occurrence of an Event of
Default (without cure or waiver by the holders of a majority of the Underlying
Common Stock or of the Majority Noteholders) of a type described in Sections
9A(i), 9A(ii), 9A(viii), 9A(x) and for so long as such Event of Default is
continuing, or upon the occurrence of a Change of Control, or (ii) the first
anniversary of the occurrence of any Event of Default (without cure or waiver by
the holders of a majority of the Underlying Common Stock or of the Majority
Noteholders) other than those described in Sections 9A(i), 9A(ii), 9A(viii) or
9A(x) (collectively, a “Triggering Event”), any holder of Warrants or Underlying
Common Stock (collectively, the “Put Securities”) shall have the option to
require the Company to purchase all of the Put Securities then outstanding held
by such holder at a purchase price equal to the price specified in Section 8E
for the Put Securities.  Such option may be exercised by written notice (a “Put
Notice”) to the Company to that effect given at any time prior to (x) 20
business days after such holder receives written notice from the Company of the
occurrence of such Event of Default or Change of Control, in the case of an
Event of Default described in clause (i) above or a Change of Control, or (y) 20
business days after the latter of the first anniversary of the occurrence of
such Event of Default and the date upon which such holder receives written
notice from the Company of the occurrence of such Event of Default, in the case
of any Event of Default not described in clause (i) above.

 

8B.          Obligation After Notice.  Upon receipt of such Put Notice, the
Company shall be obligated to purchase the Put Securities specified in such Put
Notice on the date that is 15 business days after the receipt of such Put Notice
(the “Put Closing Date”).

 

8C.          Closing.  The closing for any payment of the Put Price due to any
holder of Put Securities under this Section 8 shall occur at the offices of
Choate, Hall & Stewart, LLP, 2 International Place, Boston, Massachusetts 02110,
or at such other place as the Company and such holder may agree.  The payment of
the Put Price which is due to any holder of any Put Securities pursuant to this
Section 8 shall be paid by the Company, against delivery of the certificates
evidencing such Put Securities, in immediately available funds.

 

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8D.          Prohibitions on Payment.  Notwithstanding anything to the contrary
in this Section 8, if payment of the Put Price pursuant to this Section 8 is
prohibited due to applicable restrictions contained in (1) applicable Law or (2)
agreements governing Senior Debt of the Company Group, the Company shall (x) use
commercially reasonable efforts to obtain financing for such payment and use
commercially reasonable efforts to obtain all necessary consents and waivers to
permit such payment, (y) pay in immediately available funds the largest portion
of such payment (pro rata to each of the holders of Put Securities from whom the
Company are then obligated to purchase any Put Securities in proportion to the
Put Securities to be purchased from each holder) on the Put Closing Date that
the Company is able to pay without causing a violation and (z) pay the remaining
amount of the Put Price as soon as reasonably practicable after it is no longer
prohibited from making such payment.

 

8E.           Put Price.  The “Put Price” for any Underlying Common Stock
pursuant to this Section 8 shall be the Triggering Event Value for such
Underlying Common Stock.  “Put Price” for any Warrant pursuant to this Section 8
shall be the aggregate Triggering Event Value of the Underlying Common Stock
issuable upon the exercise of such Warrant reduced by the aggregate exercise
price payable pursuant to such Warrant to purchase such Underlying Common Stock.

 

Section 9.               Events of Default.

 

9A.          Definition.  An “Event of Default” shall have occurred if at any
time following the Closing:

 

(I)            THE COMPANY DEFAULTS IN THE PAYMENT IN FULL IN CASH OF ANY
PRINCIPAL, OR, WITH RESPECT TO ANY REDEMPTION OF THE NOTES AS AND WHEN REQUIRED
UNDER SECTION 7, THE PORTION OF THE ACCRUED AMOUNT CONSISTING OF INTEREST, ON
ANY NOTE WHEN THE SAME BECOMES DUE AND PAYABLE, WHETHER AT MATURITY OR AT A DATE
FIXED FOR REDEMPTION OR BY DECLARATION OR OTHERWISE;

 

(II)           ANY MEMBER OF THE COMPANY GROUP FAILS TO PAY WHEN DUE ANY OTHER
AMOUNT OWING HEREUNDER OR PURSUANT TO ANY OTHER TRANSACTION AGREEMENT, IF SUCH
FAILURE CONTINUES FOR MORE THAN FIVE (5) BUSINESS DAYS AFTER THE SAME BECOMES
DUE AND PAYABLE;

 

(III)          ANY MEMBER OF THE COMPANY GROUP IS IN DEFAULT IN THE PAYMENT OF
ANY PRINCIPAL OF OR PREMIUM OR MAKE-WHOLE AMOUNT OR INTEREST ON ANY INDEBTEDNESS
THAT IS OUTSTANDING IN AN AGGREGATE AMOUNT FOR ALL SUCH DEFAULTS EXCEEDING
$500,000, BEYOND ANY GRACE PERIOD PROVIDED WITH RESPECT THERETO;

 

(IV)          ANY MEMBER OF THE COMPANY GROUP BREACHES OR OTHERWISE FAILS TO
PERFORM OR OBSERVE IN ANY MATERIAL RESPECT ANY COVENANT OR AGREEMENT SET FORTH
IN SECTION 4B OR 4F OF THIS AGREEMENT OR SECTION 3.3 OF THE PARENT GUARANTY;

 

(V)           ANY MEMBER OF THE COMPANY GROUP BREACHES OR OTHERWISE FAILS TO
PERFORM OR OBSERVE IN ANY MATERIAL RESPECT ANY OTHER OBLIGATION, COVENANT OR
AGREEMENT SET FORTH IN ANY TRANSACTION AGREEMENT, OTHER THAN THOSE COVENANTS AND
AGREEMENTS SET FORTH IN SECTION 4B, OR 4F OF THIS AGREEMENT OR SECTION 3.3 OF
THE PARENT GUARANTY, WHICH

 

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SHALL BE GOVERNED BY THE TERMS OF SECTION 9A(IV) AND OTHER THAN AN EVENT
DESCRIBED IN CLAUSE (I) OR (II) ABOVE, IF SUCH BREACH OR FAILURE IS NOT CURED
WITHIN 45 DAYS FROM THE DATE OF SUCH BREACH OR FAILURE;

 

(VI)          ANY REPRESENTATION, WARRANTY OR CERTIFICATION MADE IN WRITING BY
ANY MEMBER OF THE COMPANY GROUP IN ANY TRANSACTION AGREEMENT (I) THAT IS NOT
QUALIFIED AS TO MATERIALITY PROVES TO HAVE BEEN FALSE OR INCORRECT IN ANY
MATERIAL RESPECT AS OF THE DATE MADE OR (II) THAT IS QUALIFIED AS TO MATERIALITY
PROVES TO HAVE BEEN FALSE OR INCORRECT IN ANY RESPECT AS OF THE DATE MADE;

