Attached files
| file | filename |
|---|---|
| EX-10.4.1 - SCHEDULE OF RELATED PARTIES - NORTH AMERICAN GALVANIZING & COATINGS INC | exhibit-1041_16749.htm |
| EX-10.6.1 - FORM OF WARRANT - NORTH AMERICAN GALVANIZING & COATINGS INC | exhibit-1061_16749.htm |
| EX-31.1 - EXECUTIVE OFFICER CERTIFICATION - NORTH AMERICAN GALVANIZING & COATINGS INC | exhibit31-1_16749.htm |
| EX-31.2 - EXECUTIVE OFFICER CERTIFICATION - NORTH AMERICAN GALVANIZING & COATINGS INC | exhibit31-2_16749.htm |
| EX-32 - EXECUTIVE OFFICER CERTIFICATIONS - NORTH AMERICAN GALVANIZING & COATINGS INC | exhibit32_16749.htm |
| EX-23 - CONSENT OF ACCOUNTANTS - NORTH AMERICAN GALVANIZING & COATINGS INC | exhibit23_16749.htm |
| EX-21 - SUBSIDIARIES OF THE REGISTRANT - NORTH AMERICAN GALVANIZING & COATINGS INC | exhibit21_16749.htm |
| 10-K - NORTH AMERICAN GALVANIZING AND COATINGS, INC. - NORTH AMERICAN GALVANIZING & COATINGS INC | form10-k_16749.htm |
EXHIBIT
10.5.1
FORM OF SUBORDINATED
NOTE
THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD,
PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT
WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (2) THE CORPORATION RECEIVES AN OPINION OF COUNSEL,
WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE CORPORATION, THAT THIS NOTE
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR APPLICABLE STATE SECURITIES LAWS.
Principal
Amount: $______________
Dated:________________________
Subordinated
Note No: ___________
NORTH
AMERICAN GALVANIZING & COATINGS, INC.
10.0%
SUBORDINATED NOTE
DUE
JULY 31, 2014
1.
General. North
American Galvanizing & Coatings, Inc., a Delaware corporation (the
“Corporation,” which term includes any successor Person as defined below), for
value received, hereby promises to pay to _____________________ (“Holder,” which
term includes any registered assigns), the principal sum of
_______________________ ($_______________) on July 31, 2014 (the “Maturity
Date”), unless previously redeemed, and to pay simple interest on the
outstanding principal amount hereof from the date hereof, or from the most
recent interest payment date (each such date, an “Interest Payment Date”),
quarterly in arrears on the last day of March, June, September and December of
each year, commencing September 30, 2009, at the rate of 10.0% per annum until
the principal hereof shall have become due and
payable. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months and, for any period shorter than a full quarterly period shall be
computed on the basis of a 30-day month, and for any period less than a full
calendar month shall be computed based on the number of days elapsed in such
month. In the event that any date on which the principal of or
interest on this Subordinated Note is payable is not a Business Day (as defined
below), then the payment payable on such date will be made on the next
succeeding day that is a Business Day (without any interest or other payment in
respect of any such delay), except that if such next succeeding Business Day
falls in the next calendar year, then such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the Person in whose name this
Subordinated Note (or any Subordinated Note(s) issued in exchange herefor or in
place hereof) is registered at the close
of
business on the regular record date for such Interest Payment Date, which shall
be as of 5:00 p.m., Tulsa, Oklahoma time, on the first day of the month, whether
or not a Business Day, in which the relevant Interest Payment Date occurs (or
would have occurred but for fact that the Interest Payment Date was not a
Business Day). Any such interest installment not punctually paid or
duly provided for shall be paid to the Person in whose name this Subordinated
Note (or any Subordinated Note(s) issued in exchange herefor or in place hereof)
is registered at the close of business on a special record date (rather than on
the regular record date) to be fixed by the Corporation for the payment of such
defaulted interest, notice of which shall be given to the Person in whose name
this Subordinated Note (or any Subordinated Notes(s) issued in exchange herefor
or in place hereof) is registered not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner.
