Exhibit 10.2.5 Investment and Deposit Agreement
INVESTMENT
AND
DEPOSIT AGREEMENT
Dated as of September 30, 1999
between
Vestar Capital Partners III, L.P.
and
BANK OF AMERICA, N. A.,
in its capacity as Agent for the Lenders herein defined
TABLE OF CONTENTS
SECTION 1 DEFINITIONS..........................................................1
Section 1.1 Definitions..............................................1
Section 1.2 Terms Generally..........................................2
Section 1.3 Accounting Terms.........................................2
SECTION 2 MANDATORY INVESTMENTS................................................3
Section 2.1 Leverage Reduction in Connection with Covenant Defaults..3
Section 2.2 Leverage Reduction in Connection with Shirt Group Sale...3
Section 2.3 Leverage Reduction in Bankruptcy.........................3
Section 2.4 Limitation on Investment Obligations.....................4
SECTION 3 CONDITIONS...........................................................4
Section 3.1 Conditions to Effectiveness..............................4
SECTION 4 DEPOSIT OF CAPITAL CALL NOTICES WITH AGENT...........................5
Section 4.1 Deposit of Capital Call Notices..........................5
SECTION 5 REPRESENTATIONS AND WARRANTIES.......................................5
Section 5.1 Existence and Power......................................5
Section 5.2 Authorization............................................5
Section 5.3 No Conflicts.............................................6
Section 5.4 Consents.................................................6
Section 5.5 Enforceable Obligations..................................6
Section 5.6 Permitted Investment.....................................6
Section 5.7 Venture Capital Operating Company........................6
Section 5.8 Deposited Notices........................................6
Section 5.9 Limitations on Actions...................................6
SECTION 6 AFFIRMATIVE COVENANTS................................................7
Section 6.1 Outstanding Subscriptions................................7
Section 6.2 General Partner..........................................7
Section 6.3 Plan Assets, etc.........................................7
Section 6.4 Receipt of the Funds Pursuant to the Deposited Notices...7
Section 6.5 Partners and Pro Rata Shares.............................7
SECTION 7 NEGATIVE COVENANTS...................................................7
Section 7.1 Limitations on Actions...................................7
SECTION 8 EVENTS OF DEFAULT....................................................7
Section 8.1 Events of Default........................................7
Section 8.2 Remedies.................................................8
Section 8.3 Cash Collateral Account..................................8
Section 8.4 Nature of Payments after Event of Default................9
Section 8.5 Allocation of Payments after Event of Default............9
Section 8.6 Receipt of the Funds Pursuant to the Deposited Notices...9
SECTION 9 MISCELLANEOUS.......................................................10
Section 9.1 Notices.................................................10
Section 9.2 Payments................................................10
Section 9.3 Benefit of Agreement....................................10
Section 9.4 No Waiver; Remedies Cumulative..........................10
Section 9.5 Payment of Expenses, etc................................11
Section 9.6 Amendments, Waivers and Consents........................11
Section 9.7 Counterparts............................................11
Section 9.8 Headings................................................11
Section 9.9 Survival................................................11
Section 9.10 Governing Law; Submission to Jurisdiction; Venue.......11
Section 9.11 Severability...........................................12
Section 9.12 Entirety...............................................12
Section 9.13 Binding Effect; Termination............................12
Section 9.14 Limitation on Recourse.................................12
Section 9.15 Confidentiality........................................12
ANNEXES
Exhibit A Form of Capital Call Notice
Exhibit B Terms of Subordination
INVESTMENT
AND
DEPOSIT AGREEMENT
THIS INVESTMENT AND DEPOSIT AGREEMENT, dated as of September 30, 1999 (the
"Agreement"), is executed and entered into by and between Vestar Capital
Partners III, L.P., a Delaware limited partnership (the "Fund"), and Bank of
America, N.A. (formerly known as NationsBank, N.A.), in its capacity as Agent
under the Credit Agreement hereinafter defined (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, Xxxxxx American Corp. (the "Borrower"), Xxxxxx American Investment
Corp. (the "Parent"), Xxxxxx American Group, Inc. ("Interco"), the Subsidiary
Guarantors parties thereto, the Lenders parties thereto and Gleacher NatWest
Inc., as Documentation Agent, have entered into that certain Credit Agreement
dated as of May 18, 1998 and amended as of May 27, 1998, December 18, 1998 and
March 19, 1999 (as so previously amended, the "Existing Credit Agreement"); and
WHEREAS, the parties to the Existing Credit Agreement have agreed to
further amend the Existing Credit Agreement by entering into that certain Fourth
Amendment, dated as of the date hereof (such amendment herein referred to as the
"Fourth Amendment" and, together with the Existing Credit Agreement and any
further amendments entered into subsequent to the date hereof, the "Credit
Agreement"); and
WHEREAS, as of the date hereof, the Fund is the indirect and beneficial
owner of a majority of the issued and outstanding shares of capital stock of the
Borrower; and
WHEREAS, as a condition to the effectiveness of the Fourth Amendment, the
Lenders have required that the Fund enter into this Agreement with the Agent for
the ratable benefit of the Lenders;
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and representations and warranties contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
Section 1.1 Definitions.
All capitalized terms not defined in this Agreement shall have the meanings
ascribed to such terms in the Credit Agreement. As used in this Agreement, the
following terms shall have the meanings specified below unless the context
otherwise requires:
"Amendment No. 4 Effective Date" shall have the meaning assigned to
such term in the Fourth Amendment.
"Capital Call Notice" means a capital call notice satisfying the
requirements of Section 3.1 of the Partnership Agreement and substantially
in the form of Exhibit A attached hereto.
"Cash Collateral Account" shall have the meaning assigned to such term
in Section 9.2(b).
"Credit Agreement Event of Default" means any "Event of Default" as
defined in the Credit Agreement.
"Deposited Notices" means a collective reference to the Capital Call
Notices delivered by the Fund to the Agent pursuant to Section 3.1(b) and
maintained on deposit with the Agent as contemplated by Section 4.1.
