Exhibit 10.26
Execution Copy
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AMENDED AND RESTATED
$8,000,000
SENIOR SUBORDINATED LOAN AGREEMENT
among
CD&L, INC.
and
VARIOUS LENDERS
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Dated as of January 29, 1999
amended and restated as of April 14, 2004
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TABLE OF CONTENTS
Page
SECTION 1 Amount and Terms of Loans..........................................................................3
1.01 The Loans..................................................................................3
SECTION 2. Repayment; Prepayments; Payments; Taxes............................................................5
2.01 Payment of Loans...........................................................................5
2.02 Mandatory and Voluntary Prepayments........................................................5
2.03 Method and Place of Payment................................................................6
2.04 Net Payments...............................................................................6
SECTION 3. Conditions Precedent to Exchange on the Closing Date...............................................7
3.01 Notes......................................................................................8
3.02 Corporate Documents; Proceedings...........................................................8
3.03 Subordinated Guaranties....................................................................8
3.04 Litigation.................................................................................8
3.05 Approvals..................................................................................8
3.06 Material Adverse Change, Etc...............................................................8
3.07 No Default; Representations and Warranties.................................................9
SECTION 4. Representations, Warranties and Agreements.........................................................9
4.01 Status.....................................................................................9
4.02 Power and Authority........................................................................9
4.03 No Violation...............................................................................9
4.04 Governmental Approvals....................................................................10
4.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; Etc..........................................................................10
4.06 Litigation................................................................................10
4.07 Capitalization............................................................................10
4.08 Use of Proceeds; Margin Regulations.......................................................10
4.09 Subsidiaries..............................................................................11
4.10 The Transaction...........................................................................11
4.11 Investment Company Act....................................................................11
4.12 Public Utility Holding Company Act........................................................11
4.13 Valid Issuance of Borrower Common Stock...................................................11
SECTION 5. Affirmative Covenants.............................................................................11
5.01 Information Covenants.....................................................................11
5.02 Books, Records and Inspections............................................................14
5.03 Maintenance of Property, Insurance........................................................14
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Page
5.04 Corporate Franchises......................................................................14
5.05 Compliance with Statutes, Etc.............................................................14
5.06 Compliance with Environmental Laws........................................................14
5.07 End of Fiscal Years; Fiscal Quarters......................................................15
5.08 Payment of Taxes..........................................................................15
5.09 Observation of Board of Directors.........................................................15
5.10 Use of Proceeds, Margin Regulations.......................................................16
5.11 Intellectual Property Rights..............................................................16
SECTION 6. Negative Covenants................................................................................16
6.01 Dividends.................................................................................16
6.02 Consolidated EBITDA to Interest...........................................................16
6.03 Limitation on Voluntary Payments and Modifications; Limitation on
Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; Etc...........................................................................17
6.04 Limitation on Certain Restrictions on Subsidiaries........................................17
SECTION 7. Events of Default.................................................................................17
7.01 Payments..................................................................................17
7.02 Covenants.................................................................................17
7.03 Stockholders Agreement....................................................................18
7.04 Default Under Other Agreements............................................................18
7.05 Bankruptcy, Etc...........................................................................18
7.06 Subordinated Guaranty.....................................................................18
7.07 TTM EBITDA................................................................................18
SECTION 8. Definitions and Accounting Terms..................................................................18
8.01 Defined Terms.............................................................................19
SECTION 9. Subordination.....................................................................................27
9.01 Obligations Subordinate to Senior Indebtedness............................................27
9.02 Payment Over of Proceeds Upon Dissolution.................................................28
9.03 No Payment in Certain Circumstances.......................................................29
9.04 Acceleration Rights; Remedies.............................................................30
9.05 Payment Otherwise Permitted...............................................................30
9.06 Subrogation to Rights of Holders of Senior Indebtedness...................................31
9.07 Provisions Solely to Define Relative Rights...............................................31
9.08 No Waiver of Subordination Provisions; Amendment..........................................31
9.09 Reliance on Judicial Order or Certificate of Liquidating Agent............................32
9.10 Turnover; Miscellaneous Subordination Provisions..........................................32
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Page
SECTION 10. Miscellaneous.....................................................................................33
10.01 Payment of Expenses, Etc..................................................................33
10.02 Right of Setoff...........................................................................34
10.03 Notices...................................................................................34
10.04 Benefit of Agreement......................................................................35
10.05 No Waiver; Remedies Cumulative............................................................36
10.06 Payments Pro Rata.........................................................................36
10.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL....................36
10.08 Counterparts..............................................................................37
10.09 Headings Descriptive......................................................................37
10.10 Amendment or Waiver.......................................................................38
10.11 Survival..................................................................................38
10.12 Domicile of Loans.........................................................................38
Schedules and Exhibits
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SCHEDULE I Commitments
SCHEDULE II Subsidiaries
EXHIBIT A Original Lenders
EXHIBIT B Investors
EXHIBIT C Form of Original Note
EXHIBIT D Form of Series A Convertible Note
EXHIBIT E Form of Series B Convertible Note
EXHIBIT F Form of Section 2.04(b)(ii) Certificate
EXHIBIT G Form of Section 3.02(a) Certificate
EXHIBIT H Reaffirmation
EXHIBIT I Form of Assignment and Assumption Agreement
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AMENDED AND RESTATED SENIOR SUBORDINATED LOAN AGREEMENT, dated
as of April 14, 2004, among CD&L, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Borrower"), the financial
institutions party hereto listed on Exhibit A (each, an "Original Lender") and
the individual parties hereto listed on Exhibit B (the "Investors", and
collectively with the Originals Lenders, the "Lenders"). Unless otherwise
defined herein, all capitalized terms used herein and defined in Section 8 are
used herein as therein defined.
W I T N E S S E T H :
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Background. Pursuant to a Senior Subordinated Loan Agreement
dated as of January 29, 1999, as amended (the "Original Loan Agreement"), the
Original Lenders provided loans (the "Original Loans") to the Borrower in the
original principal amount of $15.0 million. As of the date hereof, the Borrower
has repaid to the Lenders the principal sum of $4.0 million, and there remains
an outstanding principal balance due to the Lenders of $11.0 million. Such
indebtedness is evidenced by the Borrower's Senior Subordinated Promissory Notes
dated as of January 29, 1999 (the "Original Notes"). The Investors seek to
invest $4.0 million in the Borrower, subject to certain restructuring of the
Borrower's capital structure. Pursuant to an Exchange and Restructuring
Agreement dated this date (the "Exchange Agreement"), the Borrower, the
Investors and the Original Lenders have agreed as follows:
(a) The Original Lenders will exchange Original Notes in the
aggregate principal amount of $4.0 million for shares of the Series A
Convertible Redeemable Preferred Stock of CDL ("Preferred Stock") with a
liquidation preference of $4.0 million, and otherwise on the terms set forth in
the Certificate of Designation of the Preferred Stock described in and annexed
to the Exchange Agreement (the "Certificate of Designation");
(b) The Original Lenders will amend the terms of the $7.0
million balance of the Original Notes, and then exchange the Original Notes for
amended and restated notes, which will consist of two series of convertible
notes, the Series A Convertible Subordinated Debentures (the "Series A
Convertible Notes") in the principal amount of $3.0 million and the Series B
Convertible Subordinated Debentures (the "Series B Convertible Notes") in the
principal amount of $4.0 million (collectively, the "Convertible Notes" or the
"Notes"). The terms of the two series of Convertible Notes will be identical
except for the conversion rate, as further provided below and in the Exchange
Agreement;
(c) The Investors will purchase the Series A Convertible Notes
from the Lenders for a purchase price of $3.0 million and the Lenders will
assign such Series A Convertible Notes to the Investors in such manner as set
forth in Schedule I hereto;
(d) CDL will issue an additional $1.0 million of Series A
Convertible Notes to the Investors for an additional payment of $1.0 million
pursuant to this Agreement (the "New Loan" and together with the Original Loans,
the "Loans" as the same may be repaid pursuant to the terms hereof from time to
time), the proceeds of which shall be used in part to pay interest due as of the
date hereof on the Original Notes to the Lenders;
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(e) The Investors and the Lenders will enter into a
Stockholders Agreement dated as of the date hereof (the "Stockholders
Agreement") to reflect certain agreements between them with respect to CDL; and
(f) The Investors, the Lenders and CDL will enter into a
Registration Rights Agreement dated as of the date hereof (the "Registration
Rights Agreement") pursuant to which the Shares of CDL common stock issuable
upon conversion of the Preferred Stock and the Convertible Notes will be
registered for resale with the Securities and Exchange Commission.
(collectively, the foregoing are referred to as the "Transaction" and
collectively, the Loan Documents, the Exchange Agreement, the Certificate of
Designation, the Stockholders Agreement and the Registration Rights Agreement
are referred to as the "Transaction Documents").
To effectuate the foregoing, the Borrower, the Investors and the Original
Lenders have agreed to amend and restate the Original Loan Agreement in its
entirety to govern and reflect the terms of the Loans, the Series A Convertible
Notes and the Series B Convertible Notes (collectively, the "Convertible Notes"
or the "Notes").
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Loans.
1.01 The Original Loans. On or about January 29, 1999, each
Original Lender severally made an Original Loan in Dollars to the Borrower in a
principal amount equal to such Lender's commitment at such time. As of the date
hereof, after giving effect to the New Loan, the outstanding balance of the
Loans are reflected on Schedule I.
1.02 Notice of Borrowing. The Borrower shall give each
Investor at the address specified opposite its signature below, prior to 12:00
Noon (New York time) on the Business Day preceding the Closing Date, written
notice (or telephonic notice promptly confirmed in writing) of the proposed
Borrowing of Additional Loans.
1.03 Disbursement of Funds. No later than 12:00 Noon (New York
time) or the Closing Date, each Investor will make available to the Borrower an
amount equal to such Investor's Commitment, by wire transfer to an account
designated in writing by the Borrower to the Investors in Dollars and
immediately available funds.
