NFO WORLDWIDE, INC.
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Note Purchase Agreement
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Dated as of November 20, 1998
$17,000,000 9.84% Senior Subordinated Notes Due November 15, 2008
NFO WORLDWIDE, INC.
0 XXXXXXXX XXXXX
XXXXXXXXX, XX 00000
9.84% SENIOR SUBORDINATED NOTES DUE NOVEMBER 15, 2008
Dated as of November 20, 1998
To the Purchasers Named on
the Signature Page Hereto
Ladies and Gentlemen:
NFO WORLDWIDE, INC., a Delaware corporation (together with its
successors and assigns, the "COMPANY"), agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $17,000,000 aggregate
principal amount of its 9.84% Senior Subordinated Notes due November 15, 2008
(the "NOTES," such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)). The Notes shall be substantially in the form set out in
Exhibit 1, with such changes therefrom, if any, as may be approved by you and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closings
provided for in Section 3, Notes in the principal amount specified below your
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "OTHER AGREEMENTS")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "OTHER PURCHASERS"), providing for the sale at such Closings to
each of the Other Purchasers of Notes in the principal amount specified below
each such Other Purchaser's name in Schedule A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or nonperformance
by any Other Purchaser thereunder.
SECTION 3. THE CLOSING.
The closing of the sale and purchase of $17,000,000 in aggregate
principal amount of the Notes (the "CLOSING") to be purchased by you and the
Other Purchasers shall occur at the offices of Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, 1285 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, on
November 20, 1998 (the "CLOSING DATE"). At the Closing, the Company will deliver
to you the Notes to be purchased by you in the form of a single Note (or such
greater number of Notes in denominations of at least $100,000 as you may
request), dated the Closing Date and registered in your name (or in the name of
your nominee), as indicated in Schedule A, against payment by federal funds wire
transfer in immediately available funds of the amount of the purchase price
therefor as directed by the Company in Schedule C. If at the Closing the Company
shall fail to tender such Notes to you as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
SECTION 4.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
SECTION 4.2. PERFORMANCE; NO DEFAULT. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by any of Sections 10.1, 10.2, 10.3,
10.5, 10.8, 10.9 or 10.11 had such Sections applied since such date.
SECTION 4.3. COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The Company shall have delivered to you an
Officer's Certificate, dated the Closing Date, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) SECRETARY'S CERTIFICATE. The Company shall have delivered to you a
certificate of its Secretary or one of its Assistant Secretaries, dated the
Closing Date, certifying as to the
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resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, this Agreement and the Other
Agreements.
(c) INITIAL GUARANTOR SECRETARY'S CERTIFICATES. Each of the Initial
Guarantors shall have delivered to you a certificate of its Secretary or one of
its Assistant Secretaries, dated the Closing Date, certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Guaranty Agreement to which such
Initial Guarantor is a party.
SECTION 4.4. OPINIONS OF COUNSEL. You shall have received opinions in
form and substance satisfactory to you, each dated the Closing Date, from
(a) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the
Company and the Initial Guarantors, substantially in the form set out
in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs such counsel to deliver such
opinion to you), and
(b) Xxxxxxx and Xxxxxx, your special counsel in connection
with such transactions, substantially in the form set out in Exhibit
4.4(b) and covering such other matters incident to such transactions as
you may reasonably request.
SECTION 4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. On the Closing
Date your purchase of Notes shall (a) be permitted by the laws and regulations
of each jurisdiction to which you are subject, without recourse to provisions
(such as section 1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies without restriction as to the character of
the particular investment, (b) not violate any applicable law or regulation
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
SECTION 4.6. SALE OF OTHER NOTES. Contemporaneously with the Closing
the Company shall sell to the Other Purchasers and the Other Purchasers shall
purchase the Notes to be purchased by them at the Closing as specified in
Schedule A.
SECTION 4.7. PAYMENT OF SPECIAL COUNSEL FEES. Without limiting the
provisions of Section 16.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
Section 4.4(b) to the extent reflected in a statement of such counsel rendered
to the Company at least one Business Day prior to the date of such Closing.
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SECTION 4.8. PRIVATE PLACEMENT NUMBER. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
SECTION 4.9. CHANGES IN CORPORATE STRUCTURE. Except as specified in
Schedule 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent interim financial statements
referred to in Schedule 5.5.
SECTION 4.10. SENIOR NOTES. Contemporaneously with the Closing the
Company shall sell to the Senior Note Purchasers, and the Senior Note Purchasers
shall purchase, the Senior Notes to be purchased by them at the Closing under
the Senior Note Purchase Agreements.
SECTION 4.11. FLEET/CHASE DEBT FACILITY. The Fleet/Chase Debt Facility
shall be in full force and effect and the Company shall have satisfied all
conditions precedent to borrowing the amount available thereunder necessary,
together with the proceeds of the offering of the Notes and the Senior Notes, to
fund the Infratest Acquisition (whether or not such full amount or any portion
thereof shall actually be borrowed on the Closing Date). In addition,
immediately after giving effect to such borrowing under the Fleet/Chase Debt
Facility, the Company would be able to satisfy all conditions precedent under
such facility to borrow at least $10,000,000.
SECTION 4.12. INFRATEST ACQUISITION. The Infratest Acquisition shall
have been consummated in accordance with the terms of the Acquisition Agreement
and all conditions precedent to such consummation, as set forth in the
Acquisition Agreement, shall have been satisfied in all material respects (and
not waived, except for any waiver which would not be adverse to you in any
material respect).
SECTION 4.13. EXISTING SENIOR NOTE AMENDMENT. The Existing Senior Note
Purchase Agreements shall have been amended pursuant to the Existing Senior Note
Amendment.
SECTION 4.14. GUARANTY AGREEMENTS. You shall have received a
counterpart of each of the Guaranty Agreements, duly executed and delivered by
each of the Initial Guarantors, substantially in the form of Exhibit 4.14, and
such Guaranty Agreements shall be in full force and effect.
SECTION 4.15. PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you, as of the date of the
Closing Date, that:
SECTION 5.1. ORGANIZATION; POWER AND AUTHORITY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it purports to own or
hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Other Agreements and the
Notes and to perform the provisions hereof and thereof.
SECTION 5.2. AUTHORIZATION, ETC. This Agreement, the Other Agreements
and the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 5.3. DISCLOSURE. The Company, through its agent, Xxxxxxx Xxxxx
& Company, has delivered to you and each Other Purchaser a copy of a Private
Placement Memorandum, dated August, 1998 (the "MEMORANDUM"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this
Agreement, the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one
of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 1997, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
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SECTION 5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of (i) the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its Capital Stock or similar equity
interests outstanding owned by the Company and each other Subsidiary and (ii)
the Company's Affiliates, other than Subsidiaries.
(b) All of the outstanding shares of Capital Stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
in Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of Capital Stock or similar equity
interests of such Subsidiary, except for any such restrictions and agreements
that are applicable to Subsidiaries which, taken together, are not Material.
(e) There are no Unrestricted Subsidiaries.
SECTION 5.5. FINANCIAL STATEMENTS. The Company has delivered to you and
each Other Purchaser copies of the financial statements of the Company and its
Subsidiaries listed in Schedule 5.5. All of said financial statements (including
in each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Company and its Subsidiaries
as of the respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
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SECTION 5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not
(a) except for any contravention, breach or default that would
not have a Material Adverse Effect, contravene, result in any breach
of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Subsidiary under,
any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement
or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective
properties may be bound or affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary, or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary.
SECTION 5.7. GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
SECTION 5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including, without limitation, Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
SECTION 5.9. TAXES. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the
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amount of which is not individually or in the aggregate Material or (b) the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the Company or a
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The Federal income tax liabilities of the Company and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended December 31, 1992.
SECTION 5.10. TITLE TO PROPERTY, LEASES. The Company and its
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
SECTION 5.11. LICENSES, PERMITS, ETC. Except as disclosed in Schedule
5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Company, no product or
practice of the Company or any Subsidiary infringes in any material
respect any license, permit, franchise, authorization, patent,
copyright, service xxxx, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service xxxx,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
SECTION 5.12. COMPLIANCE WITH ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence
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of any such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the Company
or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions or to section 401(a)(29) or 412 of the
Code, other than such liabilities or Liens as would not be individually or in
the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $1,500,000. The term "BENEFIT
LIABILITIES" has the meaning specified in section 4001 of ERISA and the terms
"CURRENT VALUE" and "PRESENT VALUE" have the meaning specified in section 3 of
ERISA.
(c) The Company and the ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
(f) Schedule 5.12 sets forth all ERISA Affiliates and all "employee
benefit plans" maintained by the Company (or any "affiliate" thereof) or in
respect of which the Notes could constitute an "employer security" ("employee
benefit plan" has the meaning specified in section 3 of ERISA, "affiliate" has
the meaning specified in section 407(d) of ERISA and section V of the Department
of Labor Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) and
"employer security" has the meaning specified in section 407(d) of ERISA).
SECTION 5.13. PRIVATE OFFERING BY THE COMPANY. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any
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Person other than 61 Institutional Investors (including you and the Other
Purchasers), each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of section 5 of the Securities Act.
SECTION 5.14. USE OF PROCEEDS; MARGIN REGULATIONS. The Company will
apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any margin stock within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 1% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 1% of the value of such assets. As used in this
Section, the term "MARGIN STOCK" shall have the meaning assigned to it in said
Regulation U.
SECTION 5.15. EXISTING DEBT; FUTURE LIENS. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of each issue of
outstanding Debt of the Company and its Subsidiaries with an outstanding
principal amount of at least $1,000,000 as of the Closing Date (and specifying,
as to each such Debt, the collateral, if any, securing such Debt). The aggregate
amount of all Debt of the Company and its Subsidiaries not listed on Schedule
5.15 is less than $2,000,000. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal of or interest on any Debt of the Company or such Subsidiary and no
event or condition exists with respect to any Debt of the Company or any
Subsidiary that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Debt to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.
SECTION 5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
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SECTION 5.17. STATUS UNDER CERTAIN STATUTES. Neither the Company nor
any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Transportation Acts (49 U.S.C.), as amended, or the Federal Power Act, as
amended.
SECTION 5.18. ENVIRONMENTAL MATTERS. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them and has not disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.19. YEAR 2000 MATTERS. The Company has reasonable grounds for
believing that it will be Year 2000 Compliant and Ready on or before December 1,
1999. "YEAR 2000 COMPLIANT AND READY" means that
(a) the Company's and its Subsidiaries' hardware and software
systems, with respect to the operation of their business, will (i)
handle satisfactorily date information involving any and all dates
before, during and/or after January 1, 2000, including accepting input,
providing output and performing date calculations in whole or in part
and (ii) operate accurately, without Material interruption, on and in
respect of any and all dates before, during and/or after January 1,
2000 and without any Material change in performance; and
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(b) the Company has developed alternative plans to ensure
business continuity in all Material respects in the event of the
failure of the items identified in clauses (i) and (ii) in the
foregoing clause (a).
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
SECTION 6.1. PURCHASE FOR INVESTMENT. You represent that you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, PROVIDED that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
SECTION 6.2. SOURCE OF FUNDS. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"SOURCE") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect
thereof you represent that there is no "employee benefit plan" (as
defined in section 3(3) of ERISA and section 4975(e)(1) of the Code,
treating as a single plan all plans maintained by the same employer or
employee organization or affiliate thereof) with respect to which the
amount of the general account reserves and liabilities of all contracts
held by or on behalf of such plan exceeds 10% of the total reserves and
liabilities of such general account (exclusive of separate account
liabilities) PLUS surplus, as set forth in the National Association of
Insurance Commissioners' Annual Statement filed with your state of
domicile and that such acquisition is eligible for and satisfies the
other requirements of such exemption; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except
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as you have disclosed to the Company in writing pursuant to this
paragraph (c), no employee benefit plan or group of plans maintained by
the same employer or employee organization beneficially owns more than
10% of all assets allocated to such pooled separate account or
collective investment fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of part V of PTE 84-14 (the "QPAM EXEMPTION"))
managed by a "qualified professional asset manager" or "QPAM" (within
the meaning of part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning
of section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and
(i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose
assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this
paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit
plan described in section 4975(e) of the Code, other than a plan exempt
from the coverage of ERISA and the provisions of section 4975 of the
Code.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
SECTION 7.1. FINANCIAL AND BUSINESS INFORMATION. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
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(a) QUARTERLY STATEMENTS -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such quarter, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such
quarter and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the
consolidated financial position of the companies being reported on and
their consolidated results of operations and cash flows, subject to
changes resulting from year-end adjustments, PROVIDED that, so long as
no Unrestricted Subsidiaries existed at any time during the periods
covered by such financial statements, delivery within the time period
specified above of copies of the Company's Quarterly Report on Form
10-Q prepared in compliance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this Section 7.1(a);
(b) ANNUAL STATEMENTS -- within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements present
fairly, in all material respects, the consolidated financial
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position of the companies being reported upon and their
consolidated results of operations and cash flows and have
been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further whether,
in making their audit, they have become aware of any condition
or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or
event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit),
PROVIDED that, so long as no Unrestricted Subsidiaries existed at any
time during the periods covered by such financial statements, the
delivery within the time period specified above of the Company's Annual
Report on Form 10-K for such fiscal year prepared in accordance with
the requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in
clause (B) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(c) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of (i) each financial statement, report (including,
without limitation, the Company's annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act), notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public
concerning developments that are Material;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
- 15 -
(e) ERISA MATTERS -- promptly, and in any event within five
days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(c) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the Closing Date;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect;
(g) ACTIONS, PROCEEDINGS -- promptly after a Responsible
Officer becomes aware of the commencement thereof, notice of any action
or proceeding relating to the Company or any Subsidiary in any court or
before any Governmental Authority or arbitration board or tribunal as
to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected to have
a Material Adverse Effect; and
(h) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries (including, without limitation,
- 16 -
information regarding the impact of the occurrence of the year 2000 on
the Company and its Subsidiaries and plans of the Company to address
any such impact) or relating to the ability of the Company to perform
its obligations hereunder and under the Notes as from time to time may
be reasonably requested by any such holder of Notes, or such
information regarding the Company required to satisfy the requirements
of 17 C.F.R. ss.230.144A, as amended from time to time, in connection
with any contemplated transfer of the Notes.
