Document:

Exhibit 10.68

    

      EXHIBIT
        10.68

       

      SETTLEMENT
        AGREEMENT

       

      This
        Settlement Agreement (“Agreement”) is entered as of November
        21, 2006, between STRATUS
        SERVICES GROUP, INC. (“Stratus”) and STATE COMPENSATION INSURANCE FUND (“State
        Fund”) with reference to the following:

      

      A. State
        Fund has asserted claims against Stratus in an action entitled State
        Compensation Insurance Fund v. Stratus Services Group, Inc.,
        Case
        No. CV06-3025 CAS (SHx), now pending in the United States District Court
        for the
        Central District of California (the "Action"). 

       

      B. To
        avoid
        the cost and uncertainty of litigation, and without the admission of any
        claim,
        fact or defense, the parties desire to settle the Action and all actual and
        potential claims between them on the terms described below.

       

      Now,
        therefore, in consideration of the foregoing and the promises and covenants
        herein, the parties agree as follows:

       

      (c)  Nature
        of Agreement.
        This
        Agreement is a full settlement of all claims asserted in the Action or which
        could have been asserted in the Action or which arise directly or indirectly
        from any act, contract, breach or omission by Stratus any time prior to the
        date
        of this Agreement. This Agreement is not an admission of any liability, fact,
        claim or defense by any party.

       

      (d)  Settlement
        Payment to State Fund.
        

       

      (a) Stratus
        shall pay State Fund the sum of $300,000.00 in monthly installments as follows:
        $4500.00 per month for twenty-four consecutive months commencing in January
        2007, and $6000.00 per month for the following thirty-two consecutive months.
        

       

      (b) Each
        installment payment shall be sent by first class mail directly to State
        Compensation Insurance Fund, Credit & Collections Department, Attention Paul
        Nannini, P.O. Box 42087, San Francisco, CA 94142. 

       

      (c) Each
        installment payment shall be due on the first day of each calendar month
        (“Due
        Date”), beginning January 1, 2007. If any installment payment is not received
        by
        State Fund on or before the fifth (5th) calendar day after the Due Date,
        such
        payment will be considered in default. State Fund shall send written notice
        of
        default, via facsimile, to Stratus at the following number: 732-907-1888
        or such
        other facsimile number as Stratus shall designate. Upon notification, Stratus
        shall have seven (7) calendar days to cure such default. If default is not
        cured
        by Stratus within said seven (7) day time period, State Fund may, at its
        sole
        discretion, enter judgment against Stratus in the sum of $2,023,419.15 minus
        those payments made to State Fund between January 1, 2007 and the date of
        default. Not exercising this option in the event of a default by Stratus
        will
        not be a waiver by State Fund of its right to do so should a future default
        by
        Stratus take place.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (d) Stratus
        will sign a Stipulation for Entry of Judgment consistent with the provisions
        in
        this section, which Stipulation will be held by State Fund and will not be
        filed
        unless there is a default under this section.

       

      (e)  New
        Insurance.
        In the
        event that Stratus should in the future apply for a policy of workers’
compensations and employer’s liability insurance with State Fund, issuance of
        such policy will be made contingent on the payment to State Fund of
        $2,023,419.15, less any and all sums previously paid to State Fund pursuant
        to
        this agreement. This condition precedent is in addition to all other conditions
        appurtenant to issuance of such insurance policy.

       

      (f)  Release
        of Claims.
        

       

      (a) Except
        for the obligations under this Agreement, and to the fullest extent possible
        under law, State Fund fully releases and discharges Stratus and each of its
        shareholders, officers, directors, employees, agents, successors, and assigns
        from any and all claims alleged or which could have been alleged in the Action
        and all other known and unknown existing or potential claims, rights,
        liabilities, torts, damages, injuries, penalties, attorneys' fees, and causes
        of
        action which arise directly or indirectly from any act, breach, promise,
        omission, event, insurance policy or agreement prior to the date of this
        Agreement. 

       

      (b) State
        Fund understands and agrees that the foregoing release extends, but is not
        limited to, to all rights or claims related directly or indirectly to workers’
compensation policy number 1686667 it issued to Stratus on or about May 20,
        2002.

