Document:

EX-4.6

 

Exhibit 4.6

HAIGHTS CROSS COMMUNICATIONS, INC.

Warrant for the Purchase of Shares of

Common Stock of Haights Cross Communications, Inc.

                                                            

No. [#]

Warrant to Purchase

[Number] Shares

THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
“ACT”), OR ANY UNITED STATES STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR (2) PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES AND (3) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.’

     WHEREAS, Haights Cross Communications, Inc., a Delaware corporation (the “Company”) previously
granted to Holder a warrant (the “Series A Warrant”) to purchase shares of the Company’s Series A
Preferred Stock, par value $0.0003 per share (the “Series A Preferred Stock”);

     WHEREAS, on August 10, 2007, a recapitalization of the Company occurred (the
“Recapitalization”), which among other things reclassified the Company’s authorized and outstanding
Series A Preferred Stock into shares of common stock of the Company, par value $0.0003 per share
(the “Common Stock”);

     WHEREAS, pursuant to the Recapitalization, the Investors’ Agreement referenced in the Series A
Warrant was terminated and a Shareholders’ Agreement was entered into between the Company and
certain stockholders of the Company;

     WHEREAS, pursuant to the terms of the Series A Warrant, the effect of the Recapitalization was
to entitle the Holder to exercise the Series A Warrant for that number of

 

 

shares of Common Stock that the Holder would have received if the Series A Warrant had been
exercised prior to the Recapitalization;

     WHEREAS, although such adjustment occurred automatically, the Company has offered to exchange
holders’ warrant certificates for Series A Preferred Stock for warrant certificates to purchase the
appropriate number of shares of Common Stock; and

     WHEREAS, all warrants for Common Stock derived from prior warrants for Series A Preferred
Stock, whether exchanged for new warrant certificates for Common Stock or not, are the same series
of warrants.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

     FOR VALUE RECEIVED, the Company hereby certifies that [HOLDER], its successor or permitted
assigns (the “Holder”), is entitled, subject to the provisions of this Warrant, to purchase from
the Company, at the times specified herein, [Number] fully paid and non-assessable shares of Common
Stock of the Company, par value $0.0003 per share (the “Warrant Shares”), at a purchase price per
share equal to the Exercise Price (as hereinafter defined), exercisable solely in accordance with
the procedures provided in Section (b) hereof. The number of Warrant Shares to be received upon the
exercise of this Warrant and the price to be paid for a Warrant Share are subject to adjustment
from time to time as hereinafter set forth.

     (a) DEFINITIONS.

     (1) The following terms, as used herein, have the following meanings:

     “Affiliate” shall have the meaning given to such term in Rule 12b-2 promulgated under the
Securities and Exchange Act of 1934, as amended.

     “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks
in the City of New York are authorized by law to close.

     “Common Stock” means the Common Stock, par value $0.0003 per share, of the Company or other
capital stock of the Company that is not preferred as to liquidation or dividends.

     “Exercise Price” means $0.0003 per Warrant Share, such Exercise Price to be adjusted from time
to time as provided herein.

     “Expiration Date” means December 10, 2011 at 5:00 p.m. New York City time.

     “Fair Market Value” means, with respect to one share of Common Stock on any date, the Current
Market Price Per Share, as determined pursuant to paragraph (h)(6).

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     “Person” means an individual, partnership, corporation, limited liability company, trust,
joint stock company, association, joint venture, or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

     “Principal Holders” means, on any date, the Holders of at least 25% of the Warrants.

     “Warrant Certificate” the agreement by which a company issues warrants to the holder.

     “Warrants” means the Warrants to purchase Common Stock that were previously exercisable for
shares of Series A Preferred Stock prior to the Recapitalization, whether in the form of this
Warrant Certificate to purchase Common Stock or retained in the original form of Warrant
Certificate to purchase Series A Preferred Stock.

     (b) EXERCISE OF WARRANT.

     (1) The Holder is entitled to exercise this Warrant in whole or in part at any
time, or from time to time, until the Expiration Date or, if such day is not a
Business Day, then on the next succeeding day that shall be a Business Day. To
exercise this Warrant, the Holder shall execute and deliver to the Company a Warrant
Exercise Notice substantially in the form annexed hereto. No earlier than ten days
after delivery of the Warrant Exercise Notice, the Holder shall deliver to the
Company this Warrant Certificate, including the Warrant Exercise Subscription Form
forming a part hereof duly executed by the Holder. The Holder may elect (i) to
receive upon exercise of this Warrant, the number of Warrant Shares for which this
Warrant is exercisable reduced by a number of shares of Common Stock having the
aggregate Fair Market Value equal to the aggregate Exercise Price for the Warrant
Shares, (ii) to deliver as payment shares of Common Stock having the aggregate Fair
Market Value equal to the applicable portion of the aggregate Exercise Price for the
Warrant Shares or (iii) to deliver as payment such number of Warrants which, if
exercised, would result in a number of shares of Common Stock having an aggregate
Fair Market Value equal to the aggregate Exercise Price for the Warrant Shares.
Upon such delivery and election, the Holder shall be deemed to be the holder of
record of the relevant Warrant Shares, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such Warrant
Shares shall not then be actually delivered to the Holder. Notwithstanding anything
to the contrary in this paragraph (b)(1), if the aggregate Fair Market Value of the
Common Stock applied or delivered pursuant to (i), (ii) or (iii) above exceeds the
aggregate Exercise Price, in no event shall the Holder be entitled to receive any
amounts from the Company.

     (2) The Company shall pay any and all documentary, stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of the Warrant Shares.

