Exhibit 4
EXECUTION COPY
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT, dated as of March 5,
2003 (the "Effective Date"), between POLYMER GROUP, INC., a Delaware
corporation (the "Borrower"), each of the entities identified under the
caption "GUARANTORS" on the signature pages hereto (individually and together
with any entity that shall become a guarantor hereunder pursuant to Section
6.01(h) hereof, a "Guarantor", and, together with the Borrower, the
"Obligors") and MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS LP, a Delaware
limited partnership ("GOF").
WHEREAS, on May 11, 2002, the Borrower and its domestic
subsidiaries (other than Bonlam (S.C.), Inc., for which the petition date was
April 23, 2002) filed voluntary petitions for reorganization under chapter 11
of title 11 of the United States Code in the United States Bankruptcy Court
for the District of South Carolina (the "Bankruptcy Court");
WHEREAS, on January 3, 2003, the Bankruptcy Court issued an order
confirming the Borrower's and its domestic subsidiaries' Joint Second Amended
Modified Plan of Reorganization (the "Plan") and on January 16, 2003 the
Bankruptcy Court entered a supplemental order confirming the Plan;
WHEREAS, (a) the Plan and the Credit Agreement contemplate that GOF
shall issue or cause to be issued a letter of credit in favor of the
Administrative Agent, as beneficiary, in the face amount of $25,000,000, in
substantially the form of Exhibit A hereto (the "Letter of Credit"); and (b)
such Letter of Credit shall, in accordance with the terms thereof and of the
Credit Agreement, support the payments due under the Credit Agreement from the
Borrower to the Administrative Agent on December 31, 2003, June 30, 2004 and
December 31, 2004 to the extent that the Borrower fails to meet such payment
obligations;
WHEREAS, GOF has caused, or, simultaneously with the execution and
delivery of this Agreement, is causing, the Letter of Credit to be issued; and
WHEREAS, the Plan requires (and the Credit Agreement contemplates)
that, upon any drawing under the Letter of Credit, the Borrower shall issue to
GOF senior subordinated promissory notes in the face amount of such drawing,
with such additional terms and conditions as are more fully set forth in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Indebtedness" means Indebtedness of a Person (a) assumed
in connection with an Acquisition from such Person or (b) existing at the time
such Person becomes a Restricted Subsidiary or is merged or consolidated with
or into the Borrower or any Subsidiary.
"Acquired Person" means, with respect to any specified Person, any
other Person which merges with or into or becomes a Subsidiary of such
specified Person.
"Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Borrower or
any Restricted Subsidiary to any other Person, or any acquisition or purchase
of Equity Interests of any other Person by the Borrower or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated with or merged into the
Borrower or any Restricted Subsidiary or (ii) any acquisition by the Borrower
or any Restricted Subsidiary of the assets of any Person which constitute
substantially all of an operating unit or line of business of such Person or
which is otherwise outside of the ordinary course of business.
"Administrative Agent" means JPMorgan Chase Bank, as administrative
agent under the Credit Agreement, together with any successor thereto.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by, or under direct or
indirect common control with such specified Person. The term "control,"
"controlling", "controlled by" or "under common control with" with respect to
any Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities by agreement or otherwise.
"Affiliate Transaction" has the meaning set forth in Section
6.01(b).
"Agreement" means this Senior Subordinated Note Purchase Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Borrower or a Wholly Owned
Restricted Subsidiary, in one transaction or a series of related transactions,
of (i) any Equity Interest of any Restricted Subsidiary (other than directors'
qualifying shares, to the extent mandated by applicable law); (ii) any assets
of the Borrower or any Restricted Subsidiary which constitute substantially
all of an operating unit or line of business of the Borrower or any Restricted
Subsidiary; or (iii) any other property or asset of the Borrower or any
Restricted Subsidiary outside of the ordinary course of business (including
the receipt of proceeds paid on account of the loss of or damage to any
property or asset and awards of compensation for any asset taken by
condemnation, eminent domain or similar proceedings). For the purposes of this
definition, the term "Asset Sale" shall not include (a) any transaction
consummated in compliance with Section 6.02 and the creation of any Lien not
prohibited by Section 6.01(g); (b) sales of property or equipment that has
become worn out, obsolete or damaged or otherwise unsuitable
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for use in connection with the business of the Borrower or any Restricted
Subsidiary, as the case may be; (c) any transaction consummated in compliance
with Section 6.01(d); (d) any transfers of properties and assets between
Wholly Owned Restricted Subsidiaries; (e) any transaction pursuant to which
the Borrower or any Restricted Subsidiary transfers property to a Person and
the Borrower or such Restricted Subsidiary leases such property from such
Person; provided, however, that such transaction complies with Sections
6.01(d) and (e); (f) sales of Investments (i) that were originally made
pursuant to clauses (a), (b), (c) or (d) of the definition of Permitted
Investments or (ii) to the extent that such Investments were treated as
Restricted Payments; and (g) any Qualified Securitization Transaction. In
addition, solely for purposes of Section 6.01(d), any sale, conveyance,
transfer, lease or other disposition of any property or asset, whether in one
transaction or a series of related transactions, involving assets with a Fair
Market Value not in excess of $25,000,000 in any fiscal year shall be deemed
not to be an Asset Sale; provided, further, that any sale, conveyance,
transfer, lease or other disposition of any property or assets, including
without limitation the Chicopee Sale consummated on or prior to the Effective
Date shall be excluded in any determination made pursuant to this sentence.