The
principal of and interest on this Subordinated Note shall be payable at the
office or agency of the Paying Agent maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that,
payment of the principal and interest on this Subordinated Note may be made at
the option of the Corporation by (i) check mailed to the Person in whose name
this Subordinated Note is registered as of the relevant record date at such
address as shall appear in the Subordinated Note Register or (ii) by transfer to
an account maintained by the Person in whose name this Subordinated Note is
registered as of the relevant record date, provided that proper written transfer
instructions have been received by the relevant record date.
This
Subordinated Note is one of a series of Subordinated Notes of the Corporation in
an aggregate principal amount of up to $[_________] issued pursuant to
the Corporation’s offer and sale of $10,000,000 of Units, as described in the
Corporation’s Confidential Private Placement Memorandum dated July 2009, and any
amendments thereto, which shall have been received by Holder (herein sometimes
referred to as the “Subordinated Notes”).
The term
“Business Day” shall mean any weekday that is not a legal holiday in New York,
New York and is not a day on which banking institutions in New York, New York
are authorized or required by law or regulation to be closed.
The term
“Indebtedness” shall mean, whether recourse is to no, all or a portion of the
assets of the Corporation and whether or not contingent, (i) every
obligation of the Corporation for money borrowed; (ii) every obligation of
the Corporation evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of
the Corporation with respect to letters of credit (if and to the extent drawn
upon), banker’s acceptances or similar facilities issued for the account of the
Corporation; (iv) every obligation of the Corporation issued or assumed as
the deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities to trade creditors arising in the
ordinary course of business); (v) every capital lease obligation of the
Corporation; (vi) the net obligations of the Corporation whether incurred
on, prior to or after the date of this Subordinated Note, for claims in respect
of derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, options and swaps and similar arrangements; and
(vii) every
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obligation
of the type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, the
Corporation has guaranteed or is responsible or liable for, directly or
indirectly, as obligor or otherwise.
The term
“Indebtedness Ranking on a Parity with the Subordinated Notes” shall mean
Indebtedness, whether outstanding on the date of execution of this Subordinated
Note or hereafter created, assumed or incurred, to the extent such Indebtedness
by its terms ranks equally with and not prior or senior to, or subordinate or
junior to, the Subordinated Notes in the right of payment upon the happening of
the dissolution, winding-up, liquidation or reorganization of the
Corporation. The
securing of any Indebtedness, otherwise constituting Indebtedness Ranking on a
Parity with the Subordinated Notes, shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking on a Parity with the
Subordinated Notes.
The term
“Indebtedness Ranking Junior to the Subordinated Notes” shall mean any
Indebtedness, whether outstanding on the date of execution of this Subordinated
Note or hereafter created, assumed or incurred, to the extent such Indebtedness
by its terms ranks subordinate or junior to and not equally with or prior or
senior to the Subordinated Notes (and any other Indebtedness Ranking on a Parity
with the Subordinated Notes) in right of payment upon the happening of the
dissolution, winding-up, liquidation or reorganization of the
Corporation. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking Junior to the Subordinated Notes, shall not be deemed to
prevent such Indebtedness from constituting Indebtedness Ranking Junior to the
Subordinated Notes.
The term
“Person” shall mean any legal person, including an individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company or trust.
The term
“Required Holders” shall mean the current holders of Subordinated Notes
representing a majority of both the number of current holders of Subordinated
Notes and the aggregate principal amount of the Subordinated Notes.
The term
“Senior Indebtedness” shall mean the principal of (and premium if any) and
interest, if any, on all Indebtedness, whether outstanding on the date of
execution of this Subordinated Note or hereafter created, assumed or incurred,
except Indebtedness Ranking on a Parity with the Subordinated Notes or
Indebtedness Ranking Junior to the Subordinated Notes, and any deferrals,
renewals or extensions of such Senior Indebtedness.
2. Redemption. The
Corporation shall have the right to redeem this Subordinated Note in whole or in
part, in minimum denominations of $10,000 principal, on one or more occasions at
any time beginning on the date hereof until the Maturity Date (each such date of
redemption, a “Redemption Date”), in an amount equal to 100% of the principal
amount of the Subordinated Note to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption, without any prepayment
penalty (the
“Redemption Price”). The Redemption Price shall be paid prior
to 12:00 noon, New York, New York time, on the date of such
3
redemption
or at such earlier time as the Corporation determines. Any redemption
pursuant to this paragraph will be made upon not less than 10 days nor more than
60 days notice.
