1
EXHIBIT 10.20
SENIOR SUBORDINATED LOAN AGREEMENT
dated as of
August 1, 2000
among
GLOBAL ENERGY EQUIPMENT GROUP, L.L.C.,
as Borrower,
and
THE LENDERS PARTY HERETO
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.....................................................................1
SECTION 1.2. Other Definitions..............................................................23
SECTION 1.3. Accounting Terms and Determinations............................................24
SECTION 1.4. Rules of Construction..........................................................24
ARTICLE II
AMOUNT AND TERMS OF CREDIT
SECTION 2.1. The Commitments................................................................25
SECTION 2.2. Notes..........................................................................25
SECTION 2.3. Interest.......................................................................25
ARTICLE III
PREPAYMENTS; PAYMENTS
SECTION 3.1. Voluntary Prepayments..........................................................26
SECTION 3.2. Mandatory Offers to Prepay.....................................................27
SECTION 3.3. Notice and Procedures..........................................................28
SECTION 3.4. Method and Place of Payment....................................................30
SECTION 3.5. Notation of Payment............................................................30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Organization...................................................................30
SECTION 4.2. Capitalization.................................................................30
SECTION 4.3. Authorization, Etc.............................................................31
SECTION 4.4. Financial Statements...........................................................31
SECTION 4.5. Solvency.......................................................................32
SECTION 4.6. No Material Adverse Change.....................................................32
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SECTION 4.7. No Violation...................................................................32
SECTION 4.8. Compliance with Laws, Etc......................................................33
SECTION 4.9. Governmental Authorizations and Regulations....................................33
SECTION 4.10. Employee Matters...............................................................33
SECTION 4.11. Brokers........................................................................33
SECTION 4.12. Insurance......................................................................33
SECTION 4.13. Accuracy of Information........................................................34
SECTION 4.14. Representations and Warranties in Other Documents..............................34
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Conditions Precedent...........................................................34
ARTICLE VI
COVENANTS
SECTION 6.1. Information....................................................................38
SECTION 6.2. Payment of Taxes...............................................................39
SECTION 6.3. Legal Existence................................................................39
SECTION 6.4. Maintenance of Properties; Insurance; Compliance with Law; Conduct of
Business; Investment Company Act............................................40
SECTION 6.5. Waiver of Stay, Extension or Usury Laws........................................40
SECTION 6.6. Financial Covenants............................................................41
SECTION 6.7. Limitation on Restricted Payments..............................................41
SECTION 6.8. Limitation on Incurrence of Indebtedness.......................................45
SECTION 6.9. Limitation on Liens............................................................47
SECTION 6.10. Limitation on Transactions with Affiliates.....................................48
SECTION 6.11. Limitation on Restrictions Affecting Restricted Subsidiaries...................49
SECTION 6.12. Designation of Unrestricted Subsidiaries.......................................50
SECTION 6.13. Limitation on the Issuance and Sale of Equity Interests of Restricted
Subsidiaries................................................................51
SECTION 6.14. Limitation on Preferred Equity Interests of Restricted Subsidiaries............51
SECTION 6.15. Limitation on Asset Sales......................................................51
SECTION 6.16. Subsidiary Guarantees..........................................................52
SECTION 6.17. Use of Proceeds................................................................52
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ARTICLE VII
SUCCESSOR CORPORATION
SECTION 7.1. Limitation on Consolidation, Merger and Sale of Assets.........................52
SECTION 7.2. Successor Person Substituted...................................................53
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Events of Default..............................................................54
SECTION 8.2. Acceleration...................................................................56
SECTION 8.3. Powers and Remedies Cumulative.................................................57
SECTION 8.4. Waiver of Past Defaults and Events of Default..................................57
SECTION 8.5. Rights of Lenders to Receive Payment...........................................57
SECTION 8.6. Restoration of Rights and Remedies.............................................57
ARTICLE IX
SUBORDINATION
SECTION 9.1. Loans Subordinate to Senior Indebtedness.......................................58
SECTION 9.2. Payment Over of Proceeds upon Dissolution, Etc.................................58
SECTION 9.3. Suspension of Payment When Designated Senior Indebtedness in Default...........59
SECTION 9.4. Subrogation to Rights of Holders of Senior Indebtedness........................61
SECTION 9.5. Provisions Solely to Define Relative Rights....................................62
SECTION 9.6. No Waiver of Subordination Provisions..........................................62
SECTION 9.7. Reliance on Judicial Order or Certificate of Liquidating Agent.................63
SECTION 9.8. No Suspension of Remedies......................................................63
SECTION 9.9. Amendments.....................................................................63
SECTION 9.10. Proofs of Claim................................................................63
SECTION 9.11. Reinstatement..................................................................63
SECTION 9.12. Additional Definitions.........................................................64
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ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices........................................................................64
SECTION 10.2. No Waivers.....................................................................64
SECTION 10.3. Indemnification................................................................65
SECTION 10.4. Expenses; Documentary Taxes....................................................67
SECTION 10.5. Benefit of Agreement; Assignments; Participations..............................67
SECTION 10.6. New York Law; Submission to Jurisdiction; Waiver of Jury Trial.................68
SECTION 10.7. Independence of Representations, Warranties and Covenants......................69
SECTION 10.8. Severability...................................................................69
SECTION 10.9. Entire Agreement; Benefit......................................................69
SECTION 10.10. Headings.......................................................................69
SECTION 10.11. Counterparts...................................................................69
SIGNATURE PAGES
Schedule 2.1 - Lenders' Commitments
Schedule 4.2 - Capitalization
Schedule 4.3 - Documents
Schedule 6.10 - Existing Affiliate Transactions
Schedule I - Lender Contact Information
Exhibit A - Form of Note
Exhibit B - Form of Subsidiary Guarantee
Exhibit C-1 - Form of Stockholders' Agreement
Exhibit C-2 - Form of Equityholders' Agreement
Exhibit D - Form of Opinion of White & Case LLP
Exhibit E - Form of Assignment Agreement
Exhibit F - Form of Solvency Certificate
Exhibit G - Form of Closing Certificate
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SENIOR SUBORDINATED LOAN AGREEMENT
SENIOR SUBORDINATED LOAN AGREEMENT dated as of August 1, 2000
("Agreement") among Global Energy Equipment Group, L.L.C., a Delaware limited
liability company (the "Borrower"), and the lenders party hereto from time to
time (the "Lenders").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used herein,
have the following meanings:
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an acquisition from such Person or (b) existing at
the time such Person becomes a Restricted Subsidiary or is merged or
consolidated with or into the Borrower or any Restricted Subsidiary; provided,
however, that such Indebtedness was not incurred in connection with, or in
contemplation of, such acquisition, such Person becoming a Restricted Subsidiary
or such merger or consolidation.
"Acquisition" means the merger pursuant to the Acquisition
Agreement.
"Acquisition Agreement" means the Agreement and Plan of Merger
dated as of July 14, 2000, among Saw Mill Investments LLC, GEEG Holdings,
L.L.C., GEEG Acquisition Holdings Corp. and GEEG Acquisition, L.L.C.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided, however, that ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and
its Affiliates shall not be deemed to be Affiliates of the Borrower.
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"amend" means amend, modify, supplement, restate or amend and
restate, including successively; and "amending", "amended" and "amendment" have
correlative meanings.
"Annualized Basis" means, with respect to the determination of
any amount for any period (for purposes of this definition, the "Subject
Period"), the product obtained by multiplying (a) the amount accrued during the
period commencing with (and including) the Closing Date and ending on the last
day of the Subject Period and (b) the quotient obtained by dividing (i) 365 by
(ii) the number of days from (and including) the Closing Date to (and including)
the last day of the Subject Period.
"Applicable Premium" means, as a percentage of the principal
amount, (i) at any time on or prior to the fourth anniversary of the Closing
Date, 113.500% and (ii) at any time thereafter, during each twelve-month period
commencing after the anniversary of the Closing Date set forth in the table
below, the percentage set forth opposite such anniversary in the table below:
Anniversary Percentage
----------- ----------
4................................ 110.125%
5................................ 106.750
6................................ 105.400
7................................ 104.050
8................................ 102.700
9................................ 101.350
"Asset Acquisition" means (i) any capital contribution (by
means of transfers of cash or other property to others or payments for property
or services for the account or use of others, or otherwise) by the Borrower or
any Restricted Subsidiary to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by the Borrower or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated, merged with or into the Borrower
or any Restricted Subsidiary or (ii) any acquisition by the Borrower or any
Restricted Subsidiary of the assets of any Person which constitute all or
substantially all of an operating unit or line of business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, by way of any merger, consolidation or sale and
leaseback transaction) to any Person other than the Borrower or a Wholly Owned
Restricted Subsidiary, in one transaction or a series of related transactions,
of (i) any Equity Interest of any Restricted Subsidiary or (ii) other than in
the ordinary course of business, any other property or asset of the Borrower or
any Restricted Sub-
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sidiary (including awards of compensation for any asset taken by condemnation,
eminent domain or similar proceedings). The term "Asset Sale" shall not include
(a) any transaction covered by and consummated in compliance with Section 7.1;
provided, however, that any transaction consummated in compliance with Section
7.1 involving a sale, conveyance, assignment, transfer, lease or other disposal
of less than all of the Properties of the Borrower and the Restricted
Subsidiaries shall be deemed to be an Asset Sale with respect to the Properties
of the Borrower and Restricted Subsidiaries that are not so sold, conveyed,
assigned, transferred, leased or otherwise disposed of in such transaction; (b)
sales of inventory in the ordinary course of business; (c) dispositions of
equipment which is obsolete, worn out or otherwise no longer useful in the
business of the Borrower and its Restricted Subsidiaries in the good faith
opinion of management; (d) any Restricted Payment permitted by Section 6.7; (e)
any sale of all or substantially all of the assets of the Borrower and its
Restricted Subsidiaries which gives rise to a Change of Control; (f) any
non-exclusive licensing arrangement entered into by the Borrower or any
Restricted Subsidiary with respect to any intellectual property in the ordinary
course of business consistent with past practice; (g) sales of Cash Equivalents;
and (h) sales or exchanges at fair market value of specific items of equipment,
so long as the purpose of each such sale or exchange is to acquire (and results
within 120 days of such sale or exchange in the acquisition of) replacement
items of equipment which are the functional equivalent of the item of equipment
so sold or exchanged. In addition, solely for purposes of Section 3.2, sales,
conveyances, transfers, leases or other dispositions of properties or assets in
a single transaction or series of related transactions involving assets with a
fair market value of less than $500,000 shall be deemed not to be an Asset Sale.
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any other Law relating
to bankruptcy, insolvency, winding up, liquidation, reorganization or relief of
debtors, whether in effect on the date hereof or hereafter.
"Board of Directors" means (i) in the case of a Person that is
a corporation, the board of directors of such Person or any committee authorized
to act therefor, (ii) in the case of a Person that is a limited partnership, the
board of directors of its corporate general partner or any committee authorized
to act therefor (or, if the general partner is itself a limited partnership, the
board of directors of such general partner's corporate general partner or any
committee authorized to act therefor), (iii) in the case of a Person that is a
limited liability company, the board of managers of such Person or any committee
authorized to act therefor and (iv) in the case of any other Person, the board
of directors, management committee or similar governing body or any authorized
committee thereof responsible for the management of the business and affairs of
such Person.
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"Board Resolution" means a copy of a resolution certified
pursuant to an Officers' Certificate to have been duly adopted by the Board of
Directors of the Borrower and to be in full force and effect, and delivered to
the Lenders.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law to close.
"Capital Expenditures" means, for any period, the aggregate
amount of all expenditures of the Borrower and its Restricted Subsidiaries for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be so required to be capitalized on the
balance sheet in accordance with GAAP.
"Cash Equivalents" means, at any time:
(a) any direct obligation of (or obligation unconditionally
guaranteed by) the United States of America or a State thereof (or any
agency or political subdivision thereof, to the extent such obligations
are supported by the full faith and credit of the United States of
America or a State thereof) maturing not more than six months after
such time;
(b) commercial paper maturing not more than 180 days from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State of the United
States or of the District of Columbia and rated A-1 or higher
by S&P or P-1 or higher by ▇▇▇▇▇'▇, or
(ii) any lender under the Senior Credit Facility;
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than six months after its date of
issuance, which is issued by either
(i) any bank organized under the laws of the United
States (or any State thereof) and which has (x) a credit
rating of A2 or higher from ▇▇▇▇▇'▇ or A or higher from S&P
and (y) a combined capital and surplus greater than $500
million, or
(ii) any lender under the Senior Credit Facility; or
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(d) any repurchase agreement having a term of 7 days or less
entered into with any commercial banking institution satisfying the
criteria set forth in clause (c)(i) which
(i) is secured by a fully perfected security interest
in any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such commercial banking institution
thereunder.
"CFI" means Consolidated Fabrications, Inc., a Massachusetts
corporation.
"CFI Acquisition" means the acquisition by the Borrower of any
Restricted Subsidiary of CFI's businesses in accordance with the terms of the
CFI Acquisition Agreement.
"CFI Acquisition Agreement" means any stock purchase or asset
sale agreement executed and delivered by the Borrower and/or any Restricted
Subsidiary, on the one hand, and CFI and/or its stockholders, on the other hand,
with respect to the acquisition by the Borrower and/or such Restricted
Subsidiary of CFI's businesses.
"Change of Control" shall mean the occurrence of any of the
following events (whether or not approved by the Board of Directors of the
Borrower):
(a) after the initial Public Equity Offering, any Person or
"group" (other than the Permitted Holders) is or becomes the
"beneficial owner," directly or indirectly, of Equity Interests
representing 30% or more of the total voting power of the Voting Equity
Interests of the Borrower at any time when the Permitted Holders own
Equity Interests representing a lesser percentage of the total voting
power of the Voting Equity Interests of the Borrower;
(b) the Borrower consolidates with, or merges with or into,
another Person, or the Borrower or one or more Restricted Subsidiaries
sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of the assets of the Borrower and the Restricted
Subsidiaries, taken as a whole, to any Person (other than a Wholly
Owned Restricted Subsidiary), or any Person consolidates with, or
merges with or into, the Borrower, in any such event other than
pursuant to a transaction in which the Person or Persons that owned the
Equity Interests of the Borrower immediately prior to such transaction,
own Equity Interests representing a majority of the total voting power
of the Voting Equity Interests and representing a majority of the
equity of the surviving or transferee Person;
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(c) prior to the initial Public Equity Offering, Harvest shall
cease to own, directly or indirectly through Parent and/or Holdings,
80% or more of the Equity Interests of the Borrower held by it on the
Closing Date after giving effect to the Acquisition;
(d) prior to the initial Public Equity Offering, the Permitted
Holders shall cease (i) to have the power to elect a majority of the
members of the Board of Directors of the Borrower; or (ii) to own
Equity Interests representing at least 51% of the Voting Equity
Interests of the Borrower or 51% of the equity of the Borrower;
(e) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors of the
Borrower (together with any new directors whose election by the
stockholder of the Borrower or whose nomination for election by the
Board of Directors of the Borrower was approved by a vote of a majority
of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Borrower then in office after
an initial Public Equty Offering;
(f) there shall occur the liquidation or dissolution of the
Borrower.
For purposes of this definition, (I) "group" has the meaning under Section 13(d)
and 14(d) of the Exchange Act, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act, and (II) "beneficial ownership" and its
derivatives has the meaning set forth in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time, upon
the happening of an event or otherwise.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986.
"Commission" means the Securities and Exchange Commission.
"Common Equity Interests" means any Equity Interests other
than Preferred Equity Interests.
"Common Stock" means the common stock of Parent, par value
$0.01 per share, to be issued to the Lenders on the Closing Date.
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"Consolidated EBITDA" means, for any applicable period, the
sum of
(a) Consolidated Net Income of such Person,
plus
(b) to the extent deducted in determining such Consolidated
Net Income, the sum of (i) income tax expense (whether paid or
deferred), (ii) Consolidated Interest Expense, (iii) fees, costs and
expenses paid by the Borrower or any of its Restricted Subsidiaries in
respect of the Transaction in an amount not exceeding $15.5 million,
(iv) amounts attributable to amortization and depreciation of assets
and (v) other non-cash, non-recurring charges (including, and together
with, non-cash charges resulting from the granting to officers and
employees of Holdings and its Subsidiaries of options to acquire Equity
Interests of Holdings to the extent such charges arise in respect of
the differential between the exercise price of such options and the
fair market value of such Equity Interests at the time of such grant or
at any time thereafter prior to the exercise thereof),
minus
(c) to the extent included in such Consolidated Net Income,
non-cash credits.
