<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1 )*
---
DAIRY MART CONVENIENCE STORES, INC.
- --------------------------------------------------------------------------------
(Name of issuer)
CLASS A COMMON STOCK, $0.01 par value per share
- --------------------------------------------------------------------------------
(Title of class of securities)
233860204
-----------------------------------------------------------------------
(CUSIP number)
Thomas W. Janes
Triumph Capital Group, Inc.
60 State Street, 21st Floor
Boston, MA 02109
(617) 557-6000
- --------------------------------------------------------------------------------
(Name, address and telephone number of person authorized to receive notices
and communications)
December 1, 1995
-----------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement . /X/ (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following pages)
- --------------------------------
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TRIUMPH-CONNECTICUT LIMITED PARTNERSHIP
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
WC
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CONNECTICUT
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
______________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
______________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
______________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
PN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TRIUMPH-CONNECTICUT CAPITAL ADVISORS, LIMITED PARTNERSHIP
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
______________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
______________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
______________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
PN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TRIUMPH CAPITAL GROUP, INC.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
__________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
__________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
__________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
CO
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FREDERICK W. MCCARTHY
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
__________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
__________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
__________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
IN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 6
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FREDERICK S. MOSELEY, IV
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
__________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
__________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
__________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
IN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 7
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
E. MARK NOONAN
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
__________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
__________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
__________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
IN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 8
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
THOMAS W. JANES
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
__________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
__________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
__________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
IN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 9
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
JOHN M. CHAPMAN
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
_______________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
_______________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
_______________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
IN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 10
SCHEDULE 13D
CUSIP NO. 233860204
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RICHARD J. WILLIAMS
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) /X/
(B) / /
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
______________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 765,000
______________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
______________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 765,000
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
765,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*/ /
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON *
IN
________________________________________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 11
ITEM 1. SECURITY AND ISSUER.
The securities to which this statement relates are shares of Class A
Common Stock, $0.01 par value per share (the "Class A Common Stock"), of Dairy
Mart Convenience Store, Inc., a Delaware corporation ("Dairy Mart"). The
principal executive offices of Dairy Mart are located at One Vision Drive,
Enfield, Connecticut 06082.
ITEM 2. IDENTITY AND BACKGROUND.
This information was provided in the initial filing of this Schedule 13-D on
December 11, 1995.
<PAGE> 12
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
This information was provided in the initial filing of this Schedule 13-D on
December 11, 1995.
ITEM 4. PURPOSE OF TRANSACTION.
This information was provided in the initial filing of this Schedule 13-D on
December 11, 1995.
<PAGE> 13
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
This information was provided in the initial filing of this Schedule 13-D on
December 11, 1995.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
This information was provided in the initial filing of this Schedule 13-D on
December 11, 1995.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Agreement for Joint Filing on Behalf of Each Reporting Person.
Pages 15-16 of initial filing dated December 11, 1995.
B. Note and Warrant Purchase Agreement. Pages 15-57.
C. Registration Rights Agreement. Pages 58-80.
<PAGE> 14
Signature
After reasonable inquiry and to the best of my knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
Date: December 8, 1995
Triumph-Connecticut Limited Partnership
by Triumph-Connecticut Capital Advisers, L.P.
Its General Partner
By: *
--------------------------------------
Frederick W. McCarthy
Its General Partner
Triumph-Connecticut Capital Advisors, L.P.
by Triumph Capital Group, Inc.
Its General Partner
By: *
--------------------------------------
Frederick W. McCarthy
Its President
Triumph Capital Group, Inc.
By: *
--------------------------------------
Frederick W. McCarthy
Its President
*
-----------------------------------------
Frederick W. McCarthy
*
-----------------------------------------
Frederick S. Moseley, IV
*
-----------------------------------------
E. Mark Noonan
*
-----------------------------------------
Thomas W. Janes
*
-----------------------------------------
John M. Chapman
*
-----------------------------------------
Richard J. Williams
/s/ Frederick W. McCarthy
- -------------------------------
*By: Frederick W. McCarthy
Attorney-in-Fact
<PAGE> 1
EXHIBIT B
EXECUTION COPY
================================================================================
DAIRY MART CONVENIENCE STORES, INC.
10-1/4% Senior Subordinated Notes
(Series B) due March 15, 2004
AND
Warrants to Purchase 1,215,000 Shares
of Class A Common Stock, par value $0.01
per Share, of Dairy Mart Convenience Stores, Inc.
-------------------
NOTE AND WARRANT PURCHASE AGREEMENT
-------------------
Dated as of December 1, 1995
==============================================================================
1
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C> <C>
1. AUTHORIZATION OF FINANCING AND GUARANTEES . . . . . . 1
1.1. AUTHORIZATION OF NOTES . . . . . . . . . . . . 1
1.2. AUTHORIZATION OF WARRANTS . . . . . . . . . . 1
1.3. AUTHORIZATION OF GUARANTEES . . . . . . . . . 1
1.4. DEFINED TERMS . . . . . . . . . . . . . . . . 2
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . 2
2.1. SALE AND PURCHASE OF NOTES . . . . . . . . . . 2
2.2. SALE AND PURCHASE OF THE PURCHASE WARRANTS . . 2
2.3. OTHER AGREEMENTS . . . . . . . . . . . . . . . 2
3. THE CLOSING . . . . . . . . . . . . . . . . . . . . . 3
4. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . 3
4.1. DOCUMENTS DELIVERED . . . . . . . . . . . . . 3
4.2. REPRESENTATIONS AND WARRANTIES . . . . . . . . 5
4.3. PERFORMANCE; NO DEFAULT . . . . . . . . . . . 5
4.4. OPINIONS OF COUNSEL . . . . . . . . . . . . . 5
4.5. COMPLIANCE CERTIFICATES . . . . . . . . . . . 5
4.6. ENDORSEMENT OF GUARANTEES . . . . . . . . . . 6
4.7. REPLACEMENT OF ORIGINAL TRUSTEE; CONSENT
AGREEMENT . . . . . . . . . . . . . . . . . 6
4.8. SALE OF OTHER NOTES AND PURCHASE WARRANTS . . 6
4.9. REGISTRATION RIGHTS AGREEMENT . . . . . . . . 7
4.10. CONSUMMATION OF THE NIRENBERG TRANSACTION . . 7
4.11. PURCHASE PERMITTED BY APPLICABLE LAWS . . . . 7
4.12. PROCEEDINGS AND DOCUMENTS . . . . . . . . . . 7
4.13. NO ADVERSE U.S. LEGISLATION, ACTION OR
DECISION, ETC . . . . . . . . . . . . . . . 7
4.14. COMPLIANCE WITH SECURITIES LAWS . . . . . . . 8
4.15. NO ACTIONS PENDING . . . . . . . . . . . . . 8
4.16. PRIVATE PLACEMENT NUMBERS . . . . . . . . . . 8
4.17. CONDUCT OF BUSINESS . . . . . . . . . . . . . 8
4.18. SOLVENCY OF THE COMPANY; FAIRNESS OF
NIRENBERG TRANSACTION . . . . . . . . . . . 9
4.19. BANK CREDIT AGREEMENT . . . . . . . . . . . . 9
4.20. LEGAL FEES AND EXPENSES . . . . . . . . . . . 9
4.21. COMMITMENT FEE . . . . . . . . . . . . . . . 9
5. REPRESENTATIONS, COVENANTS AND WARRANTIES . . . . . . 9
5.1. ORGANIZATION, ETC . . . . . . . . . . . . . . 9
5.2. AUTHORIZATION . . . . . . . . . . . . . . . . 10
5.3. SUBSIDIARIES . . . . . . . . . . . . . . . . . 10
</TABLE>
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S><C> <C>
5.4. GOVERNMENTAL CONSENTS, ETC . . . . . . . . . . 10
5.5. ENFORCEABILITY . . . . . . . . . . . . . . . . 11
5.6. BUSINESS; FINANCIAL STATEMENTS . . . . . . . . 11
5.7. NO MATERIAL ADVERSE CHANGE . . . . . . . . . . 12
5.8. INDEBTEDNESS . . . . . . . . . . . . . . . . . 12
5.9. LITIGATION; COMPLIANCE WITH LAWS . . . . . . . 12
5.10. COMPLIANCE WITH ORDERS, OTHER INSTRUMENTS . . 13
5.11. PATENTS, TRADEMARKS, AUTHORIZATIONS, ETC . . . 14
5.12. CERTAIN FEES . . . . . . . . . . . . . . . . . 14
5.13. FEDERAL RESERVE REGULATIONS . . . . . . . . . 14
5.14. TAXES . . . . . . . . . . . . . . . . . . . . 15
5.15. COMPLIANCE WITH ERISA . . . . . . . . . . . . 15
5.16. DISCLOSURE . . . . . . . . . . . . . . . . . . 17
5.17. INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT . . . . . . . . . . . . 17
5.18. CAPITALIZATION OF THE COMPANY . . . . . . . . 17
5.19. OFFERING OF NOTES OR PURCHASE WARRANTS . . . . 18
5.20. FOREIGN ASSETS CONTROL REGULATIONS, ETC. . . . 18
5.21. ABSENCE OF UNDISCLOSED LIABILITIES . . . . . . 19
5.22. USE OF PROCEEDS. . . . . . . . . . . . . . . . 19
5.23. LICENSES . . . . . . . . . . . . . . . . . . . 19
5.24. ENVIRONMENTAL REGULATION, ETC. . . . . . . . . 20
5.25. TRANSACTIONS WITH AFFILIATES . . . . . . . . . 20
6. REPRESENTATIONS OF THE PURCHASER. . . . . . . . . . . 22
6.1. PURCHASE FOR INVESTMENT . . . . . . . . . . . . 22
6.2. CORPORATE AUTHORIZATION; VALIDITY AND
BINDING EFFECT . . . . . . . . . . . . . . . 22
6.3. SOURCE OF FUNDS . . . . . . . . . . . . . . . . 23
7. COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . 24
7.1. PERFORMANCE OF COMPANY'S OBLIGATIONS . . . . . 24
7.2. NASDAQ STOCK MARKET . . . . . . . . . . . . . . 24
7.3. FINANCIAL STATEMENTS, REPORTS, ETC. . . . . . . 24
7.4. ADDITIONAL DISTRIBUTION OF WARRANTS . . . . . . 25
7.5. AGREEMENT TO SUPPLEMENT INDENTURE . . . . . . . 25
8. PAYMENTS OF NOTES . . . . . . . . . . . . . . . . . . 25
8.1. PLACE OF PAYMENT. . . . . . . . . . . . . . . . 25
8.2. HOME OFFICE PAYMENT . . . . . . . . . . . . . . 25
9. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 26
9.1. ACCOUNTING TERMS . . . . . . . . . . . . . . . 32
10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 32
</TABLE>
ii
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C> <C>
10.1. EXPENSES . . . . . . . . . . . . . . . . . . 32
10.2. INDEMNIFICATION . . . . . . . . . . . . . . . 33
10.3. AMENDMENTS AND WAIVERS . . . . . . . . . . . 34
10.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT . . . . . . . . . . . . . . 35
10.5. SUCCESSORS AND ASSIGNS . . . . . . . . . . . 35
10.6. DISCLOSURE TO OTHER PERSONS . . . . . . . . . 36
10.7. NOTICES . . . . . . . . . . . . . . . . . . . 36
10.8. DESCRIPTIVE HEADINGS . . . . . . . . . . . . 36
10.9. GOVERNING LAW . . . . . . . . . . . . . . . . 37
10.10. COUNTERPARTS . . . . . . . . . . . . . . . . 37
</TABLE>
iii
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 5
Exhibit A FORM OF NOTE
Exhibit B FORM OF AMENDED AND RESTATED INDENTURE, BY
AND AMONG THE COMPANY, THE GUARANTORS AND
THE TRUSTEE
Exhibit C-1 FORM OF OPINION OF WEIL, GOTSHAL & MANGES
Exhibit C-2 FORM OF OPINION OF GREGORY G. WOZNIAK, ESQ.
Exhibit D CONSENT AGREEMENT
Exhibit E REGISTRATION RIGHTS AGREEMENT
Exhibit F WARRANT
Exhibit G SUBSIDIARIES
Schedule I SCHEDULE OF PURCHASERS
Schedule 3 WIRE INSTRUCTIONS
Schedule 4.1(f) NIRENBERG DOCUMENTS
Schedule 4.21 SCHEDULE OF COMMITMENT FEES
Schedule 5.4 GOVERNMENTAL CONSENTS
Schedule 5.8 INDEBTEDNESS
Schedule 5.9 ACTIONS, SUITS, PROCEEDINGS, ETC.
Schedule 5.14 TAXES
Schedule 5.15 ERISA
Schedule 5.18 CAPITALIZATION
Schedule 5.23 LICENSES
Schedule 5.24 ENVIRONMENTAL
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DAIRY MART CONVENIENCE STORES, INC.
As of December 1, 1995
To Each of the Purchasers
Listed in the Attached
Schedule of Purchasers:
Ladies and Gentlemen:
The undersigned, Dairy Mart Convenience Stores, Inc., a Delaware
corporation (herein called the "COMPANY"), hereby agrees with you as follows:
1. AUTHORIZATION OF FINANCING AND GUARANTEES.
1.1. AUTHORIZATION OF NOTES. The Company has duly authorized the
issue and sale of its 10-1/4% Senior Subordinated Notes (Series B) due March
15, 2004, to be substantially in the form of Exhibit A hereto (including each
Note delivered pursuant to any provision of this Agreement or the Other
Purchase Agreements referred to in Section 2.3 and each Note delivered in
substitution or exchange for any such Note pursuant to any such provision, the
"NOTES"), in the aggregate principal amount of $13,500,000, with the terms set
forth in the Amended and Restated Indenture, dated as of December 1, 1995,
among the Company, the Guarantors (as defined therein) and First Bank National
Association, as Trustee (as such Indenture may be amended, supplemented or
otherwise modified from time to time, substantially in the form of Exhibit B
hereto, the "INDENTURE").
1.2. AUTHORIZATION OF WARRANTS. The Company has duly authorized the
issue and sale of Common Stock Purchase Warrants (the "PURCHASE WARRANTS", such
term to include any such purchase warrants issued in substitution therefor), to
be in substantially the form of Exhibit F, for the purchase of an aggregate of
1,215,000 shares of Class A Common Stock, par value $0.01, of the Company (the
"CLASS A COMMON STOCK"), at a purchase price as set forth in the Warrant.
1.3. AUTHORIZATION OF GUARANTEES. The Company will authorize and
direct each of the Guarantor Subsidiaries to guarantee the Notes on the terms
set forth in the Indenture and to endorse the guarantees on the Notes, in the
form set forth in the Indenture (the "GUARANTEES").
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1.4. DEFINED TERMS. Certain capitalized terms used in this Agreement
are defined in Section 9; references to "Exhibit" are, unless otherwise
specified, to one of the exhibits attached to this Agreement and references to
a "Section" are, unless otherwise specified, to one of the Sections of this
Agreement.