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     (3) If the Holder exercises this Warrant in part, this Warrant Certificate
shall be surrendered by the Holder to the Company and a new Warrant Certificate of
the same tenor and for the unexercised number of Warrant Shares shall be executed by
the Company. The Company shall register the new Warrant Certificate in the name of
the Holder or in such name or names of its transferee pursuant to paragraph (f)
hereof as may be directed in writing by the Holder and deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same.

     (4) Upon surrender of this Warrant Certificate in conformity with the foregoing
provisions, the Company shall transfer to the Holder of this Warrant Certificate appropriate
evidence of ownership of the shares of Common Stock or other securities or property
(including any money) to which the Holder is entitled, registered or otherwise placed in, or
payable to the order of, the name or names of the Holder or such transferee as may be
directed in writing by the Holder, and shall deliver such evidence of ownership and any
other securities or property (including any money) to the Person or Persons entitled to
receive the same, together with an amount in cash in lieu of any fraction of a share as
provided in paragraph (e) below.

     (c) RESTRICTIVE LEGEND. Certificates representing shares of Common Stock issued pursuant to
this Warrant shall bear a legend substantially in the form of the legend set forth on the first
page of this Warrant Certificate.

     (d) RESERVATION OF SHARES. The Company hereby agrees that at all times there shall be reserved
for issuance and delivery upon exercise of this Warrant such number of its authorized but unissued
shares of Common Stock or other securities of the Company from time to time issuable upon exercise
of this Warrant as will be sufficient to permit the exercise in full of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise, shall be validly issued, fully
paid and non-assessable, free and clear of all liens, security interests, charges and other
encumbrances or restrictions on sale and free and clear of all preemptive rights.

     (e) FRACTIONAL SHARES. No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant and in lieu of delivery of any such fractional share upon
any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the Current Market Price Per Share (as defined in paragraph (h)(6)) at the date of
such exercise.

     The Company further agrees that it will not change the par value of the Common Stock from par
value $0.0003 per share to any higher par value which exceeds the Exercise Price then in effect,
and will reduce the par value of the Common Stock upon any event described in paragraph (h) that
(i) provides for an increase in the number of shares of Common Stock subject to purchase upon
exercise of this Warrant, in inverse proportion to and effective at the same time as such number of
shares is increased, but only to the extent that such increase in the number of shares, together
with all other such increases after the date hereof, causes the aggregate Exercise Price of all
Warrants (without giving effect to any exercise thereof) to be greater than $28.82 or

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(ii) would, but for this provision, reduce the Exercise Price below the par value of the
Common Stock.

     (f) EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANT.

     (1) Each taker and holder of this Warrant Certificate by taking or holding the
same, consents and agrees that the registered holder hereof may be treated by the
Company and all other Persons dealing with this Warrant Certificate as the absolute
owner hereof for any purpose and as the person entitled to exercise the rights
represented hereby.

     (2) Upon surrender of this Warrant to the Company, together with the attached
Warrant Assignment Form duly executed, the Company shall, without charge, execute
and deliver a new Warrant in the name of the assignee or assignees named in such
instrument of assignment and, if the Holder’s entire interest is not being assigned,
in the name of the Holder and this Warrant shall promptly be canceled.

     (g) LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the Company of evidence satisfactory to it
(in the exercise of its reasonable discretion) of the loss, theft, destruction or mutilation of
this Warrant Certificate, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this Warrant Certificate, if
mutilated, the Company shall execute and deliver a new Warrant Certificate of like tenor and date.

     (h) ANTI-DILUTION PROVISIONS. The Exercise Price of this Warrant and the number of shares of
Common Stock for which this Warrant may be exercised shall be subject to adjustment from time to
time upon the occurrence of certain events as provided in this paragraph (h); provided that,
notwithstanding anything to the contrary contained herein, the Exercise Price shall not be less
than the par value of the Common Stock, as such par value may be reduced from time to time in
accordance with paragraph (e).

     (1) In case the Company shall at any time after the date hereof (i) declare a
dividend or make a distribution on Common Stock payable in Common Stock, (ii)
subdivide or split the outstanding Common Stock, (iii) combine or reclassify the
outstanding Common Stock into a smaller number of shares, or (iv) issue any shares
of its capital stock in a reclassification of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the Company
is the continuing corporation), the Exercise Price in effect at the time of the
record date for such dividend or distribution or of the effective date of such
subdivision, split, combination or reclassification shall be proportionately
adjusted so that, giving effect to paragraph (h)(9), the exercise of this Warrant
after such time shall entitle the holder to receive the aggregate number of shares
of Common Stock or other securities of the Company (or shares of any security into
which such shares of Common Stock have been reclassified pursuant to clause (iii) or
(iv) above) which, if this Warrant had been exercised immediately

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prior to such time, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, distribution, subdivision, split,
combination or reclassification. Such adjustment shall be made successively whenever
any event listed above shall occur.

     (2) In case the Company shall issue or sell any Common Stock (other than (I)
Common Stock issued upon exercise of the Warrants, or (II) Common Stock issued upon
exercise or conversion of any security the issuance of which caused an adjustment
under paragraphs (h)(3) or (h)(4) hereof), the Exercise Price to be in effect after
such issuance or sale shall be determined by multiplying the Exercise Price in
effect immediately prior to such issuance or sale by a fraction, the numerator of
which shall be the sum of (x) the number of shares of Common Stock outstanding
immediately prior to the time of such issuance or sale multiplied by the Current
Market Price Per Share immediately prior to such issuance or sale and (y) the
aggregate consideration, if any, to be received by the Company upon such issuance or
sale, and the denominator of which shall be the product of the aggregate number of shares of Common Stock outstanding immediately after such issuance or sale and the
Current Market Price Per Share immediately prior to such issuance or sale but in no
event will such fraction exceed 1. In case any portion of the consideration to be
received by the Company shall be in a form other than cash, the fair market value of
such noncash consideration shall be utilized in the foregoing computation. Such
fair market value shall be determined by the Board of Directors of the Company;
provided, that if the Principal Holders shall object to any such determination, the
Board of Directors shall retain an independent appraiser reasonably satisfactory to
the Principal Holders to determine such fair market value. The Holder shall be
notified promptly of any consideration other than cash to be received by the Company
and furnished with a description of the consideration and the fair market value
thereof, as determined by the Board of Directors.

