PURCHASE AND SECURITY AGREEMENT
among
Xxxxx Xxxxxx International, Inc.,
WLFI Holdings, Inc., as Parent,
The Guarantors named herein,
The Purchasers named herein,
and
The Bank of New York, as Collateral Agent
Dated as of March 31, 2004
Relating to:
$135,000,000 Aggregate Principal Amount of
Senior Secured Notes due May 1, 2007
TABLE OF CONTENTS
Page
RECITALS 1
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01. Definitions........................................................................................2
1.02. Computation of Time Periods.......................................................................30
1.03. Accounting Terms..................................................................................30
1.04. UCC Terms.........................................................................................30
SECTION 2.
AUTHORIZATION, ISSUANCE and sale OF SECURITIES
2.01. Authorization of Issue............................................................................30
2.02. Sale..............................................................................................30
2.03. Closing...........................................................................................31
SECTION 3.
CONDITIONS TO CLOSING
3.01. Representations and Warranties....................................................................31
3.02. Performance; No Default Under Other Agreements....................................................31
3.03. Compliance Certificates...........................................................................32
3.04. Opinions of Counsel...............................................................................32
3.05. Changes in Corporate Structure....................................................................32
3.06. No Adverse Events.................................................................................32
3.07. Financial Information; Capital Structure..........................................................32
3.08. Proceedings and Documents.........................................................................33
3.09. Purchase Permitted by Applicable Law, etc.........................................................33
3.10. Transaction Documents in Force and Effect; Information............................................33
3.11. No Violation; No Legal Constraints; Consents, Authorizations and Filings, etc.....................34
3.12. Consummation of the Transactions..................................................................34
3.13. Fees..............................................................................................35
3.14. Due Diligence.....................................................................................35
3.15. Other Agreements and Documents....................................................................35
3.16. Simultaneous Purchase.............................................................................35
3.17. Personal Property Requirements....................................................................35
3.18. [Reserved]........................................................................................36
3.19. Intercreditor Agreement...........................................................................36
3.20. Ratings...........................................................................................36
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF THE ISSUERS
4.01. Due Incorporation; Power and Authority............................................................36
4.02. Capitalization....................................................................................36
4.03. Subsidiaries......................................................................................37
4.04. Due Authorization, Execution and Delivery.........................................................37
4.05. Non-Contravention; Authorizations and Approvals...................................................38
4.06. Financial Statements..............................................................................38
4.07. Absence of Undisclosed Liabilities or Events......................................................39
4.08. No Actions or Proceedings.........................................................................40
4.09. Title to Properties...............................................................................40
4.10. Intellectual Property Rights......................................................................41
4.11. Taxes.............................................................................................41
4.12. Employee Benefit Plans............................................................................42
4.13. Private Offering; No Integration or General Solicitation..........................................43
4.14. Eligibility for Resale Under Rule 144A and Regulation S...........................................43
4.15. Status Under Certain Statutes.....................................................................43
4.16. Insurance.........................................................................................44
4.17. Use of Proceeds; Margin Regulations...............................................................44
4.18. Existing Indebtedness; Future Liens...............................................................44
4.19. Compliance with Laws; Permits; Environmental Matters..............................................45
4.20. Solvency..........................................................................................46
4.21. Affiliate Transactions............................................................................46
4.22. Material Contracts................................................................................47
4.23. No Changes to Applicable Law......................................................................47
4.24. Indebtedness......................................................................................47
4.25. Fees..............................................................................................47
4.26. Brokerage Fees....................................................................................47
4.27. Documents and Procedures..........................................................................47
4.28. Absence of Labor Dispute..........................................................................47
4.29. Full Disclosure...................................................................................47
4.30. Consummation of First Lien Credit Facility........................................................48
4.31. Security Documents................................................................................48
SECTION 5.
REPRESENTATIONS OF THE PURCHASERS
5.01. Purchase for Investment...........................................................................49
SECTION 6.
COVENANTS
6.01. Payment of Notes..................................................................................52
6.02. Reports...........................................................................................52
6.03. Compliance Certificate............................................................................53
6.04. Information Regarding Collateral..................................................................54
6.05. Maintenance of Properties.........................................................................54
6.06. Taxes.............................................................................................55
6.07. Stay, Extension and Usury Laws....................................................................55
6.08. Restricted Payments...............................................................................55
6.09. Dividend and Other Payment Restrictions Affecting Subsidiaries....................................57
6.10. Incurrence of Indebtedness and Issuance of Preferred Stock........................................59
6.11. Asset Sales.......................................................................................62
6.12. Transactions with Affiliates......................................................................64
6.13. Liens.............................................................................................65
6.14. Corporate Existence...............................................................................65
6.15. Offer To Repurchase upon Change of Control........................................................65
6.16. Payments for Consent..............................................................................66
6.17. Sale and Leaseback Transactions...................................................................66
6.18. Books, Records....................................................................................67
6.19. Compliance with Law...............................................................................67
6.20. Additional Collateral; Additional Guarantors......................................................67
6.21. Security Interests; Further Assurances............................................................69
6.22. Amendments or Waivers of Certain Documents........................................................69
6.23. Certain Post-Closing Matters......................................................................70
SECTION 7.
SUCCESSORS
7.01. Merger, Consolidation, or Sale of Assets..........................................................72
7.02. Successor Corporation Substituted.................................................................73
SECTION 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
8.01. Option To Effect Legal Defeasance or Covenant Defeasance..........................................73
8.02. Legal Defeasance and Discharge....................................................................73
8.03. Covenant Defeasance...............................................................................74
8.04. Conditions to Legal or Covenant Defeasance........................................................74
8.05. Deposited Money and Government Securities To Be Held in Trust; Other Miscellaneous
Provisions........................................................................................76
8.06. Repayment to Company..............................................................................76
8.07. Reinstatement.....................................................................................76
SECTION 9.
PROVISIONS RELATING TO RESALES OF Securities
9.01. No Integration....................................................................................77
SECTION 10.
THE NOTES
10.01. Form and Execution................................................................................77
10.02. Terms of the Notes................................................................................77
10.03. Denominations.....................................................................................77
10.04. Form of Legend for the Notes......................................................................78
10.05. Payments and Computations.........................................................................78
10.06. Registration; Registration of Transfer and Exchange...............................................79
10.07. Transfer Restrictions.............................................................................80
10.08. Mutilated, Destroyed, Lost and Stolen Notes.......................................................80
10.09. Persons Deemed Owners.............................................................................81
10.10. Cancellation......................................................................................81
10.11. Paying Agent......................................................................................81
10.12. Deposit of Money..................................................................................81
SECTION 11.
EVENTS OF DEFAULT
11.01. Events of Default.................................................................................81
11.02. Remedies..........................................................................................84
11.03. Waiver of Past Defaults...........................................................................85
SECTION 12.
REDEMPTION
12.01. Right of Redemption...............................................................................86
12.02. Partial Redemptions...............................................................................86
12.03. Notice of Redemption..............................................................................86
12.04. Deposit of Redemption Price.......................................................................86
12.05. Notes Payable on Redemption Date..................................................................87
12.06. Notes Redeemed in Part............................................................................87
12.07. Offer to Purchase.................................................................................87
SECTION 13.
GUARANTEES
13.01. Guarantees........................................................................................89
13.02. Execution and Delivery of Guarantees..............................................................90
13.03. Guarantors May Consolidate, Etc. on Certain Terms.................................................90
13.04. Releases of Guarantees............................................................................91
13.05. Limitation on Guarantor Liability.................................................................91
SECTION 14.
EXPENSES, INDEMNIFICATION AND
CONTRIBUTION, AND TERMINATION
14.01. Expenses..........................................................................................92
14.02. Indemnification...................................................................................92
14.03. Contribution......................................................................................94
14.04. Survival..........................................................................................95
14.05. Termination.......................................................................................95
SECTION 15.
[RESERVED]
SECTION 16.
THE COLLATERAL AGENT
16.01. Appointment.......................................................................................96
16.02. Agent in Its Individual Capacity..................................................................96
16.03. Exculpatory Provisions............................................................................96
16.04. Reliance by Collateral Agent......................................................................98
16.05. Delegation of Duties..............................................................................98
16.06. Successor Collateral Agent........................................................................98
16.07. Non-Reliance on the Collateral Agent and Other Noteholders........................................99
16.08. Notice of Default................................................................................100
16.09. Indemnification..................................................................................100
16.10. Concerning the Collateral and the Security Documents.............................................100
16.11. Exercise of Rights...............................................................................102
16.12. No Liability for Clean-up of Hazardous Materials.................................................102
SECTION 17.
COLLATERAL: GENERAL TERMS; GRANT OF SECURITY INTEREST
17.01. Security Interest in the Pledged Collateral......................................................103
17.02. Perfection of Security Interest..................................................................103
17.03. Disposition of Pledged Collateral................................................................105
17.04. Preservation of Pledged Collateral...............................................................105
17.05. Ownership of Pledged Collateral..................................................................105
17.06. Defense of the Collateral Agent's and Noteholders' Interests.....................................106
17.07. [Reserved].......................................................................................106
17.08. [Reserved].......................................................................................106
17.09. [Reserved].......................................................................................106
17.10. [Reserved].......................................................................................106
17.11. Insurance........................................................................................107
17.12. Failure to Pay Insurance.........................................................................108
17.13. Payment of Taxes.................................................................................108
17.14. [Reserved].......................................................................................109
17.15. Receivables......................................................................................109
17.16. Inventory........................................................................................111
17.17. [Reserved].......................................................................................111
17.18. Exculpation of Liability.........................................................................111
17.19. Financing Statements.............................................................................111
17.20. After-Acquired Intellectual Property.............................................................111
17.21. Intercreditor Agreement..........................................................................112
SECTION 18.
MISCELLANEOUS
18.01. Notices..........................................................................................112
18.02. Benefit of Agreement; Assignments and Participations.............................................113
18.03. No Waiver; Remedies Cumulative...................................................................113
18.04. Amendments, Waivers and Consents.................................................................114
18.05. Counterparts.....................................................................................114
18.06. Reproduction.....................................................................................114
18.07. Headings.........................................................................................115
18.08. Governing Law; Submission to Jurisdiction; Venue.................................................115
18.09. Severability.....................................................................................116
18.10. Entirety.........................................................................................116
18.11. Survival of Representations and Warranties.......................................................116
18.12. Incorporation....................................................................................116
18.13. Statements Required in Certificate or Opinion....................................................116
EXHIBITS
Exhibit A......... Form of Note
Exhibit B......... Form of Guarantee
Exhibit C......... Form of Intercreditor Agreement
Exhibit D......... Form of Landlord Access Agreement
Exhibit E......... Form of Stock Pledge Agreement
Exhibit F......... Form of Officers' Certificate
Exhibit G......... Form of Secretary's Certificate
Exhibit H......... Form of Financial Condition Certificate
Exhibit I......... Form of Opinion of Akerman Senterfitt & Xxxxxx, P.A.
Exhibit J......... Form of Opinion of Xxxxxx Xxxxxx & Xxxxxxx llp
Exhibit K......... Form of Supplemental Agreement
Exhibit L......... Form of Collateral Questionnaire
Exhibit M......... Patent Collateral Security Agreement
Exhibit N......... Trademark Collateral Security Agreement
SCHEDULES
Schedule 1.01(a) Mortgaged Property
Schedule 1.01(b) Existing Liens
Schedule 1.01(c) Certain Leases
Schedule 3.04 Local Counsel
Schedule 3.17(vi) Landlord Access Agreements and Bailee Letters
Schedule 4.02 Capitalization
Schedule 4.03 Subsidiaries
Schedule 4.06 Financial Statements
Schedule 4.07(a) Absence of Undisclosed Liabilities
Schedule 4.07(b) Absence of Change
Schedule 4.08 No Actions or Proceedings
Schedule 4.09(a) Title to Properties
Schedule 4.09(b) Real Property Interests
Schedule 4.10 Intellectual Property Rights
Schedule 4.11 Taxes
Schedule 4.12 Employee Benefit Plans
Schedule 4.16 Insurance
Schedule 4.18 Existing Indebtedness
Schedule 4.19 Compliance with Laws
Schedule 4.21 Affiliate Transactions
Schedule 4.22 Material Contracts
Schedule 4.25 Transaction Fees
Schedule 4.26 Brokerage Fees
Schedule 4.27 Documents and Procedures
Schedule 4.28 Labor Disputes
Schedule 4.31 Filing Locations
Schedule 6.23(a) Title Insurance Amounts
Schedule 6.23(c) Additional Patents
Schedule 17.05 Equipment and Inventory
Schedule 17.15(c) Chief Executive Offices
Schedule A Information Relating to Purchasers
PURCHASE AND SECURITY AGREEMENT
PURCHASE AND SECURITY AGREEMENT, dated as of March 31, 2004, by and among
Xxxxx Xxxxxx International, Inc., a Florida corporation (the "Company"), WLFI
Holdings, Inc., a Florida corporation (the "Parent"), each Person listed as a
"Subsidiary Guarantor" on the signature pages hereto (each, a "Guarantor" and,
collectively, the "Guarantors"), each of the purchasers listed as a purchaser on
the signature pages hereto (each, a "Purchaser" and, collectively, the
"Purchasers"), and The Bank of New York, a New York banking corporation, as
collateral agent (together with its successors, in such capacity, the
"Collateral Agent") (this "Agreement").
RECITALS
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, the Company has agreed to sell to the Purchasers, and the Purchasers,
acting severally and not jointly, have agreed to purchase from the Company, an
aggregate of $135.0~million aggregate principal amount of the Company's Senior
Secured Notes due May 1, 2007 in the form of Exhibit A hereto (the "Notes");
WHEREAS, the obligations of the Company under this Agreement and the Notes
will be guaranteed by the Guarantors, such guarantees to be in the form of
Exhibit~B hereto;
WHEREAS, subject to the Transaction Documents (as defined below), the
Company and the Guarantors will at the Closing Time (as defined below) enter
into a $90.0~million Loan and Security Agreement dated the date hereof by and
among the Company, the loan parties signatory thereto, GMAC Commercial Finance
LLC as agent, and the lenders signatory thereto from time to time (the "First
Lien Credit Facility");
WHEREAS, the Company and the Guarantors have duly authorized the creation
and issuance of the Notes and the Guarantees, as applicable, and the execution
and delivery of this Agreement and the other Transaction Documents (as defined
below); and
WHEREAS, all things necessary to make this Agreement, the Notes (when
issued and delivered hereunder), the Guarantees (when validly endorsed on the
Notes) and each of the other Basic Documents valid and binding obligations of
each applicable Issuer in accordance with their respective terms have been done;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01. Definitions. As used herein, the following terms shall have the
meanings specified herein unless the context otherwise requires (it being
understood that defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular):
"Accredited Investor" means any Person that is an "accredited investor"
within the meaning of Rule 501(a)~under the Securities Act.
"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 beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Affiliate Transaction" is defined in Section 6.12.
"Agreement" shall have the meaning assigned thereto in the preamble hereof,
as the same may from time to time be amended or supplemented.
"Applicable Law" means all applicable laws, statutes, treaties, rules,
codes (including building codes), ordinances, regulations, certificates, orders
and licenses of, and published interpretations by, any Governmental Authority
and judgments, decrees, injunctions, writs, permits, orders or like governmental
action of any Governmental Authority (including any Environmental Law and any
laws pertaining to health or safety) applicable to any Issuer or any of its
Subsidiaries or any of their property or operations.
"Asset Sale" means (a)~the sale, lease, conveyance or other disposition of
any assets or rights including, without limitation, by way of a sale and
leaseback, excluding sales of services and products in the ordinary course of
business consistent with past practices, provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole shall be governed by
Section 6.15 and/or Section 7.01 hereof and not by Section 6.11 hereof, and (b)
the issue or sale by the Company or any of its Subsidiaries of Capital Stock of
any of the Subsidiaries. Notwithstanding the foregoing, none of the following
shall be deemed an Asset Sale: (A) a single transaction or a series of related
transactions that (i) involves assets having a fair market value of less than
$2.0~million, (ii) results in net proceeds to the Company and its Restricted
Subsidiaries of less than $2.0~million, or (iii) involves a transfer of assets
by the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned
Restricted Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary, (B) an issuance of Capital Stock by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, (C)
the transfer of obsolete equipment in the ordinary course of business and (D) a
Restricted Payment that is permitted under Section 6.08.
"Asset Sale Offer" has the meaning assigned to such term in Section
6.11(f).
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in that transaction, determined in accordance with (GAAP) of
the obligation of the lessee for the net rental payments during the remaining
term of the lease included in the sale and leaseback transaction (including any
period for which the lease has been extended or may, at the opinion of the
Lessor, be extended).
"Bailee Letter" means an acknowledgment, in form and substance reasonably
satisfactory to the Collateral Agent, of any bailee having possession of any of
the Pledged Collateral, stating that the bailee holds such Pledged Collateral
for the Collateral Agent.
"Bankruptcy Law" means Title 11 of the United States Code or any similar
federal, state or foreign bankruptcy, insolvency, reorganization or other law
for the relief of debtors.
"Basic Documents" means, collectively, this Agreement, the Notes, the
Security Documents, the Guarantees and all certificates, instruments, financial
and other statements and other documents made or delivered in connection
herewith and therewith.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Business Day" means any day other than a Legal Holiday.
"Capital Expenditures" for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Restricted Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including re-placements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Restricted Subsidiaries.
"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 required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (a)~in the case of a corporation, corporate stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means (a)~United States dollars, (b) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (c) certificates of deposit and eurodollar
time deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any domestic commercial bank or U.S. branch of a
foreign commercial bank having capital and surplus in excess of
$200.0-$250.0~million and a Xxxxxxxx Bank Watch Rating of "B" or better, (d)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (b) and (c) above entered into with
any financial institution meeting the qualifications specified in clause (c)
above, and (e) commercial paper having the highest rating obtainable from
Xxxxx'x or S&P and in each case maturing within 270 days after the date of
acquisition.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.
"Change of Control" means the occurrence of any of the following: (a)~the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" or "group" (as such terms are used in Section 13(d)(3) of
the Exchange Act) (whether or not otherwise in compliance with this Agreement)
other than to a Permitted Holder; (b) the adoption of a plan relating to the
liquidation or dissolution of the Company; (c) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" or "group" (as such terms are used in
Section 13(d)(3) of the Exchange Act), other than a Permitted Holder or any
underwriters in connection with an underwritten public offering, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act), except that a person or group shall be deemed to have
"beneficial ownership" of all securities that the person or group has the right
to acquire, whether the right is currently exercisable or is exercisable only
upon the occurrence of a subsequent condition, directly or indirectly, of more
than 35% of the Voting Capital Stock of the Company (measured by voting power
rather than the number of shares); (d) the first day on which more than a
majority of the members of the Board of Directors of the Company are not
Continuing Directors; or (e) the Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of the
outstanding Voting Capital Stock of the Company is converted into or exchanged
for cash, securities or other property, other than any such transaction where
the Voting Capital Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Capital Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Capital Stock of such
surviving or transferee Person immediately after giving effect to such issuance.
"Change of Control Offer" is defined in Section 6.15(a).
"Change of Control Payment" is defined in Section 6.15(a).
"Change of Control Payment Date" is defined in Section 6.15(b).
"Charge(s)" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes,
custom duties, fees, assessments, liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other authority, domestic or
foreign (including, without limitation, the PBGC or any environmental agency or
superfund), upon the Collateral, any Issuer or any of its Affiliates.
"Closing Time" is defined in Section 2.03.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Collateral" shall mean, collectively, all of the Pledged Collateral,
Securities Collateral, the Mortgaged Property and all other property of whatever
kind and nature pledged as collateral under any Security Document.
"Collateral Questionnaire" means a certificate in the form of Exhibit L or
any other form approved by the Collateral Agent, as the same shall be
supplemented from time to time.
"Collateral Account" is defined in Section 17.15(h).
"Collateral Agent" is defined in the preamble to this Agreement.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this Agreement such Commission is not existing and performing the
duties now assigned to it under the Exchange Act, the body performing such
duties at such time. "Company" shall have the meaning assigned in the preamble
to this Agreement and its successors and permitted assigns.
"Company Party" is defined in Section 4.04(c).
"Consolidated Current Assets" at any date, all amounts (other than cash and
Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the
caption "total current assets" (or any like caption) on a consolidated balance
sheet of the Company and its Restricted Subsidiaries at such date.
"Consolidated Current Liabilities" at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Company and its Restricted Subsidiaries at such date, but excluding (a)~the
current portion of any long term Indebtedness of the Company and its Restricted
Subsidiaries and (b) without duplication of clause (a)~above, all Indebtedness
consisting of revolving loans to the extent otherwise included therein.
"Consolidated EBITDA" means, with respect to any Person for any period, the
sum of Consolidated Net Income of such Person for such period plus, to the
extent deducted in calculating Consolidated Net Income for such period, (a)~an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale, plus (b) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, plus (c)
consolidated interest expense whether paid or accrued and whether or not
capitalized (including, without limitation, amortization or write-off of debt
issuance costs and expenses and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), plus (d) depreciation and amortization (including
amortization of goodwill and other intangibles but excluding amortization of
pre-paid cash expenses that were paid in a prior period) other non-cash charges
(including non-cash equity based compensation charges but excluding any non-cash
charge to the extent that it represents an accrual of or reserve for cash
charges in any future period or amortization of a prepaid cash expense that was
paid in a prior period), plus (e) non-cash restructuring charges incurred by the
Company, plus (f) cash restructuring charges to the extent actually incurred by
the Company and provided that the amount of such cash restructuring charges
added back to Consolidated Net Income shall not exceed the lesser of
$1.0 million and the amount of annualized cost savings which the Company
anticipates it will generate as a result of such cash restructuring charges, as
demonstrated by an Officers' Certificate delivered by the Company to the
Collateral Agent certifying in good faith and describing in reasonable detail
such savings, plus (g) any expenses of the Company relating to the Transactions
if not deemed interest expense, minus (h) non-recurring non-cash items
increasing such Consolidated Net Income for such period, minus (i) any income
tax benefit based on net losses of such Person and its Restricted Subsidiaries,
to the extent such amount is not netted against amounts set forth in clause (b)
above. Notwithstanding the foregoing, (j) the provision for taxes based on the
income or profits of, and the depreciation and amortization of, a Restricted
Subsidiary of a Person shall be added to Consolidated Net Income to compute
Consolidated EBITDA only to the extent (and in the same proportion) that the Net
Income of the Restricted Subsidiary was included in calculating the Consolidated
Net Income of the Person and only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company by the Restricted
Subsidiary without prior approval (that has not been obtained) pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to the
Restricted Subsidiary or its stockholders and (ii) the Net Income (but not loss)
of any Unrestricted Subsidiary shall be excluded from Consolidated Net Income,
whether or not distributed to the Company or one of its Restricted Subsidiaries.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that (a)~the Net Income (but not loss) of any Person (other
than the referent Person) that is not a Restricted Subsidiary (including
Unrestricted Subsidiaries) or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash in the relevant period to the referent Person or a
Wholly Owned Restricted Subsidiary thereof, (b) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, (c) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (d) the cumulative effect of a change
in accounting principles shall be excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (a)~was a member of the Board of Directors on the
date of this Agreement or (b) was nominated for election to the Board of
Directors with the approval of a majority of the Continuing Directors who were
members of the Board of Directors at the time of such nomination or election.
"Contract" is defined in Section 4.05.
"Controlling Person" is defined in Section 14.02(a).
"Covenant Defeasance" is defined in Section 8.03.
"Custodian" means any custodian, receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Customer" shall mean and include the account debtor with respect to any
Receivable.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Depository Accounts" is defined in Section 17.15(h).
"Discharge of the First Lien Obligations" shall mean the occurrence of all
of the following: (i) termination of all commitments to extend credit that would
constitute First Lien Obligations under the First Lien Credit Agreement, (ii)
payment in full in cash or Cash Equivalents acceptable to the First Lien
Collateral Agent of all First Lien Obligations under the First Lien Credit
Agreement and (iii) termination, cancellation or cash collateralization of all
outstanding letters of credit constituting First Lien Obligations under the
First Lien Credit Agreement.
"Disclosure Schedule" means all numbered Schedules to this Agreement.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable), or upon the happening of any event (other than as a result of an
optional call for recapitalization by the Company), matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof (other than as a result of a "change of
control" or asset sale), in whole or in part, on or prior to the date that is 91
days after the stated maturity date of the Notes. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or with the
proceeds of an asset sale shall not constitute Disqualified Stock if the terms
of such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 6.08.
"Employee Plan" means an employee benefit plan (other than a Multiemployer
Plan) covered by Title IV of ERISA sponsored by or with respect to which any
Issuer or any of its ERISA Affiliates has or may have liability, including
contingent liability.
"Enforceability Exceptions" means, with respect to any specified
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).
"Environment" means ambient air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface
strata, natural resources, the workplace or as otherwise defined in any
Environmental Law.
"Environmental Action" means (a)~any notice, claim, demand or other
communication alleging liability for investigation, remediation, removal,
cleanup, response, corrective action or other costs, damages to natural
resources, personal injury, property damage, fines or penalties resulting from,
related to or arising out of (i) the presence, Release or threatened Release in
or into the Environment of Hazardous Material at any location or (ii) any
violation of Environmental Law, and shall include, without limitation, any claim
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from, related to or arising out of the presence,
Release or threatened Release of Hazardous Material or alleged injury or threat
of injury to health, safety, the Environment and (b) any investigation,
monitoring, removal or remedial activities undertaken by or on behalf of the
Company or any of its Subsidiaries, whether or not such activities are carried
out voluntarily.
"Environmental Law" means any and all applicable treaties, laws, statutes,
ordinances, regulations, rules, decrees, judgments, orders, consent orders,
consent decrees and other binding requirements, and the common law, relating to
protection of public health or the Environment, the Release or threatened
Release of Hazardous Material, natural resources or natural resource damages, or
occupational safety or health.
"Equipment" shall mean and include as to each Issuer all of such Issuer's
goods (other than Inventory) whether now owned or hereafter acquired and
wherever located including, without limitation, all equipment, machinery,
apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or accessions
thereto.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Investee" is defined in Section 4.03.
"ERISA" is defined in Section 4.12(a).
"ERISA Affiliate" is defined in Section 4.12(b).
"Event of Default is defined in Section 11.01.
"Excess Cash Flow" for any fiscal year of the Company, means the excess, if
any, of (a)~the sum, without duplication, of (i) Consolidated EBITDA for such
fiscal year, and (ii) the aggregate net amount of non-cash loss on the
disposition of property by the Company and its Restricted Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net Income
over (b) the sum, without duplication, of (i) interest expense paid in cash
during such period, (ii) taxes paid in cash during such period (net of refunds
received during such period), (iii) the aggregate amount actually paid by the
Company and its Restricted Subsidiaries in cash during such fiscal year on
account of Capital Expenditures (excluding the principal amount of Indebtedness
incurred to finance such expenditures (but including repayments of any such
Indebtedness incurring during such period or any prior period) and any such
expenditures financed with the Net Proceeds of any Asset Sale), (iv) the
aggregate amount of all scheduled amortization payment of Indebtedness (other
than any repayments related to Excess Cash Flow for the preceding year and other
than repayments made at the Closing Time with proceeds from the Notes and
initial borrowings under the First Lien Credit Facility), and (v) the aggregate
net amount of non-cash gain on the disposition of property by the Company and
its Restricted Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated EBITDA. For purposes of this definition,
Consolidated EBITDA shall be calculated to exclude any management fees paid to
Trivest pursuant to the Management Agreement.
"Excess Proceeds" is defined in Section 6.11(f).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.
"Existing Credit Facility" means that certain Credit Agreement, dated May
5, 2001, by and among the Company, the lenders party thereto, Canadian Imperial
Bank of Commerce, as administrative agent, and the other agents party thereto.
"Existing Indebtedness" means Indebtedness (other than Indebtedness under
the First Lien Credit Facility) in existence on the date of this Agreement,
until that Indebtedness is repaid.
"Extraordinary Receipts" means the total cash insurance proceeds,
condemnation awards or other compensation received by the Company or any of its
Restricted Subsidiaries in respect of any Casualty Event.
"Financial Statements" is defined in Section 4.06.
"FIRREA" shall mean the Federal Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
"First Lien Collateral" means "Collateral" (as defined in the First Lien
Credit Agreement).
"First Lien Collateral Agent" means "Agent" (as defined in the First Lien
Credit Agreement).
"First Lien Credit Agreement" means the First Lien Credit Facility as in
effect at the Closing Time, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted under Section
6.10 hereof) or adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether under one or
more agreements by the same or any other agent, lender or group of lenders.
"First Lien Credit Facility" is defined in the third recital to this
Agreement.
"First Lien Obligations" means "Obligations" (as defined in the First Lien
Credit Agreement).
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (a)~the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period (including amortization of debt
issuance costs or write-off of debt issuance costs), whether paid or accrued and
whether or not capitalized, including, without limitation, original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), (b) any interest expense
on Indebtedness of another Person that is guaranteed by such Person or one of
its Restricted Subsidiaries or secured by a Lien on assets of such Person or one
of its Restricted Subsidiaries (whether or not such guarantee or Lien is called
upon) and (c) the product of (i) all dividend payments, whether or not in cash,
on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Capital Stock (other than
Disqualified Stock) payable solely in Capital Stock (other than Disqualified
Stock) of the Company or to the Company or a Restricted Subsidiary, times (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated EBITDA of such Person and its Restricted
Subsidiaries for that period to the Fixed Charges of such Person and its
Restricted Subsidiaries for the same period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues Preferred Stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to the incurrence, assumption, guarantee or redemption of such Indebtedness, or
the issuance or redemption of such Preferred Stock and the application of the
proceeds therefrom, as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio,
(a)~acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to that reference period and on or prior to the Calculation
Date shall be deemed to have occurred on the first day of the four-quarter
reference period and Consolidated EBITDA for that reference period shall be
calculated without giving effect to clause (c) of the proviso set forth in the
definition of Consolidated Net Income; (b) the Consolidated EBITDA attributable
to discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall be
excluded, as though such operations had been discontinued or such operations or
businesses had been disposed of on the first day of the four-quarter reference
period; and (c) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to the Fixed Charges shall not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date.
"Foreign Subsidiary" shall mean a Subsidiary that is organized under the
laws of a jurisdiction other than the United States or any state thereof or the
District of Columbia.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Agreement.
"General Intangibles" shall mean and include as to each Issuer all of such
Issuer's general intangibles, whether now owned or hereafter acquired including,
without limitation, all payment intangibles, choses in action, commercial tort
claims, causes of action, corporate or other business records, inventions,
designs, patents, patent applications, equipment formulations, manufacturing
procedures, quality control procedures, trademarks, service marks, trade
secrets, goodwill, copyrights, design rights, registrations, licenses,
franchises, customer lists, tax refunds, tax refund claims, computer programs
and computer software, all claims under guaranties, security interests or other
security held by or granted to such Issuer to secure payment of any of the
Receivables by a Customer, all rights of indemnification and all other
intangible property of every kind and nature (other than Receivables).
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States of America pledges its full faith and credit.
"Governmental Authority" means (a)~the government of the United States or
any State or other political subdivision thereof, (b) any government or
political subdivision of any other jurisdiction in which any Issuer conducts all
or any part of its business, or which asserts jurisdiction over any properties
of any Issuer or any of its Subsidiaries or (c) any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to, any such government.
"Governmental Real Property Disclosure Requirements" means any requirement
of Environmental Law requiring notification of the buyer, mortgagee or assignee
of real property, or notification, registration or filing to or with any
Governmental Authority, in connection with the sale, lease, mortgage, assignment
or other transfer (including, without limitation, any transfer of control) of
any real property, establishment or business, of the actual or threatened
presence or release in or into the Environment or the use, disposal or handling
of Hazardous Material on, at, under or near the real property, facility or
business to be sold, mortgaged, assigned or transferred.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including by way of pledge of assets or through letters
of credit or reimbursement agreements in respect thereof), of any part of all of
any Indebtedness.
"Guarantee" means the guarantee by each Guarantor of the obligations of the
Company with respect to the Notes.
"Guarantors" is defined in the preamble to this Agreement.
"Guaranty Reimbursement Agreement" means the Guaranty Reimbursement
Agreement, dated as of March 19, 2003, among the Company, the Parent, the
subsidiary obligors named therein, and Trivest.
"Hazardous Material" means any material, substance, waste, constituent,
compound, pollutant or contaminant including, without limitation, petroleum
(including, without limitation, crude oil or any fraction thereof or any
petroleum product or waste) subject to regulation or which could give rise to
liability under Environmental Law.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (a)~interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of (a)~borrowed money or (b)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or (c) banker's
acceptances or (d) representing Capital Lease Obligations or (e) the deferred
and unpaid balance of the purchase price of any property, except any such
balance that constitutes an accrued expense or trade payable, or (f)
representing any Hedging Obligations if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would appear
as a liability upon a balance sheet of such Person prepared in accordance with
GAAP, as well as all Indebtedness of others secured by a Lien on any asset of
such Person (whether or not such Indebtedness is assumed by such Person) and, to
the extent not otherwise included, the guarantee by such Person of any
Indebtedness of any other Person. The amount of Indebtedness outstanding as of
any date shall be (a)~the accreted value thereof, to the extent any Indebtedness
that does not require current payments of interest, and (b) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness. Except as required by the prior sentence,
Indebtedness shall not include any interest or similar obligations.