2. PURCHASE AND SALE OF NOTES AND PURCHASE WARRANTS. 2.1. SALE AND
PURCHASE OF NOTES. The Company hereby agrees to sell to you and, subject to
the terms and conditions herein set forth, you agree to purchase from the
Company, at the Closing provided for in Section 3 hereof, Notes in the
principal amount specified opposite your name in the schedule of purchasers at
the end hereof (the "SCHEDULE OF PURCHASERS") at the purchase price of 88% of
the principal amount of such Notes. You and the Company agree (as contemplated
by section 1273(c) of the Code and Treasury Regulations section 1.1273-2(h) for
federal income tax purposes, that the "issue price" of each Note under section
1273(b) of the Code shall equal the purchase price thereof (as set forth in the
preceding sentence). You and the Company agree to use the foregoing issue
price for U.S. federal income tax purposes with respect to this transaction.
2.2. SALE AND PURCHASE OF THE PURCHASE WARRANTS. Subject to the terms
and conditions of this Agreement, the Company will issue and sell to you and
you will purchase from the Company, at the Closing provided for in Section 3,
Purchase Warrants for the purchase of the number of shares of Class A Common
Stock specified opposite your name in the Schedule of Purchasers at a purchase
price for such Purchase Warrants of $1.33 for each share of Class A Common
Stock subject to such Purchase Warrants. You and the Company agree (as
contemplated by Section 1273(c) of the Code and Treasury Regulations section
1.1273-2(h), for U.S. federal income tax purposes, that the aggregate purchase
price of all the Purchase Warrants to be issued to you hereunder is the
purchase price paid by you for such Purchase Warrants (as set forth in the
preceding sentence). You and the Company agree to use the foregoing for all
U.S. federal income tax purposes with respect to this transaction.
2.3. OTHER AGREEMENTS. Contemporaneously herewith, the Company is
entering into separate Note and Warrant Purchase Agreements (the "OTHER
PURCHASE AGREEMENTS") identical to this Agreement with the other purchasers
(the "OTHER PURCHASERS") named in the Schedule of Purchasers, providing for the
sale to the Other Purchasers of the Notes
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and Purchase Warrants specified opposite their names in the Schedule of
Purchasers. You and the Other Purchasers are herein referred to collectively
as the "PURCHASERS" and individually as a "PURCHASER."
3. THE CLOSING. The sales of the Notes and Purchase Warrants to be
purchased by you and the Other Purchasers shall take place at a closing (the
"CLOSING") to be held at the offices of Weil, Gotshal & Manges, 767 Fifth
Avenue, New York, New York at 11:00 a.m., New York time, on December 1, 1995,
or such later time as the parties hereto may agree (such date, the "CLOSING
DATE"). At the Closing, (a) the Company will deliver to you the Notes to be
purchased by you, in the form of a single Note (or such greater number of Notes
as you may request), dated the Closing Date and registered in your name (or in
the name of your nominee), against payment of the aggregate purchase price
therefor by transfer of immediately available funds for credit as directed by
the Company in writing in Schedule 3 hereto, and (b) the Company will delivery
to you the Purchase Warrants to be purchased by you, in the form of a single
Purchase Warrant (or such greater number of Purchase Warrants as you may
request), dated the Closing Date, and registered in your name (or in the name
of your nominee), against payment of the aggregate purchase price therefor by
transfer of immediately available funds for credit as directed by the Company
in Schedule 3 hereto. If at the Closing, the Company shall fail to tender the
Notes or Purchase Warrants to be purchased by you as provided above in this
Section 3, or any of the conditions specified in Section 4 shall not have been
fulfilled to your satisfaction, you shall, at your option, be relieved of all
further obligations under this Agreement, without thereby waiving any other
rights you may have by reason of such failure or such nonfulfillment.
4. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the
Notes and Purchase Warrants to be purchased by you at the Closing is subject to
the satisfaction (or waiver by you), prior to or at the Closing, of the
following conditions:
4.1. DOCUMENTS DELIVERED. You and your special counsel shall have
received the following documents, in each case in form and substance
satisfactory to you (except that documents required to be in a form of an
exhibit hereto need only be in the form of such exhibit, appropriately com-
pleted):
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(a) This Agreement, duly executed by the Company; the Indenture, duly
executed by the parties thereto; a Note or Notes, dated the Closing Date and
registered in your name or the name of your nominee and duly executed by the
Company, in the aggregate principal amount specified opposite your name in
the Schedule of Purchasers and a Purchase Warrant or Purchase Warrants,
dated the Closing Date and registered in your name or the name of your
nominee and duly executed by the Company, for the purchase of the number of
shares of Class A Common Stock specified opposite your name in the Schedule
of Purchasers.
(b) A copy of the Restated Certificate of Incorporation of the
Company, certified as of a recent date by the Secretary of State of the
State of Delaware.
(c) Copies of certificates of the appropriate Secretary of State,
relating to the Company and each Guarantor, dated as of a recent date, as to
the good standing of the Company and such Guarantor in their respective
states of incorporation.
(d) Copies of all opinions of counsel to the Company delivered
hereunder or in connection with the Registration Rights Agreement and the
Consent Agreement addressed to you, of the counsel delivering such opin-
ions.
(e) Secretary's Certificates of each of the Company and each of the
Guarantors as to (A) its Certificate of Incorporation and By-Laws, (B) the
resolutions of the Board of Directors adopting and approving each of the
Operative Agreements and any other agreements relating to the transactions
contemplated by this Agreement to which it is a party, and (C) the names,
offices and signatures of the Company or such Guarantor's officers executing
any documents in connection with the transactions contemplated by this
Agreement.
(f) You shall have received true and correct copies of the documents
listed on Schedule 4.1(f) hereof.
(g) Such other approvals, opinions or documents as you may reasonably
request.
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4.2. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in this Agreement, and those otherwise made
in writing by the Company in the Consent Agreement or any Officers'
Certificates delivered to you by or on behalf of the Company, in connection
with the transactions contemplated by this Agreement, shall be true and correct
when made and at and as of the time of the Closing. Each Guarantor's
representations and warranties made by it in the Indenture shall be true and
correct when made and as of the time of the Closing.
4.3. PERFORMANCE; NO DEFAULT. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing, and
at the time of the Closing no default shall have occurred and be continuing
with respect to any obligations of the Company or any Guarantor, as applicable,
under any Operative Agreement. The Company shall have delivered to you an
Officers' Certificate dated the Closing Date, certifying that, at the time of
the Closing, after giving effect to the Required Consents, and immediately
following consummation of the transactions contemplated by this Agreement to
occur on the Closing Date, no default or event of default under the Indenture
shall have occurred or be continuing.
4.4. OPINIONS OF COUNSEL. You shall have received favorable opinions,
dated the Closing Date, from (a) Weil, Gotshal & Manges, special counsel for
the Company, substantially in the form set forth in Exhibit C-1, and covering
such matters incident to the transactions and (b)Gregory Wozniak, Esq.,
Corporate Counsel of the Company, substantially in the form set forth in
Exhibit C-2. It is understood and agreed that the opinions are being delivered
to you upon the direction of the Company and that you are hereby authorized to
rely on such opinions.
4.5. COMPLIANCE CERTIFICATES. The Company shall have delivered to you
an Officers' Certificate, dated the Closing Date, certifying that the
conditions specified in Sections 4.2, 4.3 and 4.10 of this Agreement have been
fulfilled and demonstrating that, after giving effect to the issuance of all of
the Notes and the Purchase Warrants and the consummation of the other
transactions contemplated by this Agreement (including, without limitation, the
Nirenberg Transaction), the Company will be in compliance with the limitations
on the incurrence or maintenance of Indebtedness contained in any instrument or
agreement applicable to or binding on the Company or any of the Company's
Subsidiaries
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(including, without limitation, the Indenture) or certifying that a complete
and correct copy of a waiver or waivers of compliance with such limitations is
attached to such Officers' Certificate. Each of the Guarantor's shall have
delivered to you an Officers' Certificate, dated the Closing Date, certifying
that the representations and warranties made by it in the Indenture are true
and correct as of the time of the Closing.
4.6. ENDORSEMENT OF GUARANTEES. Each of the Guarantors shall have
duly endorsed the Guarantees on the Notes being purchased by you.
4.7. REPLACEMENT OF ORIGINAL TRUSTEE; CONSENT AGREEMENT. (a)
REPLACEMENT OF ORIGINAL TRUSTEE. The Original Trustee shall have been replaced
as indenture trustee under the Original Indenture. First Bank National
Association shall have accepted the appointment of the Company as successor
trustee under the Original Indenture.
(b) EXECUTION AND PERFORMANCE OF CONSENT AGREEMENT BY THE COMPANY.
The Company shall have executed the Consent Agreement, substantially in the
form of Exhibit D hereto, and shall have performed and complied with all
agreements and conditions contained in the Consent Agreement required to be
performed or complied with by it prior to or at the Closing, including without
limitation, taking all action to authorize the execution and delivery of the
Amendment Warrants to be distributed to the 1994 Note Holders. Each of the
1994 Note Holders executing the Consent Agreement as of the Closing Date shall
have received their PRO RATA shares of the Amendment Warrants on such Closing
Date.
(c) EXECUTION OF REQUIRED CONSENTS. Holders of at least 51% of the
aggregate principal amount of the 1994 Notes shall have executed the Consent
Agreement (the "REQUIRED CONSENTS"). The Required Consents shall be in full
force and effect in accordance with the term of the Consent Agreement, subject
only to the sale and purchase of the Notes.
4.8. SALE OF OTHER NOTES AND PURCHASE WARRANTS. Contemporaneously with
the Closing, the Company shall have sold to the Other Purchasers the Notes and
Purchase Warrants to be purchased by them at the Closing and shall have
received payment in full therefor.
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4.9. REGISTRATION RIGHTS AGREEMENT. A Registration Rights
Agreement, substantially in the form of Exhibit E hereto (the "REGISTRATION
RIGHTS AGREEMENT") shall have been duly executed and delivered by the parties
thereto and shall be in full force and effect.
4.10. CONSUMMATION OF THE NIRENBERG TRANSACTION. Contemporaneously
with the Closing, the Nirenberg Transaction shall have been consummated. You
shall have received true, complete and correct copies of the Nirenberg
Documents.
4.11. PURCHASE PERMITTED BY APPLICABLE LAWS. On the Closing Date, the
purchase of and payment for the Notes and Purchase Warrants to be purchased by
you on the terms and conditions herein provided (including the use of the
proceeds of the issuance of such Notes and Purchase Warrants by the Company)
shall not violate any applicable law or governmental regulation (including,
without limitation, Section 5 of the Securities Act or Regulation G, T or X of
the Board of Governors of the Federal Reserve System) and shall not subject you
to any tax (other than income tax), penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental regulation,
and you shall have received such certificates or other evidence as you may
reasonably request to establish compliance with this condition.
4.12. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
taken or to be taken by the Company or any of the Guarantors in connection with
the transactions contemplated by this Agreement and all documents incident to
such transactions (including, without limitation, the Notes, the Guarantees,
the Registration Rights Agreement, the Warrants, the Indenture, the Consent
Agreement and the Nirenberg Documents) shall be reasonably satisfactory in
substance and form to you, and you and your special counsel shall have received
all such counterpart originals or certified or other copies of such documents
as you may reasonably request.
4.13. NO ADVERSE U.S. LEGISLATION, ACTION OR DECISION, ETC. No
legislation shall have been passed by either House of Congress, or introduced
and favorably reported for passage to either House of Congress by any committee
of either such House, no other action shall have been taken by any United
States governmental authority, whether by order, regulation, rule, ruling or
otherwise, and no decision shall have been tendered by any court of com-
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<PAGE> 13
petent jurisdiction in the United States, which would materially and
adversely affect the Notes or Purchase Warrants being purchased by you
hereunder as an investment or the payment of any part of the commitment fee
provided for in Section 4.21 hereof or the issue and delivery of the Amendment
Warrants.
4.14. COMPLIANCE WITH SECURITIES LAWS. The offering and sale of
the Notes and the Purchase Warrants to be issued at the Closing under this
Agreement and the Other Purchase Agreements, the endorsement of the Guarantees
on the Notes, the solicitation by the Company of the Consents, and the
consummation of other transactions contemplated by the Operative Agreements
(including, without limitation, the execution and delivery of the Indenture and
the delivery of the Warrants) to be effected at or prior to the Closing shall
have complied with all applicable requirements of federal and state securities
laws, including, without limitation, the Securities Act, the Exchange Act and
the Trust Indenture Act, and you shall have received evidence thereof
satisfactory to you.
4.15. NO ACTIONS PENDING. There shall be no suit, action,
investigation, inquiry or other proceeding by any governmental body or other
Person or any other legal or administrative proceeding pending or threatened
which (a) seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of any of the transactions
contemplated by the Agreement, or (b) is related to this Agreement and would,
in your reasonable opinion, have a reasonable likelihood of having a materially
adverse effect on any of the parties hereto or any transaction contemplated
hereby.
4.16. PRIVATE PLACEMENT NUMBERS. TheCompany shall have obtained for
the Notes and for the Warrants, Private Placement Numbers issued by Standard &
Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation
Office of the National Association of Insurance Commissioners).
4.17. CONDUCT OF BUSINESS. Except as contemplated by this
Agreement, the Other Purchase Agreements, the Indenture and the Consent
Agreement (i) there shall not have occurred any change in the capitalization
(whether in debt or equity) or corporate structure of the Company or any
Guarantor, (ii) the Company shall not have declared or paid any common stock
dividend or purchased or redeemed any shares of any class of its capital stock
or set aside any
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<PAGE> 14
amounts for such purposes or made any other payment or distribution on
or in respect of any class of capital stock and (iii) neither the Company nor
any Guarantor shall have made or announced its intention to make any agreement
or commitment, or to issue any warrants or rights, contemplating any events
specified in clause (i) or (ii) above.
4.18. SOLVENCY OF THE COMPANY; FAIRNESS OF NIRENBERG TRANSACTION. The
Company shall have delivered to you a letter of Houlihan, Lokey, Howard &
Zukin, Inc., addressed to the Company and you and the Other Purchasers, as to
the solvency of the Company on the Closing Date and after giving effect to the
Nirenberg Transaction and the other transactions contemplated by this
Agreement. The Company shall have received a letter from Houlihan, Lokey,
Howard & Zukin, Inc., addressed to the Company, as to the fairness of the
consideration received by the Company in connection with the Nirenberg
Transaction.
4.19. BANK CREDIT AGREEMENT. The Bank Credit Agreement, which
provides for aggregate credit facilities in an aggregate principal amount of up
to $20,000,000 shall be in full force and effect on the Closing Date and no
term or condition thereof shall have been amended or modified in a manner which
is adverse to you as a holder of Notes or 1994 Notes. The Company will have
delivered to you a true and correct copy of the Amended and Restated Bank
Credit Agreement.
