Exhibit 10.18
Cartiga, LLC
11.50% SENIOR SECURED NOTE due 2031
THE INDEBTEDNESS EVIDENCED BY THIS SENIOR SECURED NOTE (THE “SENIOR SECURED NOTE”) CONSTITUTES A SENIOR SECURED GENERAL OBLIGATION OF CARTIGA, LLC (THE “COMPANY”), RANKING EQUALLY IN THE RIGHT OF PAYMENT WITH OTHER EXISTING AND FUTURE SECURED AND UNSUBORDINATED INDEBTEDNESS OF THE COMPANY (INCLUDING THE COMPANY’S EXISTING 9.50% SENIOR NOTES DUE 2027, AS AMENDED TO BE SECURED ON A PARI PASSU BASIS WITH THE SENIOR SECURED NOTES (THE “2027 NOTES”)) AND RANKING SENIOR IN RIGHT OF PAYMENT TO ANY UNSECURED INDEBTEDNESS OF THE COMPANY AND TO ANY FUTURE INDEBTEDNESS OF THE COMPANY THAT IS EXPRESSLY MADE SUBORDINATE TO THE SENIOR SECURED NOTES BY THE TERMS OF SUCH INDEBTEDNESS. THE SENIOR SECURED NOTES SHALL BE EFFECTIVELY SUBORDINATE TO ANY NON-RECOURSE INDEBTEDNESS (INCLUDING ANY SECURITIZATION DEBT AND ANY NON-RECOURSE SECURED WAREHOUSE FACILITIES) TO THE EXTENT OF THE VALUE OF THE ASSETS SECURING SUCH NON- RECOURSE INDEBTEDNESS.
THIS SENIOR SECURED NOTE IS A GLOBAL SENIOR SECURED NOTE WITHIN THE MEANING OF SECTION 6 OF THIS SENIOR SECURED NOTE AND IS REGISTERED IN THE NAME OF CEDE & CO AS NOMINEE OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SENIOR SECURED NOTE IS EXCHANGEABLE FOR SENIOR SECURED NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN SECTION 6 OF THIS SENIOR SECURED NOTE, AND NO TRANSFER OF THIS SENIOR SECURED NOTE (OTHER THAN A TRANSFER OF THIS SENIOR SECURED NOTE AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES SPECIFIED IN THIS SENIOR SECURED NOTE.
UNLESS THIS SENIOR SECURED NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SENIOR SECURED NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO, OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
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INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS SENIOR SECURED NOTE WILL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS SENIOR SECURED NOTE WILL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 6 OF THIS SENIOR SECURED NOTE.
THIS SENIOR SECURED NOTE WILL BE ISSUED IN MINIMUM DENOMINATIONS OF $100,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SENIOR SECURED NOTE OR ANY BENEFICIAL INTEREST THEREIN IN A DENOMINATION OF LESS THAN $1,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SENIOR SECURED NOTE FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON THIS SENIOR SECURED NOTE, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SENIOR SECURED NOTE.
THIS SENIOR SECURED NOTE MAY BE SOLD ONLY IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THIS SENIOR SECURED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SENIOR SECURED NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
CERTAIN ERISA CONSIDERATIONS:
THE HOLDER OF THIS SENIOR SECURED NOTE, OR ANY INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH, A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SENIOR SECURED NOTE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SENIOR SECURED NOTE, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER OR HOLDER OF THIS SENIOR SECURED
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NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER: (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER PLAN, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH PLAN OR OTHER PLAN TO FINANCE SUCH PURCHASE OR (II) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
ANY FIDUCIARY OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF THIS SENIOR SECURED NOTE OR ANY INTEREST HEREIN SHOULD CONSULT WITH HIS OR HER LEGAL COUNSEL PRIOR TO ACQUIRING THIS SENIOR SECURED NOTE OR ANY INTEREST HEREIN.
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No. 1 | CUSIP QIBs: 52474D AE9 |
Cartiga, LLC
11.50% SENIOR SECURED NOTE due 2031
1.Senior Secured Notes. This Senior Secured Note is one of an issue of senior secured notes of Cartiga, LLC, a Delaware limited liability company (the “Company”), designated as the “11.50% Senior Secured Notes due 2031” (the “Senior Secured Notes”) issued pursuant to that Senior Secured Note Purchase Agreement (the “Purchase Agreement”) dated as of the date upon which this Senior Secured Note was originally issued (the “Issue Date”) between the Company and the several purchasers of the Senior Secured Notes identified in the signature pages thereto.
2.Payment. The Company, for value received, promises to pay to Cede & Co., or its registered assigns, as nominee of The Depository Trust Company, or its registered assigns, the principal sum of Thirty-Three Million Eight Hundred Thousand Dollars (U.S.) ($33,800,000), plus accrued but unpaid interest on June 15, 2031 (“Maturity Date”) and to pay interest thereon at the rate of 11.50% per annum (the “Interest Rate”), subject to adjustment pursuant to Section 2(a) below, from and including the original Issue Date of the Senior Secured Notes, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on June 15 and December 15 of each year (each, an “Interest Payment Date”), commencing December 15, 2026, until the principal hereof is paid or made available for payment, with such interest calculated on the basis of a 360-day year consisting of twelve 30-day months. If any payment of interest or principal is not paid in full when the same becomes due and payable, then interest will be compounded quarterly.
(a)Interest Rate Adjustment.
(i)In the event (x) the Company’s credit rating that has been provided by a Designated NRSRO while any Senior Secured Notes remain outstanding is downgraded to below “investment grade” or, for clarity, a rating of BB+ (or analogous rating) or below, the Interest Rate shall immediately increase effective as of the date of such downgrade by 1.00% during the period in which the Company’s credit rating is below investment grade, or (y) the Senior Secured Notes have no rating from any Designated NRSRO, the Interest Rate shall immediately increase effective as of the applicable date by 2.00%.
(ii)If, however, for purposes of clause (x) of Section 2(a)(i) above, the Company’s credit rating is subsequently upgraded to “investment grade” or, for clarity, a rating of BBB- (or analogous rating) or above, the Interest Rate shall immediately decrease effective as of the date of such upgrade to be the Interest Rate reflected in the initial paragraph of Section 2 above. If, however, for purposes of clause (y) of Section 2(a)(i) above, the Company’s credit rating is subsequently rated as “investment grade” or, for clarity, a rating of BBB- (or analogous rating) or above, the Interest Rate shall immediately decrease effective as of the date of such subsequent rating to be the Interest Rate reflected in the initial paragraph of Section 2 above.
(iii)Notwithstanding the foregoing, in no circumstances will the Interest Rate, as may be adjusted by this Section 2(a) above, exceed the initial Interest Rate (reflected in the
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initial paragraph of Section 2 above) by more than 2.00% per annum due to changes in or the absence of a rating, as contemplated by Section 2(a)(i) above, of the Senior Secured Notes, and in no event will the Interest Rate, as may be adjusted by this Section 2(a), ever be less than the initial Interest Rate (reflected in the initial paragraph of Section 2 above).
(b)Interest Payment Date that is Not a Business Day. In the event that any Interest Payment Date falls on a day that is not a Business Day, the interest payment due on that date shall be postponed to the next day that is a Business Day and no additional interest shall be payable on such Interest Payment Date as a result of that postponement (but interest shall still accrue on this Senior Secured Note).
3.Defined Terms. The following capitalized terms used in this Senior Secured Note have the meanings defined or referenced below. Terms used but not defined herein shall have the meaning given such terms in the Purchase Agreement. Certain other capitalized terms used only in specific sections of this Senior Secured Note may be defined in such sections.
(a)“2027 Notes” means (a) the Company’s outstanding 9.50% senior notes due 2027, as amended and/or supplemented in connection with the issuance of the Senior Secured Notes to be secured by the Collateral on a pari passu basis with the Senior Secured Notes, and (b) any Indebtedness issued in exchange for, or as a renewal, extension, replacement, refinancing or refunding (in whole or in part) of, the Indebtedness described in clause (a) (including any successive renewals, extensions, replacements, refinancings or refundings), in each case to the extent (and only to the extent) such Indebtedness is secured by the Collateral on a pari passu basis with the Senior Secured Notes pursuant to the Collateral Documents.