 

(VII)         ANY (A) DEFAULT WHICH RESULTS IN THE ACCELERATION OF ANY
INDEBTEDNESS OF ANY MEMBER OF THE COMPANY GROUP WHERE THE PRINCIPAL AMOUNT OF
SUCH INDEBTEDNESS, WHEN ADDED TO THE PRINCIPAL AMOUNT OF ALL OTHER INDEBTEDNESS
(OTHER THAN THE NOTES) OF THE COMPANY GROUP THEN IN DEFAULT AND ACCELERATED OR
PAST DUE, EXCEEDS $500,000, OR (B) FINAL JUDGMENT OR JUDGMENTS FOR THE PAYMENT
OF MORE THAN $1,000,000 IN THE AGGREGATE (NET OF ANY PORTION OF SUCH JUDGMENT OR
JUDGMENTS PAID BY ANY MEMBER OF THE COMPANY GROUP’S INSURANCE CARRIER) IS OR ARE
ENTERED AGAINST ANY MEMBER OF THE COMPANY GROUP AND SUCH JUDGMENT OR JUDGMENTS
IS OR ARE NOT DISCHARGED OR DISMISSED OR STAYED PENDING APPEAL WITHIN 90 DAYS
AFTER ENTRY;

 

(VIII)        (A) ANY MEMBER OF THE COMPANY GROUP MAKES AN ASSIGNMENT FOR THE
BENEFIT OF CREDITORS OR ADMITS IN WRITING ITS INABILITY TO PAY ITS DEBTS
GENERALLY AS THEY BECOME DUE; OR (B) AN ORDER, JUDGMENT OR DECREE IS ENTERED
ADJUDICATING ANY MEMBER OF THE COMPANY GROUP IS INSOLVENT; OR ANY ORDER FOR
RELIEF WITH RESPECT TO ANY MEMBER OF THE COMPANY GROUP IS ENTERED UNDER THE
FEDERAL BANKRUPTCY CODE, THE BANKRUPTCY AND INSOLVENCY ACT (CANADA), THE
COMPANIES’ CREDITORS ARRANGEMENT ACT (CANADA), OR THE WINDING-UP AND
RESTRUCTURING ACT (CANADA) (INCLUDING THE APPOINTING OF A RECEIVER, INTERIM
RECEIVER, RECEIVER AND MANAGER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN,
SEQUESTRATOR, ADMINISTRATOR, AGENT OR SIMILAR OFFICIAL OF ANY MEMBER OF THE
COMPANY GROUP, OR OF ANY SUBSTANTIAL PART OF THEIR RESPECTIVE PROPERTIES); OR
(C) ANY MEMBER OF THE COMPANY GROUP PETITIONS OR APPLIES TO ANY TRIBUNAL FOR THE
APPOINTMENT OF A CUSTODIAN, TRUSTEE, RECEIVER, INTERIM RECEIVER, RECEIVER AND
MANAGER OR LIQUIDATOR OF ANY MEMBER OF THE COMPANY GROUP OR OF ANY SUBSTANTIAL
PART OF THE ASSETS OF ANY MEMBER OF THE COMPANY GROUP, OR COMMENCES ANY
PROCEEDING (OTHER THAN A PROCEEDING FOR THE VOLUNTARY LIQUIDATION AND
DISSOLUTION OF A SUBSIDIARY OF THE COMPANY) RELATING TO ANY MEMBER OF THE
COMPANY GROUP UNDER ANY BANKRUPTCY, REORGANIZATION, WINDING-UP, COMPOSITION,
RESCHEDULING, ARRANGEMENT, INSOLVENCY, READJUSTMENT OF DEBT, DISSOLUTION OR
LIQUIDATION LAW OF ANY JURISDICTION; OR (D) ANY HOLDER OF A LIEN TAKES
POSSESSION, FORECLOSURE, SEIZURE, RETENTION, SALE OR OTHER DISPOSITION OF, OR A
RECEIVER, INTERIM RECEIVER, RECEIVER AND MANAGER, ADMINISTRATOR OR OTHER SIMILAR
OFFICER IS APPOINTED FOR, ALL OR SUBSTANTIALLY ALL OF THE PROPERTIES, ASSETS OR
REVENUES OF ANY MEMBER OF THE COMPANY GROUP; OR (E) ANY SUCH PETITION OR
APPLICATION IS FILED, OR ANY SUCH PROCEEDING IS COMMENCED, AGAINST ANY MEMBER OF
THE COMPANY GROUP, AND EITHER (1) THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY,
AS THE CASE MAY BE, BY ANY ACT INDICATES ITS APPROVAL THEREOF, CONSENT THERETO
OR ACQUIESCENCE THEREIN, (2) WITH RESPECT TO CLAUSE (D) ABOVE, SUCH PETITION,
APPLICATION OR PROCEEDING IS NOT DISMISSED WITHIN 60 DAYS OR (3) WITH RESPECT TO
CLAUSE (E) ABOVE, SUCH PROCEEDING IS NOT DISMISSED WITHIN 60 DAYS;

 

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(IX)           EAG OR EAG HOLDCO FAILS TO EXECUTE AND DELIVER TO THE PURCHASERS
A JOINDER TO THE SUBSIDIARY GUARANTY, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE PURCHASERS, ON OR PRIOR TO THE CLOSE OF BUSINESS ON THE 14TH
DAY AFTER THE CLOSING DATE; OR

 

(X)            EAG OR EAG HOLDCO FAILS TO EXECUTE AND DELIVER TO THE PURCHASERS
A JOINDER TO THE SUBSIDIARY GUARANTY, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE PURCHASERS, ON OR PRIOR TO THE CLOSE OF BUSINESS ON THE
180TH DAY AFTER THE CLOSING DATE.

 

9B.          Consequences of Events of Default Under the Notes.

