EXHIBIT 10.5
CLOSING AGREEMENT
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This CLOSING AGREEMENT (this "Agreement") is made as of February ______,
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1998 by and among AT&T Wireless PCS, Inc., a Delaware corporation ("AT&T PCS"),
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the cash equity investors listed on the signature pages hereto (the "Cash Equity
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Investors"), the management stockholders listed on the signature pages hereto
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(the "Management Stockholders"), and Triton PCS Holdings, Inc., a Delaware
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corporation formerly known as Triton PCS, Inc. (the "Company").
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Background. AT&T PCS, the Cash Equity Investors, the Management
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Stockholders, and the Company are parties to that certain Securities Purchase
Agreement dated as of October 8, 1997 (the "Securities Purchase Agreement").
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Closing of the transactions contemplated by the Securities Purchase Agreement is
occurring as of the date hereof. In connection therewith, the parties desire to
set forth their understandings regarding certain matters set forth herein.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Securities Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing Background, the mutual
promises and agreements made herein and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
1. Additional Purchasers. Pursuant to the Joinder to Securities Purchase
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Agreement dated as of December 19, 1997 that is attached hereto as Exhibit "A",
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each of First Union Capital Partners, Inc. and DAG-Triton PCS, L.P. (as assignee
of Duff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Associates, L.P.) agreed to invest an aggregate
amount of $4,973,215 in exchange for shares of Series C Preferred Stock in the
Subsequent Offering as contemplated by and in accordance with the terms of
Section 10.6 of the Securities Purchase Agreement.
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2. Name Changes. On January 6, 1998, "Triton PCS, Inc." (the signatory
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to the Securities Purchase Agreement) changed its name to "Triton PCS Holdings,
Inc.", and on January 7, 1998, "Triton PCS License Company, Inc." changed its
name to "Triton PCS, Inc.".
3. Initial Cash Contribution. Attached as Exhibit "B" is a schedule that
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sets forth the aggregate cash contributions of the Cash Equity Investors and the
Management Stockholders as of the date hereof.
4. Legal Structure. Attached hereto as Exhibit "C" is a legal structure
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chart that depicts the ownership of the Company's Subsidiaries. All of such
Subsidiaries have been formed under the laws of the State of Delaware. Triton
PCS Operating Company L.L.C. ("Triton Operating") has been qualified to conduct
business in the Commonwealth of Virginia. Triton Management Company, Inc. has
been qualified to conduct business in the Commonwealth of Pennsylvania.
5. Certain Definitional Changes. The following definitions shall
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supersede and replace the definitions of such terms that are contained in
Article I of the Securities Purchase Agreement:
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"Bridge Notes" means promissory notes of Triton Communications L.L.C.
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(as assigned to Triton PCS Operating Company L.L.C. pursuant to a
certain Assignment and Assumption Agreement dated as of January 15,
1998) in favor of certain Cash Equity Investors in the aggregate
principal amount of $1.6 million."
"Credit Agreement" means the agreement among Triton PCS, Inc., a
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Delaware corporation that is a wholly-owned Subsidiary of the Company,
the lenders and agents referred to therein, and any other parties who
become lenders or agents thereunder, dated as of February 3, 1998, to
provide a credit facility having aggregate commitments of at least
$425 million, as the same may be amended, modified or supplemented in
accordance with the terms thereof."
6. Assignment of Bridge Notes. Attached hereto as Exhibit "D" is the
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Assignment and Assumption Agreement (referred to in the revised definition of
"Bridge Notes") assigning the Bridge Notes from Triton Communications L.L.C. to
Triton PCS Operating Company L.L.C. Therefore, the delivery on the date hereof
of the Bridge Notes by each Cash Equity Investor holding such Bridge Notes to
Triton PCS Operating Company L.L.C. constitutes the contribution of such Bridge
Notes as contemplated by Section 3.2(b)(ii) of the Securities Purchase
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Agreement.
7. Contributions. Pursuant to Section 2.2 of the Securities Purchase
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Agreement and Section 3.10 of the Stockholders' Agreement, the Initial Cash
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Contributions and the Unfunded Commitments are required to be made to the
Company. The Company hereby directs that all cash contributions made after the
date hereof shall be made directly to Triton PCS, Inc., a Delaware corporation
that is a wholly-owned Subsidiary of the Company, but all such cash
contributions shall be treated as capital contributions to the capital of the
Company.