1.04 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loan made to it by each Original Lender, has been
evidenced by a promissory note substantially in the form of Exhibit C (each, an
"Original Note" and, collectively, the "Original Notes").
(b) On the Closing Date, (x) the Original Note issued to each
Original Lender shall (i) be endorsed and delivered to the Company in
exchange for (a) a Convertible Note in the amount and series indicated
on Schedule I, and (ii) Preferred Stock in the amount indicated on
Schedule I. Each Convertible Note issued to each Original Lender and
each Investor shall (i) be executed by the Borrower, (ii) be payable to
the order of
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such Original Lender or its registered assigns and be dated the Closing
Date, (iii) be in the stated principal amount equal to the Loan
outstanding to such Original Lender on the Closing Date and be payable
in the principal amount of the Loan evidenced thereby, (iv) mature on
the Maturity Date, (v) bear interest as provided in Section 1.05, (vi)
be subject to voluntary repayment and mandatory repayment as provided
in Section 2.02, (vii) be convertible into shares of the Borrower's
Common Stock on terms set forth in the forms of Series A Convertible
Note and Series B Convertible Note, as the case may be, annexed hereto
as Exhibits D and E and (viii) be entitled to the benefits of this
Agreement and the Subordinated Guaranty.
(c) Each Original Lender and Investor will note on its
internal records the amount of each Loan made or acquired by it and
each payment in respect thereof and will, prior to any transfer of any
Note, endorse on the reverse side thereof the outstanding principal
amount of the Loan evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of the Loans.
1.05 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Loan from the Closing Date until
the maturity thereof (whether by acceleration or otherwise), at a rate which
shall be as follows:
(i) 9% per annum from the Closing Date to the Second
Anniversary of the Closing Date,
(ii) 10.5% per annum from the Second Anniversary of the
Closing Date of the Closing to the Fourth Anniversary of the
Closing Date; and
(iii) 12% per annum from the Fourth Anniversary of the Closing
Date to the Seventh Anniversary of the Closing Date.
(b) Interest shall be calculated on the basis of a 360-day
year of twelve 30-day months and shall be computed on the balance of
the principal outstanding from time to time, the first payment of
interest to be due and payable 90 days following the Closing Date and
on each Quarterly Payment Date, on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise), and after
such maturity on demand.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per
annum equal to 2% in excess of the then applicable rate provided in
clause (a) above and shall be payable on demand.
1.06 Capital Adequacy Regulations. If any Lender shall have
determined that after the date hereof, the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable
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agency, has or would have the effect of reducing the rate of return on such
Lender's or such other corporation's capital or assets as a consequence of such
Lender's Commitment or Commitments hereunder or its obligations hereunder to a
level below that which such Lender or such other corporation could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's or such other corporation's policies with respect to
capital adequacy), then from time to time, upon written demand by such Lender,
accompanied by the notice referred to in the last sentence of this Section 1.06,
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such other corporation for such reduction. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use reasonable averaging and attribution methods. Each Lender,
upon determining that any additional amounts will be payable pursuant to this
Section 1.06, will give prompt written notice thereof to the Borrower, which
notice shall set forth in reasonable detail the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.06 upon the subsequent receipt of such notice.
SECTION 2. Repayment; Prepayments; Payments; Taxes.
2.01 Payment of Loans. The unpaid principal amount of the
Loans plus all accrued and unpaid interest thereon and all other amounts owed
hereunder with respect thereto shall be paid in full in cash on the Maturity
Date.
2.02 Mandatory and Voluntary Prepayments. (a) At any time
after the First Anniversary of the Closing Date, the Borrower may, upon not less
than twenty (20) days' and not more than sixty (60) days' prior written notice
to the Lenders, which notice shall be irrevocable, at any time and from time to
time, prepay the Loans in whole or in part, provided, however, that (i) each
partial prepayment pursuant to this Section 2.02(a) shall be in an aggregate
principal amount of at least $500,000 and, if greater, in integral multiples of
$500,000, and (ii) no such prepayment shall be made unless (x) there is no
Senior Indebtedness outstanding under the Credit Agreement and all commitments
under the Credit Agreement have been terminated or (y) the Credit Agreement
expressly permits such payments or the Bank has, in writing, consented to such
payment. In connection with any voluntary prepayment, there shall be no premium
or penalty upon any prepayment. The Lenders shall have the right to exercise
their conversion rights under the Convertible Notes following receipt of such
notice and prior to prepayment.
(b) Notwithstanding the foregoing, the Lenders and the
Borrower agree and acknowledge that the Credit Agreement prohibits any payments
that would otherwise be made to the Lenders under Section 2.02(a) and, as a
result thereof, no payment shall be made to the Lenders under Section 2.02(a)
unless and only to the extent the Credit Agreement is amended or modified to
provide that such amounts may be paid to the Lenders.
(c) Except in the event a given Lender waives any right to
payment of the Loans resulting from an Event of Default (or waives, in part,
repayment of a portion of its outstanding Loans to which it is otherwise
entitled as a result of an Event of Default), all prepayments which are applied
to principal will be applied on a pro rata basis to all Loans.
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2.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to each Lender not later than 12:00 Noon (New York time) on the
date when due and shall be made in Dollars and in immediately available funds at
the address specified opposite such Lender's signature below. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.
2.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 2.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income of a Lender pursuant to the laws of the
jurisdiction or any political subdivision or taxing authority thereof or therein
in which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located) and all interest, penalties
or similar liabilities with respect thereto (collectively, "Taxes"). If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due hereunder or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, then the Borrower shall be obligated
to reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income of such Lender pursuant to the laws of
the jurisdiction or any political subdivision or taxing authority thereof or
therein in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Lender is located and for any
withholding of taxes as such Lender shall determine are payable by or withheld
from such Lender in respect of such amounts so paid to or on behalf of such
Lender pursuant to the preceding sentence and in respect of any amounts paid to
or on behalf of such Lender pursuant to this sentence. The Borrower will furnish
to each Lender within 45 days after the date of the payment of any Taxes due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower on or prior to the Closing Date, or in the case of a Lender that is an
assignee or transferee of an interest under this Agreement pursuant to Section
10.04 (unless the respective Lender was already a Lender hereunder immediately
prior to such assignment or transfer), on the date of such assignment or
transfer to such Lender, (i) two accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete
exemption under an income tax treaty) (or successor forms) certifying to such
Lender's entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Lender is not a "bank" within the
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meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption
under an income tax treaty) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit F (any such certificate, a "Section
2.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form) certifying to such Lender's entitlement
as of such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that from time to time after the Closing
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower two new accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI, Form W-8BEN (with respect to a complete exemption
under an income tax treaty) or Form W-8BEN (with respect to the portfolio
interest exemption) and a Section 2.04(b)(ii) Certificate, as the case may be,
and such other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or it shall immediately notify the Borrower of its inability to deliver
any such Form or Certificate, in which case such Lender shall not be required to
deliver any such Form or Certificate pursuant to this Section 2.04(b).
Notwithstanding anything to the contrary contained in Section 2.04(a), but
subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 2.04(a) hereof to gross-up payments to be made to
a Lender in respect of income or similar taxes imposed by the United States if
(I) such Lender has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section 2.04(b)
or (II) in the case of a payment, other than interest, to a Lender described in
clause (ii) above, to the extent that such forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 2.04,
the Borrower agrees to pay additional amounts and to indemnify each Lender in
the manner set forth in Section 2.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
SECTION 3. Conditions Precedent to Exchange on the Closing
Date.
The obligation of each Lender to consummate the transactions
contemplated hereby on the Closing Date is subject to the satisfaction of the
following conditions precedent:
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3.01 Notes. On the Closing Date, there shall have been
delivered to each Lender and Investor the appropriate Convertible Notes, in each
case executed by the Borrower and in the amount, maturity and as otherwise
provided herein.
3.02 Corporate Documents; Proceedings. (a) On the Closing
Date, each Lender shall have received a certificate, dated the Closing Date,
signed by the Chief Executive Officer, Chief Financial Officer, President or any
Vice President of the Borrower, and attested to by the Secretary or any
Assistant Secretary of such Loan Party, in the form of Exhibit G with
appropriate insertions, together with copies of the resolutions of the Borrower
referred to in such certificate.
(b) All corporate and legal proceedings and all instruments
and agreements relating to the transactions contemplated by this Agreement, the
other Loan Documents and the other Documents shall be satisfactory in form and
substance to the Lenders, and each Lender shall have received all information
and copies of all documents and papers, including records of corporate
proceedings, governmental approvals, good standing certificates and bring-down
telegrams, if any, which such Lender may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate
or governmental authorities.
3.03 Subordinated Guaranties. On the Closing Date, each
Subsidiary of the Borrower shall have duly authorized, executed and delivered a
Reaffirmation of its Subordinated Guaranty in the form of Exhibit H (as amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof, the "Subordinated Guaranty"), and the Subordinated Guaranty shall
be in full force and effect.
3.04 Litigation. On the Closing Date, no litigation by any
entity (private or governmental) shall be pending or threatened with respect to
this Agreement, any other Document or any documentation executed in connection
herewith or with respect to the Transaction, or which any Lender shall determine
could reasonably be expected to have a materially adverse effect on the
Transaction or on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole (after giving
effect to the Transaction).
3.05 Approvals. All necessary governmental and third party
approvals in connection with the Transaction (including, without limitation, all
necessary approvals from Fleet Bank, N.A.) shall have been obtained and remain
in effect. There shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction.
3.06 Material Adverse Change, Etc. Since December 31, 2003,
nothing shall have occurred (and none of the Lenders shall have become aware of
any facts or conditions not previously known) which the Required Lenders shall
determine (i) could reasonably be expected to have a material adverse effect on
the rights or remedies of the Lenders or on the ability of any Loan Party to
perform its obligations to the Lenders under this Agreement or any other Loan
Document, and (ii) could reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of any
Loan Party and its Subsidiaries taken as a whole (after giving effect to the
Transaction).