4.20. LEGAL FEES AND EXPENSES. Your special counsel shall have
received payment from the Company of its statement for fees, expenses and
disbursements in connection with the negotiation, preparation and review of
this Agreement, the Other Purchase Agreements, the Notes and Purchase
Warrants being purchased by you and the Other Purchasers, the Indenture and all
other documents in connection with the transactions contemplated hereby and
thereby.
4.21. COMMITMENT FEE. The commitment fees set forth on Schedule 4.21
shall have been paid in the form indicated and in the manner indicated to the
Persons on such Schedule in the amounts set forth opposite their respective
names, in immediately available funds.
5. REPRESENTATIONS, COVENANTS AND WARRANTIES.
The Company represents, covenants and warrants that:
5.1. ORGANIZATION, ETC. The Company is a corporation duly
organized, validly existing and in good stand-
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<PAGE> 15
ing under the laws of the State of Delaware, has all requisite power
and authority, including all licenses, permits, franchises, patents,
copyrights, trademarks, trade names, service marks, service names, consents,
and approvals, to own its properties and assets and to carry on its business as
presently conducted and as proposed to be conducted, and is duly qualified and
is in good standing as a foreign corporation, and is authorized to do business,
in each jurisdiction where such qualification or authorization is required,
except where the failure so to qualify, to be authorized or to be in good
standing would not have a Material Adverse Effect.
5.2. AUTHORIZATION. Each of the Company and the Guarantors has all
requisite power and authority to enter into and perform all of its obligations
under this Agreement and the other Operative Agreements to which it is a party.
The Company has all requisite power and authority to issue and sell the Notes
and the Purchase Warrants. Each of the Guarantors has all requisite power and
authority to endorse the Guarantees on the Notes. The Company has all
requisite power and authority to issue the Amendment Warrants.
5.3. SUBSIDIARIES. Exhibit G correctly lists the name of each
Subsidiary of the Company, including, without limitation, each Guarantor
Subsidiary on the date of this Agreement and (i) the jurisdiction of its
incorporation, and (ii) the percentage of its issued and outstanding shares
owned by the Company or another of its Subsidiaries (specifying each such
other Subsidiary). Each such Subsidiary is a corporation in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own and operate its properties, and to carry
on its business as now conducted and as proposed to be conducted. All the
issued and outstanding shares of capital stock of each such Subsidiary are
validly issued, fully paid and nonassessable, and all such shares indicated in
Exhibit G as owned by the Company or another Subsidiary are so owned
beneficially and of record by the Company or such other Subsidiary free and
clear of any Lien. From and immediately after the Closing, each of the
Guarantor Subsidiaries is and will be a Guarantor under the Indenture.
5.4. GOVERNMENTAL CONSENTS, ETC. Except as set forth in Schedule 5.4,
no registrations with, or consents or approvals of, filings and other action in
respect of, any governmental authority are or will be required in connection
with the transactions contemplated by the Agreement, the Other Purchase
Agreements, any other Operative Agreement or
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the Nirenberg Documents, including, without limitation, the offering,
issuance, sale and delivery of the Notes and the Purchase Warrants, the
consummation of the Nirenberg Transaction, the delivery of the Amendment
Warrants, other than any which have been made, obtained, given, filed or taken
and are in full force and effect or the failure to make, obtain, give, file or
take would not have a material adverse effect on the interests of the 1995 Note
Holders, the 1994 Note Holders or the Warrant Holders under this Agreement, the
Other Purchase Agreements or any of the other Operative Agreements, as
applicable, or the ability of the Company, and each Guarantor as applicable, to
perform timely its obligations under this Agreement, the Other Purchase
Agreements and the other Operative Agreements.
5.5. ENFORCEABILITY. Each of this Agreement and the other Operative
Agreements constitutes the legal, valid and binding obligation of the Company,
and each Guarantor, as applicable, in each case enforceable in accordance with
its respective terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws affecting
creditors' rights generally and to general principles of equity).
5.6. BUSINESS; FINANCIAL STATEMENTS. (a) The Company has heretofore
furnished to the Purchasers complete and correct copies of (i) an audited
balance sheet and statement of operations of the Company and its Subsidiaries
as of and for the Company's most recently completed full fiscal year (ii) a
balance sheet and statement of operations for the Company and its Subsidiaries
as of and for each of the last three fiscal quarters of the Company in each
case showing the financial condition and results of operations of the Company
and its consolidated Subsidiaries as of the end of each such period and for the
then elapsed portion of the fiscal year of the Company. Each such financial
statement presents fairly the financial position and results of operations of
the Company and its Subsidiaries and has been prepared in accordance with GAAP
applied on a consistent basis throughout the periods specified, subject, in the
case of the financial statements referred to in clause (ii) of this Section
5.6(a), to normal year-end audit adjustments. The balance sheets referred to in
clause (i) of this Section 5.6(a) and any notes thereto disclose all material
liabilities, direct or contingent, of the Company and its Subsidiaries as of
the respective dates thereof as required to be disclosed therein by GAAP.
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(b) At the time of the Closing and immediately after giving effect to
the transactions contemplated by this Agreement, the Other Purchase Agreements,
and the other Operative Agreements, including, without limitation, the issue
and sale of the Notes and the Purchase Warrants, the execution and delivery of
the Indenture and the consummation of the Nirenberg Transaction: (i) the
aggregate value of all of the assets of the Company and the Subsidiaries, taken
together, at a fair valuation, in each case, exceeds the respective probable
liabilities of the Company and its Subsidiaries, taken together (including
contingent, unmatured and unliquidated liabilities); (ii) the Company and its
Subsidiaries, taken together, will (and have no reason to believe that they
will not have thereafter) have sufficient cash flow to enable each of them to
repay their respective debts and liabilities as they mature or come due; and
(iii) none of the Company and its Subsidiaries will have unreasonably small
capital. For purposes of this Section 5.6, the "fair value" of such assets
shall be determined on the basis of that amount which may be realized within a
reasonable time, either through collection or sale of such assets at the
regular market value, conceiving the latter as the amount which could be
obtained for the property in question within such period by a capable and
diligent businessperson from an interested buyer who is willing to purchase
under ordinary selling conditions.
5.7. NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change in the business, assets, prospects, properties, operations of
or in the condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"), since the date of
the most recent balance sheet referred to in Section 5.6(a)(i) hereof.
5.8. INDEBTEDNESS. Schedule 5.8 correctly sets forth all Indebtedness
of the Company and the Subsidiaries outstanding or proposed to be outstanding
at the Closing, after giving effect to the transactions contemplated by this
Agreement, or for which the Company or any of the Subsidiaries has
commitments, and identifies the collateral, if any, securing any such
Indebtedness. Neither the Company nor any of the Subsidiaries is in default on
the date of this Agreement with respect to any Indebtedness outstanding.
5.9. LITIGATION; COMPLIANCE WITH LAWS.
(a) There are no actions, suits or proceedings at law or in equity or by or
before any governmental authority now pending or, to the knowledge of the
Company or any Subsidiary,
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threatened against or affecting the Company or any Subsidiary or the
businesses, assets or rights of the Company or any Subsidiary (i) which involve
the transactions contemplated by this Agreement or any other Operative
Agreement except as set forth in Schedule 5.9, or (ii) except as set forth in
Schedule 5.9, as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could, individually or in the
aggregate, materially impair the ability of the Company and the Subsidiaries
taken as a whole to conduct business substantially as now conducted or
materially and adversely affect the business, assets, operations or condition,
financial or otherwise, of the Company and the Subsidiaries taken as a whole
or impair the validity or enforceability of, or the ability of any of the
Company or, as applicable, any Subsidiary to perform its respective obligations
under, this Agreement, the Other Purchase Agreements, any of the other
Operative Agreements or the Nirenberg Documents.
(b) None of the Company or any Subsidiary is in violation of any law,
rule or regulation, or in default with respect to any judgment, order, writ,
injunction, decree, rule or regulation of any court or governmental agency or
instrumentality, where such violation or default could have a Material Adverse
Effect. The issuance of the Notes and Purchase Warrants hereunder, the use of
the proceeds from the sale of the Notes and Purchase Warrants, and the
consummation of the other transactions contemplated by this Agreement and by
the other Operative Agreements, will not violate any applicable law or
regulation or violate or be prohibited by any applicable judgment, writ,
injunction, decree or order of any court or governmental instrumentality or
agency.
5.10. COMPLIANCE WITH ORDERS, OTHER INSTRUMENTS. Neither the Company
nor any of its Subsidiaries is in violation of the terms of its certificate
of incorporation or by-laws or any term of any agreement or instrument to
which it is a party or by which it or any of its properties or assets is bound
or any term of any applicable law, ordinance, rule or regulation of any
governmental authority or any term of any applicable order, judgment or decree
of any court, arbitrator or governmental authority (including, without
limitation, any law, ordinance, rule, regulation, or order relating to
environmental, health and safety standards or equal employment practice
requirements), the consequences of which violation would have a Material
Adverse Effect. The consummation of the transactions contemplated by this
Agreement and the other Operative Agreements will not (i) violate
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(A) any applicable provision of law, statute, rule or regulation or the
certificate of incorporation or by-laws or regulations of the Company or, in
respect of the Guarantees, any Subsidiary, (B) any order of any court, or any
rule, regulation or order of any other agency of government binding on the
Company or any Subsidiary, or (C) any provisions of any indenture, agreement
or other instrument to which the Company or any Subsidiary or any of their
respective properties or assets is or may be bound, (ii) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under any indenture, agreement or other instrument referred to
in (i) (C) above, or (iii) result in the creation or imposition of any Lien of
any nature whatsoever upon any property or assets of the Company or any
Subsidiary.
5.11. PATENTS, TRADEMARKS, AUTHORIZATIONS, ETC. The Company and each
of the Guarantors own or possess, without any material conflict with the rights
of others, all licenses and authorizations, and all rights with respect to
patents, trademarks, service marks, tradenames and copyrights which the
failure to own or possess would have a Material Adverse Effect.
5.12. CERTAIN FEES. No broker's, finder's, investment banker's or
similar fee or commission has been paid or will be payable by the Company with
respect to or for any services rendered to the Company or any Affiliate
ancillary to the offer, issue and sale of the Notes or the Purchase Warrants or
the other transactions contemplated by this Agreement except the commitment
fees under Section 4.21 and the Amendment Warrants.
5.13. FEDERAL RESERVE REGULATIONS. The Company does not own and does
not have any present intention of acquiring any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve
System (herein called "margin stock"), the current market value of which would
equal or exceed 25% of the assets of the Company. No part of the proceeds of
the Notes or the Purchase Warrants will be used in a manner that violates
Regulation G, Regulation T, Regulation X or any other regulation of the Board
of Governors of the Federal Reserve Act. Neither the Company nor any agent
acting on its behalf has taken or will take any action which would cause this
Agreement, the Notes or the Purchase Warrants to violate Regulation G,
Regulation T (12 CFR Part 224), Regulation X or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the
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Exchange Act, as amended, in each case as in effect now or as the same may
hereafter be in effect.
5.14. TAXES. The Company and each of the Subsidiaries, has filed or
caused to be filed all Federal, state and local tax returns which are required
to be filed by it, and has paid or caused to be paid all taxes required to be
paid with respect to the taxable periods covered by such returns or on any
assessment received by it, and has paid any taxes or assessments therefor
required to be paid without the filing of any return, other than any taxes or
assessments the validity of which the Company or any of its Subsidiaries is
contesting in good faith by appropriate proceedings, and with respect to
which the Company or any such Subsidiary shall have set aside on its books
adequate reserves. The Federal income tax returns of each of the Company and
its Consolidated Subsidiaries have been audited by the United States Internal
Revenue Service through the respective year set forth opposite its name on
Schedule 5.14, and, except as set forth on Schedule 5.14, neither the Company
nor any of the Subsidiaries has, as of the date hereof, requested or been
granted any extension of time to file any Federal tax return.
5.15. COMPLIANCE WITH ERISA. (a) Neither the Company nor any of its
Subsidiaries has breached the fiduciary rules of ERISA or engaged in any
prohibited transaction, and no such breach or prohibited transaction has
occurred, which, in any such case, could result in any direct or indirect
liability (including, without limitation, as a result of an indemnification
obligation) to the Company or any of its Subsidiaries in connection with a suit
for damages or pursuant to section 409, 502(i) or 502(l) of ERISA or section
4975 of the Code where such breach or prohibited transaction would have a
Material Adverse Effect.
(b) Other than for premiums payable in the normal course that are not
past due, none of the Company, any of its Subsidiaries nor any Related Person
has incurred any direct or indirect material liability (including, without
limitation, as a result of an indemnification obligation) under or pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans and no event, transaction or condition has
occurred or exists or, to the Company's best knowledge, is expected to occur or
exist with respect to any Plan that could result in any such liability to the
Company, any of its Subsidiaries or any Related Person. There has been no
reportable event (within the meaning of section 4043(b) of
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ERISA) or any other event or condition with respect to any Plan which presents
a risk of the termination of, or the appointment of a trustee to administer,
any such Plan by the PBGC.
(c) Full timely payment has been made of all amounts which the
Company, any of its Subsidiaries or any Related Person is required under
applicable law, the terms of each Plan or any collective bargaining agreement
to have paid as contributions to each such Plan , and no accumulated funding
deficiency (as defined in section 302 of ERISA or section 412 of the Code),
whether or not waived, exists or is expected to exist with respect to any Plan
(other than a Multiemployer Plan). Except as set forth on Schedule 5.15,
neither the Company, any of its Subsidiaries nor any Related Person maintains
or contributes to, and at no time during the preceding six years has the
Company, any of its Subsidiaries or any Related Person maintained or
contributed to, any Plan that is subject to section 302 or Title IV of ERISA or
section 412 of the Code.
(d) The present value of the benefit liabilities (whether or not
vested) under each Plan (other than a Multi-employer Plan), determined as of
the end of each such Plan's most recently ended Plan year on the basis of the
actuarial assumptions specified for funding purposes in each such Plan's
actuarial valuation report for such Plan year, each of which assumptions is
reasonable and in compliance with section 412 of the Code, did not exceed the
current value of the assets of each such Plan allocable to such benefit
liabilities, and no event has occurred since such date that could reasonably be
expected to cause the present value of such benefit liabilities to increase by
a material amount. The terms "present value," "current value," "benefit lia-
bilities" and "unfunded benefit liabilities" shall have the meanings assigned
to such terms in section 3 or 4001 of ERISA, as applicable.
(e) No Plan is a Multiemployer Plan or a "multiple employer" plan
(within the meaning of section 4063 or 4064 of ERISA) except as set forth on
Schedule 5.15.
(f) The execution and delivery of this Agreement and the Other
Purchase Agreements and the issuance and sale of the Notes and the Purchase
Warrants hereunder and thereunder will not involve any transaction which is
subject to the prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975 of the Code.
