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Exhibit 10.2
EXECUTION VERSION
SENIOR NOTE PURCHASE AGREEMENT
This SENIOR NOTE
PURCHASE AGREEMENT (this "Agreement") is made as of
November 9, 2005 by and between Canadian
Traffic Network ULC, an Alberta
business corporation (the "Company"), and
Metro Networks Communications, Inc., a
Maryland corporation (the "Purchaser").
RECITALS
WHEREAS, the
Company desires to issue and sell to the Purchaser, and the
Purchaser has agreed to purchase, pursuant
and subject to the terms of this
Agreement, the Company's Senior Secured
Note in an aggregate principal amount of
2,000,000 United States Dollars ("USD"), in
the form attached hereto as Exhibit
A (the "Senior Note").
WHEREAS, the
Company will use the proceeds of the issuance and sale of the
Senior Note to support the working capital
needs of the Company's business in
connection with the execution of the Corus
Affiliation Agreement (defined in
Section 2.3 below).
WHEREAS, as a
condition to the willingness of the Purchaser to purchase the
Senior Note, the Company has granted, or
will grant, to the Purchaser a first
priority Lien in all of its existing and
hereafter acquired tangible and
intangible assets, except for aviation
assets expressly included in the
definition of Excluded Collateral (defined
in the Security Agreement) to secure
the Note Obligations.
NOW, THEREFORE,
in consideration of the mutual promises, representations,
warranties, covenants and conditions set
forth in this Agreement, the parties to
this Agreement mutually agree as
follows:
1. DEFINITIONS. Certain
capitalized terms are used in this Agreement as
defined in the
preamble, recitals and sections of this Agreement. In
addition,
certain other capitalized terms are used in this Agreement as
specifically
defined in this Section 1 as follows:
"Affiliate"
means, with respect to the Company (or any other specified
Person), any
other Person which, directly or indirectly, controls or is
controlled by or
is under direct or indirect common control with the
Company (or such
specified Person).
"Applicable Interest Rate" means a
per annum interest rate (on the basis of
a 365-day year)
equal to ten percent (10%).
"ATN" means The
Australia Traffic Network Pty Limited, an Australian
proprietary
company registered under the Corporation Law of New South
Wales,
Australia.
"Bankruptcy
Code" means Title 11 of the Code, as now or hereafter in
effect, or any
successor thereto.
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"Business Day"
means any day other than a Saturday, a Sunday or a day on
which commercial
banks in New York City are required or authorized to be
closed.
"Capitalized
Lease" means any lease which is required to be capitalized on
the balance
sheet of the lessee in accordance with GAAP, including
Statement Nos.
13 and 98 of the Financial Accounting Standards Board.
"Capitalized
Lease Obligations" means the amount of liability reflecting
the aggregate
discounted amount of future payments under all Capitalized
Leases
calculated in accordance with GAAP, including Statement Nos. 13
and
98 of the
Financial Accounting Standards Board.
"Closing Date"
means the date on which the Senior Note is purchased
pursuant to
Section 2.2 hereof.
"Code" means the
United States Internal Revenue Code of 1986, together with
all rules and
regulations promulgated pursuant thereto, as amended from
time to
time.
"Collateral"
means all collateral on which a Lien is granted or purported
to be granted
pursuant to the Security Agreement.
"Control Accounts"
means the collateral accounts of the Company maintained
with the Control
Banks which shall be subject to the Control Agreements.
"Control
Agreements" means the Account Control Agreements among the
Company, each of
the Control Banks, respectively, and the Purchaser in form
and substance
satisfactory to the Purchaser.
"Control Banks"
means Scotia Bank, Bank of Montreal and Fifth Third Bank
and/or any other
financial institution determined by mutual agreement of
the Company and
the Purchaser.
"Default" means
any Event of Default and any event or condition which with
the passage of
time, or giving of notice, or both, would become an Event of
Default.
"Default
Interest Rate" means a rate equal to the lesser of (x) the
Applicable
Interest Rate plus two percent (2%) or (y) the maximum rate
allowed under
applicable law.
"Exchange Act"
means the Securities Exchange Act of 1934, as amended.
