EXHIBIT 10.4
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NUCO2 INC.
and
SUBSIDIARY GUARANTORS
-----------------------------
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
Dated as of August 25, 2003
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$30,000,000
16.3% SENIOR SUBORDINATED NOTES DUE FEBRUARY 27, 2009
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
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ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS..................................1
SECTION 1.01 CERTAIN DEFINED TERMS.......................................1
SECTION 1.02 TERMS GENERALLY............................................15
SECTION 1.03 ACCOUNTING TERMS; GAAP.....................................16
ARTICLE II AMOUNT AND TERMS OF NOTES.........................................16
SECTION 2.01 COMMITMENTS................................................16
SECTION 2.02 DISBURSEMENT OF FUNDS......................................16
SECTION 2.03 NOTES......................................................16
SECTION 2.04 INTEREST...................................................17
SECTION 2.05 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT..................18
ARTICLE III PREPAYMENTS; PAYMENTS............................................18
SECTION 3.01 PREPAYMENTS................................................18
SECTION 3.02 METHOD AND PLACE OF PAYMENT................................21
ARTICLE IV REPRESENTATIONS OF THE INVESTORS..................................21
SECTION 4.01 PURCHASE FOR INVESTMENT....................................21
SECTION 4.02 ACCREDITED AND SOPHISTICATED INVESTOR......................21
ARTICLE V CONDITIONS PRECEDENT...............................................22
SECTION 5.01 CONDITIONS PRECEDENT TO NOTES..............................22
SECTION 5.02 OTHER CONDITIONS PRECEDENT.................................23
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................24
SECTION 6.01 ORGANIZATION; POWERS.......................................24
SECTION 6.02 AUTHORIZATION; ENFORCEABILITY..............................24
SECTION 6.03 GOVERNMENTAL APPROVALS; NO CONFLICTS.......................24
SECTION 6.04 SEC DOCUMENTS; FINANCIAL CONDITION; NO MATERIAL
ADVERSE CHANGE.............................................24
SECTION 6.05 PROPERTIES.................................................25
SECTION 6.06 LITIGATION AND ENVIRONMENTAL MATTERS.......................26
SECTION 6.07 COMPLIANCE WITH LAWS AND AGREEMENTS........................26
SECTION 6.08 INVESTMENT AND HOLDING COMPANY STATUS......................26
SECTION 6.09 TAXES......................................................26
SECTION 6.10 ERISA......................................................26
SECTION 6.11 DISCLOSURE.................................................27
SECTION 6.12 DEBT AGREEMENTS............................................27
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SECTION 6.13 CAPITALIZATION.............................................27
SECTION 6.14 SUBSIDIARIES...............................................27
SECTION 6.15 PRIVATE OFFERING BY THE COMPANY............................27
SECTION 6.16 LABOR RELATIONS............................................28
ARTICLE VII AFFIRMATIVE COVENANTS............................................29
SECTION 7.01 FINANCIAL STATEMENTS AND OTHER INFORMATION.................29
SECTION 7.02 NOTICES OF MATERIAL EVENTS.................................31
SECTION 7.03 EXISTENCE; CONDUCT OF BUSINESS.............................32
SECTION 7.04 PAYMENT OF OBLIGATIONS.....................................32
SECTION 7.05 MAINTENANCE OF PROPERTIES; INSURANCE.......................32
SECTION 7.06 BOOKS AND RECORDS; INSPECTION RIGHTS.......................32
SECTION 7.07 COMPLIANCE WITH LAWS.......................................33
SECTION 7.08 USE OF PROCEEDS............................................33
SECTION 7.09 CERTAIN OBLIGATIONS AFFECTING SUBSIDIARIES.................33
SECTION 7.10 PERMITTED ACQUISITIONS.....................................34
ARTICLE VIII NEGATIVE COVENANTS..............................................35
SECTION 8.01 INDEBTEDNESS...............................................35
SECTION 8.02 LIENS......................................................36
SECTION 8.03 FUNDAMENTAL CHANGES........................................38
SECTION 8.04 ADVANCES, INVESTMENTS AND LOANS............................39
SECTION 8.05 RESTRICTED PAYMENTS........................................40
SECTION 8.07 TRANSACTIONS WITH AFFILIATES...............................40
SECTION 8.08 LIMITATION ON ISSUANCE OF CAPITAL STOCK....................40
SECTION 8.09 CAPITAL EXPENDITURES.......................................41
SECTION 8.10 CONSOLIDATED INTEREST COVERAGE RATIO.......................42
SECTION 8.11 MAXIMUM CONSOLIDATED TOTAL LEVERAGE RATIO..................43
SECTION 8.12 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.........44
SECTION 8.13 MODIFICATIONS OF CERTAIN DOCUMENTS.........................44
ARTICLE IX EVENTS OF DEFAULT.................................................46
SECTION 9.01 EVENTS OF DEFAULT; REMEDIES................................46
ARTICLE X SUBSIDIARY GUARANTEE...............................................48
SECTION 10.01 THE GUARANTEE.............................................48
SECTION 10.02 OBLIGATIONS UNCONDITIONAL.................................48
SECTION 10.03 REINSTATEMENT.............................................49
SECTION 10.04 SUBROGATION...............................................49
SECTION 10.05 REMEDIES..................................................49
SECTION 10.06 INSTRUMENT FOR THE PAYMENT OF MONEY.......................50
SECTION 10.07 CONTINUING GUARANTEE......................................50
SECTION 10.08 RIGHTS OF CONTRIBUTION....................................50
SECTION 10.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS...............50
SECTION 10.10 SUBORDINATION OF GUARANTEES...............................51
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ARTICLE XI SUBORDINATION.....................................................51
SECTION 11.01 AGREEMENT TO SUBORDINATE..................................51
SECTION 11.02 BANKRUPTCY, LIQUIDATION, DISSOLUTION, ETC.................51
SECTION 11.03 NO PAYMENT IN CERTAIN CIRCUMSTANCES.......................53
SECTION 11.04 PAYMENTS OTHERWISE PERMITTED..............................54
SECTION 11.05 SUBROGATION...............................................54
SECTION 11.06 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS...............54
SECTION 11.07 NO WAIVER OF SUBORDINATION PROVISIONS.....................55
SECTION 11.08 NOTICE TO INVESTORS.......................................55
SECTION 11.09 RELIANCE..................................................55
SECTION 11.10 REINSTATEMENT.............................................56
SECTION 11.11 SUBSIDIARY GUARANTEES.....................................56
SECTION 11.12 LIMITATIONS ON REMEDIES...................................56
SECTION 11.13 NOTICES...................................................57
ARTICLE XII MISCELLANEOUS....................................................57
SECTION 12.01 NOTICES...................................................57
SECTION 12.02 WAIVERS; AMENDMENTS.......................................57
SECTION 12.03 EXPENSES; INDEMNITY: DAMAGE WAIVER........................58
SECTION 12.04 SUCCESSORS AND ASSIGNS....................................59
SECTION 12.05 SURVIVAL..................................................61
SECTION 12.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS..................61
SECTION 12.07 SEVERABILITY..............................................61
SECTION 12.08 GOVERNING LAW; JURISDICTION; CONSENT
TO SERVICE OF PROCESS.....................................61
SECTION 12.09 WAIVER OF JURY TRIAL......................................62
SECTION 12.10 HEADINGS..................................................62
SECTION 12.11 CONFIDENTIALITY...........................................62
SCHEDULE 6.10 - ERISA
SCHEDULE 6.12 - Debt Agreements
SCHEDULE 6.13 - Capitalization
SCHEDULE 8.01 - Indebtedness
SCHEDULE 8.02 - Liens
SCHEDULE 8.04 - Investments
SCHEDULE 8.09 - Capital Expenditures Percentage
EXHIBIT A - Form of Senior Subordinated Note
EXHIBIT B - Form of Opinion of Counsel to the Obligors
EXHIBIT C - Form of Opinion of Special New York Counsel to JPMorgan Partners
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SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT (this "Agreement"),
dated as of August 25, 2003, between:
NUCO2 INC., a corporation duly organized and validly existing under
the laws of the State of Florida (the "COMPANY");
each of the Subsidiaries of the Company appearing under the caption
"SUBSIDIARY GUARANTORS" on the signature pages hereto and/or which
pursuant to Section 7.09 shall hereafter become a Subsidiary Guarantor
(each a "SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY
GUARANTORS"; and, together with the Company, the "OBLIGORS"); and
each of the Investors of the Notes (as defined below) appearing
under the caption "INVESTORS" on the signature pages hereto and each
assignee of the rights and obligations of an Investor pursuant to Section
12.04 (each, an "INVESTOR", and collectively, the "INVESTORS").
The Company has requested that the Investors acquire the Notes in an
aggregate original principal amount of $30,000,000 (the "Original Principal
Amount") to refinance certain existing indebtedness of the Company. To induce
the Investors to purchase the Notes, the Obligors and the Investors propose to
enter into this Agreement pursuant to which the Investors will purchase the
Notes issued by the Company and the Subsidiary Guarantors will guarantee the
payment in full of the Notes and all other amounts payable under this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 CERTAIN DEFINED TERMS. In addition to the other terms
defined herein, as used herein, the following terms shall have the following
meanings:
"ACQUIRED ENTITY OR BUSINESS" means either (i) the assets
constituting a business, division or product line of any Person not already a
Subsidiary of the Company or (ii) 100% of the capital stock of any such Person,
which Person shall, as a result of such stock acquisition, become a Wholly-Owned
Domestic Subsidiary of the Company (or shall be merged with and into the Company
or a Subsidiary Guarantor, with the Company or such Subsidiary Guarantor being
the surviving Person).
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling (including all directors and officers of such
Person), controlled by, or under direct or indirect common control with, such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power (i) to vote 5% or more of the
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securities having ordinary voting power for the election of directors (or
equivalent governing body) of such Person or (ii) to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise; provided that none
of the initial Investors (or any of their Affiliates) shall be deemed to be an
Affiliate of the Company or any Subsidiary thereof.
"BANKRUPTCY CODE" means the Federal Bankruptcy Code of 1978, as
amended from time to time or any successor statute thereto.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed.
"CALLED PRINCIPAL" has the meaning assigned to such term in Section
3.01.
"CALCULATION PERIOD" means, in the case of any Permitted
Acquisition, the Test Period most recently ended prior to the date of any such
Permitted Acquisition for which financial statements are available.
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"CAPITALIZED LEASE OBLIGATIONS" means, with respect to any Person,
all rental obligations of such Person which, under generally accepted accounting
principles, are or will be required to be capitalized on the books of such
Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with such principles.
"CASH EQUIVALENTS" means, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (ii) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public instrumentality thereof maturing within six months from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Xxxxx'x, (iii) dollar denominated
time deposits, certificates of deposit and bankers acceptances of any commercial
bank having, or which is the principal banking subsidiary of a bank holding
company having, a long-term unsecured debt rating of at least "A" or the
equivalent thereof from S&P or "A2" or the equivalent thereof from Xxxxx'x with
maturities of not more than six months from the date of acquisition by such
Person, (iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iii) above, (v)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Xxxxx'x and in each case maturing not more than six months after the
date of acquisition by such Person, and (vi) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above.
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"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, as amended by the Superfund Amendments and Reauthorization
Act (42 U.S.C. ss.9601 et seq.).
"CHANGE IN CONTROL" means (a) any "person" or "group" (within the
meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as
in effect on the Effective Date) shall (i) have acquired, directly or
indirectly, beneficial ownership of 30% or more on a fully diluted basis of the
voting and/or economic interest in the Company's capital stock, (ii) have
acquired, directly or indirectly, by purchase, sale, lease, exchange or other
transfer (in a single transaction or series of related transactions) all or
substantially all of the assets of the Company or (iii) obtained the power
(whether or not exercised) to elect a majority of the Company's directors or (b)
the board of directors of the Company shall cease to consist of a majority of
Continuing Directors.
"CLOSING DATE" means August 25, 2003.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time and the rules and regulations promulgated thereunder.
"COMPANY" has the meaning assigned to such term in the preamble of
this Agreement.
"CONSOLIDATED EBIT" means, for any period, Consolidated Net Income
for such period before deducting therefrom consolidated interest expense of the
Company and its Subsidiaries for such period (to the extent that such
consolidated interest expense was deducted in arriving at Consolidated Net
Income for such period) and provision for taxes based on income that were
included in arriving at Consolidated Net Income for such period and without
giving effect to any gains or losses from sales of assets other than from sales
of inventory in the ordinary course of business.
"CONSOLIDATED EBITDA" means, for any period, Consolidated EBIT for
such period, adjusted by (x) adding thereto (i) the amount of all amortization
of intangibles and depreciation that were deducted in arriving at Consolidated
Net Income for such period, (ii) the amount of all expenses incurred in
connection with the Transactions or the Senior Credit Agreement for such period
to the extent that same were deducted in arriving at Consolidated Net Income for
such period, and (iii) the amount of all non-cash deferred compensation expense
for such period to the extent that same was deducted in arriving at the
Consolidated Net Income for such period and (y) deducting therefrom (i) the
amount of all cash payments during such period that are associated with any
non-cash deferred compensation expense that was added back to Consolidated Net
Income in a previous period and (ii) the amount of all consolidated interest
income of the Company and its Subsidiaries for such period; it being understood
that in determining the Consolidated Total Leverage Ratio only, Consolidated
EBITDA for any period shall be calculated on a Pro Forma Basis to give effect to
any Acquired Entity or Business acquired during such period pursuant to a
Permitted Acquisition and not subsequently sold or otherwise disposed of by the
Company or any of its Subsidiaries during such period. Notwithstanding the
4
foregoing, determinations of Consolidated EBITDA for purposes of Section 8.11 at
any time prior to the first anniversary of the Closing Date shall be made in
accordance with the requirements of the definition of "Test Period" contained
herein.
"CONSOLIDATED INDEBTEDNESS" means, at any time, the sum of (without
duplication) (i) all indebtedness (including principal, interest, fees and
charges) of the Company and its Subsidiaries for borrowed money (including
obligations evidenced by bonds, notes or similar instruments) and for the
deferred purchase price of property or services (excluding trade payables and
accrued expenses incurred in the ordinary course of business), (ii) the
aggregate amount of all Capitalized Lease Obligations of the Company and its
Subsidiaries, (iii) all Indebtedness of the types described in clause (i), (ii),
(iv), or (v) of this definition secured by any Lien on any property owned by the
Company or any of its Subsidiaries, whether or not such Indebtedness has been
assumed by such Person (provided that, if the Person has not assumed or
otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the fair market value of the property to
which such Lien relates as determined in good faith by such Person), (iv) all
Contingent Obligations of the Company and any of its Subsidiaries (regardless of
any contrary treatment under GAAP), and (v) all Indebtedness of the Company and
its Subsidiaries of the type described in clauses (ii) and (vii) of the
definition of Indebtedness contained herein; provided that for purposes of this
definition the amount of Indebtedness in respect of the Interest Rate Protection
Agreements and other Hedging Agreements shall be at any time the unrealized net
loss position, if any, of the Company and/or its Subsidiaries thereunder on a
marked-to-marked basis determined no more than one month prior to such time.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, for any period, the
ratio of Consolidated EBITDA for such period to Consolidated Interest Expense
for such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum of
the total consolidated interest expense of the Company and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of the Company and its Subsidiaries representing the interest factor
for such period; provided that the amortization of deferred financing, legal and
accounting costs with respect to the Senior Credit Agreement and the non-cash
interest expense on the Notes, in each case, shall be excluded from Consolidated
Interest Expense to the extent same would otherwise have been included therein.
Notwithstanding the foregoing, determinations of Consolidated Interest Expense
for purposes of Section 8.10 at any time prior to the first anniversary of the
Closing Date shall be made in accordance with the requirements of the definition
of "Test Period" contained herein.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of the Company and its Subsidiaries for such period, determined on a
consolidated basis (after any deduction for minority interests), provided that
(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Subsidiary of the Company or is accounted for by the Company by
the equity method of accounting shall be included only to the extent of the
payment of cash dividends or cash distributions by such other Person to the
Company or a Subsidiary thereof during such period, (ii) the net income of any
Subsidiary of the Company shall be excluded to the extent that the declaration
or payment of cash dividends or similar cash distributions by that Subsidiary of
that net income is not at the date of determination permitted by operation of
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its charter or any agreement, instrument or law applicable to such Subsidiary
and (iii) except for determinations to be made on a Pro Forma Basis, the net
income (or loss) of any other Person acquired by the Company or a Subsidiary of
the Company in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded.
