1
Exhibit 10.72
[EXECUTION COPY]
SECURITIES PURCHASE AGREEMENT,
dated as of
February 4, 2000,
among
RAILAMERICA TRANSPORTATION CORP.
RAILAMERICA, INC.,
PALM BEACH RAIL HOLDING, INC.,
and
THE GUARANTORS PARTY HERETO,
and
THE PURCHASERS PARTY HERETO.
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PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions......................................................................... 1
Section 1.2 Incorporated Definition............................................................. 10
ARTICLE II
PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES
Section 2.1 Commitment to Purchase.............................................................. 10
Section 2.2 Takedown Procedures................................................................. 11
Section 2.3 Fees................................................................................ 11
Section 2.4 Mandatory Termination of Commitments................................................ 12
Section 2.5 Interest............................................................................ 12
Section 2.6 Maturity of Notes; Prepayment of Notes.............................................. 13
Section 2.7 Taxes............................................................................... 16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
HOLDINGS, INTERMEDIATE HOLDINGS AND THE COMPANY
Section 3.1 Incorporation of Representations and Warranties in Incorporated
Agreement....................................................................... 19
Section 3.2 Authorization, Execution and Enforceability......................................... 20
Section 3.3 Capitalization...................................................................... 20
Section 3.4 Solicitation........................................................................ 20
Section 3.5 Non-fungibility..................................................................... 21
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Section 4.1 Purchase for Investment; Authority; Binding Agreement............................... 21
ARTICLE V
CONDITIONS PRECEDENT TO PURCHASE
Section 5.1 Conditions to Purchasers' Obligation at Takedown.................................... 22
Section 5.2 Conditions to the Company's Obligations............................................. 27
ARTICLE VI
COVENANTS
Section 6.1 Incorporation of Affirmative Covenants from the Incorporated
Agreement....................................................................... 28
Section 6.2 Incorporation of Negative Covenants from the Incorporated
Agreement....................................................................... 28
Section 6.3 Investment Company Act.............................................................. 29
Section 6.4 Use of Proceeds..................................................................... 29
Section 6.5 Restrictions on Certain Amendments.................................................. 29
Section 6.6 No Senior Subordinated Debt......................................................... 29
Section 6.7 Permanent Financing................................................................. 30
Section 6.8 Additional Guarantors............................................................... 30
Section 6.9 Syndication Efforts................................................................. 30
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default Defined; Acceleration of Maturity; Waiver of
Default......................................................................... 31
ARTICLE VIII
LIMITATION ON TRANSFERS
Section 8.1 Restrictions on Transfer............................................................ 33
Section 8.2 Restrictive Legends................................................................. 33
Section 8.3 Notice of Proposed Transfers........................................................ 34
Section 8.4 Right to Sell, Transfer or Assign Notes............................................. 34
Section 8.5 Replacement Notes................................................................... 35
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ARTICLE IX
SUBORDINATION
Section 9.1 Notes Subordinated to Designated Senior Debt........................................ 35
Section 9.2 No Payment on Notes in Certain Circumstances........................................ 35
Section 9.3 Notes Subordinated to Prior Payment of all Designated Senior Debt
on Dissolution, Liquidation or Reorganization................................... 36
Section 9.4 Holders to be Subrogated to Rights of Holders of Designated Senior
Debt............................................................................ 38
Section 9.5 Obligations of the Company Unconditional............................................ 38
Section 9.6 Subordination Rights not Impaired by Acts or Omissions of the
Company or Holders of Designated Senior Debt.................................... 38
Section 9.7 Not to Prevent Events of Default.................................................... 39
Section 9.8 Miscellaneous....................................................................... 39
ARTICLE X
GUARANTEES
Section 10.1 Guarantees.......................................................................... 39
Section 10.2 Subordination of Guarantees......................................................... 41
Section 10.3 Limitation on Guarantor Liability................................................... 41
Section 10.4 Consolidation or Merger of Guarantors............................................... 41
Section 10.5 Release of Guarantors............................................................... 42
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices............................................................................. 42
Section 11.2 No Waivers; Amendments.............................................................. 42
Section 11.3 Indemnification..................................................................... 42
Section 11.4 Expenses............................................................................ 45
Section 11.5 Payment............................................................................. 45
Section 11.6 Successors and Assigns.............................................................. 45
Section 11.7 Brokers............................................................................. 45
Section 11.8 New York Law; Submission to Jurisdiction; Waiver of Jury Trial...................... 45
Section 11.9 Severability........................................................................ 46
Section 11.10 Counterparts........................................................................ 46
Section 11.11 Confidentiality..................................................................... 46
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Section 11.12 Survival of Representations and Warranties.......................................... 47
Section 11.13 Construction........................................................................ 47
Section 11.14 Integration......................................................................... 47
Section 11.15 Replacement Notes................................................................... 47
Section 11.16 Headings............................................................................ 47
SCHEDULES
Schedule 3.3 Capitalization of Holdings
ANNEX
Annex I Corporate and Capital Structure
EXHIBITS
Exhibit A Form of Escrow Agreement
Exhibit B Form of Note
Exhibit C Form of Debt Registration Rights Agreement
Exhibit D Form of Warrant Agreement
Exhibit E Form of Equity Registration Rights Agreement
Exhibit F Form of Issuance Date Certificate
Exhibit G Form of Solvency Certificate
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SECURITIES PURCHASE AGREEMENT
THIS AGREEMENT, dated as of February 4, 2000, is made by and among
RAILAMERICA TRANSPORTATION CORP., a Delaware corporation (the "COMPANY"),
RAILAMERICA, INC., a Delaware corporation ("HOLDINGS"), PALM BEACH RAIL HOLDING,
INC., a Delaware corporation ("INTERMEDIATE HOLDINGS"), each Restricted
Subsidiary of the Company that is a party hereto as a "Guarantor" (each such
Restricted Subsidiary, together with Holdings and Intermediate Holdings, the
"GUARANTORS") and the Persons parties hereto as "Purchasers" (collectively, the
"PURCHASERS").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. The following terms, as used herein (including
as used in any provision of the Incorporated Agreement that has been
incorporated by reference herein), have the following meanings:
"ADDITIONAL NOTES" means Notes issued in satisfaction of the Company's
obligations to pay interest on the outstanding Notes in accordance with the
terms hereof.
"ADMINISTRATIVE AGENT" is defined in the definition of the term "Credit
Agreement".
"AGREEMENT" means this Agreement, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"BONA FIDE PROPOSAL" has the meaning set forth in SECTION 2.6(d).
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"COMMISSION" means the Securities and Exchange Commission.
"COMMITMENT" means, with respect to any Purchaser, the amount set forth
opposite its name on the signature pages hereto or the obligation of such
Purchaser to purchase Notes hereunder in an aggregate principal amount at any
time outstanding not to exceed such amount.
"COMMON STOCK" means the authorized common stock, par value $.001 per
share, of Holdings.
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"COMPANY" is defined in the PREAMBLE.
"CREDIT AGREEMENT" means the Credit Agreement, dated as of February 4,
2000, among the Company, Intermediate Holdings, Holdings, Railink, Ltd., a
corporation organized and existing under the laws of the Province of Alberta,
Canada, Freight Victoria Limited, a corporation organized and existing under the
laws of Australia, the lenders party thereto, DLJ Capital Funding, Inc., as
syndication agent for the lenders, the lead arranger and the sole book running
manager, The Bank of Nova Scotia, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the lenders, and ING (U.S.) Capital LLC and Fleet
National Bank, as documentation agent for the lenders, as amended, modified,
amended and restated, renewed, refunded, replaced or refinanced from time to
time, PROVIDED that (i) such refinancing or refunding has a final maturity date
that is the same as or later than the final maturity date of the Indebtedness
being amended, modified, amended and restated, renewed, refunded, replaced or
refinanced, and (ii) the principal amount thereof does not exceed $380,000,000,
plus the amount of reasonable expenses incurred in connection therewith (other
than as a result of currency fluctuations) less the amount of all principal
repayments actually made from time to time hereafter of term Indebtedness and
permanent reductions of revolving Indebtedness thereunder.
"DEBT INCURRENCE" means any incurrence by Holdings, Intermediate
Holdings, the Company or any of its Restricted Subsidiaries of any Indebtedness,
other than Indebtedness permitted under CLAUSE (b) of SECTION 6.2.
"DEBT REGISTRATION RIGHTS AGREEMENT" means the Debt Registration Rights
Agreement, dated as of February 4, 2000, between the Company, the Purchasers and
the Guarantors, in the form attached as Exhibit C to this Agreement, as amended,
supplemented or otherwise modified from time to time.
"DEFAULT" means any Event of Default or any event or condition which,
with the giving of notice or lapse of time or both, would, unless cured or
waived, become an Event of Default.
"DESIGNATED SENIOR DEBT" means any Senior Debt outstanding under the
Loan Documents or otherwise described in CLAUSE (i) of the definition of Senior
Debt.
"DLJ HIGH YIELD INDEX RATE" means the index of high yield securities
most recently published by DLJSC in THE WEEK IN LEVERAGED FINANCE.
"DLJSC" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, a
Delaware corporation, and its successors.
"DOLLARS" or "$" mean lawful currency of the United States of America.
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"ENGAGEMENT LETTER" means the Engagement Letter, dated as of February
4, 2000, between Holdings and DLJSC, as amended, supplemented or otherwise
modified from time to time.
"EQUITY ISSUANCE" means the issuance of any equity securities by
Holdings (including without limitation any equity securities issued pursuant to
the exercise of stock options or warrants or the Permanent Financing), but
excluding (i) any stock option agreement, subscription agreement, incentive plan
or similar arrangement with any officer, employee or director of Holdings,
Intermediate Holdings, the Company or any of their respective Restricted
Subsidiaries, (ii) the issuance of any Capital Stock of Holdings to any officer,
director or employee of Holdings, Intermediate Holdings, the Company or any of
their respective Restricted Subsidiaries, (iii) the issuance of equity
securities pursuant to the Transaction or (iv) the issuance of equity securities
to Holdings, Intermediate Holdings, the Company or any Guarantor.
"EQUITY REGISTRATION RIGHTS AGREEMENT" means the Equity Registration
Rights Agreement, dated as of February 4, 2000, among Holdings and the
Purchasers, in the form attached as Exhibit E to this Agreement, as amended,
supplemented or otherwise modified from time to time.
"ESCROW AGENT" means Xxxxx, Inc., a Delaware corporation.
"ESCROW AGREEMENT" means the Escrow Agreement, dated as of February 4,
2000, among Holdings, the Purchasers and the Escrow Agent, in the form attached
as Exhibit A to this Agreement, as amended, supplemented or otherwise modified
from time to time.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 7.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXPIRATION DATE" has the meaning set forth in SECTION 2.1(b).
"FEE LETTER" means the letter agreement with respect to fees dated
February 1, 2000 made by DLJ Bridge Finance, Inc. and DLJ Capital Funding, Inc
and accepted by Holdings on February 2, 2000.
"FINANCING DOCUMENTS" means this Agreement, the Notes, the Debt
Registration Rights Agreement, the Equity Registration Rights Agreement, the
Warrant Agreement, the Warrants and the Escrow Agreement.
"FIRST ANNIVERSARY DATE" means the first anniversary of the Issuance
Date (or if such date is not a Business Day, the next preceding Business Day).
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"FIXED RATE HOLDER" means a Holder of a Note which is designated as a
Fixed Rate Holder by notice to the Company and to such Holder by a Purchaser or
any of its Affiliates substantially contemporaneously with the transfer by such
Purchaser or such Affiliate of such Note to such subsequent Holder with a fixed
rate of interest in accordance with Section 8.4(b).
"FIXED RATE NOTE" means a Note which has been transferred to a Fixed
Rate Holder (including any Note issued upon any subsequent exchange or transfer
thereof and any Additional Note issued in respect thereof).
"FIXED RATE SALE DATE" means the earlier of (i) the first anniversary
of the Issuance Date and (ii) the date of any refusal by the Company to execute
a Bona Fide Proposal.
"GUARANTEE" means the subordinated guarantee by the Guarantors of the
Notes pursuant to Article X.
"GUARANTEE OBLIGATION" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness (the "primary obligations") of any other
third Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor or (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation against loss in
respect thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined in
good faith by the guaranteeing Person.
"GUARANTORS" is defined in the preamble.
"HOLDER" means any holder of any Note.
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"HOLDINGS" is defined in the preamble.
"INCORPORATED AGREEMENT" means the Credit Agreement; PROVIDED that any
amendment, supplement or waiver thereto or thereunder shall be effective for
purposes of this definition if and only if consented to in writing by the
Majority Holders. Each reference herein to the Incorporated Agreement shall by
such reference incorporate the provisions of the Incorporated Agreement to which
such reference is made as though fully set forth in such place, together with
related definitions and ancillary provisions, PROVIDED that for purposes of such
incorporation by reference, except as the context may otherwise require:
(i) references therein to "this Agreement", the "Notes", the
"Loan Documents" and the like shall be deemed to refer to and include
this Agreement, the Notes and the Financing Documents, respectively;
(ii) references therein to the "Administrative Agent" shall be
deemed to refer to the Purchasers;
(iii) references therein to the "Lenders" shall be deemed to
refer to (x) prior to the issuance of the Notes, the Purchasers and (y)
from and after the issuance of the Notes, the Holders from time to time
of the Notes;
(iv) references therein to the "Required Lenders" or the like
shall be deemed to refer to the Majority Holders;
(v) references therein to the "Obligors" shall be deemed to
refer to Holdings, the Company and the Guarantors;
(vi) references in Article VI thereof to the "Credit
Extensions" shall be deemed to refer to the Indebtedness evidenced by
the Notes; and
(vii) provisions within the Incorporated Agreement shall be
deemed for all purposes hereof to be modified as set forth in ARTICLES
III, VI and VII hereof.
"INITIAL RATE" has the meaning set forth in SECTION 2.5(b).
"INTEREST PAYMENT DATE" means each May 4, August 4, November 4 and
February 4 (or, if any such date is not a Business Day, the next succeeding
Business Day).
"INTERMEDIATE HOLDINGS" is defined in the preamble.
"ISSUANCE DATE" means the date the Notes are issued by the Company and
purchased by the Purchasers.
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"ISSUANCE DATE CERTIFICATE" means a certificate of an Authorized
Officer of Holdings, Intermediate Holdings and the Company substantially in the
form of EXHIBIT F hereto, delivered pursuant to CLAUSE (d) of SECTION 5.1.
"LENDERS" means the banks and other financial institutions from time to
time party to the Credit Agreement.