"Consolidated Fixed Charges" means, for any period, the sum
(for all such fiscal quarters) of, without duplication, (i) Consolidated
Interest Expense during such period, (ii) Capital Expenditures of the Borrower
and its Restricted Subsidiaries made during such period, (iii) scheduled
principal repayments of Indebtedness required to be made during such period,
(iv) all income taxes paid in cash by the Borrower and its Restricted
Subsidiaries during such period (net of any cash refunds received during such
period) and (v) all Restricted Payments (excluding payments made pursuant to
Section 6.7(b)(viii)) made in cash by the Borrower during such period; provided
that, in the event the applicable four-fiscal-quarter period would include any
period of time prior to the Closing Date, the amounts referred to in subclauses
(i) and (iii) shall be determined on an Annualized Basis.
"Consolidated Interest Expense" means, for any fiscal quarter,
the aggregate interest expense (both accrued and paid) of the Borrower and its
Restricted Subsidiaries for such fiscal quarter that has been paid or is payable
in cash, including the portion of any payments made in respect of Capital Lease
Obligations and Synthetic Leases allocable to interest expense (net of interest
income paid during such period to the Borrower and its Restricted Subsidiaries).
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"Consolidated Net Income" means, for any period, the aggregate
of all amounts (including and together with all amounts in respect of
extraordinary gains and extraordinary losses) which would be included as net
income on the consolidated financial statements of the Borrower and its
Restricted Subsidiaries for such period.
"Contingent Liability" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
Indebtedness of any other Person (other than by endorsements of instruments in
the course of collection), or guarantees the payment of dividends or other
distributions upon the Capital Stock of any other Person; provided that
Contingent Liabilities shall not include customary indemnities set forth in
agreements entered into in the ordinary course of business between the Borrower
and its Subsidiaries, on the one hand, and their customers on the other hand.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount of the debt, obligation or other liability guaranteed thereby.
"Credit Documents" means this Agreement, the Notes, the
Subsidiaries Guarantees, the Shareholders' Agreement and the certificates
representing the Common Stock.
"Currency Agreement" shall mean any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Borrower or any Restricted Subsidiary against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Designated Senior Indebtedness" means (a) any Senior
Indebtedness under the Senior Credit Facility and (b) at any time after the
Senior Credit Facility has been terminated, any other Senior Indebtedness which
at the time of determination exceeds $15 million in aggregate principal amount
(or accreted value in the case of Indebtedness issued at a discount) outstanding
or available under a committed facility, which is specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by such Person and as to which the Lenders have been given written
notice of such designation.
"Disinterested Director" means a member of the Board of
Directors of the Borrower who does not have any direct or indirect financial
interest in or with respect to the transaction being considered.
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"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to date which
is 90 days after the Final Maturity Date; provided, however, that any Equity
Interests that would not constitute Disqualified Equity Interests but for
provisions thereof giving holders thereof the right to require the Borrower to
redeem such Equity Interests upon the occurrence of a change in control
occurring on or prior to the Final Maturity Date shall not constitute
Disqualified Equity Interests if the change in control provisions applicable to
such Equity Interests are no more favorable to the holders of such Equity
Interests than Section 3.2(b) and such Equity Interests specifically provide
that the Borrower will not redeem any such Equity Interests pursuant to such
provisions prior to the Borrower's prepayment of the Loans as are required to be
prepaid pursuant to Section 3.2(b).
"Enforceability Exceptions" means, with respect to any
obligation, any limitations on the enforceability of such obligation due to
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights or general
equity principles (other than, in any such case, any federal or state laws
relating to fraudulent transfers).
"Environmental Law" means the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act of 1976 and any other applicable federal, state, local or foreign statute,
rule, regulation, order, judgment, directive, decree, permit, license or common
law as in effect now, previously or at any time during the term of this
Agreement, and regulating, relating to or imposing liability or standards of
conduct concerning air emissions, water discharges, noise emissions, the release
or threatened release or discharge of any Hazardous Material into the
environment, the generation, handling, treatment, storage, transport or disposal
of any Hazardous Material or otherwise concerning pollution or the protection of
the outdoor or indoor environment, or human health or safety.
"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, in such Person, including any Preferred Equity Interests.
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"Equity Investment" means (1) the purchase by the Permitted
Holders of Common Equity Interests of Parent in an aggregate amount of not less
than $80.6 million in cash, and the contribution of such amount by Parent to the
Merger Sub as cash equity and (2) the rollover of equity investments by
management of the Borrower and existing shareholders of Holdings in an aggregate
amount of not less than $20.4 million (which amount is contributed to the
Borrower), in each case pursuant to the Acquisition Documents.
"Exchange Act" means the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder.
"Existing Business" means a business of the GEEG Entities
conducted on the date hereof or any activity reasonably related thereto and
reasonable extensions thereof.
"fair market value" means, with respect to any asset, the
price (after taking into account any liabilities relating to such assets) which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is under
any compulsion to complete the transaction. For the purposes of Sections 3.2,
6.7 and 6.15, (i) in the case of any transaction or series of related
transactions with an estimated value of more than $2.5 million, fair market
value shall be determined in good faith by the Board of Directors of the
Borrower, which determination shall be evidenced by a Board Resolution delivered
to the Lenders and (ii) in all other cases, fair market value shall be
determined in good faith by the management of the Borrower.
"Fee Letter" means the fee letter dated as of the date hereof
by and between the Borrower and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation.
"Final Maturity Date" means the tenth anniversary of the
Closing Date.
"Foreign Subsidiary" means any Subsidiary of the Borrower
which is organized under the laws of any jurisdiction outside of the United
States of America.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable at the
date of determination and which are consistently applied for all applicable
periods.
"GEEG Entities" means Parent, Holdings, the Borrower and its
Subsidiaries.
"Governmental Authority" means any government or political
subdivision of the United States or any other country or any agency, authority,
board, bureau, central bank, securities exchange, commission, department or
instrumentality thereof or therein, including, without limitation, any court,
tribunal, grand jury or arbitrator, in each case whether foreign or
16
-11-
domestic, or any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to such government or political
subdivision.
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guarantee shall include
any agreement to maintain or preserve any other Person's financial condition or
to cause any other Person to achieve certain levels of operating results.
"Harvest" means Harvest Partners, Inc., a New York
corporation.
"Hazardous Material" means any pollutant, contaminant or
hazardous, toxic or dangerous waste, substance, constituent or material, defined
or regulated as such in, or for purposes of, any Environmental Law, including
any asbestos, any petroleum, oil (including crude oil or any fraction thereof),
any radioactive substance, any polychlorinated biphenyls, any toxin, chemical
and any other substance that gives rise to liability under any Environmental
Law.
"Holdings" means GEEG Holdings, L.L.C., a Delaware limited
liability company.
"in the ordinary course of business" means in the ordinary
course of business of the Borrower and its Subsidiaries consistent with past
practice.
"incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "incurrence," "incurred" and "incurring" shall
have meanings correlative to the foregoing). Indebtedness of a Person existing
at the time such Person becomes a Restricted Subsidiary or is merged or
consolidated with or into the Borrower or any Restricted Subsidiary shall be
deemed to be incurred at such time.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
17
-12-
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capital Lease Obligations of such Person;
(d) net liabilities of such Person under all Interest Rate
Protection Obligations and Currency Agreements;
(e) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services (excluding trade accounts payable in the
ordinary course of business) and indebtedness secured by (or for which
the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien on property owned or being acquired
by such Person (including indebtedness arising under conditional sales
or other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse
(provided that, to the extent such indebtedness is not assumed by such
Person the recourse against such Person by the obligee of such
indebtedness is limited to the assets so secured, the amount of such
indebtedness shall be deemed to be the lesser of (x) the aggregate
amount of such indebtedness and (y) the fair market value of the assets
securing such indebtedness);
(f) obligations arising under Synthetic Leases of such Person;
(g) Disqualified Equity Interests of such Person; and
(h) all Contingent Liabilities of such Person in respect of
any of the foregoing.
The Indebtedness of any Person shall include, without duplication, the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"Independent Financial Advisor" means a nationally recognized
accounting, appraisal, investment banking firm or consultant (i) that does not,
and whose directors, officers and employees or Affiliates do not, have a direct
or indirect financial interest in the Borrower and (ii) which, in the judgment
of the Board of Directors of Parent, is otherwise independent and qualified to
perform the task for which it is to be engaged.
18
-13-
"Interest Coverage Ratio" means, as of the last day of any
fiscal quarter, the ratio computed for the period consisting of such fiscal
quarter and each of the three immediately preceding fiscal quarters of (a)
Consolidated EBITDA (for all such fiscal quarters) of the Borrower to (b)
Consolidated Interest Expense (for all such fiscal quarters) of the Borrower;
provided that, in the event the applicable four fiscal quarter period would
include any period of time prior to the Closing Date, Interest Expense for the
purposes of this clause (b) shall be determined on an Annualized Basis.
"Interest Payment Dates" means each August 1 and February 1,
commencing February 1, 2001.
"Interest Rate Protection Obligations" means, with respect to
any Person, the Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements and
(ii) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance, guarantee or other extension of credit or capital
contribution to (by means of transfers of cash or other property or assets to
others or payments for property or services for the account or use of others, or
otherwise), or purchase or acquisition of capital stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any other
Person. The amount of any Investment shall be the original cost of such
Investment, plus the cost of all additions thereto, and minus the amount of any
portion of such Investment repaid to such Person in cash as a repayment of
principal or a return of capital, as the case may be, but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment. In determining the amount of any
Investment involving a transfer of any property or asset other than cash, such
property shall be valued at its fair market value at the time of such transfer,
as determined in good faith by the Board of Directors of the Person making such
transfer.
"Laws" means any applicable federal, state, local or foreign
statutes, laws, codes, common law rules, ordinances, rules, regulations,
permits, licensing or other requirements or any judicial or administrative
decision of any governmental authority.
"Leverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of
(a) the excess of (i) Total Debt outstanding on the last day
of such fiscal quarter over (ii) the amount of up to $35.0 million of
Unrestricted Cash on the last day of such fiscal quarter
to
19
-14-
(b) Consolidated EBITDA of the Borrower computed for the
period consisting of such fiscal quarter and each of the three
immediately preceding fiscal quarters;
provided that (x) for purposes of determining Total Debt outstanding on the last
day of a fiscal quarter the determination thereof shall be based on the average
daily utilized portion of the "Revolving Loan Commitment Amount" (as defined in
the Senior Credit Facility) for the thirty-day period ending on the last day of
such fiscal quarter and (y) for purposes of determining Unrestricted Cash on the
last day of a fiscal quarter the determination thereof shall be based on the
average daily amount of Unrestricted Cash for the thirty-day period ending on
the last day of such fiscal quarter.
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrance of any kind (including any
conditional sale or capital lease or other title retention agreement, any lease
in the nature thereof) and any agreement to give any of the foregoing.
"Material Adverse Effect" means a material adverse effect on
(i) the business, operations, prospects or financial condition of the Borrower
and its Subsidiaries, taken as a whole, or (ii) the rights and remedies of the
Lenders under any Credit Document.
"Material Restricted Subsidiary" shall mean a Restricted
Subsidiary that is a "Material Subsidiary" as defined in the Senior Credit
Facility as in effect on the Closing Date.
"Merger Sub" means GEEG Acquisition, L.L.C., a Delaware
limited liability company.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Cash Proceeds" means the aggregate proceeds in the form
of cash or cash equivalents received by the Borrower or any Restricted
Subsidiary in respect of any Asset Sale, including all cash or cash equivalents
received upon any sale, liquidation or other exchange of proceeds of Asset Sales
received in a form other than cash or cash equivalents, net of (a) the direct
costs relating to such Asset Sale (including legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses incurred as a
result thereof; (b) taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale or required to be provided as a reserve in accordance with GAAP
against any potential purchase price adjustment or any other liabilities
associated with the asset disposed of in such transaction and retained by the
seller after such sale or other disposition thereof, including, to the extent
required under GAAP, any indemnification obligations associated
20
-15-
with such transaction; provided that any such amounts shall constitute Net Cash
Proceeds (to the extent not used to satisfy such liabilities) at any time such
reserves are no longer required to be maintained in accordance with GAAP; and
(d) with respect to Asset Sales by Subsidiaries, the portion of such cash
payments attributable to Persons holding a minority interest in such Subsidiary.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Obligors" means the Borrower and the Subsidiary Guarantors.
"Officer," with respect to any Person, means the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer or the Secretary of such Person, or any other officer
designated by the Board of Directors of such Person, as the case may be.
"Orders" means any judgment, decree, order, regulation,
injunction, writ or rule of any governmental authority applicable to the
Borrower or any of its Subsidiaries.
"Parent" means GEEG Acquisition Holdings, Corp., a Delaware
corporation.
"Payment Date" means a Change of Control Offer Payment Date or
a Net Proceeds Offer Payment Date.
"Permits" means all licenses, permits, exemptions,
registrations, filings and approvals of or with any Governmental Authority.
"Permitted Holders" means Harvest and its Affiliates.
"Permitted Investments" means:
(a) Cash Equivalents;
(b) Interest Rate Protection Obligations and Currency
Agreements permitted by Sections 6.8(b)(v) and (vi);
(c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(d) Investments by way of contributions to capital or
purchases of Equity Interests (i) by the Borrower in any Subsidiary
Guarantor that is or becomes a Wholly
21
-16-
Owned Restricted Subsidiary or by any Subsidiary Guarantor that is or
becomes a Wholly Owned Restricted Subsidiary in other Subsidiary
Guarantors that are Wholly Owned Restricted Subsidiaries or (ii) by any
Restricted Subsidiary in the Borrower;
(e) Investments by the Borrower or by any Subsidiary Guarantor
in Foreign Subsidiaries in an aggregate amount not to exceed $15.0
million at any time outstanding;
(f) Investments by a Foreign Subsidiary in any other Foreign
Subsidiary that is a Wholly Owned Restricted Subsidiary;
(g) Investments made by the Borrower or any Restricted
Subsidiary that constitute (i) accounts receivable arising, (ii) trade
debt granted, or (iii) deposits made in connection with the purchase of
goods or services, in each case in the ordinary course of business;
(h) Investments in respect of loans and advances made by the
Borrower or any Restricted Subsidiary in the ordinary course of
business and consistent with past practices to their respective
employees for moving, travel and emergency expenses and other similar
expenses or for income tax liabilities, so long as the aggregate
principal amount thereof does not exceed $500,000 at any time
outstanding (determined without regard to any write-downs or write-offs
of such loans and advances);
(i) Investments in respect of loans made by the Borrower
("Management Notes") to certain of its executives and other managers
("Management Investors") in connection with their purchase of Equity
Interests of Parent ("Management Units"), so long as the proceeds of
such notes are used concurrently dollar-for-dollar for the purchase of
such Management Units and then contributed concurrently by Parent as a
capital contribution to the Borrower;
(j) Asset Acquisitions;
(k) advances to subcontractors in the ordinary course of
business;
(l) non-cash consideration issued by the purchaser of assets
in connection with a sale of such assets to the extent permitted by
Section 6.15; and;
(m) other Investments in an aggregate amount not to exceed
$10.0 million at any time outstanding.
"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is acquired by, or merged into or consolidated
with, the Borrower or any Re-
22
-17-
stricted Subsidiary; provided, however, that such Liens were in existence prior
to the contemplation of such acquisition, merger or consolidation and do not
secure any property or assets of the Borrower or any Restricted Subsidiary other
than the property or assets subject to the Liens prior to such acquisition,
merger or consolidation; (b) Liens existing on the Closing Date; (c) Liens
securing Purchase Money Indebtedness incurred pursuant to Section 6.8(b)(iii);
provided, however, that (i) such Liens do not extend to any assets of the
Borrower or any Restricted Subsidiary other than the assets acquired with the
proceeds of such Indebtedness (and improvements thereto or thereon) and (ii)
such Liens attach within 90 days of the incurrence of such Indebtedness or such
improvement; (d) Liens to secure any Permitted Refinancings, in whole or in
part, of any Indebtedness secured by Liens referred to in the clauses above so
long as such Lien does not extend to any other assets (other than improvements
thereto); (e) Liens securing letters of credit entered into in the ordinary
course of business and consistent with past business practice; (f) Liens
securing Senior Indebtedness; (g) Liens securing Indebtedness of the type
permitted by Section 6.8(b)(ix) and covering only assets of the Foreign
Subsidiary obligated under such Indebtedness; and (h) other Liens on property of
the Borrower and its Restricted Subsidiaries; provided that the Indebtedness and
other obligations secured thereby does not exceed $1.0 million.