8. Resale Agreement. For purposes of Sections 7.2(f), 7.3(e) and 7.4(f)
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of the Securities Purchase Agreement only, the term "Related Agreements" shall
exclude the Resale Agreement, which is not be executed on the date hereof, but
rather shall be executed and delivered in accordance with the provisions
contained in Section 8.11 of the Stockholders' Agreement.
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9. No Franchise or Business Opportunity Relationship. Each of the parties
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acknowledges that (i) the Company and AT&T PCS and its Affiliates do not intend
to create a franchise or business opportunity relationship; (ii) the wireless
telephones ("Telephones") if any, purchased by the Company from AT&T PCS and its
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Affiliates and minutes for mobile wireless radiotelephonic service ("Minutes")
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purchased by the Company or its Affiliates under the terms of the Roaming
Agreement are being sold at bona fide wholesale prices; (iii) neither the
Company nor any of its Affiliates is required by the Purchase Agreement or the
Related Agreements or as a matter of
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practical necessity to purchase more than a reasonable quantity of Telephones or
Minutes; and (iv) neither AT&T PCS nor any of its Affiliates has made any
representation to the Company or its Affiliates that (a) the Company or its
Affiliates or its equity holders will earn, or are likely to earn, a gross or
net profit, (b) AT&T PCS or any of its Affiliates has knowledge of the market
that the Company or its Affiliates will operate in or that the market demand
will enable the Company or its Affiliates to earn a profit, (c) there is a
guaranteed market for the Company or its Affiliates, or (d) AT&T PCS or any of
its Affiliates will provide the Company or any of its Affiliates with locations
or assist the Company or it Affiliates in finding locations for use or operation
of their respective businesses. The Company has been informed at least seven
days prior to the execution of this Agreement that AT&T PCS's principal business
address is, and AT&T's agent for service of process is, c/o AT&T Corp., ▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
10. Employment of Executives. The Employment Agreements with each of the
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Management Stockholders have been entered into by Triton Management Company,
Inc., a Subsidiary of the Company, as the employer of the Management
Stockholders.
11. Directors and Officers Liability Insurance. The Company does not have
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directors and officers liability insurance coverage in place as of the date
hereof as contemplated by Section 4(e) of the Employment Agreements. The
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Company and the Management Stockholders agree to use commercially reasonable
efforts to obtain such insurance coverage as promptly as practicable after the
date hereof.
12. Network Membership License Agreement. All Licensed Activities (as
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defined in the Network Membership License Agreement) conducted pursuant to the
Network Membership License Agreement shall be conducted by Triton Operating or
other Subsidiaries of the Company that are directly or indirectly wholly-owned
by the Company. The Company shall cause Triton Operating and any such wholly-
owned Subsidiary of the Company to perform Triton Operating's obligations under
the Network Membership License Agreement.
13. Company Operations. It is contemplated that the operations of the
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Company shall be conducted through wholly-owned Subsidiaries. However, certain
documents executed, or to be executed, in connection with the Closing
(including, without limitation, the Stockholders' Agreement, the Network
Membership License Agreement, the Roaming Agreement and the Resale Agreement)
provide that the Company shall enter into agreements or conduct the Company's
operations. Notwithstanding the foregoing, the parties acknowledge and consent
that one or more of the Company's Subsidiaries have entered, or may enter, into
such agreements or conduct such operations. The parties hereto consent to such
Subsidiaries entering into such agreements or conducting such operations on the
condition that (i) such Subsidiaries shall at all times be direct or indirect
wholly-owned Subsidiaries of the Company, and (ii) the Company shall cause such
wholly-owned Subsidiaries to perform the obligations and conduct such operations
of the Company or such
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wholly-owned Subsidiaries, as the case may be, required to be performed or
conducted by the Company or such wholly-owned Subsidiaries, as the case may be,
under such agreements.
14. Pre-Closing Operations. Each of the Management Stockholders hereby
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represents, severally and not jointly, as to itself that the funds expended from
the contributions reflected under the heading "Previous Contributions" set forth
on Exhibit "B" hereto were expended in furtherance of the Business (as defined
in the Stockholders' Agreement). The foregoing constitutes an additional
representation of the Management Stockholders under Article V of the Securities
Purchase Agreement, and the Management Stockholders' indemnifications
obligations, if any, as a result of the inaccuracy of such representations shall
be governed by the provisions of Article VIII (including, without limitation the
provisions of Section 8.4) of the Securities Purchase Agreement.