     (3) In case the Company shall fix a record date for the issuance of rights,
options or warrants to the holders of its Common Stock or other securities entitling
such holders to subscribe for or purchase for a period expiring within 60 days of
such record date shares of Common Stock (or securities convertible into shares of
Common Stock) at a price per share of Common Stock (or having a conversion price per
share of Common Stock, if a security convertible into shares of Common Stock) less
than the Current Market Price Per Share on such record date, the maximum number of shares of Common Stock issuable upon exercise of such rights, options or warrants
(or conversion of such convertible securities) shall be deemed to have been issued
and outstanding as of such record date and the Exercise Price shall be adjusted
pursuant to paragraph (h)(2) hereof, as though such maximum number of shares of
Common Stock had been so issued for an aggregate consideration payable by the
holders of such rights, options, warrants or convertible securities prior to their
receipt of such shares of Common Stock. In case any portion of such consideration
shall be in a form other than cash, the fair market value of such noncash
consideration shall be determined as set forth in

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paragraph (h)(2) hereof. Such adjustment shall be made successively whenever such
record date is fixed; and in the event that such rights, options or warrants are not
so issued or expire unexercised, or in the event of a change in the number of shares
of Common Stock to which the holders of such rights, options or warrants are
entitled (other than pursuant to adjustment provisions therein which are no more
favorable in their entirety than those contained in this paragraph (h)), the
Exercise Price shall again be adjusted to be the Exercise Price which would then be
in effect if such record date had not been fixed, in the former event, or the
Exercise Price which would then be in effect if such holder had initially been
entitled to such changed number of shares of Common Stock, in the latter event.

     (4) In case the Company shall, after the date hereof, sell or issue rights,
options or warrants entitling the holders thereof to subscribe for or purchase
Common Stock (or securities convertible into shares of Common Stock) or shall issue
convertible securities, and the price per share of Common Stock of such rights,
options, warrants or convertible securities (including, in the case of rights,
options or warrants, the price at which they may be exercised) is less than the
Current Market Price Per Share, the maximum number of shares of Common Stock
issuable upon exercise of such rights, options or warrants or upon conversion of
such convertible securities shall be deemed to have been issued and outstanding as
of the date of such sale or issuance, and the Exercise Price shall be adjusted
pursuant to paragraph (h)(2) hereof as though such maximum number of shares of
Common Stock had been so issued for an aggregate consideration equal to the sum of
the aggregate consideration paid for such rights, options, warrants or convertible
securities and the aggregate consideration payable by the holders of such rights,
options, warrants or convertible securities upon the exercise or conversion thereof
prior to their receipt of such shares of Common Stock. In case any portion of such
consideration shall be in a form other than cash, the fair market value of such
noncash consideration shall be determined as set forth in paragraph (h)(2) hereof.
Such adjustment shall be made successively whenever such rights, options, warrants
or convertible securities are issued; and in the event that such rights, options or
warrants terminate or expire unexercised, or in the event of a change in the number
of shares of Common Stock to which the holders of such rights, options, warrants or
convertible securities are entitled (other than pursuant to adjustment provisions
therein which are no more favorable in their entirety than those contained in this
paragraph (h)), the Exercise Price shall again be adjusted to be the Exercise Price
which would then be in effect if such rights, options, warrants or convertible
securities had not been issued, in the former event, or the Exercise Price which
would then be in effect if such holders had initially been entitled to such changed
number of shares of Common Stock, in the latter event. No adjustment of the Exercise
Price shall be made pursuant to this paragraph (h)(4) to the extent that the
Exercise Price shall have been adjusted pursuant to paragraph (h)(3) upon the
setting of any record date relating to such rights, options, warrants or convertible
securities and such adjustment fully reflects the number of shares of Common Stock
to which the holders of such

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rights, options, warrants or convertible securities are entitled and the price
payable therefor.

     (5) In case the Company shall fix a record date for the making of a
distribution to holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash, assets or other property (other
than (I) dividends payable in Common Stock, (II) ordinary cash dividends accruing on
the Common Stock pursuant to the terms thereof, as such terms exist as of December
10, 1999 or (III) rights, options or warrants referred to in, and for which an
adjustment is made pursuant to, paragraph (h)(3)), the Exercise Price to be in
effect after such record date shall be determined by multiplying the Exercise Price
in effect immediately prior to such record date by a fraction, the numerator of
which shall be the Current Market Price Per Share on such record date, less the fair
market value (determined as set forth in paragraph (h)(2) hereof) of the portion of
the assets, cash, other property or evidence of indebtedness so to be distributed
which is applicable to one share of Common Stock, and the denominator of which shall
be such Current Market Price Per Share. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is not
so made, the Exercise Price shall again be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.