"Event of Default" means such term as defined in Section 8.1.
"General Partner" means Vestar Associates III, L.P., a Delaware
limited partnership, as general partner of the Fund.
"Investment Commitment" means, at any time, (i) $30,000,000 minus (ii)
the aggregate amount of prepayments made by the Borrower prior to such time
pursuant to Section 3.3(b)(v)(B) of the Credit Agreement minus (iii) the
aggregate amount of payments made by the Fund to purchase participation
interests in the Credit Party Obligations outstanding under the Credit
Documents pursuant to Section 2.3(d).
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"Limited Partners" means the limited partners of the Fund.
"Mandatory Investment" means a capital contribution by the Fund to the
Parent in Dollars and in funds immediately available to the Parent made for
the purpose of enabling the Borrower to make a mandatory prepayment of the
Loans outstanding under the Credit Agreement pursuant to Section
3.3(b)(v)(B) thereof.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets,
liabilities or results of operations of the Fund, (ii) the ability of the
Fund to perform any material obligation under this Agreement or (iii) the
rights and remedies of the Agent under this Agreement.
"Obligations" means, with respect to the Fund, all Indebtedness, all
other obligations that would be reflected as liabilities on a balance sheet
of the Fund and the purchase price that the Fund (directly or indirectly,
including, but not limited to, through any Subsidiary of the Fund) or the
General Partner has agreed, pursuant to a binding contract, to pay for any
investment or acquisition that has not yet closed. The Obligations of the
Fund at any time shall include the obligations of the Fund to make
Mandatory Investments (and other payments to the Agent pursuant to Section
2.1, Section 2.2 or Section 2.3) in an amount up to the Investment
Commitment at such time and any and all other payment obligations of the
Fund to the Agent (on behalf of the Lenders) under this Agreement.
"Partners" means a collective reference to the General Partner and the
Limited Partners.
"Partnership Agreement" means that certain limited partnership
agreement, dated as of November 22, 1996, among the General Partner and the
individuals and entities party thereto, as limited partners.
"Plan Asset Regulations" means the plan asset regulations of the
Department of Labor, 29 CFR ss.2510.3-101 et seq., as amended, and the
advisory opinions and rulings issued thereunder.
"Pro Rata Share" means, with respect to any Partner, such Partner's
share, expressed as a percentage, of the aggregate obligations of all of
the Partners to make capital contributions to the Fund in accordance with
the terms of the Partnership Agreement. The Pro Rata Share of each Partner
shall be based on the proportion that such Partner's Total Capital
Commitment bears to the aggregate Total Capital Commitments of all of the
Partners. In determining the Pro Rata Shares of the Partners for purposes
of completing Deposited Notices as contemplated by Section 8.2, the Agent
shall (and shall be entitled to) rely on the information delivered to the
Agent pursuant to Section 3.1(f) unless the Fund shall have provided the
Agent with updated information regarding Pro Rata Shares pursuant to
Section 6.5, in which case the Agent shall (and shall be entitled to) rely
on such updated information.
"Subsidiary" means, at any time, (i) any corporation more than 50% of
whose Equity Interests of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at such time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at such time owned by the Fund,
directly or indirectly through Subsidiaries, and (ii) any partnership,
association, joint venture or other entity of which the Fund, directly or
indirectly through Subsidiaries, owns at such time more than 50% of the
Equity Interests.
"Termination Date" means the date 30 Business Days after the later of
(i) the date that the Credit Parties deliver to the Agent the Required
Financial Information for the fiscal quarter ended December 31, 2000 and
(ii) the last day of any Leverage Grace Period that is in effect as of the
date described in the preceding clause (i).
"Total Capital Commitment" means, with respect to any Limited Partner,
an amount equal to the total amount of capital contributions that such
Limited Partner is obligated to make to the Fund pursuant to the terms of
the Partnership Agreement.
Section 1.2 Terms Generally.
All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
2
Schedules to, this Agreement unless the context shall otherwise require. For
purposes of computation of periods of time hereunder, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding."
Section 1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted in accordance with GAAP.
SECTION 2
MANDATORY INVESTMENTS
Section 2.1 Leverage Reduction in Connection with Covenant Defaults.
(a) Prior to the expiration of each Leverage Grace Period
under the Credit Agreement relating to Credit Agreement Events of
Default resulting from the failure of the Credit Parties to comply with
Section 7.11(c) and/or Section 7.11(d) of the Credit Agreement as of
the end of any fiscal quarter occurring on or before December 31, 2000,
the Fund shall, subject to Section 2.1(d), make a Mandatory Investment
in the amount necessary (after giving effect to any concurrent
prepayment pursuant to Section 3.3(b)(iii) of the Credit Agreement made
with the proceeds of an Asset Disposition) to enable the Credit Parties
to cure such Credit Agreement Events of Default in the manner
contemplated by Section 7.11(f) of the Credit Agreement.
(b) In the event that, prior to the expiration of the Leverage
Grace Period for any fiscal quarter, either (i) the Fund shall fail to
make the Mandatory Investment required pursuant to Section 2.1(a) for
such fiscal quarter or (ii) the proceeds of the Mandatory Investment
required pursuant to Section 2.1(a) for such fiscal quarter are not
used, for any reason, to prepay the Loans outstanding under the Credit
Agreement in accordance with the terms of Section 3.3(b)(v)(B) thereof,
the Fund, subject to Section 2.1(d), hereby promises to pay on demand
to the Agent (for the ratable benefit of the Lenders) an amount equal
to the amount of such required Mandatory Investment.
(c) All amounts paid by the Fund to the Agent pursuant to this
Section 2.1 shall be applied by the Agent on behalf of the Lenders to
the prepayment of the Loans outstanding under the Credit Agreement in
accordance with the terms of Section 3.3(b)(v)(B) thereof.
(d) Notwithstanding any provision to contrary set forth in
this Section 2.1, the obligations of the Fund under this Section 2.1
automatically shall be terminated upon the making of a Mandatory
Investment (or a payment to the Agent) pursuant to, and satisfying the
requirements of, Section 2.2 or Section 2.3.