(b)“Affiliate(s)” means, with respect to any person, such person’s immediate family members, partners, stockholders, members or parent and subsidiary corporations or other entities, and any other person directly or indirectly controlling, controlled by, or under common control with said person and their respective Affiliates.
(c)“Applicable Depositary Procedures” has the meaning set forth in Section 6(c) (Global Senior Secured Notes) below.
(d)“Business Day” means any day other than a Saturday or Sunday or any other day on which banking institutions in the State of New York are generally authorized or required by law or executive order to be closed.
(e)“Change of Control” means (i) the sale, exchange or other disposition of substantially all of the Company’s assets or property other than in the ordinary course of business, or (ii) any merger, sale of the outstanding limited liability company interests of the Company to a third-party purchaser, reorganization, or other transaction or series of related transactions in which the members of the Company holding a majority of the limited liability company interests of the Company immediately prior to the actions or circumstances described in this clause (ii) of the definition of Change of Control cease to own a majority of the voting securities of the resulting or surviving entity immediately after the action or circumstance described in this clause (ii). Notwithstanding the foregoing, “Change of Control” shall not include the De-SPAC Transaction (as defined below).
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(f)“Collateral” has the meaning specified in the Security Agreement.
(g)“Collateral Agency Agreement” means that certain collateral agency agreement entered into by and among the Company, the Collateral Agent and the Noteholders dated the date hereof.
(h)“Collateral Agent” means UMB Bank N.A. or, as applicable, its duly appointed successor as Collateral Agent pursuant to the terms of the Collateral Agency Agreement.
(i)“Company” has the meaning set forth in Section 1 (Senior Secured Notes) above.
(j)“Consolidated Net Income Before Tax” means, for any period, the consolidated net income (or loss) of the Company and its Subsidiaries for such period (taken as a single accounting period) determined in accordance with GAAP, but excluding federal, state and local income, value added and similar taxes therefrom (to the extent otherwise included therein).
(k)“Depositary” has the meaning set forth in Section 6(a) (Global Senior Secured Notes) below.
(l)“Designated NRSRO” means a “nationally recognized statistical rating organizations” (NRSRO) within the meaning of Section 3(a)(62) of the Exchange Act, that is designated as a “Credit Rating Provider” (or other similar designation) by the National Association of Insurance Commissioners (NAIC).
(m)“De-SPAC Transaction” means the transactions contemplated by that certain Business Combination Agreement dated August 22, 2025, by and among Alchemy Investments Acquisition Corp. 1, Alchemy Acquisition Holdings, Inc., Alchemy Merger Sub, LLC, the Company, and Halle Benett, as the representative of holders of the Company’s securities.
(n)“Eastern Time” means prevailing time in the Eastern Time Zone of the United States, including Eastern Standard Time and Eastern Daylight Time, as applicable.
(o)“Event of Default” has the meaning set forth in Section 7 (Event of Default) below.
(p)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(q)“First Call Date” has the meaning set forth in Section 5(b)(ii) below.
(r)“First Call Price” has the meaning set forth in Section 5(b)(ii) below.
(s)“Global Senior Secured Note” has the meaning set forth in Section 6(a) (Global Senior Secured Notes) below.
(t)“Governmental Agency(ies)” means, individually or collectively, any federal, state, county or local governmental department, commission, board, regulatory authority or agency with jurisdiction over the Company or a Subsidiary of the Company.
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(u)“Indebtedness” means, without duplication, the principal or face amount of (i) all obligations for borrowed money, (ii) all obligations evidenced by debentures, notes or other similar instruments, (iii) all obligations in respect of letters of credit or bankers acceptances or similar instruments (or reimbursement obligations with respect thereto), (iv) all obligations to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, and (v) all obligations as lessee which are capitalized in accordance with generally accepted accounting principles in effect in the United States (“GAAP”).
(v)“Interest Payment Date” has the meaning set forth in Section 2 (Payment) above.
(w)“Interest Rate” has the meaning set forth in Section 2 (Payment) above.
(x)“Issue Date” has the meaning set forth in Section 1 (Senior Secured Notes) above.
(y)“Leverage Ratio” means, for purposes of Section 9 (Financial Covenants) below, the result obtained by dividing (i) total Recourse Indebtedness issued by the Company (including, without limitation, the Senior Secured Notes) by (ii) the Company’s unconsolidated members’ equity less intangible items, in each case outstanding on the date of determination.
(z)“Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance, assignment, deposit arrangement, charge, preference, priority or other security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any capital lease obligations having substantially the same economic effect as any of the foregoing) in, on or of such asset.
(aa)“Make-Whole Amount” means, for purposes of Section 5(b)(i) (Optional Redemption Amounts) below and with respect to any Senior Secured Note, an amount equal to the excess, if any, of (A) the sum of (i) the present value at such redemption date using the Adjusted Treasury Yield of the First Call Price, plus (ii) the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Senior Secured Note through the First Call Date, over (B) the amount of such Called Principal, as determined by the Company in good faith, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following ascribed meanings:
(i)“Adjusted Treasury Yield” means, with respect to the Called Principal of any Note, in respect of any redemption or acceleration of any Senior Secured Note means the sum of the yield on a hypothetical United States Treasury security with a constant maturity equal to the Remaining Average Life of such Senior Secured Note (the “Treasury Constant Yield”) plus 0.50% (50 basis points). The hypothetical Treasury shall be determined by reference to the “Ask Yield(s)” for the most recently issued actively traded on-the-run United States Treasury securities (“Reported”) as indicated on the applicable “PX1” page of the PX pages of the Bloomberg Financial Markets service provided by Bloomberg L.P. (or such other display as may replace such PX1 page on the Bloomberg Financial Markets service or, if the Bloomberg Financial Markets service is not available, such other service widely recognized in the financial community) at approximately 11:00 A.M., New York time, on the date two Business Days prior to the Settlement
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Date. If there is a Treasury Reported on said Bloomberg screen with a constant maturity which is equal to the Remaining Average Life of the applicable Senior Secured Note, then the yield on such Treasury shall be the Treasury Constant Yield.
If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Adjusted Treasury Yield” means, with respect to the Called Principal of any Senior Secured Note, the sum of (x) 0.50% (50 basis points) plus (y) the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life. The Adjusted Treasury Yield shall be rounded to the number of decimal places as appears in the interest rate of the Senior Secured Notes.
(ii)“Called Principal” means, with respect to any Senior Secured Note, the principal of such Senior Secured Note that is to be redeemed pursuant to Section 5(b)(i) or has become or is declared to be immediately due and payable pursuant to Section 7 (Events of Default), as the context requires.
(iii)“Discounted Value” means, with respect to the Called Principal of any Senior Secured Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Senior Secured Notes is payable) equal to the Adjusted Treasury Yield with respect to such Called Principal.
(iv)“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year comprised of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
(v)“Remaining Scheduled Payments” means, with respect to the Called Principal of any Senior Secured Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date to but not including the First Call Date; provided that if such Settlement Date is not a date on which interest payments are due to be made under the Senior Secured Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date.
(vi)“Settlement Date” means, with respect to the Called Principal of any
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Senior Secured Note, the date on which such Called Principal is to be redeemed pursuant to Section 5(b)(i) (Optional Redemption Amounts) or has become or is declared to be immediately due and payable pursuant to Section 7 (Events of Default), as the context requires.
(bb)“Material Adverse Effect” means, with respect to any person, any change or effect that (i) is or would be reasonably likely to be material and adverse to the financial condition, results of operations or business of such person, or (ii) would materially impair the ability of such person to perform its respective obligations under either of the Purchase Agreement or the Senior Secured Notes, or otherwise materially impede the consummation of the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not be deemed to include the impact of (1) changes in laws, rules or regulations of general applicability or interpretations thereof by Governmental Agencies, (2) changes, after the Issue Date, in GAAP applicable to litigation funding companies generally, (3) changes after the Issue Date in general economic or capital market conditions affecting litigation funding companies or their market prices generally and not specifically related to the Company or the Noteholders, (4) direct effects of compliance with the Purchase Agreement and this Senior Secured Note on the operating performance of the Company or the Noteholders, including expenses incurred by the Company or the Noteholders in consummating the transactions contemplated by the Purchase Agreement and this Senior Secured Note, and (5) the effects of any action or omission taken by the Company with the prior written consent of the Noteholders, and vice versa, or as otherwise contemplated by the Purchase Agreement and the Senior Secured Notes.