SECTION 7.2. OFFICER'S CERTIFICATE. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.1 through 10.12,
inclusive and Section 10.14 through Section 10.16, inclusive, during
the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then
in existence); and
(b) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review has not
disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
SECTION 7.3. INSPECTION. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each
- 17 -
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) DEFAULT -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
SECTION 8. PAYMENT OF THE NOTES.
SECTION 8.1. REQUIRED PREPAYMENTS; PAYMENT AT MATURITY. The Company
will prepay $5,666,666 principal amount of the Notes on November 15, 2006 and
November 15, 2007, all such prepayments to be made at par and without payment of
any Make-Whole Amount. The Company will pay all of the principal amount of the
Notes remaining outstanding, if any, on November 15, 2008. Each partial
prepayment of the Notes pursuant to Section 8.2 will be applied first, to the
amount due on the maturity date of the Notes and second, to the mandatory
prepayments applicable to the Notes, as set forth in this Section 8.1, in the
inverse order of the maturity thereof.
SECTION 8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes (but if in part, in an amount not less
than $1,000,000 or such lesser amount as shall then be outstanding), at 100% of
the principal amount so prepaid, plus the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Company will give
each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such prepayment date,
the aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be accompanied by
a certificate of a Senior Financial Officer as to the estimated Make-Whole
Amount due in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.
SECTION 8.3. ALLOCATION OF PARTIAL PREPAYMENTS. In the case of each
partial prepayment of the Notes, the principal amount of the Notes to be prepaid
shall be allocated among all of the
- 18 -
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
SECTION 8.4. MATURITY; SURRENDER, ETC. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
SECTION 8.5. NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES. The
Company will not prepay (whether directly or indirectly by purchase, redemption
or other acquisition) any of the outstanding Notes except (a) upon the payment
or prepayment of the Notes in accordance with the terms of this Section 8 or
upon an acceleration of the maturity of the Notes pursuant to Section 12 or (b)
pursuant to an offer to purchase made by the Company pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions. Any such
offer (i) need not comply with the other provisions of this Section 8
(including, without limitation, the requirement to pay any Make-Whole Amount),
(ii) shall provide each holder with sufficient information to enable it to make
an informed decision with respect to such offer, and (iii) shall remain open for
at least 10 Business Days. The Company will promptly cancel all Notes acquired
by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes
pursuant to any provision of this Section 8 and no Notes may be issued in
substitution or exchange for any such Notes.
SECTION 8.6. MAKE-WHOLE AMOUNT. The term "MAKE-WHOLE AMOUNT" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, PROVIDED that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
- 19 -
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 1.25% (1.50% (the "ADJUSTED SPREAD") in the case
of a prepayment of the Notes on or prior to May 20, 2000, from the net
proceeds of a public offering of common stock by the Company (a "PUBLIC
OFFERING") as herein after provided) over the yield to maturity implied
by (a) the yields reported, as of 10:00 A.M. (New York City time) on
the second Business Day preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page UST" on the
Bloomberg Financial Market Service (or such other display as may
replace Page UST on the Bloomberg Financial Market Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (b) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (i) converting U.S. Treasury xxxx
quotations to bond equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life. In the case of any prepayment of the Notes
using the Adjusted Spread in calculating the Make-Whole Amount, the
principal amount of the Notes prepaid using the Adjusted Spread shall
not exceed the net proceeds from the Public Offering. No prepayment of
Notes shall be made using the Adjusted Spread unless concurrently
therewith the entire principal amount of the Notes then outstanding
shall be prepaid at the applicable Make-Whole Amount. In the case of
any concurrent or substantially concurrent prepayment of the Notes
using the Adjusted Spread and the unadjusted spread, for purposes of
calculating the Make-Whole Amount, the Remaining Average Life shall be
the same in each case.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one
twelfth-year) obtained by dividing (a) such Called Principal into (b)
the sum of the products obtained by multiplying (i) the principal
component of each Remaining Scheduled Payment with respect to such
Called Principal by (ii) the number of years (calculated to the nearest
one-twelfth-year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
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"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, PROVIDED that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
SECTION 9.1. COMPLIANCE WITH LAW. The Company will and will cause each
of its Restricted Subsidiaries to comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that noncompliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 9.2. INSURANCE. The Company will and will cause each of the
Restricted Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, coinsurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
SECTION 9.3. MAINTENANCE OF PROPERTIES. The Company will and will cause
each of the Restricted Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, PROVIDED that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such
- 21 -
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 9.4. PAYMENT OF TAXES AND CLAIMS. The Company will and will
cause each of the Restricted Subsidiaries to file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges,
or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes, assessments, charges or levies have become
due and payable and before they have become delinquent and all claims for which
sums have become due and payable that have or might become a Lien on properties
or assets of the Company or any Restricted Subsidiary, PROVIDED that neither the
Company nor any Restricted Subsidiary need pay any such tax or assessment or
claims if (a) the amount, applicability or validity thereof is contested by the
Company or such Restricted Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Restricted Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Restricted Subsidiary or (b) the nonpayment of all such
taxes, assessments, charges and levies in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
SECTION 9.5. CORPORATE EXISTENCE, ETC.. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.10 and 10.11, the Company will at all times preserve and keep in
full force and effect the corporate existence of each of the Restricted
Subsidiaries (unless merged into the Company or a Restricted Subsidiary) and all
rights and franchises of the Company and the Restricted Subsidiaries unless, in
the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
SECTION 9.6. LINE OF BUSINESS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, engage in any business other than
the businesses described in the Memorandum and businesses reasonably related
thereto.
SECTION 9.7. ADDITIONAL GUARANTY AGREEMENTS; RELEASE OF GUARANTY
AGREEMENTS.
(A) ADDITIONAL GUARANTIES. The Company will cause each Subsidiary that
at any time becomes liable in respect of any Guaranty of the Company's
obligations under the Fleet/Chase Debt Facility after the Closing Date to become
(simultaneously or prior to becoming liable in respect of such Guaranty of any
of the obligations under the Fleet/Chase Debt Facility) a Guarantor in respect
of this Agreement, the Other Agreements and the Notes by executing and
delivering to each holder of Notes a Guaranty Agreement in the form set out in
Exhibit 4.14.
(B) RELEASE OF GUARANTIES. Simultaneously with the release of any
Subsidiary's Guaranty of the Company's obligations under the Fleet/Chase Debt
Facility, such Subsidiary's Guaranty
- 22 -
of the Notes shall be deemed to have been released, it being understood that
such Subsidiary's Guaranty of the Company's obligations under the Senior Notes
and the Existing Senior Notes shall be released at the same time. The holders of
the Notes shall take such action as shall be reasonably requested by the Company
to effect such release.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that, on and after the Closing Date and so long
as any of the Notes are outstanding:
SECTION 10.1. SENIOR FUNDED DEBT. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Senior Funded Debt (including, without limitation, Senior Funded
Debt incurred under the Fleet/Chase Debt Facility), other than Existing Senior
Funded Debt, the Senior Notes, Inter-Company Debt and Swaps, unless, immediately
after giving effect thereto and to the application of the proceeds thereof (and
without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Senior Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been a period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended
when Consolidated Current Debt was zero, or
(2) the lowest average daily amount of Consolidated
Current Debt outstanding during any period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended,
if Consolidated Current Debt was not zero during any such
period of 30 consecutive days
to
(ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters, does not exceed 3.45 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
- 23 -
SECTION 10.2. SUBORDINATED FUNDED DEBT. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Subordinated Funded Debt, other than Existing Subordinated
Funded Debt, the Notes, Inter-Company Debt and Swaps, unless, immediately after
giving effect thereto and to the application of the proceeds thereof (and
without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been a period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended
when Consolidated Current Debt was zero, or
(2) the lowest average daily amount of Consolidated
Current Debt outstanding during any period of 30
consecutive days during the period of four consecutive
fiscal quarters of the Company then most recently ended,
if Consolidated Current Debt was not zero during any such
period of 30 consecutive days
to
(ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters does not exceed 4.0 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
SECTION 10.3. CURRENT DEBT. The Company will not, and will not permit
any Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with respect to,
any Current Debt, other than Existing Current Debt, InterCompany Debt and Swaps,
unless, immediately after giving effect thereto and to the application of the
proceeds thereof,
(a) no Default or Event of Default exists, and
- 24 -
(b) there shall have been a period of 30 consecutive days
during the period of 12 consecutive months then most recently ended on
each day of which either
(i) no Consolidated Current Debt was outstanding, or
(ii) the Company or such Restricted Subsidiary could
have incurred (but did not incur) Senior Funded Debt pursuant
to Section 10.1 in an amount not less than the amount of
Consolidated Current Debt outstanding on such day.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
SECTION 10.4. INTEREST COVERAGE RATIO. The Company will not permit the
ratio of (x) Pro Forma EBITDA for any period of four consecutive fiscal quarters
of the Company to (y) Pro Forma Consolidated Interest Expense for such period to
be less than 2.13 to 1.0.
SECTION 10.5. LIENS. The Company will not, and will not permit any of
the Restricted Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien on
or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom (whether or not provision
is made for the equal and ratable securing of the Notes in accordance with the
last paragraph of this Section 10.5), or assign or otherwise convey any right to
receive income or profits, except:
(a) Liens existing on the date of this Agreement which secure
Debt of the Company and the Restricted Subsidiaries outstanding on the
Closing Date, which Liens, to the extent not described on Schedule
5.15, secure an aggregate amount of such Debt not in excess of
$2,000,000;
(b) Liens renewing or replacing Liens then in existence and
permitted by paragraph (a) of this Section 10.5 to the extent that the
underlying obligations secured by such existing Liens are being
extended, renewed or refunded, PROVIDED that
(i) no such renewal or replacement Lien shall extend
to any property of the Company or any Restricted Subsidiary
other than property already encumbered by the existing Lien
being so renewed or replaced,
(ii) the principal amount of the underlying
obligation secured by such existing Lien which could have been
outstanding at the time of such renewal or replacement shall
not be increased in connection with such renewal or
replacement, and
- 25 -
(iii) immediately prior to, and immediately after
giving effect to, such renewal or replacement, no Default or
Event of Default exists or would exist;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business
(i) in connection with workers' compensation,
unemployment insurance and other types of social security or
retirement benefits, or
(ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations,
surety bonds, bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining
of advances or credit or the payment of the deferred purchase
price of property;
(d) (i) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case incurred in the ordinary course of business for sums not yet due
and payable or the payment of which is not at the time required by
Section 9.4, and
(ii) Liens arising solely by virtue of any statutory
or common law provisions or, in the case of Infratest or any
of its subsidiaries, Liens arising by virtue of any deposit
agreement, in each case relating to bankers' Liens, rights of
set-off or similar rights and remedies as to deposit accounts
or other funds maintained with a creditor depository
institution, PROVIDED that such deposit account is not a
dedicated cash collateral account and is not subject to
restrictions against access by the Company or any Restricted
Subsidiary in excess of those set forth by regulations
promulgated by the Federal Reserve Board (or, in the case of
Infratest, applicable German statutes or regulations);
(e) Liens arising from judicial attachments or judgments, or
securing appeal bonds, and other similar Liens, PROVIDED that
(i) the execution or other enforcement of such Liens
is effectively stayed, and
(ii) the claims secured thereby are being actively
contested in good faith and adequate reserves in respect
thereof have been established by the Company or such
Restricted Subsidiary in accordance with GAAP;
- 26 -
(f) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
in each case incidental to, and not interfering with, the ordinary
conduct of the business of the Company or any of the Restricted
Subsidiaries, PROVIDED that such Liens do not, in the aggregate,
materially impair the use of such property by the Company or such
Restricted Subsidiary;
(g) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 9.4;
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary, or immediately prior to its becoming a
Restricted Subsidiary, or any Lien existing on any property acquired by
the Company or any Restricted Subsidiary at the time such property is
so acquired (whether or not the Debt secured thereby shall have been
assumed), PROVIDED that (i) no such Lien shall have been created or
assumed in contemplation of such consolidation or merger or such
acquisition of property, and (ii) each such Lien shall extend solely to
the item or items of property so acquired;
(i) Liens on property of a Restricted Subsidiary, PROVIDED
that such Liens secure only Debt owing to the Company or a Restricted
Subsidiary; and
(j) other Liens not otherwise permitted by paragraphs (a)
through (i) of this Section 10.5, so long as the sum, without
duplication, of
(i) the aggregate amount of Indebtedness secured by
such Liens, PLUS
(ii) the aggregate amount of unsecured Debt of all
Restricted Subsidiaries, including, without limitation, the
IBH Debt, outstanding at such time (other than any such Debt
owing to the Company or other Restricted Subsidiaries),
shall not exceed 17.25% of Consolidated Total Capitalization.
If, notwithstanding the prohibition contained herein, the Company
shall, or shall permit any of the Restricted Subsidiaries to, directly or
indirectly create, incur, assume or permit to exist any Lien, other than those
Liens permitted by the provisions of paragraphs (a) through (j) of this Section
10.5, it will make or cause to be made effective provision whereby the Notes
will be secured equally and ratably with any and all other obligations thereby
secured, such security to be pursuant to agreements reasonably satisfactory to
the Required Holders and, in any such case, the Notes shall have the benefit, to
the fullest extent that, and with such priority as, the holders of the Notes may
be entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.5 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.5. The filing of a financing
- 27 -
statement to evidence for information purposes a lessor's interest in property
leased to the Company or a Restricted Subsidiary shall be deemed not to
constitute the creation of a Lien.