3.
Modification and
Waiver. The Corporation may, with the consent of
the Required Holders, modify or amend the Subordinated Notes for the purpose of
adding any provision to, or changing in any manner or eliminating any of the
provisions of, the Subordinated Notes or modifying in any manner the rights of
the holders of the Subordinated Notes; provided, however, that no such
modification or amendment shall, without the consent of each holder of Subordinated
Notes then outstanding and affected thereby: (i) change the Maturity Date of any
Subordinated Note, or reduce the principal amount of, or any installment of,
principal of or interest on the Subordinated Notes; (ii) reduce the rate or
extend the time of payment of interest, except as provided for herein; (iii)
change any of the provisions of the Subordinated Notes relating to redemption;
(iv) make the principal of, or interest payment on, the Subordinated Notes
payable in any coin or currency other than that provided in the Subordinated
Notes; (v) impair or affect the right of any holder of Subordinated Notes to
institute suit for the payment of the Subordinated Notes as provided in the
Subordinated Notes; (vi) reduce the percentage of the principal amount of the
Subordinated Notes required to consent to, modify or amend the Subordinated
Notes or for any waiver of compliance with provisions of the Subordinated Notes
or waiver of Defaults as stated in the Subordinated Notes; (vii) make any change
adverse to a Holder with respect to the subordination provisions; or (viii)
modify any of the foregoing provisions.
4.
Events of
Default. Any one or more of the following events
of default shall constitute an “Event of Default” hereunder (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary,
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
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(a)
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default
in the payment of any interest on the Subordinated Notes, whether or not
such payment is prohibited by the subordination provisions of the
Subordinated Notes, or any other Indebtedness of the Corporation, when
due, and continuance of such default for a period of 30 days;
or
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(b)
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default
in the payment of any principal of the Subordinated Notes (whether or not
such payment is prohibited by the subordination provisions of the
Subordinated Notes or any other Indebtedness of the Corporation) when due
whether at maturity, upon redemption, by declaration of acceleration of
maturity or otherwise; or
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(c)
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default
in the performance, or breach, of any covenant of the Corporation in the
Subordinated Notes (other than a covenant, a default in whose performance
or whose breach is dealt with specifically elsewhere in this Section
4), and continuance of such default or breach for a period of 90
days after there has been given, by registered or certified mail, to the
Corporation by the holders of at least 50% in aggregate principal amount
of the outstanding Subordinated Notes a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a “Notice of Default” hereunder;
or
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(d)
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a
court having jurisdiction in the premises shall enter a decree or order
for relief in respect of the Corporation in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Corporation or for any
substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 90 consecutive days;
or
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(e)
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the
Corporation shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Corporation or of any
substantial part of its property, or shall make any general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due; or
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(f)
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the
voluntary or involuntary dissolution, winding-up or termination of the
Corporation, except in connection with mergers, consolidations, sale of
assets or certain other transactions set forth in paragraph 6
below.
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If an Event of Default with respect to
the Subordinated Notes at the time outstanding occurs and is continuing, then in
every such case the holders of not less than 50% in aggregate principal amount
of the Subordinated Notes then outstanding may declare the principal amount of
all Subordinated Notes to be due and payable immediately, by a notice in writing
to the Corporation, and upon any such declaration, the same shall become
immediately due and payable.
The foregoing provisions, however, are
subject to the condition that if, at any time after the principal of the
Subordinated Notes shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, (i) the Corporation shall pay or shall deposit
with the Paying Agent a sum sufficient to pay all matured installments of
interest upon all the Subordinated Notes and the principal of any and all
Subordinated Notes which shall have become due other than by acceleration (with
interest upon such principal at
an annual rate of 10.0% to the date of such payment or deposit), and (ii) any
and all Events of Default hereunder, other than the non-payment of the principal
of the Subordinated Notes which shall have become due solely by such declaration
of acceleration, shall have been cured, waived or otherwise remedied as provided
herein, then, in every such case, the Required Holders, by written notice to the
Corporation, may rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent Event of Default or shall impair any right consequent
thereon.