"Insurance Policies" shall mean the insurance policies and coverages
required to be maintained by each Issuer which is an owner of Mortgaged Property
with respect to the applicable Mortgaged Property pursuant to Section 17.11 and
all renewals and extensions thereof.
"Insurance Requirements" shall mean, collectively, all provisions of the
Insurance Policies, all requirements of the Issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Issuer which is an owner of Mortgaged Property and
applicable to the Mortgaged Property or any use or condition thereof.
"Intellectual Property" means (a)~all inventions and discoveries (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (b) all
trademarks, service marks, trade dress, logos, trade names and corporate names,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, (c) all copyrightable
works, all copyrights and all applications, registrations and renewals in
connection therewith, (d) all broadcast rights, (e) all mask works and all
applications, registrations and renewals in connection therewith, (f) all
know-how and trade secrets, whether patentable or unpatentable and whether or
not reduced to practice (including ideas, research and development, know-how,
formulas, compositions and manufacturing and production process and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information and business and marketing plans and proposals),
(g) all computer software (including data and related documentation), (h) all
other proprietary rights, (i) all copies and tangible embodiments thereof (in
whatever form or medium) and (j) all licenses and agreements in connection
therewith.
"Intellectual Property Collateral" shall mean, collectively, the patents,
trademarks, copyrights, licenses and goodwill.
"interest" in respect of any Note shall include the interest payable
thereon including any additional interest amounts payable in the case of overdue
payments.
"Interest Payment Date" is defined in Exhibit A.
"Intercreditor Agreement" means an agreement substantially in the form of
Exhibit C.
"Inventory" shall mean and include as to each Issuer all of such Issuer's
now owned or hereafter acquired goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all raw materials, work in process, finished goods and materials and
supplies of any kind, nature or description which are or might be used or
consumed in such Issuer's business or used in selling or furnishing such goods,
merchandise and other personal property, all other inventory of such Issuer, and
all documents of title or other documents representing them.
"Investment Property" shall mean and include as to each Issuer, all such
Issuer's now owned or hereafter acquired investment property, including without
limitation all securities (whether certificated or uncertificated), securities
entitlements, securities accounts, commodities contracts, commodities accounts,
stocks, mutual fund shares, money market shares and Government Securities.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of direct or indirect
loans (including guarantees of Indebtedness or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in Section 6.08.
"Issuers" means, collectively, the Company, the Parent and the Guarantors.
"Landlord Access Agreement" shall mean a Landlord Access Agreement,
substantially in the form of Exhibit D, or such other form as may reasonably be
acceptable to the Collateral Agent.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If any payment date in
respect of the Notes is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no additional interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the UCC (or equivalent statutes) of any jurisdiction.
"Management Agreement" means that certain Amended and Restated Management
Agreement dated as of August 27, 1999 between WinsLoew Furniture, Inc. and
Trivest II, Inc., as amended by that certain amendment dated as of May 8, 2001
with Trivest Partners, L.P., as assignee of Trivest II, Inc. pursuant to an
Assignment and Assumption Agreement among the Company, as successor, Trivest II,
Inc. and Trivest Partners, L.P. effective as of January 1, 2000, and as further
amended by that certain Amendment dated as of March 19, 2003 between the Company
and Trivest Partners, L.P. and as further amended by an Amendment, of even date
herewith, between the Company and Trivest Partners, L.P., as may be further
amended, supplemented or modified from time to time as permitted by this
Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, management, operations, affairs, condition (financial or otherwise),
assets, property, prospects or results of operations of the Issuers and their
respective Subsidiaries taken as a whole, (b) the ability of the Issuers and
their respective Subsidiaries, taken as a whole, to perform any of the
Obligations under any of the Basic Documents, (c) the value of a material
portion of the Collateral, or (d) the practical realization of the benefits of
the Collateral Agent's and each Noteholder's rights and remedies under the Basic
Documents.
"Material Contracts" means any agreements, contracts or arrangements
between the Company or its Subsidiaries, on the one hand, and any third parties,
on the other, that are material to the business, management, operations,
affairs, condition (financial or otherwise), properties, assets, prospects or
results of operations of the Company and its Subsidiaries, taken as a whole.
"Maturity", when used with respect to any Note, means the date on which the
principal of such Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise (including in connection with any offer to purchase that
this Agreement requires the Company to make).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" shall mean an agreement, including, but not limited to, a
mortgage, deed of trust or any other document, creating and evidencing a Lien on
a Mortgaged Property, which shall be in form and substance reasonably
satisfactory to the Collateral Agent or the Required Noteholders, with such
schedules and including such provisions as shall be necessary to conform such
document to applicable local or foreign law or as shall be customary under
applicable local or foreign law.
"Mortgaged Property" shall mean (a)~each Real Property identified on
Schedule 1.01(a)~hereto and (b) each Real Property, if any, which shall be
subject to a Mortgage delivered after the Closing Time pursuant to Section 6.20.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Issuer or any of its ERISA Affiliates has
contributed to, or has been obligated to contribute, at any time during the
preceding (including contingent liabilities) six (6) years, or with respect to
which any Issuer or any of its ERISA Affiliates otherwise has any liability.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of changes related to preferred stock, excluding, however, (a)~any gain
(but not loss), together with any related provision for taxes on such gain (but
not loss), realized in connection with (i) any Asset Sale (including
dispositions pursuant to sale and leaseback transactions) or (ii) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (i) the direct costs
relating to such Asset Sale (including legal, accounting and investment banking
fees, and sales commissions and all title and recording taxes) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, in each case after taking into account any available tax credits
or deductions and any tax sharing arrangements, and (ii) amounts required to be
applied to the repayment of Indebtedness secured by a Prior Lien on the asset or
assets that were the subject of such Asset Sale, provided, however, if the
instrument or agreement governing such Asset Sale requires the transferor to
maintain a portion of the purchase price in escrow (whether as a reserve for
adjustment of the purchase price or otherwise) or to indemnify the transferee
for specified liabilities in a maximum specified amount, the portion of the cash
or Cash Equivalents that is actually placed in escrow or segregated and set
aside by the transferor for such indemnification obligation shall not be deemed
to be Net Proceeds until the escrow terminates or the transferor ceases to
segregate and set aside such funds, in whole or in part, and then only to the
extent of the proceeds released from escrow to the transferor or that are no
longer segregated and set aside by the transferor.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a)~provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a Guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a
default on such Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and (3) as to which the lenders have been
notified in writing that they shall not have any recourse to the stock or assets
of the Company or any of its Restricted Subsidiaries.
"Noteholder" means a Person in whose name a Note is registered on the
Security Register.
"Notes" is defined in the first recital to this Agreement.
"Notification" is defined in Section 4.19.
"Obligations" means all obligations of every nature of the Company from
time to time owed to the Noteholders, the Collateral Agent under the Basic
Documents, whether for principal, reimbursements, interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), fees, penalties, expenses, indemnities, damages or otherwise, and
whether primary, secondary, direct, indirect, contingent, fixed or otherwise.
"Offer Amount" is defined in Section 12.07.
"Offer Period" has the meaning set forth in Section 12.07.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the Chief Administrative Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or
any Vice-President of such Person.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by one Officer of such Person; provided, however, that every Officers'
Certificate with respect to compliance with a covenant or condition provided for
in this Agreement shall include (i)~a statement that the Officer making or
giving such Officers' Certificate has read such condition and any definitions or
other provisions contained in this Agreement relating thereto and (ii)~a
statement at to whether, in the opinion of the signer, such conditions has been
complied with.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Required Noteholders, that meets the requirements of Section
18.13 hereof and in form and substance reasonably acceptable to the Required
Noteholders. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Organizational Documents" shall mean, with respect to any person, (i) in
the case of any corporation, the certificate of incorporation and by-laws (or
similar documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.
"outstanding", when used with respect to the Notes, means, as of the date
of determination, all Notes theretofore executed and delivered under this
Agreement, except:
(i) Notes theretofore cancelled by the Company or delivered to the Company
for cancellation;
(ii) Notes for whose payment or redemption money in the necessary amount
has been theretofore set aside by the Company with a third party in trust for
the holders of such Notes; provided that if such Notes are to be redeemed,
notice of such redemption has been duly given as provided in this Agreement; and
(iii) Notes which have been replaced pursuant to Section 10.08 or in
exchange for or in lieu of which other Notes have been executed and delivered
pursuant to this Agreement, other than any such Notes in respect of which there
shall have been presented to the Company proof satisfactory to it that such
Notes are held by a bona fide purchaser in whose hands such Notes are valid
obligations of the Company;
provided, however, that in determining whether the holders of the requisite
principal amount of the outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
any Issuer or any other obligor upon the Notes or any Affiliate of any Issuer or
of such other obligor shall be disregarded and deemed not to be outstanding.
Notes so owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Required
Noteholders the pledgee's right so to act with respect to such Notes and that
the pledgee is not any Issuer or any other obligor upon the Notes or any
Affiliate of any Issuer or of such other obligor.
"Parent" is defined in the preamble to this Agreement.
"Patent Collateral Security Agreement" means the Patent Collateral Security
Agreement substantially in the form of Exhibit M hereto.
"Paying Agent" is defined in Section 10.12.
"Payment Default" is defined in Section 11.01(f).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" is defined in Section 4.12(b).
"Permits" means all licenses, permits, certificates of need, approvals and
authorizations from all Governmental Authorities required to lawfully conduct a
business as presently conducted.
"Permitted Business" shall mean and include the manufacture, sale or
distribution of products furnished in the furniture manufacturing industry.
Without limiting the foregoing, "Permitted Business" shall include lines of
businesses which are related or complementary to any of the above, including the
acquisition and ownership of firms which are principally but not exclusively
engaged in one or more of the above lines, and any businesses which are, in the
reasonable judgment of the Board of Directors as set forth in a resolution of
the Board of Directors, logical extensions of any of the above.
"Permitted Collateral Liens" means (i) the Liens described in clauses (1),
(2), (3), (4), (5), (6), (8), (9), (10), (12), (13), (14), (15) and (16) of the
definition of "Permitted Liens" and (ii) in the case of Mortgaged Property,
"Permitted Collateral Liens" shall mean the Liens described in clauses (1), (6),
(10), (11), (12), (13), (14) and (15) of the definition of "Permitted Liens";
provided, however, upon the date of delivery of each Mortgage under Section
6.20, 6.21 or 6.23, Permitted Collateral Liens shall mean only those Liens set
forth in Schedule B to the applicable Mortgage; provided further, however, that
such Permitted Collateral Liens incurred under clause (14) of the definition of
"Permitted Liens" will be subordinate to the Liens securing the Notes pursuant
to the terms of an intercreditor agreement satisfactory to the Required
Noteholders.
"Permitted Holder" means Trivest.
"Permitted Indebtedness" has the meaning assigned to such term in Section
6.10(b).
"Permitted Investments" means (a)~any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company; (b) any Investment in Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary in a
Person if as a result of such Investment (i) such Person becomes a Wholly Owned
Restricted Subsidiary or (ii) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Restricted Subsidiary, (d) any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 6.12, (e)
any acquisition of assets solely in exchange for the issuance of Capital Stock
(other than Disqualified Stock) of the Company, (f) other Investments in any
joint venture or partnership or other vehicle engaged in the manufacture,
distribution or sale of any products similar or related to those products sold
by the Company having an aggregate fair market value (measured on the date each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause since the date hereof of not more than $5.0 million; (g) loans and
advances to employees and officers of the Company and its Restricted
Subsidiaries in the ordinary course of business (including loans to be used to
purchase the Company's Capital Stock where such loans are secured by such
Capital Stock) not to exceed $2.0 million at any one time outstanding; and (h)
Investments in securities of trade creditors or customers received pursuant to
any plan of re-organization or similar arrangement upon the bankruptcy or
insolvency of trade creditors or customers or in good faith settlement of
delinquent obligations of trade creditors or customers.
"Permitted Liens" means (1) Liens securing Indebtedness of the Company and
its Restricted Subsidiaries under the First Lien Credit Facility incurred
pursuant to Section 6.10; (2) Liens in favor of the Company or any of its
Restricted Subsidiaries; (3) Liens on property of a Person existing at the time
the Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided, however, that the Liens were in existence
prior to the contemplation of the merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company or the Restricted Subsidiary; (4) Liens on property existing at the time
of acquisition thereof by the Company or any Restricted Subsidiary of the
Company; provided, however, that such Liens were in existence prior to the
contemplation of the acquisition and do not extend by any assets other than the
property so acquired; (5) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds, bids, leases, government
contracts or other obligations of a like nature incurred in the ordinary course
of business; (6) Liens of carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in good faith
by appropriate proceedings, promptly instituted and diligently conducted, for
which adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings) have the
effect of preventing the forfeiture or sale of the property subject to any such
Lien; (7) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security; (8) Liens to secure Indebtedness (including Capital Lease
Obligations) incurred in connection with the acquisition of assets by the
Company or its Restricted Subsidiaries permitted by Section 6.10; provided,
however, that for purposes of this sub-clause (8), (a) the Indebtedness was
incurred by the prior owner of the assets prior to the acquisition and was not
incurred in connection with, or in contemplation of, the acquisition; and (b)
each such Lien occurs only the assets acquired with that Indebtedness; (9) Liens
existing on the date hereof and set forth on Schedule 1.01(b); (10) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided, however, that for purposes of
this sub-clause (10), any reserve or other appropriate provision required in
conformity with GAAP has been made, which proceedings (or orders entered in
connection with such proceedings) have the effect of preventing the forfeiture
or sale of the property subject to any such Lien; (11) easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances that do not interfere in any material respect with the business
of the Company or any of its Restricted Subsidiaries; (12) judgment or
attachment Liens not giving rise to an Event of Default in respect of which the
Company or such Restricted Subsidiary shall in good faith be prosecuting an
appeal or proceeding and (x) at the option and at the request of the Required
Noteholders, to the extent such Lien is in an amount in excess of $500,000, the
Company or such Restricted Subsidiary shall maintain cash reserves in an amount
sufficient to pay and discharge such Lien and the Required Noteholders'
reasonable estimate of all interest and penalties related thereto and (y) such
Lien shall in all respects be subject and subordinate in priority to the Lien
and security interest created and evidenced by the Basic Documents, except if
and to the extent that the law or regulation creating, permitting or authorizing
such Lien provides that such Lien is or must be superior to the Lien and
security interest created and evidenced by the Basic Documents; (13) any
interest or title of a lessor in property subject to any Capital Lease
Obligation or other lease; (14) Liens incurred in the ordinary course of
business of the Company or any Restricted Subsidiary with respect to obligations
that do not exceed $5.0 million at any one time outstanding and that (a) are not
incurred in connection with borrowing money or obtaining advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the affected property or
materially impair its use in the Company's or such Restricted Subsidiary's
business; (15) Liens securing the Notes; (16) Liens securing the Senior
Subordinated Notes Make-Well Indebtedness, provided, however, that such Liens
under this clause (16) will be subordinate to the Liens securing the Notes
pursuant to the terms of an intercreditor agreement satisfactory to the Required
Noteholders; and (17) Liens to secure Purchase Money Indebtedness that is
otherwise permitted under this Agreement; provided that (i) the principal amount
of the Indebtedness secured by such Lien does not exceed 100% of the purchase
price, or the cost of installation, construction or improvement, of the property
or asset to which such Purchase Money Indebtedness relates, (ii) such Lien does
not extend to or cover any Property or asset other than such item of property or
asset and any improvements on such property or asset, and (iii) such Lien is
created with 90 days of such acquisition or the completion of such installation,
construction or improvement, as the case may be.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided, however, that (1) the
principal amount (or accreted value, if applicable) of the Permitted Refinancing
Indebtedness does not exceed the principal amount of (or accreted value, if
applicable), plus accrued interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses,
costs, fees and reasonable prepayment premiums and penalties incurred in
connection therewith); (2) the Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, the
Permitted Refinancing Indebtedness is subordinated in right of payment to the
Notes on terms at least as favorable to the holders of the Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (4) the Indebtedness is
incurred either by the Company or by the Restricted Subsidiary that is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government (including any agency or political subdivision
thereof).
"Plan" is defined in Section~4.12(a).
"Pledge Agreement" means a Stock Pledge Agreement substantially in the form
of Exhibit E among the Company, the Parent, the Subsidiaries identified therein
and the Collateral Agent for the benefit of the Secured Parties.
"Pledged Collateral" means and includes:
(a) all Receivables;
(b) all Equipment;
(c) all General Intangibles;
(d) all Inventory;
(e) all Investment Property;
(f) all Mortgaged Property (provided, however, the Lien of the Collateral
Agent under this Agreement and the Mortgages shall not extend to (x) any lease
identified in Schedule 1.01(a)~hereto, so long as the Company fails to obtain a
consent (in form and substance satisfactory to the Collateral Agent) from the
landlord thereunder to the applicable Mortgage in accordance with Section
6.23(a)(ii); provided further, however, that nothing herein shall relieve the
Company and its Subsidiaries from their obligations under Section 6.23(a)(ii)
and (y) any lease identified in Schedule 1.01(c) hereto);
(g) all of each Issuer's right, title and interest in and to (i) its
respective goods and other property including, but not limited to, all
merchandise returned or rejected by Customers, relating to or securing any of
the Receivables; (ii) all of each Issuer's rights as a consignor, a consignee,
an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in
transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all
supporting obligations and all additional amounts due to any Issuer from any
Customer relating to the Receivables; (iv) other property, including warranty
claims, relating to any goods securing this Agreement; (v) all of each Issuer's
contract rights, rights of payment which have been earned under a contract
right, letter of credit rights (whether or not the letter of credit is evidenced
by a writing), instruments (including promissory notes), documents, chattel
paper (whether tangible or electronic), warehouse receipts, deposit accounts,
money and securities; (vi) if and when obtained by any Issuer, all real and
personal property of third parties in which such Issuer has been granted a lien
or security interest as security for the payment or enforcement of Receivables;
and (vii) any other goods, personal property or real property now owned or
hereafter acquired by any Issuer or in any amendment or supplement hereto or
thereto, or under any other agreement between the Collateral Agent and any
Issuer;
(h) all of each Issuer's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computers, computer
software (owned by any Issuer or in which it has an interest), computer
programs, tapes, disks and documents relating to clauses (a), (b), (c), (d),
(e), (f), or (g) of this definition; and
(j) all proceeds and products of clauses (a), (b), (c), (d), (e), (f), (g)
and (h) of this definition in whatever form, including, but not limited to:
cash, deposit accounts (whether or not comprised solely of proceeds),
certificates of deposit, insurance proceeds (including hazard, flood and credit
insurance), negotiable instruments and other instruments for the payment of
money, chattel paper, security agreements, documents, eminent domain proceeds,
condemnation proceeds and tort claim proceeds.
"Post Closing Letter" means that certain Post-Closing Letter of even date
hereof delivered to the First Collateral Agent under the First Lien Credit
Facility, a copy of which has been provided to the Purchasers.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note.
"preferred stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"Preferred Stock" means the preferred stock of the Company.
"Premises" shall have the meaning assigned thereto in the applicable
Mortgage.
"principal amount" means, when used with respect to any particular Note,
the principal amount of such Note at its Stated Maturity.
"Prior Liens" means Liens existing at the Closing Time to the extent
permitted by the applicable Basic Documents.
"property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"PUHCA" is defined in Section 4.15.
"Purchase Date" has the meaning set forth in Section 12.07.
"Purchase Money Indebtedness" means Indebtedness of any Person incurred in
the normal course of business of such Person for the purpose of financing all or
any part of the purchase price, or the cost of installation, construction or
improvement of, any property or asset.
"Purchase Price" is defined in Section 2.02.
"Purchaser Indemnified Person" is defined in Section 14.02(a).
"Purchasers" is defined in the preamble to this Agreement.
"Real Property" shall mean, collectively, all right, title and interest
(including any leasehold estate) in and to any and all parcels of or interests
in real property owned, leased or operated by any person, whether by lease,
license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.
"Receivables" shall mean and include, as to each Issuer, all of such
Issuer's accounts (including, without limitation, all health-care insurance
receivables), contract rights, instruments (including promissory notes and other
instruments evidencing Indebtedness owed to Issuers by their Affiliates),
documents, chattel paper (whether tangible or electronic), general intangibles
relating to accounts, drafts and acceptances, and all other forms of obligations
owing to such Issuer arising out of or in connection with the sale, lease or
other disposition of Inventory or the rendition of services, all guarantees and
other security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to the Collateral
Agent hereunder.
"Redemption Date", when used with respect to any Note to be redeemed, means
the date fixed for such redemption by or pursuant to this Agreement.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Agreement.
"Reference Date" means December~31, 2003.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such Indebtedness. "Refinanced" or
"Refinancing" shall have correlative meanings.
"Regular Record Date" is defined in Section 10.05.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.
"Reportable Event" means an event described in Section 4043 of ERISA (other
than an event for which the requirement of 30-day notice to the PBGC has been
waived under the regulations promulgated under such Section).
"Repurchase Offer" has the meaning set forth in Section 12.07.
"Required Noteholders" means Noteholders holding more than 50% of the
aggregate principal amount of outstanding Notes.
"Requirements of Law" means, collectively, any and all requirements of any
Governmental Authority including any and all laws, ordinances, rules,
regulations or similar statutes or case law.
"Response Action" means (a)~"response" as such term is defined in CERCLA,
42 U.S.C. ~9601(24), and (b)~all other actions required by any Governmental
Authority or voluntarily undertaken to: (i)~clean up, remove, treat, xxxxx or in
any other way address any Hazardous Material in the Environment, (ii)~prevent
the Release or threatened Release, or minimize the further Release, of any
Hazardous Material or (iii)~perform studies and investigations in connection
with, or as a precondition to, clause (i) or (ii) above.
"Restricted Investments" means Investments other than Permitted
Investments.
"Restricted Payments" has the meaning assigned to such term in Section 6.08.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person more than 365 days after the
acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement is the date of the
last payment of rent or any other amount due under such arrangement prior to the
first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"Secured Parties" means, collectively, the Collateral Agent and the
Noteholders.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder.
"Securities" means, collectively, the Notes and the Guarantees.
"Securities Collateral" shall have the meaning assigned to such term in the
Pledge Agreement.
"Security Documents" means this Agreement, the Pledge Agreement, the
Intercreditor Agreement, the Mortgages, the Trademark Collateral Security
Agreement, Patent Collateral Security Agreement and each other security document
or pledge agreement delivered in accordance with applicable local or foreign law
to grant a valid, perfected security interest in any property as collateral for
the Obligations, and all UCC or other financing statements or instruments of
perfection required by this Agreement, the Pledge Agreement, any Mortgage or any
other such security document or pledge agreement to be filed with respect to the
security interests in property and fixtures created pursuant to this Agreement,
the Pledge Agreement or any Mortgage and any other document or instrument
utilized to pledge as collateral for the Obligations any property.
"Security Register" has the meaning given to such term in Section 10.06(a).
"Senior Subordinated Notes" means the 12 3/4% Senior Subordinated Notes Due
2007 of the Company.
"Senior Subordinated Notes Indenture" means the Indenture dated August 24,
1999 governing the Senior Subordinated Notes.
"Senior Subordinated Notes Make-Well Indebtedness" is defined in Section
6.10(b)(12).
"Significant Subsidiary" means any Restricted Subsidiary of the Company
that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date of this Indenture.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they mature
in the normal course of business, (b) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed as the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Stated Maturity" means, with respect to any Note or any installment of
interest thereon, the dates specified in such Note as the fixed date on which
the principal of such Note or such installment of interest is due and payable,
and when used with respect to any other Indebtedness, means the date specified
in the instrument governing such Indebtedness as the fixed date on which the
principal of such Indebtedness or any installment of interest is due and
payable.
"Subordinated Debt" means the Senior Subordinated Notes and any permitted
refinancing thereof.
"Subordinated Debt Documents" means the Subordinated Notes Documents and
each document governing or pursuant to which is issued any other Subordinated
Debt, as the same may be in effect from time to time in accordance with the
terms hereof and thereof.
"Subordinated Notes Documents" means the Senior Subordinated Notes, the
Senior Subordinated Notes Indenture and all other material documents executed
and delivered with respect to the Senior Subordinated Notes or the Senior
Subordinated Notes Indenture, as in effect at the Closing Time and as the same
may be modified, supplemented, restated and/or amended from time to time in
accordance with the terms hereof and thereof.
"Subsidiary" means, with respect to a Person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (b) any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (ii)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantors" means the Subsidiaries of the Company listed as
Subsidiary Guarantors to this Agreement and any other Subsidiary which is a
guarantor of the Notes, including any Person that executes or is required after
the Closing Time to execute a Guarantee pursuant to Section 6.20, until a
successor replaces such party pursuant to the applicable provisions of this
Agreement and, thereafter, shall mean such successor.
"Tax Returns" shall mean all returns, declarations, reports, estimates,
information returns and statements required to be filed with any Governmental
Authority in respect of any Taxes.
"Taxes" shall mean (i)~all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including, without limitation, all
net income, alternative minimum, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, assessments and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or other additional amounts imposed by any
taxing authority in connection with any item described in clause (i) and
(iii) all transferee, successor, joint and several, contractual or other
liability (including, without limitation, liability pursuant to Treas. Reg.
1.1502-6 (or any similar state, local or foreign provision)) in respect of any
items described in clause (i) or (ii).
"Title Company" shall mean any title insurance company as shall be retained
by the Company and reasonably acceptable to the Collateral Agent.
"Title Policy" shall have the meaning assigned to such term in Section
6.23.
"Trademark Collateral Security Agreement" means the Trademark Collateral
Security Agreement substantially in the form of Exhibit N hereto.
"Transaction Documents" means, collectively, the Basic Documents, the First
Lien Credit Facility and all documents, instruments and agreements related to
the foregoing.
"Transactions" means the transactions provided for in, or contemplated by,
the Transaction Documents.
"Trivest" means Trivest Partners, L.P. and/or any of its Affiliates
(including, Trivest Fund II, Ltd., Trivest Fund III, L.P., Trivest Furniture
Partners I, Ltd. and Trivest Furniture Partners II, Ltd.).
"UCC" shall mean the Uniform Commercial Code as in effect from time to time
(except as otherwise specified) in any applicable state or jurisdiction.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Resolution of
the Board of Directors; but only to the extent that such Subsidiary: (a)~has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company; (c) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional Capital Stock or (y) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries; and (e) has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries. Any such designation by
the Board of Directors shall be evidenced to the Noteholders by providing to the
Collateral Agent a certified copy of the resolution of the Board of Directors
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions and was permitted by
Section 6.08. If, at any time, any Unrestricted Subsidiary would fail to meet
the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of this Agreement and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be Incurred as of such date under Section 6.10, the Company shall
be in default of such Section 6.10). The Board of Directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 6.10, calculated
on a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period, and (ii) no Default would be in existence
following such designation.
"Voting Stock" shall mean, with respect to any Person, any class or classes
of Equity Interests pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a)~the aggregate
outstanding principal amount of such Indebtedness on such date into (b) the sum
of the total of the products obtained by multiplying (i) the amount of each
scheduled installment, sinking fund, serial maturity or other required payment
of principal including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person, 99% or more of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by that Person or by one or more Wholly Owned Restricted
Subsidiaries of that Person and one or more Wholly Owned Restricted Subsidiaries
of that Person.
1.02. Computation of Time Periods. For purposes of computation of periods
of time hereunder, the word "from" means "from and including" and the words "to"
and "until" each mean "to but excluding."
1.03. Accounting Terms. Accounting terms used but not otherwise defined
herein shall have the meanings provided, and be construed in accordance with,
GAAP.
1.04. UCC Terms. All terms used herein and defined in the UCC shall have
the meaning given therein unless otherwise defined herein.
SECTION 2.
AUTHORIZATION, ISSUANCE and sale OF SECURITIES
2.01. Authorization of Issue. (i)~~The Company has authorized the issue and
sale of $135.0~million aggregate principal amount of the Notes, each Note to be
in the form of Exhibit~A hereto, and (ii)~each Guarantor has authorized the
issue of its Guarantee of the Notes, each such Guarantee to be in the form of
Exhibit B hereto.
2.02. Sale. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Purchaser, and each Purchaser, acting severally and not
jointly, agrees to purchase from the Company, the aggregate principal amount of
Notes set forth in Schedule~A opposite the name of such Purchaser at 100% of the
principal amount thereof (the "Purchase Price").
2.03. Closing. The purchase and sale of the Notes pursuant to this
Agreement shall occur at the offices of Xxxx & Hessen, LLP at 9:00 a.m., New
York City time, on March 31, 2004, or such other time as shall be agreed upon by
the Purchasers and the Company (such time and date of payment and delivery being
herein called the "Closing Time"). At the Closing Time, the Company will deliver
to each Purchaser certificates for the Notes to be purchased by such Purchaser
at the Closing Time, in such denominations (in a minimum principal amount of
$2.5 million (unless a Purchaser is purchasing a lesser amount) and in any
greater amount in integral multiples of $1,000) as such Purchaser may request,
dated the Closing Time and registered in such name(s) as such Purchaser may
request, against payment by such Purchaser to the Company or to its order by
wire transfer of immediately available funds in the amount of the Purchase Price
to be paid by such Purchaser therefor in accordance with Section 2.02 to such
bank account or accounts as the Company may request in writing at least two
Business Days prior to the Closing Time.
SECTION 3.
CONDITIONS TO CLOSING
Each Purchaser's several obligation to purchase and pay for the Notes to be
purchased by it at the Closing Time is subject to the satisfaction or waiver by
each Purchaser prior to or at the Closing Time of each of the conditions
specified below in this Section 3:
3.01. Representations and Warranties. Each of the representations and
warranties of the Issuers in this Agreement and in each of the other Transaction
Documents shall be true and correct when made and at and as of the Closing Time
as if made on and as of the Closing Time (unless expressly stated to relate to a
specific earlier date other than the date hereof, in which case such
representations and warranties shall be true and correct as of such earlier
date).
3.02. Performance; No Default Under Other Agreements. The Issuers and each
of their respective Subsidiaries shall have performed and complied in all
material respects with all agreements and conditions contained in this Agreement
and each of the other Transaction Documents (other than as set forth in the Post
Closing Letter) required to be performed or complied with by any of them prior
to or at the Closing Time, and after giving effect to the issue and sale of the
Securities and the other Transactions (and the application of the proceeds
thereof as contemplated by Section 4.17 hereof and the other Transaction
Documents) no Default or Event of Default shall have occurred and be continuing
under this Agreement and no default or event of default shall have occurred and
be continuing under any of the other Transaction Documents (unless expressly
waived in writing by the Required Noteholders).
3.03. Compliance Certificates.
(a) Officers' Certificate. Each of the Issuers shall have delivered to the
Purchasers an Officers' Certificate, dated the Closing Time, in the form of
Exhibit F hereto, certifying that the conditions specified in this Section 3
have been fulfilled.
(b) Secretary's Certificate. Each of the Issuers shall have delivered to
the Purchasers a certificate in the form of Exhibit G hereto certifying as to
such Issuer's certificate of incorporation, bylaws and resolutions attached
thereto, the incumbency and signatures of certain officers of such Issuer, and
other corporate proceedings of such Issuer relating to the authorization,
execution and delivery of the Securities, as applicable to such Issuer, this
Agreement and the other Transaction Documents to which such Issuer is a party.
(c) Financial Condition Certificate. The Company shall have delivered to
the Purchasers a Financial Condition Certificate in the form of Exhibit H.
3.04. Opinions of Counsel. Such Purchaser shall have received the favorable
opinions in form and substance satisfactory to it, dated the Closing Time, from
(i) Akerman Senterfitt & Xxxxxx, P.A., counsel for the Issuers, substantially in
the form set forth in Exhibit I, (ii) Xxxxxx Xxxxxx & Xxxxxxx llp, special
counsel for the Purchasers in connection with such transactions, substantially
in the form set forth in Exhibit J, (iii) the opinions of the various local
counsel identified on Schedule 3.04 covering the perfection of the Liens and
security interests granted pursuant to the relevant Basic Documents and such
other related matters as any Purchaser shall reasonably request, and (iv) such
other opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals covering matters related to the transactions
contemplated by this Agreement and the other Basic Documents as any Purchaser
may reasonably request.
3.05. Changes in Corporate Structure. Except as contemplated by the
Transaction Documents, none of the Issuers nor any of their respective
Subsidiaries shall have changed its respective jurisdiction of incorporation or
been a party to any merger or consolidation or succeeded to all or any
substantial part of the liabilities of any other Person at any time following
the Reference Date and there shall have occurred no event which constitutes a
Change of Control of the Company and the Company shall not have entered into any
agreement or understanding which, if consummated, would constitute a Change of
Control of the Company.
3.06. No Adverse Events. Since the Reference Date or the date of this
Agreement there shall not have occurred a Material Adverse Effect as determined
by the Purchasers.
3.07. Financial Information; Capital Structure. Such Purchaser shall have
received a pro forma consolidated balance sheet for the Company and its
Subsidiaries as of the Closing Time after giving effect to the Transactions,
including the issuance of the Securities and the use of the proceeds thereof,
which has been certified by the Chief Administrative Officer or Chief Financial
Officer of the Company and which is in form and substance reasonably
satisfactory to such Purchaser. The pro forma consolidated capital structure of
the Company, after giving effect to the Transactions (including all adjustments
permitted by Regulation S-X under the Securities Act), shall be consistent in
all material respects with the projections provided to the Purchasers prior to
the Closing Time and the capital structure contemplated herein.