"LOAN DOCUMENTS" means the Credit Agreement, together with all notes,
collateral and security documents, guaranties, interest rate hedge or similar
arrangements to which the counterparty at the time such interest rate hedge or
similar arrangement was entered into was a lender under the Credit Agreement or
any of its Affiliates, agreements and other documents delivered at any time in
connection therewith, all as amended, supplemented or otherwise modified from
time to time in accordance with their respective terms.
"MAJORITY HOLDERS" means (i) at any time prior to the issuance of the
Notes, the Purchasers and (ii) at any time thereafter, the holders of voting
rights with respect to waivers, amendments and other actions permitted or
required to be taken by Holders under the terms of the Notes constituting a
majority of such voting rights attributable to the aggregate outstanding amount
of Notes at such time.
"MAKE-WHOLE AMOUNT" means, with respect to any Fixed Rate Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Fixed Rate Note
over the amount of such Called Principal, 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 meanings:
"CALLED PRINCIPAL" means, with respect to any Fixed Rate Note,
the principal of such Fixed Rate Note that is to be prepaid pursuant to
SECTION 2.6(b) or has become or is declared to be immediately due and
payable pursuant to SECTION 7.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Fixed Rate 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 Fixed Rate Notes is payable) equal to
the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Fixed Rate Note, 0.50% over the yield to maturity
implied by (i) the yields reported, as of 10:00 a.m. (New York City
time) on the second Business Day preceding the Settlement
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Date with respect to such Called Principal, on the display designated
as "Page USD" on the Bloomberg Financial Markets System (or such other
display as may replace Page USD on the Bloomberg Financial Markets
System) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or (ii) if such yields are not reported as of
such time or the yields reported as of such time are not ascertainable,
the Treasury Constant Maturity Series 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 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied
yield will be determined, if necessary, by (a) converting U.S. Treasury
xxxx quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) 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 (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Fixed Rate Note, all payments of such Called
Principal and interest thereon that would be due after the Settlement
Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date, PROVIDED
that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Fixed Rate 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 pursuant to SECTION 2.6(b)
or SECTION 7.1; and PROVIDED FURTHER that any such determination shall
assume the extension of the maturity of such Fixed Rate Note pursuant
to SECTION 2.6(a), whether or not such maturity has in fact been so
extended.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Fixed Rate Note, the date on which such Called Principal is to
be prepaid pursuant to SECTION 2.6(b) or has become or is declared to
be immediately due and payable pursuant to SECTION 7.1, as the context
requires.
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"MATERIAL ACQUISITION DOCUMENTS" means the Merger Agreement, the Credit
Agreement, the Engagement Letter and all other material instruments, agreements
and documents relating to the Acquisition, the RailAmerica Refinancing, the
RailTex Refinancing, the Intermediate Holdings Asset Bridge Note Issuance, the
Equity Issuance (as defined in the Incorporated Agreement), the Asset Transfer
and the transactions contemplated hereby or thereby, in each case as amended
from time to time in accordance with CLAUSE (j) of SECTIONS 6.2 and 6.5.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, assets, condition (financial or otherwise), operations, performance,
properties or prospects of Holdings, Intermediate Holdings, the Company and the
Restricted Subsidiaries taken as a whole, (ii) the material impairment of the
ability of Holdings, Intermediate Holdings, the Company or any Guarantor to
perform their respective obligations under the Financing Documents, or (iii) a
material adverse effect on the rights and remedies of any Holder under any
Financing Document.
"NET DEBT PROCEEDS" means with respect to the sale or issuance by
Holdings, Intermediate Holdings, the Company or the Restricted Subsidiaries to
any Person of any of its Indebtedness not permitted pursuant to Section 7.2.2 of
the Incorporated Agreement as incorporated by reference in CLAUSE (b) of SECTION
6.2, the EXCESS of:
(a) the gross cash proceeds received by such Person from such
sale or issuance,
OVER
(b) all underwriting commissions and legal, investment
banking, brokerage and accounting and other professional fees, sales
commissions and disbursements actually incurred in connection with such
sale or issuance which have not been paid to Affiliates of Holdings in
connection therewith.
"NET EQUITY PROCEEDS" means with respect to any sale or issuance by
Holdings, Intermediate Holdings, the Company or the Restricted Subsidiaries to
any Person of any of their respective Capital Stock or, warrants or options for
such Capital Stock or the exercise of any such warrants or options, the excess
of:
(a) the gross cash proceeds received by Holdings, Intermediate
Holdings, the Company or any such Restricted Subsidiary from such sale,
exercise or issuance; PROVIDED, HOWEVER, that the Company may exclude
up to $100,000 in aggregate of such gross proceeds in each Fiscal Year,
OVER
(b) the sum of all underwriting commissions and legal,
investment banking, brokerage, accounting and other professional fees,
sales commissions and disbursements
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actually incurred in connection with such sale or issuance which have
not been paid to Affiliates of Holdings, Intermediate Holdings, or the
Company in connection therewith.
"NOTES" means the Company's Senior Subordinated Increasing Rate Bridge
Notes substantially in the form set forth as EXHIBIT B hereto.
"OBLIGATIONS" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of Holdings, Intermediate
Holdings, the Company and each other Obligor arising under or in connection with
a Financing Document, including the principal of and premium, if any, and
interest (including interest accruing during the pendency of any proceeding of
the type described in Section 8.1.9 of the Incorporated Agreement as
incorporated by reference in CLAUSE (i) of SECTION 7.1, whether or not allowed
in such proceeding) on the Notes.
"OTHER TAXES" has the meaning set forth in SECTION 2.7(a).
"PERMANENT FINANCING" means any Debt Incurrence or Equity Issuance
following the date hereof for the purpose of refinancing the Notes.
"PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or other entity of
any kind.
"PRIME RATE" means, as of any date, the rate of interest then most
recently announced by The Bank of New York as its prime or reference rate for
dollars loaned in the United States.
"PROJECTIONS" is defined in CLAUSE (h)(i)(b) of SECTION 5.1.
"PURCHASERS" is defined in the PREAMBLE.
"REGISTRATION RIGHTS" means the registration rights applicable to the
Notes on the terms set forth in the Debt Registration Rights Agreement.
"RELEVANT FIXED INTEREST RATE" is defined in SECTION 8.4(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" means (i) all Indebtedness outstanding under the Loan
Documents, including, without limitation, in each case, principal, premium,
interest (including interest accruing subsequent to the filing of, or which
would have accrued but for the filing of, a petition for bankruptcy, whether or
not such interest is an allowable claim in such bankruptcy proceeding),
indemnifications, fees and expenses relating thereto, (ii) any interest rate
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agreements entered into in connection with any Indebtedness referred to in
clause (i), (iii) any other Indebtedness permitted to be incurred by the Company
under the terms of this Agreement which the Holders agree will be senior in
right of payment to the Notes and (iv) all obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Debt will not include (w) any liability for federal, state, local or other taxes
owed or owing by the Company, (x) any Indebtedness of the Company to any of its
Restricted Subsidiaries or other Affiliates, (y) any trade payables or (z) any
Indebtedness that is incurred in violation of this Agreement.
"SHELF REGISTRATION" means a "shelf" registration statement on any
appropriate form pursuant to Rule 415 (or similar rule that may be adopted by
the Commission) under the Securities Act.
"SUBORDINATED DEBT" means unsecured Indebtedness of Holdings,
Intermediate Holdings, the Company or any their Restricted Subsidiaries
subordinated in right of payment to the Obligations pursuant to documentation
containing redemption and other prepayment events, maturities, amortization
schedules, covenants, events of default, remedies, acceleration rights,
subordination provisions and other material terms satisfactory to the Majority
Holders.
"SUBORDINATED OBLIGATIONS" has the meaning set forth in SECTION 9.1.
"TAXES" has the meaning set forth in SECTION 2.7(a).
"TRANSFER" means any disposition of Notes that would constitute a sale
thereof under the Securities Act.
"TREASURY RATE" means, as of any date, the yield to maturity as of such
date of United States Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Statistical Release H.15 (519)
that has become publicly available at least two Business Days prior to such date
(or, if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to (but not less than) the
remaining term to maturity of the Notes; PROVIDED, HOWEVER, that if such term to
maturity is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.
"VARIABLE RATE NOTE" means any Note other than a Fixed Rate Note.
"VARIABLE RATE HOLDER" means any Holder of a Variable Rate Note.
"WARRANT AGREEMENT" means the Warrant Agreement, dated as of February
4, 2000, among Holdings and the Purchasers in the form attached as Exhibit D to
this Agreement, as amended, supplemented or otherwise modified from time to
time.
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"WARRANT SHARES" has the meaning set forth in CLAUSE (u) of SECTION
5.1.
"WARRANTS" means the warrants to purchase common stock of Holdings to
be issued pursuant to the Warrant Agreement.
Section 1.2 INCORPORATED DEFINITION. Unless the context otherwise
requires, capitalized terms defined in the Incorporated Agreement and not
otherwise defined herein shall have the meanings assigned thereto in the
Incorporated Agreement.
ARTICLE II
PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES
Section 2.1 COMMITMENT TO PURCHASE. (a) Subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties of the Company contained herein and in the other Financing Documents,
the Company may at its option issue and sell to the Purchasers on the Issuance
Date, and each Purchaser agrees to purchase on the Issuance Date, Notes in an
aggregate outstanding principal amount equaling such Purchaser's Commitment. The
purchase price for the Notes shall be 100% of the principal amount thereof.
(b) The Commitment will terminate (the "EXPIRATION DATE") on the
earliest of (i) the termination of the Merger Agreement in accordance with the
terms thereof prior to the consummation of the Acquisition, (ii) the
consummation of the Transaction without the issuance of the Notes (if such date
occurs prior to the Issuance Date), (iii) the date on which Holdings,
Intermediate Holdings, the Company or any of their respective Restricted
Subsidiaries commences the marketing of any proposed Permanent Financing with
respect to which DLJSC or any of its Affiliates is not (unless otherwise agreed
to by DLJSC in its sole and absolute discretion) the sole and exclusive manager,
agent, purchaser, underwriter or lead arranger (if such date occurs prior to the
Issuance Date) and (iv) 5:00 P.M. (New York City time) on April 15, 2000 (if
such date occurs prior to the Issuance Date); PROVIDED, that if at any time on
or after the date hereof an Event of Default shall have occurred and be
continuing, a Purchaser may at its option terminate its Commitment by notice to
the Company, such termination to be effective upon the giving of such notice;
and PROVIDED, FURTHER, that the Commitments shall automatically terminate,
without notice to the Company or any other action on the part of the Purchasers,
upon the occurrence of any Default described in clauses (b), (c) or (d) of
Section 8.1.9 of the Incorporated Agreement as incorporated by reference in
CLAUSE (i) of SECTION 7.1 with respect to any Obligor.
(c) The Commitments are not revolving in nature, and principal amounts
of Notes prepaid in accordance with SECTION 2.6 may not be resold to the
Purchasers hereunder.
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Section 2.2 TAKEDOWN PROCEDURES. (a) The Company shall give the
Purchasers notice not later than 3:00 P.M. (New York City time) one Business Day
before the date of the proposed purchase and sale of Notes, which notice shall
specify the principal amount of Notes to be purchased and sold and the proposed
Issuance Date (which shall be a Business Day).
(b) On the Issuance Date, the Purchasers, severally and not jointly,
shall deliver by wire transfer, to the account number of the Company specified
by the Company in writing no later than 1:00 P.M. (New York City time) on the
Issuance Date, immediately available funds in an amount equal to the aggregate
purchase price of the Notes to be purchased by the Purchasers hereunder on such
Issuance Date, less the aggregate amount of fees payable by the Company to the
Purchasers on such date pursuant to SECTION 2.3(a) and expenses (if any) payable
to the Purchasers on such date pursuant to SECTION 11.4.
(c) On the Issuance Date, against payment as set forth in CLAUSE (b)
above, the Company shall deliver to each Purchaser a single Note representing
the aggregate principal amount of Notes to be purchased by such Purchaser
registered in the name of such Purchaser, or, if requested by such Purchaser,
separate Notes in such other denominations representing in total such aggregate
principal amount and registered in such name or names as shall be designated by
such Purchaser by notice to the Company at least one Business Day prior to the
Issuance Date.
Section 2.3 FEES. (a) The Company shall pay to the Purchasers the fees
that are set forth in the Fee Letter at such times and in such amounts as agreed
to therein.
(b) On the Fixed Rate Sale Date, the Company shall pay to each Holder a
cash duration fee (the "EXTENSION FEE") in an amount equal to three percent
(3.00%) of the principal amount of the Notes held by such Holder that are
outstanding on such date immediately prior to such payment.
Section 2.4 MANDATORY TERMINATION OF COMMITMENTS. The Commitment shall
terminate on the Expiration Date.
Section 2.5 INTEREST. (a) Interest on each Note shall be payable
quarterly in arrears, on each Interest Payment Date of each year in which such
Note remains outstanding, commencing with the first Interest Payment Date after
the date of issuance thereof, on the principal amount of such Note outstanding.
Interest on each Variable Rate Note shall be calculated at the rates per annum
set forth below and interest on each Fixed Rate Note shall be calculated at the
Relevant Fixed Interest Rate, and in each case shall accrue from and including
the most recent Interest Payment Date to which interest has been paid on such
Note (or if no interest has been paid on such Note, (x) from the date of
issuance thereof in the case of each Variable Rate Note and (y) from the Fixed
Rate Sale Date in the case of each Fixed Rate Note) to but excluding the date on
which payment in full of the principal sum of such Note has been made.
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(b) The interest rate applicable to each Note from and including the
Issuance Date shall be 13.0% (the "INITIAL RATE") until the Interest Payment
Date falling on May 4, 2000. Interest on each Note will be calculated on the
basis of a 360-day year and paid for the actual number of days elapsed.
(c) The interest rate applicable to each Note from and including the
Interest Payment Date falling on May 4, 2000, shall be a floating rate per annum
equal to the greatest of (i) the sum of (A) the Prime Rate in effect from time
to time plus (B) 4.50%, (ii) the sum of (A) the Treasury Rate plus (B) 6.36%,
(iii) the sum of (A) the DLJ High Yield Index Rate plus (B) 0.80%, and (iv) the
sum of (A) the Initial Rate plus (B) .50%, and in the case of CLAUSES (c)(i)
through (iv), increasing by .50% on each Interest Payment Date thereafter until
the date the principal amount of, and accrued and unpaid interest on, if any,
such Note is paid in full or such Note becomes a Fixed Rate Note.