(cc)“Maturity Date” has the meaning set forth in Section 2 (Payment) above.
(dd)“Non-Recourse Indebtedness” means Indebtedness of the Subsidiaries of the Company consisting of (A) Securitization Debt and (B) Non-Recourse Secured Warehouse Facilities. The terms (1) “Securitization Debt” means Indebtedness consisting of term debt issued by a special-purpose Subsidiary of the Company that is secured by assets (including, without limitation, plaintiff advances and attorney advances) transferred to such special-purpose Subsidiary by the Company and/or any of its Affiliates that (x) is not guaranteed by the Company or any of its Subsidiaries (other than such special-purpose Subsidiary) and (y) may be satisfied only by recourse to the assets of such special-purpose Subsidiary, in each case other than with respect to market-standard agreements with respect to repurchase rights and obligations on the part of the Company or any of its Subsidiaries; and (2) “Non-Recourse Secured Warehouse Facilities” means Indebtedness consisting of a financing facility of a special-purpose Subsidiary of the Company that is secured by assets (including, without limitation, plaintiff advances and attorney advances) transferred to such special-purpose Subsidiary by the Company and/or any of its Affiliates that (x) is not a personal obligation of or guaranteed by the Company or any of its Subsidiaries (other than such special-purpose Subsidiary), other than (A) customary limited recourse obligations in respect of indemnities and repurchase or buyback obligations (each for breaches of representations, warranties or covenants or other limited performance-related triggers, as applicable) and retained servicing obligations, and (B) other market-standard agreements with respect to repurchase rights and obligations on the part of the Company or any of its Subsidiaries; and (y) may be satisfied only by recourse to the assets of such special-purpose Subsidiary, in each case other than with respect to market-standard agreements with respect to repurchase rights and obligations on the part of the Company or any of its Subsidiaries.
(ee)“Noteholder” and collectively, the “Noteholders” means the registered holders of the Senior Secured Notes from time to time.
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(ff)“NRSRO” means a nationally recognized statistical rating organization.
(gg)“Parity Secured Notes” means the Senior Secured Notes and the 2027 Notes.
(hh)“Paying Agent” means UMB Bank N.A., as the paying agent and registrar for the Senior Secured Notes.
(ii)“Payment Office” has the meaning set forth in Section 24 (Notices) below.
(jj)“Permitted Liens” means:
(i)Liens existing on the Closing Date set forth on Schedule I to the Purchase Agreement and Liens in connection with a refinancing of such Indebtedness secured by the same property or assets that is the subject of such Liens;
(ii)Liens for taxes, assessments or other governmental charges or levies not yet delinquent or that are being contested in good faith;
(iii)Liens imposed by law (including, without limitation, Liens in favor of customers for equipment under order or in respect of advances paid in connection therewith) such as landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction or other like Liens arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or that are being contested in good faith by appropriate proceedings and in respect of which, if applicable, the Company shall have set aside on its books reserves in accordance with GAAP;
(iv)Liens securing Non‑Recourse Indebtedness (including any Securitization Debt and any Non‑Recourse Secured Warehouse Facilities);
(v)purchase money Liens on equipment acquired or held in the ordinary course of business to secure Indebtedness incurred to finance the acquisition of such equipment so long as such Lien only (i) attaches to such property and (ii) secures the Indebtedness that was incurred to acquire such property;
(vi)deposits and pledges of cash securing (i) obligations incurred in respect of workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (ii) the performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory obligations, or (iii) obligations on surety or appeal bonds, but only to the extent such deposits or pledges are made or otherwise arise in the ordinary course of business and secure obligations not past due;
(vii)rights of set-off or bankers’ liens upon deposits of cash in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts in the ordinary course of business;
(viii)Liens assumed in connection with an acquisition (whether by means of a merger, consolidation or otherwise) of all of the equity interests of any entity or all or substantially all of the assets of (or any division or business line of) any entity that secure Indebtedness in an aggregate amount not to exceed $1,000,000 at any time outstanding; and
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(ix)other Liens as to which the aggregate amount of the obligations secured thereby does not exceed $1,000,000 at any time outstanding.
(kk)“Pro Forma Interest Coverage Ratio” means, for purposes of Section 9 (Financial Covenants) below, for the Company and its consolidated subsidiaries, the result obtained by dividing (i) the Adjusted EBITDA (as defined below) by (ii) Total Interest Expense (as defined below). For purposes of the definition of Pro Forma Interest Coverage Ratio, (A) “Adjusted EBITDA” means, for the Company for any period, an amount equal to (a) net income determined in accordance with GAAP, plus (b) the sum of the following to the extent deducted in the calculation of net income: (i) interest expense; (ii) income taxes; (iii) depreciation; (iv) amortization; (v) extraordinary losses determined in accordance with GAAP; (vi) any non-recurring expenses or losses reducing such net income; and (vii) any provision for doubtful accounts for such period; (B) the components of Adjusted EBITDA shall be determined in the same manner as such items are reported on the consolidated statements of income of the Company and its subsidiaries; and (C) “Total Interest Expense” shall be determined in the same manner as such items are reported on the consolidated statements of operations of the Company and its consolidated subsidiaries, determined on a pro forma basis as if any Recourse Indebtedness to be issued was issued, and any Recourse Indebtedness to be repaid with the proceeds thereof was repaid, on the first day of such period.
(ll)“Purchase Agreement” has the meaning set forth in Section 1 (Senior Secured Notes) above.
(mm)“Recourse Indebtedness” means the Indebtedness of the Company pursuant to which the Company is the borrower or a guarantor or otherwise liable for the payment of the principal amount and interest of such Indebtedness (but, in the case of any guaranty by the Company, the amount of such Indebtedness ascribed to the Company shall be limited to the amount of Indebtedness guaranteed by the Company) and, for clarity, does not include Non-Recourse Indebtedness.
(nn)“Redemption Amount” means the amounts due under Section 5(b)(ii), (iii) and (iv) (Optional Redemption Amounts) below assuming the Senior Secured Notes are redeemed during the applicable period referenced in such subsections.
(oo)“Registrar” has the meaning set forth in Section 6(c) (Global Senior Secured Notes) below.
(pp)“Required Holders” means the holders of at least a majority in principal amount of the Senior Secured Notes at the time outstanding, exclusive of Senior Secured Notes then owned by the Company or any of its Affiliates.
(qq)“Security Agreement” means the Security Agreement, dated as of the date hereof, by and among the Company, the other grantors party thereto and UMB Bank N.A., as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
(rr)“Security Register” has the meaning set forth in Section 16 (Registration of Transfer, Security Register) below.
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(ss)“Senior Secured Notes” has the meaning set forth in Section 1 (Senior Secured Notes) above.
(tt)“Special Record Date” has the meaning set forth in Section 14 (Payment Procedures) below.
(uu)“Subordinated Debt” means any Indebtedness of the Company which is contractually subordinated to the prior payment in full of the Senior Secured Notes on market standard terms.
(vv)“Subsidiary” means with respect to any person, any material corporation or entity in which a majority of the outstanding Equity Interest is directly or indirectly owned by such person; provided, however, the term “Subsidiary” shall not include subsidiaries of the Company that are inactive, dormant and have no business operations. For purposes of the definition of Subsidiary, “Equity Interest” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a person which is not a corporation, and any and all warrants, options or other rights to purchase any of the foregoing.
(ww)“Tangible Net Worth” means, for purposes of Section 9 (Financial Covenants) below, the sum of the Company’s consolidated members’ equity and Subordinated Debt, less intangible items.
4.Security Agreement; Ranking.
(a)The Company’s performance of its obligations hereunder is secured by a security interest in the Collateral as specified in the Security Agreement. For the avoidance of doubt, the Senior Secured Notes rank pari passu in right of payment and, to the extent of the Collateral, in right of security, with the 2027 Notes.