"Permitted Refinancing" means, with respect to any
Indebtedness, Indebtedness to the extent representing a refinancing of such
Indebtedness; provided, however, that (1) the refinancing Indebtedness shall not
exceed the sum of the amount of the Indebtedness being refinanced, plus the
amount of accrued interest or dividends thereon, the amount of any reasonably
determined prepayment premium necessary to accomplish such refinancing and
reasonable fees and expenses incurred in connection therewith; (2) the
refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of the Indebtedness being
refinanced and shall not permit redemption or other retirement (including
pursuant to any required offer to purchase to be made by the Borrower or any
Restricted Subsidiary) of such Indebtedness at the option of the holder thereof
prior to the final stated maturity of the Indebtedness being refinanced, other
than a redemption or other retirement at the option of the holder of such
Indebtedness (including pursuant to a required offer to purchase made by the
Borrower or a Restricted Subsidiary) upon a change of control of the Borrower
pursuant to provisions substantially similar to Section 3.2(b); (3) Indebtedness
that ranks pari passu with the Loans may be refinanced only with Indebtedness
that is made pari passu with or subordinate in right of payment to the Loans,
and Indebtedness that is subordinated in right of payment to the Loans may be
refinanced only with Indebtedness that is subordinate in right of payment to the
Loans on terms no less favorable to the Lenders than those contained in the
Indebtedness being refinanced; and (4) the refinancing Indebtedness shall be
incurred by the obligor on the Indebtedness being refinanced or by the Borrower.
23
-18-
"Permitted Seller Note" means an unsecured promissory note
issued by Parent or the Borrower in connection with an Asset Acquisition, which
note (i) provides for a final stated maturity date that is not prior to the
earlier of (x) the fifth anniversary of the closing of such Asset Acquisition
and (y) January 31, 2011 (but which may provide for scheduled amortization of
the original principal amount thereof on each anniversary of such closing date
to the extent each such required amortization payment does not exceed 20% of the
original principal amount thereof), (ii) bears interest at an annual rate not in
excess of 10%, payable with the issuance of additional promissory notes in form
and substance substantially similar to such promissory note (it being understood
and agreed that each such additional promissory note shall constitute a
Permitted Seller Note), (iii) does not provide the holders thereof with the
guaranty of any Affiliate of the issuer thereof, (iv) is subordinated in right
of payment to the Obligations hereunder (it being understood that
cross-acceleration provision with respect to Indebtedness in an aggregate
principal amount in excess of $10.0 million shall not be prohibited) and (v)
does not contain any financial maintenance covenants or any cross-default
provisions.
"Permitted Subordinated Reorganization Securities" means
securities of the Borrower issued in a plan of reorganization in a case under
Bankruptcy Law relating to the Borrower which constitutes either (x) Equity
Interests (other than Disqualified Equity Interests with the reference to "Final
Maturity Date" in the definition of such term modified to relate to the final
stated maturity of any debt securities issued in such plan of reorganization to
the holders of Designated Senior Indebtedness ("Senior Reorganization
Securities")) or (y) debt securities of the Borrower which (i) are unsecured,
(ii) have no scheduled mandatory amortization thereon prior to the final stated
maturity of the Senior Reorganization Securities, (iii) are subordinated in
right of payment to the Senior Reorganization Securities to at least the same
extent as the Loans are subordinated to Designated Senior Indebtedness and (iv)
have terms no more beneficial in the aggregate to the holders thereof than those
in effect with respect to the Loans.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability partnership, limited partnership, trust, unincorporated organization
or government or any agency or political subdivision thereof or other entity.
"Preferred Equity Interest," in any Person, means an Equity
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.
"Prepayment Offer" means a Change of Control Offer or a Net
Proceeds Offer.
24
-19-
"principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the security,
including, in the case of the Loans, any premium payable to the Lenders upon
repayment of any Loans prior to the Final Maturity Date.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Public Equity Offering" means an underwritten public offering
for cash of Common Equity Interests of Parent, Holdings or the Borrower pursuant
to an effective registration statement filed under the Securities Act (excluding
registration statements filed on Form S-8 or similar form).
"Purchase Money Indebtedness" means Indebtedness incurred in
the ordinary course of business for the purpose of financing all or any part of
the purchase price, or the cost of installation, construction or improvement, of
property or equipment; provided, however, (x) such Indebtedness shall not exceed
the cost of such property or assets and shall not be secured by any property or
assets of the Borrower or any Restricted Subsidiary other than the property and
assets so acquired or constructed and (y) the Lien securing such Indebtedness
shall be created within 90 days of such acquisition or construction or, in the
case of a refinancing of any Purchase Money Indebtedness, within 90 days of such
refinancing.
"Qualified Equity Interest" means any Equity Interest of the
Borrower other than any Disqualified Equity Interest.
"redeem" means redeem, repurchase, defease or otherwise
acquire or retire for value; and "redemption" and "redeemed" have correlative
meanings.
"refinance" means refinance, renew, extend, replace, defease
or refund, in whole or in part, including successively; and "refinancing" and
"refinanced" have correlative meanings.
"Replacement Assets" means assets that will be used or useful
in an Existing Business and Equity Interests in any Person that is or becomes a
Restricted Subsidiary upon the acquisition of such Equity Interests.
"Required Lenders" means (i) at any time prior to the Closing
Date, Lenders holding more than 50% of the Commitments and (ii) at any time
thereafter, Lenders holding more than 50% in aggregate principal amount of the
Loans outstanding at such time.
"Restricted Subsidiary" means any Subsidiary of the Borrower
other than any Unrestricted Subsidiary.
25
-20-
"S&P" means Standard & Poor's Rating Group and its successors.
"Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated thereunder.
"Senior Credit Facility" means the Credit Agreement dated as
of August 1, 2000 by and among the Borrower, as borrower, DLJ Capital Funding,
Inc., as sole lead arranger and syndication agent, Bankers Trust Company, as
administrative agent, and the lenders party thereto, together with the documents
related thereto (including the notes, any guarantee agreements and security
documents). Without limiting the generality of the foregoing, the term "Senior
Credit Facility" shall include any amendment to such credit agreement and
ancillary documents and all refinancings thereof, including any agreement or
agreements (i) extending or shortening the maturity of any Indebtedness incurred
thereunder or contemplated thereby, (ii) adding or deleting borrowers or
guarantors thereunder or (iii) increasing the amount of Indebtedness incurred
thereunder or available to be borrowed thereunder to the extent permitted
hereunder.
"Senior Credit Facility Agent" means Bankers Trust Company as
administrative agent for the Senior Credit Facility, or any successor thereto;
provided that notice of the appointment of such a successor agent as has been
given to the Lenders.
"Senior Indebtedness" means
(1) all Indebtedness of the Borrower or any Restricted
Subsidiary outstanding under the Senior Credit Facility (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 that interest is an allowable claim in that bankruptcy proceeding);
(2) all Interest Rate Protection Obligations and Currency
Agreements with any lender under the Senior Credit Facility or any
Affiliate of such lender (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 that interest is an allowable
claim in that bankruptcy proceeding);
(3) any other Indebtedness (including Acquired Indebtedness)
permitted to be incurred by the Borrower or any Restricted Subsidiary
under the terms of this Agreement, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity
with or subordinated in right of payment to the Loans or the relevant
Subsidiary Guarantee; and
(4) all Obligations with respect to the foregoing.
26
-21-
Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness will not include:
(1) any liability for federal, state, local or other taxes
owed or owing by the Borrower or any of its Subsidiaries;
(2) any Indebtedness of the Borrower or any Restricted
Subsidiary to Parent, Holdings, the Borrower or any of its
Subsidiaries;
(3) any trade payables;
(4) that portion of Indebtedness incurred in violation of the
Section 6.8; or
(5) any Indebtedness or obligation of the Borrower or any
Restricted Subsidiary which is expressly subordinated in right of
payment to any other Indebtedness or obligation of the Borrower or such
Restricted Subsidiary, as applicable, including any Subordinated
Indebtedness of the Borrower.
"Senior Subordinated Obligations" means all Obligations with
respect to the Loans, including principal, premium, if any, interest and
liquidated damages, if any, payable pursuant to the terms of the hereof or any
other Credit Document (including upon the acceleration or redemption thereof),
together with and including any amounts received or receivable upon the exercise
of rights of rescission or other rights of action, including claims for damages,
or otherwise.
"Shareholders' Agreement" means, collectively, (i) a
stockholders' agreement among Parent and its stockholders, substantially in the
form of Exhibit C-1, and (ii) an equityholders' agreement among Parent, it
stockholders, Holdings and its members, substantially in the form of Exhibit
C-2.
"Stated Maturity", when used with respect to any Loan or any
installment of interest thereon, means the date specified in such Loan as the
fixed date on which the principal of such Loan or such installment of interest
is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the
Borrower which is expressly subordinated in right of payment to the Loans.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of Voting Equity Interests are at the time,
directly or indirectly, owned by such first Person. Unless otherwise indicated,
Subsidi-
27
-22-
aries of the Borrower shall be deemed to include its Subsidiaries after giving
effect to the Acquisition.
"Subsidiary Guarantee" means a senior subordinated guarantee
of the Borrower's Obligations under this Agreement and the Notes, substantially
in the form of Exhibit F.
"Subsidiary Guarantor" means each Restricted Subsidiary of the
Borrower that has executed and delivered to the Lenders a Subsidiary Guarantee,
until such Restricted Subsidiary is released from its Subsidiary Guarantee.
"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"Synthetic Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) (a) that is not a capital lease in
accordance with GAAP and (b) in respect of which the lessee retains or obtains
ownership of the property so leased for federal income tax purposes, other than
any such lease under which that Person is the lessor.
"Total Debt" means, on any date, without duplication, the
outstanding principal amount of all Indebtedness of the Borrower and its
Restricted Subsidiaries of the type referred to in clause (a), clause (b)
(excluding obligations relative to the face amount of letters of credit to the
extent such face amount has not been drawn), clause (c), clause (e), clause (f)
and clause (g), in each case of the definition of "Indebtedness", and any
Contingent Liability in respect of any of the foregoing; provided, however, that
Indebtedness in respect of Permitted Seller Notes shall not be included in the
calculation of Total Debt to the extent that such notes do not provide for any
scheduled repayments or mandatory prepayments or redemptions of the principal
thereof prior to January 31, 2011 or for any payment of cash interest or fees
with respect thereto prior to such date.
"Transactions" means (i) the consummation of the Acquisition,
(ii) the borrowing of the Loans, (iii) the initial borrowing under the Senior
Credit Facility, (iv) the Equity Investment and (v) the payment of fees and
expenses in connection therewith.
"Trigger Date" means a Change of Control Trigger Date, a Net
Proceeds Offer Trigger Date or a Restricted Payment Offer Trigger Date.
"Unrestricted Cash" means, at any time, cash and Cash
Equivalents of the Borrower and its Subsidiaries to the extent such cash and
Cash Equivalents are not subject to any Lien (other than a Lien in favor of the
"Administrative Agent" pursuant to a "Loan Document"
28
-23-
as such terms are defined in the Senior Credit Facility) or any restriction as
to its use and is included in "cash and cash equivalents" and not "restricted
cash" on the consolidated balance sheet of the Borrower.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower
designated as such pursuant to Section 6.12, until such designation is revoked
pursuant to Section 6.12.
"Voting Equity Interests" means Equity Interests in a
corporation or other Person with voting power under ordinary circumstances
entitling the holders thereof to elect the Board of Directors or other governing
body of such corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than directors'
qualifying shares) of which are owned, directly or indirectly, by the Borrower.
SECTION 1.2. Other Definitions. The definitions of the
following terms may be found in the sections indicated as follows:
"Accrued Portion"......................................................... 6.7(a)
"Acquisition Documents"................................................... 5.1(b)
"Affiliate Transaction"................................................... 6.10(a)
"Agreement"............................................................... Introduction
"Assignee Lender"......................................................... 10.5(b)
"Assignor Lender"......................................................... 10.5(b)
"Authorized Officer"...................................................... 5.1(n)
"Basket".................................................................. 6.7(a)
"Board"................................................................... 6.17(b)
"Borrower"................................................................ Introduction
"Change of Control Offer"................................................. 3.2(b)
"Change of Control Offer Amount".......................................... 3.2(b)
"Change of Control Offer Payment Date".................................... 3.2(b)
"Change of Control Trigger Date".......................................... 3.2(b)
"Commitment".............................................................. 2.1
"Controlling Person"...................................................... 10.3
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"Designation"............................................................. 6.12
"Designation Amount"...................................................... 6.12
"Documents"............................................................... 4.3
"Equity Investment Documents"............................................. 5.1(b)
"Event of Default"........................................................ 8.1
"Indemnified Parties"..................................................... 10.3
"Loans"................................................................... 2.1
"Lenders"................................................................. Introduction
Definition of Permitted
"Management Investors", "Management Notes" and "Management Units"......... Investments
"Mandatory Prepayment Offer Notice"....................................... 3.3(a)
"Net Proceeds Offer"...................................................... 3.2(a)
"Net Proceeds Offer Amount"............................................... 3.2(a)
"Net Proceeds Offer Payment Date"......................................... 3.2(a)
"Net Proceeds Offer Trigger Date"......................................... 3.2(a)
"Non-Payment Event of Default"............................................ 9.3(b)
"Notes"................................................................... 2.2
"Payment Default"......................................................... 9.3
"Projections"............................................................. 4.4(d)
"Register"................................................................ 10.5(d)
"Representative".......................................................... 9.3(b)
"Restricted Payment"...................................................... 6.7(a)
"Restricted Payment Offer"................................................ 3.2(c)
"Restricted Payment Offer Amount"......................................... 3.2(c)
"Restricted Payment Offer Trigger Date"................................... 3.2(c)
"Revocation".............................................................. 6.12(c)
"Senior Credit Facility Documents"........................................ 5.1(b)
"Standstill Period"....................................................... 8.2
"Subsidiary Guarantee".................................................... 6.16
SECTION 1.3. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP.
SECTION 1.4. Rules of Construction. (a) The definitions in
Section 1.1 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation."
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(b) Unless the context shall otherwise require, all references
herein to (i) Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement, (ii) Persons include their respective permitted successors and
assigns or, in the case of governmental Persons, Persons succeeding to the
relevant functions of such Persons, (iii) agreements and other contractual
instruments include subsequent amendments, assignments, and other modifications
thereto to the date hereof and thereafter, but in the case of any amendment,
assignment or modification after the date hereof, only to the extent such
amendments, assignments or other modifications thereto are not prohibited by
their terms or the terms of any Credit Document, (iv) statutes and related
regulations include any amendments of same and any successor statutes and
regulations, and (v) time shall be deemed to be to New York City time.
ARTICLE II
AMOUNT AND TERMS OF CREDIT
SECTION 2.1. The Commitments. Subject to and upon the terms
and conditions set forth herein, each Lender agrees to make a term loan (each, a
"Loan," and, collectively, the "Loans") to the Borrower on the Closing Date in
the amount equal to 99.0% of the principal amount set forth next to such
Lender's name on Schedule 2.1 (each, a "Commitment," and collectively, the
"Commitments"). Once repaid, Loans may not be reborrowed.
SECTION 2.2. Notes. (a) Each Loan shall be evidenced by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit A, with blanks appropriately completed in conformity herewith
(each a "Note" and, collectively, the "Notes").
(b) Each Lender will note on its internal records the amount
of the Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
SECTION 2.3. Interest. (a) The Borrower agrees to pay interest
in respect of the unpaid principal amount of each Loan at the rate equal to
13.50% per annum. Interest shall accrue on each Loan from the Closing Date until
the payment thereof.
(b) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case,
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bear interest at a rate per annum equal to the rate which is 1.0% in excess of
the rate then borne by such Loans. Interest which accrues under this Section
2.3(b) shall be payable on demand.
(c) Accrued interest shall be payable in respect of each Loan,
(i) on each Interest Payment Date and (ii) on any repayment or prepayment (on
the amount repaid or prepaid), at maturity (whether by acceleration or
otherwise) and, after maturity, on demand.
(d) Interest shall be calculated on the basis of a 360-day
year, consisting of twelve 30-day months, and the number of days actually
elapsed.
ARTICLE III
PREPAYMENTS; PAYMENTS
SECTION 3.1. Voluntary Prepayments. (a) On or prior to the
third anniversary of the Closing Date, the Borrower shall have the right to
prepay up to $22.5 million in aggregate principal amount of the Loans with the
net cash proceeds of one or more Public Equity Offerings (which proceeds are
received by or contributed to the Borrower in cash as common equity) at the
Applicable Premium, plus accrued and unpaid interest, if any, to the date of
prepayment.
(b) After the third anniversary of the Closing Date, the
Borrower shall have the right to prepay the Loans, in whole or in part at any
time or from time to time, at the Applicable Premium, plus accrued and unpaid
interest, if any, to the date of prepayment.