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3.07 No Default; Representations and Warranties. After giving
effect to the Transaction (i) there shall exist no Default or Event of Default
and (ii) all representations and warranties contained herein or in the other
Loan Documents shall be true and correct in all material respects.
SECTION 4. Representations, Warranties and Agreements. In
order to induce the Lenders to enter into this Agreement, the Borrower makes the
following representations, warranties and agreements as to itself and its
Subsidiaries on and as of the Closing Date, all of which representations,
warranties and agreements shall survive the execution and delivery of this
Agreement and the other Loan Documents:
4.01 Status. Each Loan Party and its Subsidiaries (i) is a
duly organized and validly existing corporation (or a limited liability company
or partnership, as applicable) in good standing under the laws of the
jurisdiction of its organization, (ii) has the power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualifications except for failures to be so qualified which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of such Loan Party
and its Subsidiaries taken as a whole.
4.02 Power and Authority. Each Loan Party and its Subsidiaries
has the power to execute, deliver and perform the terms and provisions of each
of the Documents to which it is party and has taken all necessary corporate
action (or limited liability company or partnership action if applicable) to
authorize the execution, delivery and performance by it of each of such
Documents. Each Loan Party and its Subsidiaries has duly executed and delivered
each of the Documents to which it is party, and each of such Documents
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
at law).
4.03 No Violation. Neither the execution, delivery or
performance by any Loan Party of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any applicable law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality applicable to
it, (ii) will conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Credit Documents) upon any of the property or
assets of any Loan Party or its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument to which any of them are a
party or by which any of their property or assets is bound or to which any of
them may be subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws (or similar organizational documents) of any Loan Party
or its Subsidiaries.
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4.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made on or prior to the Closing Date and
are in full force and effect), or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance of any
Document, (ii) the legality, validity, binding effect or enforceability of any
such Document or (iii) the Transaction.
4.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; Etc. The consolidated financial statements of the
Borrower and its Subsidiaries as at and for the year ended December 31, 2003
present fairly in all material respects the financial position of the Borrower
at the dates of said statements and the results of operations for the period
covered thereby. Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied except to the
extent provided in the notes to said financial statements. Since December 31,
2003, there has been no material adverse change in the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
4.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower and its Subsidiaries,
threatened (i) with respect to any Document or the transactions contemplated
thereby, or (ii) that are likely to materially and adversely affect the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
4.07 Capitalization. On the Closing Date, after giving effect
to the Transaction, the authorized capital stock of the Borrower consists of (i)
30,000,000 shares of common stock, $0.001 par value per share (the "Borrower
Common Stock"), of which 7,658,660 shares are issued and outstanding, and (ii)
2,000,000 shares of preferred stock, $0.001 par value per share (the "Borrower
Preferred Stock"), none of which shares were issued and outstanding prior to the
Closing Date. All of such outstanding shares have been be duly and validly
issued, are fully paid and nonassessable.
4.08 Use of Proceeds; Margin Regulations. (a) All proceeds of
the Additional Loans shall be used by the Borrower (i) to pay accrued interest
on the Notes and (ii) thereafter, to repay outstanding loans under the Credit
Agreement or for other working capital and general corporate purposes.
(b) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purposes of
purchasing or carrying any margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof will violate or be inconsistent with the provisions
of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
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4.09 Subsidiaries. On the Closing Date, the corporations,
limited liability companies and partnerships listed on Schedule III are the only
Subsidiaries of the Borrower. Schedule III correctly sets forth, as of the
Closing Date, the percentage ownership (direct and indirect) of the Borrower in
each class of capital stock (or other equity interests) of such Subsidiaries and
also identifies the direct owner thereof.
4.10 The Transaction. All aspects of the Transaction have been
effected in accordance with the Documents and all applicable law. At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to consummate the
Transaction shall have been obtained, given, filed or taken and are in full
force and effect (or effective judicial relief with respect thereto has been
obtained). Additionally, at the time of consummation thereof, there does not
exist any judgment, order or injunction prohibiting or imposing material adverse
conditions upon the consummation of the Transaction, and there does not exist
any judgment, order or injunction prohibiting or imposing any material adverse
condition upon the Loans or the performance by any of the Loan Parties or their
Subsidiaries of their obligations under the Documents.
4.11 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
4.12 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
4.13 Valid Issuance of Borrower Common Stock. The Borrower has
duly authorized and reserved a sufficient number of shares of Borrower Common
Stock for issuance upon the conversion of the Convertible Notes without giving
effect to any additional shares of Borrower Common Stock which may be issued
after giving effect to antidilution adjustments to the conversion of the
Convertible Notes after the Closing Date pursuant to the Convertible Notes. The
Borrower Common Stock, when issued and delivered by the Borrower pursuant to
conversion of the Convertible Notes, will be duly and validly issued, fully paid
and non-assessable securities of the Borrower free and clear of all Liens, and
no Person has any preemptive rights to subscribe for any capital stock of the
Borrower.
SECTION 5. Affirmative Covenants. The Borrower covenants and
agrees that on and after the Closing Date and until the Loans and Convertible
Notes, together with interest, and all other Obligations, are paid in full:
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5.01 Information Covenants. The Borrower shall furnish to each
Lender:
(a) Quarterly Financial Statements. On the earlier to
occur of (x) the date of the filing of the Borrower's Form 10-Q Report
with the SEC for or (y) the date occurring 50 days after the close of,
each of the first three quarterly accounting periods in each fiscal
year of the Borrower, the consolidated and consolidating balance sheets
of the Borrower and its Subsidiaries as at the end of such quarterly
period and the related consolidated and consolidating statements of
earnings and stockholders' equity and statement of cash flows for such
quarter, in each case for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
period, in each case setting forth comparative figures for the related
periods in the prior fiscal year and comparable budgeted figures for
such period, all of which shall be certified by the chief financial
officer or controller of the Borrower, subject to normal year-end audit
adjustments and shall be accompanied by a management discussion and
analysis of the results of operations and financial condition with
respect to such period.
(b) Annual Financial Statements. On the earlier to
occur of (x) the date of the filing of the Borrower's Form 10-K Report
with the SEC for or (y) the date occurring 105 days after the close of,
each fiscal year of the Borrower, the consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at the end of
such fiscal year and the related consolidated and consolidating
statements of earnings and stockholders' equity and statement of cash
flows for such fiscal year and setting forth comparative figures for
the preceding fiscal year and comparable budgeted figures for such
period and certified, (x) in the case of the consolidating statements
by the chief financial officer or controller of the Borrower and (y) in
the case of the consolidated financial statements of the Borrower and
its Subsidiaries, by any of the "big five" or other independent
certified public accountants of recognized national standing reasonably
acceptable to the Required Lenders, together with a signed opinion of
such accounting firm (which opinion shall not be qualified in any
respect) stating that in the course of its regular audit of the
financial statements of the Borrower, which audit was conducted in
accordance with generally accepted auditing standards, such accounting
firm obtained no knowledge of any Default or Event of Default which has
occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is continuing,
a statement as to the nature thereof and shall be accompanied by a
management discussion and analysis of the results of operations and
financial condition with respect to such period.
(c) Officers' Certificates. At the time of the
delivery of the financial statements provided for in Section 5.01(a),
(b) and (c), a certificate of the chief financial officer or
controller, of the Borrower to the effect that no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate, in the case of certificates
delivered pursuant to Section 5.01(b) or (c), shall set forth the
calculations required to establish whether the Borrower was in
compliance with the provisions of Sections 6.03 at the end of such
fiscal quarter.
(d) Notice of Default or Litigation. Promptly, and in
any event within two Business Days after an officer of any of the Loan
Parties or their Subsidiaries obtains knowledge thereof, notice of (i)
the occurrence of any event which constitutes a Default or Event of
Default, (ii) any litigation or governmental investigation or
proceeding pending (x) against any of the Loan Parties or their
Subsidiaries which could reasonably
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be expected to materially and adversely affect the performance,
business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole or (y) with respect to
any Document, and (iii) any other event which could reasonably be
expected to materially and adversely affect the performance, business,
assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
(e) Other Reports and Filings. Promptly upon
transmission thereof, copies of any financial information, proxy
materials and other information and reports, if any, which any of the
Loan Parties or their Subsidiaries (x) has filed with the Securities
and Exchange Commission or any successor thereto (the "SEC") or (y) has
delivered to holders of, or any agent or trustee with respect to,
Indebtedness (including the holders of any Senior Indebtedness) of such
Loan Party or such Subsidiary in its capacity as such a holder, agent,
or trustee.
(f) Environmental Matters. Promptly upon, and in any
event within five Business Days after an officer of any of the Loan
Parties or any of their Subsidiaries obtains knowledge thereof, notice
of any of the following environmental matters: (i) any pending or
threatened material Environmental Claim against any of the Loan
Parties, any of their Subsidiaries, any Real Property owned or operated
by any of the Loan Parties or any of their Subsidiaries; (ii) any
condition or occurrence on or arising from any Real Property owned or
operated at any time by any of the Loan Parties or any of their
Subsidiaries that (A) could reasonably be anticipated to result in a
material noncompliance by such Loan Party or Subsidiary with any
applicable Environmental Law, or (B) could reasonably be anticipated to
form the basis of a material Environmental Claim against such Loan
Party or Subsidiary or any Real Property owned or operated by such Loan
Party or Subsidiary; (iii) any condition or occurrence on any Real
Property owned or operated by any of the Loan Parties, any of their
Subsidiaries or any property adjoining such Real Property that could
reasonably be anticipated to cause any of such Real Property owned or
leased by the Borrower or any of its Subsidiaries to be subject to any
material restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to a
material Release or material threatened Release or the actual or
alleged presence of any Hazardous Material on or from any Real Property
owned or operated at any time by any of the Loan Parties or any of
their Subsidiaries in each case as required by any Environmental Law or
any governmental or other administrative agency. All such notices shall
describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and such Loan
Party's, such Subsidiary's response thereto. In addition, Borrower will
provide the Lenders with copies of all material non-privileged
communications with any government or governmental agency relating to
Environmental Claims, all material non-privileged communications with
any person relating to material Environmental Claims, and such detailed
reports of any material Environmental Claim as may reasonably be
requested by the Required Lenders.