"CONSOLIDATED TOTAL LEVERAGE RATIO" means, at any time, the ratio of
(x) Consolidated Indebtedness at such time to (y) Consolidated EBITDA for the
Test Period then most recently ended.
"CONTINGENT OBLIGATION" means, as to any Person, any obligation of
such Person as a result of such Person being a general partner of any other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of any such primary obligation or (y) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"CONTINUING DIRECTORS" means the directors of the Company on the
Closing Date and each other director if such director's election to, or
nomination for the election to, the board of directors of the Company is
recommended or approved by a majority of then continuing directors.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCOUNTED VALUE" has the meaning assigned to such term in Section
3.01.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"ENVIRONMENTAL LAWS" means all Federal, state, local and foreign
statutes and codes or regulations, rules or ordinances issued, promulgated, or
approved thereunder, now or hereafter in effect (including those with respect to
asbestos or asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety, relating to (i)
6
emissions, discharges, releases or threatened releases of Hazardous Materials,
into the environment (including ambient air, surface water, ground water, land
surface or subsurface strata), or (ii) the manufacture, processing,
distribution, use generation, treatment, storage, disposal, transport or
handling of any Hazardous Materials, and (iii) underground storage tanks and
related piping, and emissions, discharges and releases or threatened releases
therefrom, such Environmental Laws to include, without limitation, (i) the Clean
Air Act (42 U.S.C.ss.7401 et seq.), (ii) the Clean Water Act (33 U.S.C.ss.1251
et seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C.ss.6901 et
seq.), (iv) the Toxic Substances Control Act (15 U.S.C.ss.2601 et seq.) and (v)
CERCLA, each as amended.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or based upon (i) violation of any
Environmental Law, (ii) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (iii) exposure to any
Hazardous Materials, (iv) the release or threatened release of any Hazardous
Materials into the environment or (v) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"EQUITY RIGHTS" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any stockholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time and the rules and regulations promulgated
thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means: (i) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (ii)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (iii) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (iv) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (v) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi)
the incurrence by the Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (vii) the receipt by the Company or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
7
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"ERISA PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"EVENT OF DEFAULT" has the meaning assigned to such term in Section
9.01.
"EXISTING CREDIT AGREEMENT" means the Second Amended and Restated
Revolving Credit Agreement, dated as of September 24, 2001, among the Company,
the lenders party thereto, SunTrust Bank, as administrative agent, issuing bank
and swingline lender, Xxxxxx Financial, Inc., as syndication agent, and BNP
Paribas, as documentation agent, as amended, modified or supplemented.
"EXISTING PREFERRED STOCK" means (i) 5,000 shares of Series A 8%
cumulative convertible preferred stock, no par value, issued to X.X. Xxxxxx
Partners (BHCA), L.P. and (ii) 2,500 shares of Series B 8% cumulative
convertible preferred stock, no par value, issued to Paribas North America,
Inc., in each case outstanding on the date hereof.
"EXISTING SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT" means the
Senior Subordinated Note Purchase Agreement, dated as of October 31, 1997, among
the Company, the subsidiary guarantors party thereto and the investors party
thereto, as amended, modified or supplemented.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory, monetary or administrative powers of a governmental nature
or functions of or pertaining to government.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"INDEBTEDNESS" means, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit,
bankers' acceptances and similar obligations issued for the account of such
Person and all unpaid drawings in respect of such letters of credit, bankers'
acceptances and similar obligations, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
8
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person (provided that, if the Person has
not assumed or otherwise become liable in respect of such Indebtedness, such
Indebtedness shall be deemed to be in an amount equal to the fair market value
of the property to which such Lien relates as determined in good faith by such
Person), (iv) the aggregate amount of all Capitalized Lease Obligations of such
Person, (v) all obligations of such Person to pay a specified purchase price for
goods or services, whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vi) all Contingent Obligations of such Person, and (vii)
all obligations under any Interest Rate Protection Agreement, any Other Hedging
Agreement or under any similar type of agreement. Notwithstanding the foregoing,
Indebtedness shall not include trade payables and accrued expenses incurred by
any Person in accordance with customary practices and in the ordinary course of
business of such Person.
"INTEREST PAYMENT DATE" has the meaning assigned to such term in
Section 2.04.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"INVESTMENT" has the meaning assigned to such term in Section 8.04.
"INVESTOR REPRESENTATIVE" means (i) JPMorgan Partners so long as it
shall be a holder of any of the Notes or (ii) otherwise, an Investor designated
by the Required Investors to act as the Investor Representative hereunder.
"INVESTORS" has the meaning assigned to such term in the preamble of
this Agreement.
"JPMORGAN PARTNERS" means X.X. Xxxxxx Partners (BHCA), L.P.
"LEASEHOLDS" of any Person means all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever (including
any conditional sale or other title retention agreement, any financing or
similar statement or notice filed under the UCC or any other similar recording
or notice statute, and any lease having substantially the same effect as any of
the foregoing).
"MAKE-WHOLE AMOUNT" has the meaning assigned to such term in Section
3.01.
"MARGIN STOCK" means "margin stock" within the meaning of Regulation
U.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect on the
business, operations, property, projections, assets, liabilities (whether
contractual, environmental or otherwise), condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole or (ii) a
material adverse effect on the ability of the Obligors (taken as a whole) to
9
perform their payment or other material obligations hereunder or under any other
Note Document.
"Moody's" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA as to which the Company, any Subsidiary or any ERISA
Affiliate is obligated to make, has made, or will be obligated to make
contributions on behalf of participants who are or were employed by any of them.
"NET INSURANCE PROCEEDS" means, with respect to any Recovery Event,
the cash proceeds (net of reasonable costs and taxes incurred in connection with
such Recovery Event) received by the respective Person in connection with such
Recovery Event.
"NOTE DOCUMENTS" means, collectively, this Agreement, the Notes, the
Warrant Agreement and the Warrants.
"NOTES" has the meaning assigned to such term in Section 2.01,
including any Notes issued in substitution for any Notes theretofore issued
pursuant to this Agreement and any Notes issued under Section 2.04(d)
"OBLIGORS" has the meaning assigned to such term in the preamble of
this Agreement.
"ORIGINAL PRINCIPAL AMOUNT" has the meaning assigned to such term in
the recitals of this Agreement.
"OTHER HEDGING AGREEMENTS" means any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar arrangements, or
arrangements designed to protect against fluctuations in currency values or
commodity prices.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar
functions.
"PERMITTED ACQUISITION" means the acquisition by the Company or a
Wholly Owned Domestic Subsidiary of the Company which is a Subsidiary Guarantor
of an Acquired Entity or Business (including by way of merger of such Acquired
Entity or Business with and into the Company (so long as the Company is the
surviving corporation) or a Wholly-Owned Domestic Subsidiary of the Company
which is a Subsidiary Guarantor (so long as the Subsidiary Guarantor is the
surviving corporation)), provided that (in each case) (i) the consideration paid
or to be paid by the Company or such Wholly-Owned Domestic Subsidiary consists
solely of cash, the issuance or incurrence of Indebtedness otherwise permitted
by Section 8.01 and the assumption/acquisition of any Indebtedness (calculated
at face value) which is permitted to remain outstanding in accordance with the
requirements of Section 8.01, (ii) in the case of the acquisition of 100% of the
capital stock or other equity interests of any Person (including by way of
merger), such Person shall own no capital stock or other equity interests of any
other Person (excluding de minimis amounts) unless such Person owns 100% of the
capital stock or other equity interests of such other Person, (iii) all of the
business, division or product line acquired pursuant to the respective Permitted
10
Acquisition, or the business of the Person acquired pursuant to the respective
Permitted Acquisition and its Subsidiaries taken as a whole, is in the United
States, (iv) the Acquired Entity or Business acquired pursuant to the respective
Permitted Acquisition is in a business permitted by Section 8.06 and (v) all
applicable requirements of Section 7.10 applicable to Permitted Acquisitions are
satisfied. Notwithstanding anything to the contrary contained in the immediately
preceding sentence, an acquisition which does not otherwise meet the
requirements set forth above in the definition of "Permitted Acquisition" shall
constitute a Permitted Acquisition if, and to the extent, the Required Investors
agree in writing, prior to the consummation thereof, that such acquisition shall
constitute a Permitted Acquisition for purposes of this Agreement.
"PERMITTED ACQUISITION BASKET AMOUNT" means, for each fiscal year of
the Company, $4,000,000 (or, in the case of the fiscal year of the Company
ending June 30, 2004, $5,000,000, but only to the extent such incremental
$1,000,000 over the annual basket provided above is used to acquire the assets
of Coca-Cola Enterprises pursuant to a Permitted Acquisition).
"PERMITTED ENCUMBRANCE" means, with respect to any Real Property
owned or leased by the Company or any of its Subsidiaries which is encumbered
(or required to be encumbered) by a mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or
similar security instrument, such exceptions to title as are set forth in any
mortgage title insurance policy or a binding commitment with respect thereto
pursuant to the Senior Credit Agreement.
"PERSON" means any natural person, corporation, partnership, limited
liability company, trust, joint venture, association, company or other
organization, whether or not legal entity, and any Governmental Authority.
"PIK INTEREST AMOUNT" has the meaning assigned to such term in
Section 2.04.
"PLAN" means any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) the Company or a Subsidiary of the Company or an ERISA Affiliate
and each such plan for the five year period immediately following the latest
date on which the Company, a Subsidiary of the Company or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"PRO FORMA BASIS" means, in connection with any calculation of
compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (x) the incurrence of any
Indebtedness (other than revolving Indebtedness, except to the extent same is
incurred to refinance other outstanding Indebtedness or to finance a Permitted
Acquisition) after the first day of the relevant Calculation Period as if such
Indebtedness had been incurred (and the proceeds thereof applied) on the first
day of the relevant Calculation Period, (y) the permanent repayment of any
Indebtedness (other than revolving Indebtedness except to the extent accompanied
by a corresponding permanent commitment reduction) after the first day of the
relevant Calculation Period as if such Indebtedness had been retired or redeemed
on the first day of the relevant Calculation Period and/or (z) the Permitted
Acquisition, if any, then being consummated as well as any other Permitted
11
Acquisition consummated after the first day of the relevant Calculation Period
and on or prior to the date of the respective Permitted Acquisition then being
effected, as the case may be, with the following rules to apply in connection
therewith:
(i) all Indebtedness (x) (other than revolving Indebtedness, except
to the extent same is incurred to refinance other outstanding Indebtedness
or to finance a Permitted Acquisition) incurred or issued after the first
day of the relevant Calculation Period (whether incurred to finance a
Permitted Acquisition, to refinance Indebtedness or otherwise) shall be
deemed to have been incurred or issued (and the proceeds thereof applied)
on the first day of the respective Calculation Period and remain
outstanding through the date of determination and (y) (other than
revolving Indebtedness except to the extent accompanied by a corresponding
permanent commitment reduction) permanently retired or redeemed after the
first day of the relevant Calculation Period shall be deemed to have been
retired or redeemed on the first day of the respective Calculation Period
and remain retired through the date of determination;
(ii) all Indebtedness assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest at (x) the
rate applicable thereto, in the case of fixed rate indebtedness, or (y) at
the rate which would have been applicable thereto on the last day of the
respective Calculation Period, in the case of floating rate Indebtedness
(although interest expense with respect to any Indebtedness for periods
while same was actually outstanding during the respective period shall be
calculated using the actual rates applicable thereto while same was
actually outstanding); and
(iii) in making any determination of Consolidated EBITDA, pro forma
effect shall be given to any Permitted Acquisition consummated during the
periods described above, with such Consolidated EBITDA to be determined as
if such Permitted Acquisition was consummated on the first day of the
relevant Calculation Period, but without taking into account any pro forma
cost savings and expenses.
"PROJECTIONS" means the projections dated June 2, 2003 that were
provided at the annual bank meeting and were prepared by or on behalf of the
Company in connection with the Transactions and delivered to the Investors prior
to the Closing Date.
"QUALIFIED INVESTOR" means (i) any initial Investor of the Notes and
(ii) any bank, trust company, savings and loan association, pension plan,
investment company, insurance company, broker, dealer or any other financial
institution or entity, regardless of legal form.
"REAL PROPERTY" of any Person means all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"recovery event" means the receipt by the Company or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable by
reason of theft, loss, physical destruction, damage, taking or any other similar
event with respect to any property or assets of the Company or any of its
Subsidiaries.
12
"REGULATIONS T, U AND X" means, respectively, Regulations T, U and X
of the Board of Governors of the Federal Reserve System (or any successor), as
the same may be modified and supplemented and in effect from time to time.
"REINVESTMENT YIELD" has the meaning assigned to such term in
Section 3.01.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, partners, employees,
agents and advisors of such Person and such Person's Affiliates.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
"REMAINING AVERAGE LIFE" has the meaning assigned to such term in
Section 3.01.
"REMAINING SCHEDULED PAYMENTS" has the meaning assigned to such term
in Section 3.01.
"REQUIRED INVESTORS" means, at any time, Investors holding more than
a majority in aggregate principal amount of the Notes at the time outstanding,
in aggregate principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates (other than any
Investor)).
"RESTRICTED PAYMENT" means: (i) any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Company or any of its Subsidiaries other than
dividends paid by a Subsidiary; (ii) any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of capital stock of the Company or any of its Subsidiaries or
any option, warrant or other right to acquire any such shares; (iii) any payment
on account of the purchase, redemption, conversion, exchange, retirement,
acquisition, defeasance or sinking fund payment with respect to any Indebtedness
that is junior or subordinate to the Notes; and (iv) any payment made to retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of capital stock of the Company or any of its
Subsidiaries.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended and in
effect from time to time.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended and in effect from time to time.
13
"SENIOR CREDIT AGREEMENT" means the Credit Agreement, dated as of
August 25, 2003, among the Company, the lenders from time to time parties
thereto and BNP Paribas, as administrative agent for such lenders, and any
refinancing, refunding, extension or renewal thereof (whether or not with any of
the lenders or the agent for such lenders then party to the Senior Credit
Agreement), in each case, at any time amended, modified, restated and/or
supplemented in accordance with Section 8.13(a).
"SENIOR CREDIT DOCUMENTS" means the Senior Credit Agreement and all
other documents and agreements originally executed and delivered thereunder, in
each case, as the same shall, subject to Section 8.13(a), be amended, restated
and/or supplemented and in effect from time to time.
"SENIOR DEBT" means the following obligations of the Company and its
Subsidiaries:
(i) with respect to the Company, all principal of the loans
outstanding under the Senior Credit Agreement, all interest thereon
(including any interest accruing after the date of any filing by the
Company of any petition in bankruptcy or the commencing of any bankruptcy,
insolvency or similar proceedings with respect to the Company whether or
not the same is allowed as a claim in any such proceeding) and all other
amounts outstanding thereunder, including all reimbursement obligations in
respect of letters of credit thereunder, expenses (including attorneys'
fees), indemnities and penalties and all commitment, facility and
administrative, agency or other similar fees payable by the Company from
time to time under the Senior Credit Documents, and any obligations of the
Company in respect of Interest Rate Protection Agreements owing to one or
more of the lenders under Senior Credit Agreement and/or affiliates of
such lenders (even if such lender subsequently ceases to be a lender under
the Senior Credit Agreement) that are permitted by the terms of the Senior
Credit Agreement;
(ii) with respect to any Subsidiary of the Company, the guarantee of
such Subsidiary in respect of any Senior Debt of the Company; and
(iii) with respect to the Company and its Subsidiaries, any and all
refinancings, replacements or refundings of any of the amounts referred to
in clauses (i) and (ii) above;
provided that the aggregate principal or face amount of Senior Debt (exclusive
of obligations in respect of Interest Rate Protection Agreements referred to in
said clause (i)), and any refinancing, replacement or refunding thereof
permitted under clause (iii) above (including the maximum amount of the
aggregate commitments of the lenders to extend any revolving credit facility
thereunder) shall not exceed at any time $60,000,000, minus the aggregate amount
of (x) permanent reductions of revolving credit commitments thereunder and (y)
prepayments of any term loans made from time to time in respect of the Senior
Debt (excluding however, for avoidance of doubt, reductions of revolving credit
commitments and/or prepayments of term loans made in connection with a
refinancing, replacement or refunding of Senior Debt).