(c) The Borrower shall give the Lenders prior to 12:00 noon at
least three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay Loans and the amount of such
prepayment. Each partial prepayment of Loans pursuant to this Section 3.1 shall
be in an aggregate principal amount of at least $1.0 million and in integral
multiples of $10,000 in excess thereof. Each prepayment pursuant to this Section
3.1 shall be applied pro rata among the Loans.
SECTION 3.2. Mandatory Offers to Prepay.
(a) Prepayments from Asset Sales.
(i) Upon the consummation of an Asset Sale, the Borrower
shall apply, or cause the applicable Restricted Subsidiary to apply,
the Net Cash Proceeds relating to such Asset Sale within 360 days of
receipt thereof either (A) to prepay any Senior Indebtedness and, in
the case of any Senior Indebtedness under any revolving credit
fa-
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cility, effect a permanent reduction in the availability under such
revolving credit facility (whether or not such prepayment and/or
commitment reduction is required), (B) to make an investment in
Replacement Assets or (C) a combination of prepayment and investment
permitted by the foregoing clauses (A) and (B). On the 361st day after
an Asset Sale or such earlier date, if any, as the Board of Directors
of the Borrower or of such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such Asset Sale as set forth in
clauses (A), (B) and (C) of the next preceding sentence (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds
Offer Trigger Date as permitted in clauses (A), (B) and (C) of the next
preceding sentence (each a "Net Proceeds Offer Amount") shall be
applied by the Borrower or such Restricted Subsidiary to make an offer
to prepay the Loans at a price in cash equal to the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of
prepayment (the "Net Proceeds Offer") on a date (the "Net Proceeds
Offer Payment Date") in accordance with the procedures set forth in
Sections 3.3 through 3.5; provided, however, that if at any time any
non-cash consideration received by the Borrower or any Restricted
Subsidiary, as the case may be, in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash, then such
conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in
accordance with this Section 3.2(a). The Borrower may defer the Net
Proceeds Offer until there is an aggregate unutilized Net Proceeds
Offer Amount equal to or in excess of $2.0 million resulting from one
or more Asset Sales (at which time, the entire unutilized Net Proceeds
Offer Amount, and not just the amount in excess of $2.0 million, shall
be applied as required pursuant to this paragraph).
(ii) In the event of the transfer of substantially all (but
not all) of the Property of the Borrower and its Restricted
Subsidiaries as an entirety to a Person in a transaction permitted
under Section 7.1, the successor corporation shall be deemed to have
sold the Properties of the Borrower and its Restricted Subsidiaries not
so transferred for purposes of this Section 3.2(a), and shall comply
with the provisions of this Section 3.2(a) with respect to such deemed
sale as if it were an Asset Sale. In addition, the fair market value of
such Properties of the Borrower or its Restricted Subsidiaries deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this
Section 3.2(a).
(iii) Notwithstanding the two immediately preceding
paragraphs, the Borrower and its Restricted Subsidiaries will be
permitted to consummate an Asset Sale without complying with such
paragraphs to the extent (i) at least 75% of the consideration for such
Asset Sale constitutes Replacement Assets and (ii) such Asset Sale is
for fair market value; provided that any consideration constituting
cash and Cash
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Equivalents received by the Borrower or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds
subject to the provisions of the two preceding paragraphs.
(b) Prepayments Upon Change of Control.
(i) Within 30 days following any Change of Control (each a
"Change of Control Offer Trigger Date"), the Borrower will be obligated
to offer to prepay the Loans (the "Change of Control Offer Amount") at
a price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of prepayment (the
"Change of Control Offer"), on a date (the "Change of Control Offer
Payment Date") in accordance with the procedures set forth in Sections
3.3 through 3.5.
(ii) Prior to the mailing of the notice to the Lenders
provided for in Section 3.3 below but in any event within 30 days
following any Change of Control, the Borrower hereby covenants to (i)
repay in full all Indebtedness under the Senior Credit Facility or to
offer to repay in full all such Indebtedness and to repay the
Indebtedness of each lender under the Senior Credit Facility who has
accepted such offer or (ii) obtain the requisite consents under the
Senior Credit Facility and/or any other Senior Debt which is to remain
outstanding to permit the payment of the Loans.
(c) Prepayments Pursuant to a Restricted Payment Offer. Not
later than the date which is 30 days prior to the making of any Restricted
Payment described in clause (i) or (ii) of Section 6.7(a) with any portion of
the Accrued Portion (each a "Restricted Payment Offer Trigger Date"), the
Borrower will be obligated to offer to prepay the Loans in an amount equal to
such portion of the Accrued Portion (the "Restricted Payment Offer Amount") at a
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of prepayment (the "Restricted Payment
Offer"), on a date in accordance with the procedures set forth in Sections 3.3
through 3.5
SECTION 3.3. Notice and Procedures. (a) On or prior to the
Trigger Date, the Borrower shall mail to each of the Lenders an offer to prepay
Loans (the "Mandatory Prepayment Offer Notice"). Upon receiving a Mandatory
Prepayment Offer Notice, Lenders may elect to have their Loans prepaid in whole
or in part in integral multiples of $1,000 in exchange for cash. To the extent
Lenders properly tender Loans in an amount exceeding the Net Proceeds Offer
Amount pursuant to an Asset Sale or, as the case may be, exceeding the
Restricted Payment Offer Amount pursuant to a Restricted Payment Offer, Loans of
tendering Lenders will be prepaid on a pro rata basis (based on amounts
tendered). A Prepayment Offer shall remain open for a period of 20 Business
Days.
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(b) The notice to the Lenders shall contain all instructions
and materials necessary to enable the Lender to elect to have its Loans prepaid,
including:
(i) that a Net Proceeds Offer, a Change of Control Offer or
Restricted Payment Offer, as the case may be, is being made pursuant to
this Section 3.3 and that Loans of each Lender elected to be prepaid
will be prepaid to the extent required hereunder;
(ii) the prepayment amount, the prepayment price and the
prepayment date, which shall be no earlier than 30 days nor later than
60 days from the date such notice is mailed (the "Payment Date");
(iii) that any Loan accepted for prepayment pursuant to the
Prepayment Offer shall cease to accrue interest after the Payment Date
unless the Borrower shall default in the payment of the prepayment
price of such Loan;
(iv) that if a Lender elects to have a Loan prepaid pursuant
to the Prepayment Offer, it will be irrevocably required to surrender
the related Note, with the form entitled "Option of Holder to Elect
Prepayment" on the reverse of the Note completed, to the Borrower prior
to 5:00 p.m. on the Payment Date; and
(v) that if Loans are prepaid only in part, a new Note of
the same type will be issued in principal amount equal to the unprepaid
portion of the Notes surrendered.
(c) On or before the Payment Date, the Borrower shall (i)
accept for prepayment Loans or portions thereof which are to be prepaid in
accordance with the above, and (ii) make available to the Lenders entitled
thereto in immediately available funds U.S. dollars sufficient to pay the
prepayment price of all Loans to be prepaid.
(d) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, all then outstanding Loans shall be
repaid in full on the Final Maturity Date.
SECTION 3.4. Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or under any
Loan shall be made to the account of the Lender or Lenders entitled thereto not
later than 1:00 P.M. on the date when due and shall be made in U.S. dollars in
immediately available funds. Whenever any payment to be made hereunder or under
any Loan shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
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SECTION 3.5. Notation of Payment. Each Lender agrees that
before assigning any Loan held by it or any part thereof (other than by granting
participations therein) pursuant to Section 10.5, such Lender will make a
notation thereon of all principal payments previously made thereon and of the
date to which interest thereon has been paid and will notify the Borrower of the
name and address of the assignee of that Loan; provided, however, that the
failure to make (or any error in the making of) such a notation or to notify the
Borrower of the name and address of such assignee shall not limit or otherwise
affect the obligation of the Borrower hereunder or under such Loans with respect
to the Loans and payments of principal or interest on any such Loan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
On and as of the Closing Date, the Borrower represents and
warrants to and agrees with each of the Lenders as follows:
SECTION 4.1. Organization. Each GEEG Entity is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the organizational power and authority to carry on its
business as now being conducted and to own and operate the Properties now owned
and being operated by it. Each GEEG Entity is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which such
qualification is necessary under applicable law as a result of the conduct of
its business or the ownership of its Properties, except as would not, singly or
in the aggregate, have a Material Adverse Effect.
SECTION 4.2. Capitalization. At the Closing Date, after giving
effect to the Transactions, the authorized, issued and outstanding capital of
each GEEG Entity is as set forth on Schedule 4.2. All of the issued and
outstanding securities of each GEEG Entity have been duly authorized and validly
issued and are fully paid and non-assessable and none of them have been issued
in violation of any preemptive or other right. All of the Equity Interests of
the Borrower and its Subsidiaries are owned, directly or indirectly, by Parent
other than (1) directors' qualifying shares and (2) Shenzhen Deltak Energy
Systems Co. Ltd., which is owned 40% by the joint venture partner. No GEEG
Entity is a party to or bound by any contract, agreement or arrangement to
issue, sell or otherwise dispose of (including pursuant to any option, warrant
or other right to acquire or purchase) or redeem, purchase or otherwise acquire
any Equity Interests or any other security of the Borrower exercisable or
exchangeable for or convertible into any Equity Interests of any GEEG Entity.
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SECTION 4.3. Authorization, Etc. Each GEEG Entity has the
corporate or other organizational power to enter into the Credit Documents, the
Senior Credit Facility Documents, the Acquisition Documents and the Equity
Investment Documents to which such GEEG Entity is a party and all other
agreements and material instruments and documents executed and delivered by such
GEEG Entity pursuant hereto or thereto (collectively, the "Documents") and to
carry out their respective obligations hereunder and thereunder. Schedule 4.3
constitutes a true and complete list of the Documents, a true and complete copy
of each of which has been furnished to the Lenders. The execution, delivery and
performance of the Documents and the consummation of the transactions
contemplated thereby have been duly authorized by each GEEG Entity (to the
extent a party thereto), and no other proceeding or approval on the part of any
GEEG Entity is necessary to authorize the execution and delivery of the
Documents or the performance of any of the transactions contemplated thereby.
Each of the Documents has been duly executed and delivered by each GEEG Entity
party thereto and is a valid and legally binding agreement of each such GEEG
Entity, enforceable against it in accordance with its terms except that the
enforcement hereof may be subject to the Enforceability Exceptions. The Common
Stock has been duly authorized and upon consummation of the Transactions will be
duly issued, fully paid and non-assessable.
SECTION 4.4. Financial Information. (a) The consolidated
audited balance sheet of the Borrower as of December 31, 1999 and 1998 and the
related consolidated audited statements of operations, cash flows and members'
equity for the fiscal year then ended, a copy of which has been delivered to the
Lenders, have been prepared in accordance with GAAP and fairly present in all
material respects the consolidated financial position, results of operations,
cash flows and changes in members' equity of the Borrower as of the dates and
for the periods indicated.
(b) The consolidated unaudited balance sheet of the Borrower
as of March 31, 2000 and the related consolidated unaudited statements of
operations, cash flows and members' equity for the three months ended March 31,
2000 and 1999, a copy of which has been delivered to the Lenders, have been
prepared in accordance with GAAP and fairly present in all material respects the
consolidated financial position, results of operations, cash flows and changes
in members' equity of the Borrower as of the dates and for the periods
indicated.
(c) The pro forma balance sheet of the Borrower and its
Subsidiaries as of May 27, 2000, giving effect to the Transactions as if they
had occurred on May 27, 2000, (i) complies as to form in all material respects
with the applicable requirements of Regulation S-X promulgated under the
Exchange Act, (ii) except as stated therein has been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements, and (iii) has been properly computed on the bases described therein.
The Borrower believes that the assumptions used in the preparation of such pro
forma balance sheet
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are reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(d) The projected balance sheets and statements of operations,
cash flows and members' equity of the Borrower and its Subsidiaries for the
eight years following the Closing Date (the "Projections") were prepared by the
Borrower in good faith on the basis of information and assumptions that the
Borrower and its senior management believed to be reasonable as of the date of
the Projections and such assumptions are believed by such Persons to be
reasonable as of the Closing Date (it being understood that projections are not
to be viewed as facts and that actual results during the period covered by the
Projections may differ from projected results or financial condition and that
such differences may be material).
SECTION 4.5. Solvency. Immediately after the consummation of
the Transactions, the fair value and present fair saleable value of the assets
of the Borrower and of each Subsidiary Guarantor, respectively, will exceed the
sum of its stated liabilities and identified Contingent Liabilities. Neither the
Borrower nor any Subsidiary Guarantor will be, after giving effect to the
consummation of the Transactions, (i) left with unreasonably small capital with
which to carry on its business as it is proposed to be conducted, (ii) unable to
pay its debts (contingent or otherwise) as they mature or (iii) otherwise
insolvent.
SECTION 4.6. No Material Adverse Change. There has been no
material adverse change in the business assets, operations, prospects or
financial condition of the Borrower and its Subsidiaries, taken as a whole,
since March 31, 2000.
SECTION 4.7. No Violation. Neither the execution, delivery or
performance of any Document nor the consummation of any of the transactions
contemplated thereby (i) will violate or conflict with the charter or by-laws or
similar organizational document of any GEEG Entity, (ii) will result in any
breach of or default under any material provision of any material contract or
agreement to which any GEEG Entity is a party or by which any GEEG Entity is
bound or to which any material portion of its Property is subject, (iii)
violates, is prohibited by or requires any GEEG Entity to obtain or make any
material consent, authorization, approval, registration or filing under any Law
or of any other Person, (iv) will cause any acceleration of maturity of any
material note, instrument or other indebtedness to which any GEEG Entity is a
party or by which any GEEG Entity is bound or with respect to which any GEEG
Entity is an obligor or guarantor, or (v) other than pursuant to the Senior
Credit Facility, will result in the creation or imposition of any Lien upon or
give to any other Person any interest or right (including any right of
termination or cancellation) in or with respect to the equity or any material
portion of the Properties, businesses, agreements or contracts of any GEEG
Entity.
SECTION 4.8. Compliance with Laws, Etc. Each GEEG Entity has
complied with all Laws and all Orders, except as would not have a Material
Adverse Effect.
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SECTION 4.9. Governmental Authorizations and Regulations. (a)
Each GEEG Entity has been in compliance with all Permits required to conduct its
business as presently conducted; and (b) all such Permits are valid, binding,
and in full force and effect, except in the case of either (a) or (b) for such
failures to be in compliance or valid, binding and in full force and effect as
would not, individually or in the aggregate, have a Material Adverse Effect. No
Permit is required in connection with the execution, delivery or performance by
any GEEG Entity of any Document or any of the transactions contemplated thereby,
except as have been obtained or made or for which the failure to obtain or make
would not have a Material Adverse Effect. All such Permits which have been
obtained or made by the date hereof are in full force and effect and not the
subject of any pending or, to the Borrower's knowledge, threatened attack by
appeal or direct proceeding or otherwise.
SECTION 4.10. Employee Matters. There has been no resignation
or termination of employment of any key officer or employee of any GEEG Entity,
and the Borrower has no knowledge of any impending or threatened resignation or
termination of employment of any such person.
SECTION 4.11. Brokers. Except as provided herein and in the
Acquisition Agreement, there are no claims for commissions or fees from any
investment banker, broker, finder, consultant or intermediary hired by or on
behalf of any GEEG Entity in connection with the transactions contemplated by
any Document based on any binding arrangement or agreement.
SECTION 4.12. Insurance. The GEEG Entities maintain insurance
with insurers of recognized financial responsibility against such losses and
risks and in such amounts as are reasonably prudent and customary in the
businesses in which they are engaged. No GEEG Entity (i) has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other material expenditures will have to be made in order to continue such
insurance, except as would not have a Material Adverse Effect, or (ii) has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage on
similar terms, except as would not have a Material Adverse Effect.
SECTION 4.13. Accuracy of Information. None of the factual
information heretofore or contemporaneously furnished in writing to any Lender
by or on behalf of any GEEG Entity in connection with any Credit Document or any
transaction contemplated hereby (including any of the Transactions), taken as a
whole, contains any untrue statement of a material fact, or omits to state any
material fact necessary to make any information not materially misleading in
light of the circumstances under which such information was provided, and no
other factual information hereafter furnished in connection with any Credit
Document by or on behalf of any GEEG Entity to any Lender, taken as a whole,
will contain any untrue state-
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ment of a material fact or will omit to state any material fact necessary to
make any information not materially misleading on the date as of which such
information is dated or certified in light of the circumstances under which such
information was provided.