(b)The Indebtedness of the Company evidenced by this Senior Secured Note, including the principal and interest on this Senior Secured Note, shall rank equally with other existing and future senior secured Indebtedness of the Company (other than, for the avoidance of doubt, any Non-Recourse Indebtedness (including any Securitization Debt and any Non-Recourse Secured Warehouse Facilities) to the extent of the assets securing such Non-Recourse Indebtedness) and rank senior in right of payment to any unsecured Indebtedness of the Company and to future Indebtedness of the Company that is expressly made subordinate to the Senior Secured Notes by the terms of such Indebtedness, including any Subordinated Debt. The Senior Secured Notes shall be effectively subordinate to any Non‑Recourse Indebtedness (including any Securitization Debt and any Non‑Recourse Secured Warehouse Facilities) to the extent of the value of the assets securing such secured Non-Recourse Indebtedness.
5.Redemption.
(a)Optional Redemption by the Company; Partial Redemption. This Senior Secured Note may be redeemed by the Company, at its option, in whole or in part from time to time in the amounts reflected in Section 5(b) below but in all cases in a principal amount with integral multiples of $1,000.
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(i)In the event the Company elects to redeem any Senior Secured Notes in whole or in part, the Company shall give written notice to the Paying Agent of the principal amount of such Senior Secured Notes to be so redeemed in accordance with the terms set forth in the Senior Secured Notes not less than ten (10) nor more than sixty (60) calendar days prior to the date set for redemption. In any such written notice, the Company shall identify such Senior Secured Notes by specifying the CUSIP number assigned to the Senior Secured Notes or the Global Senior Secured Note representing such Senior Secured Notes. The Paying Agent shall cause the notice of redemption to be given to the holders of the Senior Secured Notes to be redeemed in accordance with the terms set forth herein in the name and at the expense of the Company. Such notice of redemption may, at the Company’s discretion, be subject to one or more conditions precedent. If such redemption is subject to the satisfaction of any conditions precedent, the notice shall describe each condition. If applicable, the notice shall state that, in the Company’s discretion, the redemption date may be delayed until such time (including more than sixty (60) days after the date such notice was delivered) as any or all the conditions precedent shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed (which delays may occur on more than one occasion), or such notice may be rescinded at any time in the Company’s discretion if in the good faith judgment of the Company any or all of such conditions will not be satisfied.
(ii)Whenever less than all of the Senior Secured Notes of like tenor and terms are to be redeemed, the Paying Agent shall reduce the principal amount of one or more Senior Secured Notes, by the amount of such redemption, by means of an appropriate adjustment on the records of the Paying Agent. If less than the then outstanding principal amount of this Senior Secured Note is redeemed, (i) a new Senior Secured Note shall be issued by the Company representing the unredeemed portion without charge to the holder thereof and (ii) such redemption shall be effected on a pro rata basis as to the Noteholders. For purposes of clarity, upon a partial redemption, a like percentage of the principal amount of every Senior Secured Note held by every Noteholder shall be redeemed.
(b)Optional Redemption Amounts.
(iii)If the redemption of the Senior Secured Notes occurs during the period beginning on the Issue Date to but excluding June 15, 2028, the redemption amount shall be equal to the sum of (i) 100% of the principal amount being redeemed plus accrued but unpaid interest, to but excluding the redemption date, and (ii) the Make-Whole Amount determined for the redemption date with respect to such principal amount.
(iv)If the redemption of the Senior Secured Notes occurs during the period beginning on June 15, 2028 (the “First Call Date”) to but excluding June 15, 2029, the redemption amount shall equal the sum of (i) 105.750% of the outstanding principal amount being redeemed (the “First Call Price”) plus (ii) accrued but unpaid interest, to but excluding the redemption date.
(v)If the redemption of the Senior Secured Notes occurs during the period beginning on June 15, 2029 to but excluding June 15, 2030, the redemption amount shall equal the sum of (i) 102.875% of the outstanding principal amount being redeemed plus (ii) accrued but unpaid interest, to but excluding the redemption date.
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(vi)If the redemption of the Senior Secured Notes occurs during the period beginning on June 15, 2030 and ending on the Maturity Date, the redemption amount shall equal the sum of (i) 100% of the outstanding principal amount being redeemed plus (ii) accrued but unpaid interest, to but excluding the redemption date.
(c)Redemption by the Holders Upon a Change of Control. Notwithstanding anything to the contrary in Section 5(b) above, in connection with a Change of Control and upon giving not less than thirty (30) days’ notice and not more than sixty (60) days’ notice to the Noteholders prior to the Change of Control, each Noteholder may require the Company to redeem the Senior Secured Note in whole or in part, at an amount equal to 101% of the outstanding principal amount being redeemed plus accrued but unpaid interest, to but excluding the redemption date, but in all cases in a principal amount with integral multiples of $1,000.
(d)Effectiveness of Redemption. If a notice of redemption has been duly given and notwithstanding that this Senior Secured Note has been called for redemption but has not yet been surrendered for cancellation, on and after the date fixed for redemption and payment of the amount payable on such redemption, interest shall cease to accrue on the portion of this Senior Secured Note called for redemption, this Senior Secured Note shall no longer be deemed outstanding with respect to the portion called for redemption and all rights with respect to the portion of this Senior Secured Note called for redemption shall forthwith on such date fixed for redemption cease and terminate unless the Company shall default in the payment of the redemption price, except only the right of the holder hereof to receive the amount payable on such redemption, without interest. For purposes of clarity, any redemption made pursuant to the terms of this Senior Secured Note shall be made on a pro rata basis, and, for purposes of a redemption processed through The Depository Trust Company (“DTC”), on a “Pro Rata Pass-Through Distribution of Principal” basis, among all of the Senior Secured Notes outstanding at the time thereof.
(e)Purchase and Resale of the Senior Secured Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Senior Secured Notes, except (i) upon the payment or redemption of the Senior Secured Notes in accordance with this Section 5, and (ii) upon the purchase of any of the Senior Secured Notes by the Company or any Affiliate at any time in the open market, private transactions or otherwise (including, for the avoidance of doubt, pursuant to an offer to repurchase some or all of the Senior Secured Notes in a tender offer to all Noteholders, and if such tender offer is oversubscribed, the Company or its Affiliate shall purchase Senior Secured Notes from all participating Noteholders on a pro rata basis). The Paying Agent will promptly cancel all Senior Secured Notes acquired by the Company or any Affiliate pursuant to any payment or redemption of Senior Secured Notes pursuant to this Senior Secured Note and no Senior Secured Notes may be issued in substitution or exchange for any such Senior Secured Notes. Immediately upon the cancellation of any Senior Secured Notes pursuant to this Section 5(e), the security interest of the holders of such Senior Secured Notes in the Collateral shall automatically be deemed to be released, and the holders of the Senior Secured Notes shall execute and deliver to the Company any and all documentation reasonably requested and prepared by the Company at its expense to evidence such automatic release. Any purchase or repurchase of the Senior Secured Notes pursuant to this Section 5(e), including pursuant to any tender offer, shall be effected in accordance with the procedures applicable to redemptions set forth in Section 5(b), mutatis mutandis, including (i) pro rata allocation among participating Noteholders, (ii) appropriate adjustments to the records of the Paying Agent
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(including any Global Senior Secured Notes), and (iii) the issuance of replacement Senior Secured Notes representing any unpurchased portion.
6.Global Senior Secured Notes.
(a)Provided that applicable depository eligibility requirements are met, upon the written election of any Noteholder that is either (i) a Qualified Institutional Buyer, as defined in Rule 144A under the Securities Act, or (ii) an institutional “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, the Company shall use its commercially reasonable efforts to cause the Senior Secured Notes owned by such Noteholders to be issued in the form of one or more Global Senior Secured Notes (each a “Global Senior Secured Note”) registered in the name of DTC or another organization registered as a clearing agency under the Exchange Act, and designated as Depositary by the Company or any successor thereto (the “Depositary”) or a nominee thereof and delivered to such Depositary or a nominee thereof.