SECTION 10.6. RESTRICTED SUBSIDIARY DEBT. The Company will not at any
time permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise be or become directly or indirectly liable with
respect to, any Debt, other than (x) Debt owing to any other Restricted
Subsidiary or to the Company (including any Guaranty of any Debt of any
Restricted Subsidiary) and (y) the Excluded Guaranties, unless (without
duplication)
(a) the aggregate amount of unsecured Debt of all Restricted
Subsidiaries, including, without limitation, the IBH Debt, outstanding
at such time (other than (i) any such Debt owing to the Company or
Restricted Subsidiaries and (ii) the Excluded Guaranties), PLUS
(b) the aggregate amount of obligations secured by Liens
permitted pursuant to Section 10.5(j) outstanding at such time,
does not exceed 17.25% of Consolidated Total Capitalization determined at such
time.
SECTION 10.7. CONSOLIDATED NET WORTH. The Company will not, at any
time, permit Consolidated Net Worth to be less than the sum of (a) $80,750,000
plus (b) an aggregate amount equal to 50% of Consolidated Net Income (but only
if a positive number) for each completed fiscal quarter as of such time
beginning with the fiscal quarter ending December 31, 1998.
SECTION 10.8. SALE AND LEASEBACK TRANSACTIONS. The Company will not,
and will not permit any Restricted Subsidiary to, enter into any Sale and
Leaseback Transaction unless, immediately after giving effect thereto, the
aggregate amount of all Attributable Debt of the Company and the Restricted
Subsidiaries, determined on a consolidated basis, would not exceed $5,750,000.
SECTION 10.9. RESTRICTED INVESTMENTS. The Company will not, and will
not permit any of the Restricted Subsidiaries to, declare, make or authorize any
Restricted Investment unless immediately after giving effect to such action:
(a) the aggregate value of all Restricted Investments of the
Company and the Restricted Subsidiaries (valued immediately after such
action) would not exceed 10% of Consolidated Total Capitalization; and
(b) no Default or Event of Default would exist.
Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary shall
be deemed to be the making of a Restricted Investment by the owner of the
Capital Stock of such newly
- 28 -
designated Unrestricted Subsidiary in an amount equal to all the share capital
and other Investments in such Unrestricted Subsidiary held by the Company and
each other Restricted Subsidiary. For the avoidance of doubt, it is understood
that any Restricted Investments outstanding prior to the Closing Date shall be
deemed not to have been declared, made or authorized at a time when this
covenant was effective.
SECTION 10.10. MERGER, CONSOLIDATION, ETC.. The Company will not, and
will not permit any Restricted Subsidiary to, consolidate with or merge with any
other corporation or convey, transfer or lease substantially all of its assets
in a single transaction or series of transactions to any Person except that:
(a) the Company may consolidate with or merge with another
corporation or convey or transfer (except by lease) all or
substantially all of its assets in a single transaction or series of
transactions to another Person if:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance or transfer all or substantially all of the assets
of the Company as an entirety, as the case may be (the
"SUCCESSOR CORPORATION"), shall be a solvent corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(ii) if the Company is not the Successor Corporation,
such corporation shall have executed and delivered to each
holder of Notes its assumption of the due and punctual
performance and observance of each covenant and condition of
this Agreement and the Notes (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the
Required Holders), and the Company shall have caused to be
delivered to each holder of Notes an opinion of nationally
recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect
that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with
the terms hereof; and
(iii) immediately after giving effect to such
transaction:
(A) no Default or Event of Default would
exist, and
(B) the Successor Corporation would be able
to incur $1 of Funded Debt pursuant to both Section
10.1 and Section 10.2;
(b) a Restricted Subsidiary may consolidate with or merge with
the Company (so long as the Company is the surviving corporation) or
another Restricted Subsidiary or
- 29 -
convey, transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to the Company or another
Restricted Subsidiary; and
(c) a Restricted Subsidiary may consolidate with or merge with
another corporation or convey, transfer or lease all or substantially
all of its assets in a single transaction or series of transactions to
another Person if:
(i) such transaction is in compliance with Section
10.11 hereof; or
(ii) immediately after giving effect to such
transaction:
(A) no Default or Event of Default would
exist, and
(B) the Company would be able to incur $1 of
Funded Debt pursuant to both Section 10.1 and Section
10.2.
No such conveyance or transfer of all or substantially all of the assets of the
Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
SECTION 10.11. SALE OF ASSETS, ETC.
(a) SALE OF ASSETS. The Company will not, and will not permit any
Restricted Subsidiary to, make any Asset Disposition unless:
(i) in the good faith opinion of the Company, the
Asset Disposition is in exchange for consideration having a Fair Market
Value at least equal to that of the property exchanged and is in the
best interest of the Company or such Restricted Subsidiary;
(ii) immediately after giving effect to the Asset
Disposition, no Default or Event of Default would exist; and
(iii) immediately after giving effect to the Asset
Disposition, the sum of the Net Proceeds Amounts in respect of all
property that was the subject of any Asset Disposition occurring in the
period of 365 days ending with and including the date of such Asset
Disposition, MINUS the aggregate cost of Capital Assets acquired by the
Company and the Restricted Subsidiaries during such period, would not
exceed 17.25% of Consolidated Total Assets as of the end of the then
most recently ended fiscal year of the Company.
- 30 -
(b) DISPOSAL OF OWNERSHIP OF A RESTRICTED SUBSIDIARY. The Company will
not, and will not permit any of the Restricted Subsidiaries to, sell or
otherwise dispose of any shares of Restricted Subsidiary Stock (including,
without limitation, pursuant to any merger, consolidation or other transaction
specified in Section 10.10(c) hereof but excluding any transaction permitted by
Section 10.10(b)), nor will the Company permit any such Restricted Subsidiary to
issue, sell or otherwise dispose of any shares of its own Restricted Subsidiary
Stock, PROVIDED that the foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares by any
such Subsidiary;
(ii) any such Transfer of Restricted Subsidiary Stock
constituting a Transfer described in clause (a) of the definition of
"Asset Disposition"; and
(iii) the Transfer of all of the Restricted
Subsidiary Stock of a Restricted Subsidiary owned by the Company and
the other Restricted Subsidiaries if:
(A) such Transfer satisfies the requirements
of Section 10.11(a) hereof,
(B) in connection with such Transfer the
entire Investment (whether represented by stock,
Debt, claims or otherwise) of the Company and the
other Restricted Subsidiaries in such Restricted
Subsidiary is sold, transferred or otherwise disposed
of to a Person other than (1) the Company, (2)
another Restricted Subsidiary not being
simultaneously disposed of, or (3) an Affiliate, and
(C) the Restricted Subsidiary being disposed
of has no continuing Investment in any other
Restricted Subsidiary not being simultaneously
disposed of or in the Company.
Any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary shall be deemed to be an Asset
Disposition of all of the Restricted Subsidiary Stock of such
newly designated Unrestricted Subsidiary.
(c) RELEASE OF GUARANTEES OF SUBSIDIARIES. If, with respect to any
Subsidiary that is a Guarantor,
(i) all of the Company's and any Restricted
Subsidiary's Capital Stock or other equity ownership interests in such
Guarantor is Transferred (including by way of a merger) to a Person
other than the Company or a Restricted Subsidiary in accordance with
the requirements of this Section 10.11,
- 31 -
(ii) such Guarantor engages in a transaction
permitted by Section 10.10(c) with any such Person and the surviving
Person or transferee is not a Subsidiary, or
(iii) such Guarantor sells all or substantially all
of its assets to another Subsidiary or the Company and, in the case of
a sale to another Subsidiary, such other Subsidiary becomes a Guarantor
by executing a Guaranty Agreement,
then the Company may elect to cause the withdrawal of the Guaranty Agreement of
such Guarantor. Such election may be exercised if (A) no Default or Event of
Default exists and (B) such Guarantor has no guaranty obligation in respect of
any Debt under the Fleet/Chase Debt Facility, the Existing Senior Notes or the
Senior Notes (except any such obligation which is being released simultaneously
with the release of such Guaranty Agreement), and if a Senior Financial Officer
of the Company certifies in writing to each holder of the Notes that the
conditions specified in clauses (A) and (B) have been satisfied. Thereafter, the
Guaranty Agreement of such Guarantor shall be terminated, null and void and
without effect and, upon request of the Company, and in reliance on the accuracy
of the Company's written certification, each holder of Notes shall acknowledge
such termination.
SECTION 10.12. LIMITATION ON CONTRIBUTION TO COMPANY FINANCIAL
PERFORMANCE BY UNRESTRICTED SUBSIDIARIES. (a) The Company will not at any time
permit Consolidated Total Assets to be less than 80% of consolidated total
assets of the Company and its Subsidiaries as reflected on a consolidated
balance sheet of such Persons prepared in accordance with GAAP.
(b) The Company will not permit Pro Forma EBITDA for any period of four
consecutive fiscal quarters of the Company to be less than 80% of Pro Forma
EBITDA (determined as if each reference in such definition to "Restricted
Subsidiaries" were to "Subsidiaries") for such period.
SECTION 10.13. TRANSACTIONS WITH AFFILIATES. Except as set forth in
Schedule 10.13, the Company will not, and will not permit any Restricted
Subsidiary to, enter into directly or indirectly any transaction or group of
related transactions (including, without limitation, the purchase, lease, sale
or exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the Company's
or such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
SECTION 10.14. LEVERAGE RATIOS. (a) SENIOR LEVERAGE RATIO. The Company
will not permit the ratio of (x) Consolidated Senior Funded Debt, determined at
the end of any fiscal quarter of the Company, to (y) Pro Forma EBITDA for the
period of four consecutive fiscal
- 32 -
quarters of the Company ending with, and including, such fiscal quarter to be
greater than 3.74 to 1.0.
(b) TOTAL LEVERAGE RATIO. The Company will not permit the ratio of (x)
Consolidated Funded Debt, determined at the end of any fiscal quarter of the
Company, to (y) Pro Forma EBITDA for the period of four consecutive fiscal
quarters of the Company ending with, and including, such fiscal quarter to be
greater than (i) 4.25 to 1.0 at any time on or before December 31, 1999 and (ii)
3.50 to 1.0 at any time thereafter.
SECTION 10.15. LIMIT ON ACQUISITIONS. The Company will not, and will
not permit any Restricted Subsidiary to, make any Acquisition, unless:
(a) no Default or Event of Default exists or would result from
such Acquisition;
(b) the Person or assets acquired, as the case may be, involve
substantially the same or similar line of business engaged in by the
Company and its Restricted Subsidiaries;
(c) the Company demonstrates that, on a consolidated basis
with the Person and/or assets to be acquired, in accordance with GAAP,
the Company would have been in compliance with Sections 10.4, 10.7,
10.14(a) and 10.14(b) on a trailing four quarters PRO FORMA basis as of
the last day of the then most recently completed fiscal quarter of the
Company; and
(d) the aggregate amount expended by the Company and its
Restricted Subsidiaries, whether in cash, Securities or other property,
for all Acquisitions permitted hereunder within any one calendar year
exceeds $20,000,000 or its equivalent in other currencies.
SECTION 10.16. IBH DEBT. The Company will not permit the IBH Debt to be
renewed, replaced, extended or refinanced and shall not permit the maximum
aggregate principal amount thereof which may be outstanding at any time to
exceed the sum of (x) 68,000,000 Deutsche Marks and (y) $10,000,000 (or the
equivalent thereof in other currencies).
SECTION 10.17. ADDITIONAL SUBORDINATED FUNDED DEBT . The Company will
not issue any additional Funded Debt which is subordinate or junior in right of
payment to any other Funded Debt of the Company other than Subordinated Funded
Debt.