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The Company is not a party in interest with respect to any employee benefit
plan whose name has been disclosed to the Company pursuant to Section 6.3 (b),
and securities of the Company are not employer securities with respect to any
such plan.
The representation by the Company in the preceding sentence is made in
reliance upon and subject to the accuracy of your representation in Section 6.3
of this Agreement and the respective representations of the Other Purchasers in
Section 6.3 of the Other Purchase Agreement as to the source of the funds to
be used by you and the Other Purchasers to pay the purchase price of the Notes
to be purchased by you and the Other Purchasers. As used in this Section 5.15,
the terms "employee benefit plan" and "party in interest" have the respective
meanings assigned to such terms in section 3 of ERISA and the term "employer
securities" has the meaning assigned to such term in section 407(d)(1) of
ERISA.
5.16. DISCLOSURE. None of the Operative Agreements, the Nirenberg
Documents or any Officers' Certificate furnished to you by or on behalf of the
Company or any of the Guarantors in connection with the transactions
contemplated by the Operative Agreements, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact known
to the Company which may reasonably be expected to be or result in a Material
Adverse Effect.
5.17. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
Neither the Company nor any Subsidiary is an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940. Neither
the Company nor any Subsidiary is a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
5.18. CAPITALIZATION OF THE COMPANY. The authorized capital stock
of the Company is as set forth on Schedule 5.18 ("CAPITAL STOCK"). Except as
set forth on Schedule 5.18, there are no outstanding subscriptions, options,
warrants, calls, rights (including preemptive rights), commitments or
agreements of any character relating to any capital stock of the Company.
At the time of the sale of the Notes and Purchase Warrants and after
giving effect to the other transactions contemplated by this Agreement and the
other Operative
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Agreements, all outstanding shares of Capital Stock of the Company will
be validly issued, fully paid and non-assessable. At the time of the Closing
and after giving effect to the transactions contemplated by this Agreement, the
Company will not have outstanding stock or securities convertible into or
exchangeable or exercisable for any shares of its Capital Stock (other than
pursuant to Section 4.5 of the Restated Certificate of Incorporation), nor will
it have outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character relating
to, any shares of Capital Stock. At the time of the Closing and after giving
effect to the transactions contemplated by this Agreement, the Company shall
not be subject to any obligation (contingent or otherwise) to redeem,
purchase or otherwise acquire or retire any shares of Capital Stock. At the
time of the Closing and after giving effect to the transactions contemplated by
this Agreement, the Company shall not be a party to any agreement restricting
the transfer of any shares of its Capital Stock except as may be required by
applicable law. At the time of the Closing, assuming issuance of all the
Amendment Warrants issuable pursuant to the Consent Agreement, the Warrants
will be exercisable for Class A Common Stock constituting not less than 26% of
the Class A Common Stock of the Company on a fully diluted basis.
5.19. OFFERING OF NOTES OR PURCHASE WARRANTS. Neither the Company nor
any agent acting on its behalf has, directly or indirectly, offered the Notes
or Purchase Warrants or any similar security of the Company for sale to, or
solicited any offers to buy the Notes or Purchase Warrants or any similar
security of the Company from, or otherwise approached or negotiated with
respect thereto with, any person other than you, the Other Purchasers and not
more than three (3) other accredited investors and neither the Company nor
any agent acting on its behalf has taken or will take any action which would
subject the issuance or sale of the Notes or the issuance of the Warrants to
the provisions of section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
5.20. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the issue and
sale of the Notes or Purchase Warrants nor the use of the proceeds thereof as
contemplated by this Agreement will violate any of the following regulations of
the United States Treasury Department (31 C.F.R. Subtitle B,
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Note and Warrant Purchase Agreement
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<PAGE> 24
Chapter V, as amended): the Foreign Assets Control Regulations, the
Transaction Control Regulations, the Cuban Assets Control Regulations, the
Foreign Funds Control Regulations, the Iranian Assets Control Regulations, the
South African Transactions Regulations, the Libyan Sanctions Regulations, the
Nicaraguan Trade Control Regulations, the Panamanian Transaction Regulations
and the Soviet Gold Coin Regulations of the United States Treasury Department
(31 C.F.R., Subtitle B, Chapter V as amended), Executive Order No. 12635, 53
Fed. Reg. 12134 (1988), Executive Order 12724, 55 Fed. Reg. 33089 (1990) or
Executive Order 12725, 55 Fed. Reg. 33091 (1990).
5.21. ABSENCE OF UNDISCLOSED LIABILITIES. After giving effect to the
transactions contemplated by this Agreement, neither the Company nor any
Subsidiary will, to the best of the knowledge of the Company, have any obliga-
tion or liability (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due) arising out of transactions entered
into at or prior to the Closing, or any action or inaction at or prior to the
Closing, including taxes with respect to or based upon transactions or
events occurring at or prior to the Closing, other than (i) the obligations of
the Company under this Agreement, (ii) liabilities fully and adequately
reflected or reserved against in the financial statements referred to in
Section 5.6(a) hereof, (iii) liabilities incurred under agreements (other than
agreements to borrow money), leases or purchase orders entered into in the
ordinary course of business, and (iv) other liabilities reflected in Schedules
attached to this Agreement, and (v) such other obligations or liabilities that,
singularly or in the aggregate, would not have a Material Adverse Effect.
5.22. USE OF PROCEEDS. Contemporaneously with the Closing, the
Company will use the proceeds of the sale of the Notes and Purchase Warrants to
consummate the Nirenberg Transaction.
5.23. LICENSES. The Company and the Guarantors hold all licenses,
franchises, permits, consents, registrations, certificates and other approvals
(including, without limitation, those relating to environmental matters, public
and worker health and safety, buildings, highways or zoning) (individually, a
"License") required for the conduct of their respective businesses as now being
conducted, and are operating in compliance therewith, except where the failure
to hold any such License or to operate in compliance therewith would not have a
Material Adverse Effect.
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Note and Warrant Purchase Agreement
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5.24. ENVIRONMENTAL REGULATION, ETC.
(a) Except as set forth on Schedule 5.24, to the knowledge of
the Company, each of the Company and its Subsidiaries (i) has no liability under
any Environmental Law or common law cause of action relating to or arising from
environmental conditions which could have a Material Adverse Effect, and any
property owned, operated, leased, or used by the Company and its Subsidiaries
and any facilities and operations thereon comply with all applicable
Environmental Laws to the extent that failure to comply could have a Material
Adverse Effect; and (ii) has never entered into or been subject to any
judgment, consent decree, compliance order, or administrative order with
respect to any environmental or health and safety matter or claim with respect
to any environmental or health and safety matter or the enforcement of any
Environmental Law, other than such judgment, consent, decree, compliance order,
administrative order or claim which, singularly or in the aggregate, do not
have a Material Adverse Effect.
(b) Except as set forth on Schedule 5.24, to the knowledge of the
Company: (i) each of the Company and its Subsidiaries has not generated,
transported, used, stored, treated, disposed of, or managed any Hazardous
Waste, except in accordance with applicable Environmental Laws or such
violations as would not have a Material Adverse Effect; (ii) the Company is not
aware of any Release or Threat of Release of a Hazardous Material at any site
presently or formerly owned, operated, leased, or used by the Company or any of
its Subsidiaries that would have a Material Adverse Effect; and (iii) the
Company and its Subsidiaries have never had a lien imposed by any governmental
agency or authority on any property, facility, machinery, or equipment owned,
operated, leased, or used by the Company or any of its Subsidiaries in
connection with the presence of any Hazardous Material which lien would have a
Material Adverse Effect.
5.25. TRANSACTIONS WITH AFFILIATES. Except for the Nirenberg
Transaction and the Kupperman Transaction, there are no material transactions,
agreements or understandings, existing or presently contemplated, between or
among the Company or any of its Subsidiaries and any of the Company's officers
or directors or stockholders or any of their respective Affiliates or
associates. Schedule 4.1(f) sets forth all of the documents entered into or to
be entered into by the Company, any of the Guarantors, or any of their
respective officers and directors in connection
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<PAGE> 26
with the Nirenberg Transaction and the Kupperman Transaction (the
"NIRENBERG DOCUMENTS"). Upon consummation of the Nirenberg Transaction, none
of Nirenberg, FCN, the Foundation or any other entity controlled by Nirenberg,
FCN or the Foundation will have any right, interest or claim to any of the
interests transferred to the Company in connection with the Nirenberg
Transaction or any claim against the Company. Nirenberg, on behalf of himself
and his affiliates, has released the Company and its affiliates from any and
all claims that Nirenberg and/or his affiliates ever had, now has, or hereafter
can, shall or may have, for, upon or by reason of his former employment with,
service as an officer and director of, or direct or indirect holding of equity
securities of the Company, including, without limitation, by virtue of the FCN
Note (as defined in the Nirenberg Documents) or the agreements executed in
connection therewith, or in any other capacity relating to the Company, and the
termination of the foregoing relationships, including, but not limited to, any
claims arising under any federal, state or local law or ordinance, tort,
employment contract (express or implied), public policy, or any other
obligation, including, without limitation, any claims arising under Title VII
of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act, as amended, and all claims for wrongful discharge, workers'
compensation, wages, monetary or equitable relief, vacation, compensation in
lieu of vacation, disability, other employee fringe benefits, benefit plans,
medical plans, or attorneys' fees; PROVIDED, HOWEVER, that notwithstanding the
foregoing, Nirenberg reserves and has not released (i) any rights he may have
pursuant to the Company's 401(k) and profit sharing plans, (ii) his ability to
seek and obtain indemnification by the Company to the extent he is entitled to
be indemnified by the Company pursuant to this Agreement and the Company's
Restated Certificate of Incorporation and Amended and Restated By-laws as in
effect on the date hereof, (iii) all claims relating to the performance of the
Company's obligations under the Nirenberg Documents, and (iv) his ability to
assert claims for contribution or other appropriate relief against the Company
or one or more affiliates in any action in which he is a defendant commenced by
any third party, including but not limited to one or more stockholders of the
Company seeking to act on behalf of the Company. Upon consummation of the
Kupperman Transaction, Kupperman shall have resigned as employee, officer and
director of the Company and all of its Subsidiaries. Mr. Kupperman, on behalf
of himself and his affiliates, has released all claims against the Company, its
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Note and Warrant Purchase Agreement
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<PAGE> 27
subsidiaries and their respective former, current and future officers,
directors, employees, stockholders, agents, attorneys and other representatives
from any and all actions, causes of action, suits, debts, accounts, covenants,
contracts, controversies, agreements, promises, judgments, demands, liability,
claims and damages whatsoever, in law or at equity, that Kupperman and/or his
Affiliates ever had, or may have, for or upon or by reason of his employment
with, service as director of, or direct or indirect holding of equity security
in the Company; PROVIDED HOWEVER, that notwithstanding the foregoing, Kupperman
reserved (A) any rights he may have pursuant to the Company's 401k and profit
sharing plan, (B) any rights he may have under the Company's Other Employee
Benefit Arrangements, (C) his ability to seek certain indemnification by the
Company, (D) all claims relating to the performance of the Company's
obligations and (E) his ability to assert claims for contribution or other
appropriate relief against the Company and its Affiliates.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. PURCHASE FOR INVESTMENT. You represent that you are purchasing
the Notes and Purchase Warrants being purchased by you hereunder for your own
account and not with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act, provided that the disposition
of your property shall at all times be and remain within your control.
6.2. CORPORATE AUTHORIZATION; VALIDITY AND BINDING EFFECT. You
represent that you have full power and authority and have taken all action
necessary to authorize you to enter into and perform your obligations under
this Agreement and all other documents or instruments contemplated hereby.
This Agreement is a legal, valid and binding obligation of yours, and is
enforceable in accordance with its terms, except for (a) the effect upon this
Agreement of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting the rights of creditors generally and (b)
limitations imposed by a court of competent jurisdiction under general
equitable principles upon the specific enforceability of any of the remedies,
covenants or other provisions of this Agreement and upon the availability of
injunctive relief or other equitable remedies. You further represent that you
are an accredited investor as defined in Regulation D under the Securities Act
and you understand and agree that the Notes have not been registered under the
Securities Act or
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<PAGE> 28
any state securities law and may be sold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available.
6.3. SOURCE OF FUNDS. At least one of the following statements is
an accurate representation as to the source of funds to be used by you to pay
the purchase price of the Notes and Purchase Warrants purchased by you
hereunder:
(a) if you are an insurance company, no part of such funds constitutes
assets allocated to any separate account maintained by you in which any
employee benefit plan (or its related trust) has nay interests; or
(b) if you are an insurance company, to the extent that any part of
such funds constitutes assets allocated to any separate account maintained by
you, (i) such separate account is a "pooled separate account" within the
meaning of Prohibited Transaction Class Exemption 90-1, in which case you have
disclosed to the Company the name of each employee benefit plan whose assets in
such separate account exceed 10% of the total assets or are expected to exceed
10% of the total assets of such account as of the date of such purchase (and
for the purposes of this sub-division (b), all employee benefit plans
maintained by the same employer or employee organization are deemed to be a
single plan), or (ii) such separate account contains only the assets of a
specific employee benefit plan, complete and accurate information as to the
identity of which you have delivered to the Company; or
(c) if you are other than an insurance company, all or a portion of
such funds consists of funds which do not constitute assets of any employee
benefit plan (other than a governmental plan exempt from the coverage of
ERISA), and the remaining portion, if any, of such funds consists of funds
which may be deemed to constitute assets of one or more specific employee
benefit plans, complete and accurate information as to the identity of each of
which you have delivered to the Company.
As used in this Section 6.3, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in section 3 of ERISA.
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7. COVENANTS OF THE COMPANY.
7.1. PERFORMANCE OF COMPANY'S OBLIGATIONS. The Company shall at all
times promptly perform its obligations under the Indenture, the Warrants and
the Registration Rights Agreement.
7.2. NASDAQ STOCK MARKET. As soon as practicable following the
Closing Date, the Company shall take all action necessary so that the Warrants
and the shares of Class A Common Stock issuable on exercise thereof shall have
been approved for trading on the NASDAQ Stock Market.