5
In case the holders of the Subordinated
Notes shall have proceeded to enforce any right under the Subordinated Notes and
such proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been determined
adverse to such holders, then, and in every such case, the Corporation and the
holders of the Subordinated Notes shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of
the Corporation and the holders of the Subordinated Notes shall continue as
though no such proceeding had been taken.
No holder of any Subordinated Note
shall have any right by virtue of or by availing of any provision of the
Subordinated Notes to institute any suit, action or proceeding in equity or at
law or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Corporation
written notice of an Event of Default and the continuance thereof with respect
to the Subordinated Notes specifying such Event of Default, as hereinbefore
provided, and unless also the holders of not less than 50% in aggregate
principal amount of the Subordinated Notes then outstanding join in such action,
suit or proceeding, it being understood and intended, and being expressly
covenanted by the taker and holder of every Subordinated Note with every other
taker and holder, that no one or more holders of Subordinated Notes shall have
any right in any manner whatsoever by virtue of or by availing of any provision
of the Subordinated Notes to affect, disturb or prejudice the rights of any
other holder of Subordinated Notes, or to obtain or seek to obtain priority over
or preference to any other such holder, or to enforce any right under the
Subordinated Notes, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Subordinated Notes.
All powers and remedies given by this
Section 4 to the holders of the Subordinated Notes shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any other powers and
remedies available to the holders of the Subordinated Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in the Subordinated Notes or otherwise
established with respect to the Subordinated Notes, and no delay or omission of
any holder of any of the Subordinated Notes to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of, or
acquiescence in, any such Event of Default; and, subject to the provisions of
this paragraph, every power and remedy given by this Section 4 or by law to the
holders of the Subordinated Notes may be exercised from time to time, and as
often as shall be deemed expedient, by such holders of the Subordinates
Notes.
The Required Holders shall have the
right to direct the time, method, and place of conducting any proceeding for any
remedy available, or exercising any trust or power conferred on the holders of
the Subordinated Notes. Prior to any declaration accelerating the
maturity of the Subordinated Notes, the Required Holders may, on behalf of the
holders of all of the Subordinated Notes, waive any past default or Event of
Default and its consequences except an Event of Default (a) in payment of
principal of or interest on any of the Subordinated Notes (unless such Event of
Default has been cured and the Corporation has paid (or deposited with Paying
Agent) a sum
sufficient to pay all matured installments of interest and principal due other
6
than by
acceleration or (b) in respect of covenants or provisions hereof which cannot be
modified or amended without the consent of the holder of each Subordinated Note
affected. Upon any such waiver, the Event of Default covered thereby
shall be deemed to be cured for all purposes, and the Corporation and the
holders of the Subordinated Notes shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent
thereon. Any consent or waiver by the Holder shall be conclusive and
binding upon such Holder and upon all future holders and owners of this
Subordinated Note and of any Subordinated Note issued in exchange herefor or in
place hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Subordinated Note. Whenever any default or Event of Default hereunder
shall have been waived as permitted by this paragraph, such default or Event of
Default shall for all purposes of the Subordinated Notes be deemed to have been
cured and not continuing.
5. Merger, Consolidation, Sale
of Assets and Other Transactions. Nothing
contained in this Subordinated Note shall prevent any consolidation or merger of
the Corporation with or into any other Person (whether or not affiliated with
the Corporation, as the case may be), or successive consolidations or mergers in
which the Corporation or its successor or successors, as the case may be, shall
be a party or parties, or shall prevent any sale, conveyance, transfer or lease
of all or substantially all the property of the Corporation, or its successor or
successors as the case may be, to any other Person (whether or not affiliated
with the Corporation, or its successor or successors, as the case may be)
authorized to acquire and operate the same; provided, that (a) the Corporation
is the surviving Person, or the Person formed by or surviving any such
consolidation or merger (if other than the Corporation), or to which such sale,
conveyance, transfer or lease of property is made, is a Person organized and
existing under the laws of the United States or any State thereof or the
District of Columbia, and (b) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the principal of
and interest on the Subordinated Notes according to their tenor and the due and
punctual performance and observance of all the covenants and conditions of this
Subordinated Note to be kept or performed by the Corporation shall be expressly
assumed by the Person formed by such consolidation, or into which the
Corporation shall have been merged, or by the Person which shall have acquired
such property, as the case may be, and (c) immediately after giving effect to
such consolidation, merger, sale, conveyance, transfer or lease, no Event of
Default shall exist.