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SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in any of Sections 10.1 through 10.12,
inclusive, Section 10.14 through Section 10.17, inclusive, or Section
7.1 (d); or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note; or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any
Indebtedness (other than Indebtedness under this Agreement and the
Notes) beyond any period of grace provided with respect thereto (after
giving effect to any consents or waivers in respect thereof), that
individually or together with such other Indebtedness as to which any
such failure exists has an aggregate outstanding principal amount of at
least $2,000,000, or
(ii) the Company or any Restricted Subsidiary is in
default in the performance of or compliance with any term of any
evidence of any Indebtedness (other than Indebtedness under this
Agreement and the Notes), that individually or together with such other
Indebtedness as to which any such failure exists has an aggregate
outstanding principal amount of at least $2,000,000, or of any
mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared (or, after giving
effect to
- 34 -
any consents or waivers in respect thereof, one or more Persons are
entitled to declare such Indebtedness to be), due and payable before
its stated maturity or before its regularly scheduled dates of payment,
or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time
or the right of the holder of Indebtedness to convert such Indebtedness
into equity interests),
(A) the Company or any Subsidiary has become
obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly
scheduled dates of payment in an aggregate
outstanding principal amount of at least $2,000,000,
or
(B) one or more Persons have the right to
require the Company or any Subsidiary so to purchase
or repay such Indebtedness; or
(g) the Company or any Restricted Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any Restricted Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to the Company or any
Restricted Subsidiary or with respect to any substantial part of the
property of the Company or any Restricted Subsidiary, or constituting
an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of
the Company or any Restricted Subsidiary, or any such petition shall be
filed against the Company or any Restricted Subsidiary and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 above the level of coverage
provided by any applicable insurance policy are rendered against one or
more of the Company and the Restricted Subsidiaries and which judgments
are not, within 30 days after entry thereof, bonded, discharged or
- 35 -
stayed pending appeal, or are not discharged within 30 days after the
expiration of such stay; or
(j) except as otherwise specifically permitted by this
Agreement (including without limitation, Section 9.7(c) and 10.11 (c)),
or the Guaranty Agreement,
(i) any of the Guaranty Agreements shall cease to be
in full force and effect or shall be declared by a court or Government
Authority of competent jurisdiction to be void or unenforceable against
the Guarantor thereunder,
(ii) the validity or enforceability of any of the
Guaranty Agreements against the Guarantor thereunder shall be contested
by such Guarantor, the Company or any Person owning, directly or
indirectly, a majority of the common stock of the Company, or
(iii) any Guarantor, the Company or any such Person
identified in clause (ii) of this clause 11(j) shall deny that such
Guarantor has any further liability or obligation under such
Guarantor's Guaranty Agreement; or
(k) (i) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code,
(ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the
PBGC shall have instituted proceedings under ERISA section 4042 to
terminate or appoint a trustee to administer any Plan or the PBGC shall
have notified the Company or any ERISA Affiliate that a Plan may become
a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $6,000,000,
(iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans,
(v) the Company or any ERISA Affiliate withdraws from
any Multiemployer Plan, or
- 36 -
(vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder;
and any such event or events described in clauses (i) through
(vi) above, either individually or together with any other
such event or events, could reasonably be expected to have a
Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings assigned to
such terms in section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
SECTION 12.1. ACCELERATION. (a) If an Event of Default with respect to
the Company described in paragraph (g) or paragraph (h) of Section 11 (other
than an Event of Default described in clause (i) of paragraph (g) or described
in clause (vi) of paragraph (g) by virtue of the fact that such clause
encompasses clause (i) of paragraph (g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 66-2/3% in principal amount of the Notes at the
time outstanding may, subject to any limitations imposed pursuant to Section 13,
at any time at its or their option, by notice or notices to the Company, declare
all the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may, subject to any
limitations imposed pursuant to Section 13, at any time, at its or their option,
by notice or notices to the Company, declare all the Notes held by it or them to
be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
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SECTION 12.2. OTHER REMEDIES. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may, subject to any limitations imposed
pursuant to Section 13, proceed to protect and enforce the rights of such holder
by an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in any Note, or
for an injunction against a violation of any of the terms hereof or thereof, or
in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.
SECTION 12.3. RESCISSION. At any time after any Notes have been
declared due and payable pursuant to clause (b) or clause (c) of Section 12.1,
the holders of not less than 66-2/3% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, due and
payable on any Notes other than by reason of such declaration, and all interest
on such overdue principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 18, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
SECTION 12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 16, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
SECTION 13. SUBORDINATION.
The Indebtedness evidenced by the Notes shall at all times be
subordinate and junior in right of payment to all Senior Debt, whether now or
hereafter outstanding, all in the manner and with the force and effect
hereinafter set forth:
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(a) In the event of any liquidation, dissolution or winding up
of the Company, or of any execution, sale, receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization, or other similar
proceeding relative to the Company or its property, all Senior Debt
shall first be paid in full before any payment is made upon the debt
evidenced by the Notes; and in any such event any payment or
distribution of any kind or character, whether in cash, property or
Securities (other than in Securities, including equity securities, or
other evidences of debt, the payment of which is subordinated to the
payment of all Senior Debt which may at the time be outstanding to the
same extent as the Notes) which shall be made upon or in respect of any
Note shall be paid over to the holders of such Senior Debt, pro rata,
for application in payment thereof unless and until such Senior Debt
shall have been paid or satisfied in full;
(b) In the event that the Notes are declared or become due and
payable because of the occurrence of any Event of Default hereunder
(under circumstances when clauses (a), (c), (d) or (e) of this Section
13 shall not be applicable), the holders of the Notes shall be entitled
to payments only after there shall first have been paid in full all
Senior Debt outstanding at the time the Notes are declared or become
due and payable because of any such Event of Default, or payment shall
have been provided for in a manner satisfactory to the holders of such
Senior Debt;
(c) In the event that any Specified Senior Debt is declared
due and payable because of the occurrence of any event of default
applicable to any Specified Senior Debt, then no payment shall be made
on any Note from the date that such declaration has been given in
writing to the Company by any Required Senior Debt Holders until there
shall first have been paid in full all Specified Senior Debt
outstanding at such time, or payment shall have been provided for in a
manner satisfactory to the holders of such Specified Senior Debt;
(d) During the continuance of any default in the payment of
either principal or interest on any Specified Senior Debt (under
circumstances when clause (c) of this Section 13 shall not be
applicable), no payment shall be made on any Note during a period of
180 consecutive days (unless such event of default is cured or waived
in writing by the requisite holders of such Specified Senior Debt) from
the date that written notice of such default has been given to the
Company by the Required Senior Debt Holders and such notice shall
specify that it constitutes a "BLOCKAGE NOTICE" pursuant to this
Section 13;
(e) If any event of default shall have occurred as a result of
a breach of Section 10 of the Senior Note Purchase Agreements or the
Existing Senior Note Purchase Agreements (other than Sections 10.8,
10.12 and 10.13) or any comparable covenants from time to time
applicable to the Fleet/Chase Debt Facility (under circumstances when
neither clause (c) nor clause (d) of this Section 13 shall be
applicable) and the Required Senior Debt Holders have given notice of
such event to the Company, then no payment
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shall be made on any Note during a period of 180 consecutive days
(unless such event of default is cured or waived in writing by the
requisite holders of such Specified Senior Debt) from the date that
written notice of such default has been given to the Company by the
Required Senior Debt Holders and such notice shall specify that it
constitutes a "BLOCKAGE NOTICE" pursuant to this Section 13;
(f) Notwithstanding the foregoing, (i) payment on the Notes
shall not be blocked pursuant to clauses (d) and (e) of this Section 13
on more than one occasion in any period of 360 consecutive days, and
(ii) the holders of Specified Senior Debt shall not be entitled to give
notice pursuant to clauses (d) and (e) of this Section 13 more than
once with respect to any event of default which was specified in such a
blockage notice and which has continued without interruption since the
date such notice was given (it being understood that each failure to
make a scheduled payment of principal or interest on Senior Debt shall
be deemed to constitute a new event of default), nor shall such holders
be entitled to give a separate blockage notice with respect to any
event of default not so specified which was known by such holders to
exist on the date the blockage notice shall have been given pursuant to
clause (d) or (e) and which has continued without interruption from the
date such notice was given. No more than three blockage notices can be
given pursuant to clauses (d) and (e) of this Section 13. Upon receipt
of any notice pursuant to clause (c) of this Section 13 or any blockage
notice from the Required Senior Debt Holders pursuant to clause (d) or
(e) of this Section 13, the Company shall forthwith send a copy thereof
to each holder of the Notes at the time outstanding; and
(g) During the Standstill Period (as hereinafter defined), the
holders of the Notes shall be prohibited from exercising any remedies
under this Agreement, including accelerating the Notes or filing or
participating in the filing of an involuntary bankruptcy petition
against the Company. Upon the termination of any Standstill Period and
subject to the provisions of clauses (a), (b), (c), (d) and (e) of this
Section 13, the holders of the Notes may, at their sole election,
exercise any and all remedies (including the acceleration of the
maturity of the Notes) available to them under this Agreement or
applicable law. As used in this Section 13, "STANDSTILL PERIOD" means
in the case of the receipt by the Company of a blockage notice pursuant
to clause (d) or (e) of this Section 13 (a "BLOCKAGE NOTICE"), the 180
day period from and after the date of receipt of such notice. In
addition to the passage of time, the Standstill Period shall expire on
the first to occur of (i) the date on which the Required Senior Debt
Holders which shall have delivered a Blockage Notice shall have
expressly withdrawn such Blockage Notice in writing, (ii) the date on
which there is commenced, either by or against the Company, any
proceeding described in clause (a) of this Section 13, (iii) the date
on which the holders of Senior Debt shall have accelerated such Senior
Debt, and (iv) the date on which the holders of Senior Debt shall have
instituted foreclosure or other proceedings relating to the liquidation
of collateral which secures such Senior Debt.
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If any payment or distribution shall be paid to or collected or
received by any holders of the Notes in contravention of any of the terms of
this Section 13, the last paragraph of Section 10.2 of the Senior Note Purchase
Agreement or of the Existing Senior Note Purchase Agreements or any similar
provision under the Fleet/Chase Debt Facility, then such holders of the Notes
will deliver such payment or distribution, to the extent necessary to pay all
such Senior Debt in full, in cash, to the holders of the Senior Debt, ratably in
accordance with the respective amounts owing to them, and, until so delivered,
the same shall be held in trust by such holders of the Notes as the property of
the holders of such Senior Debt. If any amount is delivered to the holders of
the Senior Debt pursuant to this Section 13, whether or not such amounts have
been applied to the payment of Senior Debt, and the outstanding Senior Debt
shall thereafter be paid in full, in cash, by the Company or otherwise other
than pursuant to this Section 13, the holders of Senior Debt shall return to
such holders of the Notes an amount equal to the amount delivered to such
holders of Senior Debt pursuant to this Section 13, so long as after the return
of such amounts the Senior Debt shall remain indefeasibly paid in full, in cash.
Upon the payment in full of the Senior Debt as in this Section 13
provided, the holders of the Notes will be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of assets of the
Company applicable to the Senior Debt until the principal of, premium, if any,
and interest on the Notes shall be paid in full; and no payments or
distributions (direct or indirect) to the holders of the Senior Debt of cash,
property or Securities to which the holders of the Notes would be entitled
except for the provisions of this Section 13 shall, as between the Company, its
creditors (other than the holders of Senior Debt) and the holders of the Notes,
be deemed to be a payment by the Company to or on account of the Senior Debt.
Each and every holder of the Notes by its acceptance thereof undertakes
and agrees for the benefit of each holder of Senior Debt to execute, verify,
deliver and file any proofs of claim which any holder of Senior Debt may at any
time require in order to prove and realize upon any rights or claims pertaining
to the Notes and to effectuate the full benefit of the subordination contained
herein; and upon failure of any holder of the Notes so to do, any such holder of
Senior Debt shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the holder of the Notes to execute, verify, deliver and file
any such proofs of claim.
The Company agrees, for the benefit of the holders of Senior Debt, that
in the event that any Note is declared due and payable before its expressed
maturity because of the occurrence of an Event of Default hereunder, (i) the
Company will give prompt notice in writing of such happening to the holders of
Senior Debt and (ii) upon demand made at the option of the holders of the Senior
Debt, such Senior Debt shall forthwith become immediately due and payable
regardless of the expressed maturity thereof.
No right of any holder of any Senior Debt to enforce subordination as
herein provided shall at any time or in any way be affected or impaired by any
failure to act on the part of the Company or the holders of Senior Debt, or by
any noncompliance by the Company with any of
- 41 -
the terms, provisions and covenants of the Notes or this Agreement, regardless
of any knowledge thereof that any such holder of Senior Debt may have or be
otherwise charged with.
Each holder of the Notes waives any and all notices of the acceptance
of the provisions of this Section 13 or of the creation, renewal, extension or
accrual, now or at any time in the future, of any Senior Debt.
The obligations of each holder of the Notes under the provisions set
forth in this Section 13 shall continue to be effective, or be reinstated, as
the case may be, as to any payment in respect of any Senior Debt that is
rescinded or must otherwise be returned by the holder of such Senior Debt upon
the occurrence or as a result of any bankruptcy or judicial proceeding, all as
though such payment had not been made.
Each holder of the Notes by its acceptance thereof shall be deemed to
acknowledge and agree that the foregoing subordination provisions are, and are
intended to be, an inducement to and a consideration of each holder of any
Senior Debt, whether such Senior Debt was created or acquired before or after
the creation of the Notes, to acquire and hold, or to continue to hold, such
Senior Debt, and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt. Each such holder of Senior Debt is
intended to be, and is, a third party beneficiary of this Section 13. Each
holder of the Notes acknowledges and agrees that the provisions set forth in
this Section 13 shall be enforceable against such Persons by the holders of
Senior Debt. Notwithstanding anything contained in this Agreement to the
contrary, none of the provisions of this Section 13 or the definitions of
"Required Senior Debt Holders" and "Requisite Senior Debt" may, directly or
indirectly, be amended, modified, supplemented or waived without the prior
written consent of the holders of the Senior Debt.
The foregoing provisions are solely for the purpose of defining the
relative rights of the holders of Senior Debt on the one hand, and the holders
of the Notes on the other hand, and nothing herein shall impair, as between the
Company and the holders of the Notes, the obligation of the Company which is
unconditional and absolute, to pay the principal, premium, if any, and interest
on the Notes in accordance with their terms, nor shall anything herein prevent
the holders from exercising all remedies otherwise permitted by applicable law
or hereunder upon default hereunder, subject to the rights of the holders of
Senior Debt as herein provided for.
SECTION 14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
SECTION 14.1. REGISTRATION OF NOTES. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed
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and treated as the owner and holder thereof for all purposes hereof, and the
Company shall not be affected by any notice or knowledge to the contrary. The
Company shall give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
SECTION 14.2. TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or his attorney duly authorized
in writing and accompanied by the address for notices of each transferee of such
Note or part thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, PROVIDED that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representations set forth in
Section 6.2 and in the second sentence of Section 6.1.
SECTION 14.3. REPLACEMENT OF NOTES. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (PROVIDED that if the holder of such Note
is, or is a nominee for, an original purchaser or a Qualified
Institutional Buyer, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
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SECTION 15. PAYMENTS ON NOTES.