7.3. FINANCIAL STATEMENTS, REPORTS, ETC. For so long as any Notes and
warrants are not registered under the Securities Act, the Company shall furnish
to each holder of Notes and Warrants:
(a) within 120 days after the end of each fiscal year of the Company,
a balance sheet and an income statement of the Company, showing the
financial condition of the Company and the Subsidiaries on a consoli-
dated basis as of the close of such fiscal year and the results of
operations during such year, and a statement of stockholders' equity and a
statement of cash flows as of the close of such fiscal year, all the
foregoing financial statements of the Company and the Subsidiaries on a
consolidated basis to be prepared in accordance with GAAP consistently
applied (except for such changes therein as the Accountants conclude are
appropriate), such consolidated financial statements to be audited by
the Accountants and accompanied by an opinion of the Accountants, which
opinion shall state that said financial statements fairly present the
financial condition and results of operations of the Company and the
Subsidiaries, on a consolidated basis at the end of, and for, such fiscal
year with such exceptions or qualifications as the Accountants deem
appropriate except that the opinion of the Accountants shall be free of
exceptions or qualifications as to scope;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, an unaudited balance sheet
and an unaudited income statement showing the financial condition and
results of operations of the Company and the Subsidiaries, on a
consolidated basis as of the end of each such quarter and for the then
elapsed portion of the fiscal year certified by a Financial Officer of the
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Note and Warrant Purchase Agreement
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<PAGE> 30
Company as presenting fairly the financial position and results of
operations of the Company and the Subsidiaries on a consolidated basis
and as having been prepared in accordance with GAAP consistently applied
(except for such changes or exceptions therein as the Accountants conclude
are appropriate), in each case subject to normal year-end audit
adjustments;
(c) promptly after the same become publicly available, copies of such
annual, periodic and other reports, and such proxy statements and other
information, as shall be filed by the Company or any Subsidiary with
the Securities and Exchange Commission pursuant to the requirements of the
Exchange Act.
7.4. ADDITIONAL DISTRIBUTION OF WARRANTS. The Company agrees that,
in the event that the Registrable Equity Securities (as defined in the
Registration Rights Agreement) are not all registered under the Securities Act
pursuant to an effective shelf registration statement (as provided for in the
Registration Rights Agreement) on or before November 29, 1996, the Company
shall, within 20 days of such date, distribute additional Warrants for the
purchase of 121,500 Shares (as defined in the Warrant), on a PRO RATA basis to
holders of record of the Purchase Warrants on November 26, 1996.
7.5. AGREEMENT TO SUPPLEMENT INDENTURE. The Company will undertake to
work with the Trustee under the Indenture to amend or supplement certain
provisions of the Indenture identified to the Company prior to the date hereof
as the Trustee may determine necessary or appropriate.
8. PAYMENTS OF NOTES.
8.1. PLACE OF PAYMENT. Payments of principal, premium, if any, and
interest becoming due and payable on the Notes shall be made at the principal
office of the Trustee, unless the Company, by written notice to each holder of
any Notes, shall designate the principal office of another bank or trust
company in the Borough of Manhattan, the City and State of New York, as such
place of payment, in which case the principal office of such other bank or
trust company shall thereafter be such place of payment.
8.2. Home Office Payment. So long as you or your nominee shall be the
holder of any Note, and notwithstanding anything contained in Section 8.1, in
the Indenture or on such Note to the contrary, all sums becoming due on such
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<PAGE> 31
Note for principal, premium, if any, and interest will be paid by the
method and at the address specified for such purpose in the Schedule of
Purchasers, or by such other method or at such other address as you shall have
from time to time specified to the Company in writing for such purpose,
without the presentation or surrender of such Note or the making of any
notation thereon, except that any Note paid or prepaid in full shall be
surrendered to the Company at its principal office or at the place of payment
maintained by the Company pursuant to Section 8.1 for cancellation. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to
Section 3.7 of the Indenture. The Company will afford the benefits of this
Section 8.2 to any Institutional Holder which is the direct or indirect trans-
feree of any Note purchased by you under this Agreement and which has made the
same agreement relating to such Note as you have made in this Section 8.2.
9. DEFINITIONS. For the purpose of this Agreement, the following
terms have the meanings specified with respect thereto below:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under common control
with such Person. For the purposes of this definition, "control" when used
with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms, "controlling"
and "controlled" have meanings correlative to the foregoing.
"AMENDMENT WARRANTS" means the warrants to purchase 500,000 shares of
Class A Common Stock, subject to adjustment, substantially in the form of
Exhibit F, at an initial exercise price as set forth therein issued or to be
issued to the 1994 Note Holders in respect of the amendment of the Original
Indenture embodied in the Indenture.
"CAPITAL STOCK" has the meaning set forth in Section 5.18 hereof.
"CDA" means the Connecticut Development Authority.
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Note and Warrant Purchase Agreement
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"CDA NOTE" means the 9% Secured Promissory Note, dated March 12, 1992,
in the original principal amount of $7,100,000, made by DM Associates in favor
of the CDA.
"CDA PLEDGE AGREEMENT" means the Stock Pledge Agreement, dated March
12, 1992, between DM Associates and CDA, which was subsequently assigned to
FCN.
"CLASS A COMMON STOCK" means the Class A Common Stock of the Company,
par value $0.01 per share.
"CLASS B COMMON STOCK" means the Class B Common Stock of the Company,
par value $0.01 per share.
"CLOSING" has the meaning set forth in Section 3 hereof.
"CLOSING DATE" has the meaning set forth in Section 3 hereof.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMISSION" means the U.S. Securities and Exchange Commission and any
successor federal agency having similar powers.
"COMPANY" has the meaning set forth in the Preamble hereof.
"COMPANY SENIOR INDEBTEDNESS" has the meaning set forth in the
Indenture.
"CONSENT" or "CONSENTS" means the consent of 1994 Note Holder(s) to
waiver of certain defaults under the 1994 Indenture, which consents are
contained in the Consent Agreement.
"CONSENT AGREEMENT" means the Consent and Waiver Agreement,
substantially in the form of Exhibit D hereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ENVIRONMENT" means soil, surface waters, groundwaters, land, stream
sediments, surface or subsurface strata and ambient air.
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Note and Warrant Purchase Agreement
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<PAGE> 33
"ENVIRONMENTAL LAW(S)" means and includes any environmental or health
and safety-related law, regulation, rule, ordinance, or legally enforceable
requirement at the foreign, Federal, state, or local level.
"EXCHANGE ACT" means, at any time, the Securities Exchange Act of 1934,
as then in effect, or any similar Federal Statute then in effect, any reference
to a particular section of such Act shall include a reference to the
comparable section, if any, of any such similar federal statute.
"EVENT OF DEFAULT" has the meaning set forth in the Indenture.
"FCN" means FCN Partners Corporation, a Connecticut corporation.
"GAAP" means generally accepted accounting principles as in effect at
the time of application to the provisions hereof.
"GUARANTEES" has the meaning set forth in Section 1.3 hereof.
"GUARANTORS" has the meaning set forth in the Indenture.
"GUARANTOR SUBSIDIARY" means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of capital stock or other interest (including, without limitation,
partnership interests) entitled to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by (i) the Company or (ii) one or more Guarantor Subsidiaries. Notwithstanding
the foregoing, the Non-Recourse Subsidiary shall not be deemed to be a
Guarantor Subsidiary.
"HAZARDOUS MATERIALS" means and includes any hazardous waste, hazardous
material, hazardous substance, petroleum product, oil, toxic substance,
pollutant, contaminant, or other human health or safety, as defined or
regulated under any Environmental Law.
"HAZARDOUS WASTE" means and includes any hazardous waste as defined or
regulated under any Environmental Law.
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Note and Warrant Purchase Agreement
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<PAGE> 34
"INDEBTEDNESS" has the meaning assigned to such term in the Indenture.
"INDEMNIFIED PARTY" has the meaning set forth in Section 10.2 hereof.
"KUPPERMAN" means Mitchell J. Kupperman.
"KUPPERMAN TRANSACTION" means the resignation and termination of
Kupperman as an employee, officer and director of the Company and its
Subsidiaries.
"MATERIAL ADVERSE EFFECT" has the meaning set forth in Section 5
hereof.
"MULTIEMPLOYER PLAN" means a Plan which is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"1995 NOTE HOLDERS" means the beneficial owners of the Notes.
"1994 NOTE HOLDERS" means the owners of record of the 1994
Notes on the date hereof.
"1994 NOTES" means the 10-1/4% Senior Subordinated Notes of the Company
issued pursuant to the 1994 Indenture.
"NIRENBERG" means Charles Nirenberg.
"NIRENBERG AGREEMENT" means that certain agreement dated as of October
30, 1995, by and among Nirenberg, FCN, the Nirenberg Foundation and the
Company, as amended through the date hereof.
"NIRENBERG DOCUMENTS" has the meaning set forth in Section 5.25 hereto.
"NIRENBERG TRANSACTION" means the purchase by the Company, pursuant to
and upon the terms set forth in the Nirenberg Agreement, (i) all right, title
and interest in and to the limited partner interests of Nirenberg and the
Nirenberg Foundation in DM Associates; (ii) all right, title and interest in
and ownership by FCN of the CDA Note and all of FCN's right, title and interest
in 1,220,000 shares of the Class B Common Stock pledged by DM Associates as
secu- rity for the payment of the CDA Note pursuant to the CDA Pledge
Agreement, the CDA Pledge Agreement and any other agreement executed by DM
Associates in favor of the CDA in
29
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 35
connection with the CDA Note and/or the loan evidenced thereby; and (iii) all
right, title and interest of Nirenberg, FCN and the Nirenberg Foundation
pursuant to the agreements, instruments and letters dated January 25, 1995 and
entered into by such parties with the Company and/or the other limited partners
of DM Associates and the other general partners of New DM Management Associates
I, a Connecticut general partnership, and new DM Management Associates II, a
Connecticut general partnership, in connection with the reconstitution of DM
Associates and its general partners.
"NOTES" has the meaning set forth in Section 1.1 hereof.
"OFFICERS' CERTIFICATE" means with respect to either the Company or any
of its Subsidiaries, as the case may be, a certificate executed on behalf of
such entity by (i) its President, one of its Vice Presidents and (ii) its chief
financial officer, chief accounting officer or its treasurer.
"OPERATIVE AGREEMENTS" means this Agreement, the Other Purchase
Agreements, the Guarantees the Indenture, the Notes, the Consent Agreement, the
Warrants, the Registration Rights Agreement, and the Supplemental Indenture.
"ORIGINAL INDENTURE" means the Indenture, among the Company, the
Guarantors and Society National Bank, dated as of March 15, 1994, relating to
the original issuance of the 1994 Notes, as supplemented by the Supplemental
Indenture.
"ORIGINAL TRUSTEE" means Society National Bank.
"OTHER PURCHASE AGREEMENTS" has the meaning set forth in Section 2.3.
"OTHER PURCHASERS" has the meaning set forth in Section 2.3.
"PBGC" means the Pension Benefit Guaranty Corporation or any
governmental authority succeeding to any of its functions.
"PERSON" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization or a government or any
department or agency thereof.
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Note and Warrant Purchase Agreement
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<PAGE> 36
"PLAN" means an "employee benefit plan" (within the meaning of section
3 of ERISA) which is or has been established or maintained, or to which
contributions are or have been made by the Company, any of its Subsidiaries or
any Related Person.
"PURCHASE WARRANTS" has the meaning set forth in Section 1.2 hereof.
"PURCHASERS" means the purchasers listed in the Schedule of Purchasers.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in Section
4.9 hereof.
"REGULATION G" shall mean Regulation G of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"REGULATION T" shall mean Regulation T of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"REGULATION X" means Regulation X of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"RELATED PERSON" means, as of any date of determination, any trade or
business, whether or not incorporated, which, together with the Company or any
of its Subsidiaries, is treated as a single employer under section 414 of the
Code or the regulations promulgated thereunder.
"RELEASE" means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing, or
dumping into the Environment.
"REPORTABLE EVENT" means any reportable event as defined in section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of section 414 of the
Code).
"REQUIRED CONSENTS" has the meaning set forth in Section 4.7(c) hereof.
31
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 37
"SCHEDULE OF PURCHASERS" has the meaning set forth in Section 2.1.
"SECURITIES ACT" means, at any time, the Securities Act of 1933, as
then in effect or any similar federal statute then in effect, and any reference
to a particular section of such Act shall include a reference to the com-
parable section, if any, of any such similar federal statute.
"SUBSIDIARY" means any subsidiary of the Company which is a
corporation, association or other business entity (including a partnership)
that is incorporated or formed under the law of any United States jurisdiction.
"SUPPLEMENTAL INDENTURE" means the Supplemental Indenture, dated as of
November 29, 1995, by and among the Company, the Guarantors and First Bank
National Association, as trustee.
"THREAT OF RELEASE" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the Environment which may
result from such Release.
"WARRANTS" means the Purchase Warrants and the Amendment Warrants.
9.1. ACCOUNTING TERMS. For the purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the respective meaning
assigned to them in accordance with GAAP.
10. MISCELLANEOUS.
10.1. EXPENSES. Whether or not the transactions contemplated by this
Agreement shall be consummated, the Company agrees to pay on demand all
expenses in connection with such transactions and in connection with any
amendment or waivers (whether or not the same become effective) under or in
respect of this Agreement, the Notes and Purchase Warrants purchased by you,
the Amendment Warrants issued to you, if any, or the other Operative
Agreements, including, without limitation: (i) the cost and expenses of
duplicating and printing this Agreement, the other Operative Agreements, the
Notes, the Warrants, of furnishing all opinions by counsel for the Company, and
of the Company's performance and compliance with all agreements and conditions
contained herein on its part to be performed or
32
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 38
complied with; (ii) the fees, expenses and disbursements of your special
counsel in connection with the negotiation, preparation and review of this
Agreement, the Other Purchase Agreements, the other Operative Agreements, the
Notes, the Warrants, and in connection with the other transactions contemplated
by this Agreement, and in connection with any amendment or waivers (whether or
not the same become effective) of any documents thereof; (iii) the cost and
expenses of obtaining Private Placement Numbers for the Notes and for the
Warrants; and (iv) the reasonable out-of-pocket expenses incurred by you in
connection with such transactions and any such amendments or waivers. The
Company also agrees to save you and each of your Affiliates, your and their
respective directors, officers, employees, agents and each Person who controls
you or any Affiliate of yours within the meaning of the Securities Act or the
Exchange Act harmless from, all claims, demands, or liabilities asserted
against you in respect of the fees, if any, of brokers, finders or investment
bankers or other similar fees and any and all liabilities with respect to any
taxes (including interest and penalties) which may be payable in respect of the
execution and delivery of this Agreement, the issue of the Notes at the
Closing, the issue of the Warrants at or prior to the Closing, and the waiver
under or in respect of this Agreement, the other Operative Agreements, the
Notes or the Warrants.
10.2. INDEMNIFICATION. The Company will indemnify and hold harmless
each of you or any Affiliate of you, your and its respective directors,
officers, employees, agents and each Person, if any, who controls you or any
Affiliate of yours within the meaning of the Securities Act or Exchange Act
(any and all of whom are referred to as the "INDEMNIFIED PARTY") from and
against any and all losses, claims, damages and liabilities, whether joint or
several (including all legal fees or other expenses reasonably incurred by any
Indemnified Party in connection with the preparation for or defense of any
pending or threatened third party claim, action or proceeding, whether or not
resulting in any liability), to which such Indemnified Party may become subject
(whether or not such Indemnified Party is a party thereto) under any applicable
federal or state law or otherwise, caused by or arising out of, or allegedly
caused by or arising out of, (i) the execution and delivery of any of the
Operative Agreements and the other documents contemplated hereby, the
performance by the parties hereto and thereto of their respective obligations
under any of the Operative Agreements (including, but not limited to, the issue
and sale of the Notes and the Purchase Warrants) and
33
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 39
the consummation of the transactions contemplated hereby and thereby,
(ii) the use of the proceeds of the Notes and the Purchase Warrants or (iii)
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnified Party is a party thereto;
PROVIDED, HOWEVER, that such indemnity shall not, as to any Indemnified Party,
apply to any such losses, claims, damages, liabilities or related expenses
which shall have been determined, in a final, nonappealable judgment of a
court of competent jurisdiction, to have resulted solely from the gross
negligence or willful misconduct of such Indemnified Party.