       

      (c) State
        Fund waives all rights it may have under section 1542 of the California Civil
        Code, which reads as follows: “A general release does not extend to claims which
        the creditor does not know or suspect to exist in his or her favor at the
        time
        of executing the release, which if known by him or her must have materially
        affected his settlement with the debtor.” State Fund is aware that it may learn
        that the facts and circumstances surrounding the claims released hereby may
        be
        different from the facts and circumstances now known or believed by it to
        be
        true. It assumes the risk that it may discover facts and circumstances different
        from its current knowledge or belief, and agrees that in such event this
        Agreement nevertheless shall be in all respects effective and not subject
        to
        termination, rescission or modification for any reason. 

       

      (d) State
        Fund represents that it has not heretofore assigned or transferred to any
        person
        all or part of or any interest in any claim released hereby.

       

      (g)  Dismissal
        of the Action.
        State
        Fund and Stratus will file a stipulation for dismissal of the Action with
        prejudice in its entirety immediately after this Agreement is fully executed.
        

       

      (h)  Counterparts.
        This
        Agreement may be executed in counterparts and will be deemed fully executed
        when
        each party has signed and transmitted a counterpart to the other. All
        counterparts taken together shall constitute a single agreement. Signatures
        transmitted by fax shall be deemed fully effective as original
        signatures.

       

      (i)  Attorneys’
        Fees.
        Stratus
        and State Fund shall bear their own attorney's fees and costs incurred in
        connection with the Action and the claims released hereby. In any action
        

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      brought
        to enforce or interpret the terms of this Agreement, the prevailing party
        will
        be entitled to recover all costs incurred in such action, including reasonable
        attorneys’ fees, in addition to any other relief to which they may be otherwise
        entitled.

       

      (j)  Entire
        Agreement.
        This
        Agreement contains the entire agreement of the parties with respect to the
        subject matter hereof and any and all prior discussions, negotiations,
        commitments and understandings are merged herein. 

       

      (k)  Representations
        and Warranties.
        The
        parties represent and warrant to and agree with each other as
        follows:

       

      (a) Each
        party has received independent legal advice from attorneys of its choice
        with
        respect to the advisability of making this settlement and the release provided
        herein and with respect to the advisability of executing this
        Agreement.

       

      (b) Except
        as
        expressly stated in this Agreement, no party has made any statement or
        representation to any other party regarding any fact, which statement or
        representation is relied upon by any other party in entering into this
        Agreement. In connection with the execution of this Agreement or the making
        of
        the settlement provided for herein, no party to this Agreement has relied
        upon
        any statement, representation or promise of any other party not expressly
        contained herein.

       

      (l)  Waiver,
        Modification and Amendment.
        No
        provisions of this Agreement may be waived unless in a writing signed by
        all
        parties. Waiver of any one provision will not be deemed a waiver of any other
        provision. This Agreement may be modified or amended only by a written agreement
        executed by all of the parties.

       

      (m)  Construction.
        In the
        event of vagueness or ambiguity, this Agreement will not be construed against
        the party preparing it, but will be construed as if all parties prepared
        it
        jointly. Headings in this Agreement are for convenience only and do not limit
        or
        define any provisions. This Agreement shall be interpreted under and governed
        by
        the laws of California. If any provision of this Agreement is adjudged void
        or
        unenforceable, the same shall not affect the validity of the Agreement as
        a
        whole.

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
        written below.

       

      
        	 STRATUS
                SERVICES GROUP, INC.	 	 	 STATE
                COMPENSATION INSURANCE FUND
	/s/ Michael
                A. Maltzman  	 	 	/s/ Paul
                Nannini
	
                

              	 	 	
                

              
	
                Name: 
                  Michael A. Maltzman
Title:  Executive Vice President and
                  CFO
More Title:  Stratus Services Group, Inc.

                 

                Date:  12/01/06

              	 	 	
                Name: 
Paul
                  Nannini
Title:  Collections Manager
More Title:  State
                  Compensation Insurance Fund

                 

                Date: 
11/30/06Exhibit 4.2.5

 

 

 

DAYTON SUPERIOR CORPORATION

13% SENIOR SUBORDINATED NOTES DUE 2009

 

 

FIFTH SUPPLEMENTAL INDENTURE

DATED AS OF DECEMBER 4 , 2006

 

 

THE BANK OF NEW YORK TRUST COMPANY, N.A.

AS TRUSTEE

 

 

 

1

 

SUPPLEMENTAL INDENTURE, dated as of December
4, 2006 (this “Supplemental Indenture”), between DAYTON SUPERIOR CORPORATION,
an Ohio corporation (the “Company”), and THE BANK OF NEW YORK TRUST COMPANY,
N.A. a national banking association duly organized under the laws of the United
States, as successor trustee (the “Trustee”).