Section 2.2 Leverage Reduction in Connection with Shirt Group Sale.
(a) Concurrently with the consummation prior to the
Termination Date of any Asset Disposition involving all or
substantially all of the Shirt Group while a Sale Moratorium is in
effect, the Fund shall, subject to Section 2.2(d), make a Mandatory
Investment in the amount, if any, necessary to enable the Borrower to
prepay the Loans pursuant to Section 3.3(b)(iii) and/or Section
3.3(b)(v)(B) of the Credit Agreement by an amount sufficient to enable
the Credit Parties to comply with the financial ratio requirements set
forth in Section 8.5(c)(ii)(A) of the Credit Agreement in the manner
contemplated by Section 8.5(c)(ii)(B) of the Credit Agreement.
(b) In the event that either (i) the Fund shall fail to make
any Mandatory Investment when due as required pursuant to Section
2.2(a) or (ii) the proceeds of the Mandatory Investment required
pursuant to this Section 2.2(a) for such fiscal quarter are not used,
for any reason, to prepay the Loans outstanding under the Credit
Agreement in accordance with the terms of Section 3.3(b)(v)(B) thereof,
the Fund, subject to Section 2.2(d), hereby promises to pay on demand
to the Agent (for the ratable benefit of the Lenders) an amount equal
to the amount necessary (after giving effect to any concurrent
prepayment pursuant to Section 3.3(b)(iii) of the Credit Agreement made
with the proceeds of any Asset Disposition involving all or
substantially all of the Shirt Group) to enable the Credit Parties to
comply with the financial ratio requirements set forth in Section
8.5(c)(ii)(A) of the Credit Agreement in the manner contemplated by
Section 8.5(c)(ii)(B) of the Credit Agreement.
(c) All amounts paid by the Fund to the Agent pursuant to this
3
Section 2.2 shall be applied by the Agent on behalf of the Lenders to
the prepayment of the Loans outstanding under the Credit Agreement in
accordance with the terms of Section 3.3(b)(v)(B) thereof.
(d) Notwithstanding any provision to contrary set forth in
this Section 2.2, the obligations of the Fund under this Section 2.2
automatically shall be terminated upon the making of a Mandatory
Investment (or a payment to the Agent) pursuant to, and satisfying the
requirements of, Section 2.3.
Section 2.3 Leverage Reduction in Bankruptcy.
Notwithstanding any provision to contrary set forth in this Agreement:
(a) The obligations of the Fund under Section 2.1 and Section
2.2 shall not be satisfied by the making of a Mandatory Investment (or
any other capital contribution to or investment in the Parent or any of
the Consolidated Parties) at any time after the Business Day
immediately preceding the first day that a Bankruptcy Event with
respect to the Parent or the Borrower shall have occurred.
(b) If a Bankruptcy Event with respect to the Parent or the
Borrower shall have occurred and be continuing at a time when the Fund
is required to make a Mandatory Investment hereunder, the Fund, in lieu
of the obligations of the Fund under Section 2.1 and Section 2.2,
hereby promises to pay to the Agent (for the ratable benefit of the
Lenders), on the date that such Mandatory Investment otherwise would
have been required in accordance with the terms of Section 2.1 or
Section 2.2, as applicable, an amount equal to the amount of the
Mandatory Investment that otherwise would have been so required.
(c) In the event that, after the occurrence and during the
continuance of a Bankruptcy Event with respect to the Parent or the
Borrower, the Credit Parties shall fail to deliver the Required
Financial Information to the Agent for any fiscal quarter in compliance
with requirements of Section 7.1 of the Credit Agreement and such
default shall continue unremedied for a period of at least 45 days, the
Fund hereby promises to pay on demand to the Agent (for the ratable
benefit of the Lenders) an amount equal to the Investment Commitment at
such time.
(d) All amounts paid by the Fund to the Agent pursuant to this
Section 2.3 immediately shall be applied by the Agent (for the ratable
benefit of the Lenders) to pay for the purchase by the Fund of an
undivided, non-voting participation interest in the Credit Party
Obligations then outstanding under the Credit Documents on a basis
subordinated in right of payment to the Credit Party Obligations and
the Senior Subordinated Debt on substantially the terms and conditions
set forth on Exhibit B.
Section 2.4 Limitation on Investment Obligations.
Notwithstanding any provision to contrary set forth in this Agreement,
the Fund shall not be obligated at any time to make Mandatory Investments (or
any other payments to the Agent pursuant to Section 2.1, Section 2.2 or Section
2.3) in an amount in excess of the Investment Commitment at such time.
SECTION 3
CONDITIONS
Section 3.1 Conditions to Effectiveness.
This Agreement shall become effective on the Amendment No. 4 Effective
Date provided the following conditions are satisfied in form and substance
reasonably acceptable to the Agent:
(a) Execution of this Agreement. Receipt by the Agent of an
executed copy of this Agreement signed by a duly authorized officer of
the General Partner.
(b) Deposited Notices. Receipt by the Agent of an original
Capital Call Notice for each Limited Partner, in each case executed by
the General Partner and uncompleted in respect of the amount of the
total capital contribution to be made by all of the Limited Partners
pursuant to such Capital Call Notices and the applicable Limited
Partner's Pro Rata Share of such total capital contribution.
(c) Legal Opinion. Receipt of a legal opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Fund, in form and substance
reasonably satisfactory to the Agent.
(d) Partnership Documents. Receipt by the Agent of all
documents reasonably requested by the Agent relating to the existence
4
of the Fund, the enforceability of this Agreement and the Deposited
Notices and other matters relating thereto, in form and substance
satisfactory to the Agent, including, but not limited to:
(i) Certificates of Authorization. Certificates of
authorization of the General Partner as of the Amendment No. 4
Effective Date, approving and adopting this Agreement and the
delivery of the Deposited Notices and authorizing the
execution and delivery thereof by the General Partner on
behalf of the Fund.