In the case of any such consolidation,
merger, conveyance or transfer and upon the assumption by the successor Person
of the obligation of due and punctual payment of the principal of and interest
on all of the Subordinated Notes and the due and punctual performance and
observance of all of the covenants and conditions of the Subordinated Notes to
be performed or observed by the Corporation, such successor Person shall succeed
to and be substituted for the Corporation, with the same effect as if it had
been named herein as the party of the first part, and the Corporation thereupon
shall be relieved of any further liability or obligation hereunder or upon the
Subordinated Notes. Such successor Person thereupon may cause to be
signed, and may issue either in its own name or in the name of the Corporation,
any or all of the Subordinated Notes. All the
Subordinated Notes theretofore or thereafter issued shall in all
7
respects
have the same legal rank and benefit as this Subordinated Note, as though all of
such Subordinated Notes had been issued at the date of the execution
hereof.
6. Agreement to Subordinate;
Subordination. The Corporation covenants and agrees, and by
acceptance hereof, Holder likewise covenants and agrees, that the
Subordinated Notes shall be issued subject to the provisions of this Section 6;
and each holder of a Subordinated Note, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment by the Corporation of the
principal of and interest on the Subordinated Notes or any other amounts which
may be due on the Subordinated Notes pursuant to the terms hereof or otherwise
shall, to the extent and in the manner hereinafter set forth, be subordinated
and junior in right of payment to all Senior Indebtedness, whether outstanding
at the date of this Subordinated Note or thereafter incurred. No
provision of this Section 6 shall prevent the occurrence of any Event of Default
hereunder.
In the event and during the
continuation of any event of default by the Corporation in the payment of
principal, interest or any other payment due on any Senior Indebtedness, or in
the event that the maturity of any Senior Indebtedness has been accelerated
because of an event of default with respect to the Senior Indebtedness, or if
any judicial proceeding shall be pending with respect to any such event of
default with respect to the Senior Indebtedness, then, in any such case, no
payment shall be made by the Corporation with respect to the principal
(including redemption payments) of or interest on the Subordinated Notes or any
other amounts which may be due on the Subordinated Notes pursuant to the terms
hereof or otherwise.
In the event of the acceleration of the
maturity of the Subordinated Notes, no payment shall be made by the Corporation
with respect to the principal (including redemption payments pursuant to Section
2 of this Subordinated Note) or interest on the Subordinated Notes or any other
amounts which may be due on the Subordinated Notes pursuant to the terms hereof
or otherwise until the holders of all Senior Indebtedness outstanding at the
time of such acceleration shall receive payment in full of all amounts due on
such Senior Indebtedness (including any amounts due upon
acceleration).
In the event that, notwithstanding the
foregoing, any payment shall be received by the Holder when such payment is
prohibited by the preceding paragraphs of this Section 6, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee or trustees) notify the Holder
and the Corporation in writing within 90 days of such payment of the amounts
then due and owing on such Senior Indebtedness, and only the amounts specified
in such notice shall be paid to the holders of such Senior
Indebtedness.
8
Upon any payment by the Corporation or
distribution of assets of the Corporation of any kind or character, whether in
cash, property or securities, to creditors upon the Corporation’s liquidation,
dissolution, winding up, reorganization, assignment for the benefit of its
creditors, marshaling of its assets or any bankruptcy, insolvency, debt
restructuring or similar proceeding in connection with any insolvency or
bankruptcy proceeding involving the Corporation, all Senior Indebtedness of the
Corporation shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the
Corporation on account of the principal of or interest on the Subordinated Notes
or any other amounts which may be due on the Subordinated Notes pursuant to the
terms hereof or otherwise; and, upon any such event, any payment by the
Corporation, or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, which the holders of the
Subordinated Notes would be entitled to receive from the Corporation, except for
the provisions of this Section 6, shall be paid by the Corporation or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Subordinated Notes
if received by them, directly to the holders of Senior Indebtedness of the
Corporation (on a pro rata basis, as calculated by the Corporation) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full, in money or money’s
worth, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness, before any payment or distribution is
made to the holders of the Subordinated Notes.