"GAAP" means
United States generally accepted accounting principles as in
effect as of
December 31, 2004, which are consistent with the principles
promulgated or
adopted by the United States Financial Accounting Standards
Board and its
predecessor, applied on a consistent basis and in a manner
consistent with
the preparation of the Company's financial statements.
"GTC" means
Global Traffic Canada, Inc., a Delaware corporation, subsidiary
of GTN and
parent of CTN.
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"GTN" means
Global Traffic Network, Inc., a Delaware corporation, and
parent of
GTC.
"Guaranty
Agreement" means the guaranty agreement, dated as of the
Closing
Date, by and
among GTN, GTC and ATN, as guarantors, and the Purchaser.
"Indebtedness"
means, with respect to any Person, all obligations,
contingent or
otherwise, which in accordance with GAAP are required to be
classified upon
the balance sheet of such specified Person as liabilities,
but in any event
including (without duplication) the following:
(a) all obligations of such Person for borrowed money or with
respect
to deposits or
advances of any kind;
(b) all obligations of such Person evidenced by bonds,
debentures,
notes or other
similar instruments or upon which interest charges are
customarily
paid;
(c) all obligations of such Person for the deferred purchase price
of
property or
services, except current accounts payable arising in the
ordinary course of business
and not overdue beyond such period as is
commercially
reasonable for such Person's business;
(d) all obligations of such Person under conditional sale or
other
title retention
agreements relating to property purchased by such Person
and all
Capitalized Lease Obligations;
(e) all payment obligations of such Person with respect to
interest
rate or currency
protection agreements;
(f) all obligations of such Person as an account party under
any
letter of credit
or in respect of bankers' acceptances;
(g) all obligations of any third party secured by property or
assets
of such Person
(regardless of whether or not such Person is liable for
repayment of
such obligations);
(h) all guarantees of such Person, including existing guarantees
for
lease
obligations; and
(i) all reimbursement obligations of such Person under letters
of
credit.
"Initial Public
Offering" means a registration effected by either the
Company or GTN
of its respective stock or other securities under the
Exchange Act in
connection with the public offering of such securities
solely for cash
(other than a registration relating solely to the sale of
securities to
participants in a company stock plan, or a registration on
any form which
does not include substantially the same information as would
be required to
be included in a registration statement covering the sale of
registrable
securities) with aggregate gross proceeds to the Company or
GTN, as
applicable, of at least 5,000,000 USD.
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"Investment"
means, with respect to any specified Person:
(a) any share of capital stock, partnership or other equity
interest,
evidence of
Indebtedness or other security issued by any other Person;
(b) any loan, advance or extension of credit to, or contribution
to
the capital of,
any other Person;
(c) any guarantee of the obligations of any other Person;
(d) any acquisition of all, or any division or similar operating
unit
of, the business
of any other Person or the assets comprising such
business,
division or unit; and
(e) any other similar investment.
The term
"Investment" shall not include demand deposits in banks or
similar
institutions.
"Legal
Requirement" means any present or future requirement imposed
upon
the Company or
any Subsidiary by any law, statute, rule, regulation,
directive,
order, decree or guideline (or any interpretation thereof by
courts or of
administrative bodies), be it federal, state, provincial or
local, or
domestic or foreign, or by any board, bureau, commission,
governmental or
administrative agency, self-regulatory agency, central bank
or monetary
authority of the United States of America or any other
jurisdiction in
which the Company or any Subsidiary owns property or
conducts its
business, or any political subdivision of any of the
foregoing.
"Lien" means,
with respect to any specified Person: (a) any lien,
encumbrance,
mortgage, pledge, adverse claim, charge or security interest
of any kind upon
any property or assets of such specified Person, whether
now owned or
hereafter acquired, or upon the income or profits therefrom;
or (b) the sale,
assignment, pledge or transfer for security of any
accounts,
general intangibles or chattel paper of such specified Person,
with or without
recourse.
"Loan Documents"
means this Agreement, the Senior Note, the Security
Agreement, the
Guaranty Agreement, the Control Agreements and any other
document or
instrument relating to the foregoing.