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(g) Credit Agreement Notices. Promptly upon
transmission thereof, a copy of any notice of default furnished by the
Borrower under Article VI of the Credit Agreement simultaneously with
the delivery thereof to the Bank.
(h) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to any
Loan Party or its Subsidiaries, as any Lender may reasonably request.
5.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries, in conformity with United States
generally accepted accounting principles and all requirements of law, shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower shall, and shall cause each of its Subsidiaries to,
permit, upon reasonable notice, officers and designated representatives of any
Lender to visit and inspect, under guidance of officers of the Borrower or such
Subsidiaries, any of the properties of the Borrower or its Subsidiaries, and to
examine the books of account of the Borrower or its Subsidiaries and discuss the
affairs, finances and accounts of the Borrower or its Subsidiaries with, and be
advised as to the same by, its and their officers, all at such reasonable times
and intervals and to such reasonable extent as such Lender may request.
5.03 Maintenance of Property, Insurance. The Borrower will,
and will cause each of its Subsidiaries to, (i) keep all material property
useful and necessary in its business in good working order and condition
(ordinary wear and tear excepted), and (ii) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks and liabilities and with such
deductibles or self-insured retentions as are customary in the industry of the
Borrower.
5.04 Corporate Franchises. The Borrower shall, and shall cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises licenses and patents; provided, however, that nothing in this
Section 5.04 shall prevent the withdrawal of any such Person of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
5.05 Compliance with Statutes, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
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5.06 Compliance with Environmental Laws. The Borrower shall,
and shall cause each of its Subsidiaries to, comply, in all material respects,
with all Environmental Laws applicable to the ownership or use of all the Real
Property, and shall promptly pay, or cause its Subsidiaries to promptly pay all
costs and expenses incurred in such compliance, and will keep or cause to be
kept the Borrower's or its Subsidiaries' interest in all owned Real Properties
free and clear of any Liens imposed pursuant to such Environmental Laws imposed
in connection with their ownership or use. Neither the Borrower nor any of its
Subsidiaries will generate, use, treat, store, release or dispose of, or permit
the generation, use, treatment, storage, Release or disposal of Hazardous
Materials on any Real Property, or transport or permit the transportation of
Hazardous Materials to or from any Real Property, other than in the normal
course of business in compliance with applicable law. If required to do so under
any applicable directive or order of any governmental agency, the Borrower
agrees to undertake, and cause each of its Subsidiaries to undertake, any clean
up, removal, remedial or other action necessary to remove and clean up any
Hazardous Materials from any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries in accordance with, in all material
respects, such orders and directives of all governmental authorities, except to
the extent that the Borrower or such Subsidiary is contesting such order or
directive in good faith and by appropriate proceedings and for which adequate
reserves have been established to the extent required by GAAP; provided that it
will not constitute a breach of this Section 5.06 if a Person other than the
Borrower and its Subsidiaries takes such action on behalf of the Borrower and
its Subsidiaries.
5.07 End of Fiscal Years; Fiscal Quarters. The Borrower will
cause its, and each of its Subsidiaries', fiscal years (unless any Foreign
Subsidiary is required to adopt a different fiscal year under applicable law) to
end on December 31 of each year and each of its, and each of its Subsidiaries',
four fiscal quarters to end on March 31, June 30, September 30 and December 31
of each year.
5.08 Payment of Taxes. The Borrower shall, and shall cause
each of its Subsidiaries to, pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties would
otherwise attach thereto, and all lawful claims which, if unpaid, might become a
lien or charge upon any properties of any of its Subsidiaries; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be required
to pay any such tax, assessment, charge, levy or claim which is being contested
in good faith and by proper proceedings if it has maintained adequate reserves
with respect thereto in accordance with generally accepted accounting
principles.
5.09 Observation of Board of Directors. In the event that the
Original Lenders have not elected directors to the Board pursuant to the terms
of the Certificate of Designation for the Preferred Shares, Paribas may
designate one individual (the "Observer") to attend all meetings of the Board of
Directors of the Borrower (and any committees thereof) at the reasonable expense
of the Borrower. The Observer shall be entitled to receive all reports,
presentations and materials, as if the Observer were a member of the Board of
Directors, all at the reasonable expense of the Borrower. The Borrower agrees to
give the Observer prior written notice of all meetings of the Board of Directors
of the Borrower promptly after the scheduling thereof and in any event no later
than five Business Days prior to such meeting, or if such meeting is scheduled
less than five Business Days in advance, on the date preceding the date for
which such meeting has been scheduled.
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5.10 Use of Proceeds, Margin Regulations. (a) The Borrower
shall use all proceeds of the Additional Loans as provided in Section 4.08(a).
(b) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin stock. Neither the making of any Loan nor the
use of the proceeds thereof will violate or be inconsistent with the provisions
of the Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
5.11 Intellectual Property Rights. The Borrower will, and will
cause each of its Subsidiaries to, maintain in full force and effect all
Intellectual Property rights necessary or material to the business of the
Borrower or any Subsidiary of the Borrower and take no action (including,
without limitation, the licensing of Intellectual Property), or fail to take an
action, as the case may be, in connection with such Intellectual Property rights
which could reasonably be expected to result in a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole. The Borrower shall, and shall cause each of
its Subsidiaries to, diligently prosecute all pending applications filed in
connection with seeking the Intellectual Property rights and take all other
reasonable actions necessary for the protection and maintenance of the
Intellectual Property rights necessary or appropriate to the business of the
Borrower or any Subsidiary of the Borrower at all times from and after the
Closing Date other than any such actions the failure of which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
SECTION 6. Negative Covenants. The Borrower hereby covenants
that on and after the Closing Date and until the Loans and Convertible Notes,
together with interest and all other Obligations incurred hereunder and
thereunder, have been paid in full:
6.01 Dividends. The Borrower will not, nor will the Borrower
permit any of its Subsidiaries to, declare or pay any Dividends with respect to
the Borrower or any of its Subsidiaries, except that (i) any Subsidiary of the
Borrower may pay Dividends to the Borrower or any Wholly-Owned Domestic
Subsidiary of the Borrower and (ii) so long as no Default or Event of Default is
then in existence or would result from the payment of the respective Dividend,
the Borrower may pay cash Dividends not to exceed (x) $500,000 per annum in the
form of one or more purchases of Warrants from Paribas or any of its Affiliates
pursuant to its right of first offer under Section 14(d) of the Warrant
Agreement and (y) $250,000 per annum in the form of one or more purchases of
Warrants from any Exeter Entity or any of its Affiliates pursuant to its right
of first offer under Section 14(d) of the Warrant Agreement.
6.02 Consolidated EBITDA to Interest. The Borrower will not
permit the ratio of Consolidated EBITDA for any period of four consecutive
fiscal quarters, in each case taken as one accounting period, to be less than
three times the FTM Interest Payments for such same period of four consecutive
fiscal quarters, as determined at the end of each fiscal quarter.
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6.03 Limitation on Voluntary Payments and Modifications;
Limitation on Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; Etc. The Borrower shall not, and shall not permit its
Subsidiaries to:
(a) make (or give any notice in respect of) any
voluntary or optional payment or prepayment on or voluntary or optional
redemption (including pursuant to any change of control provision) or
voluntary or optional acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due), of
any Indebtedness that is not Senior Indebtedness;
(b) amend or modify, or permit the amendment or
modification of any provision of the Existing Indebtedness or any
agreement relating to any of the foregoing in any manner adverse to the
Lenders; or
(c) amend or modify or change its Certificate of
Incorporation (including, without limitation, by the filing or
modification of any certificate of designation), By-Laws (or similar
organizational documents) or any agreement entered into by it with
respect to its capital stock or other equity interests in any manner
adverse to the Lenders.
6.04 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (i) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (ii) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (iii) transfer any of its properties or assets to the Borrower,
except for such encumbrances or restrictions existing under or by reason of (v)
applicable law, (w) this Agreement and the other Loan Documents, (x) the Credit
Agreement and the other Credit Documents, (y) customary provisions restricting
subletting or assignments of any lease governing a leasehold interest of the
Borrower or any other Subsidiary of the Borrower and (z) any asset transfer
restrictions imposed by purchase money financing.
SECTION 7. Events of Default. Upon the occurrence of any of
the following specified events (each, an "Event of Default"):
7.01 Payments. The Borrower shall default in the payment of
the principal of, interest on or any other amount due in respect of, the
Convertible Notes, by the fifth business day following the date that same shall
become due and payable (whether on an interest payment date or the Maturity
Date, by acceleration or otherwise).
7.02 Covenants. Other than in respect of Section 6.02, the
Borrower shall fail to observe or perform any other covenant, agreement or
warranty relating to the Convertible Notes, and such failure or breach shall not
have been remedied within ten (10) business days after notice of such failure or
breach has been given to the Borrower.
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7.03 Stockholders Agreement. The Borrower or any Subsidiary
shall have entered into any agreement or taken any action described in Section
5.2(a) through (h) of the Stockholders Agreement without obtaining any required
approval of the holders of a majority of the shares of the Preferred Stock, if
required by Section 5.2 of the Stockholders Agreement.
7.04 Default Under Other Agreements. The Borrower shall
default in any of its payment obligations under any other debenture of any
mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issues, or by which there
may be secured or evidenced any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement of the Borrower in an
amount exceeding $100,000.
7.05 Bankruptcy, Etc. The Borrower shall commence, or there
shall be commenced against the Borrower, a case under any applicable bankruptcy
or insolvency laws which remains undismissed for a period of sixty (60) days; or
the Borrower suffers any appointment of any custodian for it or any substantial
part of its property which continues undischarged or unstayed for a period of 60
days; or the Borrower thereof makes a general assignment for the benefit of
creditors; or the Borrower shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due.