In the event that, notwithstanding the
foregoing, any payment or distribution of assets of the Corporation of any kind
or character prohibited by the foregoing, whether in cash, property or
securities, shall be received by the holders of the Subordinated Notes before
all Senior Indebtedness is paid in full, or provision is made for such payment
in money in accordance with its terms, such payment or distribution shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of such Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Corporation, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to, or for the benefit of the holders of, such Senior
Indebtedness. For purposes of this Section 6, the words “cash, property or
securities” shall not be deemed to include shares of stock of the Corporation as
reorganized or readjusted, or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Section
6 with respect to the Subordinated Notes to the payment of Senior Indebtedness
that may at the time be outstanding, provided that (i) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the
Corporation with, or the merger of the Corporation into, another Person or the
liquidation or dissolution of the Corporation following the sale, conveyance,
transfer or lease of its property as an entirety, or substantially as an
9
entirety,
to another Person upon the terms and conditions provided for in Section 5 of
this Subordinated Note shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section 6 if such other
Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Section 5 of this
Subordinated Note.
Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Subordinated Notes shall
be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the
Corporation, as the case may be, applicable to such Subordinated Notes until the
principal of and interest on the Senior Indebtedness shall be paid in full; and,
for the purposes of such subrogation, no payments or distributions to the
holders of such Senior Indebtedness of any cash, property or securities to which
the holders of the Subordinated Notes would be entitled, except for the
provisions of this Section 6, and no payment pursuant to the provisions of this
Section 6 to or for the benefit of the holders of such Senior Indebtedness by
holders of the Subordinated Notes shall, as between the Corporation, its
creditors other than holders of Senior Indebtedness of the Corporation, and the
holders of the Subordinated Notes, be deemed to be a payment by the Corporation
to or on account of such Senior Indebtedness. It is understood that
the provisions of this Section 6 are, and are intended solely for the purposes
of, defining the relative rights of the holders of the Subordinated Notes on the
one hand, and the holders of such Senior Indebtedness on the other
hand.
Nothing contained in this Section 6 or
elsewhere in this Subordinated Note is intended to or shall impair, as between
the Corporation, its creditors other than the holders of Senior Indebtedness of
the Corporation, and the holders of the Subordinated Notes, the obligation of
the Corporation, which is absolute and unconditional, to pay to the holders of
the Subordinated Notes the principal of and interest on the Subordinated Notes
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Subordinated Notes and creditors of the Corporation, as the case may be,
other than the holders of Senior Indebtedness of the Corporation, as the case
may be, nor shall anything herein or therein prevent the holder of any
Subordinated Note from exercising all remedies otherwise permitted by applicable
law upon an Event of Default, subject to the rights, if any, under this Section
6 of the holders of such Senior Indebtedness in respect of cash, property or
securities of the Corporation, as the case may be, received upon the exercise of
any such remedy.
Holder, by Holder’s acceptance of this
Subordinated Note, authorizes and directs the Corporation on Holder’s behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Section 6 and appoints the Corporation as
Holder’s attorney in fact for any and all such purposes.
Upon any payment or distribution of
assets of the Corporation referred to in this Section 6, the holders of the
Subordinated Notes shall be entitled to conclusively rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, liquidating trustee, custodian,
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receiver,
assignee for the benefit of creditors, agent or other person making such payment
or distribution, delivered to the holders of the Subordinated Notes, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Corporation, as the case may be, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 6.
No right of any present or future
holder of any Senior Indebtedness of the Corporation to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Corporation, as the case may be, or by
any act or failure to act, in good faith, by any such holder of any Senior
Indebtedness, or by any noncompliance by the Corporation, with the terms,
provisions and covenants of the Subordinated Notes, regardless of any knowledge
thereof that any such holder of Senior Indebtedness may have or otherwise be
charged with.