14
"SENIOR DEBT REPRESENTATIVE" means (i) initially, BNP Paribas and
(ii) thereafter, such other holder of Senior Debt notified in writing to each
Investor pursuant to (and in accordance with the requirements of) Section 11.13.
"SETTLEMENT DATE" has the meaning assigned to such term in Section
3.01.
"SUBSIDIARY" means, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time. Unless otherwise specified, "Subsidiary" and "Subsidiaries" means a
Subsidiary and Subsidiaries, respectively, of the Company.
"SUBORDINATED DEBT" has the meaning assigned to such term in Section
11.01.
"SUBSIDIARY GUARANTOR" has the meaning assigned to such term in the
preamble of this Agreement.
"TAX" means, with respect to any Person, any Federal, state or
foreign tax, assessment, customs duties or other governmental charge, levy or
assessment (including any withholding tax) upon such Person or upon such
Person's assets, revenues, income or profits.
"TEST PERIOD" means each period of four consecutive fiscal quarters
of the Company then last ended (in each case taken as one accounting period).
Notwithstanding anything to the contrary required by United States generally
accepted accounting principles for purposes of any calculation of Consolidated
Interest Expense pursuant to Section 8.10 and Consolidated EBITDA required in
determining the Consolidated Total Leverage Ratio at any time on or prior to
September 30, 2004, the term "Test Period" shall mean be a one-year period
ending on the last day of the fiscal quarter then last ended, with any
calculations of (x) Consolidated Interest Expense required in determining
compliance with Section 8.10 to be made on a pro forma basis in accordance with,
and to the extent provided in, the immediately succeeding sentence and (y)
Consolidated EBITDA required in determining the Consolidated Total Leverage
Ratio to be made on a pro forma basis in accordance with, and to the extent
provided in, the second succeeding sentence. To the extent the respective Test
Period (i) includes the fiscal quarter of the Company ended December 31, 2002,
Consolidated Interest Expense for such fiscal quarter shall be deemed to be
$1,873,000, (ii) includes the fiscal quarter of the Company ended March 31,
2003, Consolidated Interest Expense for such fiscal quarter shall be deemed to
be $1,766,000, (iii) includes the fiscal quarter of the Company ended June 30,
2003, Consolidated Interest Expense for such fiscal quarter shall be deemed to
be $1,738,000 and (iv) includes the fiscal quarter of the Company ended
September 30, 2003, Consolidated Interest Expense shall be determined by using
actual Consolidated Interest Expense for such period determined in accordance
with the definition thereof. To the extent the respective Test Period (i)
includes the fiscal quarter of the Company ended December 31, 2002, Consolidated
EBITDA for such fiscal quarter shall be deemed to be $4,421,000, (ii) includes
15
the fiscal quarter of the Company ended March 31, 2003, Consolidated EBITDA for
such fiscal quarter shall be deemed to be $5,436,000, (iii) includes the fiscal
quarter of the Company ended June 30, 2003, Consolidated EBITDA for such fiscal
quarter shall be deemed to be $6,285,000 and (iv) includes the fiscal quarter of
the Company ended September 30, 2003, Consolidated EBITDA shall be determined by
using actual Consolidated EBITDA for such period determined in accordance with
the definition thereof; provided that any additional adjustments required by the
definition of Pro Forma Basis for occurrences after the Closing Date shall also
be made.
"TRANSACTIONS" means the execution, delivery and performance by the
(i) Obligors of this Agreement, the issuance of the Notes and the use of the
proceeds thereof in accordance with the preamble of this Agreement and (ii)
Company of the Warrant Agreement and the issuance of the Warrants thereunder.
"WARRANT AGREEMENT" means the Warrant Agreement dated as of the date
hereof between the Company and the holders of the Warrants party thereto
pursuant to which the Warrants are issued, as amended and in effect from time to
time.
"WARRANTS" means each of the warrants issued to the holders of the
Warrants on the Closing Date pursuant to the Warrant Agreement, including any
warrants issued in replacement or substitution thereof.
"WHOLLY-OWNED DOMESTIC SUBSIDIARY" means, as to any Person, any
Wholly-Owned Subsidiary of such Person which is incorporated or organized in the
United States or any State thereof.
"WHOLLY-OWNED SUBSIDIARY" means, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
16
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03 ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Investors that the Company requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Required Investors notify the Company
that they request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith. To enable the ready and consistent
determination of compliance with the covenants set forth in Article VIII, the
Company will not change the last day of its fiscal year from June 30 of each
year, or the last days of the first three fiscal quarters in each of its fiscal
years from September 30, December 31, and March 31 of each year, respectively.
ARTICLE II
AMOUNT AND TERMS OF NOTES
SECTION 2.01 COMMITMENTS. Subject to and upon the terms and
conditions set forth herein, each Investor severally agrees to purchase from the
Company, and the Company agrees to issue to such Investor, its 16.3% Senior
Subordinated Note due February 27, 2009 (each a "Note" and, collectively, the
"Notes"), which Note (i) shall be issued on the Closing Date and (ii) shall be
purchased at par by such Investor in an amount equal to the principal amount set
forth opposite its name on the signature pages hereto.
SECTION 2.02 DISBURSEMENT OF FUNDS. Each Investor shall make
available all amounts to be funded by such Investor under this Agreement on the
Closing Date in immediately available funds to the account specified by the
Company.
SECTION 2.03 NOTES.
(a) The Company's obligation to pay the principal (including any PIK
Interest Amount) of, Make-Whole Amount (if any) and interest on all the Notes
issued by it shall be evidenced by a Note, substantially in the form of Exhibit
A, duly executed and delivered by the Company with blanks appropriately
completed in conformity herewith.
(b) Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of any Note, and (in case of loss,
theft or destruction) of indemnity satisfactory to it (the relevant Investor's
undertaking shall be satisfactory indemnity in case of loss, theft or
destruction of any Note owned by such Investor), and upon reimbursement to the
17
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of such Note, if mutilated, the Company will pay any unpaid
principal, Make-Whole Amount (if any), interest and prepayment charge then or
theretofore due and payable on such Note and will deliver in lieu of such Note a
new Note in the remaining unpaid principal amount thereof and carrying the same
rights to interest (unpaid and to accrue).
(c) Except to the extent otherwise provided herein, each payment of
principal of the Notes (including any PIK Interest Amount) by the Company shall
be made for account of the Investors pro rata in accordance with the respective
unpaid principal amounts of the Notes held by them and each payment of interest
on the Notes (including any PIK Interest Amount) by the Company shall be made
for account of the Investors pro rata in accordance with the amounts of interest
on such Notes then due and payable to the respective Investors.
SECTION 2.04 INTEREST.
(a) The unpaid principal amount of each Note (including any PIK
Interest Amount) shall bear interest from the Closing Date until maturity
(whether by acceleration or otherwise) at the rate of 16.3% per annum.
(b) Any amount that is not paid when due hereunder (without giving
effect to grace periods, if any) shall bear interest from the date such amount
was due through the date of payment at a rate equal to 18.3% per annum. Without
limiting the foregoing (but without duplication), upon the occurrence and during
the continuance of any Event of Default, the principal amount of the Notes
(including each PIK Interest Amount), and all other amounts then owing
hereunder, shall bear interest for each day during the period from and including
the occurrence of such Event of Default to but excluding the date such Event of
Default shall have been cured or waived at a rate equal to 18.3% per annum.
(c) Interest on the unpaid principal amount of each Note (including
any PIK Interest Amount added to principal in accordance with this Section 2.04)
shall accrue from and including the Closing Date (or, in the case of any PIK
Interest Amount, the date on which such amount is so added to principal pursuant
to this Section 2.04) to but excluding the date of any payment thereof and shall
be payable, in immediately available funds (except as expressly provided in
paragraph (d) of this Section 2.04), quarterly in arrears on February 28, May
31, August 31 and November 30 in each year and on the maturity date of each
Note, commencing on November 30, 2003 (each an "Interest Payment Date"), and on
any prepayment (on the amount prepaid), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(d) Notwithstanding anything herein to the contrary, 4.3% per annum
of the accrued interest on the Notes (including any PIK Interest Amount
theretofore added to principal) due on any Interest Payment Date (other than at
the maturity of the Notes) shall be paid "in kind" by the Company on the
relevant Interest Payment Date by adding the amount of such interest to the
principal amount of each Note (or, in the case of interest payable on any PIK
Interest Amount, to such PIK Interest Amount) (each such amount so paid in kind
pursuant to this clause being a "PIK Interest Amount"). Each Investor shall
maintain records evidencing the amount of each PIK Interest Amount (and any
interest paid "in kind" thereon) paid in respect of each Note held by such
Investor, and the entries in such records shall be prima facie evidence of the
18
existence and amounts of the obligations recorded therein (provided that the
failure of any such holder to maintain such records or any error therein shall
not in any manner affect the obligation of the Company to pay each PIK Interest
Amount, with interest thereon, in accordance with the terms of this Agreement).
At the request of any Investor, the Company shall execute and deliver to such
Investor one or more promissory notes (each substantially in the form of Exhibit
A hereto, with such changes thereto as shall be requested by such Investor to
give effect to the terms of this Section 2.04(d)) to evidence any or all of the
PIK Interest Amounts (including interest thereon) then owing to such Investor
hereunder.
(e) All computations of interest hereunder and under the Notes shall
be made on the basis of a 360-day year consisting of twelve 30-day months and
shall be payable for the actual number of days elapsed (including the first day
but excluding the date of payment thereof).
SECTION 2.05 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The failure
of any Investor to purchase the Note to be purchased by it on the Closing Date
shall not relieve any other Investor of its obligation to purchase its Note on
such date, but no Investor shall be responsible for the failure of the other
Investor to purchase its Note, and no Investor shall have any obligation to any
other Investor for the failure by such Investor to purchase any Note required to
be purchased by such Investor. The amounts payable by the Company at any time
hereunder and under the Notes to each Investor shall be a separate and
independent debt and each Investor shall be entitled to protect and enforce its
rights arising out of this Agreement and the Notes held by it, and it shall not
be necessary for any other Investor to consent to, or be joined as an additional
party in, any proceedings for such purposes.
ARTICLE III
PREPAYMENTS; PAYMENTS
SECTION 3.01 PREPAYMENTS.
(a) Subject to Article XI, the Company may, at its option, upon
notice as provided in this Section 3.01, prepay all or, from time to time, part
of the Notes (including any PIK Interest Amounts) at any time prior to February
25, 2005 in an amount equal to 100% of the principal amount being prepaid, in
each case together with interest accrued and unpaid on the Notes (or part
thereof, as the case may be) to the prepayment date plus the applicable
Make-Whole Amount.
For purposes of this Agreement, the following terms shall have the
following meanings:
"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 shall not be less than 6% of such Called
Principal.
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"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to this
Section 3.01 or has become or is declared to be immediately due and
payable pursuant to Section 9.01, 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 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, the sum of (x) if such Called Principal is to
be prepaid pursuant to Section 3.01 or has become or is declared to
be immediately due and payable pursuant to Section 9.01, 2.50% plus
(y) the yield to maturity implied by (i) 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 PX1" on Bloomberg Financial Markets (or
such other display as may replace Page PX1 on Bloomberg Financial
Markets) for actively traded U.S. Treasury securities having a
maturity equal to the remaining term of the Notes as of such
Settlement Date, or (ii) 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 U.S. 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 term of the Notes as of such Settlement Date. Such
implied yield will be determined, if necessary, by (a) converting
U.S. Treasury xxxx quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating
linearly between (1) the actively traded U.S. Treasury security with
the maturity closest to and greater than the remaining term of the
Notes and (2) the actively traded U.S. Treasury security with the
maturity closest to and less than the remaining term of the Notes.
"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
this Section 3.01 or Section 9.01.
"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 3.01 or has become or is declared to
be immediately due and payable pursuant to Section 9.01, as the
context requires.
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(b) The Company may, at its option, upon notice as provided below,
prepay all or, from time to time, part of the Notes (including any PIK Interest
Amounts) at any time from and after February 25, 2005 at a price equal to the
sum of (i) the principal amount of all PIK Interest Amounts being prepaid and
(ii) the applicable percentage for the applicable period listed below of that
portion of the Original Principal Amount being prepaid, in each case, together
with interest accrued and unpaid on the Notes (including any PIK Interest
Amounts), or part thereof, as the case may be, to the prepayment date:
Period Price
------ -----
From February 25, 2005 through August 24, 2006 106%
From August 25, 2006 through August 24, 2007 103%
Thereafter 100%.
(c) Notwithstanding clauses (a) or (b) above, in the event of a
Change in Control prior to the third anniversary of the Closing Date in which
the net cash consideration received (or receivable) by the Company or its
shareholders shall be at least equal (or equivalent) to $22.00 per share of the
Company's authorized common stock, the Company, in connection with the
consummation of such Change in Control, may at its option prepay all outstanding
Notes at a price equal to 103% of the principal amount of each Note, in each
case, together with interest accrued and unpaid on each Note (or part thereof,
as the case may be) to the payment date.
(d) The Company will give each holder of the Notes notice of each
optional prepayment under paragraph (a) or (b) of this Section 3.01 not less
than 20 days prior to the date fixed for such prepayment, specifying such 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 the interest to
be prepaid to the prepayment date with respect to such principal amount being
prepaid and the Make-Whole Amount or premium (if any), as applicable, due in
connection with such prepayment.
(e) 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
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment; provided that such prepayment shall be applied, first, to the
prepayment of all PIK Interest Amounts, together with the accrued and unpaid
interest thereon, and, only after such amounts have been paid in full, to the
prepayment of the Original Principal Amount of the Notes. At the request of the
Company, any Note which is to prepaid only in part shall be surrendered to the
Company by the holder thereof, and the Company shall issue to such holder a new
Note equal in principal amount to the unpaid portion of the surrendered Note
(after giving effect to such prepayment) and in the form of Exhibit A.
(f) In the case of each prepayment of Notes pursuant to this Section
3.01, 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,
Make-Whole Amount (if any) and premium (if any) on such principal amount accrued
to such date. 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
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Make-Whole Amount, if any, thereon, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
(g) The Company will not and will not permit any of its Affiliates
to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement or otherwise on terms identical to
those offered to all the other Investors (whether or not such terms have
actually been accepted by all the Investors). 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 Agreement and no Notes may
be issued in substitution or exchange for any such Notes.
SECTION 3.02 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made to
any Investor, not later than 1:00 p.m. (New York time) on the date when due, and
shall be made in immediately available funds in dollars to the account specified
therefor by such Investor. Any payments under this Agreement and the Notes which
are made by the Company later than 1:00 p.m. (New York time) shall be deemed to
have been made on the next succeeding Business Day. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of,
Make-Whole Amount (if any), or premium or interest on any Note, or any other
payment hereunder or under the Notes, 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.
ARTICLE IV
REPRESENTATIONS OF THE INVESTORS
Each Investor severally represents to the Company as follows:
SECTION 4.01 PURCHASE FOR INVESTMENT. Such Investor is purchasing
the Notes to be purchased by it on the Closing Date for its own general account
and/or for one or more separate accounts maintained by it and not with a view to
any distribution of the Notes that would be in violation of the securities laws
of the United States of America or any State thereof, without prejudice,
however, to such Investor's right at all times to sell or otherwise dispose of
all or any part of the Notes under an exemption from such registration available
under the Securities Act (including Rules 144 and 144A promulgated thereunder),
and subject, nevertheless, to the disposition of its property being at all times
within its control and subject to the terms of Section 12.04.