(b)Notwithstanding any other provision herein, no Global Senior Secured Note may be exchanged in whole or in part for Senior Secured Notes registered, and no transfer of a Global Senior Secured Note in whole or in part may be registered, in the name of any person other than the Depositary for such Global Senior Secured Note or a nominee thereof unless (i) such Depositary advises the Company in writing that such Depositary is no longer willing or able to properly discharge its responsibilities as Depositary with respect to such Global Senior Secured Note, and no qualified successor is appointed by the Company within ninety (90) days of receipt by the Company of such notice, (ii) such Depositary ceases to be a clearing agency registered under the Exchange Act and no successor is appointed by the Company within ninety (90) days after obtaining knowledge of such event, (iii) the Company elects to terminate the book-entry system through the Depositary or (iv) an Event of Default shall have occurred and be continuing. Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv) of this Section 6(b), the Company or its agent shall notify the Depositary and instruct the Depositary to notify all owners of beneficial interests in such Global Senior Secured Note of the occurrence of such event and of the availability of Senior Secured Notes to such owners of beneficial interests requesting the same.
(c)If any Global Senior Secured Note is to be exchanged for other Senior Secured Notes or canceled in part, or if another Senior Secured Note is to be exchanged in whole or in part for a beneficial interest in any Global Senior Secured Note, then either (i) such Global Senior Secured Note shall be so surrendered for exchange or cancellation as provided in this Section 6 or (ii) the principal amount thereof shall be reduced or increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Senior Secured Note to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Company or, if applicable, the Company’s registrar and transfer agent (“Registrar”), whereupon the Company or, if applicable, the Registrar, in accordance with the applicable rules and procedures of the Depositary (“Applicable Depositary Procedures”), shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Senior Secured Note by the Depositary, accompanied by registration instructions, the Company shall execute and deliver any Senior Secured Notes issuable in exchange for such Global Senior Secured Note (or any portion thereof) in accordance with the instructions of the Depositary.
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(d)Every Senior Secured Note executed and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Senior Secured Note or any portion thereof shall be executed and delivered in the form of, and shall be, a Global Senior Secured Note, unless such Senior Secured Note is registered in the name of a person other than the Depositary for such Global Senior Secured Note or a nominee thereof.
(e)The Depositary or its nominee, as the registered owner of a Global Senior Secured Note, shall be the holder of such Global Senior Secured Note for all purposes under this Senior Secured Note, and owners of beneficial interests in a Global Senior Secured Note shall hold such interests pursuant to Applicable Depositary Procedures. Accordingly, any such owner’s beneficial interest in a Global Senior Secured Note shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Depositary participants. If applicable, the Registrar shall be entitled to deal with the Depositary for all purposes relating to a Global Senior Secured Note (including the payment of principal and interest thereon and the giving of instructions or directions by owners of beneficial interests therein and the giving of notices) as the sole holder of the Senior Secured Note and shall have no obligations to the owners of beneficial interests therein. The Registrar shall have no liability in respect of any transfers undertaken by the Depositary.
(f)The rights of owners of beneficial interests in a Global Senior Secured Note shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its participants.
(g)No holder of any beneficial interest in any Global Senior Secured Note held on its behalf by a Depositary shall have any rights with respect to such Global Senior Secured Note, and such Depositary may be treated by the Company and any agent of the Company as the owner of such Global Senior Secured Note for all purposes whatsoever. Neither the Company nor any agent of the Company will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Senior Secured Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent the Company or any agent of the Company from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary (or its nominee) as holder of any Senior Secured Note.
(h)The Company, within thirty (30) calendar days after the receipt of written notice from the Noteholder or any other holder of the Senior Secured Notes of the occurrence of an Event of Default with respect to this Senior Secured Note, shall mail to all the Noteholders, at their addresses shown on the Security Register, such written notice of Event of Default, unless such Event of Default shall have been cured or waived before the giving of such notice as certified by the Company in writing.
7.Events of Default. An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
(a)the Company does not pay the principal of any Senior Secured Note on its due date; or
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(b)the Company does not pay any interest or premium (including any Make-Whole Amount or Redemption Amount) on any Senior Secured Note when due, and such default is not cured within five (5) Business Days; or
(c)(i) the Company is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Recourse Indebtedness that is outstanding in an aggregate principal amount of at least US$15,000,000 (or its equivalent in the relevant currency of payment) beyond any period of grace provided with respect thereto, or (ii) the Company is in default in the performance of or compliance with any term of any evidence of any Recourse Indebtedness in an aggregate outstanding principal amount of at least US$15,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Recourse Indebtedness has become, or has been declared (or one or more persons are entitled to declare such Recourse Indebtedness to be), due and payable by the Company before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Recourse Indebtedness to convert such Recourse Indebtedness into equity interests), (x) the Company has become obligated to purchase or repay Recourse Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least US$15,000,000 (or its equivalent in the relevant currency of payment), or (y) one or more persons have the right to require the Company so to purchase or repay such Recourse Indebtedness; or
(d)the Company or any Subsidiary (i) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (ii) makes an assignment for the benefit of its creditors, (iii) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (iv) is adjudicated as insolvent or to be liquidated, or (v) takes corporate action for the purpose of any of the foregoing; or
(e)a court or other Governmental Agency of competent jurisdiction enters an order appointing, without consent by the Company or any of its Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries, or any such petition shall be filed against the Company or any of its Subsidiaries and such petition shall not be dismissed within sixty (60) days; or
(f)any event occurs with respect to the Company or any Subsidiary which under the laws of any jurisdiction is analogous to any of the events described in Section 7(d) or Section 7(e), provided that the applicable grace period, if any, which shall apply shall be the one applicable to the relevant proceeding which most closely corresponds to the proceeding described in Section 7(d) or Section 7(e); or
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(g)the Company defaults in the performance of or compliance with any term contained in Section 9 (Financial Covenants and Reporting); or
(h)the Company defaults in the performance of or compliance with any term contained in any Transaction Document, including this Senior Secured Note (other than those referred to in Sections 7(a), 7(b), 7(d), 7(e) and 7(f) of this Senior Secured Note), and such default is not remedied within thirty (30) days after the earlier of (i) the Company’s Chief Financial Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Senior Secured Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 7(h)); or
(i)any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in the Purchase Agreement, the Senior Secured Note or in the certificates contemplated by Section 10(b) (Officer’s Certificate) proves to have been false or incorrect in any material respect on the date as of which made and, if capable of being cured, remains uncured for thirty (30) days after the Company receives written notice thereof from any Noteholder of a Senior Secured Note; or
(j)any of the Collateral Documents ceases to be in full force and effect, or any of the Collateral Documents ceases to give the Noteholders the valid first priority perfected Liens purported to be created thereby, or any of the Collateral Documents is declared null and void (in each case other than in accordance with the terms of this Agreement or the Collateral Documents).
8.Remedies Upon an Event of Default.
(a)Acceleration.
(i)If an Event of Default described in Section 7(d), 7(e) or 7(f) has occurred, all the Senior Secured Notes then outstanding shall automatically become immediately due and payable.
(ii)If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Senior Secured Notes then outstanding to be immediately due and payable.
Upon any Senior Secured Notes becoming due and payable under this Section 8(a), whether automatically or by declaration, such Senior Secured Notes will forthwith mature and the entire unpaid principal amount of such Senior Secured Notes, plus all accrued and unpaid interest thereon, plus (y) the Make-Whole Amount, if any, or (z) the applicable Redemption Amount each determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.
(b)Other Remedies. If any Event of Default has occurred and is continuing, and irrespective of whether any Senior Secured Notes have become or have been declared immediately due and payable under Section 8(a) (Acceleration), the holder of any Senior Secured Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement
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contained herein or in any Senior Secured Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. In addition, if the Notes have been declared immediately due and payable, the Required Holders (i) may instruct the Collateral Agent to exercise any remedies of a secured party under the New York UCC and (ii) may take any other appropriate action to protect or enforce the rights and remedies of the holders.
(c)Rescission. At any time after any Senior Secured Notes have been declared due and payable pursuant to Section 8(a)(ii), the Required Holders by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Senior Secured Notes and all other amounts that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue amounts, if any and as applicable, (b) neither the Company nor any other person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to the terms of this Senior Secured Note, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Senior Secured Notes. No rescission and annulment under this Section 8(c) will extend to or affect any subsequent Event of Default for or impair any right consequent thereon.