"Material
Adverse Change" means any change, event, condition, development
or effect that,
individually or in the aggregate, with all other changes,
events,
conditions, developments, and effects (i) is or could be
reasonably
expected to be
materially adverse to the business, operations, assets,
liabilities,
results of operations or condition (financial or otherwise),
or prospects of
the Company and its Subsidiaries (if any), taken as a
whole, or (ii)
would be reasonably expected to prevent consummation of the
Agreement or the
issuance and sale of the Senior Note, in each case other
than general
economic conditions.
"Maturity Date"
means the earlier of: (x) the third anniversary of the
Original
Issuance Date; (y) the first anniversary of the closing date of
an
Initial Public
Offering or (z) such
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earlier date on
which said amount shall become due and payable on account
of acceleration
by Purchaser according to the terms hereof, the date the
principal amount
of the Senior Note shall become due and payable.
"Note
Obligations" mean any and all Indebtedness and liabilities of
the
Company under
the Loan Documents, including, without limitation, the
obligation to
pay principal, interest, premiums, if any, expenses, costs,
attorneys' fees
and disbursements, indemnities and other amounts payable
thereunder or in
connection therewith or related thereto.
"Obligor" means
the Company, as an obligor under the Security Agreement.
"Original
Issuance Date" means November 9, 2005, the date the Senior Note
is executed and
issued.
"Payment Date"
means (a) March 31, June 30, September 30 and December 31 of
each year and
(b) the Maturity Date.
"Person" means
any entity, whether of natural or legal constitution,
including any
present or future individual, corporation, partnership, joint
venture, limited
liability company, unlimited liability company, trust,
estate,
unincorporated organization, government or any agency or
political
subdivision
thereof, domestic or foreign.
"Restricted
Payment" means, with respect to any specified Person:
(a) the declaration or payment of any dividend or distribution on
or
in respect of
any shares of any class of capital stock of or other equity
interests in
such specified Person;
(b) the purchase, redemption or other retirement of any shares of
any
class of capital
stock of or other equity interest in such specified
Person, or of
options, warrants or other rights for the purchase of such
shares,
directly, indirectly through a subsidiary or corporate parent
or
otherwise
(including any such purchase, redemption or other retirement of
any such
securities held by employees upon termination of its
employment);
(c) loans made by such specified Person to any director,
shareholder,
member, partner,
Affiliate, officer or employee of such Person; and
(d) all other payments to a holder of any class of capital stock of
or
other equity
interests or subordinated securities in such specified Person
or an Affiliate
of such Person (other than reimbursement of reasonable
out-of-pocket
expenses).
"Security
Agreement" means the Security Agreement, dated as of the
Closing
Date, by and
between the Company and the Purchaser.
"Senior
Noteholder(s)" means the holder(s) of the Senior Note.
"Subordinated
Indebtedness" means Indebtedness incurred or to be incurred
by the Company
that is subordinated to the Note Obligations (pursuant to a
subordination
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agreement to be
entered into by and among the Company, the Senior
Noteholders and
the subordinated creditor) in a manner satisfactory to the
Senior
Noteholders and contains terms, including, without limitation,
payment terms,
satisfactory to the Senior Noteholders.
"Subsidiary"
means any future direct or indirect subsidiary of the Company
(all such
entities collectively, "Subsidiaries").
2. AUTHORIZATION AND SALE.
2.1. Purchase
and Sale of the Senior Note. Subject to the terms and
conditions of this Agreement and on the basis of the
representations
and warranties set forth herein, the Company hereby agrees to sell
to
the Purchaser, and by its acceptance hereof, the Purchaser agrees
to
purchase from the Company for investment the Senior Note for an
aggregate purchase price of 2,000,000 USD (the "Purchase
Price").
2.2. Closing. At
the closing of the purchase and sale of the Senior Note
(the "Closing"), against payment of the Purchase Price to the
Company
by wire transfer of immediately available funds, the Company
will
deliver the Senior Note.
2.3. Use of
Proceeds. The proceeds of the sale of the Senior Note shall be
used solely to support the working capital needs of the
Company's
business taking into account the execution of the Traffic
Network
Affiliation Agreement with Corus Entertainment Inc. (the "Corus
Affiliation Agreement"). When reference is made herein to the
business
of the Company and the Subsidiaries, such includes the business
after
giving effect to the Corus Affiliation Agreement.
