Contract
Exhibit
10.9
THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE ISSUER HAS
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION UNDER SAID ACT IS NOT REQUIRED.
THE NOTE
IS SUBJECT TO THE TERMS, INCLUDING A RIGHT OF SET-OFF, OF A MERGER AGREEMENT
DATED AS OF MAY 7, 2010, AMONG CLARUS CORPORATION, A DELAWARE CORPORATION,
EVEREST/SAPPHIRE ACQUISITION LLC, EVEREST MERGER I CORP., EVEREST MERGER II,
LLC,, XXXXXXX MOUNTAIN PRODUCTS, INC. AND KANDERS GMP HOLDINGS, LLC AND XXXXXXXX
XXXXXXX INVESTMENT COMPANY, LLC
CLARUS
CORPORATION
5%
Unsecured Subordinated Note due May 28, 2017
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May ,
2010
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$________
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CLARUS CORPORATION, a Delaware
corporation (the “Company”), hereby
promises to pay to the order of ___________________ (the “Holder”), the
principal amount of _________________ U.S. Dollars ($___________) (such amount,
as reduced, if applicable,in accordance with Section 7 herein, the “Principal
Amount”).
This 5% Unsecured Subordinated Note due
May 28, 2017 (“Note”) is one of two
duly authorized 5% Unsecured Subordinated Notes due May 28, 2017, aggregating
$__________ in principal amount (the “Notes”) with
identical terms and rights issued to ____________ (together with its successors
or assigns “____”) and
_________________________ pursuant to that certain Merger Agreement (the “Merger Agreement”)
dated as of May 7, 2010, among Clarus Corporation, a Delaware corporation (the
“Company”),
Everest/Sapphire Acquisition LLC, Everest Merger I Corp., Everest Merger II,
LLC, Xxxxxxx Mountain Products, Inc., Kanders GMP Holdings, LLC and Xxxxxxxx
Xxxxxxx Investment Company, LLC (capitalized terms not otherwise defined herein
shall have their respective meanings as set forth in the Merger
Agreement).
The payment of the principal and
interest on this Note is subordinated in right of payment to the prior payment
in full of certain other obligations of the Company to the extent and in the
manner set forth herein.
1. Payment of
Principal. The Company shall repay the entire Principal Amount
outstanding on or before the earliest of (a) May 28, 2017 (the “Maturity Date”), (b)
a sale or transfer (in one transaction or series of related transactions) of (i)
all or substantially all of the assets of the Company or its successors or
assigns or (ii) a majority of the then-issued and outstanding capital stock of
the Company or its successors or assigns, or (c) a merger, consolidation, share
exchange or any other business combination or transaction involving the Company
or its successors or assigns whereby the holders of all of the issued and
outstanding capital stock of the Company prior to such transaction do not (x)
hold at least a majority of the voting stock or other voting equity of the
surviving or resulting entity in the transaction immediately after consummation
thereof, and (y) have the right to elect at least a majority of the directors of
the surviving or resulting entity.
2. Payment of Interest.
Interest shall accrue at the rate of five percent (5%) per annum (based on a 360
day year comprised of twelve 30 day months) on the unpaid Principal Amount
outstanding and be payable in cash quarterly in arrears on the last day of
March, June, September and December in each year until the Maturity Date, at
which time all unpaid principal and interest shall be due and payable to the
Holder in cash. Upon the occurrence and continuance of an Event of
Default (as hereinafter defined) interest shall accrue at the rate of ten
percent (10%) per annum.
3. Time of
Payment. If any payment of principal or interest on this Note
shall become due on a Saturday, Sunday, or legal holiday under the laws of the
State of New York, such payment shall be made on the next succeeding day that is
not a Saturday, Sunday or such legal holiday (a “Business Day”) and
such extension of time shall in such case be included in computing interest in
connection with such payment.
4. Prepayment. The
Company shall have the right to prepay this Note, in whole or in part, at any
time or from time to time, without premium or penalty but with interest accrued
and unpaid to the date of prepayment.
5. Events of
Default.
(a) Definition. For
purposes of this Note, an “Event of Default”
shall be deemed to have occurred if any of the following events occur and in the
case of subsections 5(a)(i) or (ii) below, KGH has given its prior written
consent to such event being deemed an Event of Default hereunder:
(i)
the Company shall default in the payment of
any amount due under this Note on the date when due, whether at maturity or
other time, by acceleration or otherwise and such default shall continue for ten
(10) days after written notice thereof ;
(ii) the
Company institutes or consents to the institution of any proceeding under the
provisions of Xxxxx 00 Xxxxxx Xxxxxx Code (“Bankruptcy Code”), or
makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officers appointed without the application or consent
of the Company and the appointment continues undischarged or unstayed for sixty
(60) calendar days; or any proceeding under the Bankruptcy Code relating to the
Company or to all or any part of its properties instituted without the consent
of the Company and continues undismissed or unstayed for sixty (60) calendar
days, or an order for relief is entered in any such proceeding (each, an “Insolvency Event”);
or
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(iii) the
Company fails to perform or observe any other material covenant or agreement of
the Company contained in this Note which remain uncured for more than ten (10)
days after written notice thereof.