     (6) For the purpose of any computation under paragraph (e) or paragraph
(h)(2), (3), (4) or (5) hereof, on any determination date, the Current Market Price
Per Share shall be deemed to be the average (weighted by daily trading volume) of
the Daily Prices (as defined below) per share of the Common Stock for the 20
consecutive trading days ending three days prior to such date. “Daily Price” means
(1) if the shares of Common Stock then are listed and traded on the New York Stock
Exchange, Inc. (“NYSE”), the closing price on such day as reported on the NYSE
Composite Transactions Tape; (2) if the shares of Common Stock are not then listed
and traded on the NYSE, the closing price on such day as reported by the principal
national securities exchange on which the shares are listed and traded; (3) if the shares of Common Stock are not then listed and traded on any such securities
exchange, the last reported sale price on such day on the Global Market of the
National Association of Securities Dealers, Inc. Automated Quotation System
(“NASDAQ”); (4) if the shares of Common Stock are not then listed and traded on any
such securities exchange and not traded on the NASDAQ Global Market, the average of
the highest reported bid and lowest reported asked price on such day as reported by
NASDAQ; or (5) if such shares are not listed and traded on any such securities
exchange, not traded on the NASDAQ Global Market and bid and asked prices are not
reported by NASDAQ, then the average of the closing bid and asked prices, as
reported by The Wall Street Journal for the over-the-counter market. If on any
determination date the shares of Common Stock are not quoted by any such
organization, the Current Market Price Per Share shall be the fair market value of
such shares on such determination date as

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determined by the Board of Directors, without regard to considerations of the lack
of liquidity, applicable regulatory restrictions or any of the transfer restrictions
or other obligations imposed on such shares. If the Principal Holders shall object
to any determination by the Board of Directors of the Current Market Price Per
Share, the Current Market Price Per Share shall be the fair market value per share
of the applicable class of Common Stock as determined by an independent appraiser
retained by the Company and reasonably acceptable to the Principal Holders, the fees
and expenses of such independent appraiser to be paid (i) by the Company if the
Current Market Price Per Share as determined by such appraiser is less than the
Current Market Price Per Share as determined by the Board of Directors of the
Company and (ii) by the Holders otherwise. For purposes of any computation under
this paragraph (h), the number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the Company.

     (7) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least one percent in such
price; provided that any adjustments which by reason of this paragraph (h)(7) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this paragraph (h) shall be made to
the nearest one tenth of a cent or to the nearest hundredth of a share, as the case
may be.

     (8) In the event that, at any time as a result of the provisions of this
paragraph (h), the holder of this Warrant upon subsequent exercise shall become
entitled to receive any shares of capital stock or other securities of the Company
other than Common Stock, the number of such other shares so receivable upon exercise
of this Warrant shall thereafter be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions contained
herein.

     (9) Upon each adjustment of the Exercise Price as a result of the calculations
made in paragraphs (h)(1), (2), (3), (4) or (5) hereof, this Warrant shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of shares of Common Stock obtained by (i) multiplying the number of shares
covered by this Warrant immediately prior to such adjustment of the number of shares
by the Exercise Price in effect immediately prior to such adjustment of the Exercise
Price and (ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.

     (10) Not less than 10 nor more than 30 days prior to the record date or
effective date, as the case may be, of any action which requires a calculation or an
adjustment or readjustment pursuant to this paragraph (h), the Company shall
forthwith file in the custody of the Secretary or an Assistant Secretary at its
principal executive office and with its stock transfer agent or its warrant agent,
if any, an officers’ certificate showing the adjusted Exercise Price determined as

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herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers’
certificate shall be signed by the chairman, president or chief financial officer of
the Company. Each such officers’ certificate shall be made available at all
reasonable times for inspection by the Holder or any holder of a Warrant executed
and delivered pursuant to paragraph (f) and the Company shall, forthwith after each
such adjustment, mail a copy, by first-class mail, of such certificate to the
Holder.

     (11) The Holder shall, at its option, be entitled to receive, in lieu of the
adjustment pursuant to paragraph (h)(5) otherwise required thereof, on the date of
exercise of the Warrants, the evidences of indebtedness, other securities, cash,
property or other assets which such Holder would have been entitled to receive if it
had exercised its Warrants for shares of Common Stock immediately prior to the
record date with respect to such distribution. The Holder may exercise its option
under this paragraph (h)(12) by delivering to the Company a written notice of such
exercise within seven days of its receipt of the certificate of adjustment required
pursuant to paragraph (h)(11) to be delivered by the Company in connection with such
distribution.

     (i) CONSOLIDATION, MERGER, OR SALE OF ASSETS. In case of any consolidation of the Company
with, or merger of the Company into, any other Person, any merger of another Person into the
Company (other than a merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock or Common Stock) or any sale or transfer of all
or substantially all of the assets of the Company or of the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be, the Holder shall have
the right thereafter to exercise this Warrant for the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by a holder of the number of
shares of Common Stock for which this Warrant may have been exercised immediately prior to such
consolidation, merger, sale or transfer, assuming (i) such holder of Common Stock is not a Person
with which the Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be (“constituent Person”), or
an Affiliate of a constituent Person and (ii) in the case of a consolidation, merger, sale or
transfer which includes an election as to the consideration to be received by the holders, such
holder of Common Stock failed to exercise its rights of election, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share of Common Stock held
immediately prior to such consolidation, merger, sale or transfer by other than a constituent
Person or an Affiliate thereof and in respect of which such rights of election shall not have been
exercised (“non-electing share”), then for the purpose of this paragraph (i) the kind and amount of
securities, cash and other property receivable upon such consolidation, merger, sale or transfer by
each non-electing share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Adjustments for events subsequent to the effective date of
such a consolidation, merger and sale of assets shall be as nearly equivalent as may be

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practicable to the adjustments provided for in this Warrant. In any such event, effective
provisions shall be made in the certificate or articles of incorporation of the resulting or
surviving corporation, in any contract of sale, conveyance, lease or transfer, or otherwise so that
the provisions set forth herein for the protection of the rights of the Holder shall thereafter
continue to be applicable; and any such resulting or surviving corporation shall expressly assume
the obligation to deliver, upon exercise, such shares of stock, other securities, cash and
property. The provisions of this paragraph (i) shall similarly apply to successive consolidations,
mergers, sales, leases or transfers.