3. TERMS OF THE SENIOR
NOTE.
3.1. Interest on
the Senior Note.
3.1.1. The Senior Note shall bear interest at a rate equal to
the
Applicable Interest Rate on the unpaid principal amount thereof
from and including the Original Issuance Date until the
Maturity
Date. Such interest shall accrue and be payable quarterly in
arrears. After and during the continuance of any Event of
Default, the Senior Note shall bear interest at the rate equal
to
the Default Interest Rate, including, in the event of a payment
default, on any
overdue principal and to the extent permitted by
applicable law, on any overdue amount, including overdue
interest. On each Payment Date, interest on the Senior Note
shall
be payable in cash.
3.1.2. Interest on the Senior Note shall be computed on the basis
of a
365-day year. In computing such interest, the date of the
making
of the Senior Note shall be included and the date of payment
shall be excluded.
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3.2. Payment of
Senior Note.
3.2.1. Payment at Maturity of the Senior Note. On the Maturity
Date,
the Company will pay in cash the entire principal amount of all
the Senior Note then outstanding, together with all accrued and
unpaid interest thereon.
3.2.2. Voluntary Prepayments. The Senior Note may be prepaid at
any
time, and from time to time, at the Company's option, in whole,
and not in part, on 30 days' prior notice to the Senior
Noteholders; provided, that any such voluntary prepayment of
the
Senior Note shall include accrued and unpaid interest on the
amount so prepaid, if any, up to but not including the date of
such payment.
3.3. Prepayment
Procedure. All payments, including any prepayment (whether
voluntary or mandatory), shall be made by wire transfer or other
same
day funds to the accounts designated in writing by the Senior
Noteholders (or such other account or address or to the attention
of
such other Person as the recipient party shall have specified by
prior
written notice to the sending party).
3.4. Taxes.
3.4.1. If the Company shall be required by law to deduct any
taxes,
levies, imposts, deductions, charges or withholdings imposed by
the United States, Canada or Australia or any political
subdivision thereof, excluding taxes imposed or based on the
recipient's overall net income, and franchise or capital taxes
imposed on it in lieu of net income taxes (all such
non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments under the Senior Note,
"Taxes") from or in respect of any sum payable hereunder or
under
any Senior Note to any Senior Noteholder, (i) the Company shall
make such deductions and (ii) the Company shall remit the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. Within 30 days
after
the date of any payment of Taxes, the Company shall furnish to
such Senior Noteholder the original or certified copy of a
receipt evidencing payment thereof.
3.4.2. In addition, the Company agrees to pay any present or
future
stamp or documentary taxes or any other excise or property
taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement
or the Senior Note.
3.4.3. Each Senior Noteholder organized under the laws of a
jurisdiction outside the United States and/or Canada, prior to
its receipt of any payment on the Senior Note, shall provide
the
Company with (i) the appropriate tax forms under such
jurisdiction certifying that such Senior Noteholder is entitled
to
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benefits under an income tax treaty to which the United States
and/or Canada is a party, which exempts the recipient from
United
States and/or Canada withholding tax on payments of interest or
certifying that the income receivable pursuant to this
Agreement
is effectively connected with the conduct of a trade or
business
in the United States and/or Canada, (ii) Internal Revenue
Service
Form W-8 or W-9, as appropriate, or any successor form
prescribed
by the Internal Revenue Service or its Canadian equivalent, and
(iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections
871(h)
and 881(c) of the Code), certifying that such Senior Noteholder
is entitled to an exemption from United States and/or Canada
withholding tax on interest payments made pursuant to this
Agreement.
3.4.4. For any period with respect to which a Senior Noteholder
has
failed to provide the Company with the appropriate form
pursuant
to Section 3.4.3, such Senior Noteholder shall not be entitled
to
indemnification under this Section 3.4 with respect to Taxes
imposed by the United States and/or Canada; provided, however,
that should a Senior Noteholder which is otherwise exempt from
Taxes become subject to Taxes because of its failure to deliver
a
form required hereunder, the Company shall, at such Senior
Noteholder's expense, take such steps as such Senior Noteholder
shall reasonably request to assist such Senior Noteholder to
recover such Taxes.