3.08. Proceedings and Documents. All corporate and other proceedings in
connection with the Transactions and the other transactions contemplated by this
Agreement and the other Transaction Documents, and all documents and instruments
incident to such transactions and the terms thereof, shall be reasonably
satisfactory to such Purchaser and such Purchaser's special counsel, and such
Purchaser and the Purchasers' special counsel shall have received all such
counterpart originals or certified or other copies of such documents as it or
they may reasonably request.
3.09. Purchase Permitted by Applicable Law, etc. At the Closing Time, such
Purchaser's purchase of the Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which it is subject, (b) not violate any
Applicable Law (including, without limitation, Regulation T, U or X of the Board
of Governors of the Federal Reserve System) and (c) not subject such Purchaser
to any tax, penalty or liability under or pursuant to any Applicable Law, which
Applicable Law was not in effect on the date hereof.
3.10. Transaction Documents in Force and Effect; Information.
(a) Transaction Documents. The Purchasers shall have received true and
correct copies of all Transaction Documents and (i) such documents (A) shall
have been duly executed and delivered by the parties thereto, (B) shall be in
form and substance reasonably satisfactory to the Purchasers and (C) shall be
valid and legally binding obligations of the parties thereto enforceable against
each of them in accordance with its respective terms, subject to the
Enforceability Exceptions, (ii) there shall have been no amendments,
alterations, modifications or waivers of any provision thereof since the date of
this Agreement without the consent of the Purchasers and (iii) all conditions to
the consummation of the transactions contemplated by such agreements shall have
been satisfied or waived in writing by the Required Noteholders.
(b) Accuracy of Information. All information furnished by the Issuers and
their respective representatives to the Purchasers on or prior to the Closing
Time with respect to the business, management, operations, affairs, condition
(financial or otherwise), assets, property, prospects or results of operations
of the Issuers and their respective Subsidiaries (taken as a whole) shall be
accurate and complete in all material respects and shall not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made (it being recognized by
the Purchasers that any projections and forecasts provided by the Issuers are
based on good faith estimates and assumptions believed by the Issuers to be
reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and
forecasts may differ from projected or forecasted results).
3.11. No Violation; No Legal Constraints; Consents, Authorizations and
Filings, etc. (a) The consummation by the Issuers and their respective
Subsidiaries of the Transactions shall not contravene, violate or conflict with
any Applicable Law, except for violations which, individually or in the
aggregate, do not and would not have a Material Adverse Effect.
(b) All consents, authorizations and filings, if any, required in
connection with the execution, delivery and performance by each of the Issuers
and their respective Subsidiaries of the Transaction Documents to which it is a
party shall have been obtained or made and shall be in full force and effect,
except for such consents, authorizations and filings the failure to obtain or
make which, individually or in the aggregate, does not and would not have a
Material Adverse Effect.
(c) There shall be no inquiry, injunction, restraining order, action, suit
or proceeding pending or entered or any statute or rule proposed, enacted or
promulgated by any Governmental Authority or any other Person which, in the
opinion of the Purchasers, (i) individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect or which seeks to
enjoin or seek damages against any Issuer or any of its Subsidiaries or any of
the Purchasers as a result of the Transactions, including the issuance of the
Notes, or (ii) relates to any of the Transactions and has or will have a
material adverse effect on any Purchaser or (iii) alleges liability on the part
of any Purchaser in connection with this Agreement, any other Transaction
Documents or the Transactions or any of the other transactions contemplated
hereby or thereby or (iv) would bar the issuance of the Securities or the use of
the proceeds thereof in accordance with the terms of this Agreement and the
other Transaction Documents.
3.12. Consummation of the Transactions. The Transactions shall be
consummated concurrently with the issuance and sale by the Issuers of the Notes
hereunder, in each case in accordance with the terms of the applicable
Transaction Documents (without any amendment thereto or waiver thereunder unless
consented to by each Purchaser) and in accordance with Applicable Law,
including, without limitation, the following:
(a) concurrently with the issuance and sale by the Issuers of the
Securities hereunder, the Company shall have consummated the First Lien Credit
Facility providing for commitments to the Company and/or the Guarantors of
$90.0 million and which at the Closing Time shall provide for undrawn
availability of not less than $12.5 million;
(b) concurrently with the issuance and sale by the Issuers of the
Securities hereunder, the Company shall have permanently repaid all amounts
outstanding under the Company's Existing Credit Facility; and
(c) concurrently with the issuance and sale by the Issuers of the
Securities hereunder, the Company shall have paid existing indebtedness owing to
Trivest (including the guaranty reimbursement indebtedness and any keep-well
payments and accrued interest thereon), swap breakage fees, financial advisor
fees due and payable at closing, accrued and unpaid management fees owing to
Trivest, a financial structuring fee as set forth in the amendment to the
Management Agreement of even date hereof payable to Trivest (which in the case
of management fees and the financial structuring fee shall be paid no later than
30 days after the date hereof).
3.13. Fees. The Company shall have paid all fees, costs and expenses
(including, without limitation, legal fees and expenses and the fees and
expenses of appraisers, consultants and other advisors) of the Purchasers and
their advisors.
3.14. Due Diligence. At the Closing Time, the Purchasers shall have
completed their business, legal, tax and environmental due diligence review of
the Company and its Subsidiaries and other matters relevant to the Transactions
to the satisfaction of the Purchasers in their sole discretion.
3.15. Other Agreements and Documents. The Purchasers shall have received
such other agreements, instruments, approvals, opinions and other documents,
each satisfactory in form and substance to the Purchasers, as the Purchasers may
reasonably request.
3.16. Simultaneous Purchase. Each of the Purchasers will simultaneously
purchase the Notes to be purchased by such Purchaser.
3.17. Personal Property Requirements. The Purchasers shall have received
(and, to the extent required hereunder, delivered to the Collateral Agent):
(i) all certificates, agreements or instruments representing or evidencing
the Securities Collateral accompanied by instruments of transfer and stock
powers undated and endorsed in blank;
(ii) intercompany notes accompanied by instruments of transfer undated and
endorsed in blank (to the extent required by Section 17);
(iii) UCC financing statements in appropriate form for filing under the
UCC, filings with the United States Patent and Trademark Office and United
States Copyright Office and such other documents under applicable Requirements
of Law in each jurisdiction as may be necessary or appropriate or, in the
opinion of the Collateral Agent or the Required Noteholders, desirable to
perfect the Liens created, or purported to be created, by the Basic Documents;
(iv) certified copies of UCC, United States Patent and Trademark Office and
United States Copyright Office, tax and judgment lien searches, bankruptcy and
pending lawsuit searches or equivalent reports or searches, each of a recent
date listing all effective financing statements, lien notices or comparable
documents that name any Issuer as debtor and that are filed in those state and
county jurisdictions in which any property of any Issuer is located and the
state and county jurisdictions in which any Issuer is organized or maintains its
principal place of business and such other searches that the Required
Noteholders deem reasonably necessary or appropriate, none of which encumber the
Collateral covered or intended to be covered by the Basic Documents (other than
Permitted Collateral Liens or any other Liens acceptable to the Purchasers); and
(v) evidence acceptable to the Required Noteholders of payment or
arrangements for payment by the Issuers of all applicable recording taxes, fees,
charges, costs and expenses required for the recording of the Basic Documents.
3.18. [Reserved].
3.19. Intercreditor Agreement. The Issuers, the Collateral Agent and the
First Lien Collateral Agent shall have entered into the Intercreditor Agreement.
3.20. Ratings. The Notes shall be rated by Xxxxx'x or S&P or have a derived
rating; otherwise the Company shall have applied for a "shadow rating" from
Xxxxx'x or S&P and shall pay for the annual expense of maintaining such rating.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF THE ISSUERS
Each Issuer, acting jointly and severally, represents and warrants to the
Purchasers as of the date hereof and as of the Closing Time as follows:
4.01. Due Incorporation; Power and Authority. Each of the Parent and each
of its Subsidiaries (a) is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, (b) is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, other
than any failures to so qualify or to be in good standing which, individually or
in the aggregate, have not had and would not have a Material Adverse Effect, (c)
has all requisite corporate power and authority to own, lease and operate its
properties and to conduct its businesses as they are currently conducted, and
(d) has all requisite corporate power and authority to enter into and perform
its obligations under each of the Transaction Documents to which it is a party.
4.02. Capitalization. The authorized Capital Stock, the issued and
outstanding Capital Stock (including shares of Capital Stock subject to
options), the identity of the holders of such Capital Stock and the number of
shares of Capital Stock of the Company owned by such holders is as of the
Closing Time as set forth on Schedule 4.02 hereof. All the issued and
outstanding shares of the Capital Stock of the Company have been duly authorized
and are validly issued, fully paid and nonassessable and are free of preemptive
rights.
4.03. Subsidiaries. Schedule 4.03 correctly states as of the Closing Time
(a) the name of each of the Parent's Subsidiaries and any other Person whose
Capital Stock is owned, directly or indirectly, by the Parent (each, an "Equity
Investee"), (b) the name of each holder of each class of outstanding Capital
Stock or other securities of the Parent or any of its Subsidiaries or any Equity
Investee and the nature and number of such securities held by such holder, and
(c) the number of authorized, issued and treasury shares of each Subsidiary of
the Parent and each Equity Investee. The Parent does not own or control,
directly or indirectly, any Capital Stock or other interest or investment
(whether equity or debt) in any Person other than the Capital Stock of its
Subsidiaries and Equity Investees listed on Schedule 4.03. Each issued and
outstanding share of Capital Stock of each Subsidiary and Equity Investee of the
Parent (a) has been duly authorized and validly issued and is fully paid and
nonassessable and free of preemptive rights and (b) except for any Capital Stock
of any Equity Investee not owned directly of indirectly by the Parent as shown
on Schedule 4.03, is owned by the Parent, directly or through Subsidiaries, free
and clear of any Lien other than the Liens established under the First Lien
Credit Agreement and Permitted Collateral Liens.
4.04. Due Authorization, Execution and Delivery.
(a) Agreement. This Agreement has been duly authorized, executed and
delivered by each Issuer and constitutes a valid and legally binding obligation
of each Issuer, enforceable against such Issuer in accordance with its terms,
subject to the Enforceability Exceptions.
(b) Notes and Guarantees. The Notes to be purchased by the Purchasers from
the Company are in the form contemplated by this Agreement, have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company at the Closing Time as provided herein, will have been
duly executed, issued and delivered by the Company, and will constitute valid
and legally binding obligations of the Company, enforceable against it in
accordance with their terms, subject to the Enforceability Exceptions. The
Guarantees endorsed on the Notes are in the form contemplated by this Agreement,
have been duly authorized for issuance pursuant to this Agreement by each of the
Guarantors and, when the Notes are executed by the Company, and delivered to the
Purchasers as provided for herein, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Guarantors, enforceable against the Guarantors in accordance with their terms,
subject to the Enforceability Exceptions.
(c) Other Transaction Documents. Each Transaction Document (other than
those referred to in paragraphs (a) and (b) of this Section 4.04) to which any
Issuer or any of its respective Subsidiaries is a party (each such party, a
"Company Party") (i) has been duly authorized, executed and delivered by each
Company Party and (ii) constitutes a valid and legally binding obligation of
each Company Party, enforceable against such Company Party in accordance with
its terms, subject to the Enforceability Exceptions.
4.05. Non-Contravention; Authorizations and Approvals. None of the Issuers
or any of their respective Subsidiaries is (i) in violation of its certificate
of incorporation or bylaws (or comparable constituent or governing documents) or
(ii) is in default (or, with the giving of notice, lapse of time or both, would
be in default) under any note, bond, mortgage, indenture, deed of trust, loan or
credit agreement, license, franchise, Permit, lease, contract or other
agreement, instrument, commitment or obligation to which any Issuer or such
Subsidiary is a party or by which any Issuer or such Subsidiary or any of its
properties or assets is bound (including, without limitation, the First Lien
Credit Agreement), or under which any Issuer or such Subsidiary or any of its
properties or assets is entitled to a benefit (each, a "Contract"), except for
any such defaults that, individually or in the aggregate, have not had and would
not have a Material Adverse Effect. None of (a) the execution and delivery by
each Issuer or any of its Subsidiaries of any of the Transaction Documents to
which it is a party, (b) the performance by any of them of their respective
obligations thereunder, (c) the consummation of the transactions contemplated
thereby or (d) the issuance and delivery of the Securities hereunder will: (i)
violate, conflict with or result in a breach of any provisions of the
certificate of incorporation or bylaws (or comparable constituent or governing
documents) of such Issuer or any of its Subsidiaries; (ii) violate, conflict
with, result in a breach of any provision of, constitute a default (or an event
which, with notice, lapse of time or both, would constitute a default) under,
result in the termination or in a right of termination of, accelerate the
performance required by or benefit obtainable under, result in the triggering of
any payment or other obligations (including any repurchase or repayment
obligations) pursuant to, result in the creation of any Lien upon any of the
properties of any Issuer or any of its Subsidiaries under, or result in their
being declared void, voidable, subject to withdrawal or without further binding
effect under, any of the terms, conditions or provisions of any Contract, except
for any such violations, conflicts, breaches, defaults, accelerations,
terminations or other matters which, individually or in the aggregate, have not
had and would not have a Material Adverse Effect; (iii) require any consent,
approval or authorization of, or declaration, filing or registration with, any
Governmental Authority, except for those consents, approvals, authorizations,
declarations, filings or registrations which have been obtained or made or the
failure of which to obtain or make, individually or in the aggregate, have not
had and would not have a Material Adverse Effect; or (iv) violate any Applicable
Laws applicable to such Issuer or any of its Subsidiaries or any of their
respective properties or assets, except for violations which, individually or in
the aggregate, have not had and would not have a Material Adverse Effect.
4.06. Financial Statements. The Company has delivered to the Purchasers
(collectively, the "Financial Statements") (a) complete and correct copies of
the audited consolidated balance sheets of the Company and its Subsidiaries as
of December 31, 2002, 2001 and 2000 and the related audited consolidated
statements of operations, stockholders' equity and cash flows for the years then
ended, including the footnotes thereto, certified by the Company's independent
certified public accountants, (b) a complete and correct copy of the unaudited
consolidated balance sheets of the Company and its Subsidiaries as of December
31, 2003, and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows for the twelve months then ended,
(c) complete and correct copies of the estimated unaudited consolidated pro
forma balance sheet of the Company and its Subsidiaries as of March 31, 2004 and
(d) (i) projected consolidated monthly balance sheets, income statements and
statements of cash flows of the Company and its Subsidiaries for the period from
January 1, 2004, through December 31, 2004, and (ii) projected consolidated
annual balance sheets, income statements and statements of cash flows of the
Company and its Subsidiaries for the fiscal years ending in 2004 through 2005.
Each of the consolidated balance sheets contained in the Financial Statements
fairly presents the consolidated financial position of the Company and its
Subsidiaries as of its date and each of the consolidated statements of
operations, stockholders' equity and cash flows included in the Financial
Statements fairly presents the consolidated results of operations and income,
retained earnings and stockholders' equity or cash flows, as the case may be, of
the Company and its Subsidiaries for the periods to which it relates (subject,
in the case of any unaudited interim financial statements, to normal year-end
adjustments that will not be material in amount or effect), in each case in
accordance with GAAP applied on a consistent basis during the periods involved,
except as noted therein. The pro forma financial statements of the Company and
its Subsidiaries contained in the Financial Statements fairly present the
consolidated financial position of the Company and its Subsidiaries as of the
date and for the periods to which they relate, in each case after giving effect
to the Transactions, have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements and have
been properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein are
appropriate in all material respects to give effect to the Transactions. Each of
the projections referred to above is believed by each Issuer to be reasonable,
has been prepared on a reasonable basis and in good faith by each Issuer, and
has been based on assumptions believed by each Issuer to be reasonable at the
time made and upon the best information then reasonably available to each
Issuer, and no Issuer is aware of any facts or information that would lead it to
believe that such projections, as so updated, are incorrect or misleading in any
material respect. Attached hereto as Schedule 4.06 are complete and correct
copies of the Financial Statements.
4.07. Absence of Undisclosed Liabilities or Events. (a) Except as set forth
in Schedule 4.07(a), neither the Parent nor any of its Subsidiaries has any
liabilities or obligations, whether accrued, contingent or otherwise, except for
(i) liabilities and obligations in the respective amounts reflected or reserved
against in the consolidated balance sheet as of the Reference Date included in
the Financial Statements, (ii) borrowings under the Company's existing revolving
credit facility in the ordinary course of business and from Trivest pursuant to
the Guaranty Reimbursement Agreement and the Senior Subordinated Notes Make-Well
Indebtedness, (iii) liabilities and obligations incurred in the ordinary course
of business since the Reference Date which, individually or in the aggregate,
have not had and would not have a Material Adverse Effect or (iv) liabilities
arising under or in connection with the Transactions.
(b) Except as set forth in Schedule 4.07(b), (i) since the Reference Date
there has been no change in the business, management, operations, affairs,
condition (financial or otherwise), assets, property, prospects or results of
operations of the Parent or its Subsidiaries, taken as a whole, except for
changes that, individually or in the aggregate, have not had or would not have a
Material Adverse Effect and (ii) there are no facts known to the Parent or any
of its Subsidiaries that have had or would have a Material Adverse Effect that
have not been set forth herein or in the Disclosure Schedule or in filings with
the Commission.
4.08. No Actions or Proceedings. (a) Except as set forth in Schedule 4.08,
there are no legal or governmental actions, suits or proceedings pending or, to
the best of each Issuer's knowledge, threatened against or affecting the
Issuers, any of their respective directors or officers (in their capacities as
such) or any of their respective properties or assets which, individually or in
the aggregate, has had or would have a Material Adverse Effect or to prohibit,
delay or materially restrict the consummation of any of the Transactions or the
other transactions contemplated by this Agreement and the other Transaction
Documents. To the knowledge of each Issuer, no Governmental Authority has
notified the Issuers of an intention to conduct any audit, investigation or
other review with respect to the Issuers, except for those audits,
investigations or reviews which, individually or in the aggregate, have not had
or would not have a Material Adverse Effect.
(b) Except for matters covered by Section 4.19, no Issuer or any of its
property is in violation of, nor will the continued operation of its property as
currently conducted violate, any Requirements of Law (including any zoning or
building ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting any Issuer's Real Property or is
in default with respect to any judgment, writ, injunction, decree, rule or order
of any Governmental Authority, where such violation or default, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
4.09. Title to Properties. (a) Except as set forth in Schedule 4.09(a),
each of the Parent and its Subsidiaries has (i) good and marketable title to and
fee simple ownership of, or a valid and subsisting leasehold interest in, all of
its real property, and (ii) good title to, or a valid and subsisting leasehold
interest in, all of its equipment and other personal property, in each case free
and clear of all Liens, except Permitted Liens. Each of the Parent and its
Subsidiaries has paid or discharged, or reserved for, all lawful claims which,
if unpaid, might become a Lien (other than a Permitted Lien) against any
property or assets of the Parent or any of its Subsidiaries. The property of the
Issuers, taken as a whole, (i) is in good operating order, condition and repair
(ordinary wear and tear excepted), except to the extent that the failure to be
in such order, condition and repair could not reasonably be expected to result
in a Material Adverse Effect, and (ii) constitutes all the property which is
required for the business and operations of the Issuers as presently conducted.
(b) Schedule 4.09(b) contains a true and complete list of each interest in
Real Property (i) owned by any Issuer as of the date hereof and describes the
type of interest therein held by such Issuer and (ii) leased, subleased or
otherwise occupied or utilized by any Issuer, as lessee, sublessee, franchisee
or licensee, as of the date hereof and describes the type of interest therein
held by such Issuer and whether such lease, sublease or other instrument
requires the consent of the landlord thereunder, except to the extent that the
failure to get any such consent could not reasonably be expected to result in a
Material Adverse Effect.
4.10. Intellectual Property Rights. Except as set forth in Schedule 4.10,
each of the Parent and its Subsidiaries owns or possesses all Intellectual
Property reasonably necessary to conduct its businesses as now conducted, except
where the expiration or loss of or failure to so own or possess any of such
Intellectual Property, individually or in the aggregate, would not have a
Material Adverse Effect. To the best knowledge of each Issuer, (a) there is no
infringement of, or conflict with, such Intellectual Property by any third party
and (b) the conduct of their businesses as currently conducted do not infringe
or conflict with any Intellectual Property of any third party, in each case
other than any such infringements or conflicts which, individually or in the
aggregate, have not had or would not have a Material Adverse Effect.
4.11. Taxes. Except as set forth in Schedule 4.11, (i) the Parent and each
of its Subsidiaries have prepared and timely filed with the appropriate taxing
authorities all Tax Returns required to be filed by such entities on or prior to
the date hereof, taking into account any extension of time to file granted to or
obtained on behalf of the Parent or any of its Subsidiaries, and each such Tax
Return is complete and correct in all material respects; (ii) the Parent and
each of its Subsidiaries have timely paid all Taxes due and payable by them
through the date hereof and have made adequate accruals for all Taxes
attributable to any taxable period (or portion thereof) ending on or prior to
the date hereof that are not yet due and payable; (iii) the Parent and each of
its Subsidiaries have withheld and paid to the appropriate governmental
authorities in a timely manner all Taxes required to have been withheld through
the date hereof; (iv) Schedule 4.11 provides a list of all Tax audits or
examinations for tax years subsequent to 2000 involving the Parent or any of its
Subsidiaries that have been completed through the date hereof, and the
resolution of such audits or examinations; (v) all deficiencies or assessments
asserted in writing against the Parent or any of its Subsidiaries by any taxing
authority have been paid or fully and finally settled, and, to the best
knowledge of the Parent and its Subsidiaries, no issue previously raised in
writing by any such taxing authority reasonably could be expected to result in a
proposed deficiency or assessment for any prior, parallel or subsequent period
(including periods subsequent to the date hereof) that would be material to the
Parent and its Subsidiaries taken as a whole; (vi) none of the Parent or any of
its Subsidiaries is presently under examination or audit by any taxing authority
or has received written notice of any pending examination or audit by any taxing
authority; (vii) no extension of the period for assessment or collection of any
Tax of the Parent or any of its Subsidiaries is currently in effect and no
extension of time within which to file any Tax Return of the Parent or any of
its Subsidiaries has been requested, which Tax Return has not since been filed;
(viii) no liens exist with respect to any Taxes of the Parent or any of its
Subsidiaries, other than liens in respect of property taxes not yet due and
payable; (ix) none of the Parent or any of its Subsidiaries has made or agreed
to make, or has ever been required to make, any change in its accounting methods
that would result in an adjustment pursuant to Section 481 of the Code (or any
similar provision of state, local or foreign law); (x) none of the Parent or any
of its Subsidiaries is a party to any tax sharing, tax matters, tax
indemnification or similar agreement; (xi) none of the Parent or any of its
Subsidiaries is a party to any agreement or arrangement that provides for the
payment of any amount, or the provision of any other benefit, that could
constitute a "parachute payment" within the meaning of Section 280G of the Code
(or any similar provision of state, local or foreign law); (xii) none of the
Parent or any of its Subsidiaries has requested a ruling from, or entered into a
closing agreement with, the IRS or any other taxing authority; and (xiii) no
claim has ever been made in writing by any governmental authority in a
jurisdiction where the Parent or any of its Subsidiaries does not file Tax
Returns that any such entity is or may be subject to taxation by that
jurisdiction.
4.12. Employee Benefit Plans. (a) Except as otherwise disclosed on Schedule
4.12, there has been no failure by any employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), which is maintained by the Parent or any of its Subsidiaries
or to which the Parent or any of its Subsidiaries contributes (each, a "Plan")
to comply with the applicable requirements of ERISA and the Code other than any
such failures that, individually or in the aggregate, have not had and would not
have a Material Adverse Effect. There is no material pending or, to the
knowledge of any Issuer threatened, claim or litigation (other than routine
claims for benefits) relating to the Plans. Neither the Parent nor any of its
Subsidiaries has engaged in a transaction with respect to any Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
that would reasonably be expected to subject the Parent or any of its
Subsidiaries to a tax or penalty imposed by either Section 4975 of the Code or
Section 502(i) of ERISA other than those that, individually or in the aggregate,
have not had and would not have a Material Adverse Effect.
(b) No material liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by the Parent or any of its Subsidiaries with
respect to any ongoing, frozen or terminated "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by any
of them, or the single-employer plan of any entity which is considered one
employer with the Company under Section 4001 of ERISA or Section 414 of the Code
(an "ERISA Affiliate"). Neither the Parent, any of its Subsidiaries nor any
ERISA Affiliate has contributed to a "multiemployer plan," within the meaning of
Section 3(37) of ERISA, at any time on or after September 26, 1980. No notice of
a "reportable event," within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been required to be filed
for any Plan which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA ("Pension Plan") or by any ERISA Affiliate within the
12-month period ending on the date hereof.
(c) Neither any Pension Plan nor any single-employer plan of an ERISA
Affiliate has an "accumulated funding deficiency" (whether or not waived) within
the meaning of Section 412 of the Code or Section 302 of ERISA and no ERISA
Affiliate has an outstanding funding waiver. All contributions required to be
made to the Pension Plans by the Parent, its Subsidiaries and their ERISA
Affiliates have been made when due. Neither the Parent nor any of its
Subsidiaries has provided, or is required to provide, security to any Pension
Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
(d) Under each Pension Plan which is a single-employer plan, as of the last
day of the most recent plan year ended prior to the date hereof, the actuarially
determined present value of all "benefit liabilities," within the meaning of
Section 4001(a)(16) of ERISA (as determined on the basis of the actuarial
assumptions contained in the Plan's most recent actuarial valuation), did not
exceed the then current value of the assets of such Plan, and there has been no
material adverse change in the financial condition of such Plan since the last
day of the most recent plan year.
(e) Neither the Parent nor any of its Subsidiaries has any obligations for
retiree health and life benefits under any Plan, except as required by
applicable law or as set forth on Schedule 4.12. The Parent or its Subsidiaries,
as applicable, may amend or terminate any such Plan at any time without
incurring any liability thereunder.
(f) The execution and delivery of this Agreement and the other Transaction
Documents and the consummation of the transactions contemplated thereby will not
involve any non-exempt prohibited transaction within the meaning of Section 406
ERISA or Section 4975 of the Code. The representation in the foregoing sentence
is made in reliance upon, and subject to the accuracy of the representation of
the Purchasers in Section 5.01(f) of this Agreement.
4.13. Private Offering; No Integration or General Solicitation. (a) Subject
to compliance by the Purchasers with the representations and warranties set
forth in Section 5 hereof and with the procedures set forth in Section 10
hereof, it is not necessary in connection with the offer, sale and delivery of
the Securities to the Purchasers in the manner contemplated by this Agreement to
register the Securities under the Securities Act.
(b) No Issuer has, directly or indirectly, offered, sold or solicited any
offer to buy, and will not, directly or indirectly, offer, sell or solicit any
offer to buy, any security of a type or in a manner which would be integrated
with the sale of the Securities and require the Securities to be registered
under the Securities Act. None of the Issuers, any of their respective
Affiliates or any person acting on any of their behalf (other than the
Purchasers, or their respective Affiliates, as to whom the Issuers make no
representation or warranty) has engaged or will engage in any form of general
solicitation or general advertising (within the meaning of Rule 502(c) under the
Securities Act) in connection with the offering of the Securities.
4.14. Eligibility for Resale Under Rule 144A and Regulation S. The Notes
are eligible for resale pursuant to Rule 144A and will not, at the Closing Time,
be of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted on a U.S. automated
interdealer quotation system. The Notes are also eligible for resale pursuant to
Regulation S in certain offshore transactions.
4.15. Status Under Certain Statutes. None of the Parent or any of its
Subsidiaries is or, after receipt of payment for the Securities and the
consummation of the other transactions contemplated by the Transaction
Documents, will be (a) subject to regulation under the Public Utility Holding
Company Act of 1935, as amended ("PUHCA"), the Federal Power Act or the
Interstate Commerce Act, each as amended, (b) an "investment company" registered
or required to be registered under the Investment Company Act of 1940, as
amended, or controlled by such a company, or (c) a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary" or a "holding company," within the meaning of
PUHCA.
4.16. Insurance. Each of the Parent and its Subsidiaries is insured by
financially sound institutions with policies in such amounts and with such
deductibles and covering such risks as are customary and generally deemed
adequate for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Parent and its Subsidiaries
against theft, damage, destruction and acts of vandalism. Set forth on Schedule
4.16 is a true, complete and correct description of all insurance maintained by
each Issuer as of the Closing Time. All insurance maintained by the Issuers is
in full force and effect, all premiums due have been duly paid, no Issuer has
received notice of violation or cancellation thereof, the Premises, and the use,
occupancy and operation thereof, comply in all material respects with all
Insurance Requirements, and there exists no default under any Insurance
Requirement except for any default that could not be reasonably expected to
result in a Material Adverse Effect.
4.17. Use of Proceeds; Margin Regulations. The Issuers will apply the
proceeds from the sale of the Notes solely as described in Section 3.12. No part
of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U, or for the purpose of buying or carrying or trading in
any securities. Margin stock does not constitute more than 5% of the value of
the consolidated assets of the Parent and its Subsidiaries, nor does the Company
or the Parent have any present intention that margin stock will constitute more
than 5% of the value of such assets. As used in this Section, the terms "margin
stock" and "purpose of buying or carrying" shall have the meanings assigned to
them in Regulation U.
4.18. Existing Indebtedness; Future Liens.
(a) Schedule 4.18 sets forth a complete and correct list of all
Indebtedness (other than the Notes) in excess of $1.0 million individually
and/or $5.0 million in the aggregate of the Parent and its Subsidiaries that
will be outstanding immediately after the consummation of the Transactions.
(b) Neither the Parent nor any Subsidiary of the Parent is in default, and
no waiver of default is currently in effect, in the payment of the principal of
or interest on any material Indebtedness of the Parent or such Subsidiary and no
event or condition exists with respect to any Indebtedness of the Parent or any
Subsidiary of the Parent that would permit (or that with notice, lapse of time
or both, would permit) any Person to cause such Indebtedness to become due and
payable before its Stated Maturity or before its regularly scheduled dates of
payment.
(c) Neither the Parent nor any of its Subsidiaries has agreed or consented
to cause or permit in the future (upon the happening of a contingency or
otherwise) any of its property or assets, whether now owned or hereafter
acquired, to be subject to a Lien that would be prohibited by this Agreement if
incurred after the first issuance of Notes.
(d) The Obligations constitute "Designated Senior Debt" under and as
defined in the Senior Subordinated Notes Indenture.
(e) This Agreement together with the First Lien Credit Agreement constitute
the "Senior Credit Facility" under and as defined in the Senior Subordinated
Notes Indenture.
(f) The Securities will be senior secured obligations and will rank senior
to all of the Company's and the Guarantors' existing and future subordinated
indebtedness, including the Company's Senior Subordinated Notes. The Securities
will rank pari passu in right of payment with all of the Company's and the
Guarantors' existing and future senior indebtedness, including indebtedness
under the First Lien Credit Agreement.
4.19. Compliance with Laws; Permits; Environmental Matters.
Except as provided in Schedule 4.19, (1) each of the Parent and its
Subsidiaries and each of their businesses, operations and real properties, taken
as a whole, are and in the last five years have been in material compliance with
all, and neither the Parent nor any of its Subsidiaries, taken as a whole, has
any material liability under, Environmental Law; (2) each of the Parent and its
Subsidiaries has obtained all Permits material to, and required for, the conduct
of its businesses and operations and the ownership, operation and use of its
assets, all as currently conducted, taken as a whole, under all Applicable Law,
all such Permits are valid and in good standing and, under the currently
effective business plans of the Parent and its Subsidiaries, no material
expenditures or operational adjustments will be required during the next five
years in order to renew or modify such Permits issued under any Environmental
Law; (3) there has been no Release or threatened Release of Hazardous Material
on, at, under or from any real property or facility presently or formerly owned,
leased or operated by the Parent or any of its Subsidiaries or their
predecessors in interest that could result in material liability to the Parent
or any of its Subsidiaries, taken as a whole, under Environmental Law; (4) there
is no Environmental Action pending or, to the best knowledge of each Issuer,
threatened against and that is material to the Parent or any of its
Subsidiaries, taken as a whole, or relating to the real property currently or
formerly owned, leased or operated by the Parent or any of its Subsidiaries or
relating to the operations of the Parent or its Subsidiaries, taken as a whole,
and there are no actions, activities, circumstances, conditions, events or
incidents that could form the basis of such an Environmental Action; and (5)
(i) none of the Parent or any of its Subsidiaries is obligated to perform any
action or otherwise incur any expense under Environmental Law pursuant to any
order, decree, judgment or agreement by which it is bound or has assumed by
contract or agreement that would be material to therein, taken as a whole, and
none of the Parent or any of its Subsidiaries is conducting or financing any
Response Action pursuant to any Environmental Law with respect to any location,
and (ii) no circumstances exist that could (A) form the basis of a material
Environmental Action against the Parent or any of its Subsidiaries or any of
their real property, facilities or assets or (B) cause any such real property,
facilities or assets to be subject to any material restriction on ownership,
occupancy, use or transferability under any Environmental Law; (6) no real
property or facility presently or formerly owned, operated or leased by the
Parent or any of its Subsidiaries and, to the best knowledge of each Issuer, no
real property or facility presently or formerly used by the Parent or any of its
Subsidiaries or any of their predecessors in interest is (i) listed or proposed
for listing on the National Priorities List promulgated pursuant to CERCLA or
(ii) listed on the Comprehensive Environmental Response, Compensation, and
Liability Information System promulgated pursuant to CERCLA or (iii) included on
any similar list maintained by any Governmental Authority including, without
limitation, any such list relating to petroleum; (7) no Lien has been recorded
or, to the best knowledge of each Issuer, threatened under any Environmental Law
with respect to any real property or other assets owned by the Parent or any of
its Subsidiaries; (8) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not affect the
validity or require the transfer of any Permit held by the Parent or any of its
Subsidiaries under Environmental Law, and will not require any notification,
registration, filing, reporting, disclosure, investigation, remediation or
cleanup ("Notification") pursuant to any Governmental Real Property Disclosure
Requirements(except for any Notifications the failure to make could not
reasonably be expected to result in a Material Adverse Effect); and (9) the
Parent has made available to each Purchaser all material records and files in
the possession, custody or control of, or otherwise reasonably available to, the
Parent or any of its Subsidiaries, their agents, employees, or representatives
concerning compliance with or liability under Environmental Law including,
without limitation, those concerning the existence of Hazardous Material at real
property or facilities currently or formerly owned, operated, leased or used by
the Parent or any of its Subsidiaries under Environmental Law.