15. Miscellaneous. The provisions of this Agreement modify the provisions
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of the Securities Purchase Agreement and any other document executed in
connection therewith; and it is intended that such modifications constitute
written amendments to the Securities Purchase Agreement or those documents, as
applicable. Except for the modifications and other agreements stated above, all
other terms and conditions of the Securities Purchase Agreement shall remain the
same and continue in full force and effect and shall constitute the legally
valid and binding obligations of the parties hereto enforceable in accordance
with their terms.
[SIGNATURES CONTAINED ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Company:
TRITON PCS HOLDINGS, INC.
By:_______________________________________________
Name:
Title:
AT&T PCS:
AT&T PCS WIRELESS, INC.
By:_______________________________________________
Name:
Title:
Cash Equity Investors:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc., its general
partner
By:_______________________________________________
Name:
Title:
▇.▇. ▇▇▇▇▇▇ INVESTMENT CORPORATION
By:_______________________________________________
Name:
Title:
SIXTY WALL STREET SBIC FUND, L.P.
By: Sixty Wall Street SBIC Corporation its general
partner
By:_______________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
PRIVATE EQUITY INVESTORS III, L.P.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Associates III, L.L.C., its
general partner
By:_______________________________________________
Name:
Title:
EQUITY-LINKED INVESTORS-II
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Associates-II, its general
partner
By:_______________________________________________
Name:
Title:
TORONTO DOMINION CAPITAL (USA), INC.
By:_______________________________________________
Name:
Title:
FIRST UNION CAPITAL PARTNERS, INC.
By:_______________________________________________
Name:
Title:
DAG-TRITON PCS, L.P.
By: Duff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLC, its general
partner
By:_______________________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
Management Stockholders:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT "A"
Joinder to Securities Purchase Agreement
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Attached hereto.
EXHIBIT "B"
Cash Equity Investor Contributions
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REQUIRED
INITIAL CASH PREVIOUS CLOSING DATE
CONTRIBUTION CONTRIBUTIONS CONTRIBUTIONS
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CB Capital Investors, L.P. $12,788,265.00 $ 3,417,857.14 $ 9,370,407.86
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▇▇ ▇▇▇▇▇▇ Capital Investment Corporation $12,148,852.00 $ 3,246,964.29 $ 8,901,887.71
Sixty Wall Street SBIC Fund, L.P. $ 639,413.00 $ 170,892.86 $ 468,520.14
Private Equity Investors III, L.P. $ 6,394,133.00 $ 1,708,928.57 $ 4,685,204.43
Equity-Linked Investors-II $ 6,394,133.00 $ 1,708,928.57 $ 4,685,204.43
Toronto Dominion Capital (USA) Inc. $ 3,197,067.00 $ 854,464.29 $ 2,342,602.71
First Union Capital Partners, Inc. $ 1,598,533.00 $ 427,232.14 $ 1,171,300.86
DAG-Triton PCS, L.P. $ 1,598,533.00 $ 427,232.14 $ 1,171,300.86
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 160,714.00 0.00 $ 160,714.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 80,357.00 0.00 $ 80,357.00
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Total $45,000,000.00 $11,962,500.00 $33,037,500.00
EXHIBIT "C"
Legal Structure Chart
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Attached hereto.
EXHIBIT "D"
Assignment and Assumption
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Attached hereto.
JOINDER TO SECURITIES PURCHASE AGREEMENT
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Each of the undersigned hereby (i) joins in and agrees to be bound (as an
"Additional Purchaser" and as a "Cash Equity Investor") by the terms of that
certain Securities Purchase Agreement, dated as of October 8, 1997 (the
"Purchase Agreement"), by and among AT&T Wireless PCS Inc., a Delaware
corporation, the Initial Cash Equity Investors referred to on Schedule I
thereto, the Management Stockholders listed on Schedule II thereto and Triton
PCS, Inc., a Delaware corporation and (ii) agrees that Schedule I attached
hereto accurately reflects the undersigned's Aggregate Commitment (as defined in
the Purchase Agreement) and (iii) acknowledges that of the $427,232.00 being
funded by the undersigned in connection with the execution of this Joinder that
$89,285.73 represents its pro-rata share of the Pre-Closing Commitment (as
defined in the Purchase Agreement) funded prior to the date hereof.
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has executed this Joinder to Securities Purchase Agreement as of this ___th day
of December, 1997.
FIRST UNION CAPITAL PARTNERS, INC.