(d) In addition to any adjustments to the Interest Rate set forth in
CLAUSE (c) above, if, pursuant to the terms of the Debt Registration Rights
Agreement, a Shelf Registration with respect to the Notes either (i) has not
been filed with the Commission on or prior to the 30th day following the Fixed
Rate Sale Date or (ii) has not been declared effective by the Commission on or
prior to the 90th day following the Fixed Rate Sale Date, then the interest rate
then in effect (including the interest rate in effect with respect to Fixed Rate
Notes) shall be increased by an additional 1.00% per annum until such time as
such Shelf Registration has been declared effective by the Commission. Following
the effectiveness of the Shelf Registration, the interest rate then in effect
shall (including the interest rate in effect with respect to Fixed Rate Notes)
be increased by an additional 1.00% beginning on the first date on which such
Shelf Registration ceases to remain effective and shall continue at such
increased interest rate until such Shelf Registration or another Shelf
Registration with respect to the Notes is declared effective by the Commission.
(e) Overdue principal and interest on the Notes shall bear interest
from the date so due to the date paid at a rate which is 2.0% per annum in
excess of the rate then borne by the Notes.
(f) Notwithstanding anything to the contrary set forth above, at no
time shall the per annum interest rate on the Notes exceed seventeen percent
(17.00%), nor shall the per annum interest rate on the Notes be lower than ten
percent (10.00%). In addition, if and to the extent that the amount of interest
payable on any Interest Payment Date is greater than the amount of interest on
the Notes that would have been payable on such Interest Payment Date if the
interest rate in effect at all times during the three-month period then ended
had been fifteen percent (15.00%) per annum (the amount of such excess being
hereinafter referred to as the "PIK Amount" for such period), then the Company
may, at its option, in lieu of payment in cash of the PIK Amount, pay interest
on such Interest Payment Date through the issuance of Additional Notes. Such
Additional Notes issued on any Interest Payment Date shall, subject to the
remaining provisions of this paragraph, be in an aggregate principal amount
equal to the PIK
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Amount for such Interest Payment Date, shall otherwise be identical to the
outstanding Notes and shall be issued to the Holders of the outstanding Notes in
proportions such that each Holder shall receive the same ratio of cash interest
to Additional Notes on such Interest Payment Date. Such Additional Notes shall
be issued only in denominations of $1,000 and multiples thereof. Any interest
otherwise payable in Additional Notes which cannot be so paid because an
Additional Note would have a denomination less than $1,000 (or not be a multiple
thereof) shall be paid in cash.
Section 2.6 MATURITY OF NOTES; PREPAYMENT OF NOTES. (a) The Notes shall
mature on the First Anniversary Date; PROVIDED, however that, unless the Company
shall have notified the Purchasers in writing not less than 5 Business Days
prior to the First Anniversary Date of its intention to repay the Notes in full
on or prior to the First Anniversary Date, the maturity date will be
automatically extended to the date which is six (6) months after the Stated
Maturity Date for Term B Loans if, on the First Anniversary Date, (i) no Default
under this Agreement shall have occurred and be continuing; (ii) no event of
default or event which with the giving of notice or the lapse of time, or both,
would become an event of default under the Loan Documents or any Indebtedness of
Holdings, Intermediate Holdings, the Company or any of its Restricted
Subsidiaries relating to more than $5,500,000 in aggregate principal amount
shall have occurred and be continuing; and (iii) all fees and expenses payable
as of such date to the Purchasers, Holders or DLJSC hereunder or under the
Engagement Letter shall have been paid in full.
(b) (i) For so long as any Variable Rate Notes are outstanding, the
Company at its option may, upon 5 Business Days' written notice to the Holders
thereof, at any time, prepay all or any part of the principal amount of the
Variable Rate Notes at a redemption price equal to 100.00% of the outstanding
principal amount of the Notes so prepaid, together with accrued and unpaid
interest through the date of prepayment, subject to SECTION 2.6(d), and (ii) for
so long as any Fixed Rate Notes are outstanding, the Company at its option may,
upon 10 Business Days' written notice to the Holders thereof, prepay all or any
part of the principal amount of the Fixed Rate Notes at a redemption price equal
to 100.00% of the outstanding principal amount of the Notes so prepaid, together
with accrued and unpaid interest through the date of prepayment and a premium
equal to the Make-Whole Amount in respect thereof, subject to SECTION 2.6(d).
(c) (i) The Company shall, following the receipt by the Company or any
Restricted Subsidiary of any Casualty Proceeds in excess of $500,000
(individually or in the aggregate (when taken together with all other Casualty
Proceeds and all Net Disposition Proceeds) over the course of a Fiscal Year),
deliver to the Holders a calculation of the amount of such Casualty Proceeds and
make a mandatory redemption of the Notes at a redemption price of 100.00% of the
principal amount so redeemed in an amount equal to 100% of such Casualty
Proceeds within 30 days of the receipt thereof; PROVIDED, HOWEVER, that no
mandatory prepayment or redemption on account of Casualty Proceeds shall be
required under this clause if the Company informs the Holders in writing no
later than 30 days following the occurrence of the Casualty Event resulting in
such Casualty Proceeds of the Company's or the Restricted Subsidiary's good
faith intention
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to apply such Casualty Proceeds to the rebuilding or replacement of the damaged,
destroyed or condemned assets or property or the acquisition or construction of
other long-term capital assets useful in the Company's or such Restricted
Subsidiary's business and the Company or the Restricted Subsidiary in fact uses
such Casualty Proceeds to rebuild or replace such damaged, destroyed or
condemned assets or property or acquire or construct such other long-term
capital assets within 360 days following the receipt of such Casualty Proceeds,
with the amount of such Casualty Proceeds unused after such 360-day period being
applied to make a mandatory redemption of the Notes at a redemption price of
100.00% of the principal amount so redeemed in an amount equal to such unused
amount of such Casualty Proceeds; PROVIDED, HOWEVER, that if such Casualty
Proceeds related to assets or property held by (x) a Canadian Subsidiary any
such reinvestments must be made by a Canadian Restricted Subsidiary, (y) an
Australian Subsidiary any such reinvestment must be made by an Australian
Restricted Subsidiary and (z) the Company or a Domestic Subsidiary any such
reinvestment must be made by the Company or a Domestic Restricted Subsidiary.
(ii) The Company shall, following the receipt by the Company or any
Restricted Subsidiary of any Net Disposition Proceeds in excess of $500,000
(individually or in the aggregate (when taken together with all other Net
Disposition Proceeds and all Casualty Proceeds) over the course of a Fiscal
Year), deliver to the Holders a calculation of the amount of such Net
Disposition Proceeds and make a mandatory redemption of the Notes at a
redemption price of 100.00% of the principal amount so redeemed in an amount
equal to 100% of such Net Disposition Proceeds within one Business Day of the
receipt thereof; PROVIDED, HOWEVER, that no mandatory prepayment or redemption
on account of Net Disposition Proceeds shall be required under this clause if
the Company informs the Holders in writing no later than one Business Day
following the receipt of such Net Disposition Proceeds of the Company's or a
Restricted Subsidiary's good faith intention to apply such Net Disposition
Proceeds to (i) the replacement of the assets or property that was the subject
of the Disposition or the acquisition or construction of other long-term capital
assets useful in the Company's or such Restricted Subsidiary's business and/or
(ii) acquire the Capital Stock of a Person in a transaction permitted under
CLAUSE (g) of Section 7.2.5 of the Incorporated Agreement as incorporated by
reference in CLAUSE (d) of SECTION 6.2 so long as (x) the Disposition giving
rise to such Net Disposition Proceeds complies with clause (f) of Section 7.2.11
of the Incorporated Agreement as incorporated by reference in CLAUSE (i) of
SECTION 6.2, (y) the aggregate amount of Net Disposition Proceeds used for such
acquisitions shall not exceed $10,000,000 in the aggregate in any Fiscal Year
and $20,000,000 in the aggregate for the term of this Agreement and (z) as a
result of such Acquisition, such Person becomes a Restricted Subsidiary and to
the extent such Person becomes a Domestic Subsidiary complies with SECTION 6.8
and the Company or the Restricted Subsidiary in fact uses such Net Disposition
Proceeds to replace, acquire or construct such assets or property or to make
such acquisition of Capital Stock within 360 days following the receipt of such
Net Disposition Proceeds, with the amount of such Net Disposition Proceeds
unused after such 360-day period being applied to make a mandatory redemption of
the Notes at a redemption price of 100.00% of the principal amount so redeemed
in an amount equal to such
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unused amount of such Net Disposition Proceeds; PROVIDED, HOWEVER, that if such
Net Disposition Proceeds related to assets or property held by (x) a Canadian
Subsidiary any such reinvestments must be made by a Restricted Subsidiary, (y)
an Australian Subsidiary any such reinvestment must be made by an Australian
Restricted Subsidiary and (z) the Company or a Domestic Subsidiary any such
reinvestment must be made by the Company or a Domestic Restricted Subsidiary
that is a Restricted Subsidiary.
(iii) Concurrently with the receipt by Holdings, Intermediate Holdings,
the Company or any of the Restricted Subsidiaries of any Net Equity Proceeds or
Net Debt Proceeds, Holdings shall deliver to the Holders a calculation of the
amount of such Net Equity Proceeds or Net Debt Proceeds, as the case may be, and
the Company shall make a mandatory redemption of the Notes at a redemption price
of 100% of the principal amount so redeemed in an amount equal to 100% of such
Net Equity Proceeds or Net Debt Proceeds, as the case may be.
(iv) Notwithstanding anything contained in this Agreement to the
contrary, the Company shall not be obligated to prepay or redeem the principal
amount of Notes with (i) any Net Debt Proceeds of any Debt Incurrence if such
prepayment is prohibited by the lenders with respect to such Debt Incurrence or
(ii) (A) any Net Debt Proceeds, Net Equity Proceeds (other than in respect of a
Permanent Financing) or (B) any Casualty Proceeds or Net Disposition Proceeds,
to the extent any portion of such Net Debt Proceeds, Net Equity Proceeds,
Casualty Proceeds or Net Disposition Proceeds is required under the Incorporated
Agreement to be paid to the holders of any Designated Senior Debt thereunder.
(d) If the Company, at any time or from time to time, (i) redeems the
Notes at their scheduled maturity (whether or not extended pursuant to SECTION
2.6), (ii) exercises its right to redeem any Notes under SECTION 2.6(b) or (iii)
redeems any Notes pursuant to SECTION 2.6(c), in any such case with or in
anticipation of funds raised directly or indirectly by any means other than a
transaction in which DLJSC or one or more of its Affiliates acted (unless
otherwise agreed to by DLJSC in its sole and absolute discretion) as sole book
running manager, lead initial purchaser, sole underwriter, sole lead agent or
sole lead arranger, as the case may be, to Holdings, Intermediate Holdings, the
Company or any of its Restricted Subsidiaries the redemption price shall be
equal to 103.00% of the principal amount of the Notes so prepaid, together with
accrued interest through the date of prepayment and, in the case of prepayment
of Fixed Rate Notes, a premium equal to the Make-Whole Amount in respect
thereof; PROVIDED, HOWEVER, that on or after the First Anniversary Date, the
Notes may be redeemed with or in anticipation of funds raised by any means other
than a transaction in which DLJSC or any Affiliate thereof has acted as sole and
exclusive lead manager, lead initial purchaser, lead underwriter, lead agent or
lead arranger as the case may be, to Holdings, Intermediate Holdings, the
Company or any of its Restricted Subsidiaries at a redemption price equal to
100.00% of the principal amount of the Notes, together with accrued interest to
the date of prepayment and, in the case of prepayment of Fixed Rate Notes, a
premium equal to the Make-Whole Amount in respect thereof unless (i) (A) prior
to the First Anniversary Date DLJSC delivered to the
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Company a proposal to market securities of Holdings, Intermediate Holdings, the
Company or any of its Restricted Subsidiaries to one or more financially
responsible institutional investors (or a commitment from DLJSC to underwrite
the public sale of such securities, on a firm commitment basis), on financial
and other terms and conditions no less favorable to the issuer than those
generally available in the United States capital markets to issuers of
securities having a creditworthiness comparable to that of the issuer, in an
amount sufficient to redeem all the Notes (a "BONA FIDE PROPOSAL"), and (B) such
issuer did not authorize DLJSC to execute such Bona Fide Proposal; it being
understood that no such proposal shall be deemed to be a Bona Fide Proposal if
DLJSC fails to execute such proposal on substantially the terms proposed, or
(ii) the Company and DLJSC have agreed in their reasonable judgment that no such
Bona Fide Proposal could be made.
(e) Any prepayment of the Notes pursuant to SECTION 2.6(b) shall be in
a minimum amount of at least $500,000, unless less than $500,000 of the Variable
Rate Notes or the Fixed Rate Notes, as the case may be, remain outstanding, in
which case all of the Notes must be prepaid. Any prepayment of the Notes
pursuant to SECTION 2.6(c) shall be in a minimum amount which is a multiple of
$1,000 times the number of Holders at the time of such prepayment.
(f) Any partial prepayment of the Notes pursuant to SECTION 2.6(b)
shall be made so that the Variable Rate Notes or the Fixed Rate Notes, as the
case may be, held by each Holder shall be prepaid in a principal amount which
shall bear the same ratio, as nearly as may be, to the total principal amount of
such Notes being prepaid as the principal amount of such Notes held by such
Holder shall bear to the aggregate principal amount of all such Notes then
outstanding. Any partial prepayment of the Notes pursuant to SECTION 2.6(c)
shall be applied first to the Variable Rate Notes until all such Notes shall
have been prepaid in full, and then to the Fixed Rate Notes, and within such
categories shall be made so that such Notes then held by each Holder shall be
prepaid in a principal amount which shall bear the same ratio, as nearly as may
be, to the total principal amount of such Notes being prepaid as the principal
amount of such Notes held by such Holder shall bear to the aggregate principal
amount of all such Notes then outstanding; PROVIDED that any Holder of a Fixed
Rate Note may elect in its discretion by written notice to the Company (given
within five Business Days of its receipt of written notice of such prepayment)
not to participate in a prepayment pursuant to SECTION 2.6(c), in which case the
amount that would otherwise have been paid to such Holder may be retained by the
Company. In the event of a partial prepayment of any Note, upon presentation and
surrender of such Note the Company shall execute and deliver to or on the order
of the Holder, at the expense of the Company, a new Note in principal amount
equal to the remaining outstanding portion of such Note.
Section 2.7 TAXES. (a) For the purposes of this Section, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by the
Company pursuant to this
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Agreement or under any Note or any other Financing Document, and all liabilities
with respect thereto, excluding (i) United States federal withholding taxes
payable under laws in effect on the date hereof and (ii) in the case of any
Purchaser or Holder, taxes imposed on the net income of such Purchaser or Holder
and franchise or similar taxes imposed on the net income of such Purchaser or
Holder, by a jurisdiction under the laws of which such Purchaser or such Holder
is organized or in which its principal executive office or the office holding
any Notes or any Financing Document is located.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or any
other Financing Document or from the execution, delivery, registration,
recordation or enforcement of, or otherwise with respect to, this Agreement or
any Note or any other Financing Document.