     (j) Redemptions. If all or a portion of the shares of Common Stock are redeemed pursuant to
the terms of the Common Stock then (i) the Holder of this Warrant shall be paid the amount such
Holder would have received (assuming a redemption pro rata from all holders of Common Stock) had
this Warrant been exercised immediately prior to the redemption and (ii) the number of Warrant
Shares for which this Warrant is exercisable shall be decreased by the number of shares of Common
Stock issuable upon exercise of this Warrant which would have been redeemed in such redemption
(assuming a redemption pro rata from all holders of Common Stock) had this Warrant been exercised
immediately prior to the redemption).

     (k) NOTICES. Any notice, demand or delivery authorized by this Warrant Certificate shall be in
writing and shall be given to the Holder or the Company as the case may be, at its address (or
telecopier number) set forth below, or such other address (or telecopier number) as shall have been
furnished to the party giving or making such notice, demand or delivery:

	 	 	 
	If to the Company:

	 	Haights Cross Communications, Inc.
	 

	 	10 New King Street, Suite 110
	 

	 	White Plains, New York 10604
	 

	 	Attention: Paul J. Crecca, Chief Executive Officer and President
	 

	 	Telephone: (914) 289-9400
	 

	 	Facsimile: (914) 289-9401
	 
	 	 
	With a copy to:

	 	Brown Rudnick Berlack Israels LLP
	 

	 	One Financial Center
	 

	 	Boston, Massachusetts 02111
	 

	 	Attention: Philip J. Flink, Esq.
	 

	 	Telephone: (617) 856-8200
	 

	 	Facsimile: (617) 856-8201
	 
	 	 
	If to the Holder:

	 	[NAME and ADDRESS]

     Each such notice, demand or delivery shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified herein and the intended recipient confirms
the receipt of such telecopy or (ii) if given by any other means, when received at the address
specified herein.

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     (l) RIGHTS OF THE HOLDER. Prior to the exercise of any Warrant, the Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder of the Company, including, without
limitation, the right to vote, to receive dividends or other distributions or to receive any notice
of meetings of shareholders or any notice of any proceedings of the Company except as may be
specifically provided for herein.

     (m) GOVERNING LAW. THIS WARRANT CERTIFICATE AND ALL RIGHTS ARISING HEREUNDER SHALL BE
CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND THE
PERFORMANCE THEREOF SHALL BE GOVERNED AND ENFORCED IN ACCORDANCE WITH SUCH LAWS.

     (n) AMENDMENTS; WAIVERS. Any provision of this Warrant Certificate may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by
the Holder and the Company, or in the case of a waiver, by the party against whom the waiver is to
be effective. No failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

12

 

     IN WITNESS WHEREOF, the Company has duly caused this Warrant Certificate to be signed by its
duly authorized officer and to be dated as of [DATE].

	 	 	 	 	 
	 	HAIGHTS CROSS COMMUNICATIONS,
INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	Acknowledged and Agreed:	 	 
	 
	 	 	 	 
	[HOLDER]	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

13

 

WARRANT EXERCISE NOTICE

(To be delivered prior to exercise of the Warrant by execution of
the Warrant Exercise Subscription Form)

To: Haights Cross Communications, Inc.

     The undersigned hereby notifies you of its intention to exercise the Warrant to purchase
shares of Common Stock, par value $0.0003 per share, of Haights Cross Communications, Inc.

     The undersigned intends to exercise the Warrant to purchase                     shares of Common Stock
(the “Shares”) and wishes, in lieu of paying the
Exercise Price of $       per share currently in
effect pursuant to the Warrant, to receive that number of shares reduced by a number of shares of
Common Stock having an aggregate Fair Market Value (as defined in the Warrant) equal to the
aggregate Exercise Price for the Shares.

- OR-

     The undersigned intends to exercise the Warrant to purchase                     shares of Common Stock
(the “Shares”) at the Exercise Price of
$      per share currently in effect pursuant to the
Warrant, and intends to deliver as payment that number of shares of Common Stock having an
aggregate Fair Market Value (as defined in the Warrant) equal to the aggregate Exercise Price for
the Shares.

- OR-

     The undersigned intends to exercise the Warrant to purchase                     shares of Common Stock
(the “Shares”) at the Exercise Price of $      per share currently in effect pursuant to the
Warrant, and intends to deliver as payment that number of Warrants which, if exercised, would
result in a number of shares of Common Stock having an aggregate Fair Market Value (as defined in
the Warrant) equal to the aggregate Exercise Price for the Shares.

	 	 	 	 	 	 	 
	 

	 	Date:                           ,
	 	___.
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(Signature of Owner)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(Street Address)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(City) (State) (Zip Code)	 	 

14

 

WARRANT EXERCISE SUBSCRIPTION FORM

To: Haights Cross Communications, Inc.

     The
undersigned irrevocably exercises the Warrant for the purchase of                      shares of
Common Stock (the “Shares”), par value $0.0003 per share, of Haights Cross Communications, Inc.
(the “Company”) at
$      per Share (the Exercise Price currently in effect pursuant to the
Warrant) (provided that in lieu of payment of $                    , the undersigned will receive a number of
Shares reduced by a number of shares of Common Stock having an aggregate Fair Market Value (as
defined in the Warrant) equal to the aggregate Exercise Price for the Shares), all on the terms and
conditions specified in the Warrant Certificate, surrenders this Warrant Certificate and all right,
title and interest therein to the Company and directs that the Shares deliverable upon the exercise
of this Warrant be registered or placed in the name and at the address specified below and
delivered thereto.