 

(I)            IF AN EVENT OF DEFAULT OF A TYPE DESCRIBED IN SECTION 9A(I) OR
9A(II) HAS OCCURRED AND IS CONTINUING, ANY HOLDER OF NOTES THEN OUTSTANDING MAY,
UPON DELIVERY OF WRITTEN NOTICE TO THE COMPANY (SO LONG AS THE MAJORITY
NOTEHOLDERS HAVE CONSENTED THERETO IN WRITING), REQUIRE THAT EACH NOTE HELD BY
SUCH HOLDER BE IMMEDIATELY REDEEMED BY THE COMPANY AT A PRICE EQUAL TO THE
ACCRUED AMOUNT OF SUCH NOTE MULTIPLIED BY (X) 105%, IF SUCH NOTICE IS GIVEN ON
OR PRIOR TO THE THIRD ANNIVERSARY OF THE CLOSING, OR (Y) THE PERCENTAGE SET
FORTH IN SECTION 7B(II) FOR THE DATE OF SUCH NOTICE IF SUCH NOTICE IS GIVEN
AFTER THE THIRD ANNIVERSARY OF THE CLOSING.  THE COMPANY SHALL REDEEM ALL NOTES
AS TO WHICH RIGHTS UNDER THIS SECTION 9B(I) HAVE BEEN EXERCISED, WITHIN FIVE (5)
DAYS AFTER ITS RECEIPT OF SUCH NOTICE.

 

(II)           IF AN EVENT OF DEFAULT OF A TYPE DESCRIBED IN ANY OF SECTIONS
9A(III) THROUGH 9A(VII) HAS OCCURRED AND IS CONTINUING, ANY HOLDER OF NOTES THEN
OUTSTANDING MAY REQUIRE AT ANY TIME AFTER THE FIRST ANNIVERSARY OF THE
OCCURRENCE OF SUCH EVENT OF DEFAULT, BY WRITTEN NOTICE DELIVERED TO THE COMPANY
AFTER SUCH ANNIVERSARY (SO LONG AS THE MAJORITY NOTEHOLDERS HAVE CONSENTED
THERETO IN WRITING), THAT EACH NOTE HELD BY SUCH HOLDER BE IMMEDIATELY REDEEMED
BY THE COMPANY AT A PRICE EQUAL TO THE ACCRUED AMOUNT OF SUCH NOTE MULTIPLIED BY
(X) 105%, IF SUCH NOTICE IS GIVEN ON OR PRIOR TO THE THIRD ANNIVERSARY OF THE
CLOSING, OR (Y) THE PERCENTAGE SET FORTH IN SECTION 7B(II) FOR THE DATE OF SUCH
NOTICE IF SUCH NOTICE IS GIVEN AFTER THE THIRD ANNIVERSARY OF THE CLOSING.  THE
COMPANY SHALL REDEEM ALL NOTES AS TO WHICH RIGHTS UNDER THIS SECTION 9B(II) HAVE
BEEN EXERCISED, WITHIN FIVE (5) DAYS AFTER ITS RECEIPT OF SUCH NOTICE.

 

(III)          IF AN EVENT OF DEFAULT OF A TYPE DESCRIBED IN SECTIONS 9A(VIII)
OR 9A(X) HAS OCCURRED, THE COMPANY SHALL IMMEDIATELY REDEEM ALL NOTES AT A PRICE
FOR EACH NOTE EQUAL TO THE ACCRUED AMOUNT THEREOF MULTIPLIED BY (X) 105%, IF
SUCH EVENT OF DEFAULT OCCURS ON OR PRIOR TO THE THIRD ANNIVERSARY OF THE
CLOSING, OR (Y) THE PERCENTAGE SET FORTH IN SECTION 7B(II) FOR THE DATE UPON
WHICH SUCH EVENT OF DEFAULT OCCURS, IF SUCH EVENT OF DEFAULT OCCURS AFTER THE
THIRD ANNIVERSARY OF THE CLOSING.

 

(IV)          IF AN EVENT OF DEFAULT OF A TYPE DESCRIBED IN SECTIONS 9A(I),
9A(II) OR 9A(IX) OR A BREACH OF SECTION 4F(II) (IN ANY CASE, AN “INTEREST RATE
TRIGGER EVENT”) OCCURS, THEN THE INTEREST RATE ON EACH OUTSTANDING NOTE SHALL
INCREASE IMMEDIATELY BY AN INCREMENT OF 200 BASIS POINTS, AND SUCH INCREASE WILL
CONTINUE UNTIL THE NEXT DAY UPON WHICH NO INCREASE PERIOD (WHETHER FOR SUCH
INTEREST RATE TRIGGER EVENT OR ANY OTHER INTEREST RATE TRIGGER EVENT) IS
CONTINUING, SUBJECT TO SUBSEQUENT INCREASES PURSUANT TO

 

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THIS SECTION 9B(IV); PROVIDED THAT SUCH INTEREST RATE SHALL NOT BE INCREASED BY
MORE THAN 200 BASIS POINTS IN THE AGGREGATE AT ANY GIVEN TIME.  AS USED IN THIS
SECTION 9B(IV):

 

(A)          the “Increase Period” for an Event of Default of a type described
in Section 9A(i) or 9A(ii) will commence on the date upon which such Event of
Default occurs and will end on the earlier of (x) the last day of the 90-Day
Period (as defined below) during which such Event of Default is cured and (y)
the date upon which such Event of Default is waived in writing by Majority
Noteholders;

 

(B)           a “90-Day Period” for an Event of Default of a type described in
Section 9A(i) or 9A(ii) means any 90-day period that ends on the day that is 90
days (or on a day that is an integral multiple of 90 days) after the date upon
which such Event of Default occurs;(1)

 

(C)           the “Increase Period” for an Event of Default of a type described
in Section 9A(ix) will commence on the date upon which such Event of Default
occurs and will end on the earlier of (x) the date upon which such Event of
Default is cured and (y) the date upon which such Event of Default is waived in
writing by Majority Noteholders; and

 

(D)          the “Increase Period” for a breach of Section 4F(ii) will commence
on the date upon which such breach occurs and will end on the earlier of (x) the
date upon which the Company delivers to the Noteholders the items described in
Section 4D(ii) for the next succeeding Fiscal Quarter as of the end of which the
Consolidated EBITDA (for the period of four consecutive Fiscal Quarters ending
on the last day of such Fiscal Quarter) is not less than the applicable amount
set forth in Section 4F(ii) and (y) the date upon which such Event of Default is
waived in writing by Majority Noteholders.

 

(V)           IF ANY EVENT OF DEFAULT EXISTS, EACH HOLDER OF NOTES SHALL ALSO
HAVE ANY OTHER RIGHTS WHICH SUCH HOLDER IS ENTITLED TO AT ANY TIME UNDER ANY
OTHER TRANSACTION AGREEMENT, ANY OTHER CONTRACT OR AGREEMENT AND ANY OTHER
RIGHTS WHICH SUCH HOLDER MAY HAVE PURSUANT TO APPLICABLE LAW.