(ii) Partnership Agreement. A copy, certified by an
officer of the general partner of the General Partner on
behalf of the Fund as true and complete, of the Partnership
Agreement, together with all amendments thereto, if any.
(iii) Incumbency Certificate. An incumbency
certificate of the President or any duly authorized officer
and Secretary of the general partner of the General Partner
who will be executing this Agreement, any Deposited Notice, or
any other document, instrument or certificate to be delivered
pursuant to the terms hereof (including the name, title and
signature of each such officer).
(e) Total Capital Commitments. Receipt by the Agent of a
certificate executed by an officer of the general partner of the
General Partner on behalf of the Fund, in form and substance
satisfactory to the Agent, stating that the aggregate Total Capital
Commitments of all Limited Partners as of the Amendment No. 4 Effective
Date equals or exceeds the sum of (i) the Investment Commitment plus
(ii) all other Obligations of the Fund.
(f) Partners and Pro Rata Shares. Receipt by the Agent of a
certificate executed by an officer of the general partner of the
General Partner on behalf of the Fund, in form and substance
satisfactory to the Agent, setting forth a list of Limited Partners and
their respective Pro Rata Shares as of the Amendment No. 4 Effective
Date. Except as otherwise permitted under Section 9.15, the information
contained in the certificate delivered to the Agent as contemplated by
this Section 3.1(f) shall not be disclosed by the Agent to any other
Person (including, without limitation, the Lenders) without the prior
written consent of the Fund.
SECTION 4
DEPOSIT OF CAPITAL CALL NOTICES WITH AGENT
Section 4.1 Deposit of Capital Call Notices.
The Fund hereby agrees that each of the Capital Call Notices delivered
by the Fund to the Agent pursuant to Section 3.1(b) shall be held by the Agent
on deposit and shall be delivered by the Agent to the Partners only under the
circumstances contemplated by, and otherwise in accordance with the terms of,
Section 8.2.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Fund hereby represents and warrants to the Agent (for the benefit
of the Lenders) that:
Section 5.1 Existence and Power.
(a) Each of the Fund and the General Partner is a limited
partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware, and is in good standing as a foreign
limited partnership in each other jurisdiction where ownership of its
properties or the conduct of its business requires it to be so other
than in such jurisdictions where failure to be in good standing could
not reasonably be expected to have a Material Adverse Effect, and has
all power and authority under such laws and its partnership agreement
and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
(b) The general partner of the General Partner (i) is duly
incorporated, validly existing and in good standing under the laws of
the state of its incorporation, (ii) has all corporate power pursuant
to proper authorization to enable it to act as the general partner of
the General Partner and to enter into this Agreement on the Fund's
behalf, and (iii) is duly qualified to do business and is in good
standing in each other jurisdiction where it is required to be
qualified in order to act as the general partner of the General
Partner, other than in such jurisdiction where the failure to be so
qualified and in good standing could not reasonably be expected to have
5
a Material Adverse Effect.
Section 5.2 authorization.
The Fund has the partnership or other necessary power and authority,
and the legal right, to enter into this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby and has by proper
action duly authorized the execution and delivery of this Agreement and the
Deposited Notices. Without limiting the generality of the above, the Fund has by
proper action duly authorized (i) the execution and delivery of one or more
Capital Call Notices to each Partner in order to fund the obligations of the
Fund to make Mandatory Investments (and other payments to the Agent pursuant to
Section 2.1, Section 2.2 or Section 2.3) in accordance with the terms of this
Agreement, (ii) the depositing of such Capital Call Notices with the Agent in
the manner contemplated by Section 4.1 and (iii) the authorizing of the Agent to
complete and deliver such Capital Call Notices on behalf of the Fund in
accordance with the terms of Section 8.2.
Section 5.3 No Conflicts.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein, nor performance of and
compliance with the terms and provisions hereof will (i) violate or conflict
with any provision of the Partnership Agreement or other governance document,
(ii) violate any material law, regulation, order, writ, judgment, injunction,
decree or permit applicable to it, (iii) violate or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound, the violation of which could
reasonably be expected to have a Material Adverse Effect, (iv) result in or
require the creation of any lien, security interest or other charge or
encumbrance (other than those contemplated in or in connection with this
Agreement) upon or with respect to the Fund's properties.
Section 5.4 Consents.
No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or other
Person is required in connection with the execution, delivery or performance of
this Agreement or with the execution and delivery of the Deposited Notices.
Section 5.5 Enforceable Obligations.
This Agreement has been duly executed and delivered by the Fund and
constitutes legal, valid and binding obligations of the Fund, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in proceedings in equity or at law and by an implied covenant
of good faith and fair dealing.
Section 5.6 Permitted Investment.
(a) The incurrence of the obligations of the Fund set forth in this
Agreement and the making by the Fund of any Mandatory Investment (and other
payments to the Agent pursuant to Section 2.1, Section 2.2 or Section 2.3) are
permitted by the Partnership Agreement, and (b) the Limited Partners shall be
obligated to make additional capital contributions (each in a pro rata amount in
proportion to such Limited Partner's Total Capital Commitment) for the purpose
of providing funds to or for the account of the Fund in an aggregate amount
sufficient to pay in full the amount required to satisfy the obligation of the
Fund to make Mandatory Investments (and other payments to the Agent pursuant to
Section 2.1, Section 2.2 or Section 2.3) in an aggregate amount of up to the
Investment Commitment, if so requested by the General Partner.
Section 5.7 Venture Capital Operating Company.
The Fund is a venture capital operating company within the meaning of
the Plan Asset Regulations, or, the Fund satisfies another exception under the
Plan Asset Regulations such that the assets of the Fund are not "plan assets"
within the meaning and as defined in the Plan Asset Regulations.
Section 5.8 Deposited Notices.