7.06 Subordinated Guaranty. The Subordinated Guaranty or any
provision thereof shall cease to be in full force or effect as to any
Subordinated Guarantor, or any Subordinated Guarantor or any Person acting by or
on behalf of any Subordinated Guarantor shall deny or disaffirm such
Subordinated Guarantor's obligations under the Subordinated Guaranty, or any
Subordinated Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
the Subordinated Guaranty and such default shall continue beyond any grace
period specifically applicable thereto.
7.07 TTM EBITDA. The Borrower shall at any time fail to
satisfy the financial covenant set forth in Section 6.02 then, and in any such
event, and at any time thereafter, if any Event of Default shall then be
continuing, the Required Lenders (or, in the case of an Event of Default under
Section 7.01, any Lender (or group of Lenders that are affiliates of one
another) with outstanding Loans in an aggregate principal equal to at least
$5,000,000) may, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of any other Lender or the
holder of any Convertible Note to enforce its claims against any Loan Party
(provided that, if an Event of Default specified in Section 7.04 shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Required Lenders to the Borrower as specified in clause
(i) below shall occur automatically without the giving of any such notice): (i)
declare the principal of and any accrued interest in respect of all Loans and
the Convertible Notes and all Obligations to be, whereupon the same shall,
subject to Section 9.04 hereof, become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and (ii) exercise any rights or remedies under
the Subordinated Guaranty.
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SECTION 8. Definitions and Accounting Terms.
8.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Additional Loan" shall mean the loan of $1 million being
provided by the Investors this date.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such Person; provided that, for the purposes of this definition,
"control" (including, with correlative meanings, the terms "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 and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this amended and restated loan
agreement, as modified, supplemented or amended from time to time.
"Anniversary" shall mean April 14 in any year. "First
Anniversary" shall mean April 14, 2005, "Second Anniversary" shall mean April
14, 2006, etc., through the "Seventh Anniversary", which shall mean April 14,
2011.
"Bank" shall mean, collectively, Fleet and any other
institution which becomes a "Lender" under the Credit Agreement pursuant to the
terms thereof after the Closing Date.
"Board" shall mean the Board of Directors of the Borrower.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrower Common Stock" shall have the meaning provided in
Section 4.07.
"Business Day" shall mean any day except Saturday, Sunday and
any day which shall be in New York City a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (ii) time deposits
and certificates of deposit of any commercial bank organized under the laws of
the United States, any State thereof or the District of Columbia having, or
which is the principal banking subsidiary of a bank holding company organized
under the laws of the United States, any State thereof, or the District of
Columbia having, capital, surplus and undivided profits aggregating in excess of
$200,000,000 and having a long-term unsecured debt rating of at least "A" or the
equivalent thereof from Standard & Poor's Corporation ("S&P") or "A2" or the
equivalent thereof from Xxxxx'x Investors Service, Inc. ("Moody's"), with
maturities of not more than twelve months from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more
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than 7 days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) commercial paper issued by any Person incorporated in the United
States and/or tax exempt securities issued by any agency or instrumentality of
any state of the United States or subdivision thereof, in each case rated at
least A-2 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's and in each case maturing not more than 12 months after the
date of acquisition by such Person, (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above and (vi) as to any Foreign
Subsidiary, securities available in the applicable foreign country where such
Foreign Subsidiary operates and which are reasonably equivalent as to credit
quality and principal risk as the securities of the types described in clauses
(i) through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Closing Date" shall mean April 14, 2004.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in effect
at the date of this Agreement, and to any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Consolidated EBIT" shall mean, for any period, the
Consolidated Net Income before any deduction for interest income, Consolidated
Interest Expense, amortization of deferred financing charges, debt discounts and
premiums and provision for income taxes and without giving effect to (i) any net
extraordinary gains or losses, or (ii) any gains or losses from sales of assets
(other than inventory sold in the ordinary course of business) or (iii) any
writeoffs of deferred financing charges, goodwill or debt discounts or premiums.
"Consolidated EBITDA" for any period shall mean Consolidated
EBIT, adjusted by adding thereto the amount of all amortization of intangibles
and depreciation and leasehold improvements that were deducted in arriving at
Consolidated Net Income for such period.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of the Borrower and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) payable during such period (but excluding amortization of deferred
financing charges and debt discounts or premiums) in respect of all Indebtedness
of the Borrower and its Subsidiaries, on a consolidated basis, for such period.
"Consolidated Net Income" shall mean, for any period, net
income of the Borrower and its Subsidiaries for such period determined on a
consolidated basis (after provision for taxes); provided, however, the net
income of any Subsidiary of the Borrower, which is not a Wholly-Owned Subsidiary
and for which the investment of the Borrower therein is accounted for by the
equity method of accounting, shall have its net income included in the
Consolidated Net Income of the Borrower and its Subsidiaries only to the extent
of the amount of cash dividends or distributions paid by such Subsidiary to the
Borrower.
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"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Credit Agreement" shall mean the Loan and Security Agreement,
dated as of June 27, 2002, among the Borrower, certain of its Subsidiaries and
the Bank, as amended prior to the Closing Date and as such agreement may, be
further amended, restated, extended, replaced, supplemented, restructured or
otherwise modified or refinanced pursuant to a Permitted Refinancing from time
to time (in whole or in part without limitation (except as provided in this
Agreement) as to terms, extensions of maturities, increasing the amount of
borrowings or other conditions or covenants), including all related notes,
collateral documents, guarantees, Interest Rate Contracts, instruments and
agreements entered into in connection therewith, as the same may be amended,
modified, supplemented, restated, restructured, replaced or refinanced pursuant
to a Permitted Refinancing from time to time.
"Credit Documents" shall mean the "Loan Documents", as defined
in the Credit Agreement (as in effect on the date hereof).
"Credit Party" shall mean the Borrower and each of its
Subsidiaries party to any Credit Document.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Dividend", with respect to any Person, shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than capital stock of such Person) or cash to its
stockholders in their capacity as stockholders, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its capital stock outstanding on or after the Closing Date
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(or any options or warrants issued by such Person with respect to its capital
stock), or set aside any funds for any of the foregoing purposes, or shall have
permitted any Subsidiary of such Person to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock of such Person
outstanding on or after the Closing Date (or any options or warrants issued by
such Person with respect to its capital stock). Without limiting the foregoing,
"Dividends" with respect to any Person shall also include all cash payments made
or required to be made by such Person with respect to any stock appreciation
rights, equity incentive plans or any similar plans or setting aside of any
funds for the foregoing purposes.
"Documents" shall mean the Loan Documents and the Credit
Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiaries" shall mean each Subsidiary of the
Borrower incorporated or organized in the United States or any State or
territory thereof.
"Eligible Transferee" shall mean and include the Investors, a
commercial bank, financial institution, other "accredited investor" (as defined
in Regulation D of the Securities Act), other than an individual, that is not a
competitor of the Borrower or any of its Subsidiaries, or a "qualified
institutional buyer" as defined in Rule 144A of the Securities Act.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any violation of, or liability under, any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (hereafter, "Claims"), including, without limitation, (a) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, policy and rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean Air Act, 42
U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss. 3803 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.; and any
applicable state and local or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which, together with the Borrower or any Subsidiary of
the Borrower, would be deemed to be a "single employer" (i) within the meaning
of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the
Borrower or a Subsidiary of the Borrower being or having been a general partner
of such person.
"Event of Default" shall have the meaning provided in
Section 7.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as in effect on the Closing Date.
"Exeter Entity" shall mean each of Exeter Venture Lenders L.P.
and Exeter Capital Partners IV, L.P. and any Affiliate that is a successor
thereto.
"Fleet" shall mean Fleet Bank, N.A. or any successor thereto
by merger or consolidation.
"FTM Interest Payments" shall mean interest due on all
Indebtedness of the Borrower at the contract rates over the twelve month period
commencing at the date of measurement.
"Hazardous Materials" means (a) petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain,
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar meaning
and regulatory effect, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated under applicable Environmental Laws.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal and interest) of such
Person for borrowed money or for the deferred purchase price of property or
services (including, without limitation, any contingent consideration (including
Permitted-Earnout Debt) or seller paper which may be payable or issuable in
connection with acquisitions by the Borrower or any of its Subsidiaries) other
than trade payables and accrued expenses arising in the ordinary course of
business in accordance with customary trade terms, (ii) the maximum amount
available to be drawn under all letters of credit issued for the account of such
Person and all unpaid drawings in respect of such letters of credit, (iii) all
Indebtedness of the types described in clauses (i), (ii), (iv), (v), (vi) or
(vii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (iv)
all Capitalized Lease Obligations of such Person, (v) all Contingent Obligations
of such Person, (vi) mandatory obligations of such Person to redeem or purchase
Stock or purchase or repay Indebtedness and (vii) any Financial Undertaking (as
such term is defined in the Credit Agreement (as in effect on the date hereof))
of such Person.
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"Indemnified Matters" shall have the meaning provided in
Section 10.01.
"Indemnitees" shall have the meaning provided in Section
10.01.
"Interest Rate Contract" shall mean interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements,
interest rate insurance, and other agreements or arrangements designed to
provide protection against fluctuations in interest rates, each as in effect on
the date hereof.
"Investor" shall have the meaning provided in the first
paragraph of this Agreement.
"Leasehold Properties" of any Person means all right, title
and interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" and "Original Lender" shall have the meanings
provided in the first paragraph of this Agreement.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" has the meaning specified in the first paragraph of
this Agreement.
"Loan Documents" shall mean, collectively, this Agreement,
each Convertible Note, and each Subordinated Guaranty.
"Loan Party" means each of the Borrower and each Subordinated
Guarantor.
"Maturity Date" shall mean April 14, 2011.
"Moody's" shall have the meaning provided in the definition of
"Cash Equivalents."
"Non-Payment Blockage Notice" shall have the meaning provided
in Section 9.03.
"Non-Payment Blockage Period" shall have the meaning provided
in Section 9.03.
"Non-Payment Default" shall have the meaning provided in
Section 9.03.