(b) All payments by the Company to or for the account of any Purchaser
or Holder under any Financing Document shall be made without deduction for any
Taxes or Other Taxes; PROVIDED that, if the Company shall be required by law to
deduct any Taxes or Other Taxes from any such payment, the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section), such
Purchaser or Holder (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, the Company shall make
such deductions, the Company shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and the
Company shall promptly furnish to such Purchaser or Holder (as the case may be)
the original or a certified copy of a receipt or other documentation available
to the Company evidencing payment thereof.
(c) The Company agrees to indemnify each Purchaser and Holder for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted (whether or not correctly) by any
jurisdiction on amounts payable under this Section) paid by such Purchaser or
Holder (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto; PROVIDED, HOWEVER, that the
Company shall not be obligated to make any payment pursuant to this SECTION
2.7(c) in respect of penalties or interest attributable to any Taxes or Other
Taxes, if written demand therefor has not been made by such Purchaser or Holder
(as the case may be) within 60 days from the date on which any Purchaser or
Holder received written notice of the imposition of Taxes or Other Taxes by the
relevant taxing authority, or for any additional imposition which may arise from
the failure of any Purchaser or Holder (as the case may be) to apply payments in
accordance with the applicable tax law after the Company has made the payments
required hereunder. After any Purchaser or Holder (as the case may be) receives
written notice of the imposition of Taxes, such Purchaser or Holder will act in
good faith to notify the Company of its obligations thereunder as soon as
reasonably possible.
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(d) The Company shall have no obligation for Taxes under SECTION 2.7(b)
or SECTION 2.7(c) for or on account of:
(i) any Taxes (other than Other Taxes) that would not have
been so imposed but for the existence of any present or former
connection between any Purchaser, Holder or beneficial owner (or
between a fiduciary, settlor, beneficiary, member, or shareholder of,
or possessor of a power over, such Purchaser, Holder or beneficial
owner, if such Purchaser, Holder or beneficial owner is an estate, a
trust, a partnership or corporation) and the jurisdiction imposing the
Tax other than merely holding such Note or any Financing Document, or
the receipt of payments in respect thereof, including, without
limitation, such Purchaser, Holder or beneficial owner (or such
fiduciary, settlor, beneficiary, member, shareholder, or possessor)
being or having been a citizen or resident thereof, or being or having
been engaged in a trade or business or having a permanent establishment
or other fixed base therein, or making or having made an election the
effect of which is to subject such Purchaser, Holder or beneficial
owner (or such fiduciary, settlor, beneficiary, member, shareholder, or
possessor) to such Tax;
(ii) any Taxes in the nature of estate, inheritance or gift
taxes;
(iii) any Tax that is imposed or withheld by reason of the
failure of such Purchaser, Holder or beneficial owner of a Note to
comply with a written request by the Company, addressed to such
Purchaser, Holder or beneficial owner, to provide information
concerning the nationality, residence or identity of such Purchaser,
Holder or beneficial owner, if providing such information under a
statute, treaty, regulation or administrative practice of the
jurisdiction imposing such Tax would result in a complete exemption
from such Tax;
(iv) any Taxes imposed on any payment on a Note to any
Purchaser or Holder that is a fiduciary or partnership or other than
sole beneficial owner of such payment to the extent a beneficiary or
settlor with respect to such fiduciary or a member of such partnership
or a beneficial owner would not have been entitled to the payment of
taxes had such beneficiary, settlor, member or beneficial owner
directly received its beneficial or distributive share of such payment;
and
(v) any combination of items (i) through (iv) above.
(e) If the Company determines in good faith that a reasonable basis
exists for contesting the imposition of a Tax or Other Tax with respect to any
Purchaser or Holder, such Purchaser or Holder shall cooperate with the Company
in challenging such Tax or Other Tax at the Company's expense (including,
without limitation, any additional costs, expenses or Taxes incurred by any
Purchaser or Holder, as the case may be, as a result of such contesting of such
Taxes) if requested by the Company; PROVIDED, HOWEVER, that nothing in this
SECTION 2.7(e) shall
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require any Purchaser or Holder to submit to the Company any tax returns or any
part thereof, or to prepare or file any tax returns other than as such Purchaser
or Holder in its sole discretion shall determine.
(f) Each Purchaser and Holder agrees, to the extent reasonable and
without material cost to it, to cooperate with the Company to minimize any
amounts payable by the Company under this SECTION 2.7.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
HOLDINGS, INTERMEDIATE HOLDINGS AND THE COMPANY
Each of Holdings, Intermediate Holdings and the Company represents and
warrants to the Purchasers (both before and after giving effect to the
Transaction) as set forth below:
Section 3.1 INCORPORATION OF REPRESENTATIONS AND WARRANTIES IN
INCORPORATED AGREEMENT. Each of Holdings, Intermediate Holdings and the Company
hereby makes, for the benefit of the Purchasers and the Holders from time to
time of the Notes, the representations and warranties contained in the following
Sections of the Incorporated Agreement:
(a) 6.1 (Organization, etc.);
(b) 6.2 (Due Authorization, Non-Contravention, etc.);
(c) 6.3 (Government Approval, Regulation, etc.);
(d) 6.5 (Financial Information);
(e) 6.6 (No Material Adverse Change);
(f) 6.7 (Litigation, Labor Controversies, etc.);
(g) 6.8 (Subsidiaries);
(h) 6.9 (Ownership of Properties);
(i) 6.10 (Taxes);
(j) 6.11 (Pension and Welfare Plans);
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(k) 6.12 (Environmental Warranties);
(l) 6.13 (Accuracy of Information);
(m) 6.14 (Regulations U and X);
(n) 6.15 (Year 2000); and
(o) 6.17 (Solvency).
Section 3.2 AUTHORIZATION, EXECUTION AND ENFORCEABILITY. (a) Each of
the Financing Documents (other than the Notes) and the Material Acquisition
Documents to which any of Holdings, Intermediate Holdings or the Company is a
party constitutes the valid and binding agreement of such Obligor enforceable in
accordance with its terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity). When
executed and delivered by the Company against payment therefor in accordance
with the terms hereof, the Notes will constitute valid and binding obligations
of the Company, enforceable in accordance with their terms (except, in any case,
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
principles of equity).
(b) The Warrants have been duly authorized by Holdings. When executed
pursuant to the terms of the Warrant Agreement and delivered to the Escrow Agent
pursuant to the provisions of this Agreement, the Warrants will be the valid and
binding obligations of Holdings, enforceable against it in accordance with their
terms (except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and by principles of equity).
(c) The Warrant Shares to be issued upon exercise of the Warrants have
been duly authorized and reserved for issuance by Holdings and will be issued at
the times and in the manner required by the Warrant Agreement and, upon due
exercise of a Warrant, the Warrant Shares issued will be validly issued, fully
paid and nonassessable.
Section 3.3 CAPITALIZATION. At the Issuance Date, after giving effect
to the consummation of the Transaction, the capitalization of Holdings will be
as set forth on SCHEDULE 3.3. All of the issued and outstanding shares of Common
Stock of Holdings are, and, upon consummation of the Transaction, will be,
validly issued, fully paid and nonassessable and the holders thereof are not
entitled to any preemptive or other similar rights. Except for the Material
Acquisition Documents or as set forth on SCHEDULE 3.3, there are no
subscriptions, options, warrants, rights, convertible securities, exchangeable
securities or other agreements or
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commitments of any character pursuant to which Holdings is required to issue any
shares of its capital stock.
Section 3.4 SOLICITATION. No form of general solicitation or general
advertising was used by the Company or, to the best of its knowledge, any other
Person acting on behalf of the Company, in connection with the offer and sale of
the Notes. Neither the Company nor, to the best of its knowledge, any Person
acting on behalf of the Company has, either directly or indirectly, sold or
offered for sale to any Person any of the Notes or any other similar security of
the Company except as contemplated by this Agreement, and the Company represents
that neither the Company nor any person acting on its behalf other than the
Purchasers and its Affiliates will sell or offer for sale to any Person any such
security to, or solicit any offers to buy any such security from, or otherwise
approach or negotiate in respect thereof with, any Person or Persons so as
thereby to bring the issuance or sale of any of the Notes within the provisions
of Section 5 of the Securities Act.
Section 3.5 NON-FUNGIBILITY. When the Notes are issued and delivered
pursuant to this Agreement, the Notes will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are (i)
listed on a national securities exchange registered under Section 6 of the
Exchange Act or (ii) quoted in a U.S. automated inter-dealer quotation system.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Section 4.1 PURCHASE FOR INVESTMENT; AUTHORITY; BINDING AGREEMENT. Each
of the Purchasers represents and warrants, severally and not jointly, as to
itself only, to Holdings and the Company that:
(a) such Purchaser is an Accredited Investor within the
meaning of Rule 501(a) under the Securities Act and the Notes to be
acquired by it pursuant to this Agreement are being acquired for its
own account without a view toward distribution and the Purchaser will
not offer, sell, transfer, pledge, hypothecate or otherwise dispose of
the Notes unless pursuant to a transaction either registered under, or
exempt from registration under, the Securities Act;
(b) the execution, delivery and performance of this Agreement
and the purchase of the Notes pursuant hereto are within such
Purchaser's corporate powers and have been duly and validly authorized
by all requisite corporate action;
(c) this Agreement has been duly executed and delivered by
such Purchaser;
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(d) this Agreement constitutes a valid and binding agreement
of such Purchaser enforceable in accordance with its terms;
(e) such Purchaser has such knowledge and experience in
financial and business matters so as to be capable of evaluating the
merits and risks of its investment in the Notes and such Purchaser is
capable of bearing the economic risks of such investment; and
(f) such Purchaser has had the opportunity to ask questions of
and receive answers from representatives of Holdings concerning
Holdings and its Subsidiaries and the terms and conditions of this
Agreement and the Notes, and has been granted access to all books,
records and documents of Holdings and its Subsidiaries as it has
requested.
ARTICLE V
CONDITIONS PRECEDENT TO PURCHASE
Section 5.1 CONDITIONS TO PURCHASERS' OBLIGATION AT TAKEDOWN. The
obligation of the Purchasers (which is several and not joint) to purchase the
Notes to be issued and sold by the Company on the Issuance Date is subject to
the satisfaction of the following conditions contemporaneously with such
purchase:
(a) RESOLUTIONS, ETC. The Purchasers shall have received from
each Obligor, as applicable, (i) a copy of a good standing certificate,
dated a date reasonably close to the Issuance Date, for each such
Person and (ii) a certificate, dated the Issuance Date, duly executed
and delivered by such Person's Secretary or Assistant Secretary,
managing member or general partner, as applicable, as to
(i) resolutions of each such Person's Board of
Directors (or other managing body, in the case of other than a
corporation) then in full force and effect authorizing, to the
extent relevant, all aspects of the Transaction applicable to
such Person and the execution, delivery and performance of
each Financing Document to be executed by such Person and the
transactions contemplated hereby and thereby;
(ii) the incumbency and signatures of those of its
officers, managing member or general partner, as applicable,
authorized to act with respect to each Financing Document to
be executed by such Person; and
(iii) the full force and validity of each Organic
Document of such Person and copies thereof;
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upon which certificates each Secured Party may conclusively rely until
it shall have received a further certificate of the Secretary,
Assistant Secretary, managing member or general partner, as applicable,
of any such Person canceling or amending the prior certificate of such
Person.
(b) TRANSACTION CONSUMMATED. (i) The Asset Transfer shall have
been consummated on terms and conditions reasonably satisfactory to the
Purchasers.
(ii) The Acquisition shall have been consummated (or
shall be consummated contemporaneously with the application by
the Company of the proceeds of the Notes) and in connection
therewith, the Company shall have acquired 100% of the issued
and outstanding stock of RailTex pursuant to the Merger
Agreement for a merger consideration comprised of (i) an
aggregate cash purchase price of no more than $139,000,000 and
(ii) the Equity Issuance (as defined in the Incorporated
Agreement) which shall have been consummated on terms
(including documentation in respect thereof in form and
substance) satisfactory in all respects to the Purchasers.
(iii) In connection with the Acquisition, the Rail
America Refinancing and the RailTex Refinancing shall have
been consummated (or shall be consummated contemporaneously
with the application by the Company of the proceeds of the
Notes) on terms and conditions satisfactory in all respects to
the Purchasers and except for capital leases and senior
secured indebtedness totaling $17,900,000 and convertible
subordinated indebtedness of $24,600,000, Holdings and its
Subsidiaries shall have no indebtedness for borrowed money
other than that incurred in connection with the Transaction.
(iv) The Company shall have received proceeds of not
less than $330,000,000 of Term Loans under the Credit
Agreement and the Revolving Loans shall be available
thereunder (but undrawn) on the Issuance Date.
(v) The Intermediate Holdings Asset Bridge Note
Issuance shall have been consummated on terms (including
documentation in respect thereof in form and substance)
satisfactory in all respects to the Purchasers and resulted in
gross cash proceeds of at least $55,000,000. All of the net
proceeds of the Intermediate Holdings Asset Bridge Note
Issuance shall have been contributed by Intermediate Holdings
to the Company as a common equity contribution for use in
partially financing the Transaction.
(vi) RailTex shall have received net cash proceeds
from the exercise of RailTex stock options of at least
$11,100,000 (subject to adjustment due to cashless exercise of
such options and termination of such options not exercised).
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(vii) The Company shall have at least $10,300,000
cash on hand immediately prior to the consummation of the
Transaction.
(viii) RailTex shall have received net cash proceeds
from the sale of RailTex Brazil of at least $9,000,000.
(ix) The fees and expenses paid or to be paid in
connection with the Transaction shall not exceed $36,000,000.
(c) TRANSACTION DOCUMENTS. The Purchasers shall have received
copies of fully executed versions of the Transaction Documents
(including the Material Acquisition Documents and the Loan Documents),
certified to be true and complete copies thereof by an Authorized
Officer of Holdings, Intermediate Holdings and the Company. Each
Transaction Document (including the Merger Agreement) shall be in full
force and effect and shall not have been modified or waived in any
material respect, nor shall there have been any forbearance to exercise
any material rights with respect to any of the terms or provisions
relating to the conditions to the consummation of the Acquisition set
forth in the Merger Agreement unless otherwise agreed to by the
Purchasers. The covenants and the other terms and conditions contained
in the Credit Agreement shall be reasonably satisfactory to the
Purchasers in all respects.
(d) ISSUANCE DATE CERTIFICATE. The Purchasers shall have
received the Issuance Date Certificate, dated the Issuance Date and
duly executed and delivered by an Authorized Officer, of each of
Holdings, Intermediate Holdings and the Company, in which certificate
each of Holdings, Intermediate Holdings and the Company shall agree and
acknowledge that the statements made therein shall be deemed to be true
and correct representations and warranties of each of Holdings,
Intermediate Holdings and the Company as of such date, and, at the time
each such certificate is delivered, such statements shall in fact be
true and correct. All documents and agreements required to be appended
to the Issuance Date Certificate shall be in form and substance
reasonably satisfactory to the Purchasers.