Each Deposited Notice, when completed by the Agent and delivered by the
Agent to the applicable Limited Partner in accordance with the terms of Section
8.2 and the definition of "Pro Rata Share" set forth in Section 1.1, will give
rise to a legal, valid and binding obligation on the part of such Limited
Partner to pay such Limited Partner's Pro Rata Share of each Mandatory
Investment (and each other payment to the Agent pursuant to Section 2.1, Section
2.2 or Section 2.3), enforceable against such Limited Partner in accordance with
the terms of such Deposited Notice and the Partnership Agreement.
Section 5.9 Limitations on Actions.
The Fund is not aware of any event or condition that could (i) have a
6
material adverse effect on the ability of the Fund to perform its obligations
under this Agreement, (ii) render invalid or unenforceable any of the Deposited
Notices or (iii) otherwise modify the obligations of any of the Partners and/or
any Person becoming Partners subsequent to the date hereof which arise upon the
due delivery of, and as contemplated by, the Deposited Notices.
SECTION 6
AFFIRMATIVE COVENANTS
The Fund hereby covenants and agrees that so long as this Agreement is
in effect:
Section 6.1 Outstanding Subscriptions.
At all times prior to the termination of this Agreement in accordance
with the terms of Section 9.13, the Fund will cause the aggregate Total Capital
Commitments of all Limited Partners to equal or exceed the sum of (i) the
Investment Commitment plus (ii) all other Obligations of the Fund.
Section 6.2 General Partner.
The Fund will cause (i) Vestar Associates III, L.P. to be the sole
general partner of the Fund at all times and (ii) Vestar Associates Corporation
III to be the sole general partner of the General Partner at all times.
Section 6.3 Plan Assets, etc.
The Fund shall at all times either (i) be a venture capital operating
company within the meaning of the Plan Asset Regulations, or (ii) satisfy
another exception under the Plan Asset Regulations such that the assets of the
Fund are not "plan assets" within the meaning and as defined in the Plan Asset
Regulations.
Section 6.4 Receipt of the Funds Pursuant to the Deposited Notices.
Immediately upon receipt by the Fund or any of its Affiliates of
payment by any Limited Partner in respect of a Deposited Notice delivered by the
Agent pursuant to Section 8.2, the Fund shall (i) notify the Agent in writing
specifying the Limited Partner making such payment and the amount thereof and
(ii) forward, or cause to be forwarded, the funds representing such payment to
the Parent.
Section 6.5 Partners and Pro Rata Shares.
Upon the reasonable request of the Agent from time to time, the Fund
shall promptly deliver to the Agent an updated list of Limited Partners and
their respective Pro Rata Shares, certified by an officer of the general partner
of the General Partner on behalf of the Fund as true and complete.
SECTION 7
NEGATIVE COVENANTS
Section 7.1 Limitations on Actions.
So long as this Agreement is in effect, the Fund covenants and agrees
that it shall not take any action that could (i) render invalid or unenforceable
any of the Deposited Notices or (ii) otherwise modify the obligations of any of
the Partners and/or any Person becoming Partners subsequent to the date hereof
which arise upon the due delivery of, and as contemplated by, the Deposited
Notices.
SECTION 8
EVENTS OF DEFAULT
Section 8.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. The Fund shall default in the payment when due of any
amounts owing under Section 2.1, Section 2.2 or Section 2.3; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made herein or in any statement or certificate delivered or
required to be delivered pursuant hereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants.
(i) Default in the due performance or
observance of any term, covenant or
7
agreement contained in Section 6 or
Section 7, or
(ii) Default in the due performance or
observance by it of any term, covenant or
agreement (other than those referred to
in subsections (a), (b) or (c)(i) of this
Section 8.1) contained in this Agreement
and such default shall continue unremedied
for a period of at least 30 days after the
earlier of an officer of the Fund
becoming aware of such default or notice
thereof by the Agent; or
(d) Effectiveness of Documents. This Agreement or any of the Deposited
Notices shall fail to be in full force and effect or to give the Agent (for
the benefit of the Lenders) any material part of the rights, powers and
privileges purported to be created hereby; or
(e) Bankruptcy, etc. A Bankruptcy Event shall occur with respect to
the Fund; or
(f) Defaults under Other Agreements. With respect to any Indebtedness
(other than Indebtedness outstanding under this Agreement or the Credit
Agreement) in excess of $20 million in the aggregate for the Fund, (A)(1)
the Fund shall default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such Indebtedness, or (2)
the occurrence and continuance of a default in the observance or
performance relating to such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default or
other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity; or (B) any such Indebtedness shall be declared due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof; provided, however, that
notwithstanding the foregoing, no Default or Event of Default shall exist
under this Section 8.1(f) with respect to a default which is being
contested in good faith by appropriate proceedings; or
(g) Judgments. The Fund shall fail within 30 days of the date due and
payable to pay, bond or otherwise discharge any judgment, settlement or
order for the payment of money (to the extent not paid or fully covered by
insurance provided by a carrier who has acknowledged coverage and has the
ability to perform) which judgment, settlement or order, when aggregated
with all other such judgments, settlements or orders due and unpaid at such
time, exceeds $20 million, and which is not stayed on appeal (or for which
no motion for stay is pending) or is not otherwise being executed.
(h) Non-Delivery of Financial Statements. The Credit Parties shall
fail to deliver the Required Financial Information to the Agent for any
fiscal quarter in compliance with the requirements of Section 7.1 of the
Credit Agreement and such failure shall continue unremedied for a period of
at least 45 days.
Section 8.2 Remedies.
Upon the occurrence and during the continuance of any Event of Default,
the Agent may, and shall be authorized to: (i) declare the unpaid amount of any
of the Fund's obligations arising under this Agreement (including, without
limitation, the Fund's obligations under Section 2.1, Section 2.2 and Section
2.3) to be due, whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Fund; (ii) complete appropriate Deposited Notices for the
Limited Partners based on each Limited Partner's Pro Rata Share of the then
current amount of the Investment Commitment; and (iii) after at least 2 Business
Days' prior written notice thereof by the Agent to the Fund, deliver such
Deposited Notices to the Limited Partners. The rights of the Agent under this
Section 8.2 are independent and in addition to such rights as the Agent may have
at law or in equity or otherwise based on the failure of the Fund to perform any
covenant, agreement or undertaking made by it in this Agreement, including the
right to seek specific performance of such covenant or agreement or seek any
other equitable relief.