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"Note" and "Convertible Note" shall have the meanings provided
in the Background section.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to any Lender pursuant to the terms of this Agreement or any other Loan
Document, including without limitation, all principal, interest, premium,
penalties, fees, expenses, indemnification, reimbursements, damages and any
other liabilities, together with and including any amounts received upon the
exercise of rights of recession or other rights of action (including claims for
damages) or otherwise.
"Observer" shall have the meaning provided in Section 5.12.
"Paribas" shall mean BNP Paribas, a French societe anonyme,
and the successor in interest to Paribas Capital Funding LLC.
"Payment Default" shall have the meaning provided in Section
9.03.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Refinancing" means any refinancing of Senior Debt
which refinancing does not result in the final maturity date of the Senior Debt
occurring prior to November 15, 2001.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan, as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower, a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, a Subsidiary of the Borrower or
an ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.
"Quarterly Payment Date" shall mean the first Business Day of
each March, June, September and December of each calendar year.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Reaffirmation" shall mean each Subsidiary Grantor's
reaffirmation of its obligations under its guaranty of the Loan and Notes in the
form set forth in Exhibit H.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leasehold Properties.
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"Related Fund" shall mean, with respect to any Lender that is
a fund that invests in loans, any other fund that invests in loans and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"Required Lenders" shall mean, at any time, Lenders the sum of
whose then outstanding Loans represents at least a majority of all then
outstanding Loans.
"S&P" shall have the meaning provided in the definition of
"Cash Equivalents."
"SEC" shall have the meaning provided in Section 5.01(h).
"Section 2.04(b)(ii) Certificate" shall have the meaning
provided in Section 2.04(b)(ii).
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Senior Debt" shall mean all payment and performance
obligations now or hereafter incurred pursuant to and in accordance with the
terms of the Credit Agreement and the other Credit Documents (including without
limitation all principal, interest (including, without limitation, any
post-petition interest on such obligations at the rate set forth in the Credit
Agreement, accruing whether or not granted or permitted in connection with an
event of the type referred to in Section 7.04 hereof), premium, penalties, fees,
expenses, indemnification, reimbursements, damages and other liabilities payable
under the Credit Agreement and the other Credit Documents) and any Interest Rate
Contract. Senior Debt outstanding under the Credit Agreement shall continue to
constitute Senior Debt for all purposes hereof, notwithstanding that such Senior
Debt or any claim in respect thereof may be disallowed, avoided or subordinated
pursuant to any insolvency law, the United States Bankruptcy Code or any similar
federal or state law for the relief of debtors or other applicable insolvency
law or equitable principles as a claim for unmatured interest.
"Senior Indebtedness" shall mean collectively, with respect to
the Borrower and its Subsidiaries, (a) the Senior Debt and (b) any additional
Indebtedness of the Borrower and its Subsidiaries for borrowed money which is
either secured or not subordinated to the payment of the Obligations, or (ix),
which additional Indebtedness may be incurred pursuant to the Credit Agreement.
Senior Indebtedness outstanding under the Credit Agreement shall continue to
constitute Senior Indebtedness for all purposes hereof, notwithstanding that
such Senior Indebtedness or any claim in respect thereof may be disallowed,
avoided or subordinated pursuant to any insolvency law, the United States
Bankruptcy Code or any similar federal or state law for relief of debtors or
other applicable insolvency law or equitable principles as a claim for unmatured
interest.
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"Subordinated Guarantor" shall mean each Domestic Subsidiary
and each other Subsidiary which has entered into the Subordinated Guaranty in
accordance with this Agreement.
"Subordinated Guaranty" shall have the meaning provided in
Section 3.03 as the same may be amended, modified or supplemented from time to
time.
"Subordinated Obligations" shall have the meaning set forth in
Section 9.01.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
directly or indirectly through one or more Subsidiaries of such Person has more
than a 50% equity interest at the time.
"Taxes" shall have the meaning provided in Section 2.04(a).
"Transaction" shall have the meaning set forth in the
Background Section.
"TTM EBITDA" shall mean Consolidated EBITDA over the twelve
month period ending on the measurement date.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"United States" and "U.S." shall each mean the United States
of America.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person that is a Domestic
Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
SECTION 9. Subordination.
9.01 Obligations Subordinate to Senior Indebtedness. The
Borrower covenants and agrees, and each Lender and each other holder of any
Convertible Note, if any, likewise covenants and agrees, that, (a) to the extent
and in the manner hereinafter set forth in this Section 9, the payment of the
Obligations, including pursuant to any amendment, modification, restatement or
renewal thereof (the "Subordinated Obligations"), is hereby expressly made
subordinated and subject in right of payment to the prior payment in full of all
Senior Indebtedness and (b) the terms and conditions of such subordination is
for the benefit of the holders of the Senior Indebtedness and each such holder
may enforce such subordination.
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9.02 Payment Over of Proceeds Upon Dissolution. In the event
of (i) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to the Borrower or to its assets, or (ii) any liquidation,
dissolution or other winding up of the Borrower, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or (iii) any
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Borrower (collectively, "Bankruptcy Events"), then and in any
such event:
the holders of Senior Indebtedness shall be entitled to receive payment in full
in cash of all amounts due or to become due on or in respect of all Senior
Indebtedness (including interest after the commencement of a Bankruptcy Event at
the rate specified in the Senior Indebtedness, whether or not allowed), before
any Lender is entitled to receive any direct or indirect payment or distribution
on account of Subordinated Obligations including, without limitation, by
exercise of set-off and any payment which may be payable or deliverable by
reason of any other Indebtedness being subordinated in right of payment to the
Subordinated Obligations;
any payment or distribution of assets of the Borrower of any kind or character,
whether in cash, property or securities (including, without limitation,
securities of the Borrower or any successor), by set-off or otherwise, to which
any Lender would be entitled on account of the Subordinated Obligations but for
the provisions of this Section 9 or 2.02, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other Indebtedness of the Borrower being subordinated to the payment of
Subordinated Obligations (except for any such payment or distribution (1)
authorized by an unstayed, final, nonappealable order or decree stating that
effect is being given to the subordination of such Subordinated Obligations to
the Senior Indebtedness, and made by a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or (2) of
securities which, if debt securities, are subordinated to at least the same
extent as the Subordinated Obligations are to (A) such Senior Indebtedness or
(B) any securities issued in exchange for Senior Indebtedness; provided,
however, that (x) the final maturity of such securities shall not be earlier
than one year following the maturity date of the last to mature of the Senior
Indebtedness (including any securities issued in exchange therefor) at the time
outstanding and the scheduled amortization thereof shall not be more favorable
(as to amount or time of payment) than the scheduled amortization of the
principal amount of the Subordinated Obligations, (y) such securities shall
contain covenants which are no more restrictive than the covenants contained
herein and shall not contain greater defaults than as are contained herein, and
(z) such securities shall bear interest at a rate per annum less than or equal
to 14% per annum computed on the same basis as described herein) shall be paid
by the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of all Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Senior Indebtedness held or represented by each, to
the extent necessary to make payment in full of all such Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness; and
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in the event that, notwithstanding the foregoing provisions of this Section 9,
any Lender shall have received any such payment or distribution of assets of the
Borrower of any kind or character on account of the Subordinated Obligations,
whether, property or securities (including, without limitation, securities of
the Borrower or any successor thereto), including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other Indebtedness of the Borrower being subordinated to the payment of the
Subordinated Obligations (but excluding any payment of the character described
in the parenthetical clause in the foregoing paragraph (b)) before all Senior
Indebtedness is paid in full, then and in such event such payment or
distribution shall be paid over or delivered, in accordance with Section 9.10
hereof, forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Borrower for application to the payment of all such Senior
Indebtedness remaining unpaid, to the extent necessary to pay such Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
If, notwithstanding the provisions of this Agreement, there
shall occur any consolidation of the Borrower with, or any merger of the
Borrower into, another corporation or the liquidation or dissolution of the
Borrower following any conveyance, transfer or lease of its properties and
assets substantially as an entirety to another corporation, such consolidation,
merger or liquidation shall not be deemed a Bankruptcy Event; provided, that no
other Bankruptcy Event shall have occurred and be continuing at the time of such
consolidation, merger or liquidation. The Bank is hereby authorized to file an
appropriate claim on behalf of the Lenders if the Lenders do not file such claim
or there is not filed on behalf of the Lenders a proper proof of claim in the
form required in any Bankruptcy Event prior to thirty (30) days before the
expiration of the time to file such claim or claims.
9.03 No Payment in Certain Circumstances. In the event that
(i) the Borrower shall fail to pay when due (after giving effect to any
applicable grace periods), upon acceleration or otherwise, any amount or
obligation with respect to Senior Indebtedness under the Credit Agreement (a
"Payment Default") which Payment Default shall not have been cured or waived in
writing, or (ii) an event of default (other than a Payment Default) under the
Credit Agreement shall occur and be continuing, which shall not have been cured
or waived in writing (a "Non-Payment Default"), and the Borrower and each Lender
receive written notice of such Non-Payment Default from either the Bank or the
holders of at least a majority in aggregate principal amount of the Senior
Indebtedness under the Credit Agreement at the time outstanding (a "Non-Payment
Blockage Notice"), then no payment on account of the Subordinated Obligations
shall be made by the Borrower or otherwise on account of the Subordinated
Obligations (x) in the case of any Payment Default, unless and until such Senior
Indebtedness shall have been paid in full or until such Payment Default shall
have been cured or waived in writing, or (y) in the case of any Non-Payment
Default, from the date on which the Borrower and each Lender receive such
Non-Payment Blockage Notice until the earlier of (1) 179 days after such date
and (2) the date, if any, on which the Senior Indebtedness under the Credit
Agreement is paid in full or such Non-Payment Default is waived by the holders
of such Senior Indebtedness under the Credit Agreement or otherwise cured (a
"Non-Payment Blockage Period"); provided, that (x) only one
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Non-Payment Blockage Notice may be given in any 360-day period, (y) no
Non-Payment Default or event which, with the giving of notice and/or lapse of
time, would become a Non-Payment Default which, in either case, existed or was
continuing on the date of the commencement of any Non-Payment Blockage Period
shall be, or be made, the basis for the commencement of a subsequent Non-Payment
Blockage Period unless such Non-Payment Default or event, as the case may be,
shall in the interim have been cured or waived in writing for period of not less
than 90 consecutive days and (z) there must be a 181 consecutive day period in
any 360 consecutive day period during which no Non-Payment Blockage Period is in
effect.