(e) DELIVERY OF NOTES. The Purchasers shall have received the
Notes to be issued on the Issuance Date, duly executed by the Company
in the denominations and registered in the names specified in or
pursuant to SECTION 2.2.
(f) PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness
identified in ITEM 7.2.2(b) of the Disclosure Schedule (Indebtedness to
Be Paid) to the Incorporated Agreement, together with all interest, all
prepayment premiums and other amounts due and payable with respect
thereto, shall have been paid in full in part from the proceeds
received by the Company in consideration for the Notes and the proceeds
of the Credit Extensions (as defined in the Credit Agreement) and the
Intermediate Holdings Asset
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Bridge Note Issuance (that were contributed by Intermediate Holdings to
and) received by the Company and the commitments in respect of such
Indebtedness shall have been terminated, and all Liens securing payment
of any such Indebtedness have been released.
(g) FEES, EXPENSES, ETC. The Purchasers shall have received
for their respective accounts all fees, costs and expenses (other than
amounts to be netted against the purchase price of the Notes pursuant
to SECTION 2.2(b)) due and payable pursuant to SECTIONS 2.3(a) and
11.4.
(h) FINANCIAL INFORMATION, MATERIAL ADVERSE CHANGE. (i) The
Purchasers shall have received
(A) a consolidating PRO FORMA income
statement of Holdings and its Subsidiaries for each
of the twelve month periods ended December 31, 1998,
September 30, 1999 and December 31, 1999 and a
consolidated balance sheet of Holdings and its
Subsidiaries, as of the most recent date practicable
near to the Closing Date (but no earlier than the
close of the Fiscal Quarter ending immediately prior
to the Closing Date) certified by the treasurer,
chief financial or accounting Authorized Officer of
Holdings, in each case, giving effect to the
consummation of the Transaction and all the
transactions contemplated by this agreement and
reflecting estimated transaction related accounting
adjustments, prepared by the Company in accordance
with Regulation S-X; and
(B) projected financial statements
(including balance sheets and statements of income,
stockholders' equity and cash flows) of Holdings and
its Subsidiaries for the eight-year period following
the Issuance Date (the "PROJECTIONS") satisfactory in
form and substance to the Purchasers.
(ii) Since December 31, 1998, there shall not have
been any material adverse change in the business, assets,
condition (financial or otherwise), operations, performance,
properties, Projections or prospects of Holdings, Intermediate
Holdings, the Company and the Restricted Subsidiaries, taken
as a whole.
(i) OPINIONS OF COUNSEL. The Purchasers shall have received
opinions, dated the Issuance Date and addressed to the Purchasers, from
(i) Xxxxxxxxx Xxxxxxx, P.A., counsel to the Obligors,
in form and substance satisfactory to the Purchasers; and
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(ii) Xxxxxx & Xxxxx, counsel to the Obligors, in form
and substance satisfactory to the Purchasers.
(j) SOLVENCY CERTIFICATE. The Purchasers shall have received a
certificate duly executed and delivered by the treasurer, chief
financial or accounting Authorized Officer of each of Holdings,
Intermediate Holdings and the Company, dated the date of the Issuance
Date, in the form of EXHIBIT G attached hereto.
(k) INSURANCE. The Purchasers shall have received certified
copies of the insurance policies (or binders in respect thereof), from
one or more insurance companies reasonably satisfactory to the
Purchasers, evidencing coverage required to be maintained pursuant to
each Loan Document.
(l) LITIGATION. There shall exist no pending or threatened
action, suit, investigation, litigation or proceeding in any court or
before any arbitrator or governmental instrumentality which (x)
purports to affect the consummation of the Transaction or the legality
or validity of this Agreement, any Note, any other Financing Document
or any Material Acquisition Document or (y) could reasonably be
expected to have a Material Adverse Effect.
(m) MINIMUM EBITDA. The Company's EBITDA for the consecutive
twelve month period ended September 30, 1999 shall be at least
$93,900,000, including (i) EBITDA as reported of $62,800,000, (ii)
transaction related accounting adjustments, prepared by the Company
which are in accordance with Regulation S-X for Form S-1 Registration
Statements of no less than $26,700,000 and (iii) other pro forma cost
savings of no less than $4,400,000 which are reasonably satisfactory in
form and substance to the Purchasers.
(n) CORPORATE, TAX AND CAPITAL STRUCTURE. The tax structure
(including Organic Documents), the Tax-Sharing Agreement, the
shareholders agreements and the management of Holdings, Intermediate
Holdings, the Company and their respective Subsidiaries both before and
after the Transaction shall be reasonably satisfactory to the
Purchasers in all respects. The corporate and capital structure of
Holdings, Intermediate Holdings, the Company and such Subsidiaries
shall be as set forth in ANNEX I hereto.
(o) APPROVALS. All governmental, shareholder and third party
consents (including Surface Transportation Board clearance) and
approvals necessary or desirable in connection with the consummation of
the Transaction, and the related financings and other transactions
contemplated hereby shall have been duly obtained and all applicable
waiting periods shall have expired, without any action being taken by
any competent authority that could restrain, prevent or impose any
materially adverse conditions on the
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Transaction, and no such law or regulation shall be applicable which in
the judgment of the Purchasers could have any such effect.
(p) ENVIRONMENTAL ASSESSMENT. The Purchasers shall have
received copies of an environmental assessment of the properties of the
Company and its Subsidiaries, to be completed by Pilko & Associates,
Inc. The results of such environmental assessment shall be reasonably
satisfactory in form, scope and substance to the Purchasers.
(q) APPRAISAL OF ASSETS. The Purchasers shall have received
copies of appraisals of the assets of the Company and its Subsidiaries
performed by Mainline Management Services, Inc. and Xxxxxx X. Xxxx &
Associates. The results of such appraisals shall be satisfactory in
form, scope and substance to the Purchasers.
(r) FOREIGN ACQUISITIONS AND TAKEOVERS ACT APPROVAL. If
Holdings, Intermediate Holdings or the Company is required to obtain an
approval or an indication of non-objection under the Foreign
Acquisitions and Takeovers Xxx 0000 of Australia or any real estate
policy guidelines of the Commonwealth Government of Australia and/or an
approval or certification of the Treasurer of Australia under the
Foreign Acquisitions and Takeovers Regulations of Australia to enter
into the Merger Agreement, or to give effect to the Transaction, the
Company shall have provided to the Purchasers, and the Purchasers shall
have received, copies of the application to obtain the approval or
certification of the Treasurer of Australia or the statement of
non-objection and copies of the relevant approval, certification or
statement.
(s) The representations and warranties of the Company
contained in the Financing Documents shall be true and correct in all
material respects on and as of the Issuance Date as if made on and as
of such date (unless stated to relate solely to an earlier date, in
which case, such representations and warranties shall be true and
correct in all material respects as of such earlier date) and the
Company shall have performed and complied with all covenants and
agreements required by the Financing Documents to be performed by it or
complied with by it at or prior to the Issuance Date, and the
Purchasers shall have received a certificate from an authorized officer
of the Company to such effect.
(t) There shall not exist any Default.
(u) Pursuant to the terms of the Escrow Agreement, Holdings
shall have executed and delivered to the Escrow Agent fully
authenticated Warrants, unregistered or registered in blank,
representing the right to purchase shares of Common Stock of Holdings
at any time in an amount equal to 3.5% of the fully-diluted Capital
Stock of Holdings, calculated after giving effect to the transactions
occurring on or prior to the Issuance Date (the "WARRANT SHARES"),
exercisable for a period of seven years at a price
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equal to the closing price per share of Common Stock of Holdings traded
on the NASDAQ National Market at the close of trading on the Issuance
Date.
(v) The Engagement Letter shall have been executed and
delivered.
(w) The Purchasers shall have received such additional
certificates, legal and other opinions and documentation as they shall
reasonably request.
Section 5.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligations of
the Company to issue and sell the Notes pursuant to this Agreement to the
Purchasers are subject to the satisfaction, at or prior to the time of purchase
of the Notes, of the following conditions:
(a) The representations and warranties of the Purchasers
contained herein shall be true and correct in all material respects on
and as of the Issuance Date as if made on and as of such date.
(b) The issuance and sale of the Notes by the Company shall
not be prohibited by any applicable law, court order or governmental
regulation.
(c) The Transaction shall have been consummated (or shall be
consummated contemporaneously with the application by the Company of
the proceeds from the issuance and sale of the Notes hereunder).
(d) Contemporaneously therewith, the Company shall have
received the purchase price for the Notes to be purchased by the
Purchasers in accordance with SECTION 2.2(b).
ARTICLE VI
COVENANTS
The Company agrees that, from and after the Issuance Date and so long
as any Notes remain outstanding and unpaid, and for the benefit of the
Purchasers and the Holders:
Section 6.1 INCORPORATION OF AFFIRMATIVE COVENANTS FROM THE
INCORPORATED AGREEMENT. Each of Holdings, Intermediate Holdings and the Company
shall, and (where and to the extent contemplated by the terms of the
Incorporated Agreement) shall cause each of their Subsidiaries to, comply with
the affirmative covenants set forth in the following Sections of the
Incorporated Agreement:
(a) 7.1.1 (Financial Information, Reports, Notices, etc.)
(excluding clause (l) thereof);
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(b) 7.1.2 (Maintenance of Existence; Compliance with Laws,
etc.);
(c) 7.1.3 (Maintenance of Properties);
(d) 7.1.4 (Insurance);
(e) 7.1.5 (Books and Records) (excluding the last sentence
thereof);
(f) 7.1.6 (Environmental Law Covenant); and
(g) 7.1.10 (Use of Proceeds of Holdings Disposition of Capital
Stock or Assets).
Section 6.2 INCORPORATION OF NEGATIVE COVENANTS FROM THE INCORPORATED
AGREEMENT. None of Holdings, Intermediate Holdings or the Company shall, nor
shall any such Obligor permit any of its Restricted Subsidiaries to, violate any
of the negative covenants set forth in the following Sections of the
Incorporated Agreement:
(a) 7.2.1 (Business Activities);
(b) 7.2.2 (Indebtedness) (excluding clause (f)(i) (to the
extent such clause requires such Indebtedness to be evidenced by a
promissory note that is pledged to the Administrative Agent pursuant to
a Loan Document)), PROVIDED that for purposes hereof (i) the aggregate
principal amount of "Obligations" permitted by clause (a) thereof shall
not exceed (i) $380,000,000 minus (ii) the aggregate amount of the
permanent payments or prepayments of Term Loans and permanent
reductions of the Revolving Loan Commitment Amount;
(c) 7.2.3 (Liens);
(d) 7.2.5 (Investments);
(e) 7.2.6 (Restricted Payments, etc.);
(f) 7.2.8 (No Prepayment of Certain Debt) (excluding clauses
(a) (as such clause relates to the Obligations evidenced hereby) and
(c)(iii) thereof);
(g) 7.2.9 (Capital Stock of Subsidiaries);
(h) 7.2.10 (Consolidation, Merger, etc.);
(i) 7.2.11 (Permitted Dispositions);
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(j) 7.2.12 (Modification of Certain Agreements); PROVIDED that
for purposes hereof the term "Subordinated Debt Documents" as used
therein shall not include the Financing Documents;
(k) 7.2.13 (Transactions with Affiliates);
(l) 7.2.14 (Restrictive Agreements, etc.) (excluding clause
(a) thereof); PROVIDED that the lead in to such Section shall be
amended by inserting the words "(other than the Loan Documents)"
immediately following the words "enter into any agreement" and
immediately preceding the word "prohibiting" in such lead in; and
(m) 7.2.15 (Sale and Leaseback).
Section 6.3 INVESTMENT COMPANY ACT. None of Holdings, Intermediate
Holdings or the Company will be or become an open-end investment trust, unit
investment trust or face-amount certificate company that is or is required to be
registered under the Investment Company Act of 1940, as amended.
Section 6.4 USE OF PROCEEDS. The proceeds from the issuance and sale of
the Notes by the Company pursuant to this Agreement shall be used to fund the
Transaction and to pay related fees and expenses.
Section 6.5 RESTRICTIONS ON CERTAIN AMENDMENTS. None of Holdings,
Intermediate Holdings or the Company will amend, or suffer to be amended, the
Loan Documents in any respect which would impose a limitation upon, or a
requirement of consent in connection with, the Permanent Financing, which
limitation or requirement was not applicable under the Loan Documents as in
effect on the Issuance Date.
Section 6.6 NO SENIOR SUBORDINATED DEBT. Except for the Indebtedness
that is permitted to be incurred under clauses (a) and (k) of Section 7.2.2 of
the Incorporated Agreement as incorporated by reference in CLAUSE (b) of SECTION
6.2 above, none of Holdings, Intermediate Holdings or the Company will, nor will
either such Obligor permit any of its Restricted Subsidiaries to, create, incur,
assume or suffer to exist any Indebtedness of Holdings, Intermediate Holdings,
the Company or such Restricted Subsidiary that is subordinate in right of
payment to any other Indebtedness of the Company or such Restricted Subsidiary
unless such Indebtedness by its terms or the terms of the instrument creating or
evidencing such Indebtedness, is subordinate in right of payment or PARI PASSU
with the Notes or the Guarantee, as applicable, on terms acceptable to the
Majority Holders.
Section 6.7 PERMANENT FINANCING. (a) The Company will, and will cause
each of its Restricted Subsidiaries to, take all actions which, in the
reasonable judgment of DLJSC, are necessary or desirable to obtain Permanent
Financing as soon as practicable through issuance of
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subordinated securities at such interest rates and other terms as are, in the
reasonable opinion of DLJSC, prevailing for new issues of securities of
comparable size and credit rating in the United States capital markets at the
time such Permanent Financing is consummated and obtained in comparable
transactions made on an arm's-length basis between unaffiliated parties;
PROVIDED that, if in the reasonable judgment of DLJSC, equity securities of
Holdings need to be provided for the consummation of the Permanent Financing on
the terms set forth above, the terms of the Permanent Financing shall provide
for the issuance of such equity securities (which may include warrants to
purchase such equity securities). The respective amounts to be financed through
the subordinated debentures or through the issuance of other securities shall be
as determined by the Company, but shall be in an amount at least sufficient to
repay or redeem the Notes in full in accordance with their terms. The Company
hereby covenants and agrees that the proceeds from the Permanent Financing shall
be used to the extent required to redeem in full the Notes in accordance with
their terms.