SECTION 15.1. PLACE OF PAYMENT. Subject to Section 15.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Greenwich, Connecticut at the principal office of the
Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
SECTION 15.2. HOME OFFICE PAYMENT. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in Section
15.1 or in such Note to the contrary, the Company will pay all sums becoming due
on such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below your name in Schedule
A, or by such other method or at such other address as you shall have from time
to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 15.1. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
14.2. The Company will afford the benefits of this Section 15.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 15.2.
SECTION 16. EXPENSES, ETC.
SECTION 16.1. TRANSACTION EXPENSES. The Company will pay all costs and
expenses (including any judgment or settlement approved by the Company,
reasonable attorneys' fees of a special counsel and, if reasonably required,
local or other counsel) incurred by you and each Other Purchaser or holder of a
Note in connection with (a) the negotiation, execution and documentation of the
transactions contemplated hereby, (b) any amendments, waivers or consents under
or in respect of this Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), and (c) any actual or threatened
proceeding relating to any action the Company has taken, or will take, as to
which the Company has made a representation and warranty hereunder, including,
without limitation: (x) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of
- 44 -
being a holder of any Note, and (y) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
SECTION 16.2. SURVIVAL. The obligations of the Company under this
Section 16 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
SECTION 18. AMENDMENT AND WAIVER.
SECTION 18.1. REQUIREMENTS. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of any of Sections 1, 2, 3, 4, 5, 6 and 22, or
any defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any payment or prepayment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 18 and 21.
Notwithstanding the provisions of the immediately preceding paragraph,
you and each Other Purchaser agrees, and each other holder of Notes by its
acceptance of any Note shall be deemed to have agreed, to grant its written
consent, promptly following the receipt of written
- 45 -
request by the Company for such consent, to any amendment of, or waiver with
respect to (prospectively only), clause (ii) of Section 10.14(b), Section 10.15
or Section 10.16 in a manner consistent with any one or more amendments of, or
waivers with respect to, the covenants in the Fleet/Chase Debt Facility that
correspond to clause (ii) of Section 10.14(b), Section 10.15 or Section 10.16,
as the case may be (the "FLEET/CHASE EQUIVALENT PROVISIONS"); PROVIDED that (A)
the Company shall have delivered to each holder of Notes a copy of such
amendment or waiver relating to the Fleet/Chase Debt Facility, together with a
certificate of a Responsible Officer of the Company to the effect that such copy
is true and complete and that such amendment or waiver relating to the
Fleet/Chase Debt Facility has become effective in accordance with the terms of
the Fleet/Chase Debt Facility and (B) the effect of the requested amendment or
waiver relating to clause (ii) of Section 10.14(b), Section 10.15 or Section
10.16, as the case may be, shall be no less favorable (and no more onerous) to
the holders of Notes than the corresponding amendment or waiver relating to the
Fleet/Chase Debt Facility is to the banks that are parties thereto. In addition,
if any or all of the Fleet/Chase Equivalent Provisions are deleted from the
Fleet/Chase Debt Facility, or such facility is terminated and not replaced by a
substantially similar facility containing provisions equivalent to the
Fleet/Chase Equivalent Provisions, then one or more of clause (ii) of Section
10.14(b), Section 10.15 and Section 10.16, whichever shall correspond to the
provisions eliminated from the Fleet/Chase Debt Facility (or all such Sections
if the Fleet/Chase Debt Facility shall be terminated and not replaced, as stated
above), shall be deemed to have been automatically deleted from this Agreement
without the need for any action by the Company or the holders of the Notes.
SECTION 18.2. SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 18 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) PAYMENT. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
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SECTION 18.3. BINDING EFFECT, ETC. Any amendment or waiver consented to
as provided in this Section 18 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "THIS AGREEMENT" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
SECTION 18.4. NOTES HELD BY COMPANY, ETC. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 19. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Xxxxxxx X. Xxxxx,
Executive Vice President, Finance & Chief Financial Officer,
telecopier: 2036298883, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this Section 19 will be deemed given on the earlier of the date of
actual receipt thereof or the third Business Day after such notice shall have
been sent in the manner provided above.
- 47 -
SECTION 20. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 20
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 21. CONFIDENTIAL INFORMATION.
For the purposes of this Section 21, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, PROVIDED that such term does not
include information that
(a) was publicly known or otherwise known to you prior to the
time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary or by any other holder of a
Note if the disclosure of such Confidential Information to such other
holder was made subject to this Section 21, or
(d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, PROVIDED that you may deliver or
disclose Confidential Information to
- 48 -
(i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your
Notes),
(ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or
offer to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this
Section 21),
(v) any Person from which you offer to purchase any
Security of the Company (if such Person has agreed in writing prior to
its receipt of such Confidential Information to be bound by the
provisions of this Section 21),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii) the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized
rating agency that requires access to information about your investment
portfolio or
(viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with
any litigation to which you are a party or (z) it an Event of Default
has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies
under your Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 21 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 21.
- 49 -
SECTION 22. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 22), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
22), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
SECTION 23. MISCELLANEOUS.
SECTION 23.1. SUCCESSORS AND ASSIGNS. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
SECTION 23.2. PAYMENTS DUE ON NONBUSINESS DAYS; WHEN PAYMENTS DEEMED
RECEIVED. (a) PAYMENTS DUE ON NONBUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day.
(b) PAYMENTS, WHEN RECEIVED. Any payment to be made to the holders of
Notes hereunder or under the Notes shall be deemed to have been made on the
Business Day such payment actually becomes available to such holder at such
holder's bank prior to 12:00 noon (local time of such bank).
Section 23.3. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 23.4. CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary or where the context clearly
would indicate otherwise) as being
- 50 -
independent of each other covenant contained herein, so that compliance with any
one covenant shall not (absent such an express contrary provision or where the
context clearly would indicate otherwise) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
SECTION 23.5. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
SECTION 23.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
[REMAINDER OF PAGE INTENTIONALLY BLANK. NEXT PAGE IS SIGNATURE PAGE.]
- 51 -
If you are in agreement with the foregoing, please sign the form of agreement on
the accompanying counterpart of this Agreement and return it to the Company,
whereupon the foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
NFO WORLDWIDE, INC.
By: /s/ X.X. Xxxxxx
-------------------
Name: X.X. Xxxxxx
Title: Assistant Secretary
- 52 -
The foregoing is hereby agreed to as of the date thereof.
[Separately executed by each of the following Purchasers]
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By CIGNA INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of one or more
separate accounts
By CIGNA INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH
AMERICA
By CIGNA INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Xxxxx Xxx
-----------------
Name: Xxxxx Xxx
Title: Director-Private Placements
- 53 -
NATIONAL LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxx
---------------------
Name: R. Xxxxx Xxxxxxx
Title: Vice President
National Life Insurance
Management Co., Inc.
NORTHERN LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Treasurer
RELIASTAR LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Representative
- 54 -
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ACQUISITION" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries after the
Closing Date) pursuant to which the Company or any of its Restricted
Subsidiaries (a) acquires equity Securities (or warrants, options or other
rights to acquire such Securities) of any Person, other than the Company or any
Person which is then a Subsidiary, pursuant to a solicitation of tenders
therefor, or in one or more negotiated block, market or other transactions not
involving a tender offer, or a combination of any of the foregoing, or (b) makes
any Person (other than a Subsidiary of the Company) a Restricted Subsidiary, or
causes any such Person to be merged into or consolidated with the Company or any
of its Restricted Subsidiaries, in any case pursuant to a merger, a purchase of
assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding Securities, in exchange for such
Securities, of cash or Securities of the Company or any of its Restricted
Subsidiaries, or a combination thereof, or (c) purchases all or substantially
all of the business or assets of any Person (other than a Subsidiary of the
Company).
"ACQUISITION AGREEMENT" means the Stock Purchase Agreement dated as of
November 10, 1998 by and among the Company, NFO Europe (Deutschland), GMBH & Co.
KG, a German limited partnership, as buyer, and the stockholders of Infratest
Xxxxx Aktiengesellschaft Holding, a German Aktiengesellschaft (stock
corporation), as sellers.
"AFFILIATE" means at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity
interests.
As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"AGREEMENT, THIS" is defined in Section 18.3.
B-1
"ASSET DISPOSITION" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or another Restricted Subsidiary, and
(ii) Transfer from the Company to a Restricted
Subsidiary,
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of the Restricted
Subsidiaries or that is obsolete.
"ATTRIBUTABLE DEBT" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Long Term Lease Rentals
required to be paid by the Company or any Subsidiary under such lease during the
remaining term thereof (determined in accordance with generally accepted
financial practice using a discount factor equal to the interest rate implicit
in such lease if known or, if not known, of 7% PER ANNUM).
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, Connecticut, Illinois or
Massachusetts are required or authorized to be closed.
"CAPITAL ASSETS" means all property and equipment of the Company and
the Restricted Subsidiaries (after deducting any reserves applicable thereto)
which would be shown as such on a consolidated balance sheet of such Persons
prepared in accordance with GAAP.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
B-2
"CAPITAL STOCK" means any class of capital stock, share capital or
similar equity interest of a Person.
"CLOSING" is defined in Section 3.
"CLOSING DATE" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" is defined in the introductory sentence of this Agreement.
"CONFIDENTIAL INFORMATION" is defined in Section 21.
"CONSOLIDATED CURRENT DEBT" means all Current Debt of the Company and
the Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED FUNDED DEBT" means the sum of Consolidated Senior Funded
Debt PLUS Consolidated Subordinated Funded Debt.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, PROVIDED that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or a Restricted Subsidiary, and the
income (or loss) of any Person, substantially all of the assets of
which have been acquired in any manner, realized by such other Person
prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company or such
Restricted Subsidiary in the form of cash dividends or similar cash
distributions,
(c) the undistributed earnings of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time
permitted by the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary,
B-3
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
income accrued during such period,
(e) any aggregate net gain, or any aggregate net loss, during
such period arising from the sale, conversion, exchange or other
disposition of Capital Assets,
(f) any gains resulting from any write-up of any assets, or
any loss resulting from any writedown of any assets,
(g) any net gain from the collection of the proceeds of life
insurance policies,
(h) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any
Restricted Subsidiary,
(i) any net income or gain, or any net loss, during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discontinued operations or the disposition thereof,
(j) in the case of a successor to the Company by consolidation
or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets, and
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"CONSOLIDATED NET WORTH" means, at any time,
(a) Consolidated Total Assets MINUS
(b) the total liabilities of the Company and the Restricted
Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and the Restricted Subsidiaries as of such
time prepared in accordance with GAAP.
"CONSOLIDATED SENIOR FUNDED DEBT" means all Senior Funded Debt of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
B-4
"CONSOLIDATED SUBORDINATED FUNDED DEBT" means all Subordinated Funded
Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means the total assets of the Company and
the Restricted Subsidiaries that would appear on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the sum,
without duplication, of:
(a) Consolidated Funded Debt;
(b) the amount of all deferred income tax liabilities of the
Company and the Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP;
(c) all amounts properly attributable to minority interests,
if any, in the stock and surplus of Restricted Subsidiaries; and
(d) Consolidated Net Worth.
"CURRENT DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more from
such date, PROVIDED that (a) Debt outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over a
period of one year or more and (b) Current Maturities of Funded Debt shall
constitute Funded Debt and not Current Debt, even though such Debt by its terms
matures on demand or within one year from such date.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time and with
respect to any item of Funded Debt, the portion of such Funded Debt outstanding
at such time which by the terms of such Funded Debt or the terms of any
instrument or agreement relating thereto is due on demand or within one year
from such time (whether by sinking fund, other required prepayment or final
payment at maturity) and is not directly or indirectly renewable, extendible or
refundable at the option of the obligor under an agreement or firm commitment in
effect at such time to a date one year or more from such time.
B-5
"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; and
(d) any Guaranty of such Person with respect to liabilities of
a type described in clauses (a) to (c), inclusive, hereof.
Without limitation of the foregoing, Debt of any Person shall include all
obligations of such Person of the character described in clauses (a) through (c)
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP. Any Person extending, renewing or refunding any Debt (other than Existing
Debt) shall be deemed to have incurred such Debt at the time of such extension,
renewal or refunding.
"DEBT FACILITY" means any agreement pursuant to which the Company or a
Restricted Subsidiary may incur Debt, as such agreement may be amended,
modified, restated or replaced by another agreement providing for the incurrence
of Debt by any such Person, except for any such amendment, modification,
restatement or replacement that provides for an increase in the amount of Debt
to an amount greater than that which could have been outstanding on the Closing
Date.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater of (i)
2% PER ANNUM above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
from time to time by The Chase Manhattan Bank in New York, New York (or its
successor) as its "base" or "prime" rate.
"DOLLARS" or "$" means lawful currency of the United States of America.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the
B-6
protection of the environment or the release of any materials into the
environment, including but not limited to those related to hazardous substances
or wastes, air emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXCLUDED GUARANTIES" means (i) the Guaranties of the Restricted
Subsidiaries issued on the Closing Date in respect of the Notes, the Existing
Senior Notes, the Senior Notes and the Debt under the Fleet/Chase Debt Facility,
(ii) any other Guaranties of Subsidiaries issued thereafter in respect of the
Debt identified in the foregoing clause (i), (iii) Guaranties of any
refinancing, replacement or renewal of such Debt so long as the aggregate
principal amount of such Debt is not in excess of that outstanding or, in the
case of the Fleet/Chase Debt Facility, available to be borrowed, immediately
after giving effect to the sale of the Notes and the Senior Notes on the Closing
Date and the holders of such Debt (other than any holders of Subordinated Funded
Debt) are parties to the Sharing Agreement, and (iv) any Guaranties of
Subsidiaries of the Existing Senior Notes, the Senior Notes, the Notes or the
obligations of the Company under the Fleet/Chase Debt Facility if Guaranties of
such Subsidiaries shall also have been issued in respect of the Notes pursuant
to Section 9.7(a).