In the event that, notwithstanding the foregoing, any Lender
shall have received any payment or distribution on account of the Subordinated
Obligations contrary to the foregoing provisions of this Section 9.03, then and
in such event such payment shall be paid over and delivered forthwith to the
holders (or their agent or trustee) of the relevant Senior Indebtedness in
accordance with Section 9.10 hereof. The provisions of this Section 9.03 shall
not apply to any payment with respect to which Section 9.02 would be applicable.
9.04 Acceleration Rights; Remedies. If an Event of Default,
other than an Event of Default under Section 7.04, shall exist at any time that
any Senior Indebtedness under the Credit Agreement shall be outstanding or there
shall exist any obligation of the Bank to make any loan or advance thereunder,
no Lender nor any other holder of the Notes shall take any action, judicial or
otherwise, to accelerate or collect payment on the Subordinated Obligations or
to pursue any other remedy with respect to the Subordinated Obligations
(including, without limitation, commencing or joining with any other creditor of
the Borrower in commencing any proceeding in bankruptcy) prior to the earlier of
(i) the expiration of 30 calendar days immediately following the receipt by the
Bank of notice of the occurrence of such Event of Default from the Required
Lenders or from the holder or holders entitled to accelerate payments on the
Subordinated Obligations or (ii) acceleration of the Senior Indebtedness under
the Credit Agreement, but such action may only be taken if at the end of such
period such Event of Default has not been cured or waived; provided, that any
amount received by any of the Lenders as a result of any acceleration permitted
above prior to payment in full in cash of the Senior Indebtedness under the
Credit Agreement shall be paid to the Bank in accordance with the provisions of
this Section 9.
9.05 Payment Otherwise Permitted. Nothing contained in this
Section 9 or elsewhere in this Agreement or in the Notes shall prevent the
Borrower, at any time except as set forth in Section 2.02 or 9.02 or under the
conditions described in Section 9.03, from making payments at any time of
principal of and interest on the Loans or any other amount payable by the
Borrower under the Notes or this Agreement. Notwithstanding the provisions of
this Section 9, no Lender shall be charged with knowledge of the existence of
any facts, including of the occurrence of a Payment Default, which would
prohibit the making of any payment or distribution by the Borrower or of any
other payment on account of the Subordinated Obligations or the receipt or
retention thereof by any Lender, or the taking of any action by any Lender of
the type referred to in Section 9.04, unless such Lender shall have received at
least two Business Day's prior written notice of such facts.
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9.06 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to, and solely Closing following, the final payment in full of all
Senior Indebtedness, the Lenders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to such Senior Indebtedness to the extent of
the payments or distributions made to the Bank, or otherwise applied to payment
of, the Senior Indebtedness pursuant to the provisions of this Section 9 until
the principal of and interest on the Loans and the Notes shall be paid in full
in cash. For purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness of any cash, property or securities to which the
Lenders would be entitled except for the provisions of this Section 9, and no
payments over pursuant to the provisions of this Section 9 to the holders of
Senior Indebtedness by the Lenders shall, as among the Borrower, its creditors
(other than holders of Senior Indebtedness) and the Lenders, be deemed to be a
payment or distribution by the Borrower to or on account of the Senior
Indebtedness.
9.07 Provisions Solely to Define Relative Rights. The
provisions of this Section 9 and Section 2.02 are and are intended solely for
the purpose of defining the relative rights of the holders of the Notes on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Section 9 or elsewhere in this Agreement or in the Notes is
intended to or shall (i) impair, as among the Borrower, its creditors (other
than holders of Senior Indebtedness) and the Lenders, the obligation of the
Borrower, which is absolute and unconditional, to pay to the Lenders the
principal of, and premium and interest on, and any other amount payable by the
Borrower under, the Loans, the Notes or this Agreement as and when the same
shall become due and payable in accordance with its terms; or (ii) affect the
relative rights against the Borrower of the Lenders and its creditors (other
than the holders of Senior Indebtedness); or (iii) prevent the Lenders from
accelerating the Loans and exercising all other remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the rights, if any,
under this Section 9 of the holders of Senior Indebtedness (x) upon the
occurrence of a Bankruptcy Event, to receive, pursuant to and in accordance with
Section 9.02, cash, property and securities otherwise payable or deliverable to
the Lenders, (y) under the conditions specified in Section 9.03, to prevent any
payment prohibited by such Section or (z) under Section 9.04.
9.08 No Waiver of Subordination Provisions; Amendment. No
right of any present or future holder of any Senior Indebtedness to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Borrower or by any act
or failure to act, in good faith, by any such holder, or by any non-compliance
by the Borrower with the terms, provisions, and covenants of this Agreement,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with. Without in any way limiting the generality of the foregoing, the
holders of Senior Indebtedness may at any time and from time to time, without
the consent of or notice to the Lenders or any other holder of the Notes,
without incurring responsibility to the Lenders or such holders and without
impairing or releasing the subordination provided in this Section 9 or the
obligations hereunder of the Lenders and such holders to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; (iv) exercise or refrain from exercising any rights
against the Borrower and any other Person or any security therefor; and (v) take
or refrain from taking any other action whether similar or dissimilar to the
foregoing.
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9.09 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Borrower or any other
payment on account of the Subordinated Obligations referred to in this Section
9, the Lenders shall be entitled to rely upon any unstayed, final, nonappealable
order or decree entered by any court of competent jurisdiction in which a
Bankruptcy Event is pending, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness of the Borrower, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Section 9.
9.10 Turnover; Miscellaneous Subordination Provisions. (a) If
a payment or distribution is made to any holder of Subordinated Obligations that
because of this Section 9 or Section 2.02 should not have been made to it, such
holder shall segregate such payment or distribution from its other funds and
property and hold it in trust for the benefit of, and, upon written request, pay
it over (in the same form as received, with any necessary endorsement) to, the
holders of Senior Indebtedness as their interests may appear, or the Bank or
other agent or representative or the trustee under the Credit Agreement,
indenture or other agreement (if any) pursuant to which Senior Indebtedness may
have been incurred or issued, as their respective interests may appear, for
application (in the case of cash) to, or as collateral (in the case of non-cash
property or securities) for the payment or prepayment of, all obligations with
respect to Senior Indebtedness remaining unpaid to the extent necessary to pay
such obligations in full in accordance with their terms, after giving effect to
an concurrent payment or distribution to or for the holders of Senior
Indebtedness.
(b) A distribution may consist of cash, securities or other
property, by set-off or otherwise, and a payment or distribution on
account of any obligations with respect to the holders of Subordinated
Obligations shall include any redemption, purchase or other acquisition
of the Subordinated Obligations.
(c) For the purpose of this Section 9 and Section 2.02, all
Senior Indebtedness now or hereafter existing shall not be deemed to
have been paid in full unless the holders or owners thereof shall have
received payment in full in cash.
(d) The agreements contained in this Section 9 and Section
2.02 shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any holder of Senior
Indebtedness upon any Bankruptcy Event of the Borrower, all as though
such payment had not been made.
(e) All rights and interests under this Agreement of the
holders of Senior Indebtedness, and all agreements and obligations of
the holders of Subordinated Obligations and the Borrower under this
Section 9 and Section 2.02, shall remain in full force and effect
irrespective of (i) any lack of validity or enforceability of the
Credit Agreement, any promissory notes evidencing the Indebtedness
thereunder, or any other agreement or instrument relating thereto or to
any other Senior Indebtedness, including, without limitation, any
agreement referred to in the definition of Credit Agreement, or (ii)
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any holders of Subordinated
Obligations or the Borrower.
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(f) The provisions set forth in this Section 9 and Section
2.02 constitute a continuing agreement and shall (i) be and remain in
full force and effect until payment in full of all Senior Indebtedness
at such time when the Bank shall have no obligation to make advances
under the Credit Agreement, (ii) be binding upon the holders of
Subordinated Obligations, the Borrower and their respective successors,
transferees and assigns, and (iii) inure to the benefit of, and be
enforceable directly by, each of the holders of Senior Indebtedness and
their respective successors, transferees and assigns.
(g) No waiver of the rights of the holders of the Senior
Indebtedness hereunder shall be deemed made unless the same shall be in
writing, duly signed by an authorized officer of such holder, and each
waiver, if any, shall apply only to the specific instance involved and
shall in no way impair the rights of such holder, or the obligations of
the Lenders, in any other respect at any other time.
SECTION 10. Miscellaneous.
10.01 Payment of Expenses, Etc. The Borrower agrees to: (i)
pay all reasonable out-of-pocket costs and expenses of Lender not to exceed
[$________] (including, without limitation, the reasonable fees and
disbursements of White & Case LLP) in connection with the review, preparation,
execution and delivery of this Agreement and the other Transaction Documents and
the documents and instruments referred to herein and therein and any amendment,
waiver, public filing or consent relating hereto or thereto, and of each of the
Lenders in connection with the enforcement of this Agreement and the other Loan
Documents and the documents and instruments referred to herein and therein
(including, without limitation, the reasonable fees and disbursements of counsel
for each of the Lenders); (ii) pay and hold each of the Lenders harmless from
and against any and all present and future stamp, excise and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Lender) to pay such
taxes; and (iii) defend, protect, indemnify and hold harmless each Lender and
each of its officers, directors, employees, representatives, attorneys, agents,
Affiliates, any other Person in control of any Lender or its affiliates
(collectively called the "Indemnitees") from and against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages (including foreseeable and unforeseeable consequential damages and
punitive damages), penalties, claims, actions, judgments, suits, proceedings,
costs, expenses and disbursements (including reasonable attorneys' and
consultants fees and disbursements) of any kind or nature whatsoever that may at
any time be incurred by, imposed on or assessed against the Indemnitees directly
or indirectly based on, or arising or resulting from, or in any way related to,
or by reason of (a) any investigation, litigation or other proceeding (whether
or not any Lender is a party thereto and whether or not any such investigation,
litigation or other proceeding is between or among any Lender, the Borrower or
any of its Subsidiaries, or any third Person or otherwise) related to the
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entering into and/or performance of this Agreement or any other Document or the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the Transaction) or in any
other Document or the exercise of any of their rights or remedies provided
herein or in the other Loan Documents; or (b) the actual or alleged generation,
presence or Release of Hazardous Materials on or from, or the transportation of
Hazardous Materials to or from, any Real Property owned or at any time operated
by the Borrower or any of its Subsidiaries; or (c) any Environmental Claim
relating to the Borrower, any of its Subsidiaries or any Real Property owned or
at any time operated by the Borrower or any of its Subsidiaries; or (d) the
exercise of the rights of any Lender under any of the provisions of this
Agreement, any other Loan Document or any Loans hereunder; or (e) the
consummation of any transaction contemplated herein (including, without
limitation, the Transaction) or in any other Loan Document (the "Indemnified
Matters") regardless of when such Indemnified Matter arises, but excluding any
such Indemnified Matter based solely on the gross negligence or willful
misconduct of any Indemnitee.