(d)No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any Noteholder in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such Noteholder’s rights, powers or remedies. No right, power or remedy conferred by this Senior Secured Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. The Company shall pay to the Noteholder on demand such amount as shall be sufficient to cover all reasonable costs and expenses of such Noteholder incurred in any enforcement or collection under this Section 8, including reasonable attorneys’ fees, expenses and disbursements.
(e)Rights and Remedies Cumulative. No right or remedy herein conferred by the Purchase Agreement, any Collateral Document or any Senior Secured Note upon or reserved to the Collateral Agent or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
(f)Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Collateral Agent, but will suffer and permit the execution of every such power as though no such law had been enacted.
9.Financial Covenants. The Company covenants that, so long as any of the Senior
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Secured Notes are outstanding:
(a)Leverage Maintenance Test. It shall not permit the Leverage Ratio as of the last day of any of its fiscal quarters to be greater than 0.60 to 1.00.
(b)Minimum Tangible Net Worth Maintenance Test. It shall maintain a minimum Tangible Net Worth as of the last day of each of its fiscal quarters of no less than $91.20 million.
(c)Designated NRSRO Ratings Maintenance. It shall use commercially reasonable efforts to maintain an Egan Jones Rating Company rating or a rating by any other Designated NRSRO while any Senior Secured Notes remain outstanding.
10.Affirmative Covenants; Information as to and Certificates of the Company.
(a)Financial and Business Information. The Company covenants that, so long as any of the Senior Secured Notes are outstanding it shall deliver to each holder of a Senior Secured Note:
(i)Quarterly Statements. Within sixty (60) days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of, an unaudited consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and unaudited consolidated statements of income, changes in members’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by an officer of the Company as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments and provided that such quarterly financial statements shall not be required to include all notes required by GAAP;
(ii)Annual Statements. Within 120 days after the end of each fiscal year of the Company, duplicate copies of, an audited consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and audited consolidated statements of income, changes in members’ equity and cash flows of the Company and its Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances;
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(iii)Notice of Default or Event of Default. Promptly, and in any event within five (5) Business Days after the Company becoming aware of the existence of any Event of Default or that any Noteholder has given any notice or taken any action with respect to a claimed default hereunder or that any Noteholder has given any notice or taken any action with respect to a claimed default of the applicable type referred to in Section 7 (Event of Default), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;
(iv)Notices from Governmental Authority. Promptly, and in any event within thirty (30) days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Governmental Agency relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect;
(v)Resignation of Auditors. Within ten (10) days following the date on which the Company’s auditors resign, notice thereof, together with such further information as the Required Holders reasonably request;
(vi)Quarterly Conference Call. On or after the required date of delivery of the quarterly or annual financial statements required to be delivered by this Section 10(a), upon the request of any Noteholder, the Company shall arrange and hold a conference call to discuss the Company’s financial and business performance with such Noteholder and Noteholders, as the case may be, and appropriate members of the Company’s management team following the conclusion of each fiscal quarter or such applicable fiscal quarter requested by such Noteholder(s).
(vii)Designated NRSRO Surveillance Reports. Promptly, and in any event within thirty (30) days of receipt thereof, a copy of any quarterly, annual or other surveillance or similar report received by the Company from a Designated NRSRO.
(viii)Requested Information. With reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Senior Secured Notes as from time to time may be reasonably requested by any Noteholder.
(b)Officer’s Certificate. Each set of financial statements delivered to a Noteholder pursuant to Section 10(a) shall be accompanied by a certificate of an officer of the Company:
(i)Covenant Compliance. Setting forth the information from such financial statements that is required in order to establish whether the Company was in compliance with the requirements of Sections 9 (Financial Covenants) and 11 (Negative Covenants), during the quarterly, annual or other period covered by the financial statements then being furnished (including with respect to each such provision that involves mathematical calculations, the information from such financial statements that is required to perform such calculations) and detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section or other covenant, and the calculation of the amount, ratio or percentage then in existence; and
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(ii)Event of Default. Certifying that such officer of the Company has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes an Event of Default or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.
(c)Electronic Delivery. The financial statements, opinions of independent certified public accountants, notices, other information and Officer’s Certificates that are required to be delivered by the Company pursuant to Section 10(a)(i), Section 10(a)(ii) and Section 10(b) shall be deemed to have been delivered if such financial statements satisfying the requirements of Sections 10(a)(i) or (ii) and related Officer’s Certificate satisfying the requirements of Section 10(b) are delivered to each Noteholder by electronic mail at the electronic mail address set forth in such Noteholder’s signature page to the Purchase Agreement (or otherwise in accordance with the procedures of DTC) or as communicated from time to time in a separate writing delivered to the Company by the Noteholder. The Company will be deemed to have delivered the Officer’s Certificate when delivered via electronic mail to a Noteholder’s electronic mail address listed on such Noteholder’s signature page to the Purchase Agreement or as otherwise communicated from time to time to the Company. In no event will the Company be liable if such electronic mail address is invalid or inoperable. Without limitation of the foregoing, in the event of an invalid or inoperable electronic mail address, the Company will make a reasonable good, faith attempt to contact the Noteholder by other means, including (but not limited to) providing such information pursuant to Section 24 below.
(d)Payment of Principal and Interest. The Company covenants and agrees for the benefit of the Noteholders that it will duly and punctually pay the principal of, and interest on, the Senior Secured Notes, in accordance with the terms hereof. Principal and interest will be considered paid on the date due if the Paying Agent thereof holds as of 11:00 A.M. Eastern Time, on any Interest Payment Date, an amount in immediately available funds provided by the Company that is designated for and sufficient to pay all principal and interest then due.
(e)Maintenance of Office. The Company will maintain an office or agency in the State of New York where Senior Secured Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Senior Secured Notes may be served, which may be the office of the Paying Agent. The Company may also from time to time designate one or more other offices or agencies where the Senior Secured Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency in the State of New York. The Company will give prompt written notice to the Noteholders of any such designation or rescission and of any change in the location of any such other office or agency.
(f)Existence. The Company will do or cause to be done all things necessary to preserve and keep in full force and effect: (i) the existence of the Company; (ii) the existence (corporate or other) of each Subsidiary; and (iii) the rights (charter and statutory), licenses and franchises of the Company and each of its Subsidiaries; provided, that the Company will not be
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required to preserve the existence (corporate or other) of any of its Subsidiaries or any such right, license or franchise of the Company or any of its Subsidiaries if the Company determines that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof will not be disadvantageous in any material respect to the Noteholders.
(g)Compliance with Laws. The Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(h)Insurance. The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.
(i)Payment of Taxes and Claims. The Company will, and will cause each of its Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(j)Books and Records. The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Agency having legal or regulatory jurisdiction over the Company or such Subsidiary, as the case may be. The Company will, and will cause each of its Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets. The Company and its Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and the Company will, and will cause each of its Subsidiaries to, continue to maintain such system.
(k)Maintenance of Liens. The Company will, at its own expense, take or cause
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to be taken, all action reasonably required on behalf of the Noteholders to maintain and preserve the perfection and first priority of the Lien (subject to Permitted Liens) on the Collateral granted under any Collateral Document, including without limitation filing all Uniform Commercial Code continuation statements in the appropriate jurisdictions and other matters included in the Collateral Requirements (as defined in the Security Agreement).
(l)Further Assurances; Collateral Documents. Promptly upon reasonable request by the Required Holders, the Company will (i) correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument relating to any Collateral, and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Required Holders may reasonably request from time to time in order to (x) carry out more effectively the purposes of the Collateral Documents and/or (y) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens (subject to Permitted Liens) intended to be created thereunder, in each case, to the extent required pursuant to the Collateral Documents.
(m)Waiver of Certain Covenants. The Company may omit in any particular instance to comply with any term, provision or condition set forth in this Section 10, if before the time for such compliance the Required Holders have waived such compliance with such term, provision or condition, but no such waiver will extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver will become effective, the obligations of the Company in respect of any such term, provision or condition will remain in full force and effect.