SECTION 4.02 ACCREDITED AND SOPHISTICATED INVESTOR. Such Investor
(a) is an "accredited investor" as defined in Rule 501(a) of the Securities Act,
and (b) by reason of its business and financial experience, has such knowledge,
sophistication and experience in business and financial matters so as to be
22
capable of evaluating the merits and risks of the prospective investment in the
Notes, is able to bear the economic risk of such investment and is able to
afford a complete loss of such investment, and (c) has been afforded the
opportunity to make inquiries of management of the Company and has made its own
investigation whether or not to purchase Notes and in making its decision has
not relied in any way on the fact that any other Person has decided to purchase
Notes under this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions Precedent to Notes. The obligations of the
Investors to purchase the Notes issued by the Company hereunder are subject, at
the time of the purchase of the Notes, to the satisfaction of the following
conditions:
(a) CORPORATE AND OTHER DOCUMENTS. Certified copies of the charter
and by-laws (or equivalent documents) of each Obligor and of all corporate
(or other) authority for each Obligor (including board of director or
similar resolutions and evidence of the incumbency, including specimen
signatures, of officers) with respect to the execution, delivery and
performance of such of the Note Documents to which such Obligor is
intended to be a party and each other document to be delivered by such
Obligor from time to time in connection herewith and the Notes hereunder
(each Investor may conclusively rely on such certificate until it receives
notice in writing from such Obligor to the contrary).
(b) OFFICER'S CERTIFICATE. A certificate of a senior officer of the
Company, dated the Closing Date, to the effect set forth in clauses (a)
and (b) of Section 5.02.
(c) OPINION OF COUNSEL TO THE OBLIGORS. An opinion, dated the
Closing Date, of Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Wolosky LLP, counsel
to the Obligors, substantially in the form of Exhibit B (and each Obligor
hereby instructs such counsel to deliver such opinion to the Investors).
(d) OPINION OF SPECIAL NEW YORK COUNSEL TO JPMORGAN PARTNERS. An
opinion, dated the Closing Date, of Milbank, Tweed, Xxxxxx & XxXxxx LLP,
special New York counsel to JPMorgan Partners, substantially in the form
of Exhibit C.
(e) NOTES. One or more Notes, duly completed and executed for each
Investor.
(f) WARRANT AGREEMENT. The Warrant Agreement, duly executed and
delivered by each of the parties thereto, and the Warrants required to be
issued under Section 2.02 of the Warrant Agreement as of the Closing Date
duly issued and delivered to each of the initial holders of the Warrants
as provided in the Warrant Agreement, and each of the other agreements and
instruments contemplated to be executed and/or delivered thereunder, in
each case duly executed and/or delivered.
23
(g) SENIOR CREDIT AGREEMENT. Evidence that the Senior Credit
Agreement providing for commitments to extend credit to the Company in an
aggregate principal amount of at least $50,000,000 and otherwise in form
and substance satisfactory to the Investors shall have been executed and
delivered by each of the parties thereto and shall be in effect, and that
the initial loans thereunder shall have been made to the Company (or
contemporaneously with the purchase of the Notes hereunder shall be made),
and the Investors shall have received copies of the Senior Credit
Agreement and, upon the request of the Investors, each of the other Senior
Credit Documents delivered thereunder in connection with the initial
borrowing thereunder, in each case certified by a senior officer of the
Company.
(h) REPAYMENT OF EXISTING INDEBTEDNESS. Evidence that the principal
of and interest on, and all other amounts owing in respect of, the
Indebtedness (including the Indebtedness outstanding under the Existing
Senior Subordinated Note Purchase Agreement and the Existing Credit
Agreement) indicated on Schedule 8.01 that is to be repaid on the Closing
Date shall have been (or shall be simultaneously) paid in full, that any
commitments to extend credit under the agreements or instruments relating
to such Indebtedness shall have been canceled or terminated and that all
guarantees in respect of, and all Liens securing, any such Indebtedness
shall have been released (or arrangements satisfactory to the Required
Lenders for such release shall have been made).
(i) FINANCIAL STATEMENTS. The Investors shall have received the
financial statements referred to in Section 6.04.
(j) OTHER DOCUMENTS. Such other documents as any Investor or special
New York counsel to the Investors may reasonably request.
The obligation of any Investor to purchase its Note hereunder is also subject to
the payment or delivery by the Company of such fees and other consideration as
the Company shall have agreed to pay or deliver to any Investor or an Affiliate
thereof in connection herewith, including the reasonable fees and expenses of
Milbank, Tweed, Xxxxxx & XxXxxx LLP, special New York counsel to JPMorgan
Partners, in connection with the negotiation, preparation, execution and
delivery of the Note Documents and the issuance of the Notes hereunder and of
the Warrants under the Warrant Agreement (to the extent that statements for such
fees and expenses have been delivered to the Company).
SECTION 5.02. OTHER CONDITIONS PRECEDENT. The obligation of any
Investor to purchase its Note(s) hereunder is subject to the further conditions
precedent that, both immediately prior to the purchase of such Note(s) and also
after giving effect thereto and to the intended use thereof:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company in
Article VI shall be true and correct on and as of the Closing Date with
the same force and effect as if made on and as of such date (or, if any
such representation or warranty is expressly stated to have been made as
of a specific date, as of such specific date).
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Investors that:
SECTION 6.01 ORGANIZATION; POWERS. Each of the Company and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its respective organization, (b) has all
requisite power and authority to carry on its business in which it is engaged
and presently proposes to engage and (c) except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 6.02 AUTHORIZATION; ENFORCEABILITY. The Transactions are
within each Obligor's corporate, partnership or limited liability company powers
and have been duly authorized by all necessary corporate, partnership or limited
liability company. Each of this Agreement and the Notes have been duly executed
and delivered by each Obligor and constitutes a legal, valid and binding
obligation of each Obligor, enforceable in accordance with its respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 6.03 GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority by the Company and its
Subsidiaries, except such as have been obtained or made and are in full force
and effect, (b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the Company or of any of
its Subsidiaries or any order, writ, injunction or decree of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
credit agreement or loan agreement or any other material agreement, contract or
instrument, in each case binding upon the Company or of any of its Subsidiaries
or its assets, or give rise to a right thereunder to require any payment to be
made by the Company or of any of its Subsidiaries, and (d) will not result in
the creation or imposition of any Lien on any asset of the Company or of any of
its Subsidiaries (other than pursuant to the Senior Credit Documents).
SECTION 6.04 SEC DOCUMENTS; FINANCIAL CONDITION; NO MATERIAL ADVERSE
CHANGE.
(a) The Company has filed in a timely manner all documents that the
Company was required to file with the Commission under Sections 13, 14(a) and
15(d) of the Securities Exchange Act, since its initial public offering. As of
their respective filing dates, all documents filed by the Company with the SEC
("SEC DOCUMENTS") complied in all material respects with the requirements of the
Securities Exchange Act or the Securities Act, as applicable. None of the SEC
Documents as of their respective dates contained any untrue statement of a
25
material fact or omitted to state material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Documents comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto.
(b) The Company has heretofore furnished to the Investors its
audited consolidated balance sheet, statements of income (including supporting
footnote disclosures) and cash flows as of and for the fiscal year ended June
30, 2002 with the opinion of Xxxxxxxx, Xxxxx & Xxxxx LLP, independent public
accountants. Such financial statements as of and for the fiscal year ended June
30, 2003 are being audited by Xxxxxxxx, Xxxxx & Xxxxx LLP and such audit is
substantially completed.
(c) The financial statements included in the SEC Documents and the
referred to in paragraph (b) above present fairly, in all material respects, the
financial position and results of operations and cash flows of the Company and
its consolidated Subsidiaries as of the respective dates and for the respective
periods in accordance with GAAP (subject, in the case of any unaudited financial
statements, to customary year-end adjustments).
(d) Since June 30, 2002, there has been no material adverse change
in the business, operations, property, projections, assets, liabilities (whether
contractual, environmental or otherwise), condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole.
(e) The Projections delivered to the Investors prior to the Closing
Date have been prepared in good faith and are based on reasonable assumptions,
and there are no statements or conclusions in the Projections which are based
upon or include information known to the Company to be misleading in any
material respect or which fail to take into account material information known
to the Company regarding the matters reported therein. On the Closing Date, the
Company believes that the Projections are reasonable and attainable, it being
recognized by the Investors, however, that projections as to future events are
not to be viewed as facts and that the actual results during the period or
periods covered by the Projections may differ from the projected results and
such differences may be material.
SECTION 6.05 PROPERTIES.
(a) Each of the Company and its Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for (i) Permitted Encumbrances and (ii) minor defects in title
that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes.
(b) Each of the Company and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Company and its
Subsidiaries, to the best of the Company's knowledge, does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
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SECTION 6.06 LITIGATION AND ENVIRONMENTAL MATTERS
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority now pending against or, to the knowledge of
any Obligor, threatened against or affecting the Company or any of its
Subsidiaries (i) that could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, or (ii) with respect to the
Transactions or the Note Documents.
(b) Except with respect to any other matters that, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, neither the Company nor any of its Subsidiaries (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability.
SECTION 6.07 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Company and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6.08 INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Company nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 6.09 TAXES. Each of the Company and its Subsidiaries has
timely filed or caused to be filed all tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 6.10 ERISA. Except as disclosed in Schedule 6.10:
(a) IDENTIFICATION OF PLANS. Neither the Company nor any ERISA
Affiliate maintains or contributes to, or has maintained or contributed
to, any Plan that is an ERISA Plan;
(b) COMPLIANCE. Each Plan has at all times been maintained, by its
terms and in operation, in accordance with all applicable laws, except
where such noncompliance (when taken as a whole) would not have a Material
Adverse Effect;
(c) LIABILITIES. Neither the Company nor any of its Subsidiaries is
currently making, nor has in the last 6 years been obligated to make,
contributions (directly or indirectly) to a Multiemployer Plan, nor is it
currently nor will it become subject to any liability (including
withdrawal liability), tax or penalty whatsoever to any Person whomsoever
27
with respect to any Plan including any tax, penalty or liability arising
under Title I or Title IV or ERISA or Chapter 43 of the Code, except where
such liabilities (when taken as a whole) would not have a Material Adverse
Effect; and
(d) Funding. The Company and each ERISA Affiliate has made full and
timely payment of all amounts (i) required to be contributed under the
terms of each Plan and applicable law and (ii) required to be paid as
expenses of each Plan.
SECTION 6.11 DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of the Company in writing to any Investor (including,
without limitation, all information contained in the Note Documents and the
Senior Credit Agreement) for purposes of or in connection with this Agreement,
the other Note Documents or any transaction contemplated herein or therein is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of the Company in writing to any Investor will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
SECTION 6.12 DEBT AGREEMENTS. Schedule 6.12 is a complete and
correct list of each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness (other than the Senior Credit Agreement,
the Existing Credit Agreement and the Existing Senior Subordinated Note Purchase
Agreement) or any extension of credit (or commitment for any extension of
credit) to, or guarantee by, the Company or any of its Subsidiaries, outstanding
on the date hereof, and the aggregate principal or face amount outstanding or
that may become outstanding under each such arrangement is correctly described
in Schedule 6.12.
SECTION 6.13 CAPITALIZATION. The authorized capital stock of the
Company consists, on the date hereof, of an aggregate of 35,000,000 shares,
consisting of (i) 30,000,000 shares of common stock, par value $0.001 per share,
of which 10,633,405 shares are duly and validly issued and outstanding, each of
which shares is fully paid and nonassessable, and (ii) 5,000,000 shares of blank
check preferred stock, of which the Existing Preferred Stock is duly and validly
issued and outstanding. As of the date hereof, (x) except as disclosed in
Schedule 6.13 and except as provided in the Warrant Agreement, there are no
outstanding Equity Rights with respect to the Company and (y) there are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem, or otherwise acquire any shares of capital stock of the Company nor are
there any outstanding obligations of the Company or any of its Subsidiaries to
make payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
the Company or any of its Subsidiaries.
SECTION 6.14 SUBSIDIARIES. The Company has no Subsidiaries as of the
Closing Date.
SECTION 6.15 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
28
approached or negotiated in respect thereof with, any person other than the
Investors and certain other institutional investors, each of which has been
offered the Notes at a private sale for investment, which offer or sale would
not require registration under the Securities Act. 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 6.16 LABOR RELATIONS. Neither the Company nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect. There is (i) no unfair labor practice complaint pending against the
Company or any of its Subsidiaries or, to the knowledge of the Company,
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of its
Subsidiaries or, to the knowledge of the Company, threatened against any of
them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Company or any of its Subsidiaries or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries (iii) no union
representation question exists with respect to the employees of the Company or
any of its Subsidiaries and (iv) no collective bargaining agreement exists which
is binding on the Company or any of its Subsidiaries; except (with respect to
any matter specified in clause (i), (ii) (iii) or (iv) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
has any Equal Employment Opportunity Commission charges or other claim of
employment discrimination pending or, to the Company's knowledge, currently
threatened against them that would reasonably be expected to have a Material
Adverse Effect; no wage and hour department investigation has been made of the
Company or any of its Subsidiaries that would reasonably be expected to have a
Material Adverse Effect; there are no occupational health and safety claims
against the Company or any of its Subsidiaries that would reasonably be expected
to have a Material Adverse Effect. Since the enactment of the Worker Adjustment
and Retraining Notification Act (the "WARN Act") neither the Company nor any of
its Subsidiaries effectuated (i) a "plant closing" (as defined in the WARN Act)
affecting any site of employment or one or more facilities or operating units
within any site of employment or facility of the Company or any of its
Subsidiaries; or (ii) a "mass layoff" (as defined in the WARN Act) affecting any
site of employment or facility of the Company or any of its Subsidiaries; nor
has the Company or any of its Subsidiaries been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local law. Neither the Company nor any of
its Subsidiaries has suffered an "employment loss" (as defined in the WARN Act)
since six (6) months prior to the date hereof; and the Company and its
Subsidiaries are in compliance in all material respects with the terms and
provisions of the Immigration Reform and Control Act of 1986, as amended, and
all related regulations promulgated thereunder.