SECTION 4.14. Representations and Warranties in Other
Documents. The representations and warranties contained in the Acquisition
Documents and the Equity Investment Documents are true and correct in all
material respects and the representations and warranties contained in the Senior
Credit Facility Documents are true and correct, and no material default has
occurred and is continuing under any of them.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Conditions Precedent. The obligation of the
Lenders to make any Loans is subject to the prior or concurrent satisfaction of
each of the following conditions:
(a) All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all
documents incidental thereto shall be reasonably satisfactory in form
and substance to the Lenders, and the Lenders shall have received the
following items, each of which shall be in form and substance
reasonably satisfactory to the Lenders and dated the Closing Date:
(1) The certified copy of each GEEG Entity's charter
or other organizational document, together with a certificate
of status, compliance, good standing or like certificate with
respect to each GEEG Entity issued by the appropriate
government officials of the jurisdiction of its incorporation
or organization, as applicable, and of each jurisdiction in
which it owns any material assets or carries on any material
business, each to be dated a recent date prior to the Closing
Date.
(2) A copy of each GEEG Entity's by-laws or operating
agreement, as applicable, certified by its Secretary or one of
its Assistant Secretaries.
(3) Resolutions of each GEEG Entity's Board of
Directors approving and authorizing the execution, delivery
and performance of each Document (to the extent a party
thereto) and approving and authorizing the making of the Loans
and the consummation of the Transactions, each certified by
its Secretary or one of its Assistant Secretaries as being in
full force and effect without amendment.
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(4) Signature and incumbency certificates with
respect to the officers of each GEEG Entity executing the
Credit Documents.
(5) Notes executed and delivered by the Borrower, for
the aggregate principal amount to be borrowed, drawn to the
order of the Lenders and with appropriate insertions.
(6) Certificates representing the Common Stock, in a
form reasonably satisfactory to the Lenders, authorized and
issued by Parent to the Lenders.
(7) Subsidiary Guarantees required by Section 6.16.
(8) Originally executed copies of the opinion of
White & Case LLP, special counsel for the Borrower,
substantially in the form of Exhibit D and addressed to the
Lenders.
(9) A solvency certificate of the chief financial
officer of the Borrower on behalf of the Borrower and each
Subsidiary Guarantor in the form of Exhibit F attached hereto.
(b) The Lenders shall have received the following items, each
of which shall be in form and substance reasonably satisfactory to the Lenders:
(1) The historical, pro forma and projected financial
statements referred to in Section 4.4.
(2) True and correct copies of the Acquisition
Agreement and all other material agreements or documents
(including opinions and certificates) entered into or
delivered in connection with the Acquisition (the "Acquisition
Documents"), all of which shall be reasonably satisfactory to
the Lenders and in full force and effect.
(3) True and correct copies of the Senior Credit
Facility and all other material agreements or documents
(including opinions and certificates) entered into or
delivered in connection with the Senior Credit Facility (the
"Senior Credit Facility Documents"), all of which shall be
reasonably satisfactory to the Lenders and in full force and
effect.
(4) True and correct copies of each definitive
agreement relating to the Equity Investment and all other
material agreements or documents (including opinions and
certificates) entered into or delivered in connection
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with the Equity Investment (the "Equity Investment
Documents"), all of which shall be reasonably satisfactory to
the Lenders and in full force and effect.
(c) The Acquisition Documents shall have been duly executed
and delivered by all parties thereto. All material conditions to
consummation of the Acquisition thereunder shall be satisfied, and the
Acquisition Documents shall not have been waived or amended in any
material respect without the Lenders' prior consent. The Acquisition
shall have been, or shall simultaneously be, consummated.
(d) The Senior Credit Facility shall have been, or shall
simultaneously be, duly executed and delivered by all parties thereto.
All conditions to borrowing thereunder shall be satisfied or waived and
the Borrower shall have borrowed, or shall simultaneously borrow,
$140.0 million the term loans under the Senior Credit Facility and
shall have at least $53.0 million of undrawn availability under the
revolving credit facility thereunder after giving effect to the
Transactions.
(e) The Equity Investment shall have been consummated and the
Borrower shall have received at least $80.6 million in cash pursuant to
the Equity Investment.
(f) The Shareholders' Agreement shall have been duly executed
and delivered by the parties thereto, and the Shareholders' Agreement
shall be in full force and effect.
(g) The Lenders shall be reasonably satisfied in all material
respects with the corporate, capital and ownership structure of the
GEEG Entities after giving effect to the Transactions to be consummated
on the Closing Date. On the Closing Date, after giving effect to the
Transactions, no GEEG Entity shall have any Indebtedness other than the
Senior Credit Facility, the Loans and other Indebtedness of up to $5.0
million aggregate principal amount.
(h) The GEEG Entities shall have received all material
approvals from Governmental Authorities and third parties necessary for
the consummation of the Transactions being consummated at the Closing
Date, and such approvals shall be in full force and effect as of the
Closing Date. No Order of any Governmental Authority shall enjoin or
restrain the Lenders from making any Loans.
(i) The Borrower shall have reimbursed DLJ Capital Funding,
Inc. and its Affiliates for all of their reasonable out-of-pocket
expenses incurred in connection with the Transactions or otherwise
arising out of the Lenders' Commitments, including the reasonable fees
and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇.
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(j) The Borrower shall have paid to the Lenders the fees payable
pursuant to the Fee Letter.
(k) Since March 31, 2000, there has not been any material adverse
change in the business operations, prospects or financial condition of the
Borrower and its Subsidiaries, taken as a whole.
(l) The representations and warranties of the Borrower in Article IV
shall be true and correct in all material respects at the Closing Date.
(m) No Default shall have occurred and be continuing or shall result
from the making of the Loans at the Closing Date.
(n) The Lenders shall have received a certificate substantially in
the form of Exhibit G, dated the Closing Date and duly executed and
delivered by the chief executive officer and chief financial officer (the
"Authorized Officers") of the Borrower (the "Closing Date Certificate"),
in which certificate the Borrower shall agree and acknowledge that the
statements made therein shall be deemed to be true and correct
representations and warranties of the Borrower as of such date, and, at
the time each such certificate is delivered, such statements shall in fact
be true and correct. All material documents and agreements required to be
appended to the Closing Date Certificate shall be in form and substance
reasonably satisfactory to the Lenders.
Each certificate signed by any officer of any GEEG Entity and
delivered to the Lenders under this Article V shall be deemed to be a
representation and warranty by the Borrower to the Lenders as to the matters
covered thereby.
ARTICLE VI
COVENANTS
The Borrower hereby agrees that, from and after the date hereof and
so long as any Obligations with respect to the Loans remain outstanding and
unpaid, for the benefit of the Lenders:
SECTION 6.1. Information. The Borrower shall deliver, or
cause to be delivered, to the Lenders:
(a) Quarterly Financial Statements. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of the
Borrower (commencing with its quarterly accounting period ending closest
to September 30, 2000), (i) the con-
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solidated balance sheet of the Borrower and its Subsidiaries as at the end
of such quarterly accounting period and the related consolidated
statements of operations, cash flows and members' equity of the Borrower
and its Subsidiaries for such quarterly accounting period and for the
elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, in each case setting forth comparative
figures for the related periods in the prior fiscal year, all of which
shall be in reasonable detail and shall be certified by the president, the
chief financial officer or the treasurer of the Borrower to the effect
that such financial statements fairly present in all material respects the
financial condition of the Borrower and its Subsidiaries as at the date
indicated and the results of their operations and their cash flows for the
period indicated, subject to normal year-end audit adjustments and the
absence of footnotes and (ii) management's discussion and analysis of the
important operational and financial developments during such fiscal
quarter.
(b) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Borrower, (i) the consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of operations, members' equity and
cash flows of the Borrower and its Subsidiaries for such fiscal year, in
each case setting forth comparative figures for the preceding fiscal year
and certified by a "Big Five" accounting firm or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Required Lenders, together with (A) a report of such
accounting firm which report shall be unqualified as to scope and shall
state that such consolidated financial statements fairly present in all
material respects the consolidated financial position of the Borrower and
its Subsidiaries as at the dates indicated and the results of their
operations and cash flows for the periods indicated in conformity with
GAAP (except as otherwise disclosed in such financial statements) and the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards, and (B) a written statement by such accounting firm
stating that in the course of its regular audit of the financial
statements of the Borrower and its Subsidiaries such accounting firm
obtained no knowledge of any Default relating to accounting matters which
has occurred and is continuing or, if in the opinion of such accounting
firm such a Default has occurred and is continuing, a statement as to the
nature and period of existence thereof; provided that such accounting firm
shall not be liable by reason of any failure to obtain knowledge of any
such Default, and (ii) management's discussion and analysis of the
important operational and financial developments during such fiscal year.
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 6.1(a) and (b), a
certificate of the president, the chief financial officer or the treasurer
of the Borrower to the effect that, to the best of such
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officer's knowledge, no Default has occurred and is continuing or, if any
Default has occurred and is continuing, specifying the nature and extent
thereof, which certificate shall set forth in reasonable detail the
calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections 3.2, 6.6,
6.7, 6.8 and 6.15 at the end of such fiscal quarter or year, as the case
may be.
(d) Notice of Default. Promptly upon, and in any event within five
Business Days after, an officer of the Borrower obtains knowledge thereof,
notice of the occurrence of any event which constitutes a Default.
SECTION 6.2. Payment of Taxes. The Borrower shall, and shall cause
its Subsidiaries to, pay and discharge, at or prior to the date upon which
penalties would accrue with respect thereto, all material tax liabilities,
except where the same may be contested in good faith by appropriate proceedings,
and for which appropriate reserves for the accrual of any of the same are
maintained in accordance with GAAP.
SECTION 6.3. Legal Existence. Subject to Article VII hereof, the
Borrower shall do or cause to be done all things necessary to preserve and keep
in full force and effect its legal existence, and the corporate, partnership or
other existence of each Restricted Subsidiary, in accordance with the respective
organizational documents of each Restricted Subsidiary and the rights (charter
and statutory), licenses and franchises of the Borrower and the Restricted
Subsidiaries; provided, however, that the Borrower shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any Restricted Subsidiary if the Board of Directors of the
Borrower shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower and the Restricted Subsidiaries,
taken as a whole.
SECTION 6.4. Maintenance of Properties; Insurance; Compliance with
Law; Conduct of Business; Investment Company Act. (a) The Borrower shall, and
shall cause each Restricted Subsidiary to, at all times cause all material
properties used in the conduct of their business to be maintained and kept in
good condition, repair and working order (reasonable wear and tear and damage
caused by casualty excepted) and supplied with all necessary equipment, and
shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements to the extent and in the manner customary for
companies in similar businesses, unless the Borrower determines in good faith
that the continued maintenance of such property is no longer economically
desirable.
(b) The Borrower will, and will cause each of its Restricted
Subsidiaries to, maintain with financially sound and reputable insurers such
public liability insurance, third party property damage insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of the Borrower and its Restricted
Subsidiaries as may customarily be carried or maintained under similar
circumstances by cor-
45
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porations of established reputation engaged in similar businesses, in each case
in such amounts (giving effect to self-insurance), with such deductibles and
covering such risks as are customary for similarly situated corporations in the
same industry.
(c) The Borrower shall, and shall cause each of its Subsidiaries to,
comply with all statutes, laws, ordinances or government rules and regulations
to which they are subject, except as would not have a Material Adverse Effect.
(d) The Borrower and the Restricted Subsidiaries shall not engage in
any business other than an Existing Business.
(e) No GEEG Entity shall be or become an investment company within
the meaning of the Investment Company Act of 1940, as amended, subject to
regulation thereunder.
SECTION 6.5. Waiver of Stay, Extension or Usury Laws. The Borrower
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead (as a defense or otherwise) or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law which would prohibit or forgive the Borrower from
paying all or any Obligations on the Loans as contemplated herein, wherever
enacted, now or at any time hereafter in force; and (to the extent that it may
lawfully do so) the Borrower hereby expressly waives all benefit or advantage of
any such law.
SECTION 6.6. Financial Covenants. (a) The Borrower shall
not permit the Leverage Ratio as of the last day of any fiscal quarter
occurring during any period set forth below to be greater than the ratio
set forth opposite such period:
Leverage
Period Ratio
12/31/00 to 9/29/01 7.75:1.0
9/30/01 to 12/31/01 7.50:1.0
1/1/02 to 6/30/02 5.50:1.0
7/1/02 to 12/31/02 5.25:1.0
1/1/03 to 12/31/03 4.00:1.0
1/1/04 to 12/31/04 2.60:1.0
1/1/05 and thereafter 2.00:1.0
(b) The Borrower shall not permit the Interest Coverage Ratio as of
the last day of any fiscal quarter occurring during any period set forth below
to be less than the ratio set forth opposite such period:
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Interest Coverage
Period Ratio
12/31/00 to 12/31/01 1.00:1.0
1/1/02 to 12/31/02 1.35:1.0
1/1/03 to 12/31/03 1.65:1.0
1/1/04 to 12/31/04 2.00:1.0
1/1/05 and thereafter 2.40:1.0
SECTION 6.7. Limitation on Restricted Payments. (a) The
Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution on any
Equity Interests of the Borrower or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders of Equity
Interests (in their capacity as such) of the Borrower or any Restricted
Subsidiary (other than any dividends, distributions and payments made to
the Borrower or any Restricted Subsidiary and dividends or distributions
payable to any Person solely in Qualified Equity Interests);
(ii) redeem any Equity Interests of the Borrower or any Restricted
Subsidiary (other than any such Equity Interests owned by the Borrower or
any Restricted Subsidiary);
(iii) redeem or make any principal payment on, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Indebtedness (other than any Subordinated Indebtedness held
by the Borrower or any Restricted Subsidiary); or
(iv) make any Investment (other than Permitted Investments)
(any of the foregoing (other than an exception thereto), a "Restricted
Payment"), unless
(A) no Default shall have occurred and be continuing at the time of
or after giving effect to such Restricted Payment;
(B) immediately after giving effect to such Restricted Payment, the
Borrower would be able to incur $1.00 of additional Indebtedness under
Section 6.8(a); and
(C) immediately after giving effect to such Restricted Payment, the
sum of the aggregate amount of all Restricted Payments (including the fair
market value of any non-cash Restricted Payment) declared or made on or
after the Closing Date (excluding any Restricted Payment described in
clause (ii), (iii), (iv), (v), (vii) (to the extent paid to the Borrower
or any Restricted Subsidiary), (viii), (ix), (x) or (xi) of the
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following paragraph (b) and excluding 50% of any Restricted Payment
described in clause (vi) of the following paragraph (b)) plus the
aggregate amount of all prepayments of Loans pursuant to Section 3.2(c)
does not exceed an amount equal to the sum of the following (the
"Basket"), without duplication:
(1) 50% of Consolidated Net Income (or 100% of Consolidated
Net Loss) for the period (treated as one accounting period)
commencing on the first day of the first fiscal quarter beginning
after the Closing Date and ending on the last day of the most recent
fiscal quarter immediately preceding the date of such Restricted
Payment for which internal financial statements are available; plus
(2) 100% of the aggregate net cash proceeds received by the
Borrower either (x) as capital contributions to the Borrower after
the Closing Date or (y) from the issue and sale (other than to a
Subsidiary of the Borrower) of Qualified Equity Interests after the
Closing Date (other than any issuance and sale of Qualified Equity
Interests financed, directly or indirectly, using funds (i) borrowed
from the Borrower or any of its Subsidiaries until and to the extent
such borrowing is repaid or (ii) contributed, extended, guaranteed
or advanced by the Borrower or any of its Subsidiaries (including in
respect of any employee stock ownership or benefit plan)); plus
(3) the aggregate amount by which Indebtedness (other than any
Subordinated Indebtedness) of the Borrower or any Restricted
Subsidiary is reduced on the Borrower's consolidated balance sheet
upon the conversion or exchange (other than by a Subsidiary of the
Borrower) subsequent to the Closing Date into Qualified Equity
Interests (less the amount of any cash, or the fair value of
property, distributed by the Borrower or any Restricted Subsidiary
upon such conversion or exchange); plus
(4) in the case of the disposition or repayment of any
Investment that was treated as a Restricted Payment made after the
Closing Date, an amount (to the extent not included in the
computation of Consolidated Net Income) equal to the lesser of: (x)
the return in cash of capital with respect to such Investment and
(y) the amount of such Investment that was treated as a Restricted
Payment, in either case, less the cost of the disposition of such
Investment and net of taxes; plus
(5) so long as the Designation thereof was treated as a
Restricted Payment made after the Closing Date, with respect to any
Unrestricted Subsidiary that has been redesignated as a Restricted
Subsidiary after the Closing Date in accordance with Section 6.12,
the Borrower's proportionate interest in
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an amount equal to the excess of (x) the total assets of such
Subsidiary, valued on an aggregate basis at the lesser of book value
and fair market value, over (y) the total liabilities of such
Subsidiary, determined in accordance with GAAP (and provided that
such amount shall not in any case exceed the Designation Amount with
respect to such Restricted Subsidiary upon its Designation); minus
(6) with respect to each Subsidiary of the Borrower which has
been designated as an Unrestricted Subsidiary after the Closing Date
in accordance with Section 6.12, the greater of (x) $0 and (y) the
Designation Amount thereof (measured as of the Date of Designation);
provided, however, that (x) no Restricted Payment described in clause (i) or
(ii) above shall be permitted pursuant to this paragraph until after the third
anniversary of the Closing Date and (y) no Restricted Payment described in
clause (i) or (ii) above shall be permitted pursuant to this paragraph using any
portion of the Basket that accrued during the first two years after the Closing
Date (the "Accrued Portion") unless the Borrower shall first have made a
Restricted Payment Offer in accordance with Section 3.2(c) hereof.