(b) Consequences of Events of
Default. Subject in all respects to Section 6
hereof:
(i)
If an Event of Default (other than an
Insolvency Event) has occurred and is continuing, the Holder of the Note, may
declare all or any portion of the outstanding Principal Amount due and payable
and demand immediate payment of all or any portion of the outstanding Principal
Amount. If the Holder demands immediate payment of all or any portion
of the Note, the Company shall immediately pay to the Holder the Principal
Amount requested to be paid together with all accrued and unpaid interest
thereon.
(ii) If
an Insolvency Event has occurred, all of the outstanding Principal Amount shall
automatically be immediately due and payable without any notice or other action
on the part of the Holder.
(iii) If
any Event of Default has occurred, interest shall accrue on the Principal Amount
of this Note in accordance with the last sentence of Section 2 of this Note for as long as such Event of Default
continues.
(iv) If
any Event of Default has occurred, each Holder shall also have any other rights
or remedies which such Person may have pursuant to applicable law or
equity.
6. Subordination.
6.1 Agreement to Be
Bound. (a) The Company covenants and agrees, and
the Holder by its acceptance thereof, likewise covenants and agrees, that the
Note is being issued subject to the provisions contained in this Section 6; and
each person holding the Note, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such
provisions.
(b) The
Note shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to the prior payment in full of all
Senior Indebtedness (as defined in Section 6.7).
6.2 Priority of Senior
Indebtedness. (a) No payment of the
Principal Amount or interest on the Note shall be made, nor shall any assets be
applied to the purchase or other acquisition or retirement of the Note, if, at
the time of such payment or application or immediately after giving effect
thereto (i) there shall exist a default in the payment of any amount due on any
Senior Indebtedness (a “Senior Payment
Default”) , or (ii) if there shall have occurred an event of default
other than a Senior Payment Default with respect to any Senior Indebtedness (an
“Other Senior
Default,” and, together with a Senior Payment Default, a “Senior Event of
Default”) or in the instrument under which the same has been issued,
permitting the holders thereof, after notice or lapse of time, or both, to
accelerate the maturity thereof. Promptly (and in any event within
ten (10) Business Days) after knowledge of both the occurrence and cure of a
Senior Event of Default , the Company shall furnish written notice thereof to
the Holder of the Note, in the manner and at the address specified pursuant to
Section 10 hereof.
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(b) Except
upon the occurrence and during the continuance of a Senior Event of Default, the
Company shall pay to the Holder all payments of the Principal Amount and
interest when due under this Note without regard to the subordination provision
of this Section 6. With respect to any payments of the Principal
Amount or interest that the Company is prohibited from making to the Holder of
this Note as a result of the operation of this Section 6, the Company shall
promptly (and in any event within ten (10) Business Days) make such payments to
the extent Article 6 no longer prohibits any such payment.
(c) Upon
the occurrence and during the continuance of a Senior Event of Default and
notwithstanding any other provision contained herein or in the Note to the
contrary, the Holder hereby agrees, for the benefit of the holders of Senior
Indebtedness, not to ask for, demand, xxx for, take or receive any amount owing
under the Note or exercise any remedy (whether pursuant hereto, including,
without limitation, acceleration of the Note, at law, in equity or otherwise)
with respect thereto until the earliest of (i) the date on which all Senior
Indebtedness is accelerated, (ii) if applicable, the date on which the Senior
Indebtedness to which such Senior Event of Default related is discharged in
accordance with its terms or such Senior Event of Default is waived by the
holders of such Senior Indebtedness or cured or (iii) any voluntary or
involuntary petition in bankruptcy filed by or against the
Company. Within ten (10) Business Days after knowledge of any Event
of Default under the Note, the Company shall furnish a copy thereof to the
holders of Senior Indebtedness in the manner and at the addresses specified in
the documents and/or agreements evidencing the applicable Senior
Indebtedness.