29
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Investors that, so long as
any Note is outstanding and until payment in full of all amounts payable by the
Company hereunder and thereunder, unless the Required Investors shall otherwise
consent pursuant to Section 12.02:
SECTION 7.01 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
will furnish to each Investor:
(a) within 90 days after the end of each fiscal year of the Company,
(i) the consolidated and consolidating balance sheet of the Company and
its Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income and retained earnings
and statement of cash flows for such fiscal year setting forth (commencing
with the Company's fiscal year ending June 30, 2004) comparative figures
for the preceding fiscal year and certified (x) in the case of
consolidated financial statements, by Xxxxxxxx Xxxxx & Xxxxx LLP or other
independent certified public accountants of recognized national standing
reasonably acceptable to the Investor Representative, together with an
unqualified opinion of such accounting firm which demonstrates that (I) in
the course of its regular audit of the financial statements of the Company
and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default relating to financial or accounting matters which
has occurred and is continuing or, if in the opinion of such accounting
firm such a Default has occurred and is continuing, a statement as to the
nature thereof, and (II) such statements fairly present in all material
respects in accordance with generally accepted accounting principles the
financial condition of the Company and its Subsidiaries as of the date
indicated and the results of their operations and changes in their cash
flows for the periods indicated (y) in the case of the consolidating
financial statements, by the chief financial officer or treasurer of the
Company that they fairly present in all material respects in accordance
with generally accepted accounting principles the financial condition of
the respective Subsidiaries or group of Subsidiaries covered thereby as of
the dates indicated and the results of their operations and changes in
their cash flows for the periods indicated, and (ii) management's
discussion and analysis of the important operational and financial
developments during such fiscal year;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, (i) the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as at the
end of such quarterly accounting period and the related consolidated and
consolidating statements of income and retained earnings and statement of
cash flows for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period, in each case setting forth comparative figures for the
corresponding quarterly accounting period in the prior fiscal year and
comparable budgeted figures for such quarterly accounting period as set
forth in the respective budget delivered pursuant to Section 7.01(e), all
of which shall be certified by the chief financial officer of the Company
that they fairly present in all material respects in accordance with
30
generally accepted accounting principles the financial condition of the
Company and its Subsidiaries as of the dates indicated and the results of
their operations for the periods indicated, subject to normal year-end
audit adjustments and the absence of footnotes, and (ii) management's
discussion and analysis of the important operational and financial
developments during such quarterly accounting period;
(c) Within 30 days after the end of each fiscal month (or, in the
case of the last fiscal month of any fiscal quarter, within 45 days after
the end of such fiscal month) of the Company (commencing with its fiscal
month ended on July 31, 2003), the consolidated and consolidating balance
sheet of the Company and its Subsidiaries as at the end of such fiscal
month and the related consolidated and consolidating statements of income
and retained earnings and statement of cash flows for such fiscal month
and for the elapsed portion of the fiscal year ended with the last day of
such fiscal month, in each case setting forth comparative figures for the
corresponding fiscal month in the prior fiscal year and comparable
budgeted figures for such fiscal month as set forth in the respective
budget delivered pursuant to Section 7.01(e), all of which shall fairly
present in all material respects in accordance with generally accepted
accounting principles the financial condition of the Company and its
Subsidiaries as of the dates indicated and the results of their operations
for the periods indicated, subject to normal year-end audit adjustments
and the absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of the chief financial officer of
the Company (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
8.01(d), 8.01(e), 8.03(c), 8.09 and 8.11, (iii) setting forth the
Consolidated Total Leverage Ratio as at the last day of the fiscal quarter
or fiscal year, as the case may be, of the Company to which such financial
statements relate, together with the calculation (in reasonable detail)
required to establish such Consolidated Total Leverage Ratio, and (iv)
stating whether any material change in GAAP or in the application thereof
which would effect the financial statements in any material respect has
occurred since the date of the audited financial statements referred to in
Section 6.04 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate;
(e) no later than 45 days following the first day of each fiscal
year of the Company, a budget in form reasonably satisfactory to the
Investors (including budgeted statements of income, sources and uses of
cash and balance sheets for the Company and its Subsidiaries on a
consolidated basis) (i) for each of the twelve months of such fiscal year
prepared in detail and (ii) for the two immediately succeeding fiscal
years prepared in summary form, in each case setting forth, with
appropriate discussion, the principal assumptions upon which such budget
is based;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Company or any Subsidiary with the SEC or with any national securities
31
exchange, or distributed by the Company to its shareholders generally, as
the case may be;
(g) promptly upon receipt thereof, copies of all significant reports
submitted to the Company by independent public accountants in connection
with each annual, interim or special audit of the financial statements of
the Company made by such accountants, including any "management letter"
received from its certified public accountants and management's response
thereto;
(h) promptly upon receipt thereof, copies of all notices given or
received by the Company with respect to noncompliance with any term or
condition related to any Senior Debt;
(i) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidiary that is in the Company's or its Subsidiary's
possession, as any Investor may reasonably request; and
(j) within 30 Business Days after the end of each month, a monthly
report, in the same form and content as had been delivered under the
Existing Senior Subordinated Note Purchase Agreement (or such other form
approved by the Required Investors), demonstrating performance levels for
such month and the trailing twelve-month period ended with such month,
including balance sheet, income statement, cash flow statement,
actual-to-budget variance and analysis, customer activities activation and
attrition rates), customer action/ticket analysis, and cost savings
achievement schedule (with respect to such cost savings achievement
schedule only, through December 31, 2003); provided that if at any time
the officer's certificate then last delivered or required to be delivered
by the Company pursuant to Section 7.01(d) demonstrates compliance with a
Consolidated Total Leverage Ratio of less than 2.00:1.00 as at the last
day of the fiscal quarter or fiscal year, as the case may be, for which
such certificate is provided, the Company shall not be required to comply
at such time with the requirements of this clause (j).
SECTION 7.02 NOTICES OF MATERIAL EVENTS. The Company will furnish to
each Investor prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Company or any Affiliate thereof that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect or with respect to any Note Document;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and its Subsidiaries in an aggregate
amount exceeding $500,000;
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect; and
32
(e) a copy of each notice of default or event of default furnished
or received by the Company under the Senior Credit Agreement (or any
agreement replacing the Senior Credit Agreement in effect from time to
time) simultaneously with such delivery or receipt.
Each notice delivered under this Section 7.02 shall be accompanied by a
statement of the chief financial officer or other executive officer of the
Company setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken with respect thereto.
SECTION 7.03 EXISTENCE; CONDUCT OF BUSINESS. The Company will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and its material rights, licenses, permits, privileges, franchises and
intellectual property; provided that the foregoing shall not prohibit (i) any
merger, consolidation, liquidation or dissolution permitted under Section 8.03
or (ii) any other action permitted under Section 8.07.
SECTION 7.04 PAYMENT OF OBLIGATIONS. The Company will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could reasonably be expected to result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Company or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 7.05 MAINTENANCE OF PROPERTIES; INSURANCE.
(a) The Company will, and will cause each of its Subsidiaries to,
(a) keep and maintain all property which is material to the conduct of the
business of the Company and its Subsidiaries in good working order and
condition, ordinary wear and tear excepted, except where such failure could not
reasonably be expected to result in a Material Adverse Effect, provided that the
Company and each Subsidiary shall not be under any obligation to repair or
replace any such property which has become obsolete or has become unsuitable or
inadequate for the purpose for which they are used.
(b) The Company will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurance companies, insurance in
such amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations.
SECTION 7.06 BOOKS AND RECORDS; INSPECTION RIGHTS. The Company will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in accordance with GAAP and all
requirements of law are made of all dealings and transactions in relation to its
business and activities. The Company will, and will cause each of its
Subsidiaries to, permit any representatives designated by any Investor, upon
reasonable prior notice, to visit and inspect its properties, to examine and
33
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and during normal business hours and as often as reasonably
requested.
SECTION 7.07 COMPLIANCE WITH LAWS.
(a) The Company will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not, either individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(b) The Company will comply, and will cause each of its Subsidiaries
to comply, with all Environmental Laws and permits applicable to, or required
by, the ownership, lease or use of Real Property now or hereafter owned, leased
or operated by the Company or any of its Subsidiaries, except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, and will promptly pay or cause to
be paid all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any Liens
imposed pursuant to such Environmental Laws. Neither the Company nor any of its
Subsidiaries will generate, use, treat, store, Release or dispose of, or permit
the generation, use, treatment, storage, Release or disposal of Hazardous
Materials on any Real Property now or hereafter owned, leased or operated by the
Company or any of its Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, except for Hazardous
Materials generated, used, treated, stored, Released or disposed of at any such
Real Properties in compliance in all material respects with all applicable
Environmental Laws and as required in connection with the normal operation, use
and maintenance of the business or operations of the Company or any of its
Subsidiaries.
SECTION 7.08 USE OF PROCEEDS. The proceeds of the Notes will be used
only for the purposes specified in the second paragraph of this Agreement.
Neither the Company nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying Margin
Stock, and no part of the proceeds of the Notes hereunder will be used to buy or
carry any Margin Stock.
SECTION 7.09 CERTAIN OBLIGATIONS AFFECTING SUBSIDIARIES.
(a) In the event that the Company or any of its Subsidiaries shall
form or acquire any new Subsidiary after the date hereof, the Company will cause
such Subsidiary to become a "Subsidiary Guarantor" (and, thereby an "Obligor")
hereunder pursuant to a written instrument in form and substance satisfactory to
the Required Investors and to deliver such proof of corporate action, incumbency
of officers, opinions of counsel and other documents as is consistent with those
delivered by each Obligor pursuant to Section 5.01 upon the Closing Date as any
Investor shall have requested.
34
(b) The Company will, and will cause each of its Subsidiaries to,
take such action from time to time as shall be necessary to ensure that each of
its Subsidiaries is a Wholly-Owned Subsidiary.
SECTION 7.10 PERMITTED ACQUISITIONS.
(a) Subject to the provisions of this Section 7.10 and the
requirements contained in the definition of Permitted Acquisition, the Company
and each Wholly-Owned Domestic Subsidiary of the Company which is a Subsidiary
Guarantor may from time to time after September 30, 2003 effect Permitted
Acquisitions, so long as (in each case except to the extent the Required
Investors otherwise specifically agree in writing in the case of a specific
Permitted Acquisition): (i) no Default shall have occurred and be continuing at
the time of the consummation of the proposed Permitted Acquisition or
immediately after giving effect thereto; (ii) the Company shall have given to
the Investors at least 10 Business Days' prior written notice of any Permitted
Acquisition (or such shorter period of time as may be reasonably acceptable to
the Required Investors), which notice shall describe in reasonable detail the
principal terms and conditions of such Permitted Acquisition; (iii) calculations
are made by the Company with respect to the financial covenants contained in
Sections 8.09 through 8.11, inclusive, for the respective Calculation Period on
a Pro Forma Basis as if the respective Permitted Acquisition (as well as all
other Permitted Acquisitions theretofore consummated after the first day of such
Calculation Period) had occurred on the first day of such Calculation Period,
and such calculations shall show that such financial covenants would have been
complied with if the Permitted Acquisition had occurred on the first day of such
Calculation Period; (iv) based on good faith projections prepared by the Company
for the period from the date of the consummation of the respective Permitted
Acquisition to the date which is one year thereafter, the level of financial
performance measured by the financial covenants set forth in Sections 8.09
through 8.11, inclusive, shall be better than or equal to such level as would be
required to provide that no Default would exist under the financial covenants
contained in such Sections 8.09 through 8.11, inclusive, as compliance with such
financial covenants would be required through the date which is one year from
the date of the consummation of the respective Permitted Acquisition; (v) all
representations and warranties contained in this Agreement shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Permitted Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date; (vi) the aggregate consideration (including, without limitation,
(I) the aggregate principal amount of any Indebtedness assumed, refinanced,
incurred or issued in connection therewith and (II) the aggregate amount paid
and reasonably expected to be paid (based on good faith projections prepared by
the Company) pursuant to any non-compete, consulting or purchase price
adjustments) payable for the proposed Permitted Acquisition, when added to the
aggregate consideration paid or payable for all other Permitted Acquisitions
theretofore consummated during such fiscal year, does not exceed the Permitted
Acquisition Basket Amount for such fiscal year; (vii) the aggregate amount of
deferred compensation or other deferred purchase price (including any earn-outs)
paid in any fiscal year of the Company in respect of all Permitted Acquisitions
(whether or not such Permitted Acquisitions were consummated during such fiscal
year) shall not exceed $2,000,000 (it being understood and agreed, however, that
35
any such deferred compensation or other deferred purchase price (including any
earn-outs) shall be structured as a multiple of the excess of the cash flow of
the Acquired Entity or Business that is the subject of the respective Permitted
Acquisition for the most recently ended 12-month period above the cash flow for
such Acquired Entity or Business for such 12-month period selected to determine
the purchase price for such Permitted Acquisition); and (viii) the Company shall
have delivered to each Investor a certificate executed by its chief financial
officer, certifying to the best of such officer's knowledge, compliance with the
requirements of preceding clauses (i) through (vii), inclusive, and containing
the calculations (in reasonable detail) required by preceding clauses (iii),
(iv), (vi) and (vii).
(b) The Company will cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and
to execute and deliver all of the documentation as and to the extent required
by, Section 7.09.
(c) The consummation of each Permitted Acquisition shall be deemed
to be a representation and warranty by the Company that the certifications
pursuant to this Section 7.10 are true and correct and that all conditions
thereto have been satisfied and that same is permitted in accordance with the
terms of this Agreement, which representation and warranty shall be deemed to be
a representation and warranty for all purposes hereunder, including, without
limitation, Section 9.01.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees with the Investors that, so long as
any Note is outstanding and until payment in full of all amounts payable by the
Company hereunder or thereunder:
SECTION 8.01 INDEBTEDNESS. The Company will not, and will not permit
any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder and under the Notes;
(b) Indebtedness constituting Senior Debt;
(c) Indebtedness of the Company under Interest Rate Protection
Agreements entered into with respect to other Indebtedness permitted under
this Section 8.01 so long as the entering into of such Interest Rate
Protection Agreements are bona fide hedging activities and are not for
speculative purposes;
(d) Indebtedness of the Company and its Subsidiaries evidenced by
Capitalized Lease Obligations (to the extent permitted pursuant to Section
8.09) and purchase money Indebtedness described in Section 8.02(g),
provided that in no event shall the sum of the aggregate principal amount
of all Capitalized Lease Obligations and purchase money Indebtedness
permitted by this clause (d) exceed $5,000,000 at any time outstanding;
36
(e) Indebtedness of a Subsidiary of the Company acquired pursuant to
a Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an asset securing such Indebtedness), provided
that (i) such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition, (ii) such
Indebtedness does not constitute debt for borrowed money, it being
understood and agreed that Capitalized Lease Obligations and purchase
money Indebtedness shall not constitute debt for borrowed money for
purposes of this clause (e) and (iii) the aggregate principal amount of
all Indebtedness permitted by this clause (e) shall not exceed $1,000,000
at any one time outstanding;
(f) intercompany Indebtedness among the Company and the Subsidiary
Guarantors to the extent permitted by Section 8.04; and
(g) Indebtedness outstanding on the Closing Date and listed on
Schedule 8.01 without giving effect to any subsequent extension, renewal
or refinancing thereof except to the extent set forth on Schedule 8.01,
provided that the aggregate principal amount of the Indebtedness to be
extended, renewed or refinanced does not increase from that amount
outstanding at the time of any such extension, renewal or refinancing.
SECTION 8.02 LIENS. The Company will not, and will not permit any of
its Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(b) Liens in respect of property or assets of the Company or any of
its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (i) which do
not in the aggregate materially detract from the value of the Company's or
such Subsidiary's property or assets or materially impair the use thereof
in the operation of the business of the Company or such Subsidiary or (ii)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(c) Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in Schedule 8.02, but only to the
respective date, if any, set forth in Schedule 8.02 for the removal,
replacement and termination of any such Liens, plus renewals, replacements
and extensions of such Liens to the extent set forth on Schedule 8.02,
provided that (i) the aggregate principal amount of the Indebtedness, if
any, secured by such Liens does not increase from that amount outstanding
37
at the time of any such renewal, replacement or extension and (ii) any
such renewal, replacement or extension does not encumber any additional
assets or properties of the Company or any of its Subsidiaries;
(d) Liens securing the Senior Debt;
(e) licenses, sublicenses, leases or subleases granted to other
Persons not materially interfering with the conduct of the business of the
Company or any of its Subsidiaries;
(f) Liens upon assets of the Company or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 8.01(d), provided that (x) such
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset
of the Company or any Subsidiary of the Company;
(g) Liens placed upon equipment or machinery acquired after the
Closing Date and used in the ordinary course of business of the Company or
any of its Subsidiaries and placed at the time of the acquisition thereof
by the Company or such Subsidiary or within 90 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price
thereof or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of any such equipment or machinery or
extensions, renewals or replacements of any of the foregoing for the same
or a lesser amount, provided that (i) the Indebtedness secured by such
Liens is permitted by Section 8.01(c) and (ii) in all events, the Lien
encumbering the equipment or machinery so acquired does not encumber any
other asset of the Company or such Subsidiary;
(h) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each
case not securing Indebtedness and not materially interfering with the
conduct of the business of the Company or any of its Subsidiaries;
(i) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into in the
ordinary course of business;
(j) Liens arising out of the existence of judgments or awards in
respect of which the Company or any of its Subsidiaries shall in good
faith be prosecuting an appeal or proceedings for review and in respect of
which there shall have been secured a subsisting stay of execution pending
such appeal or proceedings, provided that the aggregate amount of all cash
(including the stated amount of all letters of credit) and the fair market
value of all other property subject to such Liens does not exceed $500,000
at any time outstanding;
(k) statutory and common law landlords' liens under leases to which
the Company or any of its Subsidiaries is a party;
38
(l) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation
claims, unemployment insurance and social security benefits and Liens
securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business and consistent with past practice (exclusive
of obligations in respect of the payment for borrowed money), provided
that the aggregate amount of all cash and the fair market value of all
other property subject to all Liens permitted by this clause (l) shall not
at any time exceed $500,000;
(m) Permitted Encumbrances; and
(n) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Company in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 8.01(e), and (ii) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Company or any of its Subsidiaries.