8
Section 8.3 Cash Collateral Account.
To the extent that payments made by the Fund (including capital
contributions made by the Partners) pursuant to the exercise of rights by the
Agent under Section 8.2 exceed the amounts necessary to enable the Credit
Parties from time to time to (A) cure Credit Agreement Events of Default in the
manner contemplated by Section 2.1 hereof and Section 7.11(f) of the Credit
Agreement, (B) comply with the financial ratio requirements set forth in Section
8.5(c)(ii)(A) of the Credit Agreement in the manner contemplated by Section 2.2
hereof and Section 8.5(c)(ii)(B) of the Credit Agreement or (C) satisfy the
obligations of the Fund to purchase a participation interest in the Credit Party
Obligations outstanding under the Credit Documents in accordance with the terms
of Section 2.3 hereof, such amounts shall be held by the Agent in a cash
collateral account subject to the sole dominion and control of the Agent (the
"Cash Collateral Account") until this Agreement is terminated in accordance with
the terms of Section 9.13. The Agent shall charge the Cash Collateral Account
from time to time for the payment when due of all amounts payable by the Fund
hereunder. Any balance remaining in the Cash Collateral Account at the time that
this Agreement is terminated in accordance with the terms of this Section 9.13
promptly shall be turned over by the Agent to the Fund in such manner as the
Fund at the time shall specify to the Agent. At the request of the Fund, amounts
on deposit in the Cash Collateral Account shall be invested by the Agent in Cash
Equivalents. Any income earned on such Cash Equivalents will be for the account
of the Fund and shall be distributed not less than quarterly by the Agent to the
Fund. To the extent that any loss is incurred in respect of such investments by
the Agent on behalf of the Fund, the Fund not less than quarterly will deliver
to the Agent, for deposit in the Cash Collateral Account, additional amounts
sufficient to offset such losses. Notwithstanding any provision to the contrary
set forth in this Section 8.3, to the extent that funds are on deposit in the
Cash Collateral Account solely as a result of the exercise of rights by the
Agent under Section 8.2 due to the occurrence of an Event of Default under
Section 8.1(h), such funds promptly shall be turned over by the Agent (less any
amounts then due and payable by the Fund under Section 2.1, Section 2.2 or
Section 2.3) to the Fund (in such manner as the Fund shall specify to the Agent)
if such Event of Default is thereafter cured.
Section 8.4 Nature of Payments after Event of Default.
All amounts collected or received by the Agent from the Fund or any
Partner pursuant to or in connection with this Agreement and the Deposited
Notices at a time that no Bankruptcy Event with respect to the Parent or the
Borrower shall have occurred and be continuing shall be deemed to constitute
proceeds of a Sponsor Equity Issuance. All amounts collected or received by the
Agent from the Fund or any Partner pursuant to or in connection with this
Agreement and the Deposited Notices at a time that a Bankruptcy Event with
respect to the Parent or the Borrower shall have occurred and be continuing
shall be deemed to constitute payment by the Fund of the purchase price for a
participation interest in the Credit Party Obligations outstanding under the
Credit Documents on the terms described in Section 2.3(d).
Section 8.5 Allocation of Payments after Event of Default.
Notwithstanding any other provisions of this Agreement to the contrary,
after the occurrence and during the continuance of an Event of Default, all
amounts collected or received by the Agent from the Fund or any Partner pursuant
to or in connection with this Agreement and the Deposited Notices shall be
applied by the Agent (i) with respect to amounts payable pursuant to Section 2.1
or Section 2.2, to the prepayment of the Loans outstanding under the Credit
Agreement in accordance with the terms of Section 3.3(b)(v)(B) thereof or (ii)
with respect to amounts payable pursuant to Section 2.3, to pay for the purchase
by the Fund of a participation interest in the Credit Party Obligations
outstanding under the Credit Documents (on the terms described in Section
2.3(d)); provided, however, that funds on deposit in the Cash Collateral Account
shall not be available to the Agent or the Lenders for prepayment of the Loans
pursuant to this Section 8.5 except to the extent that such funds are necessary
to enable the Credit Parties from time to time (i) to cure Credit Agreement
Events of Default in the manner contemplated by Section 2.1 hereof and Section
7.11(f) of the Credit Agreement, (ii) to comply with the financial ratio
requirements set forth in Section 8.5(c)(ii)(A) of the Credit Agreement in the
manner contemplated by Section 2.2 hereof and Section 8.5(c)(ii)(B) of the
Credit Agreement or (iii) to satisfy the obligations of the Fund to purchase a
participation interest in the Credit Party Obligations outstanding under the
Credit Documents in accordance with the terms of Section 2.3.
Section 8.6 Receipt of the Funds Pursuant to the Deposited Notices.
The Agent agrees that, promptly after receipt by the Agent of any
capital contribution by any Limited Partner pursuant to the exercise of the
Agent's rights under Section 8.2, the Agent shall notify the Fund of the amount
of such capital contribution and the identity of the Limited Partner making such
capital contribution.
9
SECTION 9
MISCELLANEOUS
Section 9.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly received and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address set forth below or at such other address as such party may specify
by written notice to the other parties hereto:
if to the Fund:
Vestar Capital Partners III, L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with copies to:
Vestar Capital Partners III, L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx
Bank of America Corporate Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Section 9.2 Payments.
Except as otherwise specifically provided herein, all payments made
pursuant to any Deposited Notice shall be made to the Agent in Dollars in
immediately available funds, without offset, deduction, counterclaim or
withholding of any kind, not later than 2:00 P.M. (Charlotte, North Carolina
time). Payments received after such time shall be deemed to have been received
on the next succeeding Business Day.