 

WHEREAS, the Company and the Trustee are
parties to an Indenture, dated as of June 16, 2000 (as amended to date, the “Indenture”),
pursuant to which the Company issued its 13% Senior Subordinated Notes Due 2009
(the “Notes”); 

 

WHEREAS, the Board of Directors of the
Company has determined that it is in the best interests of the Company to
authorize and approve a proposed amendment to a provision of the Indenture (the
“Proposed Amendment”);

 

WHEREAS, Section 9.02 of the Indenture
provides that the Company and the Trustee may amend the Indenture and the Notes
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding;

 

WHEREAS, the Company is soliciting consents
pursuant to a supplement dated November 30, 2006 (the “Supplement”) to the
Consent Solicitation Statement, dated November 10, 2006 and the Consent
Solicitation Statement, dated November 10, 2006 (collectively, the “Consent
Solicitation Statement”), and accompanying Consent Letter, from the Holders of
the Notes in connection with the Proposed Amendment as described in the Consent
Solicitation Statement (the “Consent Solicitation”);

 

WHEREAS, the Holders of at least a majority
in principal amount of the Notes have consented to the Proposed Amendment to a
provision of the Indenture in accordance with Section 9.02 of the Indenture and
to the other provisions of this Supplemental Indenture; and

 

WHEREAS, the execution and delivery of this
Supplemental Indenture have been duly authorized and all conditions and
requirements necessary to make this Supplemental Indenture a valid and binding
agreement have been duly performed and complied with;

 

NOW, THEREFORE, for and in consideration of
the premises and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, it is mutually covenanted and
agreed, for the equal proportionate benefit of all Holders of the Notes, as
follows:

 

ARTICLE I.

AMENDMENT TO ARTICLE I

 

Section
1.1             Paragraph (2) of the
definition of “Permitted Indebtedness” in
Section 1.01 of the Indenture is hereby amended to read in its entirety as set
forth below:

 

(2) Indebtedness of the Company or any of its
Restricted Subsidiaries incurred pursuant to one or more Credit Facilities in
an aggregate principal amount at any 

 

2

 

time outstanding pursuant to this clause (2)
not to exceed the greater of $130.0 million or the Borrowing Base; provided
that the amount of Indebtedness permitted to be incurred pursuant to Credit
Facilities in accordance with this clause (2) shall be in addition to any
Indebtedness permitted to be incurred pursuant to Credit Facilities in reliance
on, and in accordance with, clauses (7), (13) and (15) below; and provided
further that any Indebtedness outstanding under the Senior Credit
Facility on the Issue Date shall initially be deemed to be incurred under this
clause (2) and shall initially be the only Indebtedness deemed to have been
incurred under this clause (2);

 

Section
1.2             The following definition
of “Borrowing Base” in is hereby added to Section 1.01 of the Indenture:

 

“Borrowing
Base” means, as of any date, the sum of 75% of accounts receivable, net, and
60% of the sum of inventories and rental equipment, net (each as shown on the
Company’s most recently available consolidated balance sheet as of such date); provided
that any accounts receivable, inventories or rental equipment that have been
sold, conveyed or otherwise transferred to a Securitization Entity in
connection with a Qualified Securitization Transaction shall not be included
when calculating the Borrowing Base.

 

ARTICLE II.

 

PAYMENT TO HOLDERS

 

Section
2.1             The term “Qualifying IPO” means
any one or more public offerings pursuant to a registration statement on Form
S-1 under the Securities Act of 1933 of shares of the Company’s common stock
pursuant to which the Company raises aggregate gross proceeds of at least $50.0
million.

 

Section
2.2             Pursuant to the Consent Solicitation,
the Company hereby agrees to make a cash payment to each Holder of record as of
5:00 p.m. (New York City time) on November 9, 2006 that delivered, and did not
revoke, a duly executed consent to the Proposed Amendment prior to 5:00 p.m.
(New York City time), on December 1, 2007, in the amount of $5.00 per $1,000 in
outstanding principal amount of Notes held by such Holder on November 9, 2006.

 

Section
2.3             Pursuant to the Consent
Solicitation, the Company hereby agrees to make a cash payment to each Holder
of record as of 5:00 p.m. (New York City time) on May 1, 2007, if and only if
the Company has not consummated a Qualifying IPO prior to that date, in the
amount of $2.50 per $1,000 in outstanding principal amount of Notes held by
such Holder on May 1, 2007.