SECTION 8.03 FUNDAMENTAL CHANGES. The Company will not, and will not
permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or
enter into any partnership, joint venture, or transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
(a) Capital Expenditures by the Company and its Subsidiaries shall
be permitted to the extent not in violation of Section 8.09;
(b) Investments may be made to the extent permitted by Section 8.04;
(c) the Company and its Subsidiaries may sell assets (other than the
capital stock or other equity interests of any Subsidiary), so long as (i)
no Default then exists or would result therefrom, (ii) each such sale is
in an arm's-length transaction and the Company or the respective
Subsidiary receives at least fair market value (as determined in good
faith by the Company or such Subsidiary, as the case may be), (iii) the
consideration received by the Company or such Subsidiary consists solely
of cash and is paid at the time of the closing of such sale, and (iv) the
aggregate amount of the proceeds received from all assets sold pursuant to
this clause (c) shall not exceed $1,000,000 in any fiscal year of the
Company;
(d) each of the Company and its Subsidiaries may lease (as lessee)
or license (as licensee) real or personal property (so long as any such
lease or license does not create a Capitalized Lease Obligation except to
the extent permitted by Section 8.01(d));
39
(e) each of the Company and its Subsidiaries may sell or discount,
in each case without recourse and in the ordinary course of business,
accounts receivable arising in the ordinary course of business, but only
in connection with the compromise or collection thereof and not as part of
any financing transaction;
(f) each of the Company and its Subsidiaries may grant licenses,
sublicenses, leases or subleases to other Persons not materially
interfering with the conduct of the business of the Company or any of its
Subsidiaries;
(g) any Subsidiary of the Company may merge with and into, or be
dissolved or liquidated into, the Company or any Wholly-Owned Domestic
Subsidiary of the Company which is a Subsidiary Guarantor so long as (i)
in the case of any such merger, dissolution or liquidation involving the
Company, the Company is the surviving corporation of any such merger,
dissolution or liquidation, (ii) in all other cases, the Wholly-Owned
Domestic Subsidiary which is a Subsidiary Guarantor is the surviving
corporation of any such merger, dissolution or liquidation, and (iii) in
all cases, the then continuing or surviving corporation shall have assumed
all of the obligations of such Subsidiary Guarantor hereunder;
(h) Permitted Acquisitions may be made to the extent permitted by
Section 7.10; and
(i) each of the Company and its Subsidiaries may make sales of
inventory in the ordinary course of business.
SECTION 8.04 ADVANCES, INVESTMENTS AND LOANS. The Company will not,
and will not permit any of its Subsidiaries to, directly or indirectly, lend
money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person, or purchase or own a futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing, an "Investment" and,
collectively, "Investments"), except that:
(a) the Company and its Subsidiaries may acquire and
hold accounts receivables owing to any of them, if created or
acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms of the
Company or such Subsidiary;
(b) the Company and its Subsidiaries may acquire and
hold cash and Cash Equivalents;
(c) the Company and its Subsidiaries may hold the
Investments held by them on the Closing Date as described on
Schedule 8.04, provided that any additional Investments made with
respect thereto shall be permitted only if permitted under the other
provisions of this Section 8.04;
40
(d) the Company and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
good faith settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary
course of business;
(e) the Company may enter into Interest Rate Protection
Agreements to the extent permitted by Section 8.01(c);
(f) the Company and the Subsidiary Guarantors may make
intercompany loans and advances between and among one another; and
(g) Permitted Acquisitions shall be permitted in
accordance with Section 7.10.
SECTION 8.05 RESTRICTED PAYMENTS. The Company will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except that:
(a) any Subsidiary of the Company may pay cash dividends
to the Company or to any Wholly-Owned Subsidiary of the Company; and
(b) the Company may pay regularly scheduled dividends on its
Existing Preferred Stock pursuant to the terms thereof or through an
increase in the aggregate liquidation preference thereof rather than
in cash.
SECTION 8.06 BUSINESS. The Company will not, and will not permit any
of its Subsidiaries to, engage in any business other than the businesses engaged
in by the Company and its Subsidiaries as of the Closing Date and reasonable
extensions thereof.
SECTION 8.07 TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of related transactions with any Affiliate of the Company or any of its
Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Company or such Subsidiary as would
reasonably be obtained by the Company or such Subsidiary at that time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that customary fees may be paid to non-officer directors of the Company
and its Subsidiaries.
SECTION 8.08 LIMITATION ON ISSUANCE OF CAPITAL STOCK.
(a) The Company will not, and will not permit any of its
Subsidiaries to, issue (i) any preferred stock or other preferred equity
interests or (ii) any redeemable common stock or other redeemable common equity
interests other than common stock or other redeemable common equity interests
that is redeemable at the sole option of the Company or such Subsidiary, as the
case may be.
(b) The Company will not permit any of its Subsidiaries to issue any
capital stock or other equity interests (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock or other equity interests, except (i) for transfers and
replacements of then outstanding shares of capital stock or other equity
interests, (ii) for stock splits, stock dividends and issuances which do not
decrease the percentage ownership of the Company or any of its Subsidiaries in
41
any class of the capital stock or other equity interests of such Subsidiary,
(iii) to qualify directors to the extent required by applicable law or (iv) for
issuances by Subsidiaries of the Company which are newly created or acquired in
accordance with the terms of this Agreement.
SECTION 8.09 CAPITAL EXPENDITURES.
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any Capital Expenditures, except that (i) during the
period from the Closing Date through and including September 30, 2003, the
Company and its Subsidiaries may make Capital Expenditures, so long as (x) the
aggregate amount of all such Capital Expenditures does not exceed $4,000,000
during that period and (y) the aggregate amount of all Capital Expenditures made
during the fiscal quarter of the Company ending September 30, 2003 does not
exceed $5,500,000, and (ii) during any fiscal quarter of the Company set forth
below (taken as one accounting period), the Company and its Subsidiaries may
make Capital Expenditures so long as the aggregate amount of all such Capital
Expenditures does not exceed in any fiscal quarter of the Company set forth
below the lesser of (i) the Consolidated EBITDA of the Company for the then
previous fiscal quarter multiplied by the applicable percentage for the
applicable fiscal quarter set forth in Schedule 8.09 or (ii) the amount set
forth opposite such fiscal quarter below:
Fiscal Quarter Ending Amount ($)
--------------------- ----------
December 31, 2003 5,675,000
March 31, 2004 5,950,000
June 30, 2004 6,150,000
September 30, 2004 5,875,000
December 31, 2004 5,875,000
March 31, 2005 5,875,000
June 30, 2005 5,875,000
September 30, 2005 6,000,000
December 31, 2005 6,000,000
March 31, 2006 6,000,000
June 30, 2006 6,000,000
September 30, 2006 6,100,000
December 31, 2006 6,100,000
March 31, 2007 6,100,000
June 30, 2007 6,100,000
September 30, 2007 and thereafter 6,375,000
(b) In addition to the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Company and its Subsidiaries
pursuant to clause (a) above in any fiscal quarter of the Company (before giving
42
effect to any increase in such permitted Capital Expenditure amount pursuant to
this Section 8.09(b)) is greater than the amount of Capital Expenditures
actually made by the Company and its Subsidiaries during such fiscal quarter,
50% of such excess may be carried forward and utilized to make Capital
Expenditures in the immediately succeeding fiscal quarter, provided that no
amounts once carried forward pursuant to this Section 8.09(b) may be carried
forward to any subsequent fiscal quarter of the Company thereafter and such
amounts may only be utilized after the Company and its Subsidiaries have
utilized in full the permitted Capital Expenditure amount for such fiscal
quarter as provided in Section 8.09(a) (without giving effect to any increase in
such amount pursuant to this Section 8.09(b)).
(c) In addition to the foregoing, the Company or any of its
Subsidiaries may make Capital Expenditures with the amount of Net Insurance
Proceeds received by the Company or any of its Subsidiaries from any Recovery
Event so long as such Net Insurance Proceeds are used to replace or restore any
properties or assets in respect of which such Net Insurance Proceeds were paid
within 90 days (or 180 days in the case of the restoration or replacement of
Real Property) following the date of receipt of such Net Insurance Proceeds from
such Recovery Event, but only to the extent that such Net Insurance Proceeds are
not otherwise required to be applied to repay Indebtedness pursuant to the
Senior Credit Agreement or permanently reduce the revolving credit commitments
under the Senior Credit Agreement.
(d) In addition to the foregoing, the Company and its Wholly-Owned
Domestic Subsidiaries that are Subsidiary Guarantors may make additional Capital
Expenditures (which Capital Expenditures will not be included in any
determination under Section 8.09(a) constituting Permitted Acquisitions effected
in accordance with the requirements of Section 7.10.
SECTION 8.10 Consolidated Interest Coverage Ratio. The Company will
not permit the Consolidated Interest Coverage Ratio for any Test Period ending
on the last day of a fiscal quarter of the Company set forth below to be less
than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2003 2.40:1.00
December 31, 2003 2.70:1.00
March 31, 2004 2.80:1.00
June 30, 2004 2.80:1.00
September 30, 2004 2.90:1.00
December 31, 2004 3.00:1.00
March 31, 2005 3.10:1.00
June 30, 2005 3.20:1.00
September 30, 2005 3.30:1.00
December 31, 2005 3.40:1.00
43
March 31, 2006 3.50:1.00
June 30, 2006 3.60:1.00
September 30, 2006 3.80:1.00
December 31, 2006 and thereafter 4.00:1.00
SECTION 8.11 Maximum Consolidated Total Leverage Ratio. The Company
will not permit the Consolidated Total Leverage Ratio at any time during a
period set forth below to be greater than the ratio set forth opposite such
period below:
Period Ratio
------ -----
From the Closing Date through and including
December 30, 2003 4.20:1.00
December 31, 2003 through and including
March 30, 2004 4.00:1.00
March 31, 2004 through and including June 29,
2004 3.90:1.00
June 30, 2004 through and including
September 29, 2004 3.90:1.00
September 30, 2004 through and including
December 30, 2004 3.70:1.00
December 31, 2004 through and including
March 30, 2005 3.50:1.00
March 31, 2005 through and including June 29,
2005 3.40:1.00
June 30, 2005 through and including September
29, 2005 3.10:1.00
September 30, 2005 through and including
December 30, 2005 3.00:1.00
December 31, 2005 through and including
March 30, 2006 2.85:1.00
March 31, 2006 through and including
June 29, 2006 2.70:1.00
June 30, 2006 through and including
September 29, 2006 2.60:1.00
September 30, 2006 through and including
December 30, 2006 2.50:1.00
December 31, 2006 through and including
March 30, 2007 2.40:1.00
March 31, 2007 through and including
June 29, 2007 2.30:1.00
June 30, 2007 through and including
September 29, 2007 2.20:1.00
44
September 30, 2007 through and including
December 30, 2007 2.15:1.00
December 31, 2007 through and including
March 30, 2008 2.10:1.00
March 31, 2008 through and including
June 29, 2008 2.05:1.00
Thereafter 2.00:1.00
SECTION 8.12 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Company or any of its
Subsidiaries, or pay any Indebtedness owed to the Company or any of its
Subsidiaries, (b) make loans or advances to the Company or any of its
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) this Agreement and other Note
Documents, (iii) the Senior Credit Documents, (iv) customary provisions
restricting subletting or assignment of any lease governing any leasehold
interest of the Company or any of its Subsidiaries, (v) customary provisions
restricting assignment of any licensing agreement (in which the Company or any
of its Subsidiaries is the licensee) or other contract entered into by the
Company or any of its Subsidiaries in the ordinary course of business, (vi)
restrictions on the transfer of any asset pending the close of the sale of such
asset, and (vii) restrictions on the transfer of any asset subject to a Lien
permitted by Section 8.02(c), (f), (g) or (n).
SECTION 8.13 MODIFICATIONS OF CERTAIN DOCUMENTS.
(a) The Company will not, and will not permit any of its
Subsidiaries to, change, amend, supplement or otherwise modify the terms of any
of the Senior Credit Documents, or refund or refinance the same, without the
prior consent of the Required Investors, if the effect of such amendment,
supplement or modification or such refunding or refinancing is to:
(i) directly impose upon the Company any prohibition or
limitation on its ability to make regularly scheduled payments of
principal of or interest on the Notes, or any other amounts owing to
the Investors under this Agreement, except as provided in the
subordination provisions set forth in Article XI;
(ii) increase the applicable margin with respect to
interest rates on the loans under the Senior Credit Agreement by
more than 4% per annum (or otherwise change the basis for
determining the interest rates thereunder with the result that the
applicable interest rates thereunder shall be increased by more than
4% per annum above the interest rates that otherwise would have been
in effect), provided that nothing herein shall preclude the
imposition of a post-default rate of interest in the amount and
circumstances provided in the Senior Credit Agreement as in effect
on the date hereof;
45
(iii) extend the scheduled final maturity of any of the
term loans under the Senior Credit Agreement (as in effect on the
Closing Date) by more than one year;
(iv) modify the scheduled principal payments of any of
the loans under the Senior Credit Agreement (as in effect on the
Closing Date) so as to cause the average life to maturity of such
loans to be more than one year shorter than the average life to
maturity of such loans as of the Closing Date; or
(v) (i) make more restrictive any one or more of the
financial covenants under the Senior Credit Agreement (or related
definitions) as in effect on the Closing Date (or any comparable
provision of any agreement providing for the refunding or
refinancing of the Senior Debt), unless simultaneously with the
effectiveness of the change to the Senior Credit Agreement, the
Company shall give the Investors the option to amend the
corresponding provision (if any) of this Agreement to make such
provision similarly more restrictive on the Company (whether or not
such amendment shall be agreed to by the Required Investors) or (ii)
add any financial covenants to the Senior Credit Agreement that are
not contained in the Senior Credit Agreement as in effect on the
date hereof. unless simultaneously with the effectiveness of such
addition, the Company shall give the Investors the option to amend
this Agreement to add the same financial covenant to this Agreement
(whether or not such amendment shall be agreed to by the Required
Investors) (it being understood that the levels for compliance with
such new financial covenant under this Agreement shall reflect a
differential of at least 20% from the levels for such financial
covenant as contained in the Senior Credit Agreement).
If the Company enters into any amendment, modification, restatement
and/or supplement to the Senior Credit Agreement which requires the consent of
the Required Investors pursuant to this Section 8.13(a) without obtaining such
consent, then, without limiting any rights or remedies that the Investors may
have arising therefrom, for the purposes of this Agreement (including the
definition of "Senior Debt" contained herein), references to the Senior Credit
Agreement and the Senior Credit Documents shall refer to such Senior Credit
Agreement and Senior Credit Documents as the same are in effect without giving
effect to such amendment, modification, restatement and/or supplement.
(b) The Company will not, and will not permit any of its
Subsidiaries to, consent to any modification, supplement or waiver of any of the
provisions of its certificate of incorporation, certificates of designation of
preferred stock or by-laws, if such modification, supplement or waiver could
reasonably be expected to be adverse to the interests of the Investors, in each
case without the prior consent of the Required Investors.