6.3 Acceleration of Note;
Insolvency. (a) Upon (i) any acceleration of the
principal amount due on the Note or Senior Indebtedness or (ii) any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution or winding up or total
or partial liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due upon all Senior Indebtedness shall first be paid in
full, or payment thereof duly provided for, to the full satisfaction of the
holders of Senior Indebtedness before the Holder of the Note shall be entitled
to receive or retain any assets so paid or distributed in respect thereof; and
upon any such dissolution or winding up or liquidation or reorganization, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holder of the Note would
be entitled, except for these provisions, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, or by the Holder of the Note if received by
it, directly to the holders of Senior Indebtedness, to the extent necessary to
pay all such Senior Indebtedness in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness before any
payment or distribution is made to the Holder of the Note, except that the
holders of Senior Indebtedness of the type described in clause (i) of the
definition of Senior Indebtedness shall be entitled to receive payment in full
of such Senior Indebtedness (or provisions satisfactory to the holders of such
Senior Indebtedness shall be made for such payment) before the holders of other
types of Senior Indebtedness shall be entitled to receive payment on such other
Senior Indebtedness.
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(b) In
the event that, notwithstanding the provision of the preceding paragraph or of
Section 6.2 hereof, any payment or distribution of assets of the Company
prohibited by the preceding paragraph or by Section 6.2 hereof shall be received
by the Holder of the Note before all Senior Indebtedness is paid in full, or
provision made for such payment, to the full satisfaction of the holders of
Senior Indebtedness, in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness. All payments applied to Senior Indebtedness pursuant to
this paragraph of Section 6.3 shall be allocated among the holders of Senior
Indebtedness in accordance with the provisions of the preceding paragraph of
this Section 6.3.
6.4 Subrogation, Etc. Upon payment in
full of all Senior Indebtedness, the Holder of the Note shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company pro rata in proportion to
the respective amounts then owing to the Holders of the Notes; and for purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes would be entitled except for the provisions of this Section 6, and no
payment over pursuant to such provisions to the holders of Senior Indebtedness,
shall, as between the Company and its creditors (other than the Holders of Notes
and the holders of the Senior Indebtedness), be deemed to be a payment by the
Company to or on account of Senior Indebtedness, it being understood that the
provisions of this Section 6 are and are intended solely for the purpose of
defining the relative rights of the Holders of Notes on the one hand and the
holders of Senior Indebtedness on the other hand. The holders of
Senior Indebtedness may amend, modify and otherwise deal with Senior
Indebtedness without any notice to or approval of any holder of Indebtedness
ranking junior to Senior Indebtedness; provided that the Company
will promptly (and in any event within ten (10) Business Days) notify the Holder
of the Note in writing as to any such amendment, modification, extension, waiver
or other change to the terms of the Senior Indebtedness.
6.5 Enforcement. (a) The
foregoing subordination provisions shall be for the benefit of the holders of
Senior Indebtedness and may be enforced directly by such holders against the
Holder of the Note. The Holder of the Note by its acceptance thereof
shall be deemed to acknowledge and agree that the subordination provisions of
this Section 6 are, and are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Note, to acquire and
continue to hold, or to continue to hold, such Senior Indebtedness and each
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
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(b) Upon
any payment or distribution of assets of the Company, the Holder of the Note
shall be entitled to rely upon a certificate of the receiver, trustee in
bankruptcy, liquidation trustee, Company, agent or other person making such
payment or distribution, delivered to the Holder of the Note, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertaining thereto or to the provisions of this
Section 6.
6.6
Obligations Unimpaired. Nothing
contained in this Section 6, or elsewhere in the Note, is intended to or shall
impair as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holder of the Note, the obligation of the Company, which
shall be absolute and unconditional, to pay the Holder of the Note the Principal
Amount of and interest on the Note as and when the same shall become due and
payable in accordance with the terms thereof, or affect the relative rights of
the Holder of the Note and other creditors of the Company other than the holders
of Senior Indebtedness, nor shall anything herein or therein prevent the Holder
of the Note from exercising all remedies otherwise permitted by applicable law
upon default under this Agreement, subject to the rights, if any, under this
Section 6 of the holders of Senior Indebtedness in respect to cash, property or
securities of the Company received upon the exercise of any such
remedy. Nothing contained in this Section 6 or elsewhere in the Note,
shall prevent the Company from making payment of the Principal Amount of or
interest on the Note at any time except under the conditions described in
Section 6.2 or 6.3.