10.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to the
Borrower or any of its Subsidiaries or to any other Person, any such notice
being hereby expressly waived, but in any event subject to Section 9, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of the Borrower or any of its Subsidiaries against and
on account of the Subordinated Obligations and liabilities of the Borrower or
any of its Subsidiaries to such Lender under this Agreement or under any of the
other Loan Documents, including, without limitation, all interests in
Subordinated Obligations purchased by such Lender pursuant to Section 10.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Loan Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said Subordinated
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. The Lenders hereby agree to provide notice to the Borrower and the
Bank of any action taken pursuant to this Section 10.02; provided, that the
failure to give such notice shall not affect any action taken by such Lender
pursuant to this Section 10.02.
10.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Borrower, at
its address specified opposite its signature below; if to any Lender, at its
address specified opposite its name below; if to the Bank, to the address
specified in the Credit Agreement; or, as to the Borrower or any Lender, at such
other address as shall be designated by such party in a written notice to the
other parties hereto and the Bank; and, as to the Bank, at such other address as
shall be designated by the Bank in a written notice to the Borrower and each
Lender. All such notices and communications shall, when mailed, telegraphed,
telexed, facsimile, or cabled or sent by overnight courier, be Closing three
Business Days after deposited in the mails, certified, return receipt requested,
when delivered to the telegraph company or cable company or one Business Day
following delivery to an overnight courier, as the case may be, or when sent by
telex or facsimile device, except that notices and communications to a Lender or
the Bank shall not be Closing until received by such Lender or the Bank.
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10.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that no Loan
Party may assign or transfer any of its rights, obligations or interest
hereunder or under any other Loan Document without the prior written consent of
all Lenders; and provided, further, that although any Lender may transfer,
assign or grant participations in its rights hereunder, such Lender shall remain
a "Lender" for all purposes hereunder (and may not transfer or assign all or any
portion of its Loans hereunder except as provided in Section 10.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Lender" hereunder; and provided, further, that no Lender shall transfer or
grant any participation (x) to any competitor of the Borrower or any of its
Subsidiaries or (y) under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Loan Document except to
the extent such amendment or waiver would: (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof over the amount thereof then in effect
(it being understood that waivers of any Defaults or Events of Default or of a
mandatory repayment shall not constitute a change in the terms of such
participation), or (ii) consent to the assignment or transfer by or a release of
the Borrower or any Subordinated Guarantor of any of its rights and obligations
under this Agreement or any other Loan Document other than, in the case of any
Subordinated Guaranty, as otherwise provided therein. In the case of any such
permitted participation, the participant shall not have any rights under this
Agreement or any of the other Loan Documents (the participant's rights against
such Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating thereto)
and all amounts payable by any Loan Party hereunder and thereunder shall be
determined as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may assign all or a portion of its
outstanding principal amount of Loans to one or more Eligible Transferees or to
a Related Fund each of which assignees shall become a party to this Agreement as
a Lender by execution of an assignment and assumption agreement substantially in
the form of Exhibit I (appropriately completed); provided that: (i) at such time
Schedule I shall be deemed modified to reflect the outstanding Loans of such new
Lender and of the existing Lenders; (ii) new Convertible Notes will be issued,
at the Borrower's expense, to such new Lender and to the assigning Lender upon
the request of such new Lender or assigning Lender, such new Convertible Notes
to be in conformity with the requirements of Section 1.04 (with appropriate
modifications) to the extent needed to reflect the revised outstanding Loans;
and (iii) notice that such new Lender has become a Lender hereunder is provided
to the Bank and the Borrower in accordance with Section 10.03. At the time of
each assignment pursuant to this Section 10.04(b) to a Person which is not
already a Lender hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Lender shall provide to the Borrower the appropriate
Internal Revenue Service Forms (and, if applicable, a Section 2.04(b)(ii)
Certificate) required by Section 2.04(b).
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(c) Notwithstanding the foregoing provisions of this Section
10.04, transfer of the Convertible Notes is subject to a Stockholders Agreement
among the Lenders dated this date.
10.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of any Lender or any holder of any Note in exercising any right, power
or privilege hereunder or under any other Loan Document and no course of dealing
between the Borrower or any of its Subsidiaries and any Lender or the holder of
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Loan Document expressly provided are cumulative
and not exclusive of any rights, powers or remedies which any Lender or the
holder of any Note would otherwise have. No notice to or demand on the Borrower
or any of its Subsidiaries in any case shall entitle any such Person to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any Lender or the holder of any Note to any
other or further action in any circumstances without notice or demand.
10.06 Payments Pro Rata. Each of the Lenders agrees that, if
it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise), which is applicable to the payment of the
principal of, or interest on, the Loans, of a sum which with respect to the
related sum or sums received by other Lenders is in a greater proportion than
the total of such Subordinated Obligations then owed and due to such Lender
bears to the total of such Subordinated Obligations then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Subordinated Obligations to such other Lenders
in such amount as shall result in a proportional participation by all the
Lenders in such amount; provided, that if all or any portion of such excess
amount is thereafter recovered from such purchasing Lender, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery, but
without interest.
10.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER HEREBY IRREVOCABLY DESIGNATES, ACCEPTS AND EMPOWERS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. BORROWER HEREBY FURTHER
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IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER THE
BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY LOAN DOCUMENT BROUGHT IN ANY OF THE
AFORESAID COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER THE BORROWER. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER
AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER
ANY OTHER LOAN DOCUMENT THAT SERVICE OF PROCESS IN THE MANNER DESCRIBED ABOVE
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY PARTY IN ANY OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
10.08 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be maintained by the
Borrower and the Lenders.
10.09 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
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10.10 Amendment or Waiver. The Agreement and the Convertible
Notes may be amended or supplemented upon receipt of the consent of the holders
of a majority of the aggregate principal amount of the Convertible Notes then
outstanding, and any existing Default or compliance with any provision may be
waived (other than a continuing Default or Event of Default in the payment of
principal or interest on any Convertible Note) with the consent of the holders
of a majority of the aggregate principal amount of the then outstanding
Convertible Notes. Without the consent of each holder affected, an amendment may
not (i) reduce the percentage of principal amount of the Convertible Notes,
whose holders must consent to an amendment, supplement or waiver, (ii) change
the stated maturity or the time or currency of payment of the principal of or
any interest on, or reduce the rate of interest on or principal of payable on
any Convertible Notes, (iii) make any change in the subordination provisions of
the Convertible Notes, (iv) impair the right of any holder to institute suit for
the enforcement of any payment on or with respect to such holder's Convertible
Notes, (v) waive a default in the payment of the principal of or interest on any
Convertible Notes, (vi) make any change to the conversion provisions of the
Convertible Notes regarding the control of the exercise of remedies or the right
of a holder on the Convertible Notes to bring suit against the Company if the
Company fails to make payment on the Convertible Notes, or (vii) make any
changes in the provision of the Convertible Notes containing the terms described
in this paragraph. Notwithstanding the foregoing, without the consent of any
holder of the Convertible Notes, the Convertible Notes may be amended or
supplemented by the Company to cure any ambiguity, defect or inconsistency, and
to make any change that does not, adversely affect the rights of any holder of
the Convertible Notes. The Borrower and the Lenders hereby agree for the benefit
of the holders of Senior Indebtedness that no amendment of, supplement of,
modification to or waiver under any provision of this Agreement or any Notes
will be entered into or effected (x) with respect to Section 2.02 or 9 or (y)
with respect to any other provisions, if the same would be adverse in any
material respect to the holders of Senior Indebtedness (or any of them), without
the prior consent of the Bank under the Credit Agreement.
10.11 Survival. All indemnities set forth herein including,
without limitation, in Sections 2.04 and 10.01 shall survive the execution and
delivery of this Agreement and the Notes and the making and repayment of the
Loans.
10.12 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address
00 Xxxxxx Xxxxxx CD& L, INC.
S. Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxxx X. Xxx Xxxx, Xx. By:___________________________________
Telephone: (000) 000-0000 Xxxxxx X. Xxx Xxxx, Xx., Chief Executive Officer
Facsimile: (201) 489-6974
000 Xxxxxxx Xxxxxx XXX XXXXXXX
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
By:___________________________________
Telephone: (000) 000-0000 Title:
Facsimile: (212) 841-355
By:___________________________________
Title:
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx XXXXXX VENTURE LENDERS L.P.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxx By: EXETER VENTURE ADVISORS, INC.,
as its general partner
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 By:___________________________________
Title: Vice President
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx XXXXXX CAPITAL PARTNERS IV, L.P.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxx By: EXETER IV ADVISORS, L.P.,
as its general partner
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 By: EXETER IV ADVISORS, INC.,
as its general partner
By:___________________________________
Title: Vice President
[Signatures of Investors follow]
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