 

Section
2.4             Pursuant to the Consent
Solicitation, the Company hereby agrees to make a cash payment to each Holder of
record as of 5:00 p.m. (New York City time) on June 1, 2007, if and only if the
Company has not consummated a Qualifying IPO prior to that date, in the 

 

3

 

amount of $2.50 per
$1,000 in outstanding principal amount of Notes held by such Holder on June 1,
2007.

 

Section
2.5             Payments, if any, pursuant
to Sections 2.2, 2.3 and 2.4 shall be made reasonably promptly after the dates
referred to in such Sections.

 

ARTICLE III.

MISCELLANEOUS

 

Section
3.1             The Trustee accepts the
trusts created by the Indenture, as amended and supplemented by this Supplemental
Indenture, and agrees to perform the same upon the terms and conditions of the
Indenture, as amended and supplemented by this Supplemental Indenture.

 

Section
3.2             All capitalized terms used
and not defined herein shall have the respective meanings assigned to them in
the Indenture.

 

Section
3.3             Upon execution and
delivery of this Supplemental Indenture, the terms and conditions of this Supplemental
Indenture shall be part of the terms and conditions of the Indenture for any
and all purposes, and all the terms and conditions of both shall be read
together as though they constitute one and the same instrument, except that in
case of conflict, the provisions of this Supplemental Indenture will control.

 

Section
3.4             Each of the Company and
the Trustee hereby confirms and reaffirms the Indenture in every particular
except as amended and supplemented by this Supplemental Indenture.

 

Section
3.5             Notwithstanding an earlier
execution date, the provisions of this Supplemental Indenture shall not become
operative until such time as the Company notifies the Information Agent for the
Consent Solicitation, Global Bondholder Services Corporation, that each of the
conditions set forth in the Consent Solicitation Statement, including the
absence of any law or regulation that would, and the absence of any injunction
or action or other proceeding (pending or threatened) that could, in the
Company’s sole judgment, make unlawful or invalid or enjoin the implementation
of the Proposed Amendment or that would, in the Company’s sole judgment,
question the legality or validity thereof. 
The Company shall promptly notify the Trustee in writing that this
Supplemental Indenture has become operative.

 

Section
3.6             All covenants and
agreements in this Supplemental Indenture by the Company or the Trustee shall bind
their respective successors and assigns, whether so expressed or not.

 

Section
3.7             In case any provisions in
this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

4

 

Section
3.8             Nothing in this
Supplemental Indenture, express or implied, shall give to any Person, other
than the parties hereto and their successors under the Indenture and the
Holders of the Notes, any benefit or any legal or equitable right, remedy or
claim under the Indenture.

 

Section
3.9             The parties may sign any
number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but
all of them together shall represent the same agreement.  One signed copy is enough to prove this
Supplemental Indenture.

 

Section
3.10           This Supplemental Indenture
shall be governed by and construed in accordance with the laws of the State of
New York, as applied to contracts made and performed within the State of New
York, without regard to principles of conflicts of law.  Each of the parties hereto agrees to submit
to the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Supplemental Indenture.

 

Section
3.11           All provisions of this
Supplemental Indenture shall be deemed to be incorporated in, and made a part
of, the Indenture; and the Indenture, as amended and supplemented by this
Supplemental Indenture, shall be read, taken and construed as one and the same
instrument.

 

Section
3.12           The recitals contained
herein shall be taken as the statements of the Company, and the Trustee assumes
no responsibility for their correctness. 
The Trustee shall not be liable or responsible for the validity or sufficiency
of this Supplemental Indenture or the due authorization of this Supplemental
Indenture by the Company.  In entering
into this Supplemental Indenture, the Trustee shall be entitled to the benefit
of every provision of the Indenture relating to the conduct of, affecting the
liability of or affording protection to the Trustee, whether or not elsewhere
herein so provided.

 

5

 

IN WITNESS WHEREOF, the parties hereto have
caused this Supplemental Indenture to be duly executed as of the date first
written above.

 

	
   

  	
   

  	
  DAYTON SUPERIOR CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ EDWARD J. PUISIS

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edward J. Puisis

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NEW YORK TRUST 

  COMPANY, N.A., as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ ROXANE J. ELLWANGER

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Roxane J. Ellwanger

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
							

 

6

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