4.20. Solvency. The Parent and its Subsidiaries, taken as a whole, are, and
after giving effect to the Transactions will be, Solvent.
4.21. Affiliate Transactions. Except as disclosed in Schedule 4.21 or, with
respect to transactions occurring at or after the Closing Time, as permitted by
Section 6.12 hereof: (a) there is no Indebtedness between the Parent or any of
its Subsidiaries, on the one hand, and any officer, stockholder, director or
Affiliate (other than the Parent or any of its Subsidiaries) of the Parent or
any of its Subsidiaries, on the other, (b) no such officer, stockholder,
director or Affiliate provides or causes to be provided any assets, services or
facilities to the Parent or any of its Subsidiaries which, individually or in
the aggregate, are material to the business, management, operations, affairs,
condition (financial or otherwise), assets, property, prospects or results of
operations of the Parent and its Subsidiaries, taken as a whole, (c) neither the
Parent nor any of its Subsidiaries provides or causes to be provided any assets,
services, or facilities to any such officer, stockholder, director or Affiliate
which, individually or in the aggregate, are material to the business,
management, operations, affairs, condition (financial or otherwise), assets,
property, prospects or results of operations of the Parent and its Subsidiaries,
taken as a whole, (d) neither the Parent nor any of its Subsidiaries
beneficially owns, directly or indirectly, any investment in or issued by any
such officer, director or Affiliate, and (e) to the best knowledge of each
Issuer, no such officer, stockholder, director or Affiliate has any direct or
indirect ownership interest in any Person with which the Parent or any of its
Subsidiaries competes or has a business relationship.
4.22. Material Contracts. Schedule 4.22 contains a true, correct and
complete list of all Material Contracts in effect at the Closing Time. Except as
described on Schedule 4.22, as of the Closing Time each Material Contract is in
full force and effect and no material defaults enforceable against the Parent or
any of its Subsidiaries currently exist thereunder. To the best knowledge of the
Issuers and their Subsidiaries, no party to any Material Contract intends to
terminate or is in a default under such Material Contract.
4.23. No Changes to Applicable Law. To the best knowledge of the Issuers,
no changes to Applicable Law affecting the Parent or any of its Subsidiaries
have occurred since the Reference Date or are currently pending or threatened,
in each case other than those which have not had and would not reasonably be
expected to have a Material Adverse Effect.
4.24. Indebtedness. At the Closing Time, after consummation of the
Transactions, the consolidated Indebtedness of the Company and its Subsidiaries
will not exceed $315.0 million.
4.25. Fees. All fees and other expenses payable in connection with the
consummation of the Transactions by the Parent or any of its Subsidiaries are
disclosed in Schedule 4.25.
4.26. Brokerage Fees. Except as disclosed in Schedule 4.26, neither the
Parent nor any of its Subsidiaries has paid, or is obligated to pay, to any
Person any brokerage or finder's fees in connection with the transactions
contemplated hereby or by any other Basic Documents.
4.27. Documents and Procedures. Except as disclosed on Schedule 4.27, the
agreements, instruments and documents used and the procedures followed by the
Parent and its Subsidiaries in the conduct of their business are sufficient to
effect the transactions purported to be effected by such agreements, instruments
and documents and to perfect the Liens or security interests purported to be
created by such agreements, instruments and documents, except for failures to
effect such transactions or perfect such Liens or security interests which,
individually or in the aggregate, would not have a Material Adverse Effect.
4.28. Absence of Labor Dispute. Except as disclosed on Schedule 4.28, no
labor dispute with the employees of the Parent or any of its Subsidiaries exists
or, to the best knowledge of the Issuers, is imminent, and no Issuer is aware of
any existing or imminent labor disturbance by the employees, principal
suppliers, manufacturers, customers or contractors of the Parent or any of its
Subsidiaries, which, in any case, would have a Material Adverse Effect.
4.29. Full Disclosure. Each Issuer has disclosed or caused to be disclosed
to the Purchasers all agreements, instruments and corporate or other
restrictions to which it is subject, and all other matters known to it, that,
individually or in the aggregate, could result in a Material Adverse Effect.
None of the reports, financial statements, certificates or other information
furnished by or on behalf of the Parent or any of its Subsidiaries to the
Purchasers in connection with the Transactions contemplated hereby (as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. There is no contingent liability or fact that may have a
Material Adverse Effect which has not been set forth in a footnote included in
the Financial Statements or a Schedule hereto.
4.30. Consummation of First Lien Credit Facility. All conditions precedent
to the First Lien Credit Agreement (other than conditions related to this
Agreement and other than set forth in the Post Closing Letter) have been
fulfilled or (with the prior written consent of the Purchasers) waived.
4.31. Security Documents. (a) (i) This Agreement and the Pledge Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Parties, legal, valid and enforceable Liens on, and security interests
in, the Pledged Collateral and Securities Collateral and, when (i) financing
statements and other filings in appropriate form are filed in the offices
specified on Schedule 4.31 hereto and (ii) upon the taking of possession or
control by the Collateral Agent of the Pledged Collateral and Securities
Collateral with respect to which a security interest may be perfected only by
possession or control (which possession or control shall be given to the
Collateral Agent to the extent possession or control by the Collateral Agent is
required by this Agreement or the Pledge Agreement), the Liens created by this
Agreement and the Pledge Agreement shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the grantors
thereunder in the Pledged Collateral and Securities Collateral (other than the
Intellectual Property Collateral and such Pledged Collateral and Securities in
which a security interest cannot be perfected under the UCC as in effect at the
relevant time in the relevant jurisdiction), in each case subject to no Liens
other than Permitted Collateral Liens.
(ii) When this Agreement or a short form hereof is filed in the United
States Patent and Trademark Office and the United States Copyright Office, the
Liens created by this Agreement shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the grantors hereunder
in the Intellectual Property Collateral, in each case subject to no Liens other
than Permitted Collateral Liens.
(b) When delivered, each Mortgage will, upon execution and delivery be
effective to create, in favor of the Collateral Agent, for its benefit and the
benefit of the Secured Parties, legal, valid and enforceable Liens on, and
security interests in, all of the Issuers' right, title and interest in and to
the Mortgaged Properties thereunder and the proceeds thereof, subject only to
Permitted Collateral Liens or other Liens acceptable to the Collateral Agent,
and when the Mortgages are filed in the offices specified on Schedule
1.01(a) (or, in the case of any Mortgage executed and delivered after the date
thereof in accordance with the provisions of Sections 6.20 and 6.21, when such
Mortgage is filed in the offices specified in the local counsel opinion
delivered with respect thereto in accordance with the provisions of Sections
6.20 and 6.21), the Mortgages shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the Issuers in the
Mortgaged Properties and the proceeds thereof, in each case prior and superior
in right to any other Person, other than Liens permitted by such Mortgage.
(c) Each Security Document delivered pursuant to Sections 6.20 and 6.21
will, upon execution and delivery thereof, be effective to create in favor of
the Collateral Agent, for the benefit of the Secured Parties, legal, valid and
enforceable Liens on, and security interests in, all of the Issuers' right,
title and interest in and to the Collateral thereunder, and when all appropriate
filings or recordings are made in the appropriate offices as may be required
under applicable law, such Security Document will constitute fully perfected
Liens on, and security interests in, all right, title and interest of the
Issuers in such Collateral, in each case subject to no Liens other than the
applicable Permitted Liens.
SECTION 5.
REPRESENTATIONS OF THE PURCHASERS
Each Purchaser severally and not jointly represents and warrants to the
Issuers as of the date hereof and as of the Closing Time as follows:
5.01. Purchase for Investment. (a) Such Purchaser is acquiring the
Securities for its own account, for investment and not with a view to any
distribution thereof within the meaning of the Securities Act.
(b) Such Purchaser understands that (i) the Securities have not been
registered under the Securities Act and are being issued by the Issuers in
transactions exempt from the registration requirements of the Securities Act and
(ii) the Securities may not be offered or sold except pursuant to an effective
registration statement under the Securities Act or pursuant to an applicable
exemption from registration under the Securities Act.
(c) Such Purchaser further understands that the exemption from registration
afforded by Rule 144 (the provisions of which are known to such Purchaser)
promulgated under the Securities Act depends on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts.
(d) Such Purchaser did not employ any broker or finder in connection with
the transactions contemplated in this Agreement.
(e) Such Purchaser is an Accredited Investor.
(f) Source of Funds. Each Purchaser represents that it is not acquiring the
Notes for or on behalf of any employee benefit plan, except that such a purchase
for or on behalf of an employee benefit plan shall be permitted in any one of
the following circumstances:
(i) to the extent such purchase is made by or on behalf of an "insurance
company general account" (as the term is defined in Prohibited Transaction Class
Exemption ("PTE") 95-60 (issued July 12, 1995)) in respect of which the reserves
and liabilities (as defined by the annual statement for life insurance companies
approved by the National Association of Insurance Commissioners (the "NAIC
Annual Statement")) for the general account contract(s) held by or on be-half of
any employee benefit plan together with the amount of the reserves and
liabilities for the general account contract(s) held by or on behalf of any
other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the
general account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus as set
forth in the NAJC Annual Statement filed with such Purchaser's state of
domicile; or
(ii) to the extent such purchase is made by or on behalf of a separate
account that is maintained solely in connection with such Purchaser's fixed
contractual obligations under which the accounts payable, or credited, to any
employee benefit plan (or its related trust) that has any interest in such
separate account (or to any participant or beneficiary of such employee benefit
plan (including any annuitant)) are not affected in any manner by the investment
performance of the separate account; or
(iii) to the extent such purchase is made by or on behalf of either (i) an
insurance company pooled separate account, within the meaning of PTE 90-1
(is-sued January 29, 1990), or (ii) a bank collective investment fund, within
the meaning of the PTE 91-38 (issued July 12, 1991) and, except as disclosed by
such Purchaser to the Company in writing pursuant to this paragraph (c), no
employee benefit plan or group of employee benefit plans maintained by the same
employer or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment fund; or
(iv) to the extent such purchase is made by or on behalf of assets of an
"investment fund" (within the meaning of Part V of PTE 84-14 (issued October 9,
1985) (the "QPAM Exemption")) managed by a "qualified professional asset
manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such investment fund, when
combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (d); or
(v) to the extent such purchase is made on behalf of such employee benefit
plan by an "in-house asset manager" (the "INHAM") as defined in Part IV of PTE
96-23 (issued April 10, 1996), employee benefit plans maintained by affiliates
of the INHAM and/or the INHAM have aggregate assets in excess of $250 million,
and the conditions of Part I of such exemption are otherwise satisfied; or
(vi) to the extent such employee benefit plan is a governmental plan which
is not subject to the provisions of Title I of ERISA; or
(vii) to the extent such employee benefit plan, or a separate account or
trust fund comprised of one or more employee benefit plans, has each been
identified to the Company in writing pursuant to this paragraph (vii); or
(viii) to the extent such employee benefit plan is exempt from the coverage
of Title I of ERISA.
As used in this Section 5.01(f), the terms "employee benefit plan,"
"governmental plan" and "separate account" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.
(g) Such Purchaser and his, her or its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and its subsidiaries and materials relating to the offer and sale
of the Securities which have been requested by such Purchaser or such advisors.
Such Purchaser and his, her or its advisors, if any, have been afforded the
opportunity to ask questions of the Company.
(h) Such Purchaser understands that no United States federal or state
agency or any other governmental agency has passed upon or made any
recommendation or endorsement of the Securities.
(i) Such Purchaser, if an entity, is duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is organized.
This Agreement has been duly authorized (if necessary) and executed and
delivered by or on behalf of such Purchaser, and this Agreement constitutes a
valid and binding agreement of such Purchaser enforceable in accordance with its
respective terms, except as such enforceability may be limited by the
Enforceability Exceptions.
SECTION 6.
COVENANTS
Each of the Issuers covenants and agrees with each Purchaser and each
Noteholder that until the principal amount of (and premium, if any, on) all the
Notes, and all interest and other obligations hereunder in respect thereof,
shall have been paid in full:
6.01. Payment of Notes.
(a) The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes.
(b) The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
6.02. Reports.
(a) Whether or not the Company is required to do so by the rules and
regulations of the Commission, so long as any Notes are outstanding, the Company
shall furnish to the Collateral Agent, and the Collateral Agent shall then
within two Business Days of receipt thereof furnish to (1)(x) each Noteholder,
at the request of the Required Noteholders at any time following the good faith
determination by the Required Noteholders that a Material Adverse Effect has
occurred with respect to the Company and its Subsidiaries, taken as a whole
and/or (y) any Noteholder holding at least $10.0 million aggregate principal
amount of Note, made at any time when the Company's Fixed Charge Coverage Ratio
is equal to or less than 1 to 1, monthly management financial information,
including a profit and loss statement, a balance sheet and a cash flow
statement, of the Company and its consolidated Subsidiaries substantially in the
form prepared for management of the Company, provided that the Company may
condition the delivery of such financial information upon the execution by the
recipient Noteholder(s) of a confidentiality agreement in form and substance
satisfactory to such Noteholder and the Company, (2) each Noteholder all
quarterly and annual financial and other information with respect to the Company
and its consolidated Subsidiaries that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Company were required
to file such forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its consolidated
Subsidiaries, showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in Management's Discussion and
Analysis of Financial Condition and Results of Operations, the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial information and results of operations
of the Unrestricted Subsidiaries of the Company and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants, and (3) each Noteholder all current reports that would be required
to be filed with the Commission on Form 8-K if the Company were required to file
such reports.
(b) The Company shall file a copy of all of the information and reports
required to be delivered pursuant to clause (a) of this Section 6.02 with the
Commission for public availability, unless the Commission shall not accept such
a filing, and from and after the date hereof shall make this information
available to securities analysts and prospective investors upon request. In
addition, for so long as any Notes remain outstanding, the Company shall file
with the Commission (unless the Commission shall not accept such filing) and
provide the Collateral Agent, who will then promptly provide to each Noteholder,
the information required to be delivered pursuant to clause (a) of this Section
6.02 within the time periods specified in the Commission's rules and regulations
(except that the Company's Form 10-K for the fiscal year ended December 31, 2003
shall not be required to be filed until April 30, 2004) and furnish that
information to securities analysts and prospective investors upon their request.
(c) For the benefit of Noteholders and beneficial owners from time to time
of any Note, the Issuers shall, upon the request of any such Noteholder,
furnish, at the Issuers' expense, to Noteholders and beneficial owners of any
Note and prospective purchasers of such Note information satisfying the
applicable requirements of subsection (d)(4) of Rule 144A under the Securities
Act.
6.03. Compliance Certificate.
(a) The Company shall deliver to the Collateral Agent, and the Collateral
Agent shall then distribute within two Business Days to each Noteholder, within
90 days after the end of each fiscal year, beginning in 2005 for the fiscal year
ended December 31, 2004, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Agreement, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Agreement and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Agreement (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, beginning with the fiscal
year ended December 31, 2003, the year-end financial statements delivered
pursuant to Section 6.02 above shall be accompanied by a written statement of
the Company's independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of this
Section 6 or Section 7 hereof or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding, deliver
to the Collateral Agent, and the Collateral Agent shall then distribute within
two Business Days to each Noteholder, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
6.04. Information Regarding Collateral. The Company shall not and shall not
permit any of its Subsidiaries to effect any change (i) in any Issuer's legal
name, (ii) in the location of any Issuer's chief executive office, (iii) in any
Issuer's identity or organizational structure, (iv) in any Issuer's Federal
Taxpayer Identification Number or organizational identification number, if any,
or (v) in any Issuer's jurisdiction of organization (in each case, including by
merging with or into any other entity, reorganizing, dissolving, liquidating,
reorganizing or organizing in any other jurisdiction), until (A) it shall have
given the Collateral Agent not less than 15 days' prior written notice (in the
form of an Officers' Certificate), or such lesser notice period agreed to by the
Collateral Agent, of its intention so to do, clearly describing such change and
providing such other information in connection therewith as the Collateral Agent
may reasonably request and (B) it shall have taken all action reasonably
satisfactory to the Collateral Agent, in each case, to maintain the perfection
and priority of the security interest of the Collateral Agent for the benefit of
the Secured Parties in the Collateral, if applicable. Each Issuer agrees to
promptly provide the Collateral Agent with certified Organizational Documents
reflecting any of the changes described in the preceding sentence. Each Issuer
also agrees to promptly notify the Collateral Agent of any change in the
location of any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral is located
(including the establishment of any such new office or facility), other than
changes in location to a Mortgaged Property or a leased property subject to a
Landlord Access Agreement.
6.05. Maintenance of Properties. Each Issuer shall cause all properties
reasonably required in the conduct of its business or the business of any of its
Subsidiaries to be maintained and kept in good condition, repair and working
order, ordinary wear and tear excepted, and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
such Issuer may be necessary so that the business carried on in connection
therewith may properly and advantageously conducted at all times; provided,
however, that the foregoing shall not prevent the Company from discontinuing the
use, operation or maintenance of any of such properties if (i) the Board of
Directors of such Issuer determines that such discontinuance is desirable in the
conduct of its business or the business of any Subsidiary and (ii) such
discontinuance would not result in a Material Adverse Effect and would not be
adverse in any material respect to the Noteholders.
6.06. Taxes. The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Noteholders.
6.07. Stay, Extension and Usury Laws. The Company covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Agreement; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Collateral Agent or the Noteholders, but shall suffer and permit
the execution of every such power as though no such law has been enacted.
6.08. Restricted Payments. The Company shall not, and shall not permit any
of its Restricted Subsidiaries to, directly or indirectly: (a) declare or pay
any dividend or make any other payment or distribution on account of the
Company's or any of its Restricted Subsidiaries' Capital Stock (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company or any Restricted Subsidiary) or similar payment to the
direct or indirect holders of the Company's Capital Stock in their capacity as
such, other than (i) dividends, payments or distributions payable in Capital
Stock (other than Disqualified Stock) of the Company, or (ii) to the Company or
any Wholly Owned Restricted Subsidiary; (b) purchase, redeem or otherwise
acquire or retire for value (including, without limitation, in connection with
any merger or consolidation involving the Company) any Capital Stock of the
Company, any Restricted Subsidiary, or any direct or indirect parent of the
Company (other than any such Capital Stock owned by the Company or any Wholly
Owned Restricted Subsidiary of the Company); (c) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness of the Company or any Restricted Subsidiary that is
subordinated to the Notes, except a payment of interest, customary fees and
charges or principal at Stated Maturity; or (d) make any Restricted Investment
(all such payments and other actions set forth in clauses (a)through (d) above
being collectively referred to as "Restricted Payments"), unless, at the time of
and after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the paragraph (a) of Section 6.10 hereof; and
(iii) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the Issue Date (excluding Restricted Payments permitted by clauses (2) and
(3) of the next succeeding paragraph), is less than the sum of (A) 50% of the
Consolidated Net Income of the Company for the period (taken as one accounting
period) from the beginning of the first fiscal quarter commencing after the date
hereof to the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus (B) 100% of the aggregate net cash proceeds received
by the Company from the issue or sale since the date hereof of Capital Stock of
the Company (other than Disqualified Stock) or of Disqualified Stock or debt
securities of the Company that have been converted into such Capital Stock
(other than any such Capital Stock, Disqualified Stock or convertible debt
securities sold to a Restricted Subsidiary of the Company and other than
Disqualified Stock or convertible debt securities that have been converted into
Disqualified Stock), plus (C) to the extent that any Restricted Investment that
was made after the date hereof is (i) sold for cash or otherwise liquidated or
repaid for cash or (ii) in the case of Restricted Investments arising from
guarantees by the Company or any Restricted Subsidiary, terminated, the lesser
of (x) the cash return of capital or the amount of the terminated guarantee with
respect to such Restricted Investment (less the cost of disposition, if any) and
(y) the initial amount of such Restricted Investment, plus (D) the amount equal
to the net reduction in Investments (other than Permitted Investments) made by
the Company or any of its Restricted Subsidiaries in any Person resulting from
the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries not to
exceed the lesser of (i) the amount of Investments (valued in each case as
provided in the definition of "Unrestricted Subsidiary") previously made by the
Company or its Restricted Subsidiaries in that Unrestricted Subsidiary, which
amount was included in the calculation of the amount of Restricted Payments, and
(ii) the fair market value of the Investments in the Subsidiary as of the date
that it is redesignated an Unrestricted Subsidiary; provided, however, that no
amount shall be included under this clause (D) to the extent it is already
included in Consolidated Net Income; plus (E) $2.5 million.
So long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the foregoing provisions shall not prohibit: (1) the
payment of any dividend within 60 days after the date of declaration thereof, if
at the date of declaration the payment would have complied with the provisions
of this Agreement; (2) the redemption, repurchase, retirement, defeasance or
other acquisition of any Capital Stock of the Company or Indebtedness of the
Company or any Guarantor that is subordinated to the Notes or the Guarantee of
such Guarantor, as the case may be, in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary of the
Company) of, other Capital Stock of the Company (other than any Disqualified
Stock); provided, however, that the amount of any of these net cash proceeds
that are utilized for any redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (iii)(B) of the preceding
paragraph; (3) the redemption, repurchase, retirement, defeasance or other
acquisition of Indebtedness of the Company or any Guarantor that is subordinated
to the Notes or the Guarantees of such Guarantor, as the case may be, with the
net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (4)
in the event of an Asset Sale that requires the Company to offer to repurchase
Notes pursuant to Section 6.11, the payment, purchase, redemption, defeasance or
other acquisition or retirement of Senior Subordinated Notes at a purchase price
not greater than 100% of the principal amount thereof plus any accrued and
unpaid interest thereon; provided, however, that (A) prior to such payment,
purchase, redemption, defeasance or other acquisition or retirement, the Company
has made an offer with respect to the Notes pursuant to the provisions of
Section 6.11 and has repurchased all Notes validly tendered and not withdrawn in
connection with such offer and (B) the aggregate amount of all such payments,
purchases, redemptions, defeasances or other acquisitions or retirements of all
such Senior Subordinated Notes may not exceed the amount of Net Proceeds
remaining after the Company has complied with the terms of Section 6.11(e);
provided further, however, that such repurchases and other acquisitions shall be
included in the calculation of the amount of Restricted Payments; and (5) the
redemption, repurchase or other acquisition or retirement for value of any
Capital Stock of the Company or any Restricted Subsidiary of the Company held by
any member of the Company's or any of its Restricted Subsidiaries' management or
board of directors pursuant to any management equity subscription agreement,
stock option agreement or other similar agreement or any successor arrangement
entered into in connection with the reorganization of the Company as a
corporation; provided, however, that the successor arrangement is on terms
substantially similar to the arrangement so replaced; provided further, however,
that the aggregate price paid for all redeemed, repurchased, acquired or retired
Capital Stock shall not exceed $1.0 million in any twelve month period.
The amount of all Restricted Payments, other than cash, shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or the Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in good
faith by the Board of Directors whose resolution with respect to that
determination shall be delivered to the Collateral Agent, who shall certify that
the valuation was approved by a majority of disinterested directors, if any. Not
later than the date of making any Restricted Payment, the Company shall be
required to deliver to the Collateral Agent, and the Collateral Agent shall then
distribute within two Business Days to each Noteholder, an Officers' Certificate
stating that the Restricted Payment was permitted and setting forth the basis
upon which the calculations required under this Section 6.08 were computed.
6.09. Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (1) (A) pay dividends or
make any other distributions to the Company or any of its Restricted
Subsidiaries on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, or (B) pay any Indebtedness owed
to the Company or any of its Restricted Subsidiaries, (2) make loans or advances
to the Company or any of its Restricted Subsidiaries or (3) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries.
(b) The provisions of clause (a) above shall not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date hereof and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof; provided, however, that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than those
contained in such Existing Indebtedness, as in effect on the date of this
Agreement;
(2) the First Lien Credit Facility as in effect as of the date of this
Agreement, and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof; provided,
however, that the amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more restrictive
with respect to dividend and other payment restrictions than those contained in
the First Lien Credit Facility as in effect on the date of this Agreement;
(3) this Agreement, the Notes and the Guarantees;
(4) applicable law;
(5) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of the acquisition (except to the extent the Indebtedness was incurred
or the Capital Stock authorized and issued in connection with or in
contemplation of the acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired; provided,
however, that, in the case of Indebtedness or Disqualified Stock, such
Indebtedness or Disqualified Stock would have been permitted under Section 6.10
to be incurred or issued by the Company or one of its Restricted Subsidiaries;
(6) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(7) purchase money obligations for property acquired in the ordinary course
of business that impose restrictions of the nature described in sub-clause (3)
of clause (a);
(8) Permitted Refinancing Indebtedness; provided, however, that the
restrictions contained in the agreements governing the Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced;
(9) any agreement for the sale or disposition of a Restricted Subsidiary
that restricts distributions by such Restricted Subsidiary pending its sale or
other disposition;
(10) Permitted Liens that limit the right of the Company or any of its
Restricted Subsidiaries to dispose of the assets subject to such Liens;
(11) provisions with respect to the disposition or distribution of assets
or property in joint venture agreements, asset sale agreements, stock sale
agreements and other similar agreements entered into in the ordinary course of
business; and
(12) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
6.10. Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company shall not issue any shares of Disqualified Stock and the
Company shall not permit any of its Restricted Subsidiaries to issue any
Disqualified Stock or preferred stock; provided, however, that, so long as no
Default or Event of Default has occurred and is continuing, the Company shall be
permitted to incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock, and any Guarantor may incur Indebtedness, if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which the additional Indebtedness is incurred or the
Disqualified Stock is issued would have been at least 2.25 to 1, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock had been issued at the beginning of that four-quarter period.
(b) The provisions of clause (a) above shall not apply to the incurrence of
any of the following (collectively, "Permitted Indebtedness"):
(1) the incurrence by the Company and the Guarantors of Indebtedness at any
time outstanding (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and the Guarantors
thereunder) under the First Lien Credit Facility in an aggregate principal
amount not to exceed the greater of: (a) $90.0 million; or (b) the sum of 60% of
inventory of the Company and its Restricted Subsidiaries, plus 85% of accounts
receivable of the Company and its Restricted Subsidiaries, in each case
determined in accordance with GAAP as of the most recent balance sheet, less the
aggregate amount of all Net Proceeds of Asset Sales applied to permanently repay
any of the Indebtedness referred to in this Section 6.10(b)(1) pursuant to
Section 6.11;
(2) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and any Guarantees issued pursuant to Section 13;
(3) any Existing Indebtedness of the Company and its Restricted
Subsidiaries and any guarantees of the Existing Indebtedness;
(4) the incurrence of Indebtedness between or among the Company and any of
its Wholly Owned Restricted Subsidiaries; provided, however, that (a) if the
Company is the obligor on that Indebtedness, the Indebtedness is expressly
subordinated to the prior payment in full of all Obligations with respect to the
Notes and (b) any subsequent issuance or transfer of Capital Stock that results
in any of this Indebtedness being held by a Person other than the Company or a
Wholly Owned Restricted Subsidiary, and any sale or other transfer of that
Indebtedness to a Person that is not either the Company or a Wholly Owned
Restricted Subsidiary, shall be deemed, in each case, to constitute an
incurrence of that Indebtedness by the Company or the Restricted Subsidiary, as
the case may be;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of
(a) Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Section 6.10 to be outstanding, (b) foreign
exchange contracts or (c) currency swap agreements or other similar agreements
or arrangements; provided, however, that the notional amount of any currency
swap agreement does not exceed the principal amount of debt to which such
currency swap agreement relates;
(6) the guarantee by the Company or any of the Guarantors of Indebtedness
that was permitted to be incurred by another provision of this Section 6.10;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness, including, without limitation, Indebtedness represented
by Capital Lease Obligations, mortgage financings or purchase money obligations,
in an aggregate principal amount (or accreted amount, as applicable) at any time
outstanding under this clause (7), including all Permitted Refinancing
Indebtedness incurred pursuant to clause (8) below to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (7), not to exceed
$10.0 million;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted to be incurred by clause (a) of this Section
6.10, or by clauses (2), (3), (5), (6), (7) and (11) of this clause (b);
(9) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, the event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company that was not permitted by this clause (9);
(10) the accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock;
provided, however, that in each such case, the amount thereof is included in
Fixed Charges of the Company as accrued;
(11) the incurrence by the Company or any of the Guarantors of additional
Indebtedness in an aggregate principal amount (or accreted amount, as
applicable) at any time outstanding under this clause, including all Permitted
Refinancing Indebtedness incurred pursuant to clause (8) above to refund,
refinance or replace any Indebtedness incurred pursuant to this clause (11), not
to exceed $15.0 million, solely for the purpose of financing acquisitions of
Permitted Businesses; provided, however, that the Fixed Charge Coverage Ratio on
a pro forma basis after giving effect to such acquisitions is at least 2.25 to
1; and
(12) Indebtedness incurred by the Company and/or any Guarantor and held by
Trivest (subject to participations) (i) the proceeds of which are used by the
Company to make scheduled payments of interest on the Senior Subordinated Notes,
and (ii) contains terms no less favorable to the Company and any Guarantor than
those that would have been obtained by the Company and any Guarantor in a
comparable transaction with an unrelated Person; provided that (a) such
Indebtedness shall provide that the payment of interest thereon shall be made
only in-kind (and not in cash or other property) for so long as any Notes remain
outstanding, (b) such Indebtedness shall be subordinated in right of payment to
the Notes pursuant to the terms of an intercreditor agreement in form and
substance reasonably satisfactory to the Required Noteholders, (c) shall have
affirmative and negative covenants no more onerous or restrictive to the Company
and any Guarantor than those set forth in the Senior Subordinated Notes
Indenture as in effect on the date of this Agreement and (d) may be secured by a
Lien on the Collateral, provided that such Lien shall be junior in priority and
subject to the Lien on the Collateral securing the Notes pursuant to the terms
of an intercreditor agreement in form and substance reasonably satisfactory to
the Required Noteholders ("Senior Subordinated Notes Make-Well Indebtedness").
(c) For purposes of determining compliance with this Section 6.10, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clause (b) above or is
entitled to be incurred pursuant to the clause (a) above, the Company shall, in
its sole discretion, classify or reclassify that item of Indebtedness in any
manner that complies with this covenant and the item of Indebtedness shall be
treated as having been incurred pursuant to only one of those clauses or
pursuant to clause (a) above.
(d) The Company will not, and will not permit any Guarantor to, directly or
indirectly, incur any Indebtedness that purports to be by its terms (or by the
terms of any agreement governing such Indebtedness) subordinated to any other
Indebtedness of the Company or of such Guarantor, as the case may be, unless
such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinate to the Notes or any
Guarantee of such Guarantor to the same extent and in the same manner as such
Indebtedness is subordinated to such other Indebtedness of the Company or such
Guarantor, as the case may be.
6.11. Asset Sales.
(a) The Company shall not be permitted to, and shall not permit any of its
Subsidiaries to, consummate an Asset Sale unless: (1) the Company or the
Restricted Subsidiary, as the case may be, receives consideration at the time of
the Asset Sale at least equal to the fair market value, evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Collateral Agent, of the assets or Capital Stock issued or sold
or otherwise disposed of; and (2) at least 75% of the consideration therefor
received by the Company or the Restricted Subsidiary is in the form of cash or
Cash Equivalents; provided, however, that the amount of (a) any liabilities, as
shown on the Company's or the Restricted Subsidiary's most recent balance sheet
of the Company or the Restricted Subsidiary, other than contingent liabilities
and liabilities that are by their terms subordinated to the Securities, that are
assumed by the transferee of any of those assets pursuant to a customary
novation agreement that releases the Company or the Restricted Subsidiary from
further liability and (b) any securities, notes or other obligations received by
the Company or the Restricted Subsidiary from the transferee that are
substantially concurrently converted by the Company or the Restricted Subsidiary
into cash, to the extent of the cash received, shall be deemed to be cash for
purposes of this provision.
(b) In the case of an Asset Sale of Collateral, the Company or the
Subsidiary, as applicable, shall deposit the Net Proceeds therefor in a blocked
account and such Net Proceeds will be pledged as collateral to the First Lien
Collateral Agent and the Secured Parties, in each case in accordance with the
First Lien Credit Facility and the Security Documents as governed by the
Intercreditor Agreement.