By: _______________________________
Name:
Title:
DUFF ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ASSOCIATES, L.P.
By: ________________________________,
its general partner
By: __________________________
Name:
Title:
SCHEDULE I
(AS OF DECEMBER _____, 1997)
CASH EQUITY INVESTORS
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AGGREGATE INITIAL CASH
COMMITMENT # OF SHARES/1/ CONTRIBUTION
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CB Capital Investors $39,785,713 $12,788,265
▇▇ ▇▇▇▇▇▇ Capital Investment Corporation $37,796,428 $12,148,852
Sixty Wall Street SBIC Fund, L.P. $ 1,989,285 $ 639,413
Private Equity Investors III, L.P. $19,892,857 $ 6,394,133
Equity-Linked Investors-II $19,892,857 $ 6,394,133
Toronto Dominion Capital (USA) Inc. $ 9,946,430 $ 3,197,067
First Union Capital Partners, Inc. $ 4,973,215 $ 1,598,533
Duff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Assoc., L.P. $ 4,973,215 $ 1,598,533
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Total $139,250,000 $44,758,929
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/1/ The aggregate number of shares of Series C Preferred Stock to be
issued to the Cash Equity Investors shall be 1,392,500. The number of shares of
Series C Preferred Stock issued to each Cash Equity Investor shall be determined
as follows:
(i) to each holder of Bridge Notes, a number of shares equal to (x) the
product of the aggregate principal amount of all Bridge Notes held
by such holder multiplied by two (2), divided by (y) one hundred
(100).
(ii) to each Cash Equity Investor (including each holder of Bridge
Notes), a number of shares equal to its pro rata share (based upon
such Cash Equity Investor's pro rata share of the Aggregate
Commitments of all of the Cash Equity Investors) of a number equal
to the aggregate number of shares of Series C Preferred Stock to be
issued to the Cash Equity Investors minus the aggregate number of
shares to be issued to the Bridge Note holders in accordance with
paragraph (i) above.
ADDITIONAL CONTRIBUTION SCHEDULE/2/
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TOTAL 1ST
ANNIVERSARY
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CB Capital Investors $ 9,946,428
▇▇ ▇▇▇▇▇▇ Capital Investment Corporation $ 9,449,107
Sixty Wall Street SBIC Fund, L.P. $ 497,321
Private Equity Investors III, L.P. $ 4,973,214
Equity-Linked Investors-II $ 4,973,214
Toronto Dominion Capital (USA) Inc. $ 2,486,608
First Union Capital Partners, Inc. $ 1,243,304
Duff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Assoc., L.P. $ 1,243,304
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Total $34,812,500
TOTAL 2ND
ANNIVERSARY
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CB Capital Investors $ 9,946,428
▇▇ ▇▇▇▇▇▇ Capital Investment Corporation $ 9,449,107
Sixty Wall Street SBIC Fund, L.P. $ 497,321
Private Equity Investors III, L.P. $ 4,973,214
Equity-Linked Investors-II $ 4,973,214
Toronto Dominion Capital (USA) Inc. $ 2,486,608
First Union Capital Partners, Inc. $ 1,243,304
Duff ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Assoc., L.P. $ 1,243,304
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Total $34,812,500
___________________
/2/ Additional Contributions shall be made within 20 business days
after receipt of written notice from the Company in accordance with the terms
of the Stockholders Agreement.
TOTAL 3RD
ANNIVERSARY
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CB Capital Investors $ 7,104,592
▇▇ ▇▇▇▇▇▇ Capital Investment Corporation $ 6,749,362
Sixty Wall Street SBIC Fund, L.P. $ 355,229
Private Equity Investors III, L.P. $ 3,552,296
Equity-Linked Investors-II $ 3,552,296
Toronto Dominion Capital (USA) Inc. $ 1,776,148
First Union Capital Partners, Inc. $ 888,074
Duff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Assoc., L.P. $ 888,074
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Total $24,866,071
ADDRESS FOR NOTICES
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CB Capital Investors Toronto Dominion Capital (USA), Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Investment Corporation Toronto Dominion Capital (USA), Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 38th Floor ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 1700
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sixty Wall Street SBIC Fund, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 38th Floor First Union Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ One First Union Center
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ / ▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Private Equity Investors III, L.P. Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Duff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Associates, L.P.
Attn: ▇▇▇▇▇ ▇▇▇▇ Two Embarcadero Center
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Suite 2930
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
Equity-Linked Investors-II Tel: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