Section 9.3 Benefit of Agreement.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the Agent and the Fund;
provided that (i) the Fund may not assign or transfer any of its interests and
obligations hereunder without prior written consent of the Agent and (ii) the
Agent may not assign or transfer any of its interests and obligations hereunder
without prior written consent of the Fund except to any Person which becomes a
successor Agent pursuant to Section 10.7 of the Credit Agreement and except
during the continuance of an Event of Default.
Section 9.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or the Lenders in
10
exercising any right, power or privilege hereunder and no course of dealing
between the Agent or any Lender and the Fund shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or the Lenders would otherwise have. No notice to or demand on the
Fund in any case shall entitle the Fund to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Agent and the Lenders to any other or further action in any circumstances
without notice or demand.
Section 9.5 Payment of Expenses, etc.
The Fund shall cause the Borrower to (i) pay all reasonable
out-of-pocket costs and expenses (A) of the Agent in connection with the
negotiation, preparation, execution and delivery and administration of this
Agreement and the documents and instruments referred to herein (including,
without limitation, the reasonable fees and expenses of Xxxxx & Xxx Xxxxx, PLLC,
special counsel to the Agent) and any amendment, waiver or consent relating
hereto including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Fund under this Agreement and (B) of the Agent in
connection with enforcement of this Agreement and the documents and instruments
referred to herein (including, without limitation, in connection with any such
enforcement, the reasonable fees and disbursements of counsel for the Agent);
and (ii) indemnify the Agent, its officers, directors, employees, and
representatives from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of any investigation,
litigation or other proceeding (whether or not the Agent is a party thereto)
related to the entering into and/or performance of this Agreement or the
consummation of any other transactions contemplated in this Agreement,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified).
Section 9.6 Amendments, Waivers and Consents.
Except pursuant to the terms of Section 9.13, this Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated unless such amendment, waiver, modification, change, discharge or
termination is in writing entered into, or approved in writing, by the Agent and
the Fund.
Section 9.7 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Agreement to produce or account for more than one such
counterpart.
Section 9.8 Headings.
The headings of the Sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
Section 9.9 Survival.
All indemnities set forth herein, including, without limitation, in
Section 9.5, shall survive the execution and delivery of this Agreement and
other obligations under this Agreement.
Section 9.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Agreement may be brought in the courts
of the State of New York in New York County, or of the United States
for the Southern District of New York, and, by execution and delivery
of this Agreement, each of the Fund and the Agent hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. Each of
11
the Fund and the Agent further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address set out for notices
pursuant to Section 9.1, such service to become effective three (3)
days after such mailing. Nothing herein shall affect the right of the
Agent, as the case may be, to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against the Fund, as the case may be, in any other
jurisdiction.
(b) Each of the Fund and the Agent hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement brought in the courts referred to in
subsection (a) of this Section 9.10 and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT AND THE
FUND HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.11 Severability.
If any provision of this Agreement is determined to be illegal, invalid
or unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid or unenforceable provisions.
Section 9.12 Entirety.
This Agreement represents the entire agreement of the parties hereto,
and supersedes all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to this Agreement or
the transactions contemplated herein.
Section 9.13 Binding Effect; Termination.
This Agreement shall become effective at such date determined in
accordance with Section 3.1. The term of this Agreement shall be until the
earliest of (i) the date that the Credit Agreement is terminated in accordance
with the terms of Section 11.13(b) thereof, (ii) the date that the Fund has made
aggregate Mandatory Investments (and/or other payments to the Agent pursuant to
Section 2.1, Section 2.2 or Section 2.3) in an amount at least equal to
$30,000,000, (iii) the date that the Credit Parties consummate a sale of all or
substantially all of the Shirt Group while a Sale Moratorium is in effect in
accordance with the terms of Section 8.5 of the Credit Agreement (whether or not
such sale involves the making of a Mandatory Investment (or a payment to the
Agent) by the Fund pursuant to, and satisfying the requirements of, Section
2.2)) (iv) the date that the Fund makes a Mandatory Investment (or a payment to
the Agent) pursuant to, and satisfying the requirements of, Section 2.3, or (v)
the first day on or after the Termination Date that no Event of Default shall be
continuing hereunder.
Section 9.14 Limitation on Recourse.
The Agent agrees that its rights in respect of any claim or liability
under this Agreement asserted against the Fund by it shall be limited to
satisfaction out of, and enforcement against, the assets of the Fund.
Notwithstanding anything to the contrary contained herein or in any other
document, certificate or instrument executed by the Fund pursuant hereto, the
Agent acknowledges and agrees that no officer, employee, partner, servant,
controlling Person, manager, agent, authorized representative or Affiliate of
the Fund (collectively, the "Non-Recourse Persons") shall have any liability to
the Agent (such liability, including such as may arise by operation of law,
being hereby expressly waived) for the payment of any sums now or hereafter
owing by the Fund under this Agreement or for the performance of any of the
obligations of the Fund contained herein or shall otherwise be liable or
responsible with respect thereto. If any Event of Default shall occur or if any
claim of the Agent against the Fund or alleged liability to the Agent of the
Fund shall be asserted under this Agreement, the Agent agrees that it shall not
have the right to proceed directly or indirectly against the Non-Recourse
Persons or against their respective properties and assets for the satisfaction
of any such claim or liability or for any deficiency judgment in respect of any
such claim or liability. Notwithstanding any of the foregoing, it is expressly
understood and agreed, however, that nothing contained in this Section 9.14
shall in any manner or any way constitute or be deemed (i) to excuse any
obligations of any Partner to make additional capital contributions to the Fund
pursuant to the terms of the Partnership Agreement, (ii) to impair the
12
enforceability of any of the rights arising from this Agreement or (iii) to
restrict the remedies available to the Agent to realize upon the assets of the
Fund. The foregoing acknowledgments, agreements and waivers shall survive the
termination of this Agreement and shall be enforceable by any Non-Recourse
Person.
Section 9.15 Confidentiality.