 

(VI)          IN THE CASE OF A PURCHASE OR REDEMPTION PURSUANT TO SECTION 7C OR
THIS SECTION 9B, IF THE FUNDS OF THE COMPANY LEGALLY AVAILABLE FOR REDEMPTION OF
NOTES ON ANY REDEMPTION DATE ARE INSUFFICIENT TO REDEEM THE NOTES (PLUS ANY
PREMIUM PAYABLE THEREON) TO BE REDEEMED ON SUCH DATE, THOSE FUNDS WHICH ARE
LEGALLY AVAILABLE SHALL BE USED TO REDEEM THE MAXIMUM POSSIBLE NUMBER OF NOTES
(PLUS ANY PREMIUM PAYABLE THEREON) PRO RATA AMONG THE HOLDERS OF THE NOTES TO BE
REDEEMED BASED UPON THE NUMBER

 

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(1)           e.g., if an Event of Default of a type described in Section 9A(i)
or 9A(ii) is cured on the 10th day after such Event of Default occurs, then the
Increase Period for such Event of Default will end on the 90th day after the
date upon which such Event of Default occurred; and if an Event of Default of a
type described in Section 9A(i) or 9A(ii) is cured on the 150th day after such
Event of Default occurs, then the Increase Period for such Event of Default will
end on the 180th day after the date upon which such Event of Default occurred;
in each case, unless such Event of Default is earlier waived in writing by
Majority Noteholders.

 

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of Notes held by each such holder.  Notwithstanding the provisions of the first
sentence of this Section 9B(vi), at any time thereafter when additional funds of
the Company are legally available for the redemption of Notes, such funds shall
immediately be used to redeem the Notes (plus any premium payable thereon) which
the Company have become obligated to redeem on any Redemption Date but which it
has not redeemed.

 

(VII)         AT ANY TIME AFTER ANY NOTES HAVE BEEN DECLARED DUE AND PAYABLE
PURSUANT TO SECTION 9B, THE MAJORITY NOTEHOLDERS, BY WRITTEN NOTICE TO THE
COMPANY, MAY RESCIND AND ANNUL ANY SUCH DECLARATION AND ITS CONSEQUENCES.  NO
RESCISSION AND ANNULMENT UNDER THIS PARAGRAPH WILL EXTEND TO OR AFFECT ANY
SUBSEQUENT EVENT OF DEFAULT OR POTENTIAL EVENT OF DEFAULT OR IMPAIR ANY RIGHT
CONSEQUENT THEREON.

 

Section 10.             Miscellaneous.

 

10A.        Commitment Fees; Expenses.

 

(I)            ON THE CLOSING DATE, THE COMPANY SHALL PAY TO EACH PURCHASER A
COMMITMENT FEE IN AN AMOUNT EQUAL TO 2% OF THE AGGREGATE PRINCIPAL AMOUNT OF THE
NOTES PURCHASED BY SUCH PURCHASER UNDER THIS AGREEMENT AT THE CLOSING (THE
“COMMITMENT FEE AMOUNT”).

 

(II)           EACH MEMBER OF THE COMPANY GROUP AGREES, JOINTLY AND SEVERALLY,
TO PAY, AND HOLD THE PURCHASERS HARMLESS AGAINST ANY LIABILITY FOR THE PAYMENT
OF (A) THE REASONABLE AND DOCUMENTED FEES AND EXPENSES INCURRED BY THE
PURCHASERS AND THEIR LEGAL, ACCOUNTING AND OTHER ADVISORS ARISING IN CONNECTION
WITH THEIR DUE DILIGENCE REVIEW OF THE COMPANY GROUP (INCLUDING EAG), THE
NEGOTIATION AND EXECUTION OF THE COMMITMENT LETTER (AND EXHIBITS AND ANNEXES
ATTACHED THERETO), THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION AGREEMENTS
AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, IN AN
AMOUNT NOT TO EXCEED $250,000, AND (B) THE REASONABLE AND DOCUMENTED FEES AND
EXPENSES INCURRED WITH RESPECT TO ANY RESTATEMENTS, AMENDMENTS OR WAIVERS
(WHETHER OR NOT THE SAME BECOME EFFECTIVE) UNDER OR IN RESPECT OF THIS AGREEMENT
OR ANY OTHER TRANSACTION AGREEMENT.  EACH MEMBER OF THE COMPANY GROUP SHALL PAY,
AND HOLD EACH PURCHASER AND EACH HOLDER OF NOTES, WARRANTS AND UNDERLYING COMMON
STOCK HARMLESS AGAINST LIABILITY FOR THE PAYMENT OF, (1) STAMP AND OTHER SIMILAR
TAXES (BUT EXCLUDING ANY INCOME TAXES OF PURCHASERS) WHICH MAY BE PAYABLE IN
RESPECT OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE ISSUANCE,
DELIVERY OR ACQUISITION OF ANY NOTES OR PUT SECURITIES, AND (2) THE FEES AND
OUT-OF-POCKET EXPENSES INCURRED WITH RESPECT TO THE ENFORCEMENT OF THE RIGHTS
GRANTED UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION AGREEMENT, AND (3) THE
REASONABLE FEES AND EXPENSES INCURRED BY EACH PURCHASER IN MAKING ANY FILING
WITH ANY GOVERNMENTAL ENTITY WITH RESPECT TO ITS INVESTMENT IN THE COMPANY OR IN
ANY OTHER FILING WITH ANY GOVERNMENTAL ENTITY WITH RESPECT TO THE COMPANY WHICH
MENTIONS SUCH PURCHASER.

 

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10B.        Remedies; Survival of Representations, Warranties and Covenants;
Indemnification.

 

(I)            EACH HOLDER OF NOTES, WARRANTS AND UNDERLYING COMMON STOCK SHALL
HAVE ALL RIGHTS AND REMEDIES SET FORTH IN THIS AGREEMENT AND THE OTHER
TRANSACTION AGREEMENTS FOR THE BENEFIT OF EACH SUCH HOLDER AND ALL RIGHTS AND
REMEDIES WHICH SUCH HOLDERS HAVE BEEN GRANTED AT ANY TIME UNDER ANY OTHER
AGREEMENT OR CONTRACT AND ALL OF THE RIGHTS WHICH SUCH HOLDERS HAVE UNDER ANY
LAW.  ANY PERSON HAVING ANY RIGHTS UNDER ANY PROVISION OF THIS AGREEMENT OR ANY
OTHER TRANSACTION AGREEMENT SHALL BE ENTITLED TO ENFORCE SUCH RIGHTS
SPECIFICALLY, TO RECOVER DAMAGES BY REASON OF ANY BREACH OF ANY PROVISION OF
THIS AGREEMENT OR ANY OTHER TRANSACTION AGREEMENT AND TO EXERCISE ALL OTHER
RIGHTS GRANTED BY LAW.  THE FOLLOWING INDEMNIFICATION PROVISIONS ARE IN ADDITION
TO, AND NOT IN DEROGATION OF, ANY STATUTORY, EQUITABLE, OR COMMON LAW REMEDY ANY
HOLDER OF NOTES, WARRANTS OR UNDERLYING COMMON STOCK MAY HAVE FOR BREACH OF
REPRESENTATION, WARRANTY OR COVENANT WITH RESPECT TO ANY MEMBER OF THE COMPANY
GROUP, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR BY THE OTHER
TRANSACTION AGREEMENTS.  THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
AGREEMENT SHALL SURVIVE THE CLOSING.