Without in any way limiting the
generality of the foregoing paragraph, the holders of Senior Indebtedness of the
Corporation may, at any time and from time to time, without the consent of or
notice to the holders of the Subordinated Notes, without incurring
responsibility to the holders of the Subordinated Notes and without impairing or
releasing the subordination provided in this Section 6 or the obligations
hereunder of the holders of the Subordinated Notes to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Corporation, as the case may be,
and any other Person.
7.
Denominations, Transfer and
Exchange. The Subordinated Notes are issuable
without coupons in minimum denominations of $100,000 and any integral multiple
of $50,000. This Subordinated Note has not been registered under the
Securities Act of 1933, as amended (the “Securities Act”) or any state
securities laws and may not be offered, sold, pledged, assigned or otherwise
transferred unless (i) a registration statement with respect hereto is effective
under the Securities Act and any applicable state securities laws or (ii) Holder
receives approval of the transfer from the Corporation. In all cases,
Corporation approval of transfer shall not be granted unless the Holder provides
to the Corporation, upon surrender of this Subordinated Note, and along with a
written instrument or instruments of transfer in form satisfactory to the
Corporation duly executed by holder hereof or his attorney duly authorized in
writing, an opinion of counsel, which counsel and opinion are satisfactory to
Corporation, that none of the offer, sale, pledge, assignment or other transfer
of this Subordinated Note will result in any violation of the applicable
securities laws. Upon any such transfer, one or more new Subordinated
Notes of authorized denominations and for the same aggregate principal amount
and series will be issued to the designated transferee or
transferees. In the event of any permitted transfer of this
Subordinated Note, the transferring party will be responsible for paying
Corporation’s cost of transfer of this Subordinated Note, including any transfer
agent costs and
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Corporation’s
legal fees associated with considering and/or effecting the proposed transfer of
this Subordinated Note. In case of transfer of this Subordinated Note
by operation of law, the transferee agrees to notify the Corporation of such
transfer and of its address, and to submit appropriate evidence regarding such
transfer so that this Subordinated Note may be registered in the name of the
transferee. Communications sent to any registered owner shall be
effective as against all Holders or transferees of this Subordinated Note not
registered at the time of sending the communication.
8.
Persons Deemed
Owners. Prior to due presentment for registration
or transfer of this Subordinated Note, the Corporation, any authenticating
agent, any paying agent, any transfer agent and the registrar may deem and treat
Holder as the absolute owner hereof (whether or not this Subordinated Note shall
be overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the security registrar for the Subordinated Notes) for the
purpose of receiving payment of or on account of the principal hereof and
interest due hereon and for all other purposes, and neither the Corporation nor
any authenticating agent nor any paying agent nor any transfer agent nor any
registrar shall be affected by any notice to the contrary.
9.
No Recourse Against
Others. No recourse shall be had for the payment
of the principal of or interest on this Subordinated Note, or for any claim
based hereon, or otherwise in respect hereof, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Corporation or of any predecessor or successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
10. Governing
Law. THE SUBORDINATED NOTES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
11. Paying Agent and
Registrar. The Corporation shall act as the paying agent and
registrar for the Subordinated Notes.
12. Certain Federal Income Tax
Matters. The Subordinated Notes were issued as part of an
“investment unit” (within the meaning of Section 1273(c)(2) of the Internal
Revenue Code of 1986, as amended (the “Code”)) together with warrants (the
“Warrants”) to purchase shares of common stock (the “Common Stock”) of the
Corporation. Each such investment unit consists of a Subordinated
Note having a stated principal amount of $50,000 and Warrants to purchase 7,500
shares of Common Stock. Pursuant to Treasury Regulations
§ 1.1273-2(h), the Corporation has determined that the aggregate “issue
price” of each such investment unit is $50,000, which amount shall be allocated
to the Subordinated Notes and the Warrants in proportion to their relative fair
market values as of the issue date. The Corporation shall notify
Holder as to the Corporation’s allocation within 60 days after the issue
date.
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IN
WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed
and sealed this ___ day of [_____], 2009.
NORTH
AMERICAN GALVANIZING & COATINGS, INC.
By: _________________________________________
Name:
Title:
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