"EXISTING CURRENT DEBT" means Existing Debt which is Current Debt.
"EXISTING DEBT" means
(a) Debt of the Company or any Restricted Subsidiary
outstanding on the Closing Date and identified on Schedule 5.15 (or
included in the aggregate amount set forth in Section 5.15), and any
renewal, refinancing or replacement thereof so long as there shall be
no increase in the principal amount of such Debt outstanding at the
time of such renewal, refinancing or replacement; and
(b) Debt incurred pursuant to a Debt Facility identified in
Schedule 5.15 to which the Company or any Restricted Subsidiary is a
party on the Closing Date (regardless of whether any Debt is
outstanding thereunder on the Closing Date), so long as the aggregate
amount of Debt so incurred at any time is not in excess of the maximum
amount of Debt permitted to be incurred thereunder
B-7
on the Closing Date (assuming satisfaction of all funding conditions on
such date); and
(c) the Excluded Guaranties.
"EXISTING SENIOR FUNDED DEBT" means Existing Debt which is Senior
Funded Debt.
"EXISTING SENIOR NOTE AMENDMENT" means the Amendment dated as of
November 20, 1998, pursuant to which the Existing Senior Note Purchase
Agreements will be amended.
"EXISTING SENIOR NOTE PURCHASE AGREEMENTS" means the separate Note
Purchase Agreements dated as of March 9, 1998, among the Company and the
Purchasers of the Existing Senior Notes as amended by the Existing Senior Note
Amendment and as further amended, supplemented or restated from time to time.
"EXISTING SENIOR NOTES" means the Senior Notes issued under the
Existing Senior Note Purchase Agreements, as such notes may be amended,
supplemented or restated from time to time other than any amendment that would
increase the principal amount thereof above the principal amount outstanding as
of the date of any such amendment.
"EXISTING SUBORDINATED FUNDED DEBT" means Existing Debt which is
Subordinated Funded Debt.
"FAIR MARKET VALUE" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"FLEET/CHASE DEBT FACILITY" means the Debt Facility evidenced by that
certain Credit Agreement dated as of March 9, 1998 among the Company, Fleet
National Bank and The Chase Manhattan Bank, as coagents, Fleet National Bank, as
administrative agent, and the other banks party thereto, providing for a
borrowing availability of up to $75 million.
"FUNDED DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement (including the
Fleet/Chase Debt Facility) on any date shall be deemed to be the average daily
amount outstanding under such facility during the period of 365 consecutive days
ending on and including such date, and not the actual amount outstanding on such
date; PROVIDED, HOWEVER, that, as used in the definitions of "Consolidated
Senior Funded Debt" and
B-8
"Consolidated Funded Debt," but only as such terms are used in Section 10.14,
the amount of Funded Debt outstanding under any such revolving credit or similar
agreement (including the Fleet/Chase Debt Facility) on any date shall be the
actual amount outstanding on such date.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTOR" means, at any time, each Person (including, without
limitation, each of the Initial Guarantors) that at such time is a Guarantor
under a Guaranty Agreement.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
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(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty Agreements
executed by the Initial Guarantors pursuant to Section 4.14 and each of the
other Guaranty Agreements executed and delivered from time to time pursuant to
Section 9.7, in each case as amended or supplemented from time to time.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
14.1.
"IBH DEBT" means the Debt of Infratest and its subsidiaries in the
aggregate principal amount that may be incurred under the credit facilities to
which Infratest is a party as of the Closing Date.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
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(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
Without limitation of the foregoing, Indebtedness of any Person shall include
all obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"INFRATEST" means Infratest Xxxxx Aktiengesellschaft Holding, a German
Aktiengesellschaft (stock corporation).
"INFRATEST ACQUISITION" means the purchase and sale of all of the
issued and outstanding shares of common stock of Infratest, as contemplated by
the Acquisition Agreement.
"INITIAL GUARANTOR" means each of Xxxxxxxx/Xxxxxx Associates, Inc., a
Delaware corporation, NFO Research, Inc., a Delaware corporation, Plog Research
Inc., a Delaware corporation, Prognostics Corp., a Delaware corporation, PSI
Holding Corp., a Delaware corporation, and Xxxx-Xxxxxx-Xxxx, Inc., a Delaware
corporation.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTER-COMPANY DEBT" means Debt of the Company owing to any
Wholly-Owned Restricted Subsidiary or Debt of any Restricted Subsidiary owing to
the Company or one or more Wholly-Owned Restricted Subsidiaries.
"INVESTMENT" means any investment, made in cash or by delivery of
property, by the Company or any of the Restricted Subsidiaries in any Person,
whether by acquisition of stock, Debt or other obligation or Security, or by
loan, Guaranty, advance, capital contribution or otherwise.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital
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Lease, upon or with respect to any property or asset of such Person (including
in the case of stock, stockholder agreements, voting trust agreements and all
similar arrangements to the extent that such arrangements affect control of the
issuer of such stock or the payment of dividends by such issuer).
"LONG TERM LEASE RENTALS" means, for a lease (other than a Capital
Lease) arising from a Sale-and-Leaseback Transaction having a term (including
terms of renewal or extension at the option of the lessor or the lessee, whether
or not such option has been exercised) expiring more than two (2) years after
the commencement of the initial term thereof, the sum of the minimum amount of
rental and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee, EXCLUDING any amounts required to be paid
by the lessee (whether or not therein designated as rental or additional rental)
(a) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b) which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee.
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001 (a)(3) of ERISA).
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any
Property by any Person, an amount equal to the DIFFERENCE of:
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
MINUS
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with such
Transfer, and all taxes arising on account of any gains in respect of
such Transfer which are actually payable by such Person.
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"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a trust, an unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) or other plan that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability which is covered by Title IV of ERISA.
"PREFERRED STOCK" means any class of Capital Stock of a Person that is
preferred over any other class of Capital Stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.
"PRO FORMA CONSOLIDATED INTEREST EXPENSE" means, in respect of any
period, all interest in respect of Debt of the Company and the Restricted
Subsidiaries (including imputed interest on Capital Lease Obligations) deducted
in determining Consolidated Net Income for such period, determined as if
(a) all Persons which became or ceased to be Restricted
Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, and
(b) all acquisitions or dispositions of all or substantially
all of the assets of any Person or Restricted Subsidiary which occurred
during such period had occurred on the first day of such period (and
all incurrences or retirements of Debt in connection with any such
acquisition or disposition had occurred on such first day).
For purposes of this definition, in determining the interest that would have
accrued during any period on Debt which bears a floating rate of interest, the
interest rate in effect for all of such
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period shall be deemed to be the interest rate that would have been in effect on
the first day of such period had such Debt been outstanding on such day.
"PRO FORMA EBITDA" means, in respect of any period, Consolidated Net
Income for such period PLUS, to the extent deducted in the determination thereof
for such period, each of the following:
(a) Pro Forma Consolidated Interest Expense;
(b) all depreciation and amortization allowances and other
noncash expenses of the Company and the Restricted Subsidiaries; and
(c) all taxes imposed on or measured by income or excess
profits;
in each case determined as if (i) all Persons which became or ceased to be
Restricted Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, (ii) all acquisitions or
dispositions of all or substantially all of the assets of any Person or
Restricted Subsidiary which occurred during such period had occurred on the
first day of such period (and all incurrences or retirements of Debt in
connection with any such acquisition or disposition had occurred on such first
day), and (iii) all planned future reductions in the compensation paid during
such period to the owners of the equity interests in any Person referred to in
the foregoing clauses (i) and (ii) had been in effect on the first day of such
period. For purposes of the immediately preceding clause (iii), a planned future
reduction in the compensation of any such owner shall be deemed to mean the
amount by which the salary and bonus payable to such owner in respect of the
period for which Pro Forma EBITDA is to be determined (the "REFERENCE PERIOD")
exceeds the salary and bonus the Company intends to pay such owner for the
equivalent period immediately following the Reference Period, as evidenced by
the written agreement of such owner.
"PROPERTY OR PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, xxxxxx or
inchoate.
"PTE" is defined in Section 6.2(a).
"QPAM EXEMPTION" is defined in Section 6.2(d).
"QUALIFIED INSTITUTIONAL BUYER" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"REQUIRED HOLDERS" means, at any time, the holder or holders of at
least 51% in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).
B-14
"REQUIRED SENIOR DEBT HOLDERS" means as of the date of any
determination under this Agreement, (a) in the case of any notice pursuant to
Section 13(c) or (d), either (x) the holders of 35% in aggregate principal
amount of the Senior Notes and the Existing Senior Notes voting as a single
class, or (y) the Administrative Agent under the Fleet/Chase Debt Facility
(including any successor to Fleet National Bank, as Administrative Agent), and
(b) in the case of any notice pursuant to Section 13(e) a notice from the
holders of the Requisite Senior Debt,
No notice shall be effective:
(i) pursuant to Section 13(c) unless, in the case of any notice from
the holders of the Senior Notes and the Existing Senior Notes, the aggregate
unpaid principal amount of such Senior Debt then outstanding shall be more than
$10,000,000 and in the case of any notice from the Administrative Agent under
the Fleet/Chase Debt Facility, the aggregate unpaid principal amount of Senior
Debt outstanding under the Fleet/Chase Debt Facility shall be more than
$10,000,000, PROVIDED that if neither group of holders of Senior Debt shall hold
an amount in excess of the required minimum set forth in this clause (i), then
the minimum outstanding principal amount for each group shall be reduced to
$5,000,000, and
(ii) pursuant to Section 13(d) unless, in the case of any notice from
the holders of the Senior Notes and the Existing Senior Notes, the aggregate
unpaid principal amount of such Senior Debt then outstanding shall be more than
$15,000,000 and in the case of any notice from the Administrative Agent under
the Fleet/Chase Debt Facility, the aggregate unpaid principal amount of Senior
Debt outstanding under the Fleet/Chase Debt Facility shall be more than
$15,000,000, PROVIDED that if neither group of holders of Senior Debt shall hold
an amount in excess of the required minimum set forth in this clause (ii), then
the minimum outstanding principal amount for each group shall be reduced to
$5,000,000.
"REQUISITE SENIOR DEBT" shall mean (x) in the case of the Senior Notes
and the Existing Senior Notes, the holders of 51% in aggregate unpaid principal
amount of such Senior Debt voting as a single class, and (y) in the case of the
Fleet/Chase Debt Facility, the vote of the Administrative Agent and in each case
voting in accordance with the following:
(i) a vote from both classes of Senior Debt if, (x) the Senior Notes
and the Existing Senior Notes shall be outstanding in the aggregate unpaid
principal amount equal to or more than $15,000,000, and the aggregate unpaid
principal amount of Senior Debt outstanding under the Fleet/Chase Debt Facility
shall be equal to or more than $15,000,000; or (y) the Senior Notes and the
Existing Senior Notes shall be outstanding in an aggregate unpaid principal
amount less than $15,000,000 but more than $5,000,000 and the aggregate unpaid
principal amount of Senior Debt outstanding under the Fleet/Chase Debt Facility
shall be less than $15,000,000 but more than $5,000,000;
(ii) a vote from only the Senior Notes and the Existing Senior Notes if
the Senior Notes and the Existing Senior Notes shall be outstanding in the
aggregate unpaid principal amount
B-15
equal to or more than $15,000,000, and the aggregate unpaid principal amount of
Senior Debt outstanding under the Fleet/Chase Debt Facility shall be less than
$15,000,000;
(iii) a vote from only the Administrative Agent if the Senior Debt
outstanding under the Fleet/Chase Debt Facility shall be outstanding in an
aggregate unpaid principal amount equal to or more than $15,000,000 and the
aggregate unpaid principal amount of Senior Notes and the Existing Senior Notes
shall be less than $15,000,000;
(iv) a vote from only the Senior Notes and the Existing Senior Notes if
the Senior Notes and the Existing Senior Notes shall be outstanding in the
aggregate unpaid principal amount less than $15,000,000 but equal to or more
than $5,000,000, and the aggregate unpaid principal amount of Senior Debt
outstanding under the Fleet/Chase Debt Facility shall be less than $5,000,000;
(v) a vote from only the Administrative Agent if the Senior Debt
outstanding under the Fleet/Chase Debt Facility shall be outstanding in the
aggregate unpaid principal amount less than $15,000,000 but equal to or more
than $5,000,000, and the aggregate unpaid principal amount of Senior Notes and
the Existing Senior Notes shall be less than $5,000,000; and
(vi) a vote of a majority in aggregate principal amount of both classes
of Senior Debt (voting as a single class) if the aggregate unpaid principal
amount of the Senior Notes and the Existing Senior Notes is less than $5,000,000
and the unpaid principal amount of Senior Debt outstanding under the Fleet/Chase
Debt Facility is less than $5,000,000.
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments except the following:
(a) current assets arising from the sale of goods and services
in the ordinary course of business of the Company and the Restricted
Subsidiaries;
(b) Investments in the Company or one or more Restricted
Subsidiaries in the ordinary course of business;
(c) Investments in any Person which, after giving effect to
such transaction, would be a Restricted Subsidiary;
(d) advances to officers, directors and employees of the
Company or any of the Restricted Subsidiaries for expenses incurred in
the ordinary course of business of the Company or such Restricted
Subsidiary;
(e) Investments in United States Governmental Securities;
B-16
(f) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank;
(g) Investments in debt obligations of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's, or an equivalent rating by any other credit rating agency of
recognized national standing;
(h) Investments in preferred stock of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Moody's or an equivalent rating by any other credit rating agency of
recognized national standing;
(i) Investments in obligations of any state of the United
States of America, or any governmental subdivision of any such state,
in each case rated "A" or better by S&P, "A2" or better by Moody's or
an equivalent rating by any other credit rating agency of recognized
national standing;
(j) Investments which are incurred in connection with
transactions permitted by Section 10.10; and
(k) to the extent not included in the foregoing clauses (a) to
(j), inclusive, cash and cash equivalents.