 

(II)           IN CONSIDERATION OF EACH PURCHASER’S EXECUTION AND DELIVERY OF
THIS AGREEMENT AND ACQUIRING THE NOTES HEREUNDER AND IN ADDITION TO ALL OF THE
COMPANY’S OTHER OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER TRANSACTION
AGREEMENTS, THE COMPANY AGREES TO INDEMNIFY ON AN AFTER-TAX BASIS AND DEFEND,
PROTECT AND HOLD HARMLESS EACH PURCHASER AND ITS AFFILIATES AND EACH OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, COUNSEL AND ATTORNEYS-IN-FACT
(INCLUDING THOSE RETAINED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT), SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “INDEMNITEES”) FROM
AND AGAINST ANY AND ALL ACTUAL CLAIMS, COSTS, DAMAGES, DEFICIENCIES, EXPENSES
(INCLUDING INTEREST, COURT COSTS, FEES OF ATTORNEYS, ACCOUNTANTS AND OTHER
EXPERTS OR OTHER EXPENSES OF LITIGATION OR OTHER PROCEEDINGS OR OF ANY CLAIM,
DEFAULT OR ASSESSMENT), FEES, FINES, LIABILITIES, LOSSES AND PENALTIES
(HEREINAFTER INDIVIDUALLY, A “LOSS” AND COLLECTIVELY, “LOSSES”) WHICH, DIRECTLY
OR INDIRECTLY, ARISE OUT OF, RESULT FROM OR RELATE TO (IRRESPECTIVE OF WHETHER
ANY SUCH INDEMNITEE IS A PARTY TO THE ACTION FOR WHICH INDEMNIFICATION HEREUNDER
IS SOUGHT) THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE AND ADMINISTRATION
OF THIS AGREEMENT AND ANY OTHER TRANSACTION AGREEMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY (INCLUDING, WITHOUT LIMITATION, SO-CALLED
WORK-OUTS AND/OR RESTRUCTURINGS AND ALL AMENDMENTS, WAIVERS AND CONSENTS
HEREUNDER OR THEREUNDER, WHETHER OR NOT EFFECTED), AND WITH RESPECT TO ANY
INVESTIGATION, LITIGATION OR PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDING OR
APPELLATE PROCEEDING) RELATED TO THIS AGREEMENT OR THE NOTES OR TRANSACTIONS
CONTEMPLATED HEREBY OR THE USE OF THE PROCEEDS THEREOF, WHETHER OR NOT ANY
INDEMNITEE IS A PARTY THERETO; PROVIDED, THAT THE COMPANY SHALL HAVE NO
OBLIGATION HEREUNDER TO ANY INDEMNITEE WITH RESPECT TO LOSSES TO THE EXTENT
ARISING FROM THE BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE (OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, COUNSEL, AGENTS OR
ATTORNEYS-IN-FACT) AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL
ORDER NOT SUBJECT TO FURTHER APPEAL.

 

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10C.        Purchaser’s Representations; Legends.

 

(I)            PURCHASER’S REPRESENTATIONS.

 

(A)           AUTHORIZATION.  EACH PURCHASER HEREBY REPRESENTS THAT IT HAS FULL
POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION
AGREEMENTS, AND THIS AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS CONSTITUTE
ITS VALID AND LEGALLY BINDING OBLIGATIONS, ENFORCEABLE IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS.

 

(B)           DISCLOSURE OF INFORMATION.  EACH PURCHASER HEREBY REPRESENTS THAT
IT HAS RECEIVED AND REVIEWED THE INFORMATION ABOUT THE COMPANY GROUP THAT IT HAS
REQUESTED AND REPRESENTS THAT IT HAS HAD AMPLE OPPORTUNITY TO ASK QUESTIONS AND
RECEIVE ANSWERS FROM THE COMPANY REGARDING THE TERMS AND CONDITIONS OF THE
OFFERING OF THE NOTES AND WARRANTS AND THE BUSINESS, PROPERTIES, PROSPECTS AND
FINANCIAL CONDITION OF THE COMPANY GROUP THAT IT HAS REQUESTED.  THE FOREGOING,
HOWEVER, DOES NOT LIMIT OR MODIFY THE REPRESENTATIONS AND WARRANTIES IN SECTION
6 OR THE RIGHT OF THE PURCHASERS TO RELY THEREON.

 

(C)           INVESTMENT EXPERIENCE.  EACH PURCHASER HEREBY REPRESENTS THAT IT
IS ABLE TO FEND FOR ITSELF, CAN BEAR THE ECONOMIC RISK OF ITS INVESTMENT AND HAS
SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL OR BUSINESS MATTERS THAT IT IS
CAPABLE OF EVALUATING THE MERITS AND RISKS OF THE INVESTMENT IN THE NOTES,
WARRANTS AND UNDERLYING COMMON STOCK.  SUCH PURCHASER ALSO REPRESENTS IT HAS NOT
BEEN ORGANIZED FOR THE PURPOSE OF ACQUIRING THE NOTES, WARRANTS OR UNDERLYING
COMMON STOCK.

 