(c) Within 60 days following the receipt of any Net Proceeds from an Asset
Sale constituting Collateral (other than Securities Collateral, but including
the portion of the Net Proceeds of the Asset Sale of all of the Capital Stock of
a Restricted Subsidiary in an amount equal to the sum of the fair market value
of Receivables of such Restricted Subsidiary and the fair market value of
Inventory of such Restricted Subsidiary at the time of such Asset Sale) in an
aggregate amount greater than $5.0 million, the Company shall apply all of such
Net Proceeds (and not just the amount in excess of $5.0 million):
(1) first, to repay Indebtedness under the First Lien Credit Facility and
to correspondingly reduce commitments thereunder (but only to the extent such
commitment reduction is required by the First Lien Credit Facility in the case
of revolving borrowings) and to cash collateralize letters of credit required
under the First Lien Credit Facility (provided that, upon the release of any
such amounts applied to cash collateralize letters of credit to the Company or
any Restricted Subsidiary, such amounts shall be treated as Net Proceeds
received by the Company or such Restricted Subsidiary on the date of such
release and applied in accordance with this Section 6.11); and
(2) second, to the extent any such Net Proceeds remain after application in
accordance with clause (1) above, to make an offer with such remaining Net
Proceeds to purchase the maximum amount of Notes that may be purchased with such
Net Proceeds at an offer price at a price equal to 101% of the principal amount
of the Notes.
(d) Within 60 days following the receipt of any Net Proceeds from an Asset
Sale of Securities Collateral (except as provided in the first parenthetical to
clause (c) above (relating to Securities Collateral)) in an aggregate amount
greater than $5.0 million, the Company shall apply all of such Net Proceeds (and
not just such amount in excess of $5.0 million) to make an offer to purchase the
maximum amount of Notes that may be purchased with such Net Proceeds at an offer
price at a price equal to 101% of the principal amount of the Notes.
(e) Within 365 days following the receipt of any Net Proceeds from an Asset
Sale not of Collateral, the Company shall be permitted to apply the Net
Proceeds, at its option, (1) to repay pari passu Indebtedness (as defined below)
and to correspondingly reduce commitments thereunder with respect to repaid pari
passu Indebtedness (but only to the extent such commitment reduction is required
by such pari passu Indebtedness in the case of revolving borrowings); or (2) to
acquire a controlling interest in a Permitted Business; or (3) to make a capital
expenditure; or (4) to acquire other long-term assets that are used or useful in
a Permitted Business.
(f) Pending the final application of any Net Proceeds not from an Asset
Sale of Collateral, the Company shall be permitted temporarily to reduce
Indebtedness under a revolving credit facility, if any, or otherwise invest the
Net Proceeds in any manner that is not prohibited by this Agreement. Any Net
Proceeds from Asset Sale described in clause (e) above that are not applied or
invested as provided in the first sentence of this paragraph shall be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company shall be required to make an offer to all
holders of Notes and all holders of other Indebtedness that ranks equally with
the Notes ("pari passu Indebtedness") containing provisions similar to those set
forth in this Agreement with respect to offers to purchase or redeem the
Indebtedness with the proceeds of sales of assets (an "Asset Sale Offer") to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer shall be equal to 100% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the date fixed for
purchase, and shall be payable in cash.
(g) If any Net Proceeds of an Asset Sale remain after completion of the
applicable offer, the Company shall, subject to the terms of this Agreement and
the Security Documents, be permitted to use any remaining Net Proceeds for any
purpose not otherwise prohibited by this Agreement, including, but not limited
to consummation of an asset sale offer under the Senior Subordinated Notes
Indenture.
(h) If the aggregate principal amount of Notes surrendered by the holders
thereof exceeds the amount of Net Proceeds, the Notes shall be purchased
pursuant to Section 12.07. The procedure for offers pursuant to this Section
6.11 is set forth in Section 12.07.
(i) Upon completion of each applicable offer in respect of an Asset Sale,
the amount of Net Proceeds includable in any subsequent offer shall be reset at
zero.
6.12. Transactions with Affiliates. The Company shall not, and shall not
permit any of its Restricted Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate of the Company (each of the
foregoing, an "Affiliate Transaction"), unless (i) the Affiliate Transaction is
on terms that are no less favorable to the Company or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person, (ii) if
such Affiliate Transaction or series of related Affiliate Transactions involve
aggregate consideration in excess of $3.0 million, such Affiliate Transaction
shall be approved by a majority of the disinterested members of the Board of
Directors and evidenced in a resolution of such members of the Board of
Directors certifying that that the terms of such Affiliate Transaction are at
least as favorable to the Company or the relevant Restricted Subsidiary as might
reasonably have been obtained in a comparable arm's length transaction with an
unaffiliated third party and (iii) if such Affiliate Transaction or series of
related Affiliate Transactions involves aggregate consideration in excess of
$5.0 million, or is a transaction described in clause (ii) above for which there
are no disinterested directors, the Company obtains an opinion from an
accounting, appraisal or investment banking firm of national standing to the
effect that such Affiliate Transaction is fair to the Company or the relevant
Restricted Subsidiary from a financial point of view or as the valuation.
The provisions of the foregoing paragraph shall not prohibit or apply to
(1) any employment agreement or employment arrangement, non-competition
agreement, confidentiality agreement, stock option agreement or plan, stock
ownership agreement or plan or indemnification agreement entered into by the
Company or any of its Restricted Subsidiaries with any employee or director in
the ordinary course of business and consistent with the past practice of the
Company or the Restricted Subsidiary (including the issuance of any securities
or other payments, awards or grants in securities pursuant thereto) that is
approved by a majority of disinterested directors, if any, or otherwise by a
majority of the Board of Directors of the Company; (2) transactions between or
among the Company and/or its Restricted Subsidiaries; (3) payment of reasonable
directors' fees to persons who are not otherwise Affiliates of the Company; (4)
any obligations of the Company pursuant to the Management Agreement as in effect
on the date hereof or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) in any replacement
agreement thereto so long as (x) any such amendment or replacement agreement is
not more disadvantageous to the holders in any material respect than the
original agreement as in effect on the date hereof and (y) any such amendment or
replacement agreement does not increase the amounts payable thereunder as
compared to the Management Agreement as in effect on the date hereof; (5) any
Restricted Payment that is permitted by the provisions of Section 6.08; (6)
loans and advances to employees of the Company or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with past
practice; provided, however, that loans and advances to employees for the
purpose of acquiring Capital Stock of the Company shall not exceed $2.0 million
at any one time outstanding; (7) the incurrence of Senior Subordinate Notes
Make-Well Indebtedness; provided that the incurrence thereof is in compliance
with the terms of this Agreement; (8) any bulk purchasing or insurance
arrangements with Trivest, provided that the Company's portion of any such
premium or other payments is apportioned reasonably and in good faith; and (9)
any payments expressly contemplated to be made by Section 3.12.
6.13. Liens. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or on any
income or profits therefrom nor to assign or convey any right to receive income
therefrom, in each case to secure Indebtedness or trade payables, except
Permitted Collateral Liens (in the case of Mortgaged Property) and Permitted
Liens (in all other cases).
6.14. Corporate Existence. Subject to Section 7 hereof, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect (i) its corporate existence, and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Restricted Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not reasonably
expected to be adverse in any material respect to the Noteholders.
6.15. Offer To Repurchase upon Change of Control.
(a) If a Change of Control occurs, the Company shall make an offer (a
"Change of Control Offer") to each Noteholder to repurchase all or any part,
equal to $1,000 or an integral multiple of $1,000, of the Noteholder's Notes at
an offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest thereon to the date fixed for repurchase (the
"Change of Control Payment").
(b) Within 30 business days following a Change of Control, the Company
shall mail a notice to each Noteholder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
the Notes on the date specified in the notice, which date shall be no earlier
than 30 days and no later than 60 days from the date the notice is mailed (the
"Change of Control Payment Date") pursuant to the procedures set forth in
Section 12.07 and described in the notice. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable to the repurchase of the Notes as a result of a Change of Control.
(c) On the Change of Control Payment Date, the Company shall (1) accept for
payment all Notes or portions of Notes properly tendered under the Change of
Control Offer; (2) pay to each Noteholder an amount equal to the Change of
Control Payment in respect of all Notes or portions of the Notes so tendered by
such Noteholders; and (3) deliver or cause to be delivered to the each
Noteholder an Officers' Certificate stating the aggregate principal amount of
Notes or portions of the Notes being purchased by the Company.
(d) The Change of Control provisions described in this Section 6.15 shall
be applicable notwithstanding any
other provisions of this Agreement.
(e) The Company shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in this Section 6.15 and purchases all Notes validly tendered and not
withdrawn under the Change of Control Offer.
6.16. Payments for Consent. Neither the Company nor any of its Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Noteholder for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Agreement or the Notes unless such consideration is offered to be paid
or is paid to all Noteholders that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
6.17. Sale and Leaseback Transactions. The Company shall not and shall not
permit any of its Restricted Subsidiaries to enter into any Sale and Leaseback
Transaction; provided, however, that the Company and any Guarantor may enter a
Sale and Leaseback Transaction if, at the time of entering into such Sale and
Leaseback Transaction, (a) the Company or such Guarantor could have (i) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such Sale
and Leaseback Transaction pursuant to the Fixed Charge Coverage Ratio under
Section 6.10 hereof; and (ii) incurred a Lien to secure such Indebtedness
pursuant to Section 6.13 hereof; (b) the gross cash proceeds of the Sale and
Leaseback Transaction are at least equal to the fair market value, as determined
in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Collateral Agent, such Officers' Certificate
certifying that such valuation has been approved by a majority of the
disinterested members, if any, of the Board of Directors, of the property that
is subject of such Sale and Leaseback Transaction; and (c) the Sale and
Leaseback Transaction is permitted by, and the net proceeds of such Sale and
Leaseback Transaction are applied in compliance with Section 6.11 hereof.
6.18. Books, Records. The Company and its Subsidiaries shall keep complete
and accurate books and records of their transactions in accordance with good
accounting practices on the basis of GAAP applied on a consistent basis
(including the establishment and maintenance of appropriate reserves).
6.19. Compliance with Law. The Company shall, and shall cause each of its
Subsidiaries, to comply with all Applicable Laws and shall obtain and maintain
all Permits necessary to the ownership of their respective properties or to the
conduct of their respective businesses, in each case to the extent necessary to
ensure that any such noncompliance with Applicable Law or any failure to obtain
or maintain such Permits, individually or in the aggregate, would not have a
Material Adverse Effect.
6.20. Additional Collateral; Additional Guarantors. (a) Subject to this
Section 6.20, with respect to any property acquired after the Closing Time by
any Issuer that is intended to be subject to the Lien created by any of the
Security Documents but is not so subject, the Company shall promptly (and in any
event within 30 days after the acquisition thereof) (i) execute and deliver to
the Collateral Agent such amendments or supplements to the relevant Security
Documents or such other documents as the Collateral Agent or the Required
Noteholders shall deem necessary or advisable to grant to the Collateral Agent,
for its benefit and for the benefit of the other Secured Parties, a Lien on such
property subject to no Liens other than Permitted Collateral Liens, and (ii)
take all actions necessary to cause such Lien to be duly perfected to the extent
required by such Security Document in accordance with all applicable
Requirements of Law, including the filing of financing statements in such
jurisdictions as may be reasonably requested by the Collateral Agent or the
Required Noteholders and otherwise meeting the applicable conditions set forth
in Section 3.17 and 6.23 hereof. The Company shall otherwise take such actions
and execute and/or deliver to the Collateral Agent such documents as the
Collateral Agent or the Required Noteholders shall reasonably require
(consistent with the closing conditions hereof) to confirm the validity,
perfection and priority of the Lien of the Security Documents against such
after-acquired properties.
(b) With respect to any person that is or becomes a Subsidiary after the
Closing Time, the Company shall promptly (and in any event within 30 days after
such person becomes a Subsidiary) (i) deliver to the Collateral Agent the
certificates, if any, representing all of the Capital Stock of such Subsidiary,
together with undated stock powers or other appropriate instruments of transfer
executed and delivered in blank by a duly authorized officer of the holder(s) of
such Capital Stock, and all intercompany notes owing from such Subsidiary to any
Issuer together with instruments of transfer executed and delivered in blank by
a duly authorized officer of such Issuer and (ii) cause such new Subsidiary (A)
to execute and deliver to the Noteholders Guarantees of the Notes in the form of
Exhibit B hereto and a Supplemental Agreement substantially in the form of
Exhibit K hereto pursuant to which such Subsidiary shall unconditionally
Guarantee all of the Company's obligations under the Notes on the terms set
forth in such Supplemental Agreement, and a joinder agreement to the applicable
Security Document, substantially in the form annexed thereto or, in the case of
a Foreign Subsidiary, execute a security agreement compatible with the laws of
such Foreign Subsidiary's jurisdiction in form and substance reasonably
satisfactory to the Collateral Agent or the Required Noteholders, and (B) to
take all actions necessary or advisable in the opinion of the Collateral Agent
or the Required Noteholders to cause the Lien created by the applicable Security
Document to be duly perfected to the extent required by such agreement in
accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Collateral Agent or the Required Noteholders. Notwithstanding the foregoing, (1)
the Capital Stock required to be delivered to the Collateral Agent pursuant to
clause (i) of this Section 6.20(b) shall not include any Capital Stock of a
Foreign Subsidiary created or acquired after the Closing Time and (2) no Foreign
Subsidiary shall be required to take the actions specified in clause (ii) of
this Section 6.20(b), if, in the case of either clause (1) or (2), doing so
would constitute an investment of earnings in United States property under
Section 956 (or a successor provision) of the Code, which investment would or
could reasonably be expected to trigger a material increase in the net income of
a United States shareholder of such Subsidiary pursuant to Section 951 (or a
successor provision) of the Code, as reasonably determined by the Collateral
Agent or the Required Noteholders; provided that this exception shall not apply
to (A) Voting Stock of any Subsidiary which is a first-tier controlled foreign
corporation (as defined in Section 957(a) of the Code) representing 66% of the
total voting power of all outstanding Voting Stock of such Subsidiary and (B)
100% of the Capital Stock not constituting Voting Stock of any such Subsidiary,
except that any such Capital Stock constituting 'stock entitled to vote" within
the meaning of Treasury Regulation Section 1.956-2(c)(2) shall be treated as
Voting Stock for purposes of this Section 6.20(b).
(c) The Company shall promptly grant to the Collateral Agent, within 75
days of the acquisition thereof, a security interest in and Mortgage on (i) each
Real Property owned in fee by such Issuer as is acquired by such Issuer after
the Closing Time and that, together with any improvements thereon, individually
has a fair market value of at least $250,000, and (ii) unless the Collateral
Agent or the Required Noteholders otherwise consent, each leased Real Property
of such Issuer which lease individually has a fair market value of at least
$1.0 million, in each case, as additional security for the Obligations (unless
the subject property is already mortgaged to a third party to the extent
permitted by Section 6.13). Such Mortgages shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the Collateral
Agent or the Required Noteholders and shall constitute valid and enforceable
perfected Liens subject only to Permitted Collateral Liens. The Mortgages or
instruments related thereto shall be duly recorded or filed in such manner and
in such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. Within 75 days of the acquisition
thereof, such Issuer shall otherwise take such actions and execute and/or
deliver to the Collateral Agent or the Required Noteholders such documents as
the Collateral Agent shall reasonably require to confirm the validity,
perfection and priority of the Lien of any existing Mortgage or new Mortgage
against such after-acquired Real Property (including a Title Policy, a Survey
and local counsel opinion (in form and substance reasonably satisfactory to the
Collateral Agent or the Required Noteholders in respect of such Mortgage) and
otherwise satisfy the conditions of Section 6.23 with respect to such
after-acquired Real Property.
(d) Notwithstanding anything the foregoing, no Unrestricted Subsidiary of
the Company shall be required to Guarantee the Notes provided that such
Unrestricted Subsidiary does not at such time guarantee or otherwise provide any
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
6.21. Security Interests; Further Assurances. The Company shall promptly,
upon the reasonable request of the Collateral Agent or the Required Noteholders,
at the Company's expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise deemed by the Collateral Agent or the
Required Noteholders reasonably necessary or desirable for the continued
validity, perfection and priority of the Liens on the Collateral covered thereby
subject to no other Liens except as permitted by the applicable Security
Document, or obtain any consents or waivers as may be necessary or appropriate
in connection therewith. Deliver or cause to be delivered to the Collateral
Agent from time to time such other documentation, consents, authorizations,
approvals and orders in form and substance reasonably satisfactory to the
Collateral Agent or the Required Noteholders to perfect or maintain the Liens on
the Collateral pursuant to the Security Documents. Upon the exercise by the
Collateral Agent or the Required Noteholders of any power, right, privilege or
remedy pursuant to any Basic Document which requires any consent, approval,
registration, qualification or authorization of any Governmental Authority,
execute and deliver all applications, certifications, instruments and other
documents and papers that the Collateral Agent or the Required Noteholders may
require. If the Collateral Agent or the Required Noteholders determine that they
are required by law or regulation to have appraisals prepared in respect of the
Real Property of any Issuer constituting Collateral, the Company shall provide
to the Collateral Agent appraisals that satisfy the applicable requirements of
the Real Estate Appraisal Reform Amendments of FIRREA and are otherwise in form
and substance satisfactory to the Collateral Agent or the Required Noteholders.
6.22. Amendments or Waivers of Certain Documents. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly or otherwise
change (or waive) any subordination provision (or any definition related to
subordinated provision) of any Subordinated Debt Document.
6.23. Certain Post-Closing Matters.
(a) Real Property Requirements. The Issuers shall deliver to the Collateral
Agent within 75 days of the date hereof, unless such date is extended by the
Collateral Agent or the Required Noteholders, acting reasonably:
(i) a second priority Mortgage encumbering each Mortgaged Property in favor
of the Collateral Agent, for the benefit of the Secured Parties, duly executed
and acknowledged by each Issuer that is the owner of or holder of any interest
in such Mortgaged Property, and otherwise in form for recording in the recording
office of each applicable political subdivision where each such Mortgaged
Property is situated, together with such certificates, affidavits,
questionnaires or returns as shall be required in connection with the recording
or filing thereof to create a lien under applicable law, and such financing
statements and any other instruments necessary to grant a mortgage lien under
the laws of any applicable jurisdiction, all of which shall be in form and
substance reasonably satisfactory to the Collateral Agent or the Required
Noteholders;
(ii) with respect to each Mortgaged Property, such consents, approvals,
amendments, supplements, estoppels, tenant subordination agreements or other
instruments as necessary to consummate the Transactions or as shall reasonably
be deemed reasonably necessary by the Collateral Agent or the Required
Noteholders in order for the owner or holder of the fee or leasehold interest
constituting such Mortgaged Property to grant the Lien contemplated by the
Mortgage with respect to such Mortgaged Property; provided, however, that, with
respect to any of the same relating to leasehold Mortgaged Property only, the
Issuers shall have satisfied the requirement in this clause (ii) if, after
having used commercially reasonable efforts as determined in the reasonable
judgment of the Collateral Agent or the Required Noteholders, they are unable to
obtain such consents, approvals, amendments, supplements, estoppels, tenant
subordination agreements or other instruments;
(iii) with respect to each Mortgage, a policy of title insurance (or marked
up title insurance commitment having the effect of a policy of title insurance)
insuring the Lien of such Mortgage as a valid second mortgage Lien on the
Mortgaged Property and fixtures described therein in the amount equal to not
less than 115% of the fair market value of such Mortgaged Property and fixtures,
which fair market value is set forth on Schedule 6.23(a), which policy (or such
marked-up commitment) (each, a "Title Policy") shall (A) be issued by the Title
Company, (B) to the extent necessary, include such reinsurance arrangements
(with provisions for direct access, if necessary) as shall be reasonably
acceptable to the Collateral Agent, (C) contain a "tie-in" or "cluster"
endorsement, if available under applicable law (i.e., policies which insure
against losses regardless of location or allocated value of the insured property
up to a stated maximum coverage amount), (D) have been supplemented by such
endorsements as shall be reasonably requested by the Collateral Agent or the
Required Noteholders (including endorsements on matters relating to usury, first
loss, last dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate, environmental lien,
subdivision, separate tax lot and so-called comprehensive coverage over
covenants and restrictions), and (E) contain no exceptions to title other than
exceptions reasonably acceptable to the Collateral Agent;
(iv) with respect to each Mortgaged Property, such affidavits,
certificates, information (including financial data) and instruments of
indemnification (including a so-called "gap" indemnification) as shall be
required to induce the Title Company to issue the Title Policy/ies and
endorsements contemplated above;
(v) evidence reasonably acceptable to the Collateral Agent or the Required
Noteholders of payment by the Company of all Title Policy premiums, search and
examination charges, escrow charges and related charges, mortgage recording
taxes, fees, charges, costs and expenses required for the recording of the
Mortgages and issuance of the Title Policies referred to above;
(vi) with respect to each Real Property or Mortgaged Property, copies of
all Leases in which the Company or any Subsidiary holds the lessor's interest or
other agreements relating to possessory interests, if any. To the extent any of
the foregoing affect any Mortgaged Property, such agreement shall be subordinate
to the Lien of the Mortgage to be recorded against such Mortgaged Property,
either expressly by its terms or pursuant to a subordination, non-disturbance
and attornment agreement, and shall otherwise be reasonably acceptable to the
Collateral Agent or the Required Noteholders;
(vii) with respect to each Mortgaged Property, the Company shall have made
all notifications, registrations and filings, to the extent required by, and in
accordance with, all Governmental Real Property Disclosure Requirements
applicable to such Mortgaged Property;
(viii) Surveys with respect to each Mortgaged Property; and
(ix) with respect to each location set forth on Schedule 3.17(vi), a
Landlord Access Agreement or Bailee Letter, as applicable; provided that no such
Landlord Access Agreement shall be required with respect to any Real Property
that could not be obtained after the Issuer that is the lessee or owner of the
inventory or other personal property Collateral stored with the bailee thereof,
as applicable, shall have used all commercially reasonable efforts to do so; and
(x) the opinions of the various local counsel identified on Schedule 3.04
covering the enforceability of the Mortgages and such other matters as the
Collateral Agent or the Required Noteholders may reasonably require.
(b) Foreign Capital Stock Pledge. Within 75 days of the date hereof, unless
such date is extended by the Collateral Agent or the Required Noteholders,
acting reasonably, the Company or the applicable Issuer shall deliver to the
Collateral Agent favorable written Opinion of Counsel relating to the perfection
of the pledge of Capital Stock of Maquilados Technicos S.A. de C.V., execute a
security agreement compatible with the laws of Mexico and any stock pledge
agreement and/or any other documentation or instruments executed or prepared in
connection therewith, such Opinion of Counsel, documentation or instruments
being in form and substance reasonably satisfactory to the Collateral Agent or
the Required Noteholders.
(c) Additional Patents. The applicable Issuer shall terminate or cause to
be terminated within 75 days of the date hereof any Lien which is not a
Permitted Collateral Lien, if any, encumbering the intellectual property listed
on Schedule 6.23(c) hereto.
(d) Insurance. The Collateral Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section
17.11 and the applicable provisions of the Basic Documents, each of which shall
be endorsed or otherwise amended to include a "standard" or "New York" lender's
loss payable or mortgagee endorsement (as applicable) and shall name the
Collateral Agent, on behalf of the Secured Parties, as additional insured, in
form and substance reasonably satisfactory to the Required Noteholders, which
policies shall be delivered, (i) in the case of a loss payable endorsement,
within 10 calendar days of the date hereof, or (ii) in the case of a mortgagee
endorsement, within 75 days of the date hereof or contemporaneously with the
delivery of the Mortgages pursuant to this Section 6.23.
(e) Deposit Accounts. The Collateral Agent shall have received within 15
days of the date hereof unless such date is extended by the Collateral Agent or
the Required Noteholders all other certificates, agreements, including control
agreements, or instruments necessary to perfect the Collateral Agent's security
interest in all chattel paper, all instruments, all deposit accounts and all
Investment Property of each Issuer (to the extent required by Section 17).
SECTION 7.
SUCCESSORS
7.01. Merger, Consolidation, or Sale of Assets. The Company shall not
consolidate or merge with or into another Person (whether or not the Company is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another Person unless (a) the Company is the
surviving corporation or Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (the "Successor
Company") is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia, (b) the entity or Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Successor Company assumes all the obligations of the Company
under the Notes and this Agreement pursuant to a supplemental agreement to this
Agreement in form and substance reasonably satisfactory to the Required
Noteholders and a joinder agreement to the security agreement in a form
reasonably satisfactory to the Collateral Agent or the Required Noteholders, (c)
immediately after such transaction, no Default or Event of Default exists and
(d) except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the Successor Company
shall, at the time of such transaction and after giving pro forma effect thereto
as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 6.10(a) hereof.
7.02. Successor Corporation Substituted. Upon any consolidation or merger,
or any sale, assignment, transfer, lease, conveyance or other disposition of all
or substantially all of the assets of the Company in accordance with Section
7.01 hereof, the successor corporation formed by such consolidation or into or
with which the Company is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Agreement
referring to the "Company" shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Agreement with the same effect as if such successor Person had been named
as the Company herein; provided, however, that the predecessor Company shall not
be relieved from the obligation to pay the principal of and interest on the
Notes except in the case of a sale of all of the Company's assets that meets the
requirements of Section 7.01 hereof.
SECTION 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
8.01. Option To Effect Legal Defeasance or Covenant Defeasance. The Company
may, at the option of its Board of Directors evidenced by a resolution set forth
in an Officers' Certificate, at any time, elect to have either Section 8.02 or
8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Section 8.
8.02. Legal Defeasance and Discharge. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.02, the Company
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its obligations with respect to
all outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Agreement referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Agreement, except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Noteholders of outstanding Notes to
receive solely from the trust fund described in Section 8.04 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest, on such Notes when such payments are due; (b) the
Company's obligations with respect to such Notes under Section 10 hereof, and
(c) this Section 8. Subject to compliance with this Section 8, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
8.03. Covenant Defeasance. Upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03, the Company shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from its obligations under the covenants contained in Sections 6.02,
6.08, 6.09, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16 and 6.17, hereof, and the
operation of Section 7.01(d) hereof, with respect to the outstanding Notes on
and after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Noteholders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 11.01 hereof, but, except as specified
above, the remainder of this Agreement and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 11.01(c) through
11.01(g) hereof shall not constitute Events of Default.
8.04. Conditions to Legal or Covenant Defeasance. The following shall be
the conditions to the application of either Section 8.02 or 8.03 hereof to the
outstanding Notes. In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit in a trust, for the benefit of the
Noteholders, cash in United States dollars, non-callable Government Securities,
or a combination thereof, in such amounts as shall be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the outstanding Notes on the
stated date for payment thereof or on the applicable redemption date, as the
case may be, and the Company must specify whether the Notes are being defeased
to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company shall
have delivered to the Noteholders and the Collateral Agent an Opinion of Counsel
in the United States reasonably acceptable to the Noteholders confirming that
(A) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Agreement, there has been
a change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Noteholders of the outstanding Notes shall not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and shall
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall
have delivered to the Noteholders and the Collateral Agent an Opinion of Counsel
in the United States reasonably acceptable to the Required Noteholders
confirming that the Noteholders of the outstanding Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall occur under Sections 11.01(i) or
11.01(j) hereof at any time in the period ending on the 91st day after the date
of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Agreement) to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(f) the Company shall have delivered to each Noteholder an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that on the
123rd day following the deposit, the trust funds shall not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Collateral Agent and each
Noteholder an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Noteholders over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company; and
(h) the Company shall have delivered to each Noteholder and the Collateral
Agent an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
8.05. Deposited Money and Government Securities To Be Held in Trust; Other
Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and
non-callable Government Securities (including the proceeds thereof) deposited
with a qualifying trustee reasonably acceptable to the Required Noteholders
(collectively for purposes of this Section 8.05, the "Trustee") pursuant to
Section 8.04 hereof in respect of the outstanding Notes shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Notes and
this Agreement, to the payment, either directly or as the Trustee may determine,
to the Noteholders of such Notes of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Noteholders of the outstanding
Notes.
Anything in this Section 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
8.06. Repayment to Company. Any money deposited with the Trustee in trust
for the payment of the principal of, premium, if any, or interest on any Note
and remaining unclaimed for two years after such principal, and premium, if any,
or interest has become due and payable shall be paid to the Company on its
request; and the Noteholder of such Note shall thereafter, as an unsecured
creditor, look only to the Company for payment thereof, and all liability of the
Trustee with respect to such trust money shall thereupon cease; provided,
however, that the Trustee, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in The New York Times
and The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining shall be repaid to the Company.
8.07. Reinstatement. If the Trustee is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Agreement and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee is permitted to apply
all such money in accordance with Section 8.02 or 8.03 hereof, as the case may
be; provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Noteholders of
such Notes to receive such payment from the money held by the Trustee.
SECTION 9.
PROVISIONS RELATING TO RESALES OF Securities
9.01. No Integration. Each Issuer agrees that it shall not and (to the
extent within its control) it shall cause its Affiliates not to make any offer
or sale of securities of any class of such Issuer if, as a result of the
doctrine of "integration" referred to in Rule 502 under the Securities Act, such
offer or sale would render invalid any applicable exemption from the
registration requirements of the Securities Act provided by Section 4(2) thereof
or by Rule 144A or Regulation S thereunder or otherwise with respect to the
Notes.
SECTION 10.
THE NOTES
10.01. Form and Execution. The Notes shall be in the form of Exhibit A
hereto. The Notes shall be executed on behalf of the Company by its President or
one of its Vice Presidents, under its corporate seal reproduced thereon attested
by its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who were at
any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
10.02. Terms of the Notes. The terms of the Notes shall be as set forth in
Exhibit A. Without limiting the foregoing:
(a) Stated Maturity. The Stated Maturity of the principal of the Notes
shall be as provided in Exhibit A.
(b) Interest. The Notes will bear interest on their principal amount and
overdue interest as provided in Exhibit A.
10.03. Denominations. The Notes shall be issuable only in registered form
without coupons and only in minimum denominations of $2.5 million (or such
lesser amount as may be requested at the Closing Time by any Purchaser) and any
integral multiples of $1,000 in excess of $2.5 million, provided that any
transfer other than any transfer (x) by any Purchaser to one or more Affiliates
or (y) by any Purchaser within five (5) Business Days after the Closing Time)
shall, when taken together with any simultaneous transfer by one or more
Purchasers or subsequent Noteholders, be in a minimum aggregate denomination of
$2.5 million; provided, further, that each such minimun demonination set forth
in this Section shall be decreased by the pro rata portion of any repayments of
Notes.
10.04. Form of Legend for the Notes. Unless otherwise permitted by Section
10.07, every Note issued and delivered hereunder shall bear a legend in
substantially the following form:
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED
UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY IS SUBJECT TO THE TERMS OF
THE PURCHASE AND SECURITY AGREEMENT, DATED AS OF MARCH 31, 2004 (THE "PURCHASE
AGREEMENT"), AMONG XXXXX XXXXXX INTERNATIONAL, INC. (THE "COMPANY"), WLFI
HOLDINGS, INC., AS PARENT, THE GUARANTORS NAMED THEREIN, THE BANK OF NEW YORK,
AS COLLATERAL AGENT, AND THE PURCHASERS NAMED THEREIN. A COPY OF SUCH PURCHASE
AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.
Each Note shall also bear an original issue discount legend that satisfies
the requirements of Section 1275(c) of the Code and Treasury Regulation T167
1275.3.
10.05. Payments and Computations. All payments of interest on the Notes
shall be paid by the Paying Agent to the Persons in whose names such Notes are
registered on the Security Register at the close of business on the date fifteen
days prior to the related Interest Payment Date (the 'Regular Record Date") and
all payments of principal on the Notes shall be paid by the Paying Agent to the
Persons in whose names such Notes are registered on the applicable Redemption
Date or at Maturity, as applicable. Principal on any Note shall be payable only
against surrender therefor, while payments of interest on Notes shall be made,
in accordance with this Agreement and subject to applicable laws and
regulations, by wire transfer to such account as any Noteholder shall designate
by written instructions received by the Company and the Paying Agent no less
than 15 days prior to any applicable Interest Payment Date, which wire
instruction shall continue in effect until such time as the Noteholder notifies
the Company and the Paying Agent, in writing, of a different wire instruction or
that such Noteholder no longer is the registered owner of such Note or Notes.
10.06. Registration; Registration of Transfer and Exchange.
(a) Security Register. The Company shall maintain a register (the "Security
Register") for the registration or transfer of the Notes. The name and address
of the holder of each Note, records of any transfers of the Notes and the name
and address of any transferee of a Note shall be entered in the Security
Register and the Company shall, promptly upon receipt thereof, update the
Security Register to reflect all information received from a Noteholder and
forward a copy of the updated Security Register to the Collateral Agent. There
shall be no more than one Noteholder for each Note, including all beneficial
interests therein. The Company shall provide the Collateral Agent with a copy of
the Security Register promptly following each Regular Record Date and at such
other times as the Collateral Agent may reasonably request.
(b) Registration of Transfer. Upon surrender for registration of transfer
of any Note at the office or agency of the Company, the Company shall execute
and deliver, in the name of the designated transferee or transferees, one or
more new Notes, of any authorized denominations and like aggregate principal
amount.
(c) Exchange. At the option of the Noteholder, Notes may be exchanged for
other Notes, of any authorized denominations and of like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Company shall execute
and deliver the Notes which the Noteholder making the exchange is entitled to
receive.
(d) Effect of Registration of Transfer or Exchange. All Notes issued upon
any registration of transfer of exchange of Notes shall be the valid obligations
of the Company, evidencing the same debt, and entitled to the same benefits
under this Agreement, as the Notes surrendered upon such registration of
transfer or exchange.