As of any date of determination, each Restricted Investment shall be valued at
the greater of:
(x) the amount at which such Restricted Investment is shown on
the books of the Company or any of the Restricted Subsidiaries (or zero
if such Restricted Investment is not shown on any such books); and
(y) either
(i) in the case of any Guaranty of the obligation of
any Person, the amount which the Company or any of the
Restricted Subsidiaries has paid on account of such obligation
less any recoupment by the Company or such Restricted
Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment,
the excess of (x) the greater of (A) the amount originally
entered on the books of the Company or any of the Restricted
Subsidiaries with respect thereto and (B) the cost thereof to
the Company or the Restricted Subsidiary over (y) any return
of capital (after income
B-17
taxes applicable thereto) upon such Restricted Investment
through the sale or other liquidation thereof or part thereof
or otherwise.
As used in this definition of "Restricted Investments":
"ACCEPTABLE BANK" means any bank or trust company (i) which is
organized under the laws of the United States of America or any State thereof,
(ii) which has capital, surplus and undivided profits aggregating at least
$50,000,000, and (iii) which has outstanding senior unsecured Debt rated "A" or
better by S&P, "A2" or better by Moody's or an equivalent rating by any other
credit rating agency of recognized national standing.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
"UNITED STATES GOVERNMENTAL SECURITY" means any direct obligation of,
or obligation guaranteed by, the United States of America, or any agency
controlled or supervised by or acting as an instrumentality of the United States
of America pursuant to authority granted by the Congress of the United States of
America, so long as such obligation or guarantee shall have the benefit of the
full faith and credit of the United States of America which shall have been
pledged pursuant to authority granted by the Congress of the United States of
America.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY STOCK" means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Restricted Subsidiary owned
by such Person.
"SALE-AND-LEASEBACK TRANSACTION" means a transaction or series of
transactions pursuant to which the Company or any Restricted Subsidiary shall
sell or transfer to any Person (other than the Company or a Restricted
Subsidiary) any property, whether now owned or hereafter acquired, and, as part
of the same transaction or series of transactions, the Company or any Restricted
Subsidiary shall rent or lease as lessee (other than pursuant to a Capital
Lease), or similarly acquire the right to possession or use of, such property or
one or more properties which it intends to use for the same purpose or purposes
as such property.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY" has the meaning set forth in section 2(l) of the Securities
Act.
"SENIOR DEBT" shall mean all Indebtedness for borrowed money of the
Company other than Subordinated Funded Debt. For purposes of the subordination
provisions set forth in
B-18
Section 13, all trade or accounts payable of the Company shall be specifically
excluded from the definition of Senior Debt.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"SENIOR FUNDED DEBT" means (a) any Funded Debt of the Company (other
than Subordinated Funded Debt) and (b) any Funded Debt of any Restricted
Subsidiary.
"SENIOR NOTE PURCHASE AGREEMENT" means the separate Note Purchase
Agreements, dated as of November 20, 1998, among the Company and the purchasers
of the Senior Notes issued thereunder as amended, supplemented or restated from
time to time.
"SENIOR NOTE PURCHASERS" means the purchasers of the Senior Notes.
"SENIOR NOTES" means the senior promissory notes issued under the
Senior Note Purchase Agreement, as such notes may be amended, supplemented or
restated from time to time other than any amendment that would increase the
principal amount thereof above the principal amount outstanding as of the date
of any such amendment.
"SHARING AGREEMENT" means the Sharing Agreement, dated as of November
20, 1998, among the holders of the Existing Senior Notes, the Senior Notes and
the banks party to the Fleet/Chase Credit Facility.
"SOURCE" is defined in Section 6.2.
"SPECIFIED SENIOR DEBT" means the Existing Senior Notes, the Senior
Notes, and the loans outstanding under the Fleet/Chase Debt Facility.
"SUBORDINATED FUNDED DEBT" means the Notes and any other unsecured
Funded Debt that is subordinated in right of payment or security to the Debt of
the Company substantially in the manner set forth in Section 13 or in such other
manner as shall be satisfactory to the Required Holders.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such
B-19
Person or one or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Company.
"SUCCESSOR CORPORATION" is defined in Section 10.10.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TRANSFER" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Restricted Subsidiary Stock.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
designated as such by the Company by written notice to the holders of the Notes
given within 5 Business Days of such designation, PROVIDED that, at the time of
such designation,
(a) such Subsidiary does not own any Funded Debt or Capital
Stock of the Company or any Restricted Subsidiary,
(b) no Default or Event of Default would exist, and
(c) the Company would be able to incur $1 of Funded Debt
pursuant to both Section 10.1 and Section 10.2;
PROVIDED FURTHER that such notice shall contain a statement to the effect that
all conditions to such designation have been satisfied and shall set forth the
calculations reasonably necessary to show satisfaction of the condition set
forth in the foregoing clause (c). Any Subsidiary of the Company designated as
an Unrestricted Subsidiary may not thereafter be a Restricted Subsidiary.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, at any time, any Restricted
Subsidiary 100% of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
B-20
EXHIBIT 1
FORM OF SENIOR SUBORDINATED NOTE
NFO WORLDWIDE, INC.
9.84% SENIOR SUBORDINATED NOTE DUE NOVEMBER 15, 2008
No. R- November__, 1998
PPN:
FOR VALUE RECEIVED, the undersigned NFO WORLDWIDE, INC. (herein called
the "COMPANY"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to ______________, or registered assigns,
the principal sum of __________ DOLLARS ($____________) on November 15, 2008,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance thereof at the rate of 9.84% per annum from the date
hereof, payable semi-annually on the 1st day of May and November in each year,
commencing with the May 1 or November 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 11.84% or (ii) 2% over the rate of interest publicly announced
from time to time by The Chase Manhattan Bank in New York, New York (or its
successor) as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the address shown in the register maintained by the Company for such
purpose or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreements
referred to below.
This Note is one of a series of Senior Subordinated Notes (herein
called the "NOTES") issued pursuant to separate Note Purchase Agreements, dated
as of November 20, 1998 (as from time to time amended, the "NOTE PURCHASE
AGREEMENTS"), between the Company and the respective purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representations set forth in Section 6.2 and in the second
sentence of Section 6.1 of the Note Purchase Agreements.
2
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreements. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note and the indebtedness evidenced hereby, including principal,
interest and any Make-Whole Amount, shall at all times be and remain junior and
subordinate in right of payment to any and all Senior Debt as defined in the
Note Purchase Agreements, all in the manner and to the extent set forth in the
Note Purchase Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS ARE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
NFO WORLDWIDE, INC.
By:_________________________
Name:
Title:
EXHIBIT 4.14
GUARANTY AGREEMENT
GUARANTY AGREEMENT (this "GUARANTY AGREEMENT") dated as of November 20,
1998 made by the undersigned (the "GUARANTOR"), in favor of the holders from
time to time of the $17,000,000 9.84% Senior Subordinated Notes due November 15,
2008 (the "NOTES") of NFO Worldwide, Inc. (the "COMPANY"), each such Notes being
issued pursuant to the several Note Purchase Agreements, dated as of November
20, 1998 (as amended from time to time, the "NOTE PURCHASE AGREEMENTS").
PRELIMINARY STATEMENTS:
WHEREAS, the terms used herein have the respective meanings ascribed
thereto in the Note Purchase Agreements (unless otherwise defined herein);
WHEREAS, the Guarantor is a Subsidiary of the Company and is
financially interested in its affairs and it is a condition to the purchasers of
the Notes entering into the Note Purchase Agreements (such purchasers and the
holders from time to time of the Notes being referred to, collectively, as the
"NOTEHOLDERS",) that this Guaranty is being executed and delivered to the
Noteholders.
NOW, THEREFORE, in consideration of the foregoing, the Guarantor agrees
as follows:
SECTION 1. GUARANTY OF PAYMENT.
The Guarantor absolutely unconditionally and irrevocably guarantees to
the Noteholders the punctual payment of all sums now owing or which may in the
future be owing by the Company under the Note Purchase Agreements and the Notes,
when the same are due and payable, whether on demand, at stated maturity, by
acceleration or otherwise, and whether for principal, interest, Make-Whole
Amount, premium, fees, expenses, indemnification or otherwise (all of the
foregoing sums being the "GUARANTEED OBLIGATIONS"). The Guaranteed Obligations
include, without limitation, interest accruing after the commencement of a
proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at
the rate or rates provided in the Note Purchase Agreements and the Notes. This
Guaranty is a guaranty of payment and not of collection only. None of the
Noteholders shall be required to exhaust any right or remedy or take any action
against the Company or any other person or entity or any collateral. The
Guarantor agrees that, as between the Guarantor and the Noteholders, the
Guaranteed Obligations may be declared to be due and payable for the purposes of
this Guaranty, notwithstanding any stay, injunction or other prohibition which
may prevent, delay or vitiate any declaration as regards the Company and that,
in the event of a declaration or attempted declaration, the Guaranteed
Obligations shall immediately become due and payable by the Guarantor for the
purposes of this Guaranty.
EXHIBIT 4.14
SECTION 2. GUARANTY ABSOLUTE.
The Guarantor guarantees that the Guaranteed Obligations shall be paid
strictly in accordance with the terms of the Note Purchase Agreements and the
Notes. The liability of the Guarantor under this Guaranty is absolute,
irrevocable and unconditional irrespective of: (a) any changes in the time,
manner or place of payment of, or in any other term of, all or any of the Note
Purchase Agreements, the Notes or Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any of the terms of any of the
Note Purchase Agreements, the Notes or the Guaranteed Obligations; (b) any
release or amendment or waiver of, or consent to departure from, any other
guaranty or support document, or any exchange, release or nonperfection of any
security interest, for all or any of the Note Purchase Agreements, the Notes or
the Guaranteed Obligations; (c) any present or future law, regulation or order
of any jurisdiction (whether of right or in fact) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any term of any of
the Note Purchase Agreements, the Notes or the Guaranteed Obligations; (d)
without being limited by the foregoing, any lack of validity or enforceability
of any of the Note Purchase Agreements, the Notes or the Guaranteed Obligations;
or (e) any other defense whatsoever which might constitute a defense available
to, or discharge of, the Company or a guarantor (other than that the Guaranteed
Obligations have been Fully Satisfied, as defined below).
SECTION 3. GUARANTY IRREVOCABLE.
This Guaranty is a continuing guaranty and shall remain in full force
and effect until the Guaranteed Obligations have been Fully Satisfied. For
purposes of this Guaranty, "FULLY SATISFIED" shall mean, as of any date, that,
on or before such date, (a) the principal of, Make-Whole Amount in respect of,
and interest accrued to such date on any Guaranteed Obligations shall have been
paid in full in cash and (b) all fees, expenses and other amounts then due and
payable which constituted Guaranteed Obligations shall have been paid in full in
cash.
SECTION 4. REINSTATEMENT.
Notwithstanding anything herein to the contrary, this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise
be returned by any Noteholders on the insolvency, bankruptcy, or reorganization
of the Company or otherwise, all as though such payment had not been made.
SECTION 5. SUBROGATION.
The Guarantor shall not exercise any rights which it may acquire by way
of subrogation, by any payment made under this Guaranty or otherwise, until all
the liabilities have been Fully Satisfied. If any amount is paid to the
Guarantor on account of subrogation rights under this Guaranty at any time when
all the Guaranteed Obligations have not been Fully Satisfied, the amount shall
be held in trust for the benefit of the Noteholders and shall be promptly paid
to the Noteholders to be credited and
EXHIBIT 4.14-2
applied to the Guaranteed Obligations, whether matured or unmatured or absolute
or contingent, in accordance with the terms of the Note Purchase Agreements. If
the Guarantor makes payment to the Noteholders of all or any part of the
Guaranteed Obligations and all the Guaranteed Obligations have been Fully
Satisfied, the Noteholders shall, at the Guarantor's request, execute and
deliver to the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Guarantor of any interest in the Guaranteed Obligations resulting from the
payment.
SECTION 6. SUBORDINATION.
Without limiting the Noteholders' rights under any other agreement, any
liabilities owed by the Company to the Guarantor in connection with any
extension of credit or financial accommodation by the Guarantor to or for the
account of the Company, including but not limited to interest accruing at the
agreed contract rate after the commencement of a bankruptcy or similar
proceeding, are hereby subordinated to the Guaranteed Obligations, and such
liabilities of the Company to the Guarantor, if the Required Holders so request
upon the occurrence or continuation of a Default or Event of Default, shall be
collected, enforced and received by the Guarantor as trustee for the Noteholders
and shall be paid over to the Noteholders on account of the Guaranteed
Obligations but without reducing or affecting in any manner the liability of the
Guarantor under the other provisions of this Guaranty.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
The Guarantor hereby represents and warrants that:
(a) INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. The
Guarantor is duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged, and is
duly qualified as a foreign corporation and in good standing under the
laws of each other jurisdiction in which such qualification is
required, except where the failure to so qualify has not had, and is
not reasonably expected to have, a Material Adverse Effect or to
materially adversely affect the ability of the Guarantor to perform its
obligations under this Guaranty Agreement.