(D)           INVESTMENT INTENT; OWN ACCOUNT.  EACH PURCHASER HEREBY SEVERALLY
REPRESENTS THAT IT IS ACQUIRING THE NOTES, WARRANTS AND UNDERLYING COMMON STOCK
PURCHASED HEREUNDER OR ACQUIRED PURSUANT HERETO AS PRINCIPAL FOR ITS OWN
ACCOUNT, NOT AS NOMINEE OR AGENT, WITH THE PRESENT INTENTION OF HOLDING SUCH
SECURITIES FOR PURPOSES OF INVESTMENT, AND THAT IT HAS NO INTENTION OF SELLING
SUCH SECURITIES IN VIOLATION OF ANY APPLICABLE UNITED STATES SECURITIES LAWS;
PROVIDED THAT NOTHING CONTAINED HEREIN SHALL PREVENT ANY PURCHASER AND
SUBSEQUENT HOLDERS OF NOTES, WARRANTS OR UNDERLYING COMMON STOCK FROM
TRANSFERRING SUCH SECURITIES TO ITS AFFILIATES OR ANY OTHER PERSON IN COMPLIANCE
WITH THE PROVISIONS OF SECTION 5 OF THIS AGREEMENT.  EACH PURCHASER FURTHER
REPRESENTS THAT SUCH PURCHASER DOES NOT HAVE ANY CONTRACT, UNDERTAKING OR
AGREEMENT WITH ANY PERSON TO SELL, TRANSFER OR GRANT PARTICIPATIONS TO SUCH
PERSON OR TO ANY OTHER PERSON WITH RESPECT TO THE NOTES, WARRANTS AND UNDERLYING
COMMON STOCK.  EACH PURCHASER UNDERSTANDS THAT THE NOTES, WARRANTS AND
UNDERLYING COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND
MAY BE RESOLD ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES
ACT OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE, EXCEPT UNDER
CIRCUMSTANCES WHERE NEITHER SUCH REGISTRATION NOR SUCH AN EXEMPTION IS REQUIRED
BY LAW, AND THAT, SUBJECT TO THE REGISTRATION RIGHTS AGREEMENT, THE PARENT AND
THE COMPANY ARE NOT REQUIRED TO REGISTER THE WARRANTS OR THE NOTES.

 

(E)           BROKERAGE.  THERE ARE NO CLAIMS FOR BROKERAGE COMMISSIONS,
FINDERS’ FEES OR SIMILAR COMPENSATION IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT BASED ON ANY ARRANGEMENT OR AGREEMENT BINDING
UPON ANY PURCHASER.

 

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THE PURCHASERS SHALL PAY, AND HOLD EACH MEMBER OF THE COMPANY GROUP HARMLESS
AGAINST, ANY LIABILITY (INCLUDING ATTORNEYS FEES AND OUT-OF-POCKET EXPENSES)
ARISING IN CONNECTION WITH ANY SUCH CLAIM.

 

(F)            EACH PURCHASER HEREBY REPRESENTS THAT AT LEAST ONE OF THE
FOLLOWING STATEMENTS IS AN ACCURATE REPRESENTATION AS TO EACH SOURCE OF FUNDS (A
“SOURCE”) TO BE USED BY SUCH PURCHASER TO PAY THE PURCHASE PRICE OF THE NOTES TO
BE PURCHASED BY SUCH PURCHASER HEREUNDER:

 

(1)           THE SOURCE IS AN “INSURANCE COMPANY GENERAL ACCOUNT” AS DEFINED IN
SECTION V(E) OF PROHIBITED TRANSACTION EXEMPTION (“PTE”) 95-60 (ISSUED JULY 12,
1995) AND, EXCEPT AS SUCH PURCHASER HAS DISCLOSED TO THE COMPANY IN WRITING
PURSUANT TO THIS SECTION (1), THE AMOUNT OF RESERVES AND LIABILITIES FOR THE
GENERAL ACCOUNT CONTRACT(S) HELD BY OR ON BEHALF OF ANY EMPLOYEE BENEFIT PLAN OR
GROUP OF PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION DO NOT
EXCEED 10% OF THE TOTAL RESERVES AND LIABILITIES OF THE GENERAL ACCOUNT
(EXCLUSIVE OF SEPARATE ACCOUNT LIABILITIES) PLUS SURPLUS AS SET FORTH IN THE
NAIC ANNUAL STATEMENT FILED WITH THE STATE OF DOMICILE OF THE INSURER; OR

 

(2)           THE SOURCE IS A SEPARATE ACCOUNT OF AN INSURANCE COMPANY
MAINTAINED BY SUCH PURCHASER IN WHICH AN EMPLOYEE BENEFIT PLAN (OR ITS RELATED
TRUST) HAS AN INTEREST, WHICH SEPARATE ACCOUNT IS MAINTAINED SOLELY IN
CONNECTION WITH SUCH PURCHASER’S FIXED CONTRACTUAL OBLIGATIONS UNDER WHICH THE
AMOUNTS PAYABLE, OR CREDITED, TO SUCH PLAN AND TO ANY PARTICIPANT OR BENEFICIARY
OF SUCH PLAN (INCLUDING ANY ANNUITANT) ARE NOT AFFECTED IN ANY MANNER BY THE
INVESTMENT PERFORMANCE OF THE SEPARATE ACCOUNT; OR

 

(3)           THE SOURCE IS EITHER (A) AN INSURANCE COMPANY POOLED SEPARATE
ACCOUNT, WITHIN THE MEANING OF PTE 90-1 (ISSUED JANUARY 29, 1990), OR (B) A BANK
COLLECTIVE INVESTMENT FUND, WITHIN THE MEANING OF THE PTE 91-38 (ISSUED JULY 12,
1991) AND, EXCEPT AS SUCH PURCHASER HAS DISCLOSED TO THE COMPANY IN WRITING
PURSUANT TO THIS SECTION (3), NO EMPLOYEE BENEFIT PLAN OR GROUP OF PLANS
MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION BENEFICIALLY OWNS MORE
THAN 10% OF ALL ASSETS ALLOCATED TO SUCH POOLED SEPARATE ACCOUNT OR COLLECTIVE
INVESTMENT FUND; OR

 

(4)           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 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

 

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THE QPAM EXEMPTION) OWNS A 5% OR MORE INTEREST IN THE COMPANY AND (A) THE
IDENTITY OF SUCH QPAM AND (B) THE NAMES OF ALL EMPLOYEE BENEFIT PLANS WHOSE
ASSETS ARE INCLUDED IN SUCH INVESTMENT FUND HAVE BEEN DISCLOSED TO THE COMPANY
IN WRITING PURSUANT TO THIS SECTION (4); OR

 

(5)           THE SOURCE IS A GOVERNMENTAL PLAN; OR

 

(6)           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 PURSUANT TO THIS SECTION
(6); OR

 

(7)           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 10(c)(i)(f), the terms “employee benefit plan”,
“governmental plan”, “party in interest” and “separate account” shall have the
respective meanings assigned to such terms in Section 3 of ERISA, and the term
“QPAM Exemption” means PTE 84-14 (issued March 13, 1984).

 

(II)           LEGENDS.  EACH CERTIFICATE OR INSTRUMENT REPRESENTING NOTES,
WARRANTS AND UNDERLYING COMMON STOCK SHALL BE IMPRINTED WITH A LEGEND IN
SUBSTANTIALLY THE FOLLOWING FORM, AS APPLICABLE:

 

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL,
IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER OF SUCH SECURITIES (THE
“COMPANY”), THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT IS SUBJECT TO THE
CONDITIONS SPECIFIED IN THE NOTE PURCHASE AGREEMENT, DATED AS OF NOVEMBER 22,
2005, AMONG THE COMPANY AND THE OTHER PARTIES REFERRED TO THEREIN, AS AMENDED
AND MODIFIED FROM TIME TO TIME, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE
TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH
RESPECT TO SUCH TRANSFER.  A COPY OF SUCH CONDITIONS

 

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SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST.