(e) Requirements; Charges. Every Note presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company duly executed by the Noteholder thereof or his
attorney duly authorized in writing. No service charge shall be made for any
registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 7.02 not involving any transfer.
(f) Certain Limitations. If the Notes are to be redeemed in part, the
Company shall not be required (i) to issue, register the transfer of or exchange
any Note during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of any such Notes selected for
redemption under Section 12.01 and ending at the close of business on the day of
such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
10.07. Transfer Restrictions. Subject to the provisions of this Section
10.07, any Note may be transferred or assigned, in whole or in part, by the
Noteholder of such Note at any time, and from time to time, provided such
transfer is in compliance with applicable securities laws. Each transferee or
assignee of any Note acknowledges that the Note has not been registered under
the Securities Act and may be transferred or assigned only pursuant to an
effective registration under the Securities Act or pursuant to an applicable
exemption from the registration requirements of the Securities Act. With respect
to any transfer or assignment of a Note, or any portion thereof, that shall
occur, such Noteholder shall, if required by the Company, request an opinion of
counsel (which shall be rendered by counsel reasonably acceptable to the
Company, it being expressly understood that an opinion of the in-house counsel
of such Noteholder shall be deemed acceptable by the Company) that the proposed
transfer may be effected without registration or qualification under any Federal
or state securities or blue sky law. Counsel shall, as promptly as practicable,
notify the Company and the Noteholder of such opinion and of the terms and
conditions, if any, to be observed in such transfer, whereupon the Noteholder
shall be entitled to transfer such Note (or portion thereof), subject to any
other provisions and limitations contained in this Agreement or such Note. All
instruments of transfer shall be medallion guaranteed.
10.08. Mutilated, Destroyed, Lost and Stolen Notes. If any mutilated Note
is surrendered to the Company, the Company shall execute and deliver in exchange
therefor a new Note of the same principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company (a) evidence to its satisfaction
of the destruction, loss or theft of any Note and (b) such security or indemnity
as may be required by then to save each of it and any agent harmless, then, in
the absence of notice that such Note has been acquired by a bona fide purchaser,
the Company shall execute and deliver, in lieu of any such destroyed, lost or
stolen Note, a new Note of a like principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note pursuant to this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith.
Every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all other
Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
10.09. Persons Deemed Owners. Prior to due presentment of a Note for
registration of transfer, the Company, any Issuer and any agent of the Company
or any Issuer may treat the Person in whose name such Note is registered on the
Security Register as the owner of such Note for the purpose of receiving payment
of principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue and neither the Company, any Issuer nor any
agent of the Company or any Issuer shall be affected by notice to the contrary.
The Collateral Agent shall be entitled to conclusively rely for all
purposes under this Agreement and the other Transaction Documents upon the
contents of the copy of the Security Register last received by it pursuant to
Section 10.06(a) hereof.
10.10. Cancellation. All Notes surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Company, be delivered to the Company and shall be promptly canceled by
it. The Company shall cancel any Notes previously issued and delivered hereunder
which the Company may have reacquired.
10.11. Paying Agent. The Collateral Agent shall maintain an office or
agency where the Securities may be presented for payment ("Paying Agent") and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.
10.12. Deposit of Money. On each Interest Payment Date at Maturity, any
Redemption Date, or any Purchase Date, the Company shall deposit with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such date. An installment of principal, premium or interest shall be
considered paid on the date it is due if the Paying Agent shall have received,
for the benefit of the Noteholders, on or prior to 10:00 a.m. New York City
time, that date U.S. legal tender designated for and sufficient to pay such
installment in full and is not prohibited from paying such money to the
Noteholders.
SECTION 11.
EVENTS OF DEFAULT
11.01. Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each, an "Event of
Default"):
(a) the Company defaults in the payment when due of interest on the Notes
and such default continues for a period of thirty (30) calendar days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at its
Maturity;
(c) the Company or any of its Restricted Subsidiaries fails to comply for
30 days with any of the provisions of Section 6.08, 6.10, 6.11 or 6.15 hereof;
(d) the Company or any of its Restricted Subsidiaries, for 30 days after
notice to the Company by the Noteholders of at least 25% in aggregate principal
amount of the then outstanding Notes fails to comply with any of its other
agreements or covenants in this Agreement, the Notes or any other Basic
Document;
(e) any representation, warranty, certification or statement made or deemed
to have been made by or on behalf of any Issuer or by any officer of any Issuer
in respect of any Basic Document or in any statement or certificate at any time
given by or on behalf of any Issuer or by any officer of any Issuer in writing
pursuant hereto or in connection herewith or therewith shall be false in any
material respect on the date as of which made;
(f) the default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries, or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries, whether the Indebtedness or guarantee now exists or is
created after the date hereof, which default; (i) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of any grace period provided for on the date of the default (a
"Payment Default") or (ii) results in the acceleration of the Indebtedness prior
to its scheduled maturity and, in each case, the principal amount of such
Indebtedness, together with the principal amount of any other Indebtedness under
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more;
(g) failure by the Company or any of its Significant Subsidiaries, or a
group of Restricted Subsidiaries that taken together would constitute a
Significant Subsidiary, to pay final judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed for a period of 60
consecutive days;
(h) any Guarantee of the Notes is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and effect
or any Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its guarantee; provided, however, that this
clause (h) shall apply only to a Guarantor that is a Significant Subsidiary or a
group of Guarantors that, taken together, would constitute a Significant
Subsidiary;
(i) the Company or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(1) commences a voluntary case,
(2) consents to the entry of an order for relief against it in an
involuntary case,
(3) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(4) makes a general assignment for the benefit of its creditors, or
(5) generally is not paying its debts as they become due;
(j) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(1) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case; or
(2) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(3) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary;
and, in each case, the order or decree remains unstayed and in effect for
60 consecutive days;
(k) any agent under the First Lien Credit Facility or any other party
entitled to act thereunder commences judicial proceedings to foreclose on the
collateral securing the First Lien Credit Facility, or exercises any right under
applicable law or any instrument evidencing a security interest or other
encumbrance in respect of such collateral to take ownership or effect the
transfer of such collateral in lieu of foreclosure; or
(l) any security interest and Lien purported to be created by any Security
Document shall cease to be in full force and effect, or shall cease to give the
Collateral Agent, for the benefit of the Secured Parties, the Liens, rights,
powers and privileges purported to be created and granted under such Security
Documents (including a perfected first priority security interest in and Lien
on, the Securities Collateral and a second priority security interest on all
other Collateral thereunder (except as otherwise expressly provided in such
Security Document)) in favor of the Collateral Agent, or shall be asserted by
the Company or any other Issuer not to be, a valid, perfected, first or second
priority (except as otherwise expressly provided in this Agreement or such
Security Document) security interest in or Lien on the Collateral covered
thereby.
11.02. Remedies. If an Event of Default (other than an Event of Default
specified in Section 11.01(i) or 11.01(j)) occurs and is continuing, then and in
every such case the Noteholders of 33 1/3% or more in principal amount of the
then outstanding Notes may declare the principal amount of all the Notes to be
due and payable immediately, by a notice in writing to the Company, and upon any
such declaration such principal amount and any accrued interest shall become
immediately due and payable. For the avoidance of doubt, if any Payment Default
or acceleration that constitutes an Event of Default under Section 11.01(f)
shall have occurred and prior to any acceleration under this Section 11.02 such
Payment Default shall have been cured or waived or such acceleration shall have
been rescinded, then from and after such cure, waiver or rescission, such Event
of Default shall no longer be deemed to be continuing. If an Event of Default
specified in Section 11.01(i) or 11.01(j) occurs and is continuing, the
principal amount of and any accrued interest on the outstanding Notes shall
automatically, and without any declaration or other action on the part of any
Noteholder, become immediately due and payable. Notwithstanding the foregoing,
if any Event of Default specified in Section 11.01(a) or 11.01(b) occurs and is
continuing, any Noteholder may declare such Noteholder's Notes due and payable
immediately.
If an Event of Default occurs by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to optionally redeem the Notes pursuant to Paragraph 3
of the Notes, then, upon acceleration of the Notes, an equivalent premium shall
also become and be immediately due and payable, to the extent permitted by
Applicable Law, anything in the Agreement or in the Notes to the contrary
notwithstanding, provided that if such Event of Default occurs when the Notes
are not redeemable by the Company, the premium shall be 3% of the principal of
the Notes.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained, the
Required Noteholders, by written notice to the Company, may rescind and annul
such declaration and its consequences.
Subject to the Intercreditor Agreement, upon the occurrence of any Event of
Default, the Collateral Agent shall have the right, at the direction of the
Required Noteholders, to exercise any and all other rights and remedies provided
for herein, under the UCC and at law or equity generally, including, without
limitation, the right to foreclose the security interests granted herein and to
realize upon any Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral with or without judicial
process. The Collateral Agent may, at the direction of the Required Noteholders,
enter any Issuers premises or other premises without legal process and without
incurring liability to any Issuer therefor, and the Collateral Agent may
thereupon, or at any time thereafter, in its discretion without notice or
demand, take the Collateral and remove the same to such place as the Collateral
Agent may deem advisable and the Collateral Agent may require the Issuers to
make the Collateral available to the Collateral Agent at a convenient place.
With or without having the Collateral at the time or place of sale, the
Collateral Agent may, at the direction of the Required Noteholders, sell the
Collateral, or any part thereof, at public or private sale, at any time or
place, in one or more sales, at such price or prices, and upon such terms,
either for cash, credit or future delivery, as the Collateral Agent may elect.
Except as to that part of the Collateral which is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, the Collateral Agent shall give the Issuers reasonable notification of
such sale or sales, it being agreed that in all events written notice mailed to
the Issuers at least ten (10) days prior to such sale or sales is reasonable
notification. At any public sale the Collateral Agent or any Noteholder may bid
for and become the purchaser, and the Collateral Agent, any Noteholder or any
other purchaser at any such sale thereafter shall hold the Collateral sold
absolutely free from any claim or right of whatsoever kind, including any equity
of redemption and such right and equity are hereby expressly waived and released
by each Issuer. The Collateral Agent may specifically disclaim any warranties of
title or the like at any sale of Collateral. In connection with the exercise of
the foregoing remedies, the Collateral Agent is granted permission to use all of
each Issuer's trademarks, trade styles, trade names, patents, patent
applications, licenses, franchises and other proprietary rights which are used
in connection with (a) Inventory for the purpose of disposing of such Inventory
and (b) Equipment for the purpose of completing the manufacture of unfinished
goods.
11.03. Waiver of Past Defaults. The Required Noteholders may on behalf of
the holders of all the Notes waive any past default hereunder and its
consequences, except a default:
(a) in the payment of the principal (or premium, if any) or interest on any
Note (including any Note which is required to have been purchased pursuant to an
offer to purchase that the Company is required to make hereunder), or
(b) in respect of a covenant or provision hereof which under Section 18.04
cannot be modified or amended without the consent of the holder of each
outstanding Note affected.
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; provided, however, no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 12.
REDEMPTION
12.01. Right of Redemption. The Notes may be redeemed at the election of
the Company at such times, in such amounts and at the Redemption Prices
(together with any applicable accrued interest to the Redemption Date) specified
in the Form of Note attached as Exhibit A hereto.
12.02. Partial Redemptions. In case the Company elects to redeem less than
all of the Notes, the Company shall redeem the Notes pro rata from each
Noteholder. For all purposes of this Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.
12.03. Notice of Redemption. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than 30 nor more than 45 days
prior to the Redemption Date, to each Noteholder to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the outstanding Notes are to be redeemed, the portion
of each Note to be redeemed,
(d) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note to be redeemed and that interest thereon will cease
to accrue on and after said date, and
(e) the place or places where such Notes are to be surrendered for payment
of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company and at the expense of the Company.
12.04. Deposit of Redemption Price. Prior to any Redemption Date, the
Company shall segregate and hold in trust an amount of money sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) any applicable accrued interest on all the Notes which are to be
redeemed on that date.
12.05. Notes Payable on Redemption Date. If notice of redemption shall have
been given as provided above, the Notes so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and any applicable accrued interest) such Notes
shall not bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price, together with any applicable accrued interest to the
Redemption Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the
Noteholders of such Notes, or one or more Predecessor Notes, registered as such
at the close of business on the relevant Record Dates according to their terms
and the provisions of this Agreement.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate provided by the Note.
12.06. Notes Redeemed in Part. Any Note which is to be redeemed only in
part shall be surrendered at the principal offices of the Company (with, if the
Company so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company duly executed by, the Noteholder thereof or his
attorney duly authorized in writing), and the Company shall execute and deliver
to the Noteholder of such Note without service charge, a new Note or Notes, of
any authorized denomination as requested by such Noteholder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered.
12.07. Offer to Purchase. In the event that, pursuant to Section 6.11 or
6.15 hereof, the Company shall be required to commence an offer to all
Noteholders to purchase Notes (a "Repurchase Offer"), it shall follow the
procedures specified below.
The Repurchase Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than 5:00 pm
on the Business Day of the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 6.11 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such Record Date, and no additional interest shall be payable to
Noteholders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of an Repurchase Offer, the Company shall send, by
first class mail, a notice to each of the Noteholders. The notice shall contain
all instructions and materials necessary to enable such Noteholders to tender
Notes pursuant to the Repurchase Offer. The Repurchase Offer shall be made to
all Noteholders. The notice, which shall govern the terms of the Repurchase
Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this Section 12.07
and Section 6.11 or 6.15 hereof and the length of time the Repurchase Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Repurchase Offer shall cease to accrue
interest, after the Purchase Date;
(e) that Noteholders electing to have a Note purchased pursuant to a
Repurchase Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Noteholders electing to have a Note purchased pursuant to any
Repurchase Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Noteholder to Elect Purchase" on the reverse of the Note
completed, to the Company at the address specified in the notice at least three
days before the Purchase Date;
(g) that Noteholders shall be entitled to withdraw their election if the
Company, receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Noteholder, the principal amount of the Note the Noteholder delivered for
purchase and a statement that such Noteholder is withdrawing his election to
have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Noteholders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Noteholders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered.
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to each Noteholder and the Collateral Agent an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 12.07. The
Company shall promptly (but in any case not later than 5:00 pm on the day of the
Purchase Date) mail or deliver to each tendering Noteholder an amount equal to
the purchase price of the Notes tendered by such Noteholder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note in a
principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Noteholder thereof.
Other than as specifically provided in this Section 12.07, any purchase
pursuant to this Section 12.07 shall be made pursuant to the provisions of
Sections 12.01 through 12.06 hereof.
SECTION 13.
GUARANTEES
13.01. Guarantees. Each of the Guarantors hereby, jointly and severally,
unconditionally guarantees, to each Noteholder of a Note executed and delivered
by the Company, irrespective of the validity and enforceability of this
Agreement, the Notes or the obligations of the Company hereunder or thereunder,
that: (a) the principal of and premium and interest on the Notes shall be
promptly paid in full when due, whether at Stated Maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of (and any
premium) and interest on the Notes, if any, if lawful, and all other obligations
of the Company to the Noteholders hereunder or thereunder shall be promptly paid
in full or performed, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that the same shall be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason,
the Guarantors shall be jointly and severally obligated to pay the same
immediately. The Guarantors hereby agree that their obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Agreement, the absence of any action to enforce the same, any
waiver or consent by any Noteholder with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Agreement.
If any Noteholder is required by any court or otherwise to return to the
Company or Guarantors, or any Custodian, trustee, liquidator or other similar
official acting in relation to either the Company or Guarantors, any amount paid
by such Noteholder, this Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect. Each Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the Noteholders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between
the Guarantors, on the one hand, and the Noteholders, on the other hand, (a) the
Maturity of the obligations guaranteed hereby may be accelerated as provided in
Section 11 for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby and (b) in the event of any declaration of
acceleration of such obligations as provided in Section 11, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee. The Guarantors shall have the
right to seek contribution from any non-paying Guarantor so long as the exercise
of such right does not impair the rights of the Noteholders under the
Guarantees.
13.02. Execution and Delivery of Guarantees. To evidence its Guarantee set
forth in Section 13.01, each Guarantor hereby agrees that this Agreement and a
Guarantee in the form of Exhibit B hereto shall be executed on behalf of such
Guarantor by its President or one of its Officers and, to the extent not a party
to this Agreement on the date hereof, each Guarantor shall execute and deliver
to the Noteholders a Guarantee in the form of Exhibit B hereto and a
supplemental agreement substantially in the form of Exhibit K hereto, pursuant
to which such Person shall become a Guarantor under this Section 13 and shall
guarantee the obligations of the Company under this Agreement and the Notes.
Concurrently with the execution and delivery of such Guarantee and such
supplemental agreement, such Guarantor shall deliver to the Noteholders an
opinion of counsel reasonably acceptable to the Purchasers that the foregoing
have been duly authorized, executed and delivered by such Guarantor and that
such Guarantor's Guarantee is a valid and legally binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms.
If an officer whose signature is on this Agreement or on a Guarantee no
longer holds that office at the time the Company executes and delivers the Note
on which a Guarantee is endorsed, the Guarantee shall be valid nevertheless. The
execution and delivery of any Note by the Company shall constitute due delivery
of the Guarantee set forth in this Agreement on behalf of the Guarantors. Each
Guarantor hereby agrees that its Guarantee set forth in Section 13.01 shall
remain in full force and effect notwithstanding any failure to endorse on each
Note a notation of such Guarantee.
13.03. Guarantors May Consolidate, Etc. on Certain Terms. No Guarantor may
consolidate with or merge, consolidate or amalgamate with or into (whether or
not such Guarantor is the surviving Person) another Person (other than the
Company or another Guarantor) except in accordance with Section 7.02 and unless,
subject to the provisions of Section 13.04 hereof, the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
unconditionally assumes all the obligations of such Guarantor under the Notes
and this Agreement pursuant to a Supplemental Agreement, in the form of
Exhibit K hereto.
In case of any such consolidation or merger and upon the assumption by the
successor corporation, by supplemental agreement, executed and delivered to the
Noteholders and satisfactory in form to the Required Noteholders, of the
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Agreement to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor. Such
successor corporation thereupon may cause to be signed any or all of the
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company. All the Guarantees so
issued shall in all respects have the same legal rank and benefit under this
Agreement as the Guarantees theretofore and thereafter issued in accordance with
the terms of this Agreement as though all of such Guarantees had been issued at
the date of the execution hereof.
Except as set forth in Section 8 hereof, nothing contained in this
Agreement or in any of the Notes shall prevent any consolidation or merger of a
Guarantor with or into the Company, or shall prevent any sale or conveyance of
the property of a Guarantor as an entirety or substantially as an entirety to
the Company.
13.04. Releases of Guarantees. In the event of (i) a sale or other
disposition of all of the assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise or (ii) a sale or other disposition of all of the
capital stock of any Subsidiary Guarantor, such Subsidiary Guarantor (in the
event of a sale or other disposition, by way of such a merger, consolidation,
distribution or otherwise, of all of the capital stock of such Subsidiary
Guarantor) or the corporation acquiring the property (in the event of a sale or
other disposition of all of the assets of such Subsidiary Guarantor) will be
released and relieved of any obligations under its Guarantee; provided that the
proceeds of such sale or other disposition shall be applied in accordance with
the provisions of Section 8.04 hereof. Any Subsidiary Guarantor not released
from its obligations under its Guarantee shall remain liable for the full amount
of principal of and interest on the Notes and for the other obligations of any
Subsidiary Guarantor under this Agreement as provided in this Section 13.
13.05. Limitation on Guarantor Liability. Each Guarantor, and by its
acceptance of the Notes, each Noteholder, hereby confirms that it is the
intention of all such parties that the Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Guarantee. To
effectuate the foregoing intention, the Noteholders and the Guarantors hereby
irrevocably agree that the obligations of such Guarantor under its Guarantee and
this Section 13 shall be limited to the maximum amount as will, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Section 13, result in the obligations of such Guarantor
under its Guarantee not constituting a fraudulent transfer or conveyance.
SECTION 14.
EXPENSES, INDEMNIFICATION AND
CONTRIBUTION, AND TERMINATION
14.01. Expenses. The Issuers will pay all costs and reasonable expenses
(including reasonable attorneys' and accountants' fees and disbursements
(subject to the limitations set forth in clause (a)and (b) below)) incurred by
the Purchasers or any Noteholder in connection with the Basic Documents and in
connection with any amendments, waivers or consents under or in respect of this
Agreement, the other Basic Documents or the Securities (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a)the Purchasers' reasonable out-of-pocket expenses in connection with the
Purchasers' examinations and appraisals of the Issuers' properties, books and
records and the preparation, negotiation, execution and delivery of the Basic
Documents, provided, however, that the Issuers will not have any obligation to
pay such out-of-pocket expenses for more than one legal counsel selected by the
Required Noteholders under this clause (a), (b) the costs and expenses incurred
in enforcing, defending or declaring (or determining whether or how to enforce,
defend or declare) any rights or remedies under this Agreement, the Basic
Documents or the Securities following the occurrence or during the continuance
of a Default or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the other Basic
Documents or the Securities, or by reason of being a holder of any Securities,
(c) the costs and expenses, including reasonable and documented consultants' and
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Guarantor or in connection with any work-out or restructuring of
the transactions contemplated hereby, by the other Basic Documents or by the
Securities, and (d) the fees and expenses of the Collateral Agent. The Issuers
will pay, and will save the Purchasers, in their capacity as Purchasers, and
each other holder of a Security harmless from, all claims in respect of any
fees, costs or expenses if any, of brokers and finders in relation to the
Transactions.
14.02. Indemnification.
(a) Indemnification by the Issuers. Each Issuer, jointly and severally,
agrees to indemnify and hold harmless (i) each Purchaser, (ii) each Person, if
any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) any such Person referred to in clause (i) (any
of the Persons referred to in this clause (ii) being referred to herein as a
"Controlling Person") and (iii) the respective officers, directors, managing
directors, stockholders, partners, employees, trustees, fiduciaries, and agents
of any Person referred to in clause (i) or any such Controlling Person (any such
Person referred to in clause (i), (ii) or (iii), a "Purchaser Indemnified
Person") against any losses, claims, damages or liabilities, joint or several,
to which such Purchaser Indemnified Person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based (i) upon
any inaccuracy in any of the representations and warranties of the Issuers
contained herein, (ii) upon any failure of any Issuer to perform its obligations
hereunder or under Applicable Law, or (iii) upon any change in the business,
management, operations, affairs, condition (financial or otherwise), assets,
property, prospects or results of operations of the Company and its Subsidiaries
during the period from the Reference Date to the Closing Time, inclusive, that,
individually or in the aggregate, has had or would have a Material Adverse
Effect that has not been disclosed in writing or was not known to the
Purchasers, and will reimburse each such Purchaser Indemnified Person for any
legal and other expenses incurred by such Purchaser Indemnified Person in
connection with investigating or defending any such action or claims as such
expenses are incurred. The indemnity agreement set forth in this Section
14.02(a)shall be in addition to any liabilities that the Issuers may otherwise
have.
(b) Notifications and Other Indemnification Procedures. Promptly after
receipt by a Purchaser Indemnified Person of notice of the commencement of any
action, such Purchaser Indemnified Person shall, if a claim in respect thereof
is to be made against an indemnifying party under Section 14.02(a), notify such
indemnifying party in writing of the commencement thereof, but the omission so
to notify the indemnifying party will not relieve it from any liability which it
may have to any Purchaser Indemnified Person otherwise than under Section
14.02(a), or to the extent it is not materially prejudiced as a proximate result
of such failure. In case any such action is brought against any Purchaser
Indemnified Person and it shall notify an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it shall elect within 30 days after receiving any such
notification, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such Purchaser
Indemnified Person (who shall not, except with the consent of the Purchaser
Indemnified Person, which consent shall not be unreasonably withheld, be counsel
to the indemnifying party), and, after notice from the indemnifying party to
such Purchaser Indemnified Person of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such Purchaser
Indemnified Person under such paragraph for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such Purchaser
Indemnified Person, in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding the foregoing, any Purchaser Indemnified
Person shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Purchaser Indemnified Person unless (i)the
Purchaser Indemnified Person shall have been advised by counsel in writing that
representation of the Purchaser Indemnified Person by counsel provided by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between the indemnifying party and the Purchaser Indemnified Person,
(ii) the indemnifying party shall have authorized in writing the employment of
counsel for the Purchaser Indemnified Person at the expense of the indemnifying
party or (iii)the indemnifying party shall have failed to assume the defense or
retain counsel reasonably satisfactory to the Purchaser Indemnified Person;
provided, however, that the indemnifying party shall not, in connection with any
one such action or proceeding or separate but substantially similar actions or
proceedings arising out of the same general allegations, be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all
Purchaser Indemnified Persons, except to the extent that local counsel, in
addition to their regular counsel, is required in order to effectively defend
against such action or proceeding. No indemnifying party shall, without the
written consent of the Purchaser Indemnified Person, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the Purchaser Indemnified
Person is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of the
Purchaser Indemnified Person from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any Purchaser Indemnified
Person. For the avoidance of doubt, no Purchaser Indemnified Person shall be
entitled to indemnification protection hereunder to the extent such loss, claim,
damage or liability is resultant from such person's gross negligence, willful
misconduct or malfeasance.
14.03. Contribution. If the indemnification provided for in Section 14.02
is unavailable to or insufficient to hold harmless a Purchaser Indemnified
Person under paragraph (a)or (b) of Section 14.02 in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such Purchaser Indemnified Person as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) incurred for reasons
other than such Purchaser Indemnified Person's gross negligence or willful
misconduct in such proportion as is appropriate to reflect the (i)relative
benefits received by the Issuers on the one hand and the Purchasers on the other
hand from the issuance and sale of the Notes; or (ii)if the allocation provided
in clause (i)is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the related benefits referred to in clause (i)
above but also the relative fault of the indemnifying party on the one hand and
the Purchaser Indemnified Person on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and the Purchasers on the other hand in connection with the sale of the Notes
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Notes pursuant to
this Agreement (before deducting expenses) received by the Issuers and the total
fees received by the Purchasers, bear to the aggregate initial sale price of the
Notes. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party on the one hand or the Purchaser Indemnified
Person on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this Section 14.03 were determined by pro rata allocation (even if
the Purchaser Indemnified Persons were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 14.03. The amount
paid or payable by a Purchaser Indemnified Person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 14.03 shall be deemed to include any legal or other expenses
reasonably incurred by such Purchaser Indemnified Person in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The obligations of the Issuers under this Section 14.03 shall be in
addition to any liability which the Issuers and the respective Purchasers may
otherwise have.
14.04. Survival. The obligations of the Issuers under this Section 14 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement and the termination of this Agreement.
14.05. Termination. (a) The Purchasers may terminate this Agreement, by
notice to the Company, at any time at or prior to the Closing Time (i)if there
has been, since the time of execution of this Agreement or since the Reference
Date, any material adverse change in the business, management, operations,
affairs, condition (financial or otherwise) assets, property, prospects or
results of operations of the Issuers considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii)if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, or (iii)if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv)if a
banking moratorium has been declared by either Federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section 14.05, such
termination shall be without liability of any party to any other party except as
provided in Section 14.01 hereof, and provided further that Sections 14.01,
14.02, 14.03, 14.04, 18.08 and 18.11 shall survive such termination and remain
in full force and effect.
SECTION 15.
[RESERVED]
SECTION 16.
THE COLLATERAL AGENT
16.01. Appointment. Each Noteholder, by its acceptance of the Notes, hereby
irrevocably designates and appoints the Collateral Agent as an agent of such
Noteholder under this Agreement and the other Basic Documents. Each Noteholder
irrevocably authorizes, by its acceptance to the Notes, the Collateral Agent, in
such capacity, through its agents, attorneys, or employees, to take such actions
on its behalf under the provisions of this Agreement and the other Basic
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Collateral Agent by the terms of this Agreement and the other
Basic Documents, together with such actions and powers as are reasonably
incidental thereto. The Collateral Agent agrees to act as such upon the express
conditions contained in this Section 16. Notwithstanding any provision to the
contrary elsewhere in this Agreement or in any other Basic Document, the
Collateral Agent shall not have any duties or responsibilities, except those
expressly set forth herein or in the other Basic Documents, or any fiduciary
relationship with any Noteholder, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Collateral Agent. The provisions of
this Section 16 are solely for the benefit of the Collateral Agent and the
Noteholders, and neither the Company nor any of its Subsidiaries shall have any
rights as a third-party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Collateral Agent
shall act solely as the agent of the Noteholders and the Collateral Agent does
not assume and shall not be deemed to have assumed any obligation or
relationship of agent or trust with or for the Company or any of its
Subsidiaries.
16.02. Agent in Its Individual Capacity. The Collateral Agent hereunder
shall have the same rights and powers in its capacity as a Noteholder if it
acquired a Note or Notes as any other Noteholder and may exercise the same as
though it were not a Collateral Agent, and such person and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Company or any Subsidiary or other Affiliate thereof as if it were not
Collateral Agent hereunder.
16.03. Exculpatory Provisions. Neither the Collateral Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or the other Basic Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Noteholders for any recitals,
statements, representations or warranties made by the Company, any of its
Subsidiaries or any of their respective officers contained in this Agreement,
any other Basic Documents, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Collateral Agent
under or in connection with, this Agreement or any other Basic Document or for
any failure of the Company, any of its Subsidiaries or any of their respective
officers to perform its obligations hereunder or thereunder. Notwithstanding any
provision of this Agreement or of any other Basic Document regarding or
concerning any document, evidence or action to be requested, directed or
required or deemed necessary, advisable or desirable by, or to be satisfactory
or acceptable to, the Collateral Agent, the Collateral Agent shall not be (x)
under any obligation to any Noteholder or any other Person to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Basic Documents, or to inspect
the properties, books or records of the Company or any of its Subsidiaries, (y)
responsible to any Noteholder or any other Person for the effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement, any other Basic Document, any written or oral statement or any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished to or made by the
Collateral Agent to the Noteholders or by or on behalf of the Company, any of
its Subsidiaries or any other Person to the Collateral Agent or any Noteholder,
or for any representations, warranties, recitals or statements made herein or
therein, or (z) required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Loan or of
the existence or possible existence of any Default or Event of Default.
The Collateral Agent shall not be liable for any costs, expenses, damages,
liabilities or claims, including reasonable fees of counsel (collectively,
"Losses"), resulting from its action or inaction in connection with this
Agreement or any other Transaction Document, except for those Losses arising out
of the Collateral Agent's gross negligence or willful misconduct. In no event
shall the Collateral Agent be liable for special, indirect, punitive or
consequential damages, or lost profits or loss of business, arising under or in
connection its serving as Collateral Agent.
No provision of this Agreement or any other Transaction Document shall
require the Collateral Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity or security
against such risk or liability is not reasonably assured to it.
Without limiting the generality of the foregoing, the Collateral Agent
shall be under no obligation to inquire into, and shall not be liable for the
validity or enforceability of any Collateral received by the Collateral Agent
hereunder or the due authority of any Person to act on behalf of an Issuer or
Purchaser.
The Collateral Agent shall not be responsible or liable for any failure or
delay in the performance of its obligations under this Agreement or any other
Transaction Document arising out of or caused, directly or indirectly, by
circumstances beyond its control, including without limitation, acts of God,
earthquakes, fires, floods, wars, terrorism, civil or military disturbances,
sabotage, epidemics, riots, loss or malfunctions of utilities, acts of civil or
military authority, or governmental, judicial or regulatory actions; provided
however, that the Collateral Agent shall use its best efforts to resume
performance as promptly as practicable under the circumstances.
16.04. Reliance by Collateral Agent. The Collateral Agent shall be entitled
to rely conclusively upon, and shall not incur any liability for so relying
upon, any note, resolution, notice, request, direction, instruction,
certificate, consent, statement, instrument, document, affidavit, letter,
cablegram, facsimile, telex, teletype message or other writing believed by it to
be genuine and to have been signed or sent by a proper person. The Collateral
Agent also may conclusively rely upon any statement made to it orally and
believed by it to be made by a proper person, and shall not incur any liability
for relying thereon. The Collateral Agent may consult with legal counsel (who
may be counsel for the Company), independent accountants and other advisors
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or advisors. The
Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Basic Document unless they shall first
receive such advice or concurrence of the Required Noteholders as they deem
appropriate or they shall first be indemnified to their satisfaction by the
Noteholders against any and all liability and expense which may be incurred by
them by reason of taking or continuing to take any such action. As between the
Collateral Agent and the Noteholders, the Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Basic Documents in accordance with a request of the Required
Noteholders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Noteholders.
16.05. Delegation of Duties. The Collateral Agent may execute any of its
duties under this Agreement or any other Basic Document by or through agents or
attorneys-in-fact and shall be entitled to advice of experts, advisors and
counsel concerning all matters pertaining to such duties (including, but not
limited to, insurance claim advisors under Section 17.11(a)and real estate
counsel under Section 6.20(c) and 6.23 hereof), at the expense of the Company
under Section 16.13, the Collateral Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by them
with reasonable care except to the extent otherwise required by Section 16.03.
The rights, privileges, protections, immunities and benefits given to the
Collateral Agent hereunder, including, without limitation, its right to be
indemnified, (i)are extended to, and shall be enforceable by, each agent,
attorney-in-fact, custodian and other Person employed by the Collateral Agent to
act hereunder and (ii)shall apply with full force and effect in respect of each
other agreement and document executed and delivered by the Collateral Agent,
including but not limited to each other Security Document.