(b) CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The
execution, delivery and performance by the Guarantor of this Guaranty
Agreement have been duly authorized by all necessary corporate action
and do not and will not: (i) require any consent or approval of its
stockholders; (ii) contravene its charter or bylaws; (iii) violate any
provision of, or require any filing, registration, consent or approval
under, any law, rule, regulation (including, without limitation,
Regulation U), order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to the Guarantor or
any of its subsidiaries; (iv) result in a breach of or constitute a
default or
EXHIBIT 4.14-3
require any consent under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which the Guarantor is a
party or by which it or its properties may be bound or affected; (v)
result in, or require, the creation or imposition of any Lien upon or
with respect to any of the properties now owned or hereafter acquired
by the Guarantor; or (vi) cause the Guarantor or any subsidiary to be
in default under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture,
agreement, lease or instrument, except where such contravention,
violation, breach, default or Lien is not reasonably expected to have a
Material Adverse Effect or to materially adversely affect the ability
of the Guarantor to perform its obligations under this Guaranty
Agreement.
(c) LEGALLY ENFORCEABLE AGREEMENTS. This Guaranty Agreement is
a legal, valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally
and by equitable principles relating to availability of equitable
remedies.
(d) LITIGATION. There are no actions, suits or proceedings
pending or, to the knowledge of the Guarantor, threatened, against or
affecting the Guarantor or any of its subsidiaries before any court,
governmental agency or arbitrator, which in any one case or in the
aggregate, is reasonably expected to have a Material Adverse Effect or
to materially adversely affect the ability of the Guarantor to perform
its obligations under this Guaranty Agreement.
(e) SOLVENCY.
(i) The present fair saleable value of the assets of
the Guarantor before giving effect to all the transactions
contemplated by the Note Purchase Agreements exceeds the
amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including contingent
liabilities) of the Guarantor as they mature.
(ii) The property of the Guarantor does not
constitute unreasonably small capital for the Guarantor to
carry out its business as now conducted and as proposed to be
conducted, including the capital needs of the Guarantor.
(iii) The Guarantor does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and
amounts of cash to be received by the Guarantor, and of
amounts to be payable on or in respect of debt of the
Guarantor.)
EXHIBIT 4.14-4
SECTION 8. REMEDIES GENERALLY; SEPARATE ACTION; OTHER ENFORCEMENT RIGHTS.
The remedies provided in this Guaranty Agreement are cumulative and not
exclusive of any remedies provided by law. Each of the rights and remedies
granted under this Guaranty Agreement to each Noteholder may be exercised by
such Noteholder without notice by such Noteholder to, or the consent of or any
other action by, any other Noteholder. Each Noteholder may proceed to protect
and enforce this Guaranty Agreement by suit or suits or proceedings in equity,
at law or in bankruptcy, and whether for the specific performance of any
covenant or agreement contained herein or in execution or aid of any power
herein granted or for the recovery of judgment for the obligations hereby
guarantied or for the enforcement of any other proper, legal or equitable remedy
available under applicable law.
SECTION 9. SETOFF.
Upon the occurrence and during the continuance of any Event of Default,
the Guarantor agrees that, in addition to (and without limitation of) any right
of setoff, banker's lien or counterclaim the Noteholders may otherwise have, the
Noteholders shall be entitled at their option, to offset balances (general or
special, time or demand, provisional or final) held by them for the account of
the Guarantor at any of their respective offices, in U.S. dollars or in any
other currency, against any amount payable by the Guarantor under this Guaranty
Agreement which is not paid when due following any applicable notice and cure
periods (regardless of whether such balances are then due to the Guarantor), in
which case the Noteholders taking such action shall promptly notify the
Guarantor thereof; PROVIDED that the failure of any Noteholder to give such
notice shall not affect the validity of such action.
SECTION 10. WAIVERS OR PRESENTMENT, NOTICE OF DISHONOR, ETC.
The Guarantor waives presentment, notice of dishonor, protest, notice
of acceptance of this Guaranty Agreement or incurrence of the Guaranteed
Obligations and any other formality with respect to any of the Guaranteed
Obligations or this Guaranty Agreement.
SECTION 11. AMENDMENTS AND WAIVERS.
No amendments or waiver of any provision of this Guaranty Agreement,
nor consent to any departure by the Guarantor therefrom, shall be effective
unless it is in writing and signed by all of the Noteholders, and then the
waiver of consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any Noteholder to
exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver or preclude any other or further exercise thereof or the
exercise of any other right. This Guaranty Agreement shall be automatically
released in the circumstances set forth in Section 9.7(b) and 10.11 (c) of the
Note Purchase Agreement.
EXHIBIT 4.14-5
SECTION 12. EXPENSES.
The Guarantor shall reimburse each Noteholder on demand for all costs,
expenses and charges (including, without limitation, reasonable fees and charges
of external legal counsel for the Noteholders) incurred by such Noteholder in
connection with the performance or enforcement of this Guaranty Agreement. The
obligations of the Guarantor under this Section shall survive the termination of
this Guaranty Agreement.
SECTION 13. ASSIGNMENT.
This Guaranty Agreement shall be binding on, and shall inure to the
benefit of, the Guarantor, the Noteholders and their respective successors and
assigns; PROVIDED that the Guarantor may not assign or transfer its rights or
obligations under this Guaranty Agreement. Without limiting the generality of
the foregoing, each Noteholder may assign or otherwise transfer its rights under
the Note Purchase Agreements and the Notes to any other person or entity in
accordance with the relevant Note Purchase Agreement, and such assignee or
transferee shall then become vested with all the rights granted to such
Noteholders in this Guaranty Agreement or otherwise.
SECTION 14. CAPTIONS.
The headings and captions in this Guaranty Agreement are for
convenience only and shall not affect the interpretation or construction of this
Guaranty Agreement.
SECTION 15. GOVERNING LAW, ETC.
THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF CONNECTICUT.
THE GUARANTOR CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE STATE
OR FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT. SERVICE OF PROCESS BY ANY
NOTEHOLDER IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE GUARANTOR
IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS
OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO TIME. THE GUARANTOR WAIVES ANY
RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL. TO THE EXTENT THAT THE GUARANTOR HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), THE
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF THE GUARANTEED
OBLIGATIONS UNDER THIS GUARANTY.
SECTION 16. COMMERCIAL WAIVER.
THE GUARANTOR ACKNOWLEDGES THAT THE GUARANTEED OBLIGATIONS ARE FOR
COMMERCIAL PURPOSES AND WAIVES ANY RIGHT TO NOTICE AND HEARING UNDER SECTIONS
52278a THROUGH 52278n OF THE CONNECTICUT GENERAL STATUTES AS NOW OR HEREAFTER
AMENDED AND AUTHORIZES THE ATTORNEY OF ANY NOTEHOLDER, OR ANY SUCCESSOR THERETO,
TO ISSUE A WRIT OF PREJUDGMENT REMEDY WITHOUT COURT
EXHIBIT 4.14-6
ORDER. FURTHER, THE GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE
BENEFITS OF ALL VALUATION, APPRAISEMENTS, HOMESTEAD, EXEMPTION, STAY, REDEMPTION
AND MORATORIUM LAWS NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAWS. THE
GUARANTOR ACKNOWLEDGES THAT IT MAKES THESE WAIVERS AND THE WAIVERS CONTAINED IN
SECTION 15 KNOWINGLY AND VOLUNTARILY AND ONLY AFTER EXTENSIVE CONSIDERATION OF
THE RAMIFICATIONS OF THESE WAIVERS WITH ITS ATTORNEYS.
SECTION 17. OBLIGATIONS SUBORDINATED TO SENIOR DEBT.
Notwithstanding anything to the contrary contained herein, as long as
any Senior Debt is outstanding, the rights of the Noteholders under this
Guaranty Agreement shall be subordinated to Senior Debt on the terms and
conditions set forth in Section 13 of the Note Purchase Agreements (including
the limitations on payments to be received by the Noteholders and the
application of moneys received in respect of the Notes, and the exercise of any
remedies under this Guaranty Agreement shall be limited in the manner and with
the same effect as if the Guarantor were named as the Company in Section 13 of
the Note Purchase Agreements.
The subordination provisions referred to in the immediately preceding
paragraph are solely for the purpose of defining the relative rights of the
holders of Senior Debt on the one hand, and the Noteholders on the other hand,
and nothing herein shall impair, as between the Guarantor and the Noteholders,
the obligation of the Guarantor which is unconditional and absolute, to pay the
Liabilities in accordance with their terms, nor shall anything herein prevent
the Noteholders from exercising all remedies otherwise permitted by applicable
law or hereunder upon default hereunder or under the Note Purchase Agreements,
subject to the rights of the holders of Senior Debt as herein provided for.
SECTION 18. SAVINGS CLAUSE.
(a) It is the intent of the Guarantor and the Noteholders that the
Guarantor's maximum obligations hereunder shall be equal to, but not in excess
of:
(i) in a case or proceeding commenced by or against the
Guarantor under the Bankruptcy Code of the United States of America
(the "BANKRUPTCY CODE"), the maximum amount which would not otherwise
cause the Guaranteed Obligations (or any other obligations of the
Guarantor to any Noteholder) to be avoidable or unenforceable against
the Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any
state fraudulent transfer or fraudulent conveyance act or statute
applied in such case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against the
Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum
amount which would not otherwise cause the Guaranteed
EXHIBIT 4.14-7
Obligations (or any other obligations of the Guarantor to any
Noteholder) to be avoidable or unenforceable against the Guarantor
under such law, statute or regulation including, without limitation,
any state fraudulent transfer or fraudulent conveyance act or statute
applied in any such case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of the Guarantor to any
Noteholder) shall be determined in any such case or proceeding shall hereinafter
be referred to as the "AVOIDANCE PROVISIONS").
(b) To the end set forth in Section 18(a), but only to the extent that
the Guaranteed Obligations would otherwise be subject to avoidance under the
Avoidance Provisions if the Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for the Guaranteed
Obligations, or if the Guaranteed Obligations would render the Guarantor
insolvent, or leave the Guarantor with unreasonably small capital to conduct its
business, or cause the Guarantor to have incurred debts (or to have intended to
have incurred debts) beyond its ability to pay such debts as they mature, in
each case as of the time any of the Guaranteed Obligations are deemed to have
been incurred under the Avoidance Provisions and after giving effect to
contribution as among the Guarantor and other guarantors, the maximum Guaranteed
Obligations for which the Guarantor shall be liable hereunder shall be reduced
to that amount which, after giving effect thereto, would not cause the
Guaranteed Obligations (or any other obligations of the Guarantor to any
Noteholder), as so reduced, to be subject to avoidance under the Avoidance
Provisions. This Section 18 is intended solely to preserve the rights of the
Noteholders hereunder to the maximum extent that would not cause the Guaranteed
Obligations of the Guarantor to be subject to avoidance under the Avoidance
Provisions, and neither the Guarantor nor any other Person shall have any right
or claim under this Section 18 as against any Noteholder that would not
otherwise be available to such Person under the Avoidance Provisions.
SECTION 19. JUDGMENT CURRENCY.
(a) The obligations of the Guarantor under this Guaranty, the Notes and
the Note Purchase Agreements to make payments in Dollars or in any Alternative
Currency (the "OBLIGATION CURRENCY") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Noteholders of the
full amount of the Obligation Currency expressed to be payable to them
hereunder. If for the purpose of obtaining or enforcing judgment against the
Guarantor in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "JUDGMENT CURRENCY") an amount due
in the Obligation Currency, the conversion shall be made, at the Alternative
Currency Equivalent or Dollar Equivalent, in the case of any Alternative
Currency or Dollars, and, in the case of other currencies, the rate of exchange
(as quoted by the Required Holders or if the Required Holders do not quote a
rate of exchange in such currency by a known dealer in such currency designated
by the Noteholders) determined, in each case, as on
EXHIBIT 4.14-8
the Banking Day immediately preceding the day on which the judgment is given
(such Banking Day being hereinafter referred to as the "JUDGMENT CURRENCY
CONVERSION DATE").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Guarantor covenants and agrees to pay such additional amounts, if any
(but in any event not a lesser amount), as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate of exchange prevailing
on the Judgment Currency Conversion Date.
(c) For purposes of determining the Alternative Currency Equivalent or
Dollar Equivalent rate of exchange for this Section, such amount shall include
any premium and costs payable in connection with the purchase of the Obligation
Currency.
SECTION 20. DEFINED TERMS.
"ALTERNATIVE CURRENCY" means British Pounds, French Francs, German
Deutschmarks, Japanese Yen, Hong Kong Dollars, Canadian Dollars, New Zealand
Dollars, Australian Dollars, Euro (or the applicable unit of combined currency
determined by the European economic community when available) or such other
currency other than Dollars that the Company may reasonably request from time to
time, which the Noteholders are able to reasonably accommodate.
"ALTERNATIVE CURRENCY EQUIVALENT" means, with respect to an amount of
Dollars on any date in relation to any specified Alternative Currency, the
amount of such specified Alternative Currency that may be purchased with such
amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
"BANKING DAY" means any day on which commercial banks are not
authorized or required by law to close in New York, New York.
"DOLLAR EQUIVALENT" means, with respect to an amount of any Alternative
Currency on any date in relation to Dollars, the amount of Dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate with respect to such Alternative Currency on such date.
"SPOT EXCHANGE RATE" means, on any date of determination thereof, (a)
with respect to any Alternative Currency, the spot rate at which Dollars are
offered for such Alternative Currency on such day by the principal branch of the
Fleet National Bank at approximately 11:00 a.m. (Boston, Massachusetts time),
and (b) with respect to Dollars in relation to any specified Alternative
Currency, the spot rate at which such specified Alternative Currency is offered
on such date by the principal branch of the Fleet National Bank for Dollars at
approximately 11:00 a.m. (Boston, Massachusetts time).
EXHIBIT 4.14-9
IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Guaranty.
[Name of Guarantor]
By______________________
Name:
Title
EXHIBIT 4.14-10