(b) The Company covenants that it will, and will cause each of its
Restricted Subsidiaries to, enter into such agreements as in the reasonable
judgment of DLJSC are customary in connection with the Permanent Financing, make
such filings under the Securities Act, the Exchange Act, the Trust Indenture Act
of 1939, as amended, and State securities laws (subject to customary exceptions)
as in the reasonable judgment of DLJSC shall be required to permit consummation
of the Permanent Financing and take such steps as in the reasonable judgment of
DLJSC are necessary to cause such filings to become effective or in the
reasonable judgment of DLJSC are otherwise required to consummate the Permanent
Financing in a manner that does not violate the Credit Agreement.
Section 6.8 ADDITIONAL GUARANTORS. The Company will cause each of its
Domestic Restricted Subsidiaries that enters a Guarantee Obligation with respect
to any Designated Senior Debt to execute and deliver to the Holders a
counterpart hereof as a Guarantor hereunder within 5 Business Days of its
entering such Guarantee Obligation with respect to such Designated Senior Debt.
Section 6.9 SYNDICATION EFFORTS. (a) The Company acknowledges that the
Purchasers may transfer (such transfers, collectively, the "SYNDICATION") all or
part of the Notes issued to the Purchasers on the Issuance Date to one or more
other Holders. Holdings, Intermediate Holdings and the Company shall, and shall
cause the Guarantors to, actively assist Rail America Funding, Inc. in
completing the syndication in a manner satisfactory to it. Without limiting the
foregoing, upon the request of Rail America Funding, Inc., Holdings,
Intermediate Holdings and the Company shall, and shall cause the Guarantors to
(i) use commercially reasonable efforts to ensure that the syndication efforts
benefit materially from the Purchasers existing lending and other financing
relationships, (ii) provide direct contact between senior management and
advisors of Holdings, Intermediate Holdings, the Company, and the Guarantors and
the proposed Holders, (iii) assist in the preparation of a confidential
information memorandum and other marketing materials to be used in connection
with the syndication and (iv) host, with Rail America Funding,
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Inc. or on one or more of their respective Affiliates, of one or more meetings
of prospective Holders.
(b) DLJSC or one of its Affiliates shall manage all aspects of
any syndication, in consultation with the Company including decisions as to the
selection of potential Holders to be approached and when they will be
approached, when their commitments will be accepted, which potential Holders
will participate, and the principal amount of the Notes to be transferred to
each such Holder. In order to assist DLJSC or such Affiliate in any syndication
efforts, Holdings, Intermediate Holdings and the Company shall, and shall cause
each of the Guarantors to, promptly prepare and provide to DLJSC, the Purchasers
or such Affiliate all information with respect to Holdings, Intermediate
Holdings, the Company, the Transaction, the Permanent Financing and the other
transactions contemplated hereby and thereby, including all financial
information and projections, as DLJSC, Rail America Funding, Inc., or such
Affiliate may reasonably request in connection with such syndication.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 EVENTS OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER
OF DEFAULT. In case one or more of the following (each, an "Event of Default"),
whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall have occurred and be continuing:
(a) default in the payment of all or any part of the principal
or premium, if any, on any of the Notes as and when the same shall
become due and payable either at maturity, upon any redemption, by
declaration or otherwise; or
(b) default in the payment of any installment of interest upon
any of the Notes or any fees payable under this Agreement or the
Engagement Letter or any amount payable under SECTION 2.7 as and when
the same shall become due and payable, and continuance of such default
for a period of five days; or
(c) failure on the part of Holdings, Intermediate Holdings, or
the Company to observe or perform any of the covenants contained in
SECTIONS 6.1(g), 6.2, 6.3, 6.4, 6.5 and 6.6 of this Agreement; or
(d) failure on the part of Holdings, Intermediate Holdings, or
the Company to observe or perform any of the other covenants or
agreements contained in the Financing
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Documents, if such failure shall continue for a period of 30 days after
the date on which written notice thereof shall have been given to the
Company by a Holder; or
(e) there shall be a default in respect of any Indebtedness of
the Company or any of its Restricted Subsidiaries in an aggregate
principal amount in excess of $5,500,000 whether such Indebtedness now
exists or shall hereafter be created (excluding the Notes) if such
default results in acceleration of the maturity of such Indebtedness;
or the Company or any of its Restricted Subsidiaries shall fail to pay
at maturity any such Indebtedness whether such Indebtedness now exists
or shall hereafter be created; or
(f) any representation, warranty, certification or statement
made or deemed made by the Company or any of its Restricted
Subsidiaries in any Financing Document or which is contained in any
certificate, document or financial or other statement furnished at any
time under or in connection with any Financing Document shall prove to
have been untrue in any material respect when made or deemed made; or
(g) a Change in Control has occurred; or
(h) any of the Financing Documents to which the Company or a
Guarantor is a party shall for any reason fail to constitute the valid
and binding agreement of the Company or such Guarantor as the case may
be,; or
(i) any Event of Default set forth in Sections 8.1.6
(Judgments) (PROVIDED that the amount "$5,000,000" therein shall be
replaced with the amount "$5,500,000") or 8.1.9 (Bankruptcy,
Insolvency, etc.) of the Incorporated Agreement,
then, and in each and every such case (other than an Event of Default described
in clauses (b), (c) and (d) of Section 8.1.9 of the Incorporated Agreement as
incorporated by reference in CLAUSE (i) above with respect to any Obligor),
unless the principal of all the Notes shall have already become due and payable,
the Majority Holders (or, if at such time the Purchasers no longer hold at least
50% of the aggregate outstanding principal amount of the Notes, Holders of at
least 33 1/3% of the aggregate outstanding principal amount of the Notes), by
notice in writing to the Company and the Administrative Agent, may declare the
entire outstanding principal amount of the Notes together with accrued and
unpaid interest thereon to be immediately due and payable; PROVIDED that for so
long as the Loan Documents are in effect, such acceleration shall not become
effective until the earlier of (i) five Business Days after the notice of
acceleration is given to the Administrative Agent or (ii) the date on which the
Indebtedness under the Loan Documents is accelerated. If an Event of Default
described in clauses (b), (c) or (d) of Section 8.1.9 of the Incorporated
Agreement as incorporated by reference in CLAUSE (i) above with respect to any
Obligor occurs, the outstanding principal of and accrued and unpaid interest on
the Notes will be immediately due and payable without any notice, declaration or
other act on the part of the Holders. The Majority Holders may annul any notice
of acceleration or past Defaults (other than
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monetary Defaults not yet cured) by delivering a notice of annulment to the
Company and the Administrative Agent. If an Event of Default shall occur and be
continuing, the Purchasers shall have the right to appoint one (1)
representative to serve as a member of the Board of Directors of Holdings;
PROVIDED, HOWEVER, that such right shall terminate if the Purchasers no longer
hold at least 50% of the aggregate outstanding principal amount of the Notes.
ARTICLE VIII
LIMITATION ON TRANSFERS
Section 8.1 RESTRICTIONS ON TRANSFER. From and after the Issuance Date,
none of the Notes shall be transferable except upon the conditions specified in
SECTIONS 8.2 and 8.3, which conditions are intended to ensure compliance with
the provisions of the Securities Act in respect of the Transfer of any of such
Notes or any interest therein and SECTION 8.4; PROVIDED, HOWEVER, that the
Purchasers shall not Transfer any Notes to any Person that is not its Affiliate
prior to the Fixed Rate Sale Date without the consent of the Company (which
consent shall not be unreasonably delayed or denied). The Purchasers will cause
any proposed transferee of any Notes (or any interest therein) held by it to
agree to take and hold such Notes (or any interest therein) subject to the
provisions and upon the conditions specified in this SECTION 8.1 and in SECTIONS
8.2 and 8.3.
Section 8.2 RESTRICTIVE LEGENDS. (a) Each Note issued to the Purchasers
or to a subsequent transferee shall (unless otherwise permitted by the
provisions of SECTION 8.2(b) or SECTION 8.3) include a legend in substantially
the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT
BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN
COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE
SECURITIES PURCHASE AGREEMENT, DATED AS OF FEBRUARY 4, 2000, A
COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER OF THIS SECURITY
AT ITS PRINCIPAL EXECUTIVE OFFICE.
(b) Any Holders of Notes registered pursuant to the Securities Act and
qualified under applicable state securities laws may exchange such Notes on
transfer for new securities that shall not bear the legend set forth in CLAUSE
(a) of this SECTION 8.2.
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Section 8.3 NOTICE OF PROPOSED TRANSFERS. (a) Ten days prior to any
proposed Transfer (other than Transfers of Notes (i) registered under the
Securities Act, (ii) to an Affiliate of DLJSC or a general partnership in which
DLJSC, or any of its Affiliates is one of the general partners or (iii) to be
made in reliance on Rule 144A under the Securities Act) of any Notes, the holder
thereof shall give written notice to the Company of such holder's intention to
effect such Transfer, setting forth the manner and circumstances of the proposed
Transfer, and which notice shall be accompanied by (A) an opinion of the
proposed transferee's counsel (reasonably satisfactory to the Company) addressed
to the Company to the effect that the proposed Transfer of such Notes may be
effected without registration under the Securities Act, (B) such representation
letters in form and substance reasonably satisfactory to the Company to ensure
compliance with the provisions of the Securities Act and (C) such letters in
form and substance reasonably satisfactory to the Company from each such
transferee stating such transferee's agreement to be bound by the terms of this
Agreement. Such proposed Transfer may be effected only if the Company shall have
received such notice of transfer, opinion of counsel, representation letters and
other letters referred to in the immediately preceding sentence, whereupon the
holder of such Notes shall be entitled to Transfer such Notes in accordance with
the terms of the notice delivered by the holder to the Company. Each Note
transferred as above provided shall bear the legend set forth in SECTION 8.2(a)
except that such Note shall not bear such legend if the opinion of counsel
referred to above is to the further effect that neither such legend nor the
restrictions on Transfer in SECTIONS 8.1 through 8.3 are required in order to
ensure compliance with the provisions of the Securities Act.
(b) Ten days prior to any proposed Transfer of any Notes to be made in
reliance on Rule 144A under the Securities Act ("RULE 144A"), the holder thereof
shall give written notice to the Company of such holder's intention to effect
such Transfer, setting forth the manner and circumstances of the proposed
Transfer and certifying that such Transfer will be made (i) in full compliance
with Rule 144A and (ii) to a transferee that (A) such holder reasonably believes
to be a "qualified institutional buyer" within the meaning of Rule 144A and (B)
is aware that such Transfer will be made in reliance on Rule 144A. Such proposed
Transfer may be effected only if the Company shall have received such notice of
transfer, whereupon the holder of such Notes shall be entitled to Transfer such
Notes in accordance with the terms of the notice delivered by the holder to the
Company. Each Note transferred as above provided shall bear the legend set forth
in SECTION 8.2(a).
Section 8.4 RIGHT TO SELL, TRANSFER OR ASSIGN NOTES. (a) Subject to
SECTIONS 8.1 through 8.3, the Purchasers shall have the absolute and
unconditional right to Transfer Notes in compliance with applicable law to any
third party at any time.
(b) Commencing on the Fixed Rate Sale Date, any Note then outstanding
may be sold by the Purchaser that is the holder of such Note to any Person
(other than any Affiliate of such Purchaser) on a fixed rate basis with the
interest rate per annum fixed at a market rate to be determined by such
Purchaser (such interest rate with respect to such Note, the "RELEVANT FIXED
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INTEREST RATE"); PROVIDED that (i) such rate shall in no event exceed 17.00% per
annum and (ii) such Purchaser shall give the Company ten days written notice
prior to any such sale.
Section 8.5 REPLACEMENT NOTES. Within five Business Days after any
Transfer made pursuant to SECTION 8.3(a) or 8.3(b), upon surrender to the
Company of the Notes subject to such Transfer, the Company, at its own expense,
shall execute and deliver to the Purchaser in exchange for the Note or Notes
that are subject of such Transfer a new Note or Notes registered in the name of
the transferee of such Note or Notes (or in such name or names as shall be
designated by such transferee) in an amount equal to the aggregate principal
amount of the Note or Notes so transferred, and if the transferring Holder has
not transferred all of the Notes held by such transferor a new Note or Notes
registered in the name of the transferring holder (or such name or names as
shall be designated by such transferring holder) equal to the aggregate
principal amount of the Notes surrendered in connection with such Transfer less
the aggregate principal amount of the Note or Notes that are the subject of such
Transfer, which shall be dated the effective date of such Transfer and shall
otherwise be in substantially the form of EXHIBIT B attached hereto. Holdings
shall not be required to pay any documentary stamp tax which may be payable in
respect of any Transfer of any Note from a Holder to any transferee; PROVIDED
that Holdings shall take all such actions as may be reasonably requested by such
Holder or such transferee to minimize or eliminate any such tax.
ARTICLE IX
SUBORDINATION
Section 9.1 NOTES SUBORDINATED TO DESIGNATED SENIOR DEBT. The Company
for itself and its successors, and each Holder, by its acceptance of the Notes,
agrees that the payment of the principal amount of the Notes and interest
thereon, and any claim for rescission or damages in respect thereof under any
applicable law (the "Subordinated Obligations") by the Company is subordinated,
to the extent and in the manner provided in this ARTICLE IX, to the prior
payment of Designated Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed); PROVIDED, that the
provisions of this ARTICLE IX do not apply to, and the Notes are not
subordinated in respect of, the proceeds of the Permanent Financing. This
ARTICLE IX will constitute a continuing offer to all persons who, in reliance
upon its provisions, become holders of, or continue to hold, Designated Senior
Debt, and such provisions are made for the benefit of the holders of Designated
Senior Debt, and such holders are made obligees under this ARTICLE IX and they
and/or each of them may enforce its provisions.
Section 9.2 NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES. (a) No
payment will be made on account of the Subordinated Obligations, or to acquire
any of the Notes for cash, property or securities, or on account of the
redemption provisions of the Notes (x) upon the maturity of any Designated
Senior Debt by lapse of time, acceleration or otherwise, unless and
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until all such Designated Senior Debt shall first be paid in full in cash or
cash equivalents or provision for the payment in full in cash or cash
equivalents have been made with respect thereto, in each case, in a manner
satisfactory to the holders of Designated Senior Debt or (y) in the event that
the Company defaults in the payment of any principal of or interest on or any
other amounts payable on or due in connection with any Designated Senior Debt
when it becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise, unless and until such default has
been cured or waived in writing.