- OR-

     The undersigned irrevocably exercises the Warrant for the purchase of                     shares of Common
Stock (the “Shares”), par value $0.0003 per share, of Haights Cross Communications, Inc. (the
“Company ”) at $      per share (the Exercise Price currently in effect pursuant to the Warrant)
(such payment being made by delivering that number of shares of Common Stock having an aggregate
Fair Market Value (as defined in the Warrant) equal to the aggregate Exercise Price for the
Shares), all on the terms and conditions specified in the Warrant Certificate, surrenders this
Warrant Certificate and all right, title and interest therein to the Company and directs that the
Shares deliverable upon the exercise of this Warrant be registered or placed in the name and at the
address specified below and delivered thereto.

- OR-

     The undersigned irrevocably exercises the Warrant for the purchase of                     shares of Common
Stock (the “Shares”), par value $0.0003 per share, of Haights Cross Communications, Inc. (the
“Company ”) at $      per share (the Exercise Price currently in effect pursuant to the Warrant)
(such payment being made by delivering that number of Warrants which, if exercised, would result in
a number of shares of Common Stock having an aggregate Fair Market Value (as defined in the
Warrant) equal to the aggregate Exercise Price for the Shares), all on the terms and conditions
specified in the Warrant Certificate, surrenders this Warrant Certificate and all right, title and
interest therein to the Company and directs that the Shares deliverable upon the exercise of this
Warrant be registered or placed in the name and at the address specified below and delivered
thereto.

	 	 	 	 	 	 	 
	 

	 	Date:                           ,
	 	___.
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(Signature of Owner)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(Street Address)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(City) (State) (Zip Code)	 	 

15

 

Securities and/or check to be issued to:

Please insert social security or identifying number:

Name:

Street Address:

City, State and Zip Code:

Any unexercised portion of the Warrant evidenced by the
within Warrant Certificate to be issued to:

Please insert social security or identifying number:

Name:

Street Address:

City, State and Zip Code:

16

 

WARRANT ASSIGNMENT FORM

Dated

FOR VALUE RECEIVED,

hereby sells, assigns and transfers unto,

               
            
              
               
              
          
               
      (the “Assignee”),

(please type or print in block letters)

(insert address)

its right to purchase shares of Common Stock represented by this Warrant and does hereby
irrevocably constitute and appoint
                                                             Attorney, to transfer the same on
the books of the Company, with full power of substitution in the premises.

Signature

17EX-10.6

 

Exhibit 10.6

CONTINUING AND UNCONDITIONAL GUARANTY

To: BOS (USA) Inc.

     1. The Guaranty. For valuable consideration, FRANKLIN CREDIT MANAGEMENT CORPORATION,
a Delaware corporation (“Guarantor”) hereby unconditionally guarantees the prompt and
complete payment and performance of all Obligations (as hereinafter defined) of Tribeca Lending
Corp, a New York corporation (“Borrower”) and each Company Subsidiary (as defined in the
Loan Agreement hereinafter referred to; the Borrower and the Company Subsidiaries, collectively,
the “Obligors”) to BOS (USA) Inc., its subsidiaries and affiliates (collectively,
“Lender”), or order, in lawful money of the United States. The liability of Guarantor
under this Guaranty is not limited as to the principal amount of the Obligations guaranteed and
includes, without limitation, liability for all interest, fees, indemnities (including, without
limitation, hazardous waste indemnities), and other reasonable costs and expenses relating to or
arising out of the Obligations. This Guaranty is cumulative and does not supersede any other
outstanding guaranties, and the liability of Guarantor under this Guaranty is exclusive of
Guarantor’s liability under any other guaranties signed by Guarantor.

     2. Definitions. (a) Unless the context indicates otherwise, the following terms used
herein have the following meanings (and shall include in the singular number the plural and in the
plural number the singular): 

          “Loan Agreement” shall mean the Master Credit and Security Agreement dated as of March
24, 2006, among Borrower, the Company Subsidiaries and Lender, as now in effect and as hereafter
amended, restated, renewed, or superseded.

          “Obligations” shall mean any and all debts, liabilities, and obligations of each
Obligor to Lender under the Loan Agreement and the other Loan Documents (as such term is defined in
the Loan Agreement), now or hereafter existing, whether voluntary or involuntary and however
arising, whether direct or indirect or acquired by Lender by assignment, succession, or otherwise,
whether due or not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, held or to be held by Lender for its own account or as agent for another or others,
whether such Obligor may be liable individually or jointly with others, whether recovery upon such
debts, liabilities and obligations may be or hereafter become unenforceable for any reason.
Obligations includes, without limitation, any and all obligations of any Obligor to Lender for
reasonable attorneys’ fees and all other reasonable costs and expenses incurred by Lender in the
collection or enforcement of any debts, liabilities, and obligations of any Obligor to Lender under
the Loan Documents. Unless the context indicates otherwise, capitalized terms used herein and not
otherwise defined shall have the meanings provided for such terms (directly or by cross-reference)
in the Loan Agreement.

     3. Obligations Independent. The obligations hereunder are independent of the
obligations of each Obligor or any other guarantor, and a separate action or actions may be brought
and prosecuted against Guarantor whether action is brought against any Obligor or any other
guarantor or whether any Obligor or any other guarantor be joined in any such action or actions.
Anyone executing this Guaranty shall be bound by its terms without regard to execution by anyone
else.