 

10D.        Entire Agreement.  This Agreement, the other Transaction Agreements
and the other agreements and instruments referred to herein and therein contain
the entire agreement between the parties hereto and supersede any prior
understandings, agreements or representations by or between the parties hereto,
written or oral, which may have related to the subject matter hereof in any way,
including that certain Commitment Letter by and between the Company and ABRY
dated as of September 21, 2005 (the “Commitment Letter”).

 

10E.         Successors and Assigns.  Except as otherwise expressly provided
herein or therein, all covenants and agreements contained in this Agreement or
any other Transaction Agreement 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 whether so expressed or not.  In addition, and whether or not
any express assignment has been made, the provisions of this Agreement or any
other Transaction Agreement which are for any Purchaser’s benefit as a purchaser
or holder of Notes, Warrants or Underlying Common Stock are also for the benefit
of, and enforceable by, any subsequent holder of such Notes, Warrants or
Underlying Common Stock and such subsequent holder shall be deemed a “Purchaser”
hereunder in all respects.  No member of the Company Group may assign its rights
under this Agreement without the prior written consent of the Majority
Noteholders and the holders of a majority of the Underlying Common Stock.

 

10F.         Counterparts.  This Agreement and any other Transaction Agreement
may be executed simultaneously in two or more counterparts, any one of which
need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same agreement.

 

10G.        Descriptive Headings; Interpretation.  Section headings used in this
Agreement or in any other Transaction Agreement are for convenience only and are
not to affect the construction of, or to be taken into consideration in
interpreting, such agreement.  The use of the word “including” or any variation
or derivative thereof in this Agreement or in any other Transaction Agreement is
by way of example rather than by limitation.  All references in this Agreement
to “dollars” or “$” shall be to United States dollars and all references to
“Section”, “subsection” or “clause” shall be references to this Agreement.

 

10H.        Notices; Business Days.  All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement or any other Transaction Agreement shall be in writing and shall
be deemed to have been received when delivered personally to the recipient or
when sent by facsimile followed by delivery by reputable overnight courier
service (charges prepaid), one day after being sent to the recipient by
reputable overnight courier service (charges prepaid) or five days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid.  Any notice, demand or other communication
hereunder may be given by any other means (including telecopy or electronic
mail), but shall not be deemed to have been duly given unless and until it is
actually received by the intended recipient.  Such notices, demands and other
communications shall be sent to (i) each Purchaser at the address indicated for
such Purchaser on Annex 1 attached hereto,

 

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(ii) any other holder of Notes, Warrants or Underlying Common Stock at the
address set forth in the Company’s records and (iii) the Company at the address
indicated below:

 

175 Columbia St. West,
Suite 102
Waterloo, Ontario
Canada N2L 5Z5
Attention: David Strucke
Facsimile: 1-519-747-5282

 

with a copy (which shall not constitute notice to the Company) to:

Choate, Hall & Stewart LLP
Two International Place
Boston, MA 02110
Attention: Fred Callori, Esq.
Facsimile: 1-617-248-4000

 

or to such other address, to the attention of such other Person and/or with such
other copy or copies as the recipient party has specified by prior written
notice to the sending party.  If any time period for giving notice or taking
action expires on a day which is a Saturday, Sunday or legal holiday in the
Province of Ontario, Canada or the Commonwealth of Massachusetts (any other day
being a “business day”), such time period shall automatically be extended to,
the next business day immediately following such Saturday, Sunday or legal
holiday.

 

10I.          Consent to Amendments and Waivers.  Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company Group or the holders of the Notes unless
such modification, amendment or waiver is approved in writing by (i) the
Company, (ii) the Majority Noteholders and (iii) with respect to any provision
which survives the repayment of the Notes and which is not otherwise covered by
the terms of the Warrant Agreement, the holders of a majority of the Underlying
Common Stock.  Notwithstanding the foregoing, without the consent of any other
Person, the Company may amend this Agreement to change the addresses for notice
to any Person at such Person’s request.  No other course of dealing between the
Company and any holder of Notes, Warrants or Underlying Common Stock or any
delay in exercising any rights, power or remedy under this Agreement or any of
the other Transaction Agreements shall operate as a waiver of any rights of any
such holder.

 

10J.         Severability.  Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision of this Agreement or any other Transaction
Agreement is held to be prohibited by or invalid under applicable Law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement or such other
Transaction Agreement.

 

10K.        Construction.  The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and the other Transaction
Agreements.  In the event

 

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an ambiguity or question of intent or interpretation arises, this Agreement and
the other Transaction Agreements shall be construed as if drafted jointly by the
parties hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement or any other Transaction Agreement.  Nothing in the schedules
attached hereto shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the schedule attached hereto
identifies the exception with particularity and describes the relevant facts in
detail.  Without limiting the generality of the foregoing, the mere listing (or
inclusion of a copy) of a document or other item shall not be deemed adequate to
disclose an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself or the content of such document or other item).  The parties hereto
intend that each representation, warranty, and covenant contained herein shall
have independent significance.  If any party hereto has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which
such party has not breached shall not detract from or mitigate the fact that
such party is in breach of the first representation, warranty, or covenant.

 

10L.         Incorporation of Annexes, Schedules and Exhibits.  The annexes,
schedules and exhibits identified in this Agreement are incorporated herein by
reference and made a part hereof.

 

10M.       Registered Holders; Ownership.  As used in this Agreement and each of
the other Transaction Agreements, references to a “holder” of Notes, Warrants or
Underlying Common Stock shall mean the registered holder of such Notes, Warrants
or Underlying Common Stock as set forth in the Company’s records.  For purposes
of this Agreement and each of the other Transaction Agreements, all holdings of
Notes, Warrants or Underlying Common Stock by Persons who are Affiliates of each
other shall be aggregated for purposes of meeting any threshold tests under this
Agreement and each of the other Transaction Agreements.