(b) Upon the occurrence of any event of default (or if an event of
default would result upon any payment with respect to the Subordinated
Obligations) with respect to any Designated Senior Debt, as such event of
default is defined in the instruments evidencing such Designated Senior Debt or
under which it is outstanding, permitting the holders to accelerate its maturity
(if the default is other than default in payment of the principal of or interest
on or any other amount due in connection with such Designated Senior Debt), upon
written notice of the event of default given to the Company by the holders of
such Designated Senior Debt (or their agent or representative), then, unless and
until such event of default has been cured or waived in writing, no payment will
be made by the Company with respect to the Subordinated Obligations or to
acquire any of the Notes for cash, property or securities or with regard to
redemption of Notes; PROVIDED, that the foregoing will not prevent the making of
any payment for a period of more than 179 days after the date the written notice
of the default is given unless such Designated Senior Debt in respect of which
such event of default exists has been declared due and payable in its entirety
within that period, and that declaration has not been rescinded. If such
Designated Senior Debt is not declared due and payable within 179 days after the
written notice of the default is given, promptly after the end of the 179-day
period the Company will pay all sums not paid during the 179-day period because
of this CLAUSE (b) unless CLAUSE (a) above is then applicable. During any period
of 360 consecutive days only one such period during which payment of principal
of, or interest on, the Notes may not be made may commence and the duration of
such period may not exceed 179 days.
(c) If any payment or distribution of assets of the Company is received
by any Holder in respect of the Subordinated Obligations at a time when that
payment or distribution should not have been made because of CLAUSE (a) or (b)
above, such payment or distribution will be received and held in trust for and
will be paid over to the holders of Designated Senior Debt which is due and
payable and remains unpaid or unprovided for (pro rata as to each of such
holders on the basis of the respective amounts of such Designated Senior Debt
which is due and payable) until all such Designated Senior Debt has been paid in
full in cash or cash equivalents or provided for in cash or cash equivalents in
a manner satisfactory to the holders of Designated Senior Debt, after giving
effect to any concurrent payment or distribution or provision therefor to the
holders of such Designated Senior Debt.
Section 9.3 NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL DESIGNATED
SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION. (a) Upon any
distribution of assets of the Company
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upon any dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency, receivership or similar proceeding related
to the Company or its property or upon an assignment for the benefit of
creditors, any marshaling of the Company's assets or liabilities, or otherwise):
(i) the holders of all Designated Senior Debt will first be
entitled to receive payment in full in cash or cash equivalents or
provision for payment in full in cash or cash equivalents in a manner
satisfactory to the holders of Designated Senior Debt of the principal
of and interest on Designated Senior Debt and other amounts due in
connection with Designated Senior Debt (including interest accruing
subsequent to an event described in Section 8.1.9 of the Incorporated
Agreement) (or which would have accrued but for the occurrence of such
event) at the rate provided for in the documents governing such
Designated Senior Debt, whether or not such interest is an allowed
claim enforceable against the debtor in a bankruptcy case under Title
11 of the United States Code), before the Holders are entitled to
receive any payment on account of the principal of or interest on the
Notes;
(ii) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to
which the Holders would be entitled except for the provisions of this
Section will be paid by the liquidating trustee or agent or other
person making such a payment or distribution directly to the holders of
Designated Senior Debt or their representatives to the extent necessary
to make payment in full in cash or cash equivalents or provision for
payment in full in cash or cash equivalents in a manner satisfactory to
the holders of Designated Senior Debt of all Designated Senior Debt
remaining unpaid, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of such Designated
Senior Debt; and
(iii) if, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether
in cash, property or securities is received by the Holders on account
of the Subordinated Obligations before all Designated Senior Debt is
paid in full in cash or cash equivalents or provided for in cash or
cash equivalents in a manner satisfactory to the holders of Designated
Senior Debt, such payment or distribution will be received and held in
trust for and will be paid over to the holders of the Designated Senior
Debt remaining so unpaid or unprovided for or their representatives for
application to the payment of such Designated Senior Debt until all
such Designated Senior Debt has been paid in full in cash or cash
equivalents or provided for in cash or cash equivalents in a manner
satisfactory to the holders of Designated Senior Debt, after giving
effect to any concurrent payment or distribution or provision therefor
to the holders of such Designated Senior Debt.
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(b) The Company will give prompt written notice to the Holders of any
dissolution, winding up, liquidation or reorganization of it or any assignment
for the benefit of its creditors and of any event of default in respect of
Designated Senior Debt.
(c) For purposes of this SECTION 9.3, the words "cash, property or
securities" shall not be deemed to include (x) shares of common stock of the
Company as reorganized or readjusted, (y) securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which are
subordinated, to at least the same extent as the Notes, to the payment of all
Designated Senior Debt then outstanding or (z) any payment or distribution of
securities of the Company or any other corporation authorized by an order or
decree giving effect, and stating in such order or decree that effect has been
given, to subordination of the Notes to Designated Senior Debt and made by a
court of competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy, insolvency or similar law. For purposes of this ARTICLE
IX, (i) "distribution" and "payment" with respect to the Company or its assets
include payments, distributions and other transfers of assets by or on behalf of
the Company from any source, of any kind or character, whether direct or
indirect, by set-off or otherwise, whether in cash, property or securities, (ii)
"payment on the account of the Subordinated Obligations" shall not include the
Warrants, any shares issued upon exercise of the Warrants or any sale or
transfer of any of the foregoing and (iii) "cash equivalents" means Cash
Equivalents described in clause (i) of the definition thereof to the extent such
Cash Equivalents mature within nine months.
Section 9.4 HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF DESIGNATED
SENIOR DEBT. Following the payment in full in cash or cash equivalents or
provision for payment in full in cash or cash equivalents in a manner
satisfactory to the holders of Designated Senior Debt of all Designated Senior
Debt, the Holders will be subrogated to the rights of the holders of Designated
Senior Debt to receive payments or distributions of assets of the Company
applicable to the Designated Senior Debt until all amounts owing on the Notes
have been paid in full, and for the purpose of such subrogation no such payments
or distributions to the holders of Designated Senior Debt by or on behalf of the
Company or by or on behalf of the Holders by virtue of this ARTICLE IX which
otherwise would have been made to the Holders will, as between the Company and
the Holders, be deemed to be payment by the Company to or on account of the
Designated Senior Debt, it being understood that the provisions of this ARTICLE
IX are and are intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of Designated Senior Debt, on
the other hand.
Section 9.5 OBLIGATIONS OF THE COMPANY UNCONDITIONAL. Nothing contained
in this ARTICLE IX or elsewhere in the Notes is intended to or will impair, as
between the Company and the Holders, the obligations of the Company, which are
absolute and unconditional, to pay to the Holders the Subordinated Obligations
as and when they become due and payable in accordance with their terms, or is
intended to or will affect the relative rights of the Holders and creditors of
the Company other than the holders of the Designated Senior Debt, nor will
anything herein or therein prevent any Holder from exercising all remedies
otherwise permitted by applicable law
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upon default under the Notes, subject to the rights if any, under this ARTICLE
IX of the holders of Designated Senior Debt.
Section 9.6 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
THE COMPANY OR HOLDERS OF DESIGNATED SENIOR DEBT. No right of any present or
future holders of any Designated Senior Debt to enforce subordination as
provided herein will at any time or in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to act
by any such holder, or by any noncompliance by the Company with the terms of
this ARTICLE IX, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with. The holders of Designated Senior Debt may
extend, renew, modify or amend the terms of the Designated Senior Debt or any
security or guarantee therefor or thereof, release, sell or exchange such
security, exercise or refrain from exercising any rights against the Company,
any of its Subsidiaries or any other Person and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
the document or the Holders. No amendment to these provisions will be effective
against the holders of the Designated Senior Debt who have not consented thereto
in writing.
Section 9.7 NOT TO PREVENT EVENTS OF DEFAULT. The failure to make a
payment on account of the Subordinated Obligations by reason of any provision of
this ARTICLE IX will not be construed as preventing the occurrence of an Event
of Default.
Section 9.8 MISCELLANEOUS. If, upon any proceeding referred to in
SECTION 9.3, a Holder does not file a claim in such proceeding prior to fifteen
days before the expiration of the time to file such claim, the holders of the
Designated Senior Debt or their agent or representative, at the expense of the
holders of Designated Senior Debt, may file such claim on behalf of such Holder.
ARTICLE X
GUARANTEES
Section 10.1 GUARANTEES. (a) Subject to SECTIONS 10.2 and 10.3, each of
the Guarantors jointly and severally unconditionally guarantees to each Holder,
irrespective of the validity and enforceability of the other provisions of this
Agreement, or of the Financing Documents, the Notes and the obligations of the
Company hereunder or thereunder, that: (i) the principal of, premium, if any,
and interest, if any, on the Notes shall be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and (to the
extent permitted by law) interest on the overdue principal of, premium, if any,
and interest, if any, on the Notes (including all reasonable costs of collection
and enforcement thereof and interest thereon which would be owing by the Company
but for the effect of any bankruptcy law, if any), and all other obligations of
the Company to the Holders under this Agreement, the Financing Documents and the
Notes shall be promptly paid in full when due or performed, all in accordance
with the terms
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of this Agreement, the Financing Documents and the Notes; and (ii) in case of
any extension of time of payment or renewal of any Notes, or the issuance of any
of such other obligations, that the same shall be promptly paid in full when due
or performed in accordance with their terms whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
and unconditionally obligated to pay the same immediately whether or not such
failure to pay has become an Event of Default which could cause acceleration
pursuant to SECTION 7.1. Each Guarantor agrees that this is a continuing
guarantee of payment and not merely a guarantee of collection.
(b) The Guarantors hereby agree that, subject to SECTIONS 10.2 AND
10.3, their obligations hereunder shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Company under this
Agreement, the Financing Documents or the Notes, by operation of law or
otherwise;
(ii) any modification or amendment of or supplement to any
other provisions of this Agreement, or to the Financing Documents or
the Notes with the consent of the Guarantors, which consent shall not
be unreasonably withheld;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for, or any other guarantee of, any of the
obligations guaranteed by this ARTICLE X;
(iv) any change in the corporate existence, structure or
ownership of the Company, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Company or its assets or any
resulting release or discharge of any obligation of the Company
contained in this Agreement, the Financing Documents or the Notes;
(v) the existence of any claim, set-off or other rights which
any Guarantor may have at any time against the Company or any other
Person, whether in connection herewith or with an unrelated
transactions, PROVIDED that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against
the Company for any reason of this Agreement, the Financing Documents
or the Notes, or any provision of applicable law or regulation
purporting to prohibit the payment by the Company of the principal of
or interest on the Notes or any other amount payable by it under this
Agreement, the Financing Documents or the Notes;
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(vii) any other act or omission to act or delay of any kind by
the Company or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of any Guarantor's obligations hereunder;
or
(viii) any issuance of additional Notes pursuant to SECTION
2.5(f).
(c) Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that, subject to this
Article X, this Guarantee shall not be discharged except by complete performance
of all obligations on and with respect to the Notes, this Agreement and the
Financing Documents.
(d) If any Holder is required by any court or otherwise to return to
the Company or any of the Guarantors, or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or any of the
Guarantors, any amount paid to such Holder, this Guarantee, to the extent of the
amount so returned, shall be reinstated in full force and effect.
(e) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in SECTION 7.1 notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby and (y) in the event of any declaration of
acceleration of such obligations as provided in SECTION 7.1, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee. The Guarantors shall have the
right to seek contribution from any non-paying Guarantor so long as the exercise
of such right does not impair the rights of the Holders under this Guarantee.
Section 10.2 SUBORDINATION OF GUARANTEES. The obligations of each
Guarantor under its Guarantee pursuant to this Article X are junior and
subordinated to any guarantees by such Guarantor of any Designated Senior Debt
on the same basis as the Notes are junior and subordinate to such Designated
Senior Debt under ARTICLE IX (it being understood that delivery of any notice to
the Company pursuant to SECTION 9.2(b) shall constitute notice to each Guarantor
hereunder).
Section 10.3 LIMITATION ON GUARANTOR LIABILITY. Each Guarantor, and by
its acceptance of Notes, each Holder, hereby confirms that it is the intention
of all such parties that this Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any bankruptcy law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar
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federal or state law to the extent applicable to this Guarantee. To effectuate
the foregoing intention, the Holders and the Guarantors hereby irrevocably agree
that the obligations of each Guarantor under this Guarantee shall be limited to
the maximum amount as will, after giving effect to such maximum amount and all
other contingent and fixed liabilities of such Guarantor that are relevant under
such laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Guarantee, result
in the obligations of such Guarantor under the Guarantee not constituting a
fraudulent transfer or conveyance.
Section 10.4 CONSOLIDATION OR MERGER OF GUARANTORS. Subject to SECTION
10.5, without limiting the provisions of CLAUSE (h) of SECTION 6.2, no Guarantor
may consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another corporation, Person or entity whether or not
affiliated with such Guarantor unless such corporation, person or entity is a
Guarantor.
Section 10.5 RELEASE OF GUARANTORS. If at any time any Guarantor shall
be released from all of its obligations under all guarantees of, and all grants
of Liens on any of its assets or property securing, Designated Senior Debt, the
obligations of such Guarantor under this Agreement and the other Financing
Documents shall be automatically released.
ARTICLE XI
MISCELLANEOUS
Section 11.1 NOTICES. All notices, demands and other communications to
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given to such party at its address set forth on the signature pages
hereof, or such other address as such party may hereinafter specify for the
purpose. Each such notice, demand or other communication shall be effective (i)
if given by facsimile, when such facsimile is transmitted to the facsimile
number specified on the signature page hereof, or (ii) if given by overnight
courier, addressed as aforesaid or by any other means, when delivered at the
address specified in this Section.
Section 11.2 NO WAIVERS; AMENDMENTS. (a) No failure or delay on the
part of any party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise.
(b) Any provision of this Agreement may be amended, supplemented or
waived if, but only if, such amendment, supplement or waiver is in writing and
is signed by the Company and
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the Majority Holders; PROVIDED, that without the consent of each Holder of any
Note affected thereby, an amendment, supplement or waiver may not (a) reduce the
aggregate principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver, (b) reduce the rate or extend the time for payment of
interest on any Note, (c) reduce the principal amount of or extend the stated
maturity of any Note or (d) make any Note payable in money or property other
than as stated in the Notes. In determining whether the Holders of the requisite
principal amount of Notes have concurred in any direction, consent, or waiver as
provided in this Agreement or in the Notes, Notes which are owned by the Company
or any other obligor on or guarantor of the Notes, or, except for DLJSC and its
Affiliates by any Person controlling, controlled by, or under common control
with any of the foregoing, shall be disregarded and deemed not to be outstanding
for the purpose of any such determination; and PROVIDED, FURTHER, that no such
amendment, supplement or waiver which affects the rights of the Purchasers and
its Affiliates otherwise than solely in their capacities as Holders of Notes
shall be effective with respect to them without their prior written consent.