(b) The foregoing provisions will not prevent:
(i) the payment of any dividend or distribution on Equity Interests
within 60 days after the date of declaration of such dividend or
distribution, if at the date of such declaration, such dividend or
distribution would comply with the provisions of this Agreement;
(ii) the redemption of any Equity Interests of the Borrower or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent issue and sale (other than to a Subsidiary of
the Borrower) of, Qualified Equity Interests;
(iii) any Investment to the extent that the consideration
therefor consists of Qualified Equity Interests;
(iv) the redemption of Subordinated Indebtedness made in exchange
for, or out of the net cash proceeds of, a substantially concurrent issue
and sale (other than to a Subsidiary) of, (x) Qualified Equity Interests
or (y) a Permitted Refinancing of such Subordinated Indebtedness;
(v) Restricted Payments to Holdings for the purpose of paying, so
long as all proceeds are promptly used by Holdings to pay, (i) reasonable
fees for audit, legal and similar administrative services in an aggregate
amount not to exceed $150,000 per
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year, (ii) customary fees to non-officer directors of Holdings who are not
affiliated or associated with Affiliates of Holdings and (iii)
out-of-pocket expenses to directors or observers of the Board of Directors
of Holdings;
(vi) so long as the Borrower and Holdings are both not treated for
tax purposes as corporations or associations taxable as corporations or
entities that are subject to an entity level tax for income tax purposes,
Restricted Payments to Holdings in the amounts and at the times specified
in Section 6.1(b) of the Limited Liability Company Agreement of Holdings
(as in effect on the date hereof); provided that no such Restricted
Payment shall be made more than 15 Business Days prior to the due date for
the applicable taxes;
(vii) any Restricted Subsidiary of the Borrower that is not a Wholly
Owned Restricted Subsidiary may make Restricted Payments to its
shareholders generally so long as the Borrower or its respective
Subsidiary which owns the equity interest in the Subsidiary making such
Restricted Payment receives at least its proportionate share thereof
(based upon its relative holding of the equity interest in the Subsidiary
making such Restricted Payment);
(viii) any payments described in Section 6.10(b)(vi);
(ix) the Acquisition;
(x) so long as at the time of such purchase (and after giving
effect thereto) there shall exist no Default, Restricted Payments to
Holdings to permit Holdings to repurchase Management Units from any
Management Investor (i) with proceeds of the key-man life insurance
maintained on the life of such Management Investor or (ii) with cash in an
aggregate amount not exceeding $1.0 million per year; and
(xi) repurchases of Equity Interests of the Borrower deemed to occur
upon the exercise of stock options if such Equity Interests represent a
portion of the exercise price thereof and so long as no cash is paid or
distributed by the Borrower or any of its Restricted Subsidiaries in
connection therewith;
provided, further, however, that no issuance of Qualified Equity Interests
pursuant to clause (ii), (iii) or (iv) shall increase the Basket.
SECTION 6.8. Limitation on Incurrence of Indebtedness. (a) The
Borrower shall not, and shall not cause or permit any Restricted Subsidiary to,
directly or indirectly, incur any Indebtedness; provided, however, that so long
as no Default has occurred and is continuing or would result therefrom, the
Borrower or any Subsidiary Guarantor may incur Indebtedness if, at the time of
such incurrence, the ratio of Consolidated EBITDA to ▇▇▇▇▇▇▇-
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dated Fixed Charges the four quarter period then last ended for which internal
financial statements are available, determined on a pro forma basis, would be
greater than or equal to 2.0 to 1.0.
(b) The foregoing limitations of paragraph (a) of this covenant will not
apply to any of the following:
(i) the Loans incurred on the Closing Date and Permitted
Refinancings thereof;
(ii) Indebtedness of the Borrower or any Subsidiary Guarantor
incurred under the Senior Credit Facility in an aggregate amount
(including the face amount of all letters of credit) not to exceed $205.0
million at any time outstanding, less the aggregate amount of any
mandatory prepayments actually made thereunder from the proceeds of Asset
Sales; provided, however, that if the CFI Acquisition is consummated, the
amount permitted by this clause (ii) shall be increased by $20.0 million;
(iii) Purchase Money Indebtedness, Indebtedness represented by
Capital Lease Obligations and industrial revenue bonds or other similar
governmental or municipal bonds of the Borrower or any Subsidiary
Guarantor and Permitted Refinancings thereof, in an aggregate amount not
to exceed $10.0 million at any time outstanding;
(iv) (1) Indebtedness of any Subsidiary Guarantor owed to and held
by the Borrower or any Subsidiary Guarantor and (2) Indebtedness of the
Borrower owed to and held by any Subsidiary Guarantor which is unsecured
and subordinated in right of payment to the payment and performance of the
Borrower's obligations under the Loans; provided, however, that an
incurrence of Indebtedness that is not permitted by this clause (iv) shall
be deemed to have occurred upon (x) any sale or other disposition of any
Indebtedness of the Borrower or any Subsidiary Guarantor referred to in
this clause (iv) to any Person other than the Borrower or any Subsidiary
Guarantor or (y) any Subsidiary Guarantor that holds Indebtedness of the
Borrower or another Subsidiary Guarantor ceasing to be a Subsidiary
Guarantor;
(v) Interest Rate Protection Obligations of the Borrower or any
Restricted Subsidiary relating to Indebtedness of the Borrower (which
Indebtedness (x) bears interest at fluctuating interest rates and (y) is
otherwise permitted to be incurred under this covenant); provided,
however, that the notional principal amount of such Interest Rate
Protection Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Rate Protection Obligations relate;
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(vi) Indebtedness of the Borrower or any Restricted Subsidiary under
Currency Agreements to the extent that such Currency Agreements are
incurred in the ordinary course of business and not for speculative
purposes;
(vii) Indebtedness of Foreign Subsidiaries owing to the Borrower or
Subsidiary Guarantors (including (x) the then aggregate amount which is
undrawn and available under letters of credit with respect to which the
Borrower or a Subsidiary Guarantor is obligated to reimburse the issuer
thereof for drawings thereunder and a Foreign Subsidiary is the account
party with respect to such letters of credit and (y) the then aggregate
amount which has been drawn under such letters of credit with respect to
which the issuer thereof has not been reimbursed) in an aggregate amount
not to exceed $15.0 million at any time outstanding;
(viii) Indebtedness of Foreign Subsidiaries that are Wholly
Owned Restricted Subsidiaries owing to other Foreign Subsidiaries;
(ix) Indebtedness of Foreign Subsidiaries incurred for working
capital purposes in an aggregate amount at any time outstanding not to
exceed $6.0 million (or its equivalent at the time incurred) at any time
outstanding;
(x) Acquired Indebtedness of the Borrower or any Subsidiary
Guarantor and Permitted Seller Notes in an aggregate amount not to exceed
$20.0 million at any time outstanding;
(xi) guarantees by the Borrower and the Subsidiary Guarantors of
each other's Indebtedness to the extent that such Indebtedness is
otherwise permitted under this Section 6.8;
(xii) Indebtedness of the Borrower or any Subsidiary of the Borrower
arising from agreements of the Borrower or a Subsidiary of the Borrower
providing for indemnification, adjustment of purchase price, earn out or
other similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or a Subsidiary of the
Borrower permitted under this Agreement (other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition); provided that the maximum assumable liability in respect of
all such Indebtedness shall at no time exceed the gross proceeds actually
received by the Borrower and its Subsidiaries in connection with such
disposition; and
(xiii) other Indebtedness (including, without limitation, under the
Senior Credit Facility) of the Borrower or any Subsidiary Guarantor in an
aggregate amount not to exceed $20.0 million at any time outstanding.
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(c) For purposes of determining any particular amount of
Indebtedness under this covenant, Liens or obligations with respect to letters
of credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included.
SECTION 6.9. Limitation on Liens. The Borrower shall not, and shall
not cause or permit any Restricted Subsidiary to, directly or indirectly, incur
any Lien (other than any Permitted Lien) of any kind against or upon any of
their respective properties or assets now owned or hereafter acquired, or any
proceeds, income or profits therefrom securing Indebtedness or trade payables,
unless contemporaneously therewith or prior thereto, (i) in the case of any Lien
securing an obligation that ranks pari passu with the Loans or any Subsidiary
Guarantee, effective provision is made to secure the Loans or such Subsidiary
Guarantee equally and ratably with or prior to such obligation with a Lien on
the same collateral and (ii) in the case of any Lien securing an obligation that
is subordinated in right of payment to the Loans or any Subsidiary Guarantee,
effective provision is made to secure the Loans or such Subsidiary Guarantee
with a Lien on the same collateral that is prior to the Lien securing such
subordinated obligation, in each case, for so long as such obligation is secured
by such Lien.
SECTION 6.10. Limitation on Transactions with Affiliates. (a) The
Borrower shall not, and shall not cause or permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into any transaction or
series of related transactions with or for the benefit of any Affiliate, any
holder of 10% or more of any class of Equity Interests of Parent, the Borrower
or any Restricted Subsidiary (an "Affiliate Transaction"), unless such Affiliate
Transaction is on terms customary for similar arrangements, transactions or
contracts entered into by Persons generally and such terms are no less favorable
to the Borrower or such Restricted Subsidiary than could be obtained in an
arm's-length transaction with a Person that is not an Affiliate. For any
Affiliate Transaction (or series of related Affiliate Transactions that are
similar or part of a common plan) involving an amount or having a fair market
value in excess of $1.0 million, the Borrower shall deliver to the Lenders an
Officers' Certificate stating that a majority of the Disinterested Directors has
determined that the transaction satisfies the above criteria, as evidenced by a
Board Resolution delivered to the Lenders. For any Affiliate Transaction (or
series of related Affiliate Transactions that are similar or part of a common
plan) involving an amount or having a fair market value in excess of $7.5
million or if there shall be no Disinterested Directors, the Borrower shall
deliver to the Lenders a written opinion from an Independent Financial Advisor
to the effect that such transaction is fair, from a financial point of view, to
the Borrower or such Restricted Subsidiary, as the case may be.
(b) Notwithstanding the foregoing, the restrictions set forth in
this covenant shall not apply to (i) transactions exclusively between or among
the Borrower and one or more Wholly Owned Restricted Subsidiaries or exclusively
between or among Wholly Owned Restricted Subsidiaries; (ii) customary directors'
fees, indemnification and similar arrangements,
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employee salaries, bonuses or employment agreements, compensation or employee
benefit arrangements and incentive arrangements with any officer, director or
employee of the Borrower entered into in the ordinary course of business; (iii)
agreements (and transactions pursuant to agreements) in effect on the Closing
Date and listed on Schedule 6.10, as such agreements are in effect on the
Closing Date or as thereafter amended in a manner not adverse to the Lenders;
(iv) loans and advances to officers, directors and employees of the Borrower or
any Restricted Subsidiary for travel, entertainment, moving and other relocation
expenses, in each case made in the ordinary course of business and consistent
with past business practices; (v) any Restricted Payments permitted by Section
6.7 and any Permitted Investment; (vi) so long as no Default has occurred and is
continuing, payments not exceeding, in any fiscal year, $750,000 to Harvest and
its Affiliates and $150,000 to Saw Mill Investments LLC and its Affiliates (or
payments to Holdings to permit Holdings or Parent to make such payments) in
respect of management and advisory services rendered by them to Parent and its
Subsidiaries, so long as such fees accrue ratably throughout the year and are
payable in advance semi-annually, (vii) any sale of Equity Interests of the
Borrower; (viii) consummation of the Transactions and payment of related fees
and expenses not to exceed $15.5 million in the aggregate, in each case pursuant
to the Acquisition Documents, and (ix) purchases and sales of products and
services in the ordinary course of business between the Borrower or any of its
Subsidiaries and TPS Holdings, Inc.
SECTION 6.11. Limitation on Restrictions Affecting Restricted
Subsidiaries. (a) The Borrower shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (x) pay dividends or make any other
distributions to the Borrower or any other Restricted Subsidiary on its Equity
Interests or with respect to any other interest or participation in, or measured
by, its profits, or pay any Indebtedness owed to the Borrower or any other
Restricted Subsidiary, (y) make loans or advances to, or guarantee any
Indebtedness or other obligations of, the Borrower or any other Restricted
Subsidiary or (z) transfer any of its properties or assets to the Borrower or
any other Restricted Subsidiary.
(b) The foregoing shall not prohibit (a) any encumbrance or
restriction existing under or by reason of any agreement in effect on the
Closing Date (including the Senior Credit Facility), as any such agreement is in
effect on such date or as thereafter amended or refinanced but only if such
encumbrance or restriction is no more restrictive than in the agreement being
amended or refinanced; (b) any encumbrance or restriction existing under or by
reason of any agreement relating to any Acquired Indebtedness; provided,
however, such encumbrance or restriction shall not apply to any assets of the
Borrower or any Restricted Subsidiary other than the Restricted Subsidiary
acquired or its assets; (c) customary provisions contained in an agreement that
has been entered into for the sale or disposition of all or substantially all of
the Equity Interests or assets of a Restricted Subsidiary; provided, however,
that (x) such
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encumbrance or restriction is applicable only to such Restricted Subsidiary or
assets and (y) such sale or disposition is made in accordance with this
Agreement; (d) any encumbrance or restriction existing under or by reason of
applicable law; (e) customary provisions restricting subletting or assignment of
any lease governing any leasehold interest of any Restricted Subsidiary; (f)
covenants in purchase money obligations for property acquired in the ordinary
course of business restricting transfer of such property; (g) covenants in
security agreements securing Indebtedness of a Restricted Subsidiary (to the
extent that such Liens were otherwise incurred in accordance with Section 6.9)
that restrict the transfer of property subject to such agreements; (h) covenants
in any Senior Indebtedness; provided that, in the good faith of the Board of
Directors of the Borrower, such covenants are not materially more restrictive
than those in the Senior Credit Facility; or (i) any encumbrances or
restrictions imposed by any amendments or refinancings of the contracts,
instruments or obligations referred to in clauses (a) through (h) above;
provided that, in the good faith of the Board of Directors of the Borrower, the
resulting encumbrances or restrictions are not materially more restrictive than
those existing prior to such amendment or refinancing.
SECTION 6.12. Designation of Unrestricted Subsidiaries. (a)
The Borrower may designate any Subsidiary of the Borrower as an
"Unrestricted Subsidiary" under this Agreement (a "Designation") only if:
(i) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such Designation, the
Borrower could incur $1.00 of additional Indebtedness under Section
6.8(a); and
(iii) the Borrower would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to Section 6.7(a) in an amount
(the "Designation Amount") equal to the fair market value of the
Borrower's proportionate interest in the net worth of such Subsidiary on
such date calculated in accordance with GAAP.
All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted
Subsidiaries.
(b) The Borrower shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, at any time (x) provide credit
support for, subject any of its properties or assets (other than the Equity
Interests of any Unrestricted Subsidiary) to the satisfaction of, or guarantee,
any Indebtedness of any Unrestricted Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness), (y) be liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity
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upon the occurrence of a default with respect to any Indebtedness of any
Unrestricted Subsidiary.
(c) The Borrower may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:
(i) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Agreement.
All Designations and Revocations must be evidenced by resolutions of
the Board of Directors of the Borrower, delivered to the Lenders certifying
compliance with the foregoing provisions.
SECTION 6.13. Limitation on the Issuance and Sale of Equity
Interests of Restricted Subsidiaries. The Borrower shall not sell, and shall not
cause or permit any Restricted Subsidiary, directly or indirectly, to issue or
sell, any Equity Interests of a Restricted Subsidiary, except (i) to the
Borrower or a Wholly Owned Restricted Subsidiary; (ii) the sale of all of the
Equity Interests of a Restricted Subsidiary in accordance with Section 6.15; or
(iii) in the case of issuance of Equity Interests by a Restricted Subsidiary
that is not a Wholly Owned Restricted Subsidiary on the Closing Date or on the
date it became a Restricted Subsidiary if, after giving effect to such issuance,
the Borrower maintains its direct or indirect percentage of beneficial and
economic ownership of such non-Wholly Owned Restricted Subsidiary.