16.06. Successor Collateral Agent. A Collateral Agent may resign as
Collateral Agent upon 20 days' notice to the Noteholders and the Company. Upon
the resignation of a Collateral Agent, the Required Noteholders shall appoint a
successor Collateral Agent which is a bank or a trust company for the
Noteholders subject to prior approval by the Company (such approval not to be
unreasonably withheld or delayed), whereupon such successor Collateral Agent
shall succeed to the rights, powers and duties of the resigning Collateral
Agent, and the term "Collateral Agent" shall include such successor Collateral
Agent effective upon its appointment, and the resigning Collateral Agent's
rights, powers and duties as a Collateral Agent shall be terminated, without any
other or further act or deed on the part of such former Collateral Agent or any
of the parties to this Agreement. Such successor Collateral Agent shall assume
in writing the obligations of such retiring Collateral Agent hereunder. If the
Required Noteholders have not designated a successor Collateral Agent within 60
days of such resignation, the Collateral Agent may petition a court of competent
jurisdiction to appoint a successor Collateral Agent, the cost of which
proceeding shall be borne by the Company. Any corporation into which the
Collateral Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Collateral
Agent is a party, or any state or national bank or trust company in any manner
succeeding to all or substantially all of the corporate trust business of the
Collateral Agent shall automatically succeed to all of the rights and
obligations of the Collateral Agent hereunder without any document so providing
or further action on the part of any of the parties hereto. After the
resignation of a Collateral Agent hereunder, the provisions of this Section 16
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Agreement.
16.07. Non-Reliance on the Collateral Agent and Other Noteholders. Each
Noteholder by its acceptance of its Note(s) expressly acknowledges that neither
the Collateral Agent nor any of their respective officers, directors, employees,
the agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by the Collateral Agent hereafter taken,
including any review of the affairs of the Company or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Collateral
Agent to any Noteholder. Each Noteholder by its acceptance of its Note(s)
represents to the Collateral Agent that it has, independently and without
reliance upon the Collateral Agent or any other Noteholder, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property, financial
and other condition, prospects and creditworthiness of the Company and its
Subsidiaries and made its own decision to make its Loan hereunder and enter into
this Agreement. Each Noteholder also represents by its acceptance of its Notes
that it will, independently and without reliance upon the Collateral Agent or
any other Noteholder, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other condition, prospects
and creditworthiness of the Company and its Subsidiaries. Except as otherwise
set forth in this Agreement, the Collateral Agent shall not have any duty or
responsibility to provide any Noteholder with any credit or other information
concerning the business, operations, assets, property, financial and other
condition, prospects or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the Collateral Agent or any
of their officers, directors, employees, the agents, attorneys-in-fact or
Affiliates.
16.08. Notice of Default. The Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Collateral Agent has actually received notice from a
Noteholder or the Company referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default." In
the event that the Collateral Agent receives such a notice, the Collateral Agent
shall give prompt notice thereof to the Noteholders. The Collateral Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Noteholders; provided that, as between the
Collateral Agent and the Noteholders unless and until the Collateral Agent shall
have received such directions, the Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Noteholders (other than take actions not in accordance with
Section 11.02).
16.09. Indemnification. The Issuers, jointly and severally, and the
Noteholders, ratably according to their respective principal amount of Notes
owned on the date on which indemnification is sought under this Section 16.09
(or, if indemnification is sought after the date upon which all Notes shall have
been redeemed and Obligations shall have been paid in full, ratably in
accordance with such outstanding Notes as in effect immediately prior to such
date), agree to indemnify the Collateral Agent in its capacity as such (to the
extent not reimbursed by the Company or the Subsidiary Guarantors and without
limiting the obligation of the Company or the Subsidiary Guarantors to do so),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (whether before or after the payment of the
Notes and Obligations) be imposed on, incurred by or asserted against the
Collateral Agent in any way relating to or arising out of its acceptance of its
appointments and performance under the Notes, this Agreement, any of the other
Basic Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Collateral Agent under or in connection with any of the
foregoing; provided that no Noteholder shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the Collateral Agent's gross negligence or willful misconduct. If any
indemnity furnished to the Collateral Agent for any purpose shall, in the
reasonable opinion of the Collateral Agent or the Required Noteholders, be
insufficient or become impaired, the Collateral Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section 16.09
shall survive the payment of the Loan and all other amounts payable hereunder,
and the resignation or removal of the Collateral Agent.
16.10. Concerning the Collateral and the Security Documents.
(a) Each Noteholder by its acceptance of its Note(s) authorizes and directs
The Bank of New York to act as Collateral Agent and to enter into the Security
Documents relating to the Collateral for the benefit of the Noteholders and the
other secured parties. Each Noteholder by its acceptance of its Notes agrees
that any action taken by the Collateral Agent or the Required Noteholders (or,
where required by the express terms, hereof, a different proportion of the
Noteholders) in accordance with the provisions hereof or the other Basic
Documents or Security Documents, and the exercise by the Collateral Agent or the
Required Noteholders (or, where so required, such different proportion) of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of the
Noteholders. Without limiting the generality of the foregoing, the Collateral
Agent, shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Noteholders with respect to all payments
and collections arising in connection herewith and with the Security Documents
relating to the Collateral; (ii) execute and deliver each Security Document
relating to the Collateral and accept delivery of each such agreement delivered
by the Company or any of its Subsidiaries; (iii) act as the Collateral Agent for
the Noteholders for purposes stated therein to the extent such action is
provided for under the Security Documents, provided, however, the Collateral
Agent herein appoints, authorizes and directs each Noteholder to act as
collateral sub-agent for the Collateral Agent and the Noteholders for purposes
of the perfection of all security interests and Liens with respect to the
Company's and its Subsidiaries' respective deposit accounts maintained with, and
cash and Cash Equivalents held by, such Noteholder; (iv) manage, supervise and
otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and
liens created or purported to be created by the Security Documents; and (vi)
except as may be otherwise specifically restricted by the terms hereof or of any
other Security Document or Basic Document, exercise all remedies given to the
Collateral Agent or the Noteholders with respect to the Collateral under the
Security Documents relating thereto, applicable law or otherwise.
(b) The Noteholders by their acceptance of their Notes direct the
Collateral Agent to release, upon transfer of Collateral permitted by, or
otherwise in accordance with, the terms hereof, any Lien held by the Collateral
Agent under the Security Documents; provided, however, that (y) the Collateral
Agent shall not be required to execute any such document on terms which, in its
opinion, would expose it to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (z) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon all interests retained by the Company and/or any
of its Subsidiaries, including (without limitation) the proceeds of any sale,
all of which shall, to the extent set forth in the Basic Documents and the
Security Documents, continue to constitute part of the Collateral.
Each of the Noteholders by their acceptance of their Notes directs the
Collateral Agent to (i)execute and deliver or file or cause to be delivered or
filed such termination and partial release statements and such other things as
are necessary to release Liens to be released pursuant to this Section 16.10
promptly upon the effectiveness of any such release and (ii) enter into the
Intercreditor Agreement, other Security Documents and other agreements
contemplated or permitted herein.
(c) The Collateral Agent shall not have any obligation whatsoever to any
Noteholder or to any other Person to assure that the Collateral exists or is
owned by the Company or any of its Subsidiaries or is cared for, protected or
insured or has been encumbered or that the Liens granted to the Collateral Agent
herein or pursuant to the Security Documents have been properly or sufficiently
or lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Collateral Agent in
any of the Basic Documents or the Security Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Collateral Agent's own interests in the
Collateral as one of the Noteholders and that neither shall the Collateral Agent
shall have any duty or liability whatsoever to any Noteholder, except as
expressly provided herein.
Each Noteholder by its acceptance of its Notes instructs the Collateral
Agent to enter into the Security Documents and the Intercreditor Agreement and
such amendments or modifications thereto consistent herewith and as the
Collateral Agent or the Required Noteholders reasonably determine to be
necessary to subordinate the Liens granted by the Company and the Restricted
Subsidiaries in the Collateral in favor of the Collateral Agent and the
Noteholders to the Liens granted pursuant to the First Lien Credit Facility to
secure the First Lien Obligations.
(d) Each Noteholder by its acceptance of its Notes hereby (i) instructs the
Collateral Agent to enter into the Intercreditor Agreement and (ii) authorizes
the Collateral Agent to enter into amendments and restatements of the
Intercreditor Agreement and the Security Documents to the extent permitted by
the Intercreditor Agreement and the Basic Documents.
16.11. Exercise of Rights. Notwithstanding anything to the contrary herein,
(i) the Collateral Agent shall have no obligation to exercise any rights granted
to the Collateral Agent in this Agreement unless it is directed to do so by the
Required Noteholders in writing, (ii) the Collateral Agent shall have no
obligation to seek such directions from the Required Noteholders and (iii) each
reference in this Agreement to the Collateral Agent's rights shall create no
duty on the part of the Collateral Agent. In the event the Collateral Agent
fails or refuses to exercise any discretion or provide any consent under this
Agreement, such discretion or consent may be exercised by the Required
Noteholders and in such event the Required Noteholders will be bound by the
obligations and undertakings of the Tranche B Agent under the Intercreditor
Agreement.
16.12. No Liability for Clean-up of Hazardous Materials. In the event that
the Collateral Agent is required to acquire title to an asset for any reason, or
take any managerial action of any kind in regard thereto, in order to carry out
any fiduciary or trust obligation for the benefit of another, which in the
Collateral Agent's action may cause the Collateral Agent to be considered an
"owner or operator" under the provisions of CERCLA, or otherwise cause the
Collateral Agent to incur liability under CERCLA or any other federal, state or
local law, the Collateral Agent reserves the right to, instead of taking such
action, either resign as Collateral Agent or arrange for the transfer of the
title or control of the asset to a court appointed receiver. The Collateral
Agent shall not be liable to the Issuers, the Noteholders or any other Person
for any environmental claims or contribution actions under any federal, state or
local law, rule or regulation by reason of the Collateral Agent's actions and
conduct as authorized, empowered and directed hereunder or under any of the
other Basic Documents relating to the discharge, release or threatened release
of hazardous materials into the environment.
16.13 Collateral Agent Fee. The Collateral Agent shall be entitled to
receive and the Company agrees to pay to the Collateral Agent such compensation
as may be agreed upon from time to time between the Collateral Agent and the
Company and for the Collateral Agent's reasonable out-of-pocket expenses
actually incurred which are a normal incident of the services provided
hereunder, provided that the Company receives evidence reasonably satisfactory
to it of such expenses.
SECTION 17.
COLLATERAL: GENERAL TERMS; GRANT OF SECURITY INTEREST
17.01. Security Interest in the Pledged Collateral. To secure the prompt
payment and performance to the Collateral Agent and each Noteholder of the
Obligations, each Issuer hereby assigns, pledges and grants to the Collateral
Agent for its benefit and the ratable benefit of the Noteholders a continuing
security interest in and to all of its Pledged Collateral, whether now owned or
existing or hereafter acquired or arising and wheresoever located, subject to no
liens other than Permitted Collateral Liens. Each Issuer shall xxxx its books
and records as may be necessary or appropriate to evidence, protect and perfect
the Collateral Agent's security interest and shall cause its financial
statements to reflect such security interest.
17.02. Perfection of Security Interest.
(a) Each Issuer shall take all action that may be necessary or desirable,
or that the Collateral Agent or the Required Noteholders may reasonably request,
so as at all times to maintain the validity, perfection, enforceability and
priority of the Collateral Agent's security interest in the Pledged Collateral
or to enable the Collateral Agent to protect, exercise or enforce its rights
hereunder and in the Pledged Collateral, including, but not limited to, (i)
immediately discharging all Liens other than Permitted Collateral Liens, (ii)
obtaining landlords' or mortgagees' lien waivers, (iii) delivering to the
Collateral Agent (to the extent required pursuant to Section 17.01), endorsed or
accompanied by valid instruments of assignment, and stamping or marking any and
all chattel paper, instruments, letters of credit and advices thereof and
documents evidencing or forming a part of the Pledged Collateral with an
appropriate reference to the fact that the Collateral Agent has a security
interest therein, (iv) entering into warehousing, lockbox, bailee and other
custodial arrangements satisfactory to the Required Noteholders, and (v)
executing and delivering financing statements, instruments of pledge, mortgages,
notices and assignments, in each case in form and substance satisfactory to the
Required Noteholders, relating to the creation, validity, perfection,
maintenance or continuation of the Collateral Agent's security interest in the
Pledged Collateral (whether now owned or hereafter created or acquired) under
the UCC or other applicable law; provided, that, prior to the Discharge of the
First Lien Obligations, the requirements for delivery of Pledged Collateral
under this Section 17.02(a)shall be deemed to have been satisfied by delivery of
such Pledged Collateral to the First Lien Collateral Agent.
(b) The Collateral Agent may (without any duty on the part of the
Collateral Agent to do so) at any time and from time to time file or cause to be
filed, without the signature of any Issuer in accordance with Section 9-509 of
the UCC, financing statements, continuation statements and amendments thereto
that describe the Pledged Collateral as "all assets" of the applicable Issuer
and which contain any other information required by the UCC for the sufficiency
or filing office acceptance of any financing statements, continuation statements
or amendments. Each Issuer agrees to furnish any such information to the
Collateral Agent promptly upon request.
(c) Each Issuer shall, at any time and from time to time, take such steps
as the Collateral Agent or the Required Noteholders may reasonably request (i)
to obtain an acknowledgment, in form and substance reasonably satisfactory to
the Required Noteholders, of any bailee having possession of any of the Pledged
Collateral, stating that the bailee holds such Pledged Collateral for the
Collateral Agent, (ii) to obtain "control" of any letter-of-credit rights,
deposit accounts, securities accounts, commodity accounts or electronic chattel
paper (as such terms are defined in the UCC with corresponding provisions
thereof defining what constitutes "control" for such items of Pledged
Collateral), with any agreements establishing control to be in form and
substance reasonably satisfactory to the Required Noteholders (subject to the
rights of the First Lien Collateral Agent), and (iii) otherwise to insure the
continued perfection and priority of the Collateral Agent's security interest in
any of the Pledged Collateral for the benefit of the Noteholders and of its
rights therein. If any Issuer shall at any time, acquire a "commercial tort
claim" (as such term is defined in the UCC) in excess of $500,000, such Issuer
shall promptly notify the Collateral Agent thereof in writing, therein providing
a reasonable description and summary thereof, and upon delivery thereof to the
Collateral Agent, such Issuer shall be deemed to thereby grant to the Collateral
Agent for the benefit of the Noteholders (and each Issuer hereby grants to the
Collateral Agent, for the benefit of each Noteholder) a security interest and
lien in and to such commercial tort claim and all proceeds thereof, all upon the
terms of and governed by this Agreement; provided, however, that Issuers shall
not be required to notify the Collateral Agent with respect to commercial tort
claims in existence at the Closing Time of less than $1,000,000 until thirty
(30) days after the Closing Time.
(d) Each Issuer hereby confirms and ratifies all UCC financing statements
naming the Collateral Agent as secured party with respect to such Issuer on or
prior to the date of this Agreement.
(e) All reasonable charges, expenses and fees the Collateral Agent may
incur in doing any of the foregoing, and any local taxes relating thereto, shall
be charged to the Issuers and added to the Obligations, and shall be paid by the
Company to the Collateral Agent immediately upon demand.
(f) To the extent effective under applicable law, each Issuer hereby
further authorizes the Collateral Agent (without any duty on the part of the
Collateral Agent to do so) to file filings with the United States Patent and
Trademark Office or United States Copyright Office (or any successor office or
any similar office in any other country), including this Agreement, short form
security agreements, or other documents in form and substance acceptable to the
Required Noteholders for the purpose of perfecting, confirming, continuing,
enforcing or protecting the security interest granted by such Issuer hereunder,
without the signature of such Issuer, and naming such Issuer, as debtor, and the
Collateral Agent, as secured party.
17.03. Disposition of Pledged Collateral. Each Issuer will safeguard and
protect all Pledged Collateral for the Collateral Agent's general account and
make no disposition thereof whether by sale, lease or otherwise except the sale
of Inventory in the ordinary course of business and as otherwise may be
permitted by this Agreement.
17.04. Preservation of Pledged Collateral. Following the occurrence and
during the continuance of an Event of Default, in addition to the rights and
remedies set forth in Section 11.02, the Collateral Agent at the direction of
the Required Noteholders: (a)may at any time take such steps as the Collateral
Agent deems necessary to protect the Collateral Agent's interest in and to
preserve the Pledged Collateral, including the hiring of such security guards or
the placing of other security protection measures as the Collateral Agent may
deem appropriate; (b) may employ and maintain at any Issuer's premises a
custodian who shall have full authority to do all acts necessary to protect the
Collateral Agent's interests in the Pledged Collateral; (c) may lease warehouse
facilities to which the Collateral Agent may move all or part of the Pledged
Collateral; (d) may use any Issuer's owned or leased lifts, hoists, trucks and
other facilities or equipment for handling or removing the Pledged Collateral;
and (e) shall have, and is hereby granted, a right of ingress and egress to the
places where the Pledged Collateral is located, and may proceed over and through
any Issuer's owned or leased property. Following the occurrence and during the
continuance of a Default or an Event of Default, each Issuer shall cooperate
fully with all of the Collateral Agent's efforts to preserve the Pledged
Collateral and will take such actions to preserve the Pledged Collateral as the
Required Noteholders may reasonably direct. Following the occurrence and during
the continuance of an Event of Default, all of the Collateral Agent's expenses
of preserving the Pledged Collateral, including any expenses relating to the
bonding of a custodian, shall be charged to the Issuers and added to the
Obligations, and shall be paid by the Company to the Collateral Agent
immediately upon demand.
17.05. Ownership of Pledged Collateral. With respect to the Pledged
Collateral, at the time the Pledged Collateral becomes subject to the Collateral
Agent's security interest: (a)each Issuer shall be the sole owner of and fully
authorized and able to sell, transfer, pledge and/or grant a second priority
(first priority, in the case of Securities Collateral) security interest in each
and every item of its respective Pledged Collateral to the Collateral Agent;
and, except for Permitted Collateral Liens the Pledged Collateral shall be free
and clear of all Liens and encumbrances whatsoever; (b) each document and
agreement executed by each Issuer or delivered to the Collateral Agent or any
Noteholder in connection with this Agreement shall be true and correct in all
respects; (c) all signatures and endorsements of each Issuer that appear on such
documents and agreements shall be genuine and each Issuer shall have full
capacity to execute same; and (d) each Issuer's Equipment and Inventory shall be
located as set forth on Schedule 17.05 or (to the extent that a Default or Event
of Default would not result therefrom) at any other location within the
continental United States as the Company shall have given Collateral Agent
fifteen (15) days prior written notice, and shall not be removed from such
location(s) (but can be moved to and from such locations) without the prior
written consent of the Required Noteholders except with respect to the sale of
Inventory in the ordinary course of business and Equipment to the extent
permitted hereby.
17.06. Defense of the Collateral Agent's and Noteholders' Interests. Until
(a)payment and performance in full of all of the Obligations, provided, that,
prior to the Discharge of the First Lien Obligations, the requirements for
delivery of Pledged Collateral under this Section 17.06 shall be deemed to have
been satisfied by delivery of such Pledged Collateral to the First Lien
Collateral Agent and (b) the irrevocable termination of this Agreement, the
Collateral Agent's interests in the Pledged Collateral shall continue in full
force and effect. Each Issuer shall defend the Collateral Agent's interests in
the Pledged Collateral against any and all Persons whatsoever, other than with
respect to Permitted Collateral Liens. At any time following and during the
continuance of a Default or Event of Default, the Collateral Agent shall have
the right, at the direction of the Required Noteholders, to take possession of
the indicia of the Pledged Collateral and the Pledged Collateral in whatever
physical form contained, including without limitation: labels, stationery,
documents, instruments and advertising materials. If the Collateral Agent
exercises this right to take possession of the Pledged Collateral, Issuers
shall, upon demand, assemble it in the best manner possible and make it
available to the Collateral Agent at a place reasonably convenient to the
Collateral Agent. In addition, with respect to all Pledged Collateral, the
Collateral Agent and Noteholders shall be entitled to all of the rights and
remedies set forth herein and further provided by the UCC or other applicable
law. At any time following and during the continuance of a Default or Event of
Default, each Issuer shall, and the Collateral Agent may, at the direction of
the Required Noteholders, instruct all suppliers, carriers, forwarders,
warehouses or others receiving or holding cash, checks, Inventory, documents or
instruments in which the Collateral Agent holds a security interest to deliver
same to the Collateral Agent and/or subject to the Collateral Agent's order and
if they shall come into any Issuer's possession, they, and each of them, shall
be held by such Issuer in trust as the Collateral Agent's trustee, and such
Issuer will immediately deliver them to the Collateral Agent in their original
form together with any necessary endorsement.
17.07. [Reserved].
17.08. [Reserved].
17.09. [Reserved].
17.10. [Reserved].
17.11. Insurance.
(a) Each Issuer shall bear the full risk of any loss of any nature
whatsoever with respect to the Pledged Collateral. At each Issuer's own cost and
expense, in such amounts as is customary in the case of companies engaged in
business similar to such Issuer's with carriers reasonably acceptable to the
Required Noteholders, each Issuer shall (a)keep all its insurable properties and
properties in which each Issuer has an interest insured against the hazards of
fire, flood, sprinkler leakage, those hazards covered by extended coverage
insurance and such other hazards, and for such amounts, as is customary in the
case of companies engaged in businesses similar to such Issuer's including,
without limitation, business interruption insurance; (b) maintain a bond in such
amounts as is customary in the case of companies engaged in businesses similar
to such Issuer insuring against larceny, embezzlement or other criminal
misappropriation of insured's officers and employees who may either singly or
jointly with others at any time have access to the assets or funds of such
Issuer either directly or through authority to draw upon such funds or to direct
generally the disposition of such assets; (c) maintain public and product
liability insurance against claims for personal injury, death or property damage
suffered by others in such amounts as is customary in the case of companies
engaged in businesses similar to such Issuer's; (d) maintain all such worker's
compensation or similar insurance as may be required under the laws of any state
or jurisdiction in which Issuer is engaged in business; and (e) furnish the
Collateral Agent with (i) copies of all policies and evidence of renewal thereof
at least thirty (30) days prior to the applicable expiration date, and (ii)
appropriate loss payable endorsements in form and substance satisfactory to the
Required Noteholders, naming the Collateral Agent as an additional insured and
loss payee as its interests may appear with respect to all insurance coverage
referred to in clauses (a)and (c) above, and providing (A) that all proceeds
thereunder shall be payable to the Collateral Agent (subject to the rights of
the First Lien Collateral Agent), (B) no such insurance shall be affected by any
act or neglect of the insured or owner of the property described in such policy,
and (C) that such policy and loss payable clauses may not be cancelled, amended
or terminated unless at least thirty (30) days' prior written notice is given to
the Collateral Agent. In the event of any loss thereunder, the carriers named
therein hereby are directed, subject to the Intercreditor Agreement, by the
Collateral Agent and the applicable Issuer to make payment for such loss to the
Collateral Agent and not to such Issuer and the Collateral Agent jointly. If any
insurance losses are paid by check, draft or other instrument payable to any
Issuer and the Collateral Agent jointly, the Collateral Agent may endorse such
Issuer's name thereon and do such other things as the Collateral Agent may deem
advisable to reduce the same to cash. Subject to the Intercreditor Agreement,
the Collateral Agent is hereby authorized (without any duty on the part of the
Collateral Agent to do so) to adjust and compromise claims under insurance
coverage referred to in clauses (a)and (c) above. All loss recoveries received
by the Collateral Agent upon any such insurance may be applied, subject to the
Intercreditor Agreement, to the Obligations, in such order as the Collateral
Agent in its sole discretion shall determine.
(b) Anything in Section 17.11(a)to the contrary notwithstanding, and
provided that no Default or Event of Default shall have occurred and be
continuing, the Collateral Agent shall remit, subject to the Intercreditor
Agreement, to Issuers insurance proceeds received by the Collateral Agent during
any calendar year under insurance policies procured and maintained by Issuers
which insure Issuers' insurable properties to the extent such insurance proceeds
do not exceed $250,000 in the aggregate during such calendar year or $100,000
per occurrence. Notwithstanding the foregoing, the Collateral Agent shall not be
obligated to remit the insurance proceeds to the Issuers (x) if the failure to
apply such net proceeds to the Obligations shall result in an obligation on the
part of the applicable Issuer to apply such net proceeds to any other
Indebtedness and (y) unless the Issuers shall provide the Collateral Agent with
evidence reasonably satisfactory to the Required Noteholders that the insurance
proceeds will be used by the Issuers within ninety (90) days of such Issuer's
receipt of such insurance proceeds to repair, replace or restore the insured
property which was the subject of the insurable loss, and if the Collateral
Agent does not remit such proceeds, then such proceeds shall be applied to the
Obligations in such order as provided herein.
(c) Notwithstanding anything to the contrary herein, prior to the Discharge
of the First Lien Obligations, the requirements for payment of insurance
proceeds under this Section 17.11 shall be deemed to have been satisfied by
delivery of such proceeds to the First Lien Collateral Agent.
17.12. Failure to Pay Insurance. If any Issuer fails to obtain insurance as
hereinabove provided, or to keep the same in force, the Collateral Agent, if the
Required Noteholders so elect but without duplication of the rights of the First
Lien Collateral Agent, may obtain such insurance and pay the premium therefor
for the Issuers and such expenses so paid shall be part of the Obligations and
shall be paid to the Collateral Agent by the Company immediately upon demand.
17.13. Payment of Taxes. Each Issuer will pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon such Issuer or
any of the Pledged Collateral including, without limitation, real and personal
property taxes, assessments and charges and all franchise, income, employment,
social security benefits, withholding, and sales taxes; provided, however, that
no Issuer shall be required to pay any taxes, assessments or Charges to the
extent that they are less than $250,000 in the aggregate for all Noteholders or
to the extent that such Issuer has contested or disputed those taxes,
assessments or Charges in good faith, by expeditious protest, administrative or
judicial appeal or similar proceeding provided that any related tax Lien is
stayed and sufficient reserves are established to protect Collateral Agent's
security interest in or Lien on the Collateral. If any tax by any governmental
authority is or may be imposed on or as a result of any transaction between any
Issuer and the Collateral Agent or any Noteholder which the Collateral Agent or
any Noteholder may be required to withhold or pay or if any taxes, assessments,
or other Charges remain unpaid after the date fixed for their payment, or if any
claim shall be made which, in the Collateral Agent's or the Required
Noteholders' opinion, may possibly create a valid Lien on the Pledged
Collateral, the Collateral Agent may (without any duty on the part of the
Collateral Agent to do so) without notice to Issuers pay the taxes, assessments
or other Charges and each Issuer hereby indemnifies and holds the Collateral
Agent and each Noteholder harmless in respect thereof. The Collateral Agent will
not pay any taxes, assessments or Charges to the extent that any Issuer has
contested or disputed those taxes, assessments or Charges in good faith, by
expeditious protest, administrative or judicial appeal or similar proceeding
provided that any related tax Lien is stayed and sufficient reserves are
established to the reasonable satisfaction of the Collateral Agent to protect
the Collateral Agent's security interest in or Lien on the Pledged Collateral.
The amount of any payment by the Collateral Agent under this Section 17.13 shall
be charged to the Issuers and added to the Obligations and shall be paid to the
Collateral Agent immediately upon demand.
17.14. [Reserved].
17.15. Receivables.
(a) Locations of Issuer. Each Issuer's chief executive office is located at
the addresses set forth on Schedule 17.15(c).
(b) Collection of Receivables. After the Discharge of the First Lien
Obligations, and until any Issuer's authority to do so is terminated by the
Collateral Agent (which notice the Collateral Agent may, at the direction of the
Required Noteholders, give at any time following the occurrence and during the
continuance of an Event of Default or a Default), each Issuer will, at such
Issuer's sole cost and expense, but on the Collateral Agent's behalf and for the
Collateral Agent's account, collect as the Collateral Agent's property and in
trust for the Collateral Agent all amounts received on Receivables, and shall
not commingle such collections with any Issuer's funds or use the same except to
pay Obligations. After the Discharge of the First Lien Obligations, each Issuer
shall, upon request, deliver to the Collateral Agent, or deposit in the
Collateral Account, in original form and on the date of receipt thereof, all
checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness.
(c) Notification of Assignment of Receivables. At any time following the
occurrence and during the continuance of an Event of Default or a Default, the
Collateral Agent shall, at the direction of the Required Noteholders, have the
right to send notice of the assignment of, and the Collateral Agent's security
interest in, the Receivables to any and all Customers or any third party holding
or otherwise concerned with any of the Pledged Collateral. Thereafter, after the
Discharge of the First Lien Obligations, the Collateral Agent shall have the
sole right to collect the Receivables, take possession of the Pledged
Collateral, or both. The Collateral Agent's actual collection expenses,
including, but not limited to, stationery and postage, telephone and telecopy,
secretarial and clerical expenses and the salaries of any collection personnel
used for collection, shall be charged to the Issuers and added to the
Obligations, and shall be paid to the Collateral Agent immediately upon demand.
(d) Power of the Collateral Agent to Act on Issuers' Behalf. After the
Discharge of the First Lien Obligations, the Collateral Agent shall have the
right to receive, endorse, assign and/or deliver in the name of the Collateral
Agent or any Issuer any and all checks, drafts and other instruments for the
payment of money relating to the Receivables, and each Issuer hereby waives
notice of presentment, protest and non-payment of any instrument so endorsed.
Each Issuer hereby designates, subject to the Intercreditor Agreement, the
Collateral Agent or the Collateral Agent's designee as such Issuer's attorney
with power (x) at any time upon the occurrence and during the continuance of a
Default or Event of Default at the direction of the Required Noteholders (i) to
demand payment of the Receivables; (ii) to enforce payment of the Receivables by
legal proceedings or otherwise; (iii) to exercise all of Issuers' rights and
remedies with respect to the collection of the Receivables and any other Pledged
Collateral; (iv) to settle, adjust, compromise, extend or renew the Receivables;
(v) to settle, adjust or compromise any legal proceedings brought to collect
Receivables; (vi) to prepare, file and sign such Issuer's name on a proof of
claim in bankruptcy or similar document against any Customer; (vii) to prepare,
file and sign such Issuer's name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the Receivables; and
(viii) to endorse such Issuer's name upon any notes, acceptances, checks,
drafts, money orders or other evidences of payment or Collateral; (ix) to send
verifications of Receivables to any Customer; (x) to sign such Issuer's name on
all financing statements or any other documents or instruments deemed necessary
or appropriate by the Required Noteholders to preserve, protect, or perfect the
Collateral Agent's interest in the Collateral and to file same; and (xi) to do
all other acts and things necessary to carry out this Agreement. All acts of
said attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission nor for any
error of judgment or mistake of fact or of law, unless done maliciously or with
gross (not mere) negligence; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid. The Collateral Agent
shall have the right at any time following the occurrence and during the
continuance of a Default or Event of Default, to change the address for delivery
of mail addressed to any Issuer to such address as the Collateral Agent may
designate and to receive, open and dispose of all mail addressed to any Issuer.
(e) No Liability. Neither the Collateral Agent nor any Noteholder shall,
under any circumstances or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Receivables or any instrument received in payment
thereof, or for any damage resulting therefrom, except for Collateral Agent's or
such Noteholder's gross negligence or willful misconduct. Subject to the
Intercreditor Agreement, following the occurrence and during the continuance of
a Default or Event of Default the Collateral Agent may, at the direction of the
Required Noteholders, without notice to or consent from any Issuer, xxx upon or
otherwise collect, extend the time of payment of, compromise or settle for cash,
credit or upon any terms any of the Receivables or any other securities,
instruments or insurance applicable thereto and/or release any obligor thereof.
The Collateral Agent is authorized and empowered, at the direction of the
Required Noteholders, to accept following the occurrence and during the
continuance of a Default or Event of Default the return of the goods represented
by any of the Receivables, without notice to or consent by any Issuer, all
without discharging or in any way affecting any Issuer's liability hereunder.
(f) Establishment of a Lockbox Account, Dominion Account. After the
Discharge of the First Lien Obligations, all proceeds of Collateral shall, at
the direction of the Collateral Agent, following the direction of the Required
Noteholders, (subject to the rights of the First Lien Collateral Agent), be
deposited by Issuers into a lockbox account, dominion account or such other
blocked account (collectively, the "Collateral Accounts") as the Collateral
Agent may require pursuant to an arrangement with such bank as may be selected
by Issuers and be acceptable to the Required Holders. Issuers shall issue to any
such bank, an irrevocable letter of instruction directing said bank to transfer
such funds so deposited to the Collateral Agent, either to any account
maintained by the Collateral Agent at said bank or by wire transfer to
appropriate account(s) of the Collateral Agent. All funds deposited in the
Collateral Account shall immediately become the property of the Collateral Agent
and Issuers shall obtain the agreement by such bank to waive any offset rights
against the funds so deposited. Neither the Collateral Agent nor any Noteholder
assumes any responsibility for any Collateral Account arrangement, including
without limitation, any claim of accord and satisfaction or release with respect
to deposits accepted by any bank thereunder. Alternatively, the Collateral Agent
may establish depository accounts (collectively, the "Depository Accounts") in
the name of the Collateral Agent at a bank or banks for the deposit of such
funds and Issuers shall deposit all proceeds of Pledged Collateral or cause same
to be deposited, in kind, in such Depository Accounts of the Collateral Agent in
lieu of depositing same to the Collateral Accounts.