11.Negative Covenants. The Company covenants that so long as any of the Senior Secured Notes are outstanding:
(a)Debt Interest Coverage Incurrence Test. It shall not issue additional Recourse Indebtedness that (i) is secured by any assets of the Company or any of its Subsidiaries or (ii) ranks senior to or pari passu with the Senior Secured Notes in right of payment, unless the Pro Forma Interest Coverage Ratio for the most recent trailing 4 quarter period for which financial statements are available is greater than 1.25 to 1.00.
(b)Limitation on Additional Recourse Indebtedness. Neither the Company nor any of its Subsidiaries will create, incur, assume or permit to exist any Recourse Indebtedness that will rank senior to the Senior Secured Notes in right of payment to the Senior Secured Notes without the consent of the Required Holders other than any Recourse Indebtedness secured exclusively by Permitted Liens. For the avoidance of doubt, this limitation does not include any Non-Recourse Indebtedness. For the avoidance of doubt, Indebtedness shall not be deemed to rank senior in right of payment solely because it has an earlier maturity date or is unsecured.
(c)Restricted Payments. The Company will not (i) make any cash dividend or other distribution to any of its equity holders, except for tax distributions, (ii) repurchase or redeem any of its equity interests or any warrants, options or other rights in respect thereof, (iii) pay any management fees or similar fees to any of its equity holders or any Affiliate thereof, or (iv) make any redemption, prepayment (whether mandatory or optional), defeasance, repurchase or any other payment in respect of any Indebtedness that is contractually subordinated in right of payment to the
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Senior Secured Notes (other than any intercompany debt between or among the Company and its Subsidiaries) (each of the foregoing, a “Restricted Payment”), unless after giving effect to such Restricted Payment the aggregate amount of all Restricted Payments made since the Issue Date would not exceed the sum of (1) $10,000,000, plus (2) 50% of cumulative Consolidated Net Income Before Tax since June 30, 2026, plus (3) to the extent otherwise constituting Restricted Payments, payments made after the closing of the De-SPAC Transaction to the Company’s corporate parent, the proceeds of which are used to (I) pay any tax liabilities in any jurisdiction in respect of consolidated, combined, unitary or affiliated returns and (II) pay operating expenses and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses provided by third parties and any indemnification claims made by directors or officers).
(d)Limitation on Liens. The Company shall not incur, assume, create or permit to exist any Lien on any of the Collateral (whether now owned or hereafter acquired), except the Permitted Liens, without the prior written consent of the Required Noteholders.
(e)Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, enter into directly or indirectly any transaction or group of related transactions with any Affiliate (other than the Company or another Subsidiary), except (i) in the ordinary course and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon terms no less favorable to the Company or such Affiliate than would be obtained in a comparable arm’s length transaction with a person not an Affiliate, (ii) any agreements pursuant to which the Company or any of its Subsidiaries may lease or rent office space from one or more Affiliates on market terms, (iii) Restricted Payments permitted pursuant to Section 11(c) above, (iv) Non‑Recourse Indebtedness (including any Securitization Debt and any Non‑Recourse Secured Warehouse Facilities) and (v) sales of assets for cash to asset management funds managed by the Company or a Subsidiary thereof or to investors in such funds. For the avoidance of doubt, nothing in this Section 11(e) shall prohibit any transaction between the Company and any Subsidiary relating to any Non-Recourse Indebtedness.
(f)Change of Control. The Company shall not undertake a Change of Control, unless:
(i)The Company has first complied with the provisions of Section 5(d) (Redemption by the Holders Upon a Change of Control) above;
(ii)To the extent any Noteholders elect not to redeem the Senior Secured Notes held by such Noteholders, pursuant to Section 5(d) above, the continuing entity into which the Company is merged or the person which acquires by conveyance or transfer or which leases substantially all of the properties and assets of the Company shall be a corporation, association or other legal entity organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and expressly assumes the due and punctual payment of the principal of and any premium and interest on the outstanding Senior Secured Notes according to their terms, and the due and punctual performance of all covenants and conditions hereof on the part of the Company to be performed or observed; and
(iii)Immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing.
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(g)Line of Business. Except to the extent permitted by Sections 11(e), the Company will not permit any Subsidiary to engage in any business if, as a result in each case, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the Issue Date.
12.Denominations. The Senior Secured Notes are issuable only in registered form without interest coupons in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof.
13.Charges and Transfer Taxes. No service charge will be made for any registration of transfer or exchange of this Senior Secured Note, or any redemption or repayment of this Senior Secured Note, or any conversion or exchange of this Senior Secured Note for other types of securities or property, but the Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges that may be imposed in connection with the transfer or exchange of this Senior Secured Note from the Noteholder requesting such transfer or exchange.
14.Payment Procedures. Payment of the principal and interest payable on the Maturity Date will be made by check, by wire transfer or by Automated Clearing House (ACH) transfer in immediately available funds to a bank account in the United States designated by the registered Noteholder if such Noteholder shall have previously provided wire instructions to the Company, upon presentation and surrender of this Senior Secured Note at the Payment Office or at such other place or places as the Company shall designate by notice to the registered Noteholders as the Payment Office, provided that this Senior Secured Note is presented to the Company in time for the Company to make such payments in such funds in accordance with its normal procedures. Payments of interest (other than interest payable on the Maturity Date) shall be made on each Interest Payment Date by wire transfer in immediately available funds or check mailed to the registered Noteholder, as such person’s address appears on the Security Register. Interest payable on any Interest Payment Date shall be payable to the Noteholder in whose name this Senior Secured Note is registered at the close of business on the fifteenth (15th) calendar day prior to the applicable Interest Payment Date, without regard to whether such date is a Business Day, except that interest not paid on the Interest Payment Date, if any, will be paid to the holder in whose name this Senior Secured Note is registered at the close of business on a special record date fixed by the Company (a “Special Record Date”), notice of which shall be given to the Noteholder not less than ten (10) calendar days prior to such Special Record Date. To the extent permitted by applicable law, interest shall accrue, at the rate at which interest accrues on the principal of this Senior Secured Note, on any amount of principal or interest on this Senior Secured Note not paid when due. All payments on this Senior Secured Note shall be applied first against costs and expenses of the Noteholder, if any, for which the Company is liable under this Senior Secured Note; then against interest due hereunder; and then against principal due hereunder. The Noteholder acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Senior Secured Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Senior Secured Notes. For the avoidance of doubt, the Senior Secured Notes shall also be pari passu in right of payment and, to the extent of the Collateral, in right of security, with the 2027 Notes, and any distributions of proceeds of Collateral shall be made on a pro rata basis among the holders of the Parity Secured Notes in accordance with the Collateral Documents. In the event that the Noteholder receives payments in excess of its pro rata share of the Company’s payments to the holders of all of the Senior Secured Notes, then the Noteholder shall hold in trust all such excess payments for the benefit
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of the other Noteholders and shall pay such amounts held in trust to such other holders upon demand by such holders.
15.Form of Payment. Payments of principal of and interest on this Senior Secured Note shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.
16.Registration of Transfer, Security Register. Except as otherwise provided herein, this Senior Secured Note is transferable in whole or in part and may be exchanged for a like aggregate principal amount of Senior Secured Notes of other authorized denominations, by the Noteholder in person, or by its attorney duly authorized in writing, at the Payment Office or the offices of the Registrar. The Company or the Registrar shall maintain a register providing for the registration of the Senior Secured Notes and any exchange or transfer thereof (the “Security Register”). Upon surrender or presentation of this Senior Secured Note for exchange or registration of transfer, the Company or the Registrar shall execute and deliver in exchange therefor a Senior Secured Note or Senior Secured Notes of like aggregate principal amount, each in a minimum denomination of $100,000 or any amount in excess thereof which is an integral multiple of $1,000 (and, in the absence of an opinion of counsel satisfactory to the Company to the contrary, bearing the restrictive legend(s) set forth hereinabove) and that is or are registered in such name or names requested by the Noteholder. Any Senior Secured Note presented or surrendered for registration of transfer or for exchange shall be duly endorsed and accompanied by a written instrument of transfer in such form as is attached hereto and incorporated herein, duly executed by the Noteholder or its attorney duly authorized in writing, with such tax identification number or other information for each person in whose name a Senior Secured Note is to be issued, and accompanied by evidence of compliance with any restrictive legend(s) appearing on such Senior Secured Note or Senior Secured Notes as the Company may reasonably request to comply with applicable law. Such transferee will be solely responsible for delivering to the Company or the Registrar a mailing address or other information necessary for the Company or the Registrar to deliver notices and payments to such transferee. No exchange or registration of transfer of this Senior Secured Note shall be made on or after (i) the fifteenth (15th) day immediately preceding the Maturity Date or (ii) the due delivery of notice of redemption until fifteen (15) days after any redemption that is a partial redemption is completed. The Registrar shall, as soon as practicable, provide the Collateral Agent with a copy of the most recent Security Register upon a request therefor from the Collateral Agent. For all purposes of the Senior Secured Notes, the Collateral Agent shall be entitled to conclusively rely upon the Security Register provided to it by the Registrar.