SECTION 6.14. Limitation on Preferred Equity Interests of Restricted
Subsidiaries. The Borrower shall not permit any Restricted Subsidiary to issue
any Preferred Equity Interests or permit any Person (other than the Borrower or
one or more Wholly Owned Restricted Subsidiaries) to hold any such Preferred
Equity Interests.
SECTION 6.15. Limitation on Asset Sales. The Borrower shall
not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale unless:
(a) the Borrower shall apply, or shall cause such Restricted
Subsidiary to apply, the Net Cash Proceeds in accordance with Section
3.2(a) hereof; and
(b) the Borrower or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the fair
market value (including the value of all non-cash consideration) of the
shares and assets subject to such Asset Sale; and
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(c) at least 80% of the consideration received by the Borrower or
such Restricted Subsidiary therefor is in the form of:
(1) cash or Cash Equivalents;
(2) assumption of liabilities (as shown on the Borrower's or
such Restricted Subsidiary's most recent balance sheet) of the
Borrower or any such Restricted Subsidiary (other than liabilities
that are by their terms subordinated to the Loans) by the transferee
of any such assets;
(3) any notes or other obligations received by the Borrower or
any such Restricted Subsidiary from such transferee that are
converted by the Borrower or such Restricted Subsidiary into cash or
Cash Equivalents within 90 days of the receipt thereof (to the
extent of the cash or Cash Equivalents received); or
(4) any combination of the foregoing.
SECTION 6.16. Subsidiary Guarantees. The Borrower shall cause each
Restricted Subsidiary that, directly or indirectly, guarantees, or otherwise
becomes an obligor with respect to, the Senior Credit Facility to execute and
deliver to the Lenders a Subsidiary Guarantee. Each Subsidiary Guarantor shall
be automatically released from its Subsidiary Guarantee when it ceases to
guarantee, or otherwise be an obligor with respect to, the Senior Credit
Facility other than by or as a result of payment under such guarantee.
SECTION 6.17. Use of Proceeds. (a) The proceeds from the issuance of
the Loans on the Closing Date shall be used, together with the proceeds of the
Equity Investment and borrowings of up to $142.0 million under the Senior Credit
Facility, to consummate the Acquisition and pay related transaction costs.
(b) No portion of the proceeds from the issuance of Loans shall be
used in any manner which might cause the issuance or the application of such
proceeds to violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System (the
"Board") or any other regulation of the Board or to violate the Exchange Act.
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ARTICLE VII
SUCCESSOR CORPORATION
SECTION 7.1. Limitation on Consolidation, Merger and Sale of Assets.
(a) The Borrower shall not consolidate with or merge with or into (whether or
not the Borrower is the Surviving Person) any other Person and the Borrower
shall not, and shall not cause or permit any Restricted Subsidiary to, sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially all
of the property and assets of the Borrower and the Restricted Subsidiaries,
taken as a whole, to any Person or Persons in a single transaction or series of
related transactions, unless: (i) either (x) the Borrower shall be the Surviving
Person or (y) the Surviving Person (if other than the Borrower) shall be a
corporation organized and validly existing under the laws of the United States
of America or any State thereof or the District of Columbia, and shall, in any
such case, expressly assume by a joinder and assumption agreement, all of the
obligations of the Borrower under the Credit Documents; (ii) immediately after
giving effect to such transaction, no Default shall have occurred and be
continuing; and (iii) except in the case of a merger of the Borrower with or
into a Wholly Owned Restricted Subsidiary that is a Subsidiary Guarantor and
except in the case of a merger solely for the purpose of reincorporating the
Borrower in another jurisdiction, immediately after giving effect to such
transaction, the Borrower or the Surviving Person (as the case may be) could
incur at least $1.00 of additional Indebtedness under Section 6.8(a) (if the
Borrower shall not be the Surviving Person, all references to the Borrower and
the Restricted Subsidiaries in the definitions used to determine the ratio
therein shall be to the Surviving Person and its Subsidiaries after giving
effect to such transaction (excluding any Unrestricted Subsidiaries)).
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all the properties and assets of one or more Restricted
Subsidiaries the Equity Interests of which constitutes all or substantially all
the properties and assets of the Borrower shall be deemed to be the transfer of
all or substantially all the properties and assets of the Borrower. Transfers of
assets between or among the Borrower and the Subsidiary Guarantors will not be
subject to the foregoing covenant.
(b) In connection with any consolidation, merger or transfer of all
or substantially all of the assets of the Borrower pursuant to this Section 7.1,
the Borrower or the Surviving Person, as applicable, shall deliver, or cause to
be delivered, to the Lenders, in form and substance reasonably satisfactory to
the Required Lenders, an Officers' Certificate and an opinion of counsel, each
stating that such consolidation, merger or transfer and the joinder and
assumption agreement in respect thereto comply with this Section 7.1 and that
all conditions
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precedent herein provided for relating to such transaction or transactions have
been complied with.
SECTION 7.2. Successor Person Substituted. In the event of any
transaction (other than a lease) described in and complying with the conditions
in Section 7.1(a) in which the Borrower is not the Surviving Person and the
Surviving Person is to assume all the Obligations of the Borrower under the
Credit Documents, such Surviving Person shall succeed to, be substituted for,
and may exercise every right and power of, the Borrower and the Borrower shall
be discharged from its Obligations under the Credit Documents.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Events of Default. An "Event of Default" occurs if:
(1) the Borrower fails to pay any principal of the Loans when the
same becomes due and payable at maturity, upon acceleration,
prepayment or otherwise (whether or not such payment is permitted by
the provisions of Article IX);
(2) the Borrower fails to pay any interest on any Loan or any
other amount payable by the Borrower under any Credit Document when
the same becomes due and payable and such failure continues for a
period of 30 days (whether or not such payment is permitted by the
provisions of Article IX);
(3) the Borrower fails to observe or perform any of its
obligations set forth in Section 3.2 (Mandatory Prepayments),
Section 6.6 (Financial Covenants) or Section 7.1 (Limitation on
Consolidation, Merger and Sale of Assets);
(4) the Borrower fails to perform any of its obligations under
Section 6.7 (Limitation on Restricted Payments), Section 6.8
(Limitation on the Incurrence of Indebtedness), Section 6.9
(Limitation on Liens) or Section 6.17 (Use of Proceeds) and such
failure shall continue for a period of 30 days after written notice
from the Lenders of not less than 35% of the aggregate principal
amount of the Loans then outstanding;
(5) the Borrower fails to observe or perform any of its other
obligations in any Credit Document for 60 days after written notice
from the Lenders of not less than 35% of the aggregate principal
amount of the Loans then outstanding;
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(6) any representation or warranty made by the Borrower in any
Credit Document on the Closing Date shall prove to have been
incorrect in any material respect on or as of the date made;
(7) default under any mortgage, indenture or other instrument or
agreement under which there may be issued or by which there may be
secured or evidenced Indebtedness of the Borrower or any Restricted
Subsidiary, whether such Indebtedness now exists or is hereafter
incurred, which default (x) is caused by a failure to pay at final
maturity the principal amount of such Indebtedness, (y) results in
the acceleration of such Indebtedness prior to its express final
maturity or (z) results in the commencement of judicial proceedings
to foreclose upon, or to exercise remedies under applicable law or
applicable security documents to take ownership of, the property or
assets securing such Indebtedness and, in each case, the principal
amount of such Indebtedness, together with the principal amount of
any other such Indebtedness with respect to which an event described
in clause (x), (y) or (z) has occurred and is continuing, aggregates
$7.5 million or more;
(8) the entry of a final judgment or judgments which can no
longer be appealed for the payment of money in excess of $7.5
million in the aggregate (exclusive of any amounts fully covered by
insurance (less any applicable deductible) to the extent the
provider of such insurance is not denying its liability with respect
thereto) against the Borrower or any Material Restricted Subsidiary
and such judgment remains undischarged for a period of 60
consecutive days during which a stay of enforcement of such judgment
shall not be in effect;
(9) the Borrower or any Material Restricted Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become due; or
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(10) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Borrower or any Material
Restricted Subsidiary in an involuntary case,
(B) appoints a Custodian of the Borrower or any Material
Restricted Subsidiary or for all or substantially all of the
property of the Borrower or any Restricted Subsidiary, or
(C) orders the liquidation of the Borrower or any
Material Restricted Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
SECTION 8.2. Acceleration. If an Event of Default (other than an
Event of Default arising under Section 8.1(9) or (10) with respect to the
Borrower) occurs and is continuing, subject to the next succeeding paragraph,
Lenders holding Loans representing 40% of the aggregate principal amounts of
Loans then outstanding may, by written notice to the Borrower and, in the event
that the Senior Credit Facility is in effect, the Senior Credit Facility Agent,
declare to be due and payable the entire principal amount of all the Loans then
outstanding, at the Applicable Premium, plus accrued and unpaid interest to the
date of acceleration and such amounts (i) shall become immediately due and
payable or (ii) if there is any Indebtedness outstanding under the Senior Credit
Facility, shall become due and payable upon the first to occur of an
acceleration under the Senior Credit Facility or 10 days after such notice is
given; provided, however, that after such acceleration but before a judgment or
decree based on such acceleration is obtained, the Required Lenders may rescind
and annul such acceleration and its consequences if all existing Events of
Default, other than the nonpayment of accelerated principal, premium, if any, or
interest that has become due solely because of the acceleration, have been cured
or waived and if the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default specified in Section 8.1(9) or (10) with respect to the Borrower occurs,
the principal amount of all the Loans outstanding, at the Applicable Premium,
plus accrued and unpaid interest thereon, shall be due and payable immediately
without any declaration or other act on the part of the Lenders.
Notwithstanding anything to the contrary in this Agreement or any
other Credit Document, the Lenders may not accelerate the Loans or exercise any
remedies with respect to the Borrower's Obligations under the Credit Documents
(including, without limitation, the filing or commencement of any law suit or
other legal proceeding or the initiation of any bankruptcy proceeding with
respect to the Borrower or any of its Subsidiaries), in each case,
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until the Standstill Period has elapsed; provided, however, that the foregoing
shall not apply if an Event of Default arising under Section 8.1(9) or (10) with
respect to the Borrower has occurred. "Standstill Period" means the period
beginning on the date on which an Event of Default has occurred and ending on
the earliest of (i) the date which is 90 days thereafter, (ii) the date on which
all Senior Indebtedness under the Senior Credit Facility has been paid in full
in cash or is no longer outstanding, and (iii) the date on which the Senior
Credit Facility has been accelerated or the lenders thereof or the Senior Credit
Facility Agent has initiated any bankruptcy proceeding with respect to the
Borrower or any of its Subsidiaries.
SECTION 8.3. Powers and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Lenders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent or subsequent assertion or employment of any
other appropriate right or remedy. Every power and remedy given hereunder or by
law may be exercised from time to time, and as often as shall be deemed
expedient, by the Lenders.
SECTION 8.4. Waiver of Past Defaults and Events of Default. Subject
to Sections 8.2, 8.5 and 10.2 hereof, the Required Lenders have the right to
waive any existing Default or compliance with any provision of any Credit
Document. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Agreement; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
SECTION 8.5. Rights of Lenders to Receive Payment. Subject to the
provisions of the second paragraph of Section 8.2, notwithstanding any other
provision of this Agreement (other than, and subject to, Article IX), the right
of any Lender to receive payment of principal of and interest on the Loans on or
after the respective due dates therefor, or to bring suit for the enforcement of
any such payment on or after such respective dates, is absolute and
unconditional and shall not be impaired or affected without the consent of the
Lender.
SECTION 8.6. Restoration of Rights and Remedies. If any Lender has
instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to such Lender, then and in every case, subject to any
determination in such proceeding, the Borrower and the Lenders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Lenders shall continue as though no such
proceeding had been instituted.
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ARTICLE IX
SUBORDINATION
SECTION 9.1. Loans Subordinate to Senior Indebtedness. The Borrower
covenants and agrees, and each Lender, by its acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set
forth in this Article IX, the payment of the Senior Subordinated Obligations is
hereby expressly made subordinate and subject in right of payment as provided in
this Article IX to the prior indefeasible payment and satisfaction in full in
cash of all Senior Indebtedness.
This Article IX shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of or continue to hold
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
SECTION 9.2. Payment Over of Proceeds upon Dissolution, Etc. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar case or
proceeding in connection therewith, relative to the Borrower or to its
creditors, as such, or to their assets, whether voluntary or involuntary or (b)
any liquidation, dissolution or other winding-up of the Borrower, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any general assignment for the benefit of creditors or any other
marshalling of assets or liabilities of the Borrower, then:
(1) the holders of Senior Indebtedness shall be entitled to
receive indefeasible payment and satisfaction in full in cash of all
amounts due on or in respect of all Senior Indebtedness, before the
Lenders are entitled to receive or retain any payment or
distribution of any kind or character on account of the Senior
Subordinated Obligations (excluding Permitted Subordinated
Reorganization Securities); and
(2) any payment or distribution of assets of the Borrower of any
kind or character, whether in cash, property or securities, by
set-off or otherwise, to which the Lenders would be entitled but for
the provisions of this Article IX (excluding Permitted Subordinated
Reorganization Securities) shall be paid by the liquidating trustee
or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or
their representative or representatives or to the trustee or
trustees under any Agreement under which any instruments evidencing
any such Senior Indebtedness may have been is-
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sued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by each, to
the extent necessary to make payment in full in cash of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to the holders of
such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions
of this Section 9.2, any Lender shall have received any payment or
distribution of assets of the Borrower of any kind or character,
whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of any Senior
Subordinated Obligation (excluding Permitted Subordinated
Reorganization Securities) before all Senior Indebtedness is paid in
full in cash, then such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of the Borrower for
application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Senior Indebtedness in
full in cash, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of Senior
Indebtedness.
The consolidation of the Borrower with, or the merger of the
Borrower with or into, another Person or the liquidation or dissolution of the
Borrower following the conveyance, transfer or lease of its properties and
assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article VII hereof shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the benefit of creditors
or marshaling of assets and liabilities of the Borrower for the purposes of this
Article IX if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in such Article VII hereof.
SECTION 9.3. Suspension of Payment When Designated Senior
Indebtedness in Default. (a) Unless Section 9.2 hereof shall be applicable,
after the occurrence of a default in payment of the principal of or interest
under, or any other payment obligation under, any Designated Senior Indebtedness
occurs and is continuing (a "Payment Default"), no payment or distribution of
any assets or securities of any kind or character (including, without
limitation, cash, property and any payment or distribution which may be payable
or deliverable by reason of the payment of any other Indebtedness of the
Borrower being subordinated to the payment of the Loans by the Borrower) may be
made by or on behalf of the Borrower or any of its Subsidiaries, including,
without limitation, by way of set-off or otherwise, for or on account of any
Senior Subordinated Obligation, or for or on account of the repayment of any
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Senior Subordinated Obligation, and no Lender shall take or receive from the
Borrower or any of its Subsidiaries, directly or indirectly in any manner,
payment in respect of all or any Senior Subordinated Obligation following the
occurrence of a Payment Default on Designated Senior Indebtedness, and such
prohibition shall continue until such default is cured, waived in writing or
ceases to exist. At such time as the prohibition set forth in the preceding
sentence shall no longer be in effect, subject to the provisions of the
following paragraph (b), the Borrower shall resume making any and all required
payments in respect of the Senior Subordinated Obligations, including any missed
payments.