17.16. Inventory. To the extent Inventory held for sale or lease has been
produced by any Issuer, it has been and will be produced by such Issuer in
accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder.
17.17. [Reserved].
17.18. Exculpation of Liability. Nothing herein contained shall be
construed to constitute the Collateral Agent or any Noteholder as any Issuer's
agent for any purpose whatsoever, nor shall the Collateral Agent or any
Noteholder be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Pledged Collateral wherever the same may be
located and regardless of the cause thereof. Neither the Collateral Agent nor
any Noteholder, whether by anything herein or in any assignment or otherwise,
assume any of Issuer's obligations under any contract or agreement assigned to
the Collateral Agent or such Noteholder, and neither the Collateral Agent nor
any Noteholder shall be responsible in any way for the performance by Issuer of
any of the terms and conditions thereof.
17.19. Financing Statements. Except as respects the financing statements
naming the Collateral Agent as secured party, any Financing Statements
evidencing Permitted Collateral Liens and the financing statements described on
Schedule 1.01(b), no financing statement covering any of the Pledged Collateral
or any proceeds thereof is on file in any public office. Subsequent to the
Closing Time financing statements covering any of the Pledged Collateral or any
proceeds thereof may be filed only with respect to Permitted Collateral Liens.
17.20. After-Acquired Intellectual Property. If any Issuer shall, at any
time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of this Agreement
or the other Security Documents, survive the termination thereof), (i) obtain
any rights to any additional Intellectual Property Collateral or (ii) become
entitled to the benefit of any additional Intellectual Property Collateral or
any renewal or extension thereof, including any reissue, division, continuation,
or continuation-in-part of any Intellectual Property Collateral, or any
improvement on any Intellectual Property Collateral, the provisions hereof shall
automatically apply thereto and any such item enumerated in clause (i) or (ii)
of this Section 17.20 with respect to such Issuer shall automatically constitute
Intellectual Property Collateral if such would have constituted Intellectual
Property Collateral at the time of execution hereof and be subject to the Lien
and security interest created by this Agreement without further action by any
party. Each Issuer shall promptly (i) provide to the Collateral Agent written
notice of any of the foregoing and (ii) confirm the attachment of the Lien and
security interest created by this Agreement to any rights described in clauses
(i) and (ii) of the immediately preceding sentence of this Section 17.20 by
execution and filing of any instruments or statements as shall be reasonably
necessary to preserve, protect or perfect the Collateral Agent's security
interest in such Intellectual Property Collateral. Further, each Issuer
authorizes the Collateral Agent to file or cause to be filed short form security
agreements that include any Intellectual Property Collateral acquired or arising
after the date hereof of such Issuer.
17.21. Intercreditor Agreement. All of the rights and remedies granted to
the Collateral Agent and the Noteholders pursuant to this Section 17 shall be
subject to the terms of the Intercreditor Agreement. In the event of any
conflict between this Agreement and the Intercreditor Agreement, the provisions
of the Intercreditor Agreement shall control. The provisions of this Section
17.21 are solely for the benefit of the Collateral Agent, the Noteholders, the
First Lien Collateral Agent and the lenders under the First Lien Credit Facility
(each of the foregoing, a "Creditor") and shall not give any Issuer, its
successors or assigns or any other person any rights vis-a-vis any Creditor.
SECTION 18.
MISCELLANEOUS
18.01. Notices. Except as otherwise expressly provided herein, all notices,
instructions, directions, requests, consents and other communications shall have
been duly given and shall be effective (a) when delivered, (b) when transmitted
via telecopy (or other facsimile device) to the number set out below if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), (c) the day following the day on
which the same has been delivered prepaid to a reputable national overnight air
courier service or (d) the third Business Day following the day on which the
same is sent by certified or registered mail, postage prepaid, in each case to
the respective parties at the address set forth below, or at such other address
as such party may specify by written notice to the other party hereto:
(i) if to a Purchaser or its nominee, to the Purchaser or its nominee at
the address specified for such communications in Schedule A, with a copy to
Xxxxxx Xxxxxx & Xxxxxxx llp, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
attention: Xxxx Xxxxxxxxxxxx, Esq., Tel.: (000) 000-0000, Fax: (000) 000-0000,
or at such other address as the Purchaser or its nominee shall have specified to
the Company in writing;
(ii) if to any other Noteholder, to such Noteholder at the address of such
Noteholder appearing in the Security Register or such other address as such
other holder shall have specified to the Company in writing;
(iii) if to an Issuer, to the Company at 0000 X. Xxxxxxx Xxxxxx, Xxxxxxx
Xxxxx, XX 00000, attention: Xx. Xxxx Xxxxxxxxx, Tel.: (000) 000-0000, Fax:
(000)000-0000, and c/o Trivest Partners, L.P., 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx
000, Xxxxx, XX 00000, attention: Xxxxx Xxxxxxxx, Esq., Tel.: (000) 000-0000,
Fax: (000)000-0000, with a copy to Akerman Senterfitt & Xxxxxx, P.A., Xxx
Xxxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxx, XX 00000, attention: Xxxxxxx Xxxxxxx,
Esq., Tel.: (000)000-0000, Fax: (000)000-0000 or at such other address as the
Company shall have specified to the holder of each Note in writing; or
(iv) if to the Collateral Agent, to The Bank of New York at 000 Xxxxxxx
Xxxxxx, Xxxxx 0-Xxxx, Xxx Xxxx, XX 00000, attention: CDO Unit, Tel.:
(000)000-0000, Fax: (000)000-0000 or at such other address as the Collateral
Agent shall have specified to the Company in writing.
18.02. Benefit of Agreement; Assignments and Participations. Except as
otherwise expressly provided herein, all covenants, agreements and other
provisions contained in this Agreement by or on behalf of any of the parties
hereto shall bind, inure to the benefit of and be enforceable by their
respective successors and assigns (including, without limitation, any subsequent
holder of a Security) whether so expressed or not; provided, however, that the
Issuers may not assign or transfer any of their rights or obligations without
the prior written consent of the other parties hereto and each such holder.
Nothing in this Agreement or in the Securities, express or implied, shall
give to any Person other than the parties hereto, their successors and assigns
and the holders from time to time of the Securities any benefit or any legal or
equitable right, remedy or claim under this Agreement.
18.03. No Waiver; Remedies Cumulative. No failure or delay on the part of
any party hereto or any Noteholder in exercising any right, power or privilege
hereunder or under the Securities and no course of dealing between any Issuer
and any other party or Noteholder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under the Securities preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein and in the Securities are cumulative and not
exclusive of any rights or remedies which the parties or Noteholders would
otherwise have. No notice to or demand on any Issuer in any case shall entitle
any Issuer to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the other parties hereto
or the Noteholders to any other or further action in any circumstances without
notice or demand.
18.04. Amendments, Waivers and Consents(a). Subject to Section 3.6 of the
Intercreditor Agreement, this Agreement may be amended and the observance of any
term hereof may be waived, including the waiver of the right to accelerate
without curing all existing default (either retroactively or prospectively) with
(and only with) the written consent of the Issuers and the Required Noteholders
(or, if prior to the Closing Time, Purchasers who have agreed to purchase a
majority in aggregate principal amount of the Notes); provided, however, that no
such amendment or waiver may, without the prior written consent of the
Noteholder of each Note then outstanding and affected thereby (or each Purchaser
if prior to the Closing Time) (i) subject any Noteholder to any additional
obligation, (ii) reduce the principal of (or premium, if any) or rate of
interest on any Note, (iii) postpone the date fixed for any payment of principal
of (or premium, if any) or interest on any Note, (iv) change the percentage of
the aggregate principal amount of the Notes the holders of which shall be
required to consent or take any other action under this Section 18.04 or any
other provision of this Agreement, (v) release any Guarantor from its Guarantee
other than in accordance with the terms of this Agreement, (vi) adversely affect
the ranking of the Notes or (vii) release all or substantially all of the
Collateral; and provided, further, that without the consent of the Collateral
Agent, no such amendment, modification, termination or waiver may amend, modify,
terminate or waive any provision of Section 16 as the same applies to such
Collateral Agent or any other provision of this Agreement as it relates to the
rights or obligations of the Collateral Agent. No amendment or waiver of this
Agreement will extend to or affect any obligation, covenant, agreement, Default
or Event of Default not expressly amended or waived or thereby impair any right
consequent thereon.
18.05. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart. Each counterpart may consist of a number of copies hereof,
each signed by less than all, but together signed by all, of the parties hereto.
18.06. Reproduction. This Agreement, the other Transaction Documents and
all documents relating, hereto and thereto, including, without limitation,
(a) consents, waivers and modifications that may hereafter be executed, (b)
documents received by the Purchasers at the Closing Time (except the Securities
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished in connection herewith, may be reproduced by
any photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and any original document so reproduced may be destroyed.
Each Issuer agrees and stipulates that, to the extent permitted by Applicable
Law, any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not such reproduction was made in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 18.06
shall not prohibit any Issuer, any other party hereto or any Noteholder from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
18.07. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
18.08. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS AGREEMENT, THE NOTES AND THE GUARANTEES SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
(b) If any action, proceeding or litigation shall be brought by any
Purchaser or any Noteholder in order to enforce any right or remedy under this
Agreement or any of the Securities, the Issuers hereby consent and will submit,
and will cause each of their Subsidiaries to submit, to the jurisdiction of any
state or federal court of competent jurisdiction sitting within the area
comprising the Southern District of New York on the date of this Agreement. The
Issuers hereby irrevocably waive any objection, including, but not limited to,
any objection to the laying of venue or based on the grounds of forum non
conveniens, which they may now or hereafter have to the bringing of any such
action, proceeding or litigation in such jurisdiction. The Issuers further agree
that they shall not, and shall cause their Subsidiaries not to, bring any
action, proceeding or litigation arising out of this Agreement, the Securities
or any other Transaction Document in any state or federal court other than any
state or federal court of competent jurisdiction sitting within the area
comprising the Southern District of New York on the date of this Agreement.
(c) The Issuers hereby irrevocably designate CT Corporation System at an
address in New York City designated at the Closing Time as the designee,
appointee and agent of the Issuers to receive, for and on behalf of the Issuers,
service of process in such jurisdiction in any action, proceeding or litigation
with respect to this Agreement, on the Securities or any of the other Basic
Documents. It is understood that a copy of such process served on the Collateral
Agent will be promptly forwarded by mail to the applicable Issuers at its
address set forth opposite its signature below, but the failure of the
applicable Issuers to have received such copy shall not affect in any way the
service of such process. The Issuers and the Purchasers further irrevocably
consent to the service of process of any of the aforementioned courts in any
such action, proceeding or litigation by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Company at its said
address, such service to become effective thirty (30) days after such mailing.
(d) Nothing herein shall affect the right of any holder of a Note to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Issuers in any other jurisdiction. If service of
process is made on a designated agent it should be made by either (i) personal
delivery or (ii) mailing a copy of summons and complaint to the agent via
registered or certified mail, return receipt requested.
(e) ALL PARTIES HEREBY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
SECURITIES.
18.09. Severability. If any provision of this Agreement is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable to
the extent of such illegality, invalidity or unenforceability and the remaining
provisions shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid or unenforceable provisions.
18.10. Entirety. This Agreement together with the other Transaction
Documents represents the entire agreement of the parties hereto and thereto, and
supersedes all prior agreements and understandings, oral or written, if any,
relating to the Transaction Documents or the transactions contemplated herein or
therein.
18.11. Survival of Representations and Warranties. All representations and
warranties and covenants and indemnities made by the Issuers herein shall
survive the execution and delivery of this Agreement, the issuance and transfer
of all or any portion of the Securities and the payment of principal of the
Notes and any other obligations hereunder, regardless of any investigation made
at any time by or on behalf of the Purchasers or any other holder that is
Affiliated with the Purchasers. All statements contained in any certificate
delivered by or on behalf of any Issuers pursuant to this Agreement shall be
deemed representations and warranties of the Issuers under this Agreement.
18.12. Incorporation. All Exhibits and Schedules attached hereto are
incorporated as part of this Agreement as if fully set forth herein.
18.13. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(a) a statement that the Person making such certificate or opinion has read
such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of the date first above
written.
XXXXX XXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
PARENT:
WLFI HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
GUARANTORS:
BJ MEXICO IV, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
BJ MEXICO V, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
BJCLW HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
BJI EMPLOYEES SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
BJIP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
XXXXX XXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
CASUAL LIVING WORLDWIDE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
CHARTER FURNITURE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
LODGING BY LIBERTY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
LOEWENSTEIN, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
POMPEII FURNITURE CO., INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
SOUTHERN WOOD PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
TEXACRAFT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
TROPIC CRAFT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
WABASH VALLEY MANUFACTURING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
WINSTON FURNITURE COMPANY OF ALABAMA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
WINSTON PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
THE WOODSMITHS COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: CFO
COLLATERAL AGENT:
THE BANK OF NEW YORK, not in its
individual capacity but solely as Collateral Agent
By: /s/ Xxxxxxxxx Xxxxx
Name: Xxxxxxxxx Xxxxx
Title: Vice President
PURCHASERS:
Alpha u.s. sub fund ii llc
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
B&W MASTER TOBACCO RETIREMENT TRUST
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
DELPHI FINANCIAL GROUP
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner:
xxxxxxx xx investment holdings, ltd.
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
goldenTree capital SOLUTIONS offshore fund
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
goldentree capital solutions fund
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
GOLDENTREE HIGH YIELD MASTER FUND, LTD.
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
GOLDENTREE HIGH YIELD VALUE MASTER FUND, L.P.
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner:
GOLDENTREE HIGH YIELD MASTER FUND II, LTD.
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
STICHTING PENSIOENFONDS HOOGOVENS
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
houston municipal employees pension system
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
THE MUNICIPAL FIRE AND POLICE RETIREMENT SYSTEM OF IOWA
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
GOLDENTREE LOAN OPPORTUNITIES I, LIMITED
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
GOLDENTREE LOAN OPPORTUNITIES II, LIMITED
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
GOLDENTREE HIGH YIELD OPPORTUNITIES I, L.p.
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
GOLDENTREE HIGH YIELD OPPORTUNITIES II, L.P.
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner:
RELIANCE STANDARD LIFE INSURANCE COMPANY
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
SAFETY NATIONAL CASUALTY CORPORATION
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
SAFETY NATIONAL CASUALTY CORPORATION
By: GOLDENTREE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
Continental casualty company
By: /s/ Xxxxxxx X. XxXxxx
Name: Xxxxxxx X. XxXxxx
Title: Vice President and Assistant Treasurer
DEUTSCHE BANK AG LONDON
By: /s/ Xxxxxxxx Brumm________________
Name: Xxxxxxxx Xxxxx
Title: Authorized Signatory
By: /s/ Xxxxx McGoey__________________
Xxxxx XxXxxx
Authorized Signatory
sun america life insurance company
BY: aig gLOBAL iNVESTMENT CORP.
AS iNVESTMENT ADVISOR
By: /s/ Xxxxxx X. Oh_________
Name: Xxxxxx X. Oh
Title: Managing Director
the variable annuity life insurance company
By: AIG global investment corp., it's investment advisor
By: /s/ Xxxxxx X. Oh__________
Name: Xxxxxx X. Oh
Title: Managing Director
aig annuity life insurance company By: AIG global investment
corp., it's investment advisor
By: /s/ Xxxxxx X. Oh
Name: Xxxxxx X. Oh
Title: Managing Director
gsc pARTNERS GEMINI FUND, LIMITED
By: /s/ Xxxx Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
GSC PARTNERS CDo FUND III, LIMITED
By: /s/ Xxxx Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
A-8
EXHIBIT A
[FORM OF NOTE]
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED
UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY IS SUBJECT TO THE TERMS OF
THE PURCHASE AND SECURITY AGREEMENT, DATED AS OF MARCH 31, 2004 (THE "PURCHASE
AGREEMENT"), AMONG Xxxxx Xxxxxx International, Inc. (THE "COMPANY"), WLFI
HOLDINGS, INC., AS PARENT, THE GUARANTORS NAMED THEREIN, THE BANK OF NEW YORK,
AS COLLATERAL AGENT (THE "COLLATERAL AGENT"), AND THE PURCHASERS NAMED THEREIN.
A COPY OF SUCH PURCHASE AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.
THE ISSUERS OBLIGATIONS TO THE NOTEHOLDERS ARE SUBJECT TO AN INTERCREDITOR
AGREEMENT WITH THE FIRST LIEN COLLATERAL AGENT (AS DEFINED IN THE PURCHASE
AGREEMENT).
SENIOR SECURED NOTES DUE MAY 1, 2007
No. ~~~~~~~~~~~~~~~~~~ $
Xxxxx Xxxxxx International, Inc., a corporation duly organized and existing
under the laws of Delaware (herein called the 'Company", which term includes any
successor Person under the Purchase Agreement), for value received, hereby
promises to pay to [~~~~~~~~~~~~~~~~~~~~~~], or registered assigns, the
principal sum of [~~~~~~~~~~~~~~~~] Dollars on May 1, 2007 (the "Stated
Maturity").
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
XXXXX XXXXXX INTERNATIONAL, INC.
[Seal]
By: __________________________________________________
Name:
Title:
[Form of Reverse of Note]
1. General. This Note is one of a duly authorized issue of Notes of the
Company designated as its Senior Secured Notes due May 1, 2007 (herein called
the "Notes"), limited in aggregate principal amount to the sum of $135,000,000
issued pursuant to the Purchase and Security Agreement, dated as of March 31,
2004 (herein called the "Purchase Agreement"), among the Company, WLFI Holdings,
Inc., as Parent, the Guarantors named therein, The Bank of New York, as
Collateral Agent, and the Purchasers named therein, to which Purchase Agreement
and all amendments thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company and the Noteholders and of the terms upon which the Notes are, and
are to be, issued and delivered. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Purchase Agreement.
Principal on this Note shall be payable only against surrender therefor,
while payments of interest on this Note shall be made, in accordance with the
Purchase Agreement and subject to applicable laws and regulations, by wire
transfer to such account as any Noteholder shall designate by written
instructions received by the Company and the Paying Agent no less than 15 days
prior to any applicable Interest Payment Date, which wire instruction shall
continue in effect until such time as the Noteholder otherwise notifies the
Company and the Paying Agent or such Noteholder no longer is the registered
owner of this Note. On each Interest Payment Date, at Maturity, any Redemption
Date or any Purchase Date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such date. An installment of principal, premium or interest shall be
considered paid on the date it is due if the Paying Agent shall have received,
for the benefit of the Noteholders, on or prior to 10:00 a.m. New York City
time, that date U.S. legal tender designated for and sufficient to pay such
installment in full and is not prohibited from paying such money to the
Noteholders.
2. Interest. The Company promises to pay interest on the principal amount
of this Note from the date of issuance of this Note at a rate per annum, reset
quarterly, equal to LIBOR plus 9.00%, as determined by the Company (the
"Calculation Agent").
For purposes of this Section 2, the following terms shall have the meanings
indicated below:
"LIBOR," with respect to an Interest Period, will be the rate (expressed as
a percentage per annum) for deposits in United States dollars for a three-month
period beginning on the second London Banking Day after the Determination Date
that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the
Determination Date. If Telerate Page 3750 does not include such a rate or is
unavailable on a Determination Date, the Calculation Agent will request the
principal London office of each of four major banks in the London interbank
market, as selected by the Calculation Agent, to provide such bank's offered
quotation (expressed as a percentage per annum), as of approximately 11:00 a.m.,
London time, on such Determination Date, to prime banks in the London interbank
market for deposits in a Representative Amount in United States dollars for a
three-month period beginning on the second London Banking Day after the
Determination Date. If at least two such offered quotations are so provided,
LIBOR for the Interest Period will be the arithmetic mean of such quotations. If
fewer than two such quotations are so provided, the Calculation Agent will
request each of three major banks in New York City, as selected by the
Calculation Agent, to provide such bank's rate (expressed as a percentage per
annum), as of approximately 11:00 a.m., New York City time, on such
Determination Date, for loans in a Representative Amount in United States
dollars to leading European banks for a three-month period beginning on the
second London Banking Day after the Determination Date. If at least two such
rates are so provided, LIBOR for the Interest Period will be the arithmetic mean
of such rates. If fewer than two such rates are so provided, then LIBOR for the
Interest Period will be LIBOR in effect with respect to the immediately
preceding Interest Period.
"Interest Period" means the period commencing on and including an interest
payment date and ending on and including the day immediately preceding the next
succeeding interest payment date, with the exception that the first Interest
Period shall commence on and include the Issue Date and end on and include June
29, 2004.
"Determination Date," with respect to an Interest Period, will be the
second London Banking Day preceding the first day of the Interest Period.
"London Banking Day" is any day in which dealings in United States dollars
are transacted or, with respect to any future date, are expected to be
transacted in the London interbank market.
"Representative Amount" means U.S.$1,000,000.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Moneyline Telerate service (or any successor service or such other page as may
replace Page 3750 on that service or any successor service).
The amount of interest for each day that the Notes are outstanding (the
"Daily Interest Amount") will be calculated by dividing the interest rate in
effect for such day by 360 and multiplying the result by the principal amount of
the Notes. The amount of interest to be paid on the Notes for each Interest
Period will be calculated by adding the Daily Interest Amounts for each day in
the Interest Period.
All percentages resulting from any of the above calculations will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point being rounded upwards
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all
dollar amounts used in or resulting from such calculations will be rounded to
the nearest cent (with one-half cent being rounded upwards).
The interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States law
of general application.
The Calculation Agent will, upon the request of any Noteholder, provide the
interest rate then in effect with respect to the Notes. All calculations made by
the Calculation Agent in the absence of manifest error will be conclusive for
all purposes and binding on the Noteholders.
The Company will pay interest quarterly in arrears on each March 31, June
30, September 30 and December 31 and at Stated Maturity (each, an "Interest
Payment Date"), commencing on June 30, 2004.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate of 1% in excess
if the rate of interest borne by this Note (without regard to any applicable
grace periods) to the extent lawful.
All interest payable, on any Interest Payment Date will, as provided in the
Purchase Agreement, be paid by the Paying Agent to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close of business
on the Regular Record Date for such interest, which shall be the fifteenth
calendar day (whether or not a Business Day) immediately preceding such Interest
Payment Date. Notwithstanding the foregoing if this Note is issued after a
Regular Record Date and prior to an Interest Payment Date, the record date for
such Interest Payment Date shall be the original issue date.
Interest on this Note shall be computed on the basis of a 360-day year and
twelve 30-day months.
Interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the holders of such Notes, or one or more
Predecessor Notes, of record at the close of business on the relevant record
dates referred to on the face hereof, all as provided in the Purchase Agreement.
3. Optional Redemption. (a)~The Company may redeem, at its option, the
Notes, in whole at any time or in part from time to time from and after
March 31, 2005 at the applicable Redemption Price as set forth below.
Period: Redemption Price:
March 31, 2005 - March 31, 2006 103.00%
April 1, 2006 - September 30, 2006 101.00%
October 1, 2006 and thereafter 100.00%
(b) Notwithstanding the foregoing, the Company may, at its option, elect on
one occasion occurring on or prior to 60 days following the completion of the
Company's audit for the fiscal year ended December~31, 2004 (but in any event no
later than June 30, 2005) if no Default or Event of Default shall have occurred
and be continuing at such time and if the report of the Company's independent
auditors in respect of the 2004 fiscal year is an "unqualified" (to the extent
it relates to the accuracy of the financial information used in the calculation
of Excess Cash Flow) audit report, redeem at a redemption price of 100% of the
principal amount thereof plus accrued interest a principal amount of Notes not
to exceed the lesser of (a)~5% of the original principal amount of the Notes
issued under the Purchase Agreement and (b) the amount of Excess Cash Flow for
the 2004 fiscal year.
4. Procedures for Redemption. If less than all the Notes are to be
redeemed, the Notes shall be redeemed pro rata from each Noteholder.
The Notes do not have the benefit of any sinking fund obligations.
In the event of redemption or purchase pursuant to an offer to purchase
this Note in part only, a new Note or Notes for the unredeemed or unpurchased
portion hereof will be issued in the name of the Noteholder hereof upon the
cancellation hereof.
6. Events of Default. If an Event of Default shall occur and be continuing,
the principal of all the Notes may be declared due and payable in the manner and
with the effect provided in the Purchase Agreement. Upon payment of (i) the
principal so declared due and payable and any overdue installment of interest,
(ii) any overdue principal and premium payable upon redemption or repurchase of
this Note, and (iii) as provided on the face hereof, interest on any overdue
principal of, and any premium and interest on this Note (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of, and
interest on, this Note shall terminate.
7. Offers to Purchase Notes. The Purchase Agreement provides that, subject
to certain conditions, if (i) certain Excess Proceeds are available to the
Company as a result of certain security issuances or (ii) a Change of Control
occurs, the Company shall be required to make an offer to purchase all or a
specified portion of the Notes as provided for in the Purchase Agreement.
8. Amendments, Modifications and Waivers. The Purchase Agreement permits,
with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and certain rights of
the Noteholders under the Purchase Agreement at any time by the Company with the
consent of the Noteholders of a majority in aggregate principal amount of the
Notes at the time outstanding. The Purchase Agreement also contains provisions
permitting the Noteholders of specified percentages in aggregate principal
amount of the Notes at the time outstanding, on behalf of the Noteholders of all
the Notes, to waive compliance by the Company with certain provisions of the
Agreement and certain past defaults under the Agreement and their consequences.
Any such consent or waiver by the Noteholder of this Note shall be conclusive
and binding upon such Noteholder and upon all future Noteholders and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Note.
9. Registration of Transfer. As provided in the Purchase Agreement and
subject to certain limitations therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer at the principal offices of the Company, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company duly executed by (in each case with signatures medallion
guaranteed), the Noteholder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Purchase Agreement and subject to certain limitations therein set forth, Notes
are exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Noteholder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company and any agent of the Company may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company nor the Collateral Agent shall be
affected by notice to the contrary.
10. Miscellaneous. All terms used in this Note which are defined in the
Agreement shall have the meanings assigned to them in the Purchase Agreement.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased in its entirety by the
Company pursuant to Section 6.11 or 6.15 of the Agreement, check the box:
If you want to elect to have only a part of the principal amount of this
Note purchased by the Company pursuant to Section 6.11 or 6.15 of the Agreement,
state the portion of such amount: $_______________.
Dated: Your Signature: ___________________________________
(Sign exactly as name appears on the other side of
this Note)
Signature Guarantee: _________________________________________________
(Signature must be guaranteed by a financial
institution that is member of the Securities Transfer
Agent Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York Stock
Exchange, Inc. Medallion Signature Program ("MSP")or
such other signature guarantee program as may be
determined by the Security Registrar in addition
to, or in substitution for, STAMP, SEMP or MSP,
all in accordance with the Securities Exchange
Act of 1934, as amended.)
B-3
EXHIBIT B
FORM OF GUARANTEE
THE OBLIGATIONS OF THE GUARANTORS TO THE HOLDERS OF NOTES PURSUANT TO THIS
GUARANTEE AND THE PURCHASE AND SECURITY AGREEMENT, DATED AS OF MARCH 31, 2004,
AMONG XXXXX XXXXXX INTERNATIONAL, INC. (THE "COMPANY"), WLFI HOLDINGS, INC., AS
PARENT, THE GUARANTORS NAMED THEREIN, THE BANK OF NEW YORK, AS COLLATERAL AGENT,
AND THE PURCHASERS NAMED THEREIN (THE "PURCHASE AGREEMENT") ARE EXPRESSLY SET
FORTH IN SECTION 13 OF THE PURCHASE AGREEMENT, AND REFERENCE IS HEREBY MADE TO
SUCH PURCHASE AGREEMENT FOR THE PRECISE TERMS OF THIS GUARANTEE. THE TERMS OF
THE PURCHASE AGREEMENT, INCLUDING WITHOUT LIMITATION SECTION~13, ARE
INCORPORATED HEREIN BY REFERENCE.
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Noteholder, irrespective of the validity and enforceability
of the Purchase Agreement, the Notes or the obligations of the Company
thereunder, that: (a) the principal of and premium and interest on the Notes
shall be promptly paid in full when due, whether at Stated Maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
(and any premium) and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Noteholders thereunder shall be promptly paid
in full or performed, all in accordance with the terms thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same shall be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or the Purchase Agreement, the absence of any action to enforce the same,
any waiver or consent by any Noteholder with respect to any provisions thereof,
the recovery of any judgment against the Company, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that, subject to Section 13 of the Purchase Agreement, this Guarantee shall not
be discharged except by complete performance of the obligations contained in the
Notes and the Purchase Agreement.
If any Noteholder is required by any court or otherwise to return to the
Company or Guarantors, or any Custodian, trustee, liquidator or other similar
official acting in relation to either the Company or Guarantors, any amount paid
by such Noteholder, this Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect. Each Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the Noteholders in
respect of any obligations guaranteed hereby. Each Guarantor further agrees
that, as between the Guarantors, on the one hand, and the Noteholders, on the
other hand, (a) the Maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 11 of the Purchase Agreement for the purposes
of this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations Guaranteed hereby and
(b) in the event of any declaration of acceleration of such obligations as
provided in Section 11 of the Purchase Agreement, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Guarantee. The Guarantors shall have the right to seek
contribution from any nonpaying Guarantor so long as the exercise of such right
does not impair the rights of the Noteholders under the Guarantees.
Each Guarantor, and by its acceptance of Notes, each Noteholder, hereby
confirms that it is the intention of all such parties that this Guarantee not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Guarantee. To
effectuate the foregoing intention, the Noteholders and the Guarantors hereby
irrevocably agree that the obligations of each Guarantor under this Guarantee
and Section 13 of the Purchase Agreement shall be limited to the maximum amount
as will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under Section 13 of the Purchase Agreement,
result in the obligations of such Guarantor under this Guarantee not
constituting a fraudulent transfer or conveyance.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon each Guarantor and its respective successors and
assigns to the extent set forth in the Purchase Agreement until full and final
payment of all of the Company's obligations under the Notes and the Purchase
Agreement and shall inure to the benefit of the Noteholders and their successors
and assigns and, in the event of any transfer or assignment of rights by any
Noteholder, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and of Section 13 of the Purchase
Agreement. Notwithstanding the foregoing, any Guarantor that satisfies the
provisions of Section 13.04 of the Purchase Agreement shall be released of its
obligations hereunder.
THIS GUARANTEE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF THE STATE OF NEW YORK THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
Capitalized terms used herein have the same meanings given in the Purchase
Agreement unless otherwise indicated.
[GUARANTOR]
By: ____________________________________________________
Name:
Title:
X-0
XXXXXXX X
XXXX XX XXXXXXXXXXXXX XXXXXXXXX
X-0
EXHIBIT D
FORM OF LANDLORD ACCESS AGREEMENT
E-1
EXHIBIT E
FORM OF STOCK PLEDGE AGREEMENT
F-1
EXHIBIT F
FORM OF OFFICERS' CERTIFICATE
G-1
EXHIBIT G
FORM OF SECRETARY'S CERTIFICATE
H-1
EXHIBIT H
FORM OF FINANCIAL CONDITION CERTIFICATE
I-1
EXHIBIT I
FORM OF OPINION OF AKERMAN SENTERFITT & XXXXXX, P.A.
J-1
EXHIBIT J
FORM OF OPINION OF XXXXXX XXXXXX & XXXXXXX llp
K-1
EXHIBIT K
FORM OF SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT (this "Supplemental Agreement"), dated as of
[~~~~~~~~~~~~~~~], by and between ~~~~~~~~~~~~~~~~~~ (the "New Guarantor")
and Xxxxx Xxxxxx International, Inc. (the "Company").
W I T N E S S E T H :
WHEREAS, the Company, the Guarantors named therein and the Purchasers named
therein have each heretofore executed and delivered to each other a Purchase and
Security Agreement (the "Purchase Agreement"), dated as of March 31, 2004,
providing for the issuance and sale by the Company to the Purchasers of an
aggregate principal amount of $135,000,000 of Senior Secured Notes (the
"Notes"); and
WHEREAS, Section 13.02 of the Purchase Agreement provides that under
certain circumstances the Company is required to cause the New Guarantor to
execute and deliver to the Noteholders a supplemental agreement pursuant to
which the New Guarantor shall unconditionally guarantee all of the Company's
obligations under the Notes pursuant to a Guarantee on the terms and conditions
set forth herein;
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor covenants and agrees for the equal and ratable benefit of the
Noteholders as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Purchase Agreement.
2. AGREEMENT TO GUARANTEE. The New Guarantor hereby agrees, jointly and
severally with all other Guarantors, to unconditionally guarantee the Company's
obligations under the Notes on the terms and subject to the conditions set forth
in Section 13 of the Purchase Agreement and to be bound by all other applicable
provisions of the Purchase Agreement,
3. INTENDED THIRD PARTY BENEFICIARIES. The Noteholders from time to time of
the Notes are intended third party beneficiaries of this Supplemental Agreement
and the terms and provisions of this Supplemental Agreement may not be amended,
modified exceptions provided for in the Purchase Agreement.
4. EFFECTIVENESS. This Supplemental Agreement shall be effective upon
execution by the parties hereto.
6. GOVERNING LAW. THIS SUPPLEMENTAL AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF THE STATE OF NEW YORK THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
7. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for convenience only
and shall not affect the construction hereof.
[NEW GUARANTOR]
By: ____________________________________________________
Name:
Title:
L-1
EXHIBIT L
FORM OF COLLATERAL QUESTIONNAIRE