3.4.5. Without prejudice to the survival of any other agreement
hereunder, the agreements and obligations contained in this
Section 3.4 shall survive the payment in full of principal and
interest under the Senior Note.
3.5. Manner and
Time of Payment.
3.5.1. All payments under the Senior Note of principal,
interest,
premiums, expenses, costs and fees hereunder shall be made
without defense, set-off or counterclaim, in same day funds and
delivered to the Senior Noteholders not later than 2:00 p.m.
(New
York time) on the date such payment is due, with such payment
to
be made in each case, by wire transfer or other same day funds
to
such accounts designated in writing by the Senior Noteholders
(or
such other account or address or to the attention of such other
Person as the recipient party shall have specified by prior
written notice to the sending party); provided that funds
received by such holders after 2:00 p.m. (New York time) shall
be
deemed to have been paid on the next succeeding Business Day.
3.5.2. Whenever any payment to be made hereunder or under the
Senior
Note shall be stated to be due on a day which is not a Business
Day, the payment shall be made on the next succeeding Business
Day and such additional period shall be included in the
computation of the payment of interest hereunder or under the
Senior Note.
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4. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY. The Company represents and
warrants to the
Purchaser as follows:
4.1.
Organization and Good Standing. The Company and each Subsidiary is
a
company duly organized, validly existing and in good standing
under
the laws of the jurisdiction of its organization. The Company and
each
Subsidiary (a) has all requisite power and authority to conduct
its
business as it is now being conducted and as proposed to be
conducted,
and (b) is duly qualified and in good standing as a foreign company
in
each jurisdiction where the failure to be so qualified and in
good
standing would have a material adverse effect upon its operations
or
condition (financial or otherwise). A copy of the certificate
of
incorporation and by-laws (or other constituent documents, as
applicable) of the Company and each of its Subsidiaries
(collectively,
the "Governing Documents") are attached hereto as Schedule 4.1.
4.2.
Authorization. The Company and each Subsidiary has the full
entity
power and authority to enter into this Agreement and each other
Loan
Document to which it is party and to perform all of its
obligations
hereunder and thereunder. The Company and each Subsidiary has
duly
authorized by all necessary action, the execution, delivery and
performance of this Agreement and each other Loan Document to which
it
is party. The Company and each Subsidiary has duly executed and
delivered this Agreement and each other Loan Document to which it
is
party, and each such document constitutes a legal, valid and
binding
obligation of the Company and each Subsidiary, as the case may
be,
enforceable against the Company and each Subsidiary, in
accordance
with their terms, except as such enforceability may be limited
by
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally
the
enforcement of, creditors' rights and remedies or by other
equitable
principles of general application. No consent, approval,
authorization
or order of, declaration by, or filing or registration with, any
court
or governmental or regulatory agency or board, foreign or domestic,
or
any other Person is or will be required in connection with
their
execution and delivery of this Agreement or any other Loan
Documents
and their consummation of the transactions contemplated hereby
or
thereby.
4.3.
Capitalization. Schedule 4.3 set forth the authorized capital of
the
Company on the date hereof. After the Closing, the authorized
and
issued capital of the Company shall be the same. No Person is
entitled
to any preemptive rights or rights of first refusal with respect
to
the purchase or sale of any securities by the Company. There are
no
outstanding options, warrants or other rights, commitments or
arrangements, written or oral, to which the Company is a party or
by
which the Company is bound, to purchase or otherwise acquire
any
authorized but unissued securities of the Company or any
security
directly or indirectly convertible into or exchangeable or
exercisable
for any equity of the Company.
4.4. Valid
Issuance of the Senior Note. The Senior Note being purchased by
the Purchaser hereunder, when issued, sold and delivered in
accordance
with the
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terms hereof for the Purchase Price, will be duly and validly
authorized and issued and free of restrictions on transfer, other
than
restrictions imposed under this Agreement and applicable United
States
state or federal securities laws. The Senior Note will be issued
in
compliance with all applicable United States and Canadian
securities
laws.