Promptly after receipt by an Indemnified Party of notice of any claim,
action or proceeding with respect to which an Indemnified Party is entitled to
indemnity hereunder, such Indemnified Party will notify the Company of such
claim or the commencement of such action or proceeding, PROVIDED that the
failure of an Indemnified Party to give notice as provided herein shall not
relieve the Company of its obligations under this Section 10.2 with respect to
such Indemnified Party, except to the extent that the Company is actually
prejudiced by such failure. The Company will assume the defense of such claim,
action or proceeding and will employ counsel reasonably satisfactory to the
Indemnified Party and will pay the fees and expenses of such counsel.
Notwithstanding the preceding sentence, the Indemnified Party will be
entitled, at the expense of the Company, to employ counsel separate from
counsel for the Company and for any other party in such action if the
Indemnified Party reasonably determines that a conflict of interest or other
reasonable basis exists which makes representation by counsel chosen by the
Company not advisable.
This indemnification will be in addition to any other obligation that
the Company may otherwise have under any of the Operative Agreements, and shall
survive the transfer of any Note or Warrant or portions thereof or interest
therein by you or any of your Affiliates and the payment of any Note or
exercise of any Warrant.
10.3. AMENDMENTS AND WAIVERS. Any term of this Agreement and the
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively) only with the
written consent of (a)the Company and (b) the holders of at least a majority in
principal amount of the Notes at the time outstanding issued pursuant hereto
and pursuant to the Other Purchase Agreements, PROVIDED that, (i) without the
34
Note and Warrant Purchase Agreement
-----------------------------------
<PAGE> 40
prior written consent of the holders of all the Notes at the time
outstanding, no such amendment or waiver shall amend Section 10.3, or reduce
the aforesaid percentages of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver; and (ii) without
the prior consent of the holders of all the Warrants amend Section 10.2. Any
amendment or waiver effected in accordance with this Section 10.3 shall be
binding on each holder of any Note issued and sold pursuant to this
Agreement, any of the Other Purchase Agreements or the Indenture at the time
outstanding, each future holder of any Note, each holder of any Warrant issued
in connection with the transactions contemplated by this Agreement, each future
holder of any Warrant, and the Company and its Subsidiaries.
10.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained in this Agreement or otherwise
made in writing in any Officers' Certificate delivered to you by or on behalf
of the Company or any of its Subsidiaries, shall survive the execution and the
delivery of this Agreement, any investigation at any time made by you or on
your behalf, the purchase of the Notes by you under this Agreement, any payment
of the Notes, the issuance of any Warrants as contemplated by this Agreement
or by the Consent Agreement, and any disposition of such Notes or Warrants.
All statements contained in any Officers' Certificate delivered by or on behalf
of the Company or any of its Subsidiaries pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be deemed
representations or warranties of the Company under this Agreement.
10.5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by or against the respective
successors and assigns of the parties hereto, whether so expressed or not, and,
in particular, shall inure to the benefit of and be enforceable against any
holder or holders at any time of the Notes or the Purchase Warrants sold
hereunder or any part thereof. Notwithstanding anything herein to the
contrary, the Company may not assign its rights and obligations under this
Agreement, other than by operation of law, without the prior written consent of
(i) the holders of 66-2/3% of the outstanding principal amount of the Notes and
(ii) the holders of 66-2/3% of the outstanding Purchase Warrants. This
Agreement embodies the entire agreement and understanding between you and the
Company and supersedes all prior agreements and understandings relating to the
subject matter hereof.
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Note and Warrant Purchase Agreement
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<PAGE> 41
10.6. DISCLOSURE TO OTHER PERSONS. The Company acknowledges that the
holder of any Note or Purchase Warrants may deliver copies of any financial
statements and other documents delivered to such holder, and disclose any other
information disclosed to such holder, by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement to (i) such
holder's directors, officers, employees, agents and professional consultants,
(ii) any other holder of any Note or Purchase Warrants, (iii) any Person to
which such holder offers to sell such Note or Purchase Warrant or any part
thereof, (iv) any Person to which such holder sells or offers to sell a
participation in all or any part of such Note or Purchase Warrant, (v) any
governmental authority having jurisdiction over such holder, (vi) the National
Association of Insurance Commissioners or any similar organization or (vii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (a) in compliance with any law, rule, regulation or order
applicable to such holder, (b) in response to any subpoena or other legal
process, (c) in connection with any litigation to which such holder is a party
or (d) in order to protect such holder's investment in such Note or Purchase
Warrant.
10.7. NOTICES. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service
(with charges prepaid) or telecopied and (i) if to you, addressed or telecopied
or you at the address or telecopy number specified for such communications in
the Schedule of Purchasers attached hereto as Schedule I, or at such other
address or telecopy number as you shall have specified to the Company in
writing, (ii) if to any other holder of any Note or Purchase Warrant, addressed
or telecopied to such other holder at such address or telecopy number as such
other holder shall have specified to the Company in writing or, if any such
other holder shall not have so specified an address or telecopy number to the
Company, then addressed or telecopied to such other holder in care of the last
holder of such Note which shall have so specified an address or telecopy number
to the Company, and (iii) if to the Company, addressed to it at One Vision
Drive, Enfield, Connecticut, 06082, Attention: Gregory G. Landry, or at such
other address or to such other telecopy number as the Company shall have
specified to the holder of each Note in writing. Any notice given by telecopy
must be confirmed in writing.
10.8. DESCRIPTIVE HEADINGS. The descriptive headings of the several
Sections of this Agreement are
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Note and Warrant Purchase Agreement
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<PAGE> 42
inserted for convenience only and do not constitute a part of this Agreement.
10.9. GOVERNING LAW. (a) THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CHOICE OF LAW
DOCTRINE. Such choice of law is made pursuant to Section 5-1401 of the General
Obligations Law of the State of New York.
(b) The Company hereby irrevocably submits itself to the jurisdiction
of the Supreme Court of the State of New York, New York County, and to the
jurisdiction of the United States District Court for the Southern District of
New York, for purpose of any suit, action or other proceeding arising out of or
relating to this Agreement, the Notes or any other Operative Agreement or any
of the transactions contemplated hereby or thereby, and hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such state or Federal court. The Company hereby irrevocably
waives, to the fullest extent it may effectively do so, and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason whatsoever, that such
suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper or that this Agreement or
the Notes or any subject matter of any thereof may not be enforced in or by
such courts. The Company agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by law.
10.10. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or ac-
count for more than one such counterpart.
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Note and Warrant Purchase Agreement
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<PAGE> 43
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement between you
and the Company.
Very truly yours,
DAIRY MART CONVENIENCE
STORES, INC.
By /s/ Gregory Wozniak
-----------------------------
Name: Gregory Wozniak
Title: Vice President
The foregoing Agreement is
hereby accepted as of the
date first above written.
TRIUMPH-CONNECTICUT LIMITED PARTNERSHIP
By: Triumph Connecticut Capital Advisors
Limited Partnership
Its: General Partner
By: Frederick W. McCarthy
Its: Managing General Partner
By /s/ Thomas W. Janes
--------------------------------------------
Name: Thomas W. Janes
Title: Designated Signatory
Note and Warrant Purchase Agreement
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<PAGE> 1
Exhibit C
REGISTRATION RIGHTS AGREEMENT
-----------------------------
Registration Rights Agreement, dated as of
December 1, 1995, by and among Dairy Mart Convenience
Stores, Inc., a Delaware corporation (the "Company"), and
holders (each a "Holder" and collectively, the "Holders") of
(i) the Company's 10-1/4% Senior Subordinated Notes
(Series B), due March 15, 2004 (the "Series B Notes") and
(ii) warrants to purchase shares of Class A Common Stock,
par value $.01 per share, of the Company (the "Warrants").
W I T N E S S E T H :
- - - - - - - - - -
BACKGROUND. This Agreement is entered into in
connection with (A) the several Note and Warrant Purchase
Agreements, dated as of December 1, 1995, among the Company
and each of the purchasers, respectively (the "Purchasers")
listed on Schedule I (the "Schedule of Purchasers") thereto
(the "Purchase Agreement"), relating to the issuance and
sale by the Company of an aggregate of U.S. $13,500,000 of
the Series B Notes and Warrants to purchase an aggregate of
1,215,000 shares of the Class A Common Stock, (B) the
Consent Agreement, dated as of December 1, 1995, by and
among the Company and the consenting noteholders (the
"Consenting Noteholders") listed in Schedule A thereto (the
"Consent Agreement"), relating to the waiver of certain
defaults and the consent to certain amendments to the
Indenture, dated as of March 3, 1994, by and among the
Company, the Guarantors (as defined therein) and Society
National Bank, as trustee, as supplemented (the "Original
Indenture"). In order to induce the Purchasers to enter
into the Purchase Agreement and to induce the Consenting
Noteholders to enter into the Consent Agreement, the Company
has agreed to provide the registration rights set forth in
this Agreement for the equal benefit of all Holders from
time to time of Registrable Securities (as hereinafter
defined). The execution and delivery of this Agreement is a
condition precedent to each such Purchaser's obligation to
purchase the Series B Notes and Warrants pursuant to the
Purchase Agreement and each such Consenting Noteholder's
obligation to deliver a waiver and consent pursuant to the
Consent Agreement.
NOW, THEREFORE, in consideration of the premises
and the covenants hereinafter contained, it is agreed as
follows:
<PAGE> 2
ARTICLE I
1.1. DEFINITIONS. The following shall have
(unless otherwise provided elsewhere in this Registration
Rights Agreement) the following respective meanings (such
meanings being equally applicable to both the singular and
plural form of the terms defined):
"Agreement" shall mean this Registration Rights
Agreement, including all amendments, modifications and
supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may
be in effect at the time such reference becomes operative.
"Business Day" shall mean any day that is not a
Saturday, a Sunday or a day on which banks are required or
permitted to be closed in the State of Connecticut. Unless
specifically stated herein as a Business Day, all days
referred to herein shall mean calendar days.
"Commission" shall mean the Securities and
Exchange Commission or any other federal agency then
administering the Securities Act and other federal
securities laws.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, or any similar federal statute, and
the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.
"Holders" has the meaning set forth in the
introductory paragraph hereto.
"NASD" shall mean the National Association of
Securities Dealers, Inc., or any successor corporation
thereto.
"Registrable Debt Securities" shall mean (a) the
Series B Notes; (b) any other securities issued in exchange
for or substitution of any Series B Notes; and (c) any
securities issued or issuable with respect to the Series B
Notes or any other securities issued or issuable in exchange
for or substitution of any such Series B Notes in connection
with a combination, recapitalization, merger, consolidation
or other reorganization or otherwise; PROVIDED that any such
securities shall cease to be Registrable Debt Securities
with respect to a proposed offer or sale thereof when a
Registration Statement with respect to the sale of such
securities shall have become effective under the Securities
Act and such securities have been disposed of in accordance
with the plan of distribution set forth in such Registration
Statement or when they shall have been distributed to the
2
<PAGE> 3
public pursuant to Rule 144, Rule 144A or any successor
provisions under the Securities Act.
"Registrable Equity Securities" shall mean (a) the
Warrants, (b) any securities, including without limitation,
any Class A Common Stock, issued or issuable upon exercise
of the Warrants, (c) any securities issued or issuable with
respect to the Warrants or any securities issued or issuable
upon exercise of the Warrants, by way of a dividend or stock
split or in connection with a combination of shares,
recapitalization, merger, consolidation or other
reorganization or otherwise; PROVIDED that any such
Registrable Equity Securities shall cease to be Registrable
Equity Securities (i) with respect to a proposed offer or
sale thereof when a Registration Statement with respect to
the sale of such securities shall have become effective
under the Securities Act and such securities have been
disposed of in accordance with the plan of distribution set
forth in such Registration Statement, (ii) when they shall
have been distributed to the public pursuant to Rule 144,
Rule 144A or any successor provisions under the Securities
Act, or (iii) with respect to any Warrant, if and when such
Warrant is exercised or terminates by its terms without
having been exercised; PROVIDED that the securities issued
or issuable upon exercise of any Warrant shall not cease to
be "Registrable Equity Securities" by reason of such
exercise of a Warrant.
"Registrable Securities" shall mean, collectively,
the Registrable Debt Securities and the Registrable Equity
Securities.
"Registration Expenses" shall mean all expenses
incident to the Company's performance of or compliance with
Article II or Article III hereof, including, without
limitation: (i) all Commission and stock exchange or NASD
registration and filing fees and expenses; (ii) all fees and
expenses of compliance with applicable state securities or
"blue sky" laws (including, without limitation, reasonable
fees and disbursements of counsel for the underwriters in
connection with "blue sky" qualification of any Registrable
Security); (iii) all word processing, duplicating, printing
expenses, messenger and delivery expenses; (iv) all fees and
expenses incurred in connection with the listing of the
Registrable Securities to be registered on each securities
exchange or national market system on which such securities
are listed; (v) all fees and disbursements of counsel for
the Company and all independent certified public accountants
(including the expenses of any annual audit and "cold
comfort" letters required by or incident to such performance
and compliance); (vi) all fees and disbursements of
underwriters customarily paid by issuers or sellers of
3
<PAGE> 4
securities (including the fees and expenses of any
"qualified independent underwriters" required by the NASD);
(vii) the reasonable fees and expenses of one counsel
retained in connection with each such registration by each
of the Holders of a majority of the Registrable Securities
being registered; (viii) the fees and expenses of any
special experts retained by the Company; (ix) fees and
expenses of any other persons retained by the Company; and
(x) premiums and other costs of policies of insurance
against liabilities arising out of the public offering of
the Registrable Securities being registered. The foregoing
shall not include any underwriting discounts or commissions
or transfer taxes, if any, attributable to the sale of
Registrable Securities by Holders of such Registrable
Securities if obtained at the discretion of the Company.
"Registration Statement" shall mean each
registration statement filed with the Commission pursuant to
the provisions provided herein and all amendments and
supplements to such registration statement, including post-
effective amendments, in each case including the prospectus
contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as
the same shall be in effect from time to time.
"Shelf Registration Statement" shall mean a
"shelf" registration statement with respect to Registrable
Securities on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by
the Commission, and all amendments and supplements to such
registration statement, including post-effective amendments,
in each case including the prospectus contained therein, all
exhibits thereto and all material incorporated by reference
therein.
"Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, or any similar federal
statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to
time.
"Underwritten Offering" shall mean a sale of
securities of the Company to an underwriter or underwriters
for reoffering to the public.
"Warrants" has the meaning set forth in the
introductory paragraph hereto.
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1.2. CONSTRUCTION. Unless the context otherwise
requires, "or" is not exclusive.
ARTICLE II
2.1. SHELF REGISTRATION. The Company shall file
within 90 calendar days of the date hereof one or more Shelf
Registration Statements providing for the sale by the
Holders of all of the Registrable Securities. The Company
shall use its best efforts to have such Shelf Registration
Statement declared effective by the Commission as soon as
practicable after such filing. The Company shall use its
best efforts to keep the Shelf Registration Statement
continuously effective for a period of at least three years
following the date on which such Shelf Registration
Statement is initially declared effective or such shorter
period which will terminate when all of the Registrable
Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement. The
Company further agrees, if necessary, to supplement or amend
the Shelf Registration Statement, if required by, or
appropriate under, the rules, regulations or instructions
applicable to the registration form used by the Company for
such Shelf Registration Statement or by the Securities Act
or by any other rules and regulations thereunder.
2.2. REQUIRED REGISTRATION. (a) From and after
the expiration of the Shelf Registration Statement provided
for in Section 2.1, after receipt of a written request from
(x) the Holders of Registrable Equity Securities
representing at least an aggregate of 50% of the total of
all Registrable Equity Securities outstanding or (y) the
Holders of Registrable Debt Securities representing at least
an aggregate of 50% of the total of all Registrable Debt
Security outstanding, requesting that the Company effect the
registration of such Registrable Securities under the
Securities Act, the Company shall promptly give written
notice, pursuant to Section 2.2(c) hereof, to the Holders of
such Registrable Equity Securities or Registrable Debt
Securities, as the case may be, of the receipt of such
request and each such other Holder, in lieu of exercising
its rights under Section 2.3, may elect (by written notice
sent to the Company within ten Business Days from the date
of such Holder's receipt of the aforementioned notice) to
have such Registrable Equity Securities or Registrable Debt
Securities, as the case may be, held by it included in such
registration thereof pursuant to this Section 2.2.
Thereupon the Company shall, as expeditiously as is possible
and subject to the other terms and conditions of this
Agreement, file with the Commission a Registration Statement
under the Securities Act in accordance with Section 2.5
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<PAGE> 6
covering the Registrable Securities requested to be included
in such registration, and the Company will use its best
efforts to cause such Registration Statement to become
effective as expeditiously as practicable.
(b) FORM OF REQUEST. (i) All requests for
registration pursuant to this Section 2.2 of any Holder
shall (A) describe the number and class of Registrable
Securities to be sold, (B) contain an undertaking to furnish
all such information and materials of such Holder and to
take all such action as may be reasonably required by such
Holder in order to permit the Company to comply with all
applicable requirements of the Commission and to obtain
acceleration of the effective date of the Registration
Statement; update, to the extent required by applicable law,
any information about such Holder contained in such
Registration Statement during the period such Registration
Statement is effective; and indicate whether such request
pertains to an Underwritten Offering.
(ii) As a condition precedent to the
inclusion of Registrable Securities owned by or
issuable to any Holder that has not executed a copy of
this Agreement in any registration, such Holder's
request for registration pursuant to this Section 2.2
shall in addition to the information required by
subparagraph (i) of this subsection (b) contain an
undertaking to comply with all provisions of this
Agreement.
(c) RIGHTS OF OTHER HOLDERS. If the Company
shall receive a request to file a Registration Statement
pursuant to Section 2.2(a), the Company shall (A) give
written notice within 10 Business Days of such request to
the other Holders of the Registrable Securities to be
subject to the Registration Statement, which notice shall
identify the number and type of Registrable Securities
proposed to be registered by such Holder, and (B) use its
best efforts to include in such offering, subject to Section
2.2(f), Registrable Securities subject to such registration
as are owned by or issuable to each Holder as such Holder
shall request within 20 Business Days after the date of such
notice from the Company.
(d) LIMITATIONS ON FILING. Notwithstanding the
foregoing provisions of this Section 2.2, the Company shall
not be obligated to file a registration statement pursuant
to this Section 2.2 during any 180 day period following the
date on which a prior Registration Statement filed pursuant
to this Section 2.2 becomes effective. The Company shall be
obligated to effect, pursuant to this Section 2.2, no more
than two (2) registrations required to be effected by
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<PAGE> 7
Holders of Registrable Equity Securities and no more than
two (2) registrations required to be effected by Holders of
Registrable Debt Securities pursuant to this Section 2.2.
(e) EFFECTIVE REGISTRATION STATEMENT. A
registration requested pursuant to this Section 2.2 will not
be deemed to have been effected (i) unless it has become
effective, PROVIDED that a registration which does not
become effective after the Company has filed a Registration
Statement with respect thereto solely by reason of the
refusal to proceed of the Holders initiating such request
shall be deemed to have been effected by the Company at the
request of such Holders, unless such Holders shall have
elected to pay all Registration Expenses in connection with
such registration, (ii) if, after it has become effective,
such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission
or other governmental agency or court, or (iii) if the
conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such
registration are not satisfied.
(f) UNDERWRITING PROCEDURES. If the Holders of a
majority of the Registrable Securities subject to a
registration requested pursuant this Section 2.2 so elect,
the offering of all or a portion of such Registrable
Securities shall be in the form of an Underwritten Offering.
The managing underwriter or underwriters for such offering
shall be selected by such Holders, and shall be reasonably
acceptable to the Company. The Holders shall provide the
Company with notice of the identity or identities of the
managing underwriter or underwriters they have selected
within a reasonable time prior to the commencement of the
Underwritten Offering. If the managing underwriter advises
in writing that, in its opinion the number of securities to
be included in such registration exceeds the number which
can be sold in such offering, the Company will include in
such registration Registrable Securities requested to be
included, PRO RATA among the Holders thereof.
2.3. INCIDENTAL REGISTRATION. (a) (i) If the
Company at any time proposes to register any of its equity
securities under the Securities Act, on its behalf and/or on
behalf of any of its security holders ("the demanding
security holders") (other than a registration pursuant to
Section 2.1 or 2.2 or registration on Form S-4 or S-8 or any
successor form for securities to be offered in a transaction
of the type referred to in Rule 145 under the Securities Act
or to employees of the Company pursuant to any employee
benefit plan, respectively), on a form and in a manner that
would permit registration of the Registrable Equity
Securities for sale to the public under the Securities Act,
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<PAGE> 8
it will give written notice to all Holders of such
Registrable Equity Securities promptly of its intention to
do so, describing such securities and specifying the form
and manner and the other relevant facts (including, without
limitation, (x) whether or not such registration will be in
connection with an Underwritten Offering and, if so, the
identity of the managing underwriter and whether such
offering will be pursuant to a "best efforts" or "firm
commitment" underwriting, and (y) the price (net of
underwriting commissions, discounts and the like) at which
the securities are reasonably expected to be sold).
(ii) If the Company at any time proposes to
register any of its debt securities under the Securities
Act, on its behalf and/or on behalf of any of its security
holders ("the demanding security holders") (other than a
registration pursuant to Section 2.1 or 2.2) on a form and
in a manner than would permit registration of the
Registrable Debt Securities for sale to the public under the
Securities Act, it will give written notice to all Holders
of such Registrable Debt Securities promptly of its
intention to do so, describing such securities and
specifying the form and manner and the other relevant facts
(including, without limitation, (x) whether or not such
registration will be in connection with an Underwritten
Offering and, if so, the identity of the managing
underwriter and whether such offering will be pursuant to a
"best efforts" or "firm commitment" underwriting, and (y)
the price (net of underwriting commissions, discounts and
the like) at which the securities are reasonably expected to
be sold).
(b) Each Holder of any such Registrable
Securities desiring to have Registrable Securities
registered under this Section 2.3 shall advise the Company
in writing within 20 Business Days after the date of such
notice from the Company, setting forth the amount of such
Registrable Securities for which registration is requested.
The Company shall thereupon include in such filing the
number of shares of Registrable Securities for which
registration is so requested, subject to the next sentence,
and shall use its best efforts to effect registration under
the Securities Act of such securities. If, in an
Underwritten Offering, the managing underwriter shall advise
the Company in writing that, in its opinion, the number of
securities proposed to be included in such registration must
be limited due to market considerations, then the Company
will include in such registration to the extent of the
number which the Company is so advised can be sold in such
offering securities determined as follows:
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<PAGE> 9
(i) if such registration as initially
proposed by the Company was solely a primary
registration of its securities, (x) first, the
securities proposed by the Company to be sold for its
own account, and (y) second, any Registrable Securities
requested to be included in such registration PRO RATA
among the Holders thereof requesting such registration
on the basis of the number of shares of such securities
requested to be included by such holders, and (z) third
any other securities of the Company proposed to be
included in such registration, in accordance with the
priorities, if any, then existing among the Company and
the holders of such other securities, and
(ii) if such registration as initially
proposed by the Company was in whole or in part
requested by holders of securities of the Company,
other than holders of Registrable Securities, pursuant
to demand registration rights, (x) first, such
securities held by the holders initiating such
registration, PRO RATA among the holders thereof, on
the basis of the number of shares of such securities
requested to be included by such holders, (y) second,
any Registrable Securities requested to be included in
such registration and any other securities proposed to
be sold by the Company in such registration), PRO RATA
among the holders thereof requesting such registration
and the Company on the basis of the number of shares of
such securities requested to be included by such
holders and the shares to be sold by the Company and
(z) third, any other securities of the Company proposed
to be included in such registration, in accordance with
the priorities, if any, then existing among the Company
and the holders of such other securities.
(c) If any registration under Sections 2.1 or 2.2
or this Section 2.3 involves an Underwritten Offering, all
Holders requesting inclusion of Registrable Securities must
sell their Registrable Securities to the underwriters
selected by the Company on the same terms and conditions as
apply to the Company or other selling security holders
participating in such registration. No registration under
this Section 2.3 shall relieve the Company of its
obligations to effect any registration pursuant to Section
2.2 hereof.
(d) In connection with an Underwritten Offering
with respect to which Holders of Registrable Securities
shall have requested registration pursuant to this Section
2.3, the Company shall have the right to select the managing
underwriter. The Holders of Registrable Securities to be
distributed to the underwriter or underwriters shall be
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<PAGE> 10
parties to the underwriting agreement between the Company
and such underwriter(s) and the representations and
warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriter(s) shall
also be made to and for the benefit of the Holders and the
conditions precedent to the obligations of such Holders of
Registrable Securities under such underwriting agreement
shall be reasonably satisfactory to such Holders. Such
Holders shall not be required to make any representations or
warranties to the Company or its underwriter(s) other than
representations or warranties regarding such Holder and such
Holder's intended method of distribution, the ownership of
Registrable Securities to be distributed to the underwriter
or underwriters and any other information required to be
included in the applicable Registration Statement in respect
of such Holders pursuant to applicable law.
(e) Notwithstanding anything in this Section 2.3
to the contrary, if, at any time after giving written notice
as described in Section 2.3(a) of its intention to register
securities and prior to the effective date of the
Registration Statement filed in connection with such
registration, the Company shall determine either not to
register or to discontinue registration of such securities,
the Company may, at its election, give written notice of
such determination to each Holder of Registrable Securities
and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such
registration (but not from its obligation to pay the
Registrable Expenses in connection therewith).
2.4. RIGHT TO REVIEW REGISTRATION STATEMENTS.
(a) In connection with the preparation and prior to the
filing of each Registration Statement under the Securities
Act under which Registrable Securities are or are proposed
to be registered, the Company will give the holders of
Registrable Securities registered under such Registration
Statement, and their respective counsel and accountants, the
opportunity to review and comment upon such Registration
Statement, each prospectus included therein or filed with
the Commission and each amendment thereof or supplement
thereto, and will give each of them such access to its books
and records and such opportunities to discuss the business
of the Company with its officers and the independent public
accountants who have certified its financial statements as
shall be necessary, in the opinion of such Holders' and such
underwriters' respective counsel to conduct a reasonable
investigation within the meaning of the Securities Act.
(b) Each such Holder of Registrable Securities
shall have the right to review and comment upon such
Registration Statement and to request the insertion therein
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<PAGE> 11
of material furnished to the Company in writing which in the
judgment of such Holder (a "Requesting Holder") of
Registrable Securities should be included; PROVIDED,
HOWEVER, such information shall not be required to be
included if in the reasonable opinion of counsel of the
Company, the inclusion of such material furnished by such
Requesting Holder would be misleading or otherwise in
violation of the rules and regulations of the Securities
Act. Furthermore, a Requesting Holder has the right to
require the deletion of any reference to such Requesting
Holder by name or otherwise if such reference is not
required by the Securities Act or the rules promulgated
thereunder.
(c) The Company will not file any Registration
Statement (including any amendment thereto, any prospectus,
any supplement thereto including such documents incorporated
by reference and proposed to be filed after the initial
filing of the Registration Statement) to which the holders
of at least a majority of the securities (including
Registrable Securities) covered by such Registration
Statement or the underwriter or underwriters, if any, shall
reasonably object; PROVIDED that the Company may file such
document in a form required by law or upon the advice of its
counsel.