The Agent agrees to keep confidential any information furnished or made
available to it by or on behalf of the Fund pursuant to this Agreement that is
marked confidential, provided that nothing herein shall prevent the Agent from
disclosing such information (a) as required by any law, rule, or regulation, (b)
upon the order of any court or administrative agency, (c) upon the request or
demand of any regulatory agency or authority having jurisdiction over the Agent
or any Affiliate thereof, (d) that is or becomes available to the public or that
is or becomes available to the Agent or any Affiliate thereof other than as a
result of a disclosure by the Agent prohibited by this Agreement, (e) in
connection with any litigation to which the Agent or any of its Affiliates may
be a party, (f) to the extent necessary in connection with the exercise of any
remedy under this Agreement, and (g) to any Affiliate of the Agent.
[Signature Page to Follow]
13
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Investment and Deposit Agreement to be duly executed and delivered as of
the date first above written.
Vestar Capital Partners III, L.P.,
a Delaware limited partnership
By: Vestar Associates III, L.P.,
its General Partner
By: Vestar Associates Corporation III,
its General Partner
By: ___________________________
Name:
Title:
Bank of America, N.A.
By: ________________________________
Name:
Title:
14
Exhibit A
[Letterhead of Vestar Associates III, L.P.]
[Name and address of partner]
Re: [Vestar/Xxxxxx-American Corp.]
Dear ___________:
Pursuant to Section 3.1(a) of the Agreement of Limited Partnership of
Vestar Capital Partners III, L.P., Vestar Associates III, L.P. (the "General
Partner") is calling for payment of the Capital Contribution to be made in
connection with Vestar/Xxxxxx American Corp. Your pro rata share of the $
__________ Capital Contribution for your $ __________ commitment is $
__________. Kindly pay either by certified or cashier's check or by wire
transfer of immediately available funds to the account set forth below (or to
such other account as Bank of America, N.A. shall have notified you in writing)
no later than the tenth (10th) business day following the date of this letter.
Via Check: or Via Bank Wire:
Payable to: Bank of America, N.A. Payable to: Bank of America, N.A.
Send to: Bank of America, N.A.. Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxx
Bank of America Corporate Center ABA Routing No.: 000-000-000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 Account No.: 1366212250600
Attn: Xxxxx Xxxxxx For Credit to: Corporate Services
Telephone: (000) 000-0000 Reference: Vestar Capital
Account No. 1366212250600 Partners III, L.P.
For Credit to: Corporate Services Amount: $______________
Reference: Vestar Capital
Partners III, L.P.
Amount: $______________
If you have any questions, please feel free to call me at (000) 000-0000.
Very truly yours,
Vestar Associates III, L.P.,
General Partner of Vestar Capital Partners III, L.P.
By: Vestar Associates Corporation III,
its General Partner
By: __________________________________
Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial Officer
Exhibit B
Terms of Subordination
o No payments or prepayments of principal or interest on the participation
interest of the Fund in the Credit Party Obligations (the "Fund
Participation Interest") may be made by the Credit Parties or received by
the Fund until the Credit Party Obligations and the Senior Subordinated
Debt (collectively, the "Senior Debt") have been paid in full in cash and
the Commitments under the Credit Agreement shall have been terminated.
o Until all Senior Debt has been paid in full in cash and the Commitments
under the Credit Agreement shall have been terminated, the Fund shall have
no right to direct the Agent to exercise remedies in respect of the Fund
Participation Interest.
o Until the date 91 days after all Senior Debt has been paid in full in cash
and the Commitments under the Credit Agreement shall have been terminated,
the Fund shall not take any action in its capacity as holder of the Fund
Participation Interest to initiate an involuntary bankruptcy proceeding in
respect of any Credit Party.
o The Lenders (excluding the Fund) and the holders of the Senior Subordinated
Debt (collectively, the "Senior Creditors") shall have the right, if not
exercised by the Fund, to file proofs of claim (and any notice of
assignment of the right to receive payments) in respect of Fund
Participation Interest to the extent not filed by the Fund in any
bankruptcy proceeding in respect of any Credit Party.
o In any bankruptcy proceeding in respect of any Credit Party, the Senior
Creditors shall be entitled to payment in full in cash before the Fund, in
its capacity as holder of the Fund Participation Interest, shall be
entitled to receive any payments, property or assets (other than (i) debt
securities that are subordinated at least to the extent provided in this
Exhibit B and (ii) equity securities that are not redeemable for cash, and
in respect of which no cash dividends are payable), until all Senior Debt
has been paid in full in cash and the Commitments under the Credit
Agreement shall have been terminated.
o Any payments received by the Fund, in its capacity as holder of the Fund
Participation Interest, in contravention of the foregoing subordination
provisions shall be held in trust for the benefit of, and immediately
turned over to, the Senior Creditors.
o In any reorganization proceeding in respect of any Credit Party, Senior
Creditors shall be entitled to approve (on behalf of the Fund, in its
capacity as holder of the Fund Participation Interest) the use of cash
collateral by such Credit Party.
o In any bankruptcy proceeding in respect of any Credit Party, the Fund, in
its capacity as holder of the Fund Participation Interest, shall not (i)
vote against any plan of reorganization or liquidation supported by the
Senior Creditors or (ii) vote for any plan of reorganization or liquidation
opposed by the Senior Creditors.
o In any bankruptcy proceeding in respect of any Credit Party, (i) the Fund,
in its capacity as holder of the Fund Participation Interest, shall not
file any motion, application or other pleading seeking affirmative relief,
including without limitation for the appointment of a trustee or examiner,
for the conversion of the case to a liquidation proceeding, for the
substantive consolidation of such Credit Party's bankruptcy case with the
case of any other entity, for the creation of a separate official committee
representing only the Fund or any other form of affirmative relief of any
other kind or nature and (ii) the Fund, in its capacity as holder of the
Fund Participation Interest, shall not file any objection or other
responsive pleading opposing any relief requested by the Senior Creditors.
o The Fund, in its capacity as holder of the Fund Participation Interest,
shall not exercise any right of subrogation in respect of any of the Credit
Party Obligations until all Senior Debt has been paid in full in cash and
the Commitments under the Credit Agreement shall have been terminated.