(b) Unless Section 9.2 hereof shall be applicable, upon the
occurrence of an event of default on Designated Senior Indebtedness other than a
Payment Default (a "Non-Payment Event of Default"), no payment or distribution
of any assets or securities of the Borrower of any kind or character (including,
without limitation, cash, property and any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness of the
Borrower being subordinated to the payment of the Loans by the Borrower) shall
be made by or on behalf of the Borrower or any of its Subsidiaries, including,
without limitation, by way of set-off or otherwise, for or on account of any
Senior Subordinated Obligation or for or on account of any Senior Subordinated
Obligation, and no Lender shall take or receive from the Borrower, any of its
Subsidiaries or any other Person, directly or indirectly in any manner, payment
in respect of any Senior Subordinated Obligation, for a period (a "Payment
Blockage Period") commencing on the date of receipt by the Borrower of written
notice from the Senior Credit Facility Agent or, if the Senior Credit Facility
has been terminated, any other representative of the holders of Designated
Senior Indebtedness (the "Representative") of such Non-Payment Event of Default
unless and until (subject to any blockage of payments that may then be in effect
under the preceding paragraph (a)) the earliest to occur of the following
events: (x) 179 days shall have elapsed since the date of receipt of such
written notice by the Borrower, (y) such Non-Payment Event of Default on
Designated Senior Indebtedness shall have been cured or waived in writing or
shall have ceased to exist or such Designated Senior Indebtedness shall have
been discharged or paid in full in cash or (z) such Payment Blockage Period
shall have been terminated by written notice to the Borrower or the Lenders from
the Representative, after which, in the case of clause (x), (y) or (z), the
Borrower shall resume making any and all required payments in respect of the
Senior Subordinated Obligations, including any missed payments. Notwithstanding
any other provisions of this Agreement, no Non-Payment Event of Default on
Designated Senior Indebtedness which existed or was continuing on the date of
the commencement of any Payment Blockage Period initiated by the Representative
shall be, or be made, the basis for the commencement of a second Payment
Blockage Period initiated by the Representative, whether or not within the
Initial Blockage Period unless such first Non-Payment Event of Default shall
have been cured or waived for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such period
that, in either case, would give
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rise to an event of default pursuant to any provisions under which an event of
default previously existed or was continuing, shall constitute a new event of
default for this purpose). In no event shall a Payment Blockage Period extend
beyond 179 days from the date of the receipt by the Lenders of the notice
referred to in this Section 9.3(b) (the "Initial Blockage Period") and only one
such Payment Blockage Period may be commenced within any 360 consecutive days.
Any number of additional Payment Blockage Periods may be commenced during the
Initial Blockage Period; provided, however, that no such additional Payment
Blockage Period shall extend beyond the Initial Blockage Period. After the
expiration of the Initial Blockage Period, no Payment Blockage Period may be
commenced under this Section 9.3(b) until at least 180 consecutive days have
elapsed from the last day of the Initial Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Lenders
shall have received any payment prohibited by the foregoing provisions of this
Section 9.3, then and in such event such payment shall be paid over and
delivered forthwith to the Representative initiating the Payment Blockage
Period, in trust for distribution to the holders of Senior Indebtedness or, if
no amounts are then due in respect of Senior Indebtedness, promptly returned to
the Borrower, or otherwise as a court of competent jurisdiction shall direct.
SECTION 9.4. Subrogation to Rights of Holders of Senior
Indebtedness. Upon the payment in full in cash of all Senior Indebtedness, the
Lenders shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of and
interest on the Loans shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the Lenders would be entitled except for the
provisions of this Article IX, and no payments over pursuant to the provisions
of this Article IX to the holders of Senior Indebtedness by Lenders shall, as
among the Borrower, its creditors other than holders of Senior Indebtedness and
the Lenders, be deemed to be a payment or distribution by the Borrower to or on
account of the Senior Indebtedness.
If any payment or distribution to which the Lenders would otherwise
have been entitled but for the provisions of this Article IX shall have been
applied, pursuant to the provisions of this Article IX, to the payment of all
amounts payable under the Senior Indebtedness of the Borrower, then and in such
case the Lenders shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of such Senior Indebtedness in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Indebtedness in full
in cash.
SECTION 9.5. Provisions Solely to Define Relative Rights. The
provisions of this Article IX are and are intended solely for the purpose of
defining the relative rights of the Lenders on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing
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contained in this Article or elsewhere in this Agreement or in the Notes is
intended to or shall (a) impair, as among the Borrower, its creditors other than
holders of Senior Indebtedness and the Lenders, the obligation of the Borrower,
which is absolute and unconditional, to pay to the Lenders the principal of and
interest on the Loans as and when the same shall become due and payable in
accordance with their terms; (b) affect the relative rights against the Borrower
of the Lenders and creditors of the Borrower other than the holders of Senior
Indebtedness; or (c) prevent any Lender from exercising all remedies otherwise
permitted by applicable law upon a Default under this Agreement, subject to the
rights, if any, under this Article IX and the provisions of Section 8.2 (1) of
the holders of Senior Indebtedness in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of the Borrower referred to in
Section 9.2 hereof, to receive, pursuant to and in accordance with such Section,
cash, property and securities otherwise payable or deliverable to such Lender,
or (2) under the conditions specified in Section 9.3, to prevent any payment
prohibited by such Section or enforce their rights pursuant to Section 9.3(c)
hereof.
The failure to make a payment on account of principal of or interest
on the Loans by reason of any provision of this Article IX shall not be
construed as preventing the occurrence of a Default hereunder.
SECTION 9.6. No Waiver of Subordination Provisions. (a) No right of
any present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Borrower or by any act or failure to
act, in good faith, by any such holder, or by any non-compliance by the Borrower
with the terms, provisions and covenants of this Agreement, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 9.6, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Lenders, without incurring
responsibility to the Lenders and without impairing or releasing the
subordination provided in this Article IX or the obligations hereunder of the
Lenders to the holders of Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against the
Borrower and any other Person; provided, however, that in no event shall any
such actions limit the right of the Lenders to take any action to accelerate the
maturity of the Loans pursuant to Article VIII hereof or to
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pursue any rights or remedies hereunder or under applicable laws if the taking
of such action does not otherwise violate the terms of this Agreement.
SECTION 9.7. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Borrower
referred to in this Article IX, the Lenders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding-up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Lenders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other Indebtedness of the Borrower, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article IX.
SECTION 9.8. No Suspension of Remedies. Nothing contained in this
Article IX shall limit the right of the Lenders to take any action to accelerate
the maturity of the Loans pursuant to Article VIII or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article IX of the holders, from time to time, of Senior Indebtedness.
SECTION 9.9. Amendments. The provisions of this Article IX
may not be amended or modified without the written consent of the
"Required Lenders" as defined in the Senior Credit Facility.
SECTION 9.10. Proofs of Claim. Each Lender hereby agrees that if
such Lender does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 8.1(9) or (10) at least 30
days prior to the expiration of the time to file such claim, the lenders under
the Senior Credit Facility or the Senior Credit Facility Agent are or is hereby
authorized to file an appropriate claim for and on behalf of the Lenders.
SECTION 9.11. Reinstatement. To the extent any payment of Senior
Indebtedness (whether by or on behalf of the Borrower, as proceeds of security
or enforcement of any right of setoff or otherwise) is declared to be fraudulent
or preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred.
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SECTION 9.12. Additional Definitions. As used in this Article IX,
the words "distribution" and "payment" may consist of a distribution, payment or
other transfer of assets by or on behalf of the Borrower (including a repayment
or prepayment of any Loan) from any source, of any kind or character, whether in
cash, securities or other property, by set-off or otherwise.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. All notices, demands and other communications
to any party hereunder shall be in writing (including telecopier 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 hereafter
specify for the purpose to the other parties. Each such notice, demand or other
communication shall be effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified on the signature pages hereof, or
Schedule I in the case of the Lenders, and receipt thereof is confirmed by
telephone or in writing, (ii) if given by mail, four days after such
communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in or pursuant to this Section.
SECTION 10.2. No Waivers. (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.
(b) Subject to Section 9.9, any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Required Lenders; provided, however, that without
the consent of each Lender, an amendment or waiver may not (i) reduce the
aggregate principal amount of Loans whose Lenders must consent to an amendment
or waiver, (ii) reduce the rate or extend the time for payment of interest on
the Loans, (iii) reduce the principal amount of or extend the Stated Maturity of
the Loans, (iv) make the Loans payable in money or property other than as stated
herein or (v) reduce the premium payable upon repayment or prepayment of any
Loan prior to the Final Maturity Date (including upon acceleration).
SECTION 10.3. Indemnification. The Borrower agrees to indemnify and
hold harmless the Lenders, their affiliates and each Person, if any, who
controls any Lender, or any of their 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
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each Lender, their 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, as incurred, reasonable costs of investigating, preparing or
defending any such claim or action, whether or not such Indemnified Party is a
party thereto) relating to or arising out of, or in connection with, any
activities contemplated by any Credit Document or any other services rendered in
connection therewith; provided, however, that the Borrower will not be
responsible for any claims, liabilities, losses, damages or expenses to the
extent they 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 Borrower also agrees that no Indemnified Party
shall have any liability for claims, liabilities, damages, losses or expenses,
including legal fees, incurred by the Borrower in connection with this Agreement
except to the extent they 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.
If any action shall be brought against an Indemnified Party
with respect to which indemnity may be sought against the Borrower under this
Agreement, such Indemnified Party shall promptly notify the Borrower in writing
and the Borrower shall, if requested by such Indemnified Party or if the
Borrower 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 Borrower shall not
affect any obligations the Borrower may have to such Indemnified Party under
this Agreement or otherwise unless the Borrower 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 Borrower 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 Borrower, 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 Borrower, in which case, if such
Indemnified Party notifies the Borrower in writing that it elects to employ
separate counsel at the expense of the Borrower, the Borrower shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Party; provided, however, that the Borrower 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 Lenders.
The Borrower shall not be liable for any settlement of any such action effected
without the written consent of the Borrower (which shall not be unreasonably
withheld) and the Borrower agrees to indemnify and hold harmless each
Indemnified Party from and against any loss or liability
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by reason of settlement of any action effected with the consent of the Borrower.
In addition, the Borrower will not, without the prior written consent of the
Lenders, 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 to 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 Lenders and the other Indemnified Parties,
satisfactory in form and substance to the Lenders, from all liability arising
out of such action, claim, suit or proceeding.
If for any reason the foregoing indemnity is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party harmless to the
extent specified therein, then in lieu of indemnifying such Indemnified Party,
the Borrower 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 appropriate to reflect the relative benefits received
by the Borrower on the one hand and by the Lenders on the other from the
transactions contemplated by this Agreement or (ii) if the allocation provided
by clause (i) is not permitted under applicable law, in such proportion as is
appropriate to reflect not only the relative benefits received by the Borrower
on the one hand and the Lenders on the other, but also the relative fault of the
Borrower and the Lenders as well as any other relevant equitable considerations.
Notwithstanding the provisions of this Section 10.3, the aggregate contribution
of all Indemnified Parties shall not exceed the amount of fees actually received
by the Lenders pursuant to this Agreement. It is hereby further agreed that the
relative benefits to the Borrower on the one hand and the Lenders on the other
with respect to the transactions contemplated hereby shall be deemed to be in
the same proportion as (x) the total value of the transactions contemplated
hereby bears to (y) the fees paid to the Lenders with respect to the
transactions contemplated hereby.
The indemnification, contribution and expense reimbursement
obligations set forth in this Section 10.3 (i) shall be in addition to any
liability the Borrower may have to any Indemnified Party at common law or
otherwise, (ii) shall survive the termination of this Agreement and the other
Credit Documents and the payment in full of the Loans and (iii) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Lenders or any other Indemnified Party.
SECTION 10.4. Expenses; Documentary Taxes. The Borrower agrees
to pay all reasonable out-of-pocket costs, expenses and other payments in
connection with the making of the Loans as contemplated by this Agreement,
including (i) all reasonable fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
incurred in connection with the preparation of the Credit Documents, (ii) all
reasonable out-of-pocket expenses of the Lenders, including fees and
disbursements of one firm of legal counsel, in connection with any waiver or
consent hereunder or under any other Credit Document or any amendment hereof or
thereof and
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(iii) all out-of-pocket expenses of the Lenders, including fees and
disbursements of their counsel, in connection with any collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.
SECTION 10.5. Benefit of Agreement; Assignments;
Participations. (a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and permitted assigns
of the parties hereto subject to the following paragraphs (a) and (b); provided,
however, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of each of the Lenders.
(b) Any Lender (or any Lender together with one or more other
Lenders) (any such Lender, an "Assignor Lender") may assign all or a portion of
such Lender's Loans to any Person (any such Person, an "Assignee Lender");
provided that (i) the Assignor Lender and the Assignee Lender shall execute and
deliver an Assignment Agreement in the form of Exhibit E and upon such execution
and delivery the Assignee Lender shall be deemed automatically to have become a
party hereto and shall have the rights and obligations of a Lender hereunder and
under the other Credit Documents, (ii) at such time Schedule I shall be deemed
modified to reflect the outstanding Loans of such new Lender and of the existing
Lenders and (iii) upon the surrender of the relevant Notes by the assigning
Lender (or, upon such assigning Lender's indemnifying the Borrower for any lost
Note pursuant to a customary indemnification agreement) new Notes will be
issued, at the Borrower's expense, to such new Lender and to the assigning
Lender upon the request of such new Lender or assigning Lender to the extent
needed to reflect the revised outstanding Loans. Each Assignor Lender, to the
extent that rights and obligations hereunder have been assigned and delegated by
it in connection with such Assignment Agreement, shall be released from its
obligations hereunder and under the other Credit Documents.
(c) Any Lender may grant participations in its Loans
hereunder; provided that the Borrower shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
each Loan Document, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (other than with respect to those
provisions of this Agreement which may not be amended without the consent of
each Lender affected thereby) and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not sold such participation.
(d) The Borrower shall maintain at its principal office a
register (the "Register") on which it shall record the name and address of each
Lender from time to time hereunder, the principal amount of the Loans made by
each Lender and each repayment in respect of the principal amount of the Loans
of each Lender. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this
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paragraph. The Borrower agrees to record any assignment upon receipt by it of
notice thereof by the Assignor Lender or the Assignee Lender pursuant to Section
10.1.
(e) The Borrower agrees that it shall maintain the Register
and take such other actions to ensure that the interest, fees, principal and any
other amounts paid with respect to the Loans will qualify for the "portfolio
interest exemption" and, therefore, will not be subject to United States federal
income tax or withholding tax; provided that such amounts are not effectively
connected with a United States trade or business of the lender of such Loan.
(f) All payments made by the Borrower pursuant to this
Agreement shall be made free and clear of, and without deduction or withholding
for, any United States withholding taxes; provided that each Lender that is not
a U.S. person as such term is defined in Section 7701(a)(30) of the Code
delivers to the Borrower, on or prior to such Person becoming a Lender under
this Agreement, a complete original signed copy of IRS form W8-BEN certifying to
such Lender's entitlement to complete exemption from United States withholding
tax with respect to payments to be made under this Agreement.
SECTION 10.6. 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 applicable to contracts made and to be
performed in that state. Each party hereto hereby submits to the non-exclusive
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 the Credit Documents or
the transactions contemplated thereby. 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
THE CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 10.7. Independence of Representations, Warranties and
Covenants. The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exception be deemed to permit any action or omission that would be in
contravention of applicable law.
SECTION 10.8. Severability. If any provision of this
Agreement, or the application of such provision to any Person or circumstance,
is held by a court of competent jurisdiction to be invalid, the remainder of
this Agreement or the application of such provision to other Persons or
circumstances shall in no way be affected thereby; provided, however, that
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the parties shall negotiate in good faith to replace the offending provision or
application with a substitute provision or application that will have
substantially the same economic effect. To the extent that it may effectively do
so under applicable law, each party hereby waives any provision of law which
renders any provision of this Agreement invalid, illegal or unenforceable in any
respect.
SECTION 10.9. Entire Agreement; Benefit. This Agreement, the
other Credit Documents and the Fee Letter constitute the entire contract among
the parties relating to the subject matter hereof. Any previous agreement among
the parties with respect to the subject matter hereof is superseded by this
Agreement and the other Credit Documents.
SECTION 10.10. Headings. Article and Section headings and the
Tables of Contents and Exhibits and Schedules are for convenience of reference
only, are not part of this Agreement and are not to affect the construction of,
or to be taken into consideration in interpreting, this Agreement.
SECTION 10.11. 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.
74
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.
BORROWER:
GLOBAL ENERGY EQUIPMENT GROUP, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
75
LENDERS:
DLJ CAPITAL FUNDING, INC.
By: /s/ ▇▇▇▇▇ ▇. Paradise
-----------------------------------------
Name: ▇▇▇▇▇ ▇. Paradise
Title: Senior Vice President
GOLDEN TREE ASSET MANAGEMENT, L.P.
AS AGENT FOR DEUTSCHE BANK SHARPS ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
GOLDEN TREE ASSET MANAGEMENT, L.P.
AS AGENT FOR HIGHBRIDGE INTERNATIONAL LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
GOLDEN TREE ASSET HIGH YIELD PARTNERS, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
76
MAGNETITE ASSET INVESTORS L.L.C.
By: BLACKROCK FINANCIAL MANAGEMENT, INC.,
AS MANAGING MEMBER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
77
Schedule 2.1
LENDERS' COMMITMENTS
LENDER COMMITMENT
------ ----------
DLJ Capital Funding, Inc. $57,000,000
Golden Tree Asset Management, L.P., as $ 1,000,000
agent for Highbridge International LLC
Golden Tree Asset Management, L.P., as
agent for Deutche Bank Sharps ▇▇▇▇▇▇ Inc. $ 1,000,000
Golden Tree High Yield Partners, L.P. $ 1,000,000
Magnetite Asset Investors L.L.C. $ 7,500,000