46
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01 EVENTS OF DEFAULT; REMEDIES. If any of the following
events ("Events of Default") shall occur:
(a) the Company shall fail to pay any principal or Make-Whole
Amount, if any, of any Note when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;
(b) the Company shall fail to pay any interest on any Note or any
fee or any other amount (other than an amount referred to in clause (a) of
this Section 9.01) payable under this Agreement or the Notes, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Obligors in or in connection with this Agreement or any
amendment or modification hereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
this Agreement or any amendment or modification hereof, shall prove to
have been incorrect in any material respect when made or deemed made;
(e) the Company or any of its Subsidiaries shall fail to observe or
perform any covenant, condition or agreement contained in Section 7.02(a),
7.10 or Article 8;
(f) the Company shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clauses (a) through (e), inclusive, of this Article), and
such failure shall continue unremedied for a period of 35 days after
notice thereof from any Investor to the Company;
(g) the Company or any Subsidiary shall fail to make any payment
(whether of principal, Make-Whole Amount or interest and regardless of
amount) at final stated maturity in respect of any Indebtedness (other
than the Notes) having an aggregate unpaid principal balance in excess of
$1,000,000 or such Indebtedness shall be declared to or become due and
payable, required to be prepaid, redeemed, purchased or defeased in full
or an offer to prepay, redeem, purchase or defease in full such
Indebtedness, in each case prior to the final stated maturity thereof;
(h) the Company or any of its Subsidiaries shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Company or any of its Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of
the property of the Company or any of its Subsidiaries, or the Company or
any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
47
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or any of its
Subsidiaries, or there is commenced against the Company or any of its
Subsidiaries any such proceeding which remains undismissed for a period of
60 days, or the Company or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or the Company or any of its
Subsidiaries suffers any appointment of any custodian or the like for it
or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or the Company or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or
any corporate, limited liability company or similar action is taken by the
Company or any of its Subsidiaries for the purpose of effecting any of the
foregoing;
(i) one or more judgments or decrees shall be entered against the
Company or any Subsidiary of the Company involving in the aggregate for
the Company and its Subsidiaries a liability (not paid or fully covered by
a reputable and solvent insurance company) and such judgments and decrees
either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 60
consecutive days, and the aggregate amount of all such judgments equals or
exceeds $1,000,000;
(j) an ERISA Event shall have occurred that, when taken together
with all other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect;
(k) the guarantees of the Subsidiary Guarantors or any provision
thereof shall cease to be in full force or effect as to any Subsidiary
Guarantor, or any Subsidiary Guarantor or any Person acting for or on
behalf of such Subsidiary Guarantor shall deny or disaffirm such
Subsidiary Guarantor's obligations under such guarantee or any Subsidiary
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
such guarantee; or
(l) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Company
described in clause (h) of this Section 9.01), and at any time thereafter during
the continuance of such event, the Required Investors may (subject to the
provisions of Article XI), by notice to the Company (with a copy to the Senior
Debt Representative in the manner set forth in Section 11.13, provided that the
failure to provide such copy, or any delay in so providing such copy, shall not
affect the validity of such notice), declare the Notes then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal and applicable Make-Whole Amounts in
respect of such principal amount (if any) of the Notes so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Company accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Obligors; and in case of any event with
respect to the Company described in clause (h) of this Section 9.01, the
48
principal and applicable Make-Whole Amounts in respect of such principal amount
(if any) of the Notes then outstanding, together with accrued interest thereon
and all fees and other obligations of the Company accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company.
ARTICLE X
SUBSIDIARY GUARANTEE
SECTION 10.01 THE GUARANTEE. The Subsidiary Guarantors hereby
jointly and severally guarantee to each Investor and its successors and assigns
the prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of, Make-Whole Amount in respect of such
principal (if any) and interest on the Note(s) held by each Investor of, the
Company and all other amounts from time to time owing to the Investors by the
Company under this Agreement and the Notes, in each case strictly in accordance
with the terms thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). The Subsidiary Guarantors hereby further jointly and
severally agree that if the Company shall fail to pay in full when due (whether
at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Subsidiary Guarantors will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
SECTION 10.02 OBLIGATIONS UNCONDITIONAL. The obligations of the
Subsidiary Guarantors under Section 10.01 are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the Notes
or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 10.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance
or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
49
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or the Notes or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, any
Investor as security for any of the Guaranteed Obligations shall fail to
be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Investor exhaust any right, power or remedy or proceed against the Company under
this Agreement or the Notes or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
SECTION 10.03 REINSTATEMENT. The obligations of the Subsidiary
Guarantors under this Article X shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Company in respect
of the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise and the Subsidiary
Guarantors jointly and severally agree that they will indemnify each Investor on
demand for all reasonable costs and expenses (including reasonable fees of
counsel) incurred by such Investor in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
SECTION 10.04 SUBROGATION. Each Subsidiary Guarantor hereby waives
all rights of subrogation or contribution, whether arising by contract or
operation of law (including any such right arising under the Bankruptcy Code) or
otherwise by reason of any payment by it pursuant to the provisions of this
Article X and further agrees with the Company for the benefit of each of its
creditors (including each Investor) that any such payment by it shall constitute
a contribution of capital by such Subsidiary Guarantor to the Company (or an
investment in the equity capital of the Company by such Subsidiary Guarantor).
SECTION 10.05 REMEDIES. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and the Investors,
the obligations of the Company under this Agreement and the Notes may be
declared to be forthwith due and payable as provided in Article IX (and shall be
deemed to have become automatically due and payable in the circumstances
provided in Article IX) for purposes of Section 10.01 notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Company and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by the Company) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of Section 10.01.
50
SECTION 10.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Article X constitutes
an instrument for the payment of money, and consents and agrees that any
Investor, at its sole option, in the event of a dispute by such Subsidiary
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
SECTION 10.07 CONTINUING GUARANTEE. The guarantee in this Article X
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
SECTION 10.08 RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the property, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Subsidiary Guarantor to any Excess Funding Guarantor under this Section 10.08
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other provisions
of this Article X and such Excess Funding Guarantor shall not exercise any right
or remedy with respect to such excess until payment and satisfaction in full of
all of such obligations.
For purposes of this Section 10.08, (i) "EXCESS FUNDING GUARANTOR"
means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has
paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "EXCESS PAYMENT" means, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (iii) "PRO RATA SHARE" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all property of such Subsidiary
Guarantor (excluding any shares of stock of any other Subsidiary Guarantor)
exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable
value of all property of all of the Subsidiary Guarantors exceeds the amount of
all the debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of the Subsidiary
Guarantors hereunder) of the Subsidiary Guarantors, determined (A) with respect
to any Subsidiary Guarantor that is a party hereto on the Closing Date, as of
the Closing Date, and (B) with respect to any other Subsidiary Guarantor, as of
the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
SECTION 10.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of the Subsidiary Guarantors under
Section 10.01 would otherwise, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 10.01, then, notwithstanding any
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other provision hereof to the contrary, the amount of such liability shall,
without any further action by any Subsidiary Guarantor, any Investor or any
other Person, be automatically limited and reduced to the highest amount that
(after giving effect to all other contingent and fixed obligations of such
Subsidiary Guarantor (including all Senior Debt of such Subsidiary Guarantor))
is valid and enforceable and not subordinated to the claims of other creditors
as determined in such action or proceeding.
SECTION 10.10 SUBORDINATION OF GUARANTEES. The obligations of the
Subsidiary Guarantors under this Article X to the Investors are subordinated as
provided in Section 11.11.
ARTICLE XI
SUBORDINATION
SECTION 11.01 AGREEMENT TO SUBORDINATE. The Company covenants and
agrees, and each Investor likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article XI, the payment of the
principal of, Make-Whole Amount (if any) and interest and premium (if any) on
the Notes, and all other sums due and payable by the Company to the Investors
hereunder (for purposes of this Article XI, collectively, the "SUBORDINATED
DEBT"), are hereby expressly made subordinate and subject in right of payment to
the prior payment in full in cash of all Senior Debt. Each Investor hereby
agrees not to amend or otherwise modify any provision of this Article XI (and
any defined term used in this Article XI) without the prior written consent of
the requisite number of holders of Senior Debt as provided in the Senior Credit
Agreement. The holders of Senior Debt and their agent under the Senior Credit
Agreement are third-party beneficiaries of the provisions of this Article XI and
are entitled to rely thereon. To the extent that there is any conflict between
any provision of this Article XI and any provision of any other Article of this
Agreement, this Article XI shall govern to the extent of such conflict.
SECTION 11.02 BANKRUPTCY, LIQUIDATION, DISSOLUTION, ETC. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event:
(i) the holders of Senior Debt shall be entitled to receive payment
in full in cash of all amounts due or to become due on or in respect of
all Senior Debt, before any Investor is entitled to receive any payment on
account of the Subordinated Debt; and
(ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which any Investor would be entitled but for the provisions
of this Article XI, including any such payment or distribution which may
be payable or deliverable by reason of the payment of any other
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Indebtedness of the Company being subordinated to the payment of the
Subordinated Debt (other than any payment or distribution in the form of
equity or debt securities of the Company or any successor obligor of
Senior Debt provided for by a plan of reorganization or readjustment
approved by a majority of the holders of Senior Debt under the Senior
Credit Agreement which, in the case of any such debt securities, (x) are
subordinated in right of payment to all Senior Debt that may at the time
be outstanding to the same extent as, or to a greater extent than, the
Subordinated Debt is subordinate to the Senior Debt as provided in this
Article XI, (y) are not payable prior to the payment in full of the Senior
Debt and (z) have other material terms which are at least as favorable to
the holders of the Senior Debt at the time outstanding as the terms of the
Subordinated Debt) shall be paid by the liquidating trustee or agent or
other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the holders of Senior Debt or their representative or representatives or
to the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Debt may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the principal of
and interest and premium (if any) on, the Senior Debt held or represented
by each, to the extent necessary to make payment in full in cash of all
Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt; and
(iii) in the event that, notwithstanding the foregoing provisions of
this Section 11.02, any Investor shall have received any such payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the
Subordinated Debt (but excluding any payment of the character described in
the parenthetical clause in the foregoing clause (ii)) before all Senior
Debt is paid in full in cash, then and in such event such payment or
distribution shall be held in trust for the holders of Senior Debt and
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for application to the
payment of all Senior Debt remaining unpaid, to the extent necessary to
pay all Senior Debt in full in cash, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt.
If the Investors shall have failed to file proper claims or proofs
of claim with respect to the Notes in any proceeding of the type referred to in
the first sentence of this Section 11.02 prior to 30 days before the expiration
of the time to file such claims or proofs of claim, the Investors hereby appoint
and empower the Senior Debt Representative to file such claims or proofs of
claim, and if the Investors shall fail to vote any such claim at least 15 days
prior to the expiration of the time to vote such claim, the Investors hereby
appoint and empower the Senior Debt Representative to vote such claim; provided
that the Senior Debt Representative shall have no obligation to file and/or vote
any such claim. If the Senior Debt Representative votes any such claim in
accordance with the provisions of this paragraph no Investor shall be entitled
to modify, revoke or withdraw such vote. The Investors shall execute and
deliver, at the expense of the holders of the Senior Debt, such agreements,
instruments and documents as the Senior Debt Representative may reasonably
request to carry out the provisions of this paragraph.
53
SECTION 11.03 NO PAYMENT IN CERTAIN CIRCUMSTANCES.
(a) In the event that any principal of or interest on the Senior
Debt is not paid when due, whether at stated maturity, by mandatory prepayment,
by acceleration or otherwise, but after expiration of any applicable grace
period (each a "SENIOR DEBT PAYMENT DEFAULT"), then no payment or distribution
of any kind or character (including any acquisition of the Notes) shall be made
by the Company, or accepted by any Investor, on account of the Subordinated Debt
unless and until such payment shall have been made or such Senior Debt Payment
Default is waived in accordance with the terms of such Senior Debt.
(b) In the event that any Event of Default under, and as defined in,
the Senior Credit Agreement (other than a SENIOR DEBT PAYMENT DEFAULT) (each a
"Senior Debt Non-Payment Default") shall have occurred and be continuing and the
Company and the Investors shall have received written notice of such Senior Debt
Non-Payment Default from the Senior Debt Representative (a "PAYMENT BLOCKAGE
NOTICE"), then no payment or distribution of any kind or character shall be made
by the Company, or accepted by any Investor, on account of the Subordinated Debt
(including any repurchase of the Notes) during the period (a "PAYMENT BLOCKAGE
PERIOD") commencing on the date the Company and the Investors received such
Payment Blockage Notice and ending on the earlier of (i) the date 180 days
thereafter and (ii) the date on which the Senior Debt Non-Payment Default giving
rise to the Payment Blockage Period is cured or waived in accordance with the
terms of the Senior Credit Documents; provided that (x) the holders of Senior
Debt shall not be entitled to institute a Payment Blockage Period more often
than once within any period of 360 consecutive days and (y) no Senior Debt
Non-Payment Default or event which, with the giving of notice and/or lapse of
time, would become a Senior Debt Non-Payment Default which existed on the date
of the commencement of any such blockage period may be used as the basis for any
subsequent Payment Blockage Notice unless such Senior Debt Non-Payment Default
or event, as the case may be, shall in the interim have been cured or waived for
a period of not less than 90 consecutive days (it being acknowledged that any
subsequent action, or any breach of any financial covenant for a period
commencing after the date of commencement of such Payment Blockage Period, that,
in either case, would give rise to a Senior Debt Non-Payment Default after such
date pursuant to any provision under which a Senior Debt Non-Payment Default
previously exists or was continuing shall constitute a new Senior Debt
Non-Payment Default for this purpose).
(c) The failure of the Company to make any payment with respect to
the Subordinated Debt by reason of the operation of this Section 11.03 shall not
be construed as preventing the occurrence of an Event of Default hereunder.
Immediately upon the expiration of any period under this Section 11.03 during
which no payment may be made on account of the Subordinated Debt, the Company
may resume making any and all payments on account of the Subordinated Debt
(including any payment of principal, interest (including interest at the
applicable post-default interest rate specified in Section 2.04(b)) or any other
amount missed during such period), so long as such payment is not then
prohibited under any other provision of this Agreement.
(d) The Company will not make any optional or mandatory prepayment
or repurchase of the Notes as provided for under Section 3.01 and the Investors
shall not accept any amount in respect of such prepayment or repurchase to the
54
extent that such prepayment or repurchase is prohibited under the Senior Credit
Agreement, unless the lenders under the Senior Credit Agreement shall have given
their written consent thereto.
(e) In the event that, notwithstanding the foregoing, the Investors
shall have received any payment prohibited by the foregoing provisions of this
Section 11.03, then and in such event such payment shall be held in trust for
the holders of the Senior Debt and paid over or delivered forthwith to the agent
for the holders of the Senior Debt for application to the Senior Debt remaining
unpaid after giving effect to any concurrent payment or distribution to the
holders of Senior Debt in respect of the Senior Debt. No amount paid by the
Company to the Investors and paid over by the Investors to the holders of the
Senior Debt pursuant to this Article XI shall, as between the Company and the
Investors, be deemed to be a payment by the Company to or on account of the
Subordinated Debt.
(f) Notwithstanding anything herein to the contrary, the Company may
make any payment of interest "in kind" in respect of the Notes in accordance
with Section 2.04(d).
(g) The provisions of this Section 11.03 shall not apply to any
payment with respect to which Section 11.02 would be applicable.
SECTION 11.04 PAYMENTS OTHERWISE PERMITTED. Nothing contained in
this Article XI or elsewhere in this Agreement or in the Notes shall prevent the
Company, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company referred
to in Section 11.02 or under the conditions described in Section 11.03, from
making payments at any time of the Subordinated Debt.
SECTION 11.05 SUBROGATION. Subject to the payment in full in cash of
all Senior Debt, the Investors shall be subrogated to the rights of the holders
of such Senior Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Debt until the principal of and interest on
the Notes shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of Senior Debt of any cash, property or
securities to which the Investors would be entitled except for the provisions of
this Article XI, and no payments over pursuant to the provisions of this Article
XI to the holders of Senior Debt by the Investors shall, as among the Company,
its creditors (other than holders of Senior Debt), and the Investors be deemed
to be a payment or distribution by the Company to or on account of the Senior
Debt.