4.5.
Subsidiaries. The Company has no Subsidiaries and no Investment in
any
other Person.
4.6. Security
Interest. The Security Agreement when executed and delivered
as contemplated hereunder, will create and grant to the Purchaser
a
legal, valid and binding first priority Lien in the Collateral
identified therein. Such Collateral is not subject to any other
Liens
whatsoever.
4.7. Absence of
Undisclosed Liabilities. The Company has not been engaged
in any business other than as contemplated by this Agreement.
Except
as set forth on
Schedule 4.7 hereto, the Company has no liabilities or
obligations (whether accrued, absolute, contingent, unliquidated
or
otherwise, whether due or to become due) other than liabilities
and
obligations that were incurred by the Company in connection with
the
transactions contemplated by this Agreement.
4.8. Compliance
with Law and Other Instruments. Neither the issuance of the
Senior Note nor the execution and delivery of this Agreement and
each
other Loan Document, nor the consummation of the transactions
contemplated hereby or thereby, will (a) conflict with or
constitute a
breach or violation of, the Governing Documents, (b) conflict
with,
constitute a breach of, constitute a default under, or constitute
an
event which, with notice or lapse of time or both would be a breach
of
or default under, any agreement, document, indenture, mortgage,
deed
of trust or other instrument or undertaking to which the Company
or
any Subsidiary or their Affiliates is a party or by which any of
its
respective assets or properties are bound, (c) constitute a
violation
of any Legal Requirement applicable to the Company or the
Subsidiaries
or by which any of its respective assets or properties are bound,
(d)
result in the creation or imposition of any Lien upon any asset
or
property of the Company (other than the Liens to secure the
Note
Obligations), or (e) permit any party to terminate any agreement
to
which the Company or any Subsidiary is a party or under which
the
Company or any Subsidiary is a beneficiary.
4.9. Litigation.
Except as described on Schedule 4.9 hereto, there is no
litigation or governmental proceeding or investigation pending or,
to
the best of the Company's knowledge, threatened against or
affecting
the Company or any Subsidiary or any of their directors or
officers,
that involves the possibility of any judgment or liability which
might
materially and adversely affect any of the business,
operations,
assets, liabilities, results of operations or condition (financial
or
otherwise), or prospects of the Company or any Subsidiary, the
consummation of the transactions contemplated hereby or the right
of
the
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Company to conduct its business as now conducted or as proposed to
be
conducted, including after giving effect to the Corus
Affiliation
Agreement.
4.10.
Registration Rights. Except as described on Schedule 4.10 hereto
and
as contemplated herein, the Company has not granted or agreed to
grant
to any person or entity any rights (including "piggy-back"
registration rights) to have any securities of the Company
registered
with the Securities and Exchange Commission, the Canadian
equivalent
thereof or any other governmental entity, foreign or domestic,
which
has not been satisfied.
4.11. Permits.
The Company and the Subsidiaries possess all franchises,
certificates, licenses, authorizations and permits or similar
authority (the "Permits") necessary to conduct their respective
businesses, and neither the Company nor any Subsidiary has
received
any notice of proceedings relating to the revocation or
modification
of any such Permit or is in default in any material respect under
any
such Permit.
4.12. Insurance.
Set forth on Schedule 4.12 is a complete and correct list
of the insurance policies of the Company and the Subsidiaries
in
effect on the date hereof. The Company and the Subsidiaries have
valid
and effective insurance policies issued in favor of the Company
and
the Subsidiaries with financially sound and reputable companies and
in
such types and amounts and covering such risks as are consistent
with
customary practices and standards of companies engaged in business
and
operations substantially similar to the Company and the
Subsidiaries.
4.13. Business
Plan. The Company has prepared the business plan, dated as
of July 13, 2005, a copy of which was previously delivered to
Purchaser and is attached hereto as Schedule 4.13, in good
faith,
based on facts believed by the Company to be accurate and based
on
certain assumptions believed by the Company to be reasonable.
4.14. GTC. GTC
is a holding company and does not conduct any business or
hold any assets, other than its ownership in CTN.
4.15.