Section 11.3 INDEMNIFICATION. (a) The Company (the "INDEMNIFYING
PARTY") agrees to indemnify and hold harmless each Purchaser, its respective
Affiliates, and each Person, if any, who controls such Purchaser, or any of its
Affiliates, within the meaning of the Securities Act or the Exchange Act (a
"CONTROLLING PERSON"), and the respective partners, agents, employees, officers
and directors of such Purchaser, its Affiliates and any such Controlling Person
(each an "INDEMNIFIED PARTY," and collectively, the "INDEMNIFIED PARTIES"), from
and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation and as incurred, reasonable costs of
investigating, preparing or defending any such claim or action, whether or not
such Indemnified Party is a party thereto) arising out of, or in connection with
any activities contemplated by this Agreement or any other services rendered in
connection herewith, including, but not limited to, losses, claims, damages,
liabilities or expenses arising out of or based upon any untrue statement or any
alleged untrue statement of a material fact or any omission or any alleged
omission to state a material fact in any of the disclosure or offering or
confidential information documents (the "DISCLOSURE DOCUMENTS") pertaining to
any of the transactions or proposed transactions contemplated herein, including
any eventual refinancing or resale of the Notes, PROVIDED, that the Indemnifying
Party will not be responsible for any claims, liabilities, losses, damages or
expenses that are determined by final judgment of a court of competent
jurisdiction to result from such Indemnified Party's gross negligence, willful
misconduct or bad faith. The Indemnifying Party also agrees that (i) no
Purchaser shall have liability (except for breach of provisions of this
Agreement) for claims, liabilities, damages, losses or expenses, including legal
fees, incurred by the Indemnifying Party in connection with this Agreement,
unless they are determined by final judgment of a court of competent
jurisdiction to result from such Purchaser's gross negligence, willful
misconduct or bad faith and (ii) no Purchaser shall in any event have any
liability to the Company on any theory of liability for special or punitive
damages (as opposed to direct or actual damages) arising out of, or in
connection with, or as a result of this Agreement.
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(b) If any action shall be brought against an Indemnified Party with
respect to which indemnity may be sought against the Indemnifying Party under
this Agreement, such Indemnified Party shall promptly notify the Indemnifying
Party in writing and the Indemnifying Party shall, if requested by such
Indemnified Party or if the Indemnifying Party desires to do so, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party and payment of all reasonable fees and expenses. The
failure to so notify the Indemnifying Party shall not affect any obligations the
Indemnifying Party may have to such Indemnified Party under this Agreement or
otherwise unless the Indemnifying Party is materially adversely affected by such
failure. Such Indemnified Party shall have the right to employ separate counsel
in such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party, unless: (i)
the Indemnifying Party has failed to assume the defense and employ counsel
reasonably satisfactory to such Indemnified Party or (ii) the named parties to
any such action (including any impleaded parties) include such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Indemnifying Party,
in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Party,
PROVIDED, HOWEVER, that the Indemnifying Party shall not, in connection with any
one such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be responsible hereunder for the reasonable fees
and expenses of more than one such firm of separate counsel, in addition to any
local counsel, which counsel shall be designated by the Purchasers. The
Indemnifying Party shall not be liable for any settlement of any such action
effected without the written consent of the Indemnifying Party (which shall not
be unreasonably withheld) and the Indemnifying Party agrees to indemnify and
hold harmless each Indemnified Party from and against any loss or liability by
reasons of settlement of any action effected with the consent of the
Indemnifying Party. In addition, the Indemnifying Party will not, without the
prior written consent of the Indemnified Party, settle or compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not any Indemnified Party is
a party thereto) unless such settlement, compromise, consent or termination
includes an express unconditional release of the Purchasers and the other
Indemnified Parties, reasonably satisfactory in form and substance to the
Purchasers, from all liability arising out of such action, claim, suit or
proceeding.
(c) If for any reason the foregoing indemnity is unavailable (otherwise
than pursuant to the express terms of such indemnity) to an Indemnified Party or
insufficient to hold an Indemnified Party harmless, then in lieu of indemnifying
such Indemnified Party, the Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of such claims,
liabilities, losses, damages, or expenses (i) in such proportion as is
-46-
52
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and by a Purchaser on the other from the transactions
contemplated by this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted under applicable law, in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and such Purchaser on the other, but also the
relative fault of the Indemnifying Party and such Purchaser as well as any other
relevant equitable considerations. Notwithstanding the provisions of this
SECTION 11.3, the aggregate contribution of all Indemnified Parties shall not
exceed the amount of fees actually received by the Purchasers pursuant to this
Agreement. It is hereby further agreed that the relative benefits to the
Indemnifying Party on the one hand and a Purchaser on the other with respect to
the transactions contemplated hereby shall be deemed to be in the same
proportion as (i) the aggregate principal amount of Notes issued by the Company
bears to (ii) the fees actually received by such Purchaser pursuant to this
Agreement. The relative fault of the Indemnifying Party on the one hand and a
Purchaser on the other with respect to the transactions contemplated hereby
shall be determined by reference to, among other things, whether any untrue or
alleged untrue statement of material fact or the omission or alleged omission to
state a material fact related to information supplied by the Indemnifying Party
or by such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(d) The indemnification, contribution and expense reimbursement
obligations set forth in this SECTION 11.3 (i) shall be in addition to any
liability the Indemnifying Party may have to any Indemnified Party at common law
or otherwise, (ii) shall survive the termination of this Agreement and the
payment in full of the Notes and (iii) shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the
Purchasers or any other Indemnified Party.
Section 11.4 EXPENSES. The Company agrees to pay all reasonable
out-of-pocket costs, expenses and other payments of the Purchasers in connection
with the purchase and sale of the Notes as contemplated by this Agreement
including without limitation (i) reasonable fees and disbursements of special
counsel and any local counsel for the Purchasers incurred in connection with the
preparation of this Agreement, (ii) all reasonable out-of-pocket expenses of the
Purchasers, including reasonable fees and disbursements of counsel, in
connection with any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (iii) if an Event of Default occurs,
all reasonable out-of-pocket expenses incurred by the Purchasers and each Holder
of Notes, including reasonable fees and disbursements of a single counsel (which
counsel shall be selected by the Purchasers if the Purchaser is a Holder of
Notes when such Event of Default occurs), in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
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53
Section 11.5 PAYMENT. The Company agrees that, so long as a Purchaser
shall own any Notes purchased by it from the Company hereunder, the Company will
make payments to such Purchaser of all amounts due thereon by wire transfer by
1:00 P.M. (New York City time) on the date of payment to such account as is
specified beneath such Purchaser's name on the signature page hereof or to such
other account or in such other similar manner as such Purchaser may designate to
the Company in writing.
Section 11.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the Company, the Purchasers, the
Guarantors, the holders of the Designated Senior Debt and their respective
successors and assigns; PROVIDED that neither the Company nor any Guarantor may
assign or otherwise transfer its rights or obligations under this Agreement to
any other Person without the prior written consent of the Majority Holders. All
provisions hereunder purporting to give rights to the Purchasers and its
Affiliates, or to Holders are for the express benefit of such Persons.
Section 11.7 BROKERS. The Company represents and warrants that, except
for DLJSC and Barclays Capital, it has not employed any broker, finder,
financial advisor or investment banker who might be entitled to any brokerage,
finder's or other fee or commission in connection with the Transaction or the
sale of the Notes.
Section 11.8 NEW YORK LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.9 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
-48-
54
Section 11.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Section 11.11 CONFIDENTIALITY. (a) The Company acknowledges and agrees
that: (i) the Purchasers and certain of their respective Affiliates are a full
service financial firm and as such may from time to time effect transactions for
their own account or the account of customers, and hold positions in loans or
options on loans of Persons that may be the subject of this arrangement; (ii)
the Purchasers may employ the services of DLJSC and its Affiliates in providing
certain services hereunder and may, subject to CLAUSE (b) below, exchange with
such entities information concerning Holdings, Intermediate Holdings, the
Company and the Guarantors, and such Affiliates will be entitled to the benefits
afforded the Purchasers hereunder, and (iii) the Purchasers or their respective
Affiliates may be providing financing or other services to Persons whose
interests may conflict with the interest of Holdings, Intermediate Holdings, the
Company and the Guarantors.
(b) The Purchasers and each other Holder agrees to keep confidential
any Confidential Information; PROVIDED that nothing herein shall prevent the
Purchasers or such other Holder from disclosing any such information (i) to the
extent permitted under the Engagement Letter, (ii) to any Person which receives
such information having been made aware of, and which agrees to maintain, the
confidential nature thereof in order to facilitate or enable the Purchasers or
such other Holder to syndicate, sell transfer (including, without limitation,
the transfer of a participation in the Notes) or assign any portion of its
notes, (iii) to any Holder, (iv) to its employees, directors, agents, attorneys,
accountants and other professional advisors which receive such information
having been made aware of the confidential nature thereof, (v) upon the request
or demand of any Governmental Authority having jurisdiction over either
Purchaser, (vi) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(vii) which has been publicly disclosed other than in breach of this Agreement,
or (viii) in connection with the exercise of any remedy hereunder.
Section 11.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the issuance of the Notes.
Section 11.13 CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
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Section 11.14 INTEGRATION. This Agreement represents the agreement of
the parties hereto with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by Holdings, the Company
or the Purchasers relative to the subject matter hereof not expressly set forth
herein or in the other Financing Documents.
Section 11.15 REPLACEMENT NOTES. If any mutilated Note is surrendered
to the Company or the Company receives reasonably satisfactory evidence of the
destruction, loss or theft of any Note (which evidence shall be, in the case of
an institutional investor, notice from such institutional investor of such
ownership and such destruction, loss or theft), the Company shall, at the
expense of the holder of such Note, execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
Section 11.16 HEADINGS. Section headings used herein and in the table
of contents are for convenience only and are not to effect the construction of,
or be taken into consideration in interpreting this Agreement and the other
Financing Documents.
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56
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers, as of the date first
above written.
RAILAMERICA TRANSPORTATION
CORP.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
Address for Notices:
0000 Xxxxxx Xxxxx Xxxx. X.X.
Xxxx Xxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
GUARANTORS:
RAILAMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
Address for Notices:
0000 Xxxxxx Xxxxx Xxxx. X.X.
Xxxx Xxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
57
PALM BEACH RAIL HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
Address for Notices:
0000 Xxxxxx Xxxxx Xxxx. X.X.
Xxxx Xxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
CASCADE AND COLUMBIA RIVER
RAILROAD COMPANY, INC., a
Delaware corporation
DAKOTA RAIL, INC., a South Dakota
corporation
DELAWARE VALLEY RAILWAY
COMPANY, INC., a Delaware
corporation
FLORIDA RAIL LINES, INC., a Delaware
corporation
HURON AND EASTERN RAILWAY
COMPANY, INC., a Michigan
corporation
KS BOCA, INC., a Florida corporation
KALYN/XXXXXXX INCORPORATED, a
Texas corporation
MARKSMAN CORP., a Delaware
corporation
58
MINNESOTA NORTHERN RAILROAD,
INC., a Delaware corporation
OTTER TAIL VALLEY RAILROAD
COMPANY, INC., a Minnesota
corporation
PLAINVIEW TERMINAL COMPANY, a
Texas corporation
PRAIRIE HOLDING CORPORATION, a
Florida corporation
RAILAMERICA AUSTRALIA, INC., a
Delaware corporation
RAILAMERICA EQUIPMENT
CORPORATION, a Delaware
corporation
RAILAMERICA INTERMODAL
SERVICES, INC., a Delaware
corporation
RAIL OPERATING SUPPORT GROUP,
INC., a Delaware corporation
SAGINAW VALLEY RAILWAY
COMPANY, INC., a Delaware
corporation
SOUTH CENTRAL TENNESSEE
RAILROAD CORP., a Delaware
corporation
ST. CROIX VALLEY RAILROAD
COMPANY, a Delaware corporation
TOLEDO, PEORIA & WESTERN
RAILWAY CORPORATION, a New
Jersey corporation
00
XXX XXXXXX, XXXXXX & XXXXXXX
XXXXXXXX CORPORATION, a New
York corporation
VENTURA COUNTY RAILROAD CO.,
INC., a Delaware corporation
WEST TEXAS AND LUBBOCK
RAILROAD COMPANY, INC., a Texas
corporation
INDIANA SOUTHERN RAILROAD, INC.,
a Delaware corporation
CENTRAL RAILROAD COMPANY OF
INDIANAPOLIS, an Indiana
corporation
CENTRAL RAILROAD COMPANY OF
INDIANA, an Indiana corporation
DALLAS, GARLAND &
NORTHEASTERN RAILROAD, INC.,
a Texas corporation
DALLAS, GARLAND &
NORTHEASTERN RAILROAD, INC.,
a Delaware corporation
GEORGIA SOUTHWESTERN
RAILROAD, INC., a Texas corporation
INDIANA AND OHIO RAIL CORP., a
Delaware corporation
INDIANA AND OHIO RAILWAY
COMPANY., a Delaware corporation
INDIANA AND OHIO CENTRAL
RAILROAD INC., a Delaware
corporation
60
CONNECTICUT SOUTHERN
RAILROAD, INC., a Delaware
corporation
CENTRAL OREGON & PACIFIC
RAILROAD, INC., a Delaware
corporation
BOSTON CENTRAL FREIGHT
RAILROAD, INC., a Delaware
corporation
AUSTIN & NORTHWESTERN
RAILROAD COMPANY., INC., a
Texas corporation
SOUTH CAROLINA CENTRAL
RAILROAD COMPANY, INC., a South
Carolina corporation
SAN DIEGO & IMPERIAL VALLEY
RAILROAD COMPANY, INC., a
California corporation
RAILTEX LOGISTICS, INC., a Delaware
corporation
MID-MICHIGAN RAILROAD, INC., a
Michigan corporation
MISSOURI & NORTHERN ARKANSAS
RAILROAD COMPANY, INC., a
Kansas corporation
RAILTEX DISTRIBUTION SERVICES,
INC., a Texas corporation
RAILTEX INTERNATIONAL
HOLDINGS, INC., a Delaware
corporation
61
NORTH CAROLINA AND VIRGINIA
RAILROAD COMPANY, INC., a
Delaware corporation
NEW ENGLAND CENTRAL RAILROAD,
INC., a Delaware corporation
NEW ORLEANS LOWER COAST
RAILROAD COMPANY, INC., a
Louisiana corporation
PITTSBURGH INDUSTRIAL
RAILROAD, INC., a Delaware
corporation
RAILTEX ACQUISITION CORP., a
Delaware corporation
RAILTEX SERVICE CO., INC., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
62
COMMITMENT: PURCHASERS:
----------- RAIL AMERICA FUNDING, INC.
$95,000,000
By:
----------------------------------
Name:
Title:
Address for Notices:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxx Xxxxxxxxx
Wiring Instructions:
ABA#
A/C#
=========== Attention:
$95,000,000