2.5. REGISTRATION PROCEDURES. In connection with
the registration of any of its securities under the
Securities Act effected pursuant to the requirements of this
Agreement, the Company will, as expeditiously as possible
and subject to the other terms and conditions of this
Agreement:
(a) notify each Holder of Registrable Securities
as to the filing of a Registration Statement covering
securities of that Holder, and of all amendments or
supplements thereto filed prior to the effective date of
such Registration Statement;
(b) notify each Holder of Registrable Securities
covered by a Registration Statement promptly after it shall
receive notice thereof, of the time when said Registration
Statement becomes effective or when any amendment or
supplement to any prospectus forming a part of said
Registration Statement has been filed;
(c) notify each Holder of Registrable Securities
covered by a Registration Statement promptly of any request
by the Commission for the amending or supplementing of such
Registration Statement or prospectus or for additional
information;
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<PAGE> 12
(d) prepare and promptly file with the Commission
amendments and supplements to such Registration Statement
and the prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective as
required hereby and to comply with the provisions of the
Securities Act with respect to the sale or other disposition
of all securities covered by such Registration Statement
(including, without limitation, as may be necessary to
correct any statements or omissions if, at any time when a
prospectus relating to the Registrable Securities is
required to be delivered under the Securities Act, any event
with respect to the Company shall have occurred as a result
of which any such prospectus or any other prospectus as then
in effect would include an untrue statement of a material
fact or omit to state any material fact necessary in order
to make the statements made, in light of the circumstances
under which they were made, not misleading); and, in
addition, prepare and file with the Commission, promptly
upon the written request of any Holder of Registrable
Securities, any amendments or supplements to such
Registration Statement or prospectus which may be reasonably
necessary or advisable in connection with the distribution
of the Registrable Securities;
(e) furnish each Holder, as soon as available,
such number of copies of each Registration Statement, in
conformity with the requirements of the Securities Act, and
such other documents, as such selling Holders may from time
to time reasonably request;
(f) use its best efforts to register or qualify
the securities covered by such Registration Statement under
such securities or blue sky laws of such jurisdictions
within the United States and Puerto Rico as each holder of
such securities shall request (PROVIDED, HOWEVER, that the
Company shall not be obligated to qualify as a foreign
corporation to do business under the laws of any
jurisdiction in which it is not then qualified or to file
any general consent to service or process), and do such
other reasonable acts and things as may be required of it to
enable such holder to consummate the disposition in such
jurisdiction of the securities covered by such Registration
Statement;
(g) in the case of the registration of the
Registrable Debt Securities, the Company shall use its best
efforts to qualify the indenture under which such securities
were issued (the "Indenture") under the Trust Indenture Act;
(h) enter into customary agreements (including an
underwriting agreement in customary form in the case of an
underwritten offering of Registrable Equity Securities) and
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<PAGE> 13
take such other actions as are reasonably required by the
Holders of Registrable Securities or the underwriters, if
any, in order to expedite or facilitate the disposition of
such Registrable Securities (including, without limitation,
providing for the benefit of the Holders the representations
and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriter(s));
(i) comply with all applicable rules and
regulations of the Commission, and make generally available
to its security holders, earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the
Securities Act) no later than forty-five (45) days after the
end of any 12-month period (or ninety (90) days after the
end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to an underwriter or to
underwriters in a firm commitment or best efforts
Underwritten Offering and (ii) if not sold to an underwriter
or to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after
the effective date of the relevant Registration Statement,
which statements shall cover said 12-month periods;
(j) advise each Holder of Registrable Securities
promptly after the Company shall receive notice or obtain
knowledge of the issuance of any stop order by the
Commission suspending the effectiveness of any Registration
Statement or amendment thereto or of the initiation or
threatening of any proceeding for that purpose, and promptly
use its best efforts to prevent the issuance of any stop
order or obtain its withdrawal promptly if such stop order
should be issued;
(k) deliver an opinion of counsel for the Company
in customary form and covering such matters of the type
customarily covered by opinions of issuer's counsel and such
other matters as the Holders of a majority of the
Registrable Securities covered by a Registration Statement
or the underwriters reasonably request and, in the case of
an underwritten offering, deliver to the underwriters a
"cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of
the type customarily covered by such letters;
(l) prior to the effective date of a Registration
Statement, (i) provide the registrar for the Registrable
Securities with printed certificates for such securities in
a form eligible for deposit with DTC and (ii) provide a
CUSIP number for such securities; and
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(m) use its best efforts to list all Registrable
Securities covered by such registration statement on any
securities exchange on which any of the securities of the
same class as the Registrable Securities are then listed.
At its expense, the Company shall, in addition to
the requirements of Section 2.1 hereof, keep each
Registration Statement effective until the earlier of
(i) such time when all Registrable Securities covered by
such Registration Statement have been sold and (ii) 90 days
from the date the Registration Statement first becomes
effective or such longer period as may be required by the
Securities Act.
It shall be a condition precedent to the
obligation of Company to take any action pursuant to this
Agreement in respect of the securities which are to be
registered at the request of any Holder of Registrable
Securities that such Holder shall furnish to Company such
information regarding the securities held by such Holder and
the intended method of disposition thereof as Company shall
reasonably request and as shall be required in connection
with the action taken by Company.
The Company shall be entitled to postpone for a
reasonable period of time (but not exceeding 90 days) the
filing of any registration statement (other than pursuant to
Section 2.1 hereof) otherwise required to be prepared and
filed by it pursuant to this Agreement if the Company
determines, in its reasonable judgment, that such
registration and offering would materially and adversely
interfere with any material financing, acquisition,
corporate reorganization or other material transaction
involving the Company or would require premature disclosure
thereof. The Company shall promptly give the Holders of
Registrable Securities requesting registration thereof
pursuant to Section 2.2 or 2.3 hereof written notice of such
determination, containing a general statement of the reasons
for such postponement and an approximation of the
anticipated delay. If the Company shall so postpone the
filing of a registration statement, such Holders of
Registrable Securities requesting registration thereof
pursuant to Section 2.2 shall have the right to withdraw the
request for registration by giving written notice to the
Company within 10 Business Days after receipt of the notice
of postponement and, in the event of such withdrawal, such
request shall not be counted for purposes of the requests
for registration to which Holders of Registrable Securities
are entitled pursuant to Section 2.2 hereof.
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In the case of a Shelf Registration Statement,
each Holder of Registrable Securities covered thereby, upon
receipt of any notice (a "Suspension Notice") from the
Company of the happening of any event of the kind requiring
an action pursuant to Section 2.5(d) hereof, shall forthwith
discontinue disposition of the Registrable Securities
pursuant to the Shelf Registration Statement covering such
Registrable Securities until such Holder's receipt of the
copies of the supplemented or amended prospectus
contemplated by Section 2.5(d) or until it is advised in
writing (the "Advice") by the Company that the use of the
prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by
reference in the prospectus, and, if so directed by the
Company, such Holder will, or will request the managing
underwriter or underwriters, if any, to, deliver to the
Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of
the prospectus covering such Registrable Securities current
at the time of receipt of such notice. In the event that
the Company shall give any Suspension Notice, (i) the
Company shall use its best efforts and take such actions as
are reasonably necessary to render the Advice and end the
Suspension Period as promptly as practicable and (ii) the
time periods for which a Shelf Registration Statement is
required to be kept effective pursuant to Section 2.1 hereof
shall be extended by the number of days during the
Suspension Period.
2.6. EXPENSES. All Registrable Expenses incurred
in connection with this Agreement shall be paid by the
Company.
2.7. RULE 144, RULE 144A. The Company covenants
that it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules
and regulations adopted by the Commission thereunder in a
timely manner and, if at any time the Company is not
required to file such reports, it will, upon the reasonable
request of any Holder of Registrable Securities, make
publicly available other information so long as necessary to
permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will
take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell
Registrable Securities without registration under the
Securities Act within the limitation of the exemptions
provided by (a) Rule 144 and Rule 144A under the Securities
Act, as such Rules may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder of Registrable
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Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such
information requirements.
ARTICLE III
3.1. INDEMNIFICATION AND CONTRIBUTION. (a) In
the event of any registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the
Company shall indemnify and hold harmless each Holder of
such Registrable Securities, and each other person
(including each underwriter) who participated in the
offering or sale of such Registrable Securities and each
other person, if any, who controls such Holder or such
participating person within the meaning of the Securities
Act, and their respective directors, officers, partners,
agents and affiliates (each, an "Indemnified Person")
against any losses, claims, damages or liabilities, joint or
several, to which such Indemnified Person may become subject
under the Securities Act or otherwise (including, without
limitation, the reasonable fees and expenses of legal
counsel), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue or alleged
untrue statement of any material fact contained in any
Registration Statement or any part thereof under which such
securities were registered under the Securities Act
(including, without limitation, any documents incorporated
therein by inference, any exhibits thereto, any preliminary
prospectus or final prospectus contained therein, or any
amendment or supplement thereto), or (ii) any omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse such Indemnified
Person for any legal or any other expenses reasonably
incurred by such person in connection with investigating or
defending any such loss, claim, damage, liability, action or
proceeding; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon
any alleged untrue statement or alleged omission made in
such registration statement, preliminary prospectus,
prospectus or amendment or supplement in reliance upon and
in conformity with written information furnished to the
Company by such Indemnified Person specifically for use
therein or in the case of any underwritten offering, so
furnished for such purposes by any underwriter. Such
indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such
Indemnified Person, and shall survive the transfer of
securities by a Holder.
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(b) Each Holder of any Registrable Securities, by
acceptance thereof, agrees to indemnify and hold harmless
the Company, its directors and officers and each other
person, if any, who controls the Company within the meaning
of the Securities Act against any losses, claims, damages or
liabilities, severally, to which the Company or any such
director or officer or any such person may become subject
under the Securities Act or any other statute or at common
law, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of
any statement or alleged statement in or omission or alleged
omission from such Registration Statement, if such statement
or alleged statement or omission or alleged omission was
made in reliance on and in conformity with written
information furnished to the Company by such selling Holder
expressly for use in the preparation of such Registration
Statement; PROVIDED, HOWEVER, that (A) the indemnifying
Holder shall not be liable in any such case to the extent
that any such statement or omission is completely corrected
(x) in the final prospectus, in the case of a preliminary
prospectus, or (y) in an amendment or supplement to a
prospectus or prospectus supplement (PROVIDED, HOWEVER, that
nothing in this clause (y) shall limit the indemnifying
Holder's liability with respect to sales made prior to the
receipt by the Company from the indemnifying Holder of
written notice of such an untrue statement or such an
omission) and (B) the liability of such indemnifying Holder
under this Section 3.1(b) shall be limited to the amount of
proceeds received by such indemnifying Holder in the
offering giving rise to the liability.
(c) If the indemnification provided for in this
Section 7 from the indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative fault
of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct
17
<PAGE> 18
or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed
to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation
or proceeding.
(d) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section
7(c) were determined by pro rata allocation or by any other
method of allocation which does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent
misrepresentation. Each prospective selling Holder's
obligations to contribute as provided in this Section 3.1(c)
are several in proportion to the relative value of their
respective Registrable Securities covered by such
Registration and are not joint.
(e) The obligations of the Company and of each of
the Holders under this Section 3.1 shall be in addition to
any liability which the Company or which any of the Holders
may otherwise have.
(f) The indemnification and contribution payments
required by this Section 3.1 shall be made by periodic
payments of the amounts thereof during the course of the
investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
ARTICLE IV
4.1. MISCELLANEOUS. (a) NO INCONSISTENT
AGREEMENTS. The Company will not hereafter enter into any
agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement. The Company has
not previously entered into any agreement which remains in
effect with respect to any of its securities granting any
registration rights to any person.
(b) REMEDIES. Each holder of Registrable
Securities, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason
of a breach by it of the provisions of this Agreement and
18
<PAGE> 19
hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(c) AMENDMENTS AND WAIVERS. Except as otherwise
provided herein, the provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents
to departure from the provisions hereof may not be given
unless the Company has obtained the written consent of, in
respect of any of the foregoing affecting the holders of
Registrable Debt Securities, holders of a majority of the
principal amount of Registrable Debt Securities then
outstanding and, in respect of the foregoing affecting the
holders of Registrable Equity Securities, holders of a
majority of the shares of Registrable Equity Securities then
outstanding and subject to unexercised Warrants.
(d) NOTICE GENERALLY. Any notice, demand,
request, consent, approval, declaration, delivery or other
communication hereunder to be made pursuant to the
provisions of this Agreement shall be sufficiently given or
made if in writing and either delivered in person with
receipt acknowledged or sent by registered or certified
mail, return receipt requested, postage prepaid, or by
telecopy and confirmed by telecopy answerback, addressed as
follows:
(i) If to any initial Holder of Registrable
Securities, as indicated on Schedule A.
(ii) If to any other Holder of Registrable
Securities at its last known address appearing on the
books of the Company maintained for such purpose.
(iii) If to the Company at
Dairy Mart Convenience Stores, Inc.
One Vision Drive
Enfield, CT 06082
Attention: Gregory G. Landry
or at such other address as may be substituted by notice
given as herein provided. The giving of any notice required
hereunder may be waived in writing by the party entitled to
receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other
communication hereunder shall be deemed to have been duly
given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by
telecopy answerback or three (3) Business Days after the
same shall have been deposited in the United States mail.
Failure or delay in delivering copies of any notice, demand,
request, approval, declaration, delivery or other
19
<PAGE> 20
communication to the person designated above to receive a
copy shall in no way adversely affect the effectiveness of
such notice, demand, request, approval, declaration,
delivery or other communication.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall
inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto including any
person to whom Registrable Securities are transferred;
PROVIDED that, except by operation of law, this Agreement
may not be assigned by the Company without the prior written
consent of the Holders of 66-2/3% of the Registrable
Securities at the time such consent is requested. All
references to "Holder" in this Agreement shall include any
Person for whom the Holder is a nominee, and the benefits of
and rights of this Agreement shall accrue to such Person or
Persons which have a beneficial interest in the Registrable
Securities and for whom the Holder is a nominee.
(f) HEADINGS. The headings in this Agreement are
for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(g) GOVERNING LAW. This Agreement shall be
governed by the laws of the State of New York, without
regard to the provisions thereof relating to conflict of
laws.
(h) SEVERABILITY. Wherever possible, each
provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
(i) ENTIRE AGREEMENT. This Agreement, represents
the complete agreement and understanding of the parties
hereto in respect of the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the
subject matter hereof.
20
<PAGE> 21
IN WITNESS WHEREOF, the Company and Purchasers
have executed this Agreement as of the date first above
written.
DAIRY MART CONVENIENCE STORES, INC.
By: /s/ Gregory Wozniak
-------------------------------
Name: Gregory Wozniak
Title: Vice President
IDS EXTRA INCOME FUND, INC.
By:
-------------------------------
Name:
Title:
SUNAMERICA LIFE INSURANCE COMPANY
By:
-------------------------------
Name:
Title:
21
<PAGE> 22
IN WITNESS WHEREOF, the Company and Purchasers
have executed this Agreement as of the date first written
above.
DAIRY MART CONVENIENCE STORES, INC.
By:
-------------------------------
Name:
Title:
Address: One Vision Drive
Enfield, CT 06082
Attn: Robert B. Stein
Telecopier: (203) 741-4487
TRIUMPH-CONNECTICUT LIMITED
PARTNERSHIP
By: Triumph-Connecticut Capital Advisors
Limited Partnership
Its: General Partner
By: Frederick W. McCarthy
Its: Managing General Partner
By: /s/ Thomas W. Janes
-------------------------------
Name: Thomas W. Janes
Title: Designated Signatory
Address: 60 State Street
21st Floor
Boston, MA 02109
Attn: Thomas W. Janes
Telecopier: (617) 557-6022
<PAGE> 23
SCHEDULE A
----------
<TABLE>
<CAPTION>
Number of Class A
Principal Amount of Common Shares
Name of Purchaser Subordinated Notes Subject to Warrants
- ----------------- ------------------ -------------------
<S> <C> <C>
IDS Extra Income $2,000,000 180,000
Fund, Inc.
901 Marquette Ave.
South
Suite 2810
Minneapolis, MN 55402
SunAmerica Life $3,000,000 270,000
Insurance Company
1999 Avenue of the Stars
Suite 3800
Los Angeles, CA 90067-6022
Attn: Robert Sydow
Triumph - Connecticut $8,500,000 765,000
Limited Partnership
60 State Street - 21st Fl.
Boston, MA 02109
</TABLE>
22