Disclosure. Neither this Agreement, nor any other Loan Document,
nor
any other material furnished by or on behalf of the Company or
any
Subsidiary to the Purchaser in connection with this Agreement or
any
other Loan Document and the transactions contemplated hereby
and
thereby, contains any untrue statement of any material fact, or
omits
to state any material fact that is necessary in order to make
the
statements contained herein or therein, in light of the
circumstances
under which they were made, complete and not misleading.
5. REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER. The Purchaser represents
and warrants to
the Company as follows:
5.1.
Organization; Legal Capacity; Due Authorization. The Purchaser is
a
company duly incorporated, validly existing and in good standing
under
the laws of the
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State of Maryland and has full corporate power and authority to
execute and deliver this Agreement and each other Loan Document
to
which it is a party and to perform its obligations hereunder
and
thereunder. This Agreement and each other Loan Document has been
duly
authorized by all necessary action and has been executed and
delivered
by the Purchaser and is the legal, valid and binding obligation of
the
Purchaser enforceable against it in accordance with the terms
hereof,
except as such enforceability may be limited by applicable
bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws
relating to, or affecting generally the enforcement of,
creditors'
rights and remedies or by other equitable principles of general
application.
5.2. No
Consents. No consent, approval, authorization or order of,
declaration by, or filing or registration with, any court or
governmental or regulatory agency or board, foreign or domestic,
or
any other Person is or will be required in connection with its
execution and delivery of this Agreement or any other Loan
Documents
and its consummation of the transactions contemplated hereby or
thereby.
5.3.
Restrictions on Transfer. The Purchaser has been advised that
the
Senior Note has not been registered under the Securities Act of
1933,
as amended (the "Securities Act"); or any state securities laws in
the
United States and, therefore, cannot be resold unless registered
under
the Securities Act and/or applicable state securities laws or
unless
an exemption from such registration requirements is available.
6. CONDITIONS OF CLOSING. The
obligation of the Purchaser to purchase the
Senior Note at
the Closing is subject to the satisfaction at or prior to
the Closing of
the following conditions:
6.1.
Representations and Warranties. The representations and warranties
of
the Company contained in Section 4 shall be true and correct on and
as
of the date hereof and on as of the Closing Date with the same
effect
as though such representations and warranties had been made on and
as
of the Closing Date.
6.2.
Performance. The Company shall have performed and complied with
all
agreements, obligations and conditions contained in this
Agreement
that are required to be performed or complied with by it at or
prior
to the Closing.
6.3. Compliance
Certificate. The Company shall deliver to the Purchaser at
the Closing a certificate dated the Closing Date and signed by
the
President of the Company certifying that (a) the conditions
specified
in Sections 6.1 and
6.2 have been satisfied and (b) no Default shall
exist on the Closing Date prior to or immediately after giving
effect
to the sale of Senior Note.
6.4. Approvals.
All authorizations, consents, waivers, approvals or permits
of, notice to, or filings or registrations with, any Person or
any
governmental authority or regulatory body of the United States,
Canada
or of any state or province thereof
-12-
<PAGE>
that are required in connection with the lawful issuance and sale
of
the Senior Note to the Purchaser pursuant to this Agreement
(other
than those which are not required to be obtained before the
Closing)
shall have
been duly obtained and shall be effective on and as of the
Closing Date.
6.5. Related
Agreements. The Company and the other parties thereto (other
than the Purchaser), as applicable, shall have duly authorized,
executed and delivered the Loan Documents, in each case in form
and
substance satisfactory to the Purchaser.
6.6. No
Injunction. No statute, rule, regulation, executive order,
decree,
ruling or injunction shall have been enacted, entered, promulgated
or
endorsed by any governmental authority or regulatory body of
competent
jurisdiction which prohibits the consummation of any of the
transactions contemplated by the Loan Documents or otherwise
relating
to the issuance and sale of the Senior Note.
6.7. Litigation;
Proceedings. Other than that disclosed on Schedule 4.9, no
litigation, governmental proceeding or investigation shall have
been
instituted or threatened against the Company which could reasonably
be
expected to result in, individually or in the aggregate, a
Material