SECTION 11.06 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this Article XI are and are intended solely for the purpose of
defining the relative rights of the Investors on the one hand and the holders of
Senior Debt on the other hand. Nothing contained in this Article XI or elsewhere
in this Agreement or the Notes is intended to or shall (a) impair, as among the
Company, its creditors (other than holders of Senior Debt) and the Investors,
the obligation of the Company, which is absolute and unconditional, to pay to
the Investors the principal of and interest or premium (if any) on, and any
other amount payable by the Company under, the Notes or this Agreement as and
when the same shall become due and payable in accordance with their respective
terms; or (b) affect the relative rights against the Company of the Investors
and creditors of the Company (other than the holders of Senior Debt); or (c)
prevent the Investors from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the rights of the
holders of Senior Debt (i) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshalling
of assets and liabilities of the Company referred to in Section 11.02, to
receive, pursuant to and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Investors, (ii) under the
conditions specified in Section 11.03, to prevent any payment prohibited by
Section 11.03 or (iii) pursuant to Section 11.12.
SECTION 11.07 NO WAIVER OF SUBORDINATION PROVISIONS. No right of any
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any non-compliance by the Company with the
terms, provisions and covenants of this Agreement, regardless of any knowledge
thereof any such holder may have or be otherwise charged with. Without in any
way limiting the generality of the foregoing sentence, the holders of Senior
Debt may, at any time and from time to time, without the consent of or notice to
the Investors, without incurring responsibility to the Investors and without
impairing or releasing the subordination provided in this Article XI or the
obligations hereunder of the Investors to the holders of Senior Debt, do any one
or more of the following: (a) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding; (b)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Debt, or waive any provision thereof or the
occurrence of any default thereunder; (c) release any Person liable in any
manner for the collection of Senior Debt; and (d) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 11.08 NOTICE TO INVESTORS. Notwithstanding the provisions of
this Article XI or any other provision of this Agreement, the Investors shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment to it in respect of the Subordinated Debt, unless and
until the Investors shall have received written notice thereof from an Obligor
or a holder of Senior Debt or from any trustee, fiduciary or agent therefor;
and, prior to the receipt of any such written notice, the Investors shall be
entitled in all respects to assume that no such facts exist. The Investors shall
be entitled to rely on the delivery to it of a written notice by a Person
representing itself to be a holder of Senior Debt (or a trustee, fiduciary or
agent therefor) to establish that such notice has been given by a holder of
Senior Debt (or a trustee, fiduciary or agent therefor). In the event that the
Investors determine in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Debt to participate in any
payment or distribution pursuant to this Article XI, the Investors may request
such Person to furnish evidence to the reasonable satisfaction of the Investors
as to the amount of Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XI and if such
evidence is not furnished, the Investors may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 11.09 RELIANCE. Upon any payment or distribution of assets
of the Company referred to in this Article XI, the Investors shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
56
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Investors for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XI.
SECTION 11.10 REINSTATEMENT. If, at any time, all or part of any
payment with respect to Senior Debt theretofore made by the Company or any other
Person is rescinded or must otherwise be returned by the holders of Senior Debt
for any reason whatsoever (including the insolvency, bankruptcy or
reorganization of the Company or such other Person), the subordination
provisions set forth in this Article XI shall continue to be effective or be
reinstated, as the case may be, all as though such payment had not been made. It
is further agreed that any diminution (whether pursuant to court decree or
otherwise, including without limitation for any of the reasons described in the
immediately preceding sentence) of any Subsidiary Guarantor's obligation to make
any distribution or payment in respect of any Senior Debt of such Subsidiary
Guarantor, except to the extent such diminution occurs by reason of the
repayment (which has not been disgorged or returned) of such Senior Debt of such
Subsidiary Guarantor in cash, shall have no force or effect for purposes of the
subordination provisions contained in this Article XI, with any turnover of
payments as otherwise calculated pursuant to this Article XI to be made as if no
such diminution had occurred.
SECTION 11.11 SUBSIDIARY GUARANTEES. The obligations of each
Subsidiary Guarantor under Article X are subordinate and subject in right of
payment in full in cash of any Senior Debt of such Subsidiary Guarantor to the
same extent and in the same manner set forth in the preceding provisions of this
Article XI and, for purposes of applying this Section 11.11, references in such
preceding sections to "the Company" shall be deemed to refer to the relevant
Subsidiary Guarantor.
SECTION 11.12 LIMITATIONS ON REMEDIES.
(a) Notwithstanding anything contained herein to the contrary,
during any period commencing on the occurrence of a Senior Debt Payment Default
or the date of receipt of a Payment Blockage Notice under Section 11.03(b) and
ending on the earlier of (i) the date on which such Senior Debt Payment Default
or the default that is the subject of such Payment Blockage Notice, as the case
may be, is cured or waived or (ii) 120 days after the occurrence of such Senior
Debt Payment Default or the receipt by the Investors of such Payment Blockage
Notice, as the case may be, the Investors shall not (A) accelerate the Notes as
provided in Section 9.01, (B) initiate any judicial proceeding or action to
collect the Notes or (C) initiate any case, proceeding or other action in
respect of any Obligor of the type referred to in clause (a) or (b) of Section
11.02 unless, prior to the expiration of such period, (x) the holder or holders
(or their respective agent(s)) of any Senior Debt shall take any action of the
type referred to in clauses (A), (B) and (C) above in respect of such Senior
Debt or (y) any Senior Debt and/or the Subordinated Debt shall have become
automatically due and payable in accordance with their respective terms.
57
(b) Prior to taking any action of the type referred to in clauses
(A), (B) and (C) of Section 11.12(a), the Investors shall give the Senior Debt
Representative not less than 5 Business Days' notice of the Investors' intent to
take any such action (which notice may be given during the continuation of any
period during which the Investors are blocked from receiving payments under
Section 11.03).
SECTION 11.13 NOTICES. All notices or other communications required
or permitted to be made by the holders of Senior Debt or the Senior Debt
Representative to the Investors shall be made to the Investor Representative, at
its address provided under Section 12.01 (and upon receipt of any such notice or
communication, the Investor Representative shall furnish a copy thereof to each
Investor, and receipt thereof by the Investor Representative shall be deemed to
satisfy the requirements of this Article XI for delivery thereof to the
Investors). By acceptance of the benefits of this Article XI, the holders of
Senior Debt agree with the Investors that (i) all notices or other
communications required or permitted to be made to the holders of Senior Debt
under this Article XI by the Investors or the Investor Representative may be
made to the Senior Debt Representative at its address specified in Section 10.03
of the Senior Credit Agreement and (ii) BNP Paribas shall be the Senior Debt
Representative for all purposes hereof until such time as the Investor
Representative shall have received notice in writing from BNP Paribas or the
then current Senior Debt Representative specifying a new Senior Debt
Representative, following which the Investor Representative and each Investor
shall be fully protected in dealing solely with such Senior Debt Representative
for purposes of this Article XI.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, to the intended recipient thereof at its
respective address (or telecopy number) set forth beneath its name on the
signature pages hereto. Any party hereto may change its address or telecopy
number for notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt or if mailed by certified mail or registered mail,
on the date three days after the date of mailing.
SECTION 12.02 WAIVERS; AMENDMENTS.
(a) No failure or delay by any Investor in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Investors hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
58
provision of this Agreement or consent to any departure by the Obligors
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 12.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the issuance of a Note shall
not be construed as a waiver of any Default, regardless of whether any Investor
may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Obligors and the Required Investors; provided that no such
agreement shall (i) increase the commitment of any Investor without the written
consent of such Investor, (ii) reduce the principal amount of any Note or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Investor affected thereby, (iii) postpone the scheduled
date of payment of the principal amount of any Note, or any interest thereon, or
any fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any commitment of any
Investor, without the written consent of each Investor affected thereby, (iv)
change any provision of this Agreement that would alter the pro rata sharing of
payments required thereunder, without the written consent of each Investor, or
(v) change any of the provisions of this Section 12.02 or the definition of
"Required Investors" or any other provision hereof specifying the number or
percentage of Investors required to waive, amend or modify any rights hereunder
or make any determination or grant any consent hereunder, without the written
consent of each Investor; provided further that no such waiver, amendment or
modification shall be effective unless consented to by the requisite number of
lenders under the Senior Credit Agreement as required by the Senior Credit
Agreement as in effect on the date hereof. Notwithstanding anything herein to
the contrary, in the event that within 60 days after the Closing Date the
Company requests the Investors to amend or modify this Agreement to increase the
aggregate principal amount of the Notes issued hereunder, such amendment will
require the consent of each Investor.
SECTION 12.03 EXPENSES; INDEMNITY: DAMAGE WAIVER.
(a) The Company shall pay (i) all reasonable out-of-pocket expenses
incurred by any Investor and its Affiliates, including the reasonable fees,
charges and disbursements of Milbank, Tweed, Xxxxxx & XxXxxx LLP, special New
York counsel to JPMorgan Partners, in connection with the preparation,
negotiation, execution and delivery of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by any Investor, including the above fees,
charges and disbursements of any counsel for any Investor, in connection with
the enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section 12.03, or in connection with the Notes
issued hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof.
(b) The Company shall indemnify each Investor, and each Related
Party of any of the foregoing Persons (each such Person being called an
"INDEMNITEE") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
59
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Note or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee. Promptly after receipt by an Indemnitee of notice
of any complaint or the commencement of any action or proceeding with respect to
which indemnification is being sought hereunder, such Indemnitee will notify the
Company in writing of such complaint or of the commencement of such action or
proceeding, but failure so to notify the Company will not relieve the Company
from any liability which the Company may have hereunder or otherwise, except to
the extent that such failure materially prejudices the Company's rights. If the
Company so elects or is requested by such Indemnitee, the Company will assume
the defense of such action or proceeding, including the employment of counsel
reasonably satisfactory to such Indemnitee and the payment of the fees and
disbursements of such counsel, and in such event such Indemnitee will cooperate
in connection therewith as reasonably requested by the Company (subject to the
expenses of such Indemnitee being reimbursed by the Company as provided above).
In the event, however, such Indemnitee reasonably determines that having common
counsel would present such counsel with a conflict of interest or if the Company
fails to assume the defense of the action or proceeding in a timely manner, then
such Indemnitee may employ separate counsel to represent or defend it in any
such action or proceeding and the Company will pay the reasonable fees and
disbursements of such counsel, provided, however, that the Company will not be
required to pay the fees and disbursements of more than one separate counsel for
all Indemnified Parties in any jurisdiction in any single action or proceeding.
In any action or proceeding the defense of which the Company assumes, any
Indemnitee will have the right to participate in such litigation and to retain
its own counsel at such Indemnitee's own expense.
(c) To the extent permitted by applicable law, the Obligors shall
not assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Note or the use of the proceeds thereof.
(d) All amounts due under this Section 12.03 shall be payable
promptly after written demand therefor.
SECTION 12.04 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto, all future holders of the Notes, and their
respective successors and assigns permitted hereby, except that no Obligor may
60
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Investor (and any attempted assignment or
transfer by any Obligor without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Investors and, to the extent expressly provided in
Article XI, the holders of Senior Debt and the Senior Debt Representative) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Notwithstanding anything herein to the contrary, no Investor may
assign all or any portion of its rights under this Agreement and the Note(s)
held by such Investor (i) to a Person engaged in the operation of any business
involving the sale of carbonic gas or the rental of bulk CO2 cylinders or high
pressure cylinders, (ii) to any Person other than a Qualified Investor and (iii)
unless such assignment complies with the registration requirements (or an
applicable exemption therefrom) under the Securities Act and any applicable
state securities laws. From and after the effective date of any transfer of a
Note by any holder thereof to another Person, such Person shall become a party
to this Agreement, be an "Investor" for all purposes hereof and, to the extent
of the interest assigned pursuant to such transfer, have the rights and
obligations of an Investor under this Agreement, and the relevant transferring
Investor shall, to the extent of the interest assigned thereby, be released from
its obligations under this Agreement (and, in the case of any transfer covering
all of such transferring Investor's rights and obligations under this Agreement,
such Investor shall cease to be a party hereto but shall continue to be entitled
to the benefits of Section 12.03).
(c) 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 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 a Qualified Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
(d) 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 A. 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
61
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 $2,000,000, 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 $2,000,000. 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
Article IV.
SECTION 12.05 SURVIVAL. All covenants, agreements, representations
and warranties made by the Obligors herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the issuance of any
Note regardless of any investigation made by any such other party or on its
behalf and notwithstanding that any Investor may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Note or any fee or any other amount
payable under this Agreement is outstanding and unpaid. The provisions of
Section 12.03 shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of the
Notes or the termination of this Agreement or any provision hereof.
SECTION 12.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement
constitutes the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 12.07 SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 12.08 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Obligor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
62
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any Investor may otherwise have to bring any action or
proceeding relating to this Agreement against any Obligor or its properties in
the courts of any jurisdiction.
(c) Each Obligor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in Section 12.08(b). Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 12.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 12.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.09.
SECTION 12.10 HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 12.11 CONFIDENTIALITY. Each of the Investors agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process (and the Investor or the Investor
Representative shall promptly notify the Company of any such disclosure), (d) to
any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section 12.11, to any
transferee permitted under Section 12.04 (including prospective transferee) of
its rights or obligations under this Agreement, (g) with the consent of the
63
Company or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 12.11 or (ii) becomes
available to any Investor on a nonconfidential basis from a source other than
the Company. For the purposes of this Section 12.11, "Information" means all
information received from the Company relating to the Company or any Subsidiary
or their respective business, other than any such information that is available
to any Investor on a nonconfidential basis prior to disclosure by the Company;
provided that, in the case of information received from the Company after the
date hereof, such information is clearly identified at the time of delivery as
confidential unless such information is received pursuant to an inspection under
Section 7.06. Any Person required to maintain the confidentiality of Information
as provided in this Section 12.11 shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information and has taken measures to cause its
representatives to do the same. 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 12.11 as though it were a party to this Agreement.
Notwithstanding the foregoing, the Investors and the Obligors (and each of their
respective employees, representatives or other agents) may disclose to any and
all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to such
person relating to such tax treatment or tax structure, other than any
information for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws, and except that, with respect to any document
or similar item that in either case contains information concerning the U.S. tax
treatment or U.S. tax structure of such transactions as well as other
information, this paragraph shall only apply to such portions of the document or
similar item that relate to such tax treatment or tax structure.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
NUCO2 INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title: Chief Financial Officer
Address for Notices:
NuCo2 Inc.
0000 X.X. Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
SUBSIDIARY GUARANTORS
[None as of the Closing Date]
AMOUNT OF NOTE INVESTORS
$11,528,918.31 X.X. XXXXXX PARTNERS (BHCA). L.P.
BY: JPMP MASTER FUND MANAGER, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------
Name:
Title:
$2,027,686.25 X.X. XXXXXX PARTNERS Global investors, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------
Name:
Title:
$1,017,990.31 X.X. XXXXXX PARTNERS GLOBAL
INVESTORS (CAYMAN), L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------
Name:
Title:
$311,561.54 X.X. XXXXXX PARTNERS GLOBAL
INVESTORS A, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------
Name:
Title:
$113,843.59 X.X. XXXXXX PARTNERS GLOBAL
INVESTORS (CAYMAN) II, L.P.
BY: JPMP GLOBAL INVESTORS, L.P.,
ITS GENERAL PARTNER
BY: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------
Name:
Title:
Address for Notices for the foregoing
Investors:
X.X. Xxxxxx Partners (BHCA), L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx, Xx.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
$3,000,000 XXXXXXX XXXXXX PRIVATSTIFTUNG
By: /s/ Xxxxx Xxxx
---------------------------------
Name: Xxxxx Xxxx
Title: Trustee
Address for Notices:
--------------------
Xxxxxxx Xxxxxx Privatstiftung
c/o Xxxxx Xxxx
0 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Telephone:
Fax:
$2,000,000 KBGM LLC
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Title: Authorized Agent
Addresses for Notices:
----------------------
KBGM LLC
c/o Xxxxxxx Xxxxxxxx
Xxxxxxxx Business Services
8-D Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax:
$10,000,000 THE ROYAL BANK OF SCOTLAND PLC
By: /s/ Xxxxxxx Xxxxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Director
Addresses for Notices:
----------------------
The Royal Bank of Scotland
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Una Corr
Telephone: (000) 000-0000
Fax: (000) 000-0000