6.7 Definition of Senior
Indebtedness. The term “Senior Indebtedness”
shall mean the principal and interest on (i) all Indebtedness (as defined in the
Merger Agreement) of the Company and its Subsidiaries for money borrowed from
time to time from banks or other financial institutions, an agency or agencies
of the federal government or other institutions engaged in the business of
lending money, (ii) all Capital Leases of the Company and its Subsidiaries,
(iii) obligations of the Company for the reimbursement of any obligor on any
letters of credit, banker's acceptance or similar credit transaction, and (iv)
any deferrals, renewals and extensions of any Indebtedness described in clauses
(i) through (iii) above, unless under the express provisions of the instrument
creating or evidencing any such indebtedness, or pursuant to which the same is
outstanding, such indebtedness is not superior in right of payment to the
Notes. For the avoidance of doubt, Senior Indebtedness shall not
include Indebtedness owed or owing to any Subsidiary or any officer, director or
employee of the Company or any Subsidiary. For purposes hereof, the
Senior Indebtedness includes any and all Indebtedness under the Loan Agreement
dated May , 2010, between Zions First National Bank and each of Black
Diamond Equipment, Ltd., Black Diamond Retail, Inc., Clarus Corporation,
Everest/Sapphire Acquisition, LLC, and Xxxxxxx Mountain Products, LLC, together
with any amendments, supplements, modifications, extensions, replacements,
renewals, restatements, refundings or refinancing thereof, including without
limitation Indebtedness arising under letters of credit issued pursuant
thereto.
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7. Reduction or Increase of the
Principal Amount. The Principal Amount may be reduced by the
Company in accordance with the terms and conditions set forth in Section 11.6 of
the Merger Agreement. Upon any such reduction in the Principal
Amount, the Company shall execute and deliver a new Note to the Holder and the
Holder shall return this Note to the Company. The failure of the
Company to deliver a new Note to the Holder at any time as required by this Note
shall not affect the Company’s obligations to the Holder to pay the Principal
Amount, as applicable, and accrued and unpaid interest when and as due
hereunder.
8. Loss, Theft, Destruction or
Mutilation of Note. Upon receipt of evidence of the loss,
theft, destruction or mutilation of this Note, and, in the case of any such
loss, theft or destruction, upon receipt of an affidavit of loss from the Holder
in form reasonably satisfactory to the Company, the Company will make and
deliver, in lieu of this Note, a new Note of like tenor.
9. Place of Payment;
Notices. Payments of principal and any notice hereunder are to
be delivered to the Holder at the following address: ________________________ or
to such other address as specified in a written notice delivered to the Company
by Holder. Notices sent by the Company shall be deemed received when
delivered personally or one (1) Business Day after being sent by Federal Express
or other nationally recognized overnight carrier for next day delivery or three
(3) Business Days after being sent by certified or registered mail to the
following address:
Clarus
Corporation
0000 Xxxx
0000 Xxxxx
Xxxx Xxxx
Xxxx, XX 00000
Fax: (000)
000-0000
Attention: Chief
Financial Officer
with a
copy to:
Xxxx
Xxxxxxx, P.C.
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
Facsimile:
(000) 000 0000
10. Jurisdiction. This
Note shall be subject to the exclusive jurisdiction of the courts of New York
County, New York. The Company and the Holder, for themselves and
their successors, irrevocably and expressly agree to submit to the exclusive
jurisdiction of the courts of the State of New York for the purpose of enforcing
the terms of this Note or the transactions contemplated hereby. The
Company and the Holder irrevocably waive (for themselves and their successors),
to the fullest extent permitted by law, any objection which they may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Note or any judgment entered by any court located in
New York County, New York, and further irrevocably waive any claim that any
suit, action or proceeding brought in New York County, New York has been brought
in an inconvenient forum.
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11. Governing
Law. The validity, construction, and interpretation of this
Note shall be governed by the internal laws of the State of New York without
respect to the principles of conflicts of laws of the State of New York or any
other jurisdiction.
12. Assignment. This
Note may be assigned by the Company to any wholly-owned subsidiary of the
Company; provided, however, that the Company shall (i) provide written notice of
such assignment to the Holder within five (5) days of such assignment, (ii)
provide a written assumption signed by the assignee of this Note agreeing to be
bound by the provisions of this Note, and (iii) remain jointly and severally
liable with any such assignee for the obligations, liabilities and provisions of
this Note. This Note may be assigned by the Holder, subject to the
Company’s Right of Set-off set forth in the Merger Agreement.
13. Amendments. No
amendment, modification or waiver of any provision of this Note, nor any consent
to any departure by the Company therefrom, shall be effective unless the same
shall be in writing and signed by KGH and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
14. Pro Rata
Payments. All payments of the Principal Amount and interest
owing on the Notes shall be made on a pro rata basis (in accordance with the
respective Principal Amounts outstanding thereunder).
IN
WITNESS WHEREOF, the Company has executed and delivered this Note on the date
first above written.
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CLARUS
CORPORATION
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By:
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Name:
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Title:
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CONFIRMED
AND AGREED TO AS OF
THE DATE
FIRST WRITTEN ABOVE:
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By:
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Name:
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Title:
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