 

10N.        GOVERNING LAW.  TO THE EXTENT APPLICABLE, THE CORPORATE LAW OF THE
STATE OF DELAWARE SHALL GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE
RIGHTS AND OBLIGATIONS OF COMPANY AND ITS SECURITYHOLDERS.  ALL OTHER ISSUES AND
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THIS AGREEMENT AND ANY OF THE OTHER TRANSACTION AGREEMENTS AND THE ANNEXES,
EXHIBITS AND SCHEDULES HERETO AND THERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF
THE COMMONWEALTH OF MASSACHUSETTS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF
MASSACHUSETTS.  IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE
COMMONWEALTH OF MASSACHUSETTS SHALL CONTROL THE INTERPRETATION AND CONSTRUCTION
OF THIS AGREEMENT AND EACH OF

 

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THE OTHER TRANSACTION AGREEMENTS (AND ALL ANNEXES, SCHEDULES AND EXHIBITS HERETO
AND THERETO), EVEN THOUGH UNDER THAT JURISDICTION’S CHOICE OF LAW OR CONFLICT OF
LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY
APPLY.

 

10O.        JURISDICTION AND VENUE.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT OR ANY OTHER TRANSACTION
AGREEMENT SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN BOSTON, MASSACHUSETTS.  BY EXECUTING AND DELIVERING THIS
AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS TO WHICH THEY ARE A PARTY, THE
COMPANY AND EACH HOLDER OF NOTES, WARRANTS AND UNDERLYING COMMON STOCK, ACCEPTS
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER TRANSACTION AGREEMENTS.  THE COMPANY AND EACH HOLDER OF NOTES,
WARRANTS AND UNDERLYING COMMON STOCK HEREBY WAIVE ANY CLAIM THAT MASSACHUSETTS
IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.

 

10P.         WAIVER OF RIGHT TO JURY TRIAL.  THE COMPANY AND EACH HOLDER OF
NOTES, WARRANTS AND UNDERLYING COMMON STOCK HEREBY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY in any litigation in any court with
respect to, in connection with, or arising out of this Agreement or any of the
other Transaction Agreements or the validity, protection, interpretation,
collection or enforcement hereof or thereof.  EACH PARTY HERETO AGREES THAT THIS
SECTION 10P IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND EACH OF THE
OTHER TRANSACTION AGREEMENTS AND ACKNOWLEDGES THAT EACH OTHER PARTY HERETO WOULD
NOT HAVE ENTERED INTO THIS AGREEMENT OR MADE AN INVESTMENT HEREUNDER IF THIS
SECTION 10P WERE NOT PART OF THIS AGREEMENT AND THE OTHER TRANSACTION
AGREEMENTS.

 

10Q.        Confidentiality.  For the purposes of this Section, “Confidential
Information” means information delivered to any Purchaser by or on behalf of the
Company or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement or the other Transaction Agreements that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified in a tangible manner when received by such Purchaser as
being confidential information of the Company or such Subsidiary, provided that
such term does not include information that (a) was publicly known or otherwise
known to such Purchaser or any of its Representatives prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by such Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise
becomes known to such Purchaser or any of its Representatives other than through
disclosure by the Company or any Subsidiary or (d) without limiting clause (a)
above, constitutes financial statements delivered to such Purchaser under this
Agreement that are otherwise publicly available.  Each Purchaser will maintain
the

 

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confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (i) its directors, officers,
limited partners and other investors, trustees, employees, agents, attorneys and
affiliates, (ii) its financial advisors and other professional advisors who
agree to hold confidential the Confidential Information substantially in
accordance with the terms of this Section 10Q (the Persons described in clauses
(i) and (ii) being such Purchaser’s “Representatives”), (iii) any other holder
of any Note or Underlying Common Stock, (iv) any institutional investor to which
it sells or considers selling any Note and/or Underlying Common Stock or any
part thereof or any participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 10Q), (v) any Person from which it considers
purchasing any security of the Company or any Subsidiary (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 10Q), (vi) any Federal or state
regulatory authority having jurisdiction over such Purchaser or any of its
Representatives, (vii) any nationally recognized rating agency that requires
access to information about such Purchaser’s investment portfolio, or (viii) any
other Person to which such delivery or disclosure such Purchaser’s deems in good
faith to be necessary or appropriate (w) to effect compliance with any law,
rule, regulation or order applicable to such Purchaser or any of its
Representatives, (x) in response to any subpoena or other legal process or (y)
in the enforcement or for the protection of such Purchaser’s rights and remedies
under any Transaction Agreement.  Each holder of a Note, by its acceptance of a
Note, will be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 10Q as though it were a party to this Agreement.

 

10R.        Consideration for Notes.  The Purchasers and the Company acknowledge
and agree that the fair market value of the Tranche A Notes on the Closing Date
is $5,800,000, and the fair market value of the Tranche B Notes on the Closing
Date is $14,500,000.  Each Purchaser and the Company shall file their respective
federal, state, provincial, territorial and local Tax returns in a manner which
is consistent with such valuation and allocation and shall not take any contrary
position with any Taxing authority.

 

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IN WITNESS WHEREOF, the parties have executed this Note Purchase Agreement as of
the date first written above.

 

 

 

COMPANY:

 

 

 

 

 

NAVTECH SYSTEMS SUPPORT INC.

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

PURCHASERS:

 

 

 

 

ABRY MEZZANINE PARTNERS, L.P.

 

 

 

 

By:

ABRY MEZZANINE INVESTORS, L.P.,

 

 

Its General Partner

 

 

 

 

By:

ABRY MEZZANINE HOLDINGS LLC,

 

 

Its General Partner

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

ABRY INVESTMENT PARTNERSHIP, L.P.

 

 

 

 

By:

ABRY Investment GP, LLC

 

 

Its General Partner

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

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ANNEX 1
SCHEDULE OF PURCHASERS

 

Names and Addresses

 

Tranche A Notes

 

Tranche B
Notes

 

 

 

 

 

 

 

ABRY Mezzanine Partners, L.P.
111 Huntington Avenue
30th Floor
Boston, MA 02199
Attention: John Hunt
Facsimile: (617) 859-8797

 

$

5,973,371.43

 

$

14,933,428.57

 

 

 

 

 

 

 

with a copy (which shall not constitute notice to the Purchaser) to:

 

 

 

 

 

 

 

 

 

 

 

Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, NY 10022
Attention: John Kuehn, Esq.
Facsimile: (212) 446-6460

 

 

 

 

 

 

 

 

 

 

 

ABRY Investment Partnership, L.P.
111 Huntington Avenue
30th Floor
Boston, MA 02199
Attention: John Hunt
Facsimile: (617) 859 8797

 

$

26,628.57

 

$

66,571.43

 

 

 

 

 

 

 

with a copy (which shall not constitute notice to the Purchaser) to:

 

 

 

 

 

 

 

 

 

 

 

Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, NY 10022
Attention: John Kuehn, Esq.
Facsimile: (212) 446-6460

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

$

6,000,000

 

$

15,000,000

 

 

Annex 1

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