 

 

     4. Rights of Lender. (i) Guarantor acknowledges that Lender, without notice or demand
and without affecting its liability hereunder, may from time to time to:

          (a) Intentionally omitted;

          (b) receive and hold security for the payment of this Guaranty or any Obligations and
exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such
security;

          (c) apply such security and direct the order or manner of sale thereof as Lender in its
discretion may determine;

          (d) release or substitute any Guarantor or any one or more of any endorsers or other
guarantors of any of the Obligations; and

          (e) permit the Obligations to exceed Guarantor’s liability under this Guaranty, and Guarantor
agrees that any amounts received by Lender from any source other than Guarantor shall be deemed to
be applied first to any portion of the Obligations not guaranteed by Guarantor.

     (ii) This Guaranty to Lender is a continuing guaranty which applies to any renewal,
compromise, extension, acceleration, or otherwise that may change the time for payment, or
otherwise change the terms of the Obligations or any part thereof, including increase or decrease
of the rate of interest thereon, or otherwise result in a change the terms of any Loan Documents;
provided however, that any renewal, compromise, extension, acceleration, or change is by agreement
of the parties to the applicable Loan Document, or pursuant to the terms and conditions
thereof.

Lender acknowledges that nothing in this Guaranty grants Lender the right to unilaterally amend any
of the terms of the Loan Agreement or any other Loan Document.

     5. Guaranty to be Absolute. Guarantor agrees that until the Obligations have been
paid in full and any commitments of Lender or facilities provided by Lender with respect to the
Obligations have been terminated, Guarantor shall not be released by or because of the taking, or
failure to take, any action that might in any manner or to any extent vary the risks of Guarantor
under this Guaranty or that, but for this paragraph, might discharge or otherwise reduce, limit, or
modify Guarantor’s obligations under this Guaranty. Guarantor waives and surrenders any defense to
any liability under this Guaranty based upon any such action, including but not limited to any
action of Lender described in the immediately preceding paragraph of this Guaranty. It is the
express intent of Guarantor that Guarantor’s obligations under this Guaranty are and shall be
absolute and unconditional.

     6. Guarantor’s Waivers of Certain Rights and Certain Defenses. Guarantor waives:

          (a) any right to require Lender to proceed against any Obligor, proceed against or exhaust any
security for the Obligations, or pursue any other remedy in Lender’s power whatsoever;

-2-

 

          (b) any defense arising by reason of any disability or other defense of any Obligor, or the
cessation from any cause whatsoever of the liability of any Obligor; and

          (c) any defense based on any claim that Guarantor’s obligations exceed or are more burdensome
than those of any Obligor.

     No provision or waiver in this Guaranty shall be construed as limiting the generality of any
other waiver contained in this Guaranty.

     7. Waiver of Subrogation. Until the Obligations have been paid in full and any
commitments of Lender or facilities provided by Lender with respect to the Obligations have been
terminated, even though the Obligations may be in excess of Guarantor’s liability hereunder,
Guarantor waives to the extent permitted by applicable law any right of subrogation, reimbursement,
indemnification, and contribution (contractual, statutory, or otherwise) including, without
limitation, any claim or right of subrogation under the Bankruptcy Code (Title 11, United States
Code) or any successor statute, arising from the existence or performance of this Guaranty, and
Guarantor waives to the extent permitted by applicable law any right to enforce any remedy that
Lender now has or may hereafter have against any Obligor, and waives any benefit of, and any right
to participate in, any security now or hereafter held by Lender.

     8. Waiver of Notices. Guarantor waives all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor, notices of intent to
accelerate, notices of acceleration, notices of any suit or any other action against any Obligor or
any other person, any other notices to any party liable on any Loan Document (including Guarantor),
notices of acceptance of this Guaranty, notices of the existence, creation, or incurring of new or
additional Obligations to which this Guaranty applies or any other Obligations of any Obligor to
Lender, and notices of any fact that might increase Guarantor’s risk.

     9. [Intentionally deleted]

     10. [Intentionally deleted].

     11. Reinstatement of Guaranty. If this Guaranty is terminated for any reason, and
subsequently any payment or transfer of any interest in property by any Obligor to Lender is
rescinded or must be returned by Lender to any Obligor, this Guaranty shall be reinstated with
respect to any such payment or transfer, regardless of any such prior revocation, return, or
cancellation.

     12. Stay of Acceleration. In the event that acceleration of the time for payment of
any of the Obligations is stayed upon the insolvency, bankruptcy, or reorganization of any Obligor
or otherwise, all such Obligations guaranteed by Guarantor shall nonetheless be payable by
Guarantor immediately if requested by Lender.

     13. No Setoff or Deductions; Taxes. Guarantor represents and warrants that it is
organized and resident in the United States of America. All payments by Guarantor hereunder shall
be paid in full, without setoff or counterclaim or any deduction or withholding whatsoever,
including, without limitation, for any and all present and future taxes.

-3-

 

     14. Information Relating to Obligors. Guarantor acknowledges and agrees that it shall
have the sole responsibility for, and has adequate means of, obtaining from each Obligor such
information concerning such Obligor’s financial condition or business operations as Guarantor may
require, and that Lender has no duty, and Guarantor is not relying on Lender, at any time to
disclose to Guarantor any information relating to the business operations or financial condition of
any Obligor.

     15. Obligors’ Authorization. Where any Obligor is a corporation, partnership, or
limited liability company, it is not necessary for Lender to inquire into the powers of such
Obligor or of the officers, directors, partners, members, managers, or agents acting or purporting
to act on its behalf, and any Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder, subject to any limitations on Guarantor’s liability
set forth herein.

     16. Representations and Warranties. Guarantor represents and warrants that:

          (a) Guarantor is a corporation duly incorporated and validly existing under the laws of the
jurisdiction of its incorporation.