17.Successors and Assigns. This Senior Secured Note shall be binding upon the Company and inure to the benefit of the Noteholder and its respective successors and permitted assigns. The Noteholder may assign all, or any part of, or any interest in, the Noteholder’s rights and benefits hereunder only to the extent and in the manner permitted by the terms of this Note. To the extent of any such assignment, such assignee shall have the same rights and benefits against the Company and shall agree to be bound by and to comply with the terms and conditions of the Purchase Agreement as it would have had if it were the Noteholder hereunder.
18.Priority. The Senior Secured Notes rank pari passu among themselves and pari passu, including but not limited to, in the event of any insolvency proceeding, dissolution, assignment for the benefit of creditors, reorganization, restructuring of debt, marshaling of assets and liabilities or similar proceeding or any liquidation or winding up of the Company, with all other
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present or future secured senior debt obligations of the Company, except (a) any Non‑Recourse Indebtedness (including any Securitization Debt and any Non‑Recourse Secured Warehouse Facilities) to the extent of the value of the related assets necessary to secure such Indebtedness, and (b) any secured senior debt that, pursuant to its express terms, is senior or subordinate in right of payment to the Senior Secured Notes. Each holder of this Senior Secured Note is entitled to the benefits of the Collateral Documents.
19.Ownership. Prior to due presentment of this Senior Secured Note for registration of transfer, the Company may treat the holder in whose name this Senior Secured Note is registered in the Security Register as the absolute owner of this Senior Secured Note for receiving payments of principal and interest on this Senior Secured Note and for all other purposes whatsoever, whether or not this Senior Secured Note be overdue, and the Company shall not be affected by any notice to the contrary.
20.Waiver and Consent.
(a)This Senior Secured Note may be amended or waived pursuant to, and in accordance with, the provisions set forth herein and as set forth in Section 7.3 of the Purchase Agreement. Any such consent or waiver given by the Noteholder shall be conclusive and binding upon such Noteholder and upon all subsequent holders of this Senior Secured Note and of any Senior Secured Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Secured Note. No delay or omission of the Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.
(b)No waiver or amendment of any term, provision, condition, covenant or agreement in the Senior Secured Notes shall be effective except with the consent of the Required Holders; provided, however, that without the consent of each Noteholder of an affected Senior Secured Note, no such amendment or waiver may: (i) reduce the principal amount of any Senior Secured Note; (ii) reduce the rate of or change the time for payment of interest on any Senior Secured Note; (iii) extend the maturity of any Senior Secured Note; (iv) change the currency in which payment of the obligations of the Company under the Senior Secured Notes is to be made; (v) lower the percentage of aggregate principal amount of outstanding Senior Secured Notes required to approve any amendment of the Senior Secured Notes; (vi) release all or substantially all of the Collateral; (vii) make any changes to the partial redemption provisions of Section 5(a) (Optional Redemption by the Company; Partial Redemptions), Section 7 (Events of Default), Section 18 (Priority), or this Section 20 (Waiver and Consent) of the Senior Secured Notes that adversely affects the rights of any Noteholder; or (viii) disproportionately affect the rights of any of the holders of the then outstanding Senior Secured Notes; provided, further, that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing, the Company may amend or supplement the Senior Secured Notes without the consent of the Noteholders to cure any ambiguity, defect or inconsistency or to provide for uncertificated Senior Secured Notes in addition to or in place of certificated Senior Secured Notes, or to make any change that does not adversely affect the rights of any Noteholder of any of the Senior Secured Notes. No failure to exercise or delay in exercising, by any Noteholder of the Senior Secured Notes, of any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof, or the exercise
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of any other right or remedy provided by law, except as restricted hereby. The rights and remedies provided in this Senior Secured Note are cumulative and not exclusive of any right or remedy provided by law or equity. No notice or demand on the Company in any case shall, in itself, entitle the Company to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Noteholders to any other or further action in any circumstances without notice or demand. No consent or waiver, expressed or implied, by the Noteholders to or of any breach or default by the Company in the performance of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance of the same or any other obligations of the Company hereunder. Failure on the part of the Noteholders to complain of any acts or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Noteholders of their rights hereunder or impair any rights, powers or remedies on account of any breach or default by the Company.
21.Absolute and Unconditional Obligation of the Company.
(a)No provisions of this Senior Secured Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal and interest on this Senior Secured Note at the times, places and rate, and in the coin or currency, herein prescribed.
(b)No delay or omission of the Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.
(c)Any insured depository institution which shall be a Noteholder or which otherwise shall have any beneficial ownership interest in this Senior Secured Note shall, by its acceptance of such Note (or beneficial interest therein), be deemed to have waived any right of offset with respect to the indebtedness evidenced thereby.
22.No Sinking Fund; Convertibility. This Senior Secured Note is not entitled to the benefit of any sinking fund. This Senior Secured Note is not convertible into or exchangeable for any of the equity securities, other securities or assets of the Company or any subsidiary of the Company.
23.No Recourse Against Others. No recourse under or upon any obligation, covenant or agreement contained in this Senior Secured Note, or for any claim based thereon or otherwise in respect thereof, will be had against any past, present or future member, employee, officer, or manager, as such, of the Company or of any predecessor or successor, either directly or through the Company or any predecessor or successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of this Senior Secured Note by the Noteholder and as part of the consideration for the issuance of this Senior Secured Note.
24.Notices.
(a)All notices to the Company under this Senior Secured Note shall be in writing and addressed to the Company at 400 Park Avenue, 12th Floor, New York, NY 10022, Attention: Chief Financial Officer, or to such other address as the Company may notify to the Noteholder (the “Payment Office”).
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(b)Except to the extent otherwise provided for in Section 10(c) (Electronic Delivery), all notices and communications to be provided to the Noteholders hereunder shall be in writing and sent by (i) first-class mail or (ii) by an internationally recognized overnight delivery service to each Noteholder at its address as set forth in the Security Register; provided, however, to the extent such Noteholder requests that all notices and communications (notwithstanding those contemplated by Section 10(c) (Electronic Delivery), which shall only be provided via electronic mail) be provided by electronic mail and provides the Company with an electronic mail address, the Company shall provide such notice or communication via electronic mail to such electronic mail address by such Noteholder.
25.Further Issues. The Company may, without the consent of the Noteholders, create and issue additional notes having the same terms and conditions of the Senior Secured Notes (except for the Issue Date, issue price, purchase price, first interest payment date applicable thereto and first date from which interest will accrue) so that such further notes shall be consolidated and form a single series with the Senior Secured Notes, so long as both immediately before and after giving effect to any such further issues, (a) no Event of Default has occurred and is continuing and (b) on a pro forma basis, the Company is in compliance with the Financial Covenants set forth in Section 9.
26.Governing Law; Interpretation. THIS SENIOR SECURED NOTE WILL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned has caused this Senior Secured Note to be duly executed and attested.
CARTIGA, LLC | |||
| | ||
| | ||
By: | |||
Name: | Samuel Wathen | ||
Title: | President and CEO | ||
TRANSFER AGENT AUTHENTICATION: | |
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UMB BANK N.A. | |
Name: | |
Title: |
Cartiga, LLC – 11.50% Senior Secured Note due 2031
Signature Page to Senior Secured Note