          (b) The execution, delivery and performance of this Guaranty will not contravene any law, rule
or regulation, or any judgment or order, applicable to Guarantor, or conflict or be inconsistent
with or result in any breach of any contract, agreement or instrument to which Guarantor or any of
its properties or assets is subject, or result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of Guarantor, or violate any
provision of the corporate charter or by-laws of Guarantor.

          (c) The execution, delivery and performance of this Guaranty is within the corporate powers of
Guarantor and has been duly authorized by all necessary corporate action.

          (d) This Guaranty constitutes a valid and binding obligation of Guarantor enforceable against
Guarantor in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and except as enforceability may be subject to general principles of
equity, whether such principles are applied in a court of equity or at law.

          (e) No order, permission, consent, approval, license, authorization, registration or
validation of, or filing with, or exemption by, any governmental authority is required to
authorize, or is required in connection with, the execution, delivery and performance of this
Guaranty, or the taking of any action contemplated hereby or thereby.

     17. Setoff. Upon the occurrence and during the continuance of any Event of Default,
Lender may, at its option and without notice or demand to the extent not prohibited by law, set off
against any or all liabilities of Guarantor all money owed by Lender or any of its agents or
affiliates in any capacity to Guarantor, whether or not due, and also set off against all other
liabilities of Guarantor to Lender all money owed by Lender in any capacity to Guarantor. If
exercised by Lender, Lender shall be deemed to have exercised such right of setoff and to have

-4-

 

made a charge against any such money immediately upon the occurrence of such default although
made or entered on the books subsequent thereto.

     18. Notices. All notices required under this Guaranty shall be personally delivered
or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the
signature page of this Guaranty, or to such other addresses as Lender and Guarantor may specify
from time to time in writing. Notices sent by (a) first class mail shall be deemed delivered on
the earlier of actual receipt or on the fourth business day after deposit in the U.S. mail, postage
prepaid, and (b) overnight courier shall be deemed delivered on the next business day.

     19. Successors and Assigns. This Guaranty (a) binds Guarantor and Guarantor’s
executors, administrators, successors, and assigns, provided that Guarantor may not assign its
rights or obligations under this Guaranty without the prior written consent of Lender, and (b)
inures to the benefit of Lender and Lender’s indorsees, successors, and assigns. Subject to
compliance with the terms of Section 11.5 and 11.9 of the Loan Agreement, Lender may, without
notice to Guarantor and without affecting Guarantor’s obligations hereunder, sell, assign, grant
participations in, or otherwise transfer to any other person, firm, or corporation the Obligations
and this Guaranty, in whole or in part. Guarantor agrees that Lender may disclose to any assignee
or purchaser, or any prospective assignee or purchaser (subject in each case to compliance with the
terms of Section 11.15 of the Loan Agreement), of all or part of the Obligations any and all
information in Lender’s possession concerning Guarantor, this Guaranty, and any security for this
Guaranty.

     20. Amendments, Waivers, and Severability. No provision of this Guaranty may be
amended or waived except in writing. No failure by Lender to exercise, and no delay in exercising,
any of its rights, remedies, or powers shall operate as a waiver thereof, and no single or partial
exercise of any such right, remedy, or power shall preclude any other or further exercise thereof
or the exercise of any other right, remedy, or power. The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of any other provision
of this Guaranty.

     21. Costs and Expenses. Guarantor agrees to pay all reasonable attorneys’ fees, and
all other costs and expenses that may be incurred by Lender (a) in the enforcement of this Guaranty
or (b) in the preservation, protection, or enforcement of any rights of Lender in any case
commenced by or against Guarantor or any Obligor under the Bankruptcy Code (Title 11, United States
Code) or any similar or successor statute.

     22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE THAT WOULD
RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

     23. Jurisdiction. GUARANTOR HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST
GUARANTOR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR DOCUMENTS CONTEMPLATED HEREBY
OR REFERRED TO HEREIN MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK
CITY OR OF THE UNITED STATES OF AMERICA

-5-

 

FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
GUARANTOR ACCEPTS AND CONSENTS FOR ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, and further consents (to the extent
permitted by applicable law) to the service of process in any such action or proceeding being made
upon Guarantor by mail at the address stated alongside its name on the signature page hereof or at
such other address as Lender is notified of in accordance with Section 18 hereof. Guarantor
agrees that Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York
shall apply to this Agreement. Guarantor waives any right to stay or to dismiss any action or
proceeding brought before any of said courts on the basis of forum non conveniens. Nothing
herein shall limit the right of Lender to bring proceedings against Guarantor in the courts of any
other jurisdiction.

     24. WAIVER OF JURY TRIAL. EACH OF LENDER AND GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER
AGREEMENT OR DOCUMENT RELATED HERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF LENDER, GUARANTOR, THE BORROWER OR ANY AFFILIATE OF ANY
THEREOF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE LOAN AGREEMENT AND
THE OTHER LOAN DOCUMENTS.

     25. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:
(A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE SUBJECT MATTER
HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF
TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM
SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C)
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE
CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
UNDERSTANDINGS OF THE PARTIES.

-6-

 

     The parties executed this agreement as of August ___, 2007, intending to create an instrument
executed under seal.

	 	 	 	 	 	 	 	 	 
	Attested to:	 	 	 	FRANKLIN CREDIT MANAGEMENT CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	BY:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	Address for notices to Lender: 

c/o Bank of Scotland

565 Fifth Avenue

New York, NY 10017 

Attn: Christine Renard, Senior Vice President	 	 	 	Address for notices:

101 Hudson Street, 25th Floor

Jersey City, NJ 07302

Attn: General Counsel	 	 

-7-

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