"Assignment and Acceptance" means an assignment and acceptance
entered into by GOF or an Eligible Assignee and an Eligible Assignee in
substantially the form of Exhibit B hereto.
"Bankruptcy Code" means Title I of the Bankruptcy Reform Act of
1978, as amended from time to time, as set forth in sections 101 et seq. of
Title 11 of the United States Code, and applicable portions of Titles 18 and
28 of the United States Code.
"Bankruptcy Court" has the meaning set forth in the first whereas
clause.
"Bankruptcy Law" means the Bankruptcy Code or any similar Federal,
state or foreign law for the relief of debtors.
"Bonlam" means Bonlam S.A. de C.V., a corporation duly organized
and validly existing under the laws of Mexico.
"Borrower" has the meaning set forth in the first introductory
paragraph hereto.
"Borrowing" has the meaning set forth in Section 2.01.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions are not required by law or authorized to
close in New York, New York.
"Bylaws" means the Bylaws of the Borrower in substantially the form
attached as Exhibit C hereto.
"Capital Lease Obligations" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be properly capitalized on the balance sheet in
accordance with GAAP.
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"Capital Stock" means any and all shares or other equivalents
(however designated) of capital stock, including all common stock and all
preferred stock, in the case of a corporation, partnership interests or other
equivalents (however designated) in the case of a partnership, membership
interests or other equivalents (however designated) in the case of a limited
liability company, or common shares of beneficial interest or other
equivalents (however designated) in the case of a trust.
"Cash Equivalents" means: (a) U.S. Dollars; (b) securities issued
or directly and fully guaranteed or insured by the U.S. government or any
agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition; (c) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any domestic commercial bank
having capital and surplus in excess of $500,000,000; (d) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (b) and (c) above entered into with any
financial institution meeting the qualifications specified in clause (c)
above; (e) commercial paper rated P-1, A-1 or the equivalent thereof by
Xxxxx'x or S&P, respectively, and in each case maturing within six months
after the date of acquisition; and (f) corporate securities having a rating
equal to or higher than BBB -- and Baa3, or the equivalents thereof, by both
S&P and Xxxxx'x, respectively, if both such entities rate the securities, or
having such rating from one of such entities if only one such entity is rating
such securities.
"CERCLA" has the meaning set forth in Section 5.01(m)(iii).
"CERCLIS" has the meaning set forth in Section 5.01(m)(iii).
"Certificate of Incorporation" means the Borrower's Amended and
Restated Certificate of Incorporation in substantially the form of Exhibit D
hereto.
"Change of Control" means the occurrence of any of the following
events (whether or not approved by the Board of Directors of the Borrower):
(i) any Person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, including any group acting for the purpose of acquiring, holding
or disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than one or more Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon the happening
of an event or otherwise), directly or indirectly, of more than 50% of the
total voting power of the then outstanding Voting Equity Interests of the
Borrower; (ii) the Borrower consolidates with, or merges with or into, another
Person (other than the Borrower or any Wholly Owned Restricted Subsidiary) or
the Borrower or any Significant Restricted Subsidiary sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of the
assets of the Borrower and its Subsidiaries (determined on a consolidated
basis) to any Person (other than the Borrower or any Wholly Owned Restricted
Subsidiary), other than any such transaction where immediately after such
transaction the Person or Persons that "beneficially owned" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have
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"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time upon the happening of an event or otherwise) immediately prior
to such transaction, directly or indirectly, a majority of the total voting
power of the then outstanding Voting Equity Interests of the Borrower, as the
case may be, "beneficially own" (as so determined), directly or indirectly, a
majority of the total voting power of the then outstanding Voting Equity
Interests of the surviving or transferee Person; or (iii) the Borrower is
liquidated or dissolved or adopts a plan of liquidation or dissolution other
than in a transaction which complies with the provisions of Section 6.02.
"Chicopee Sale" means the sale of the warehouse in Dayton, New
Jersey, owned by Chicopee, Inc., a Delaware corporation.
"Class C Dividends" means the special annual dividend on the
Borrower's Class C Common Stock, par value $.01 per share, required to be paid
by the Borrower pursuant to its Amended and Restated Certificate of
Incorporation.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of Consolidated EBITDA for the four
quarter period of the most recent four consecutive fiscal quarters for which
financial statements are available ending prior to the date of such
determination (the "Four Quarter Period") to (ii) Consolidated Fixed Charges
for such Four Quarter Period; provided, however, that (1) if the Borrower or
any Restricted Subsidiary has incurred any Indebtedness since the beginning of
such Four Quarter Period that remains outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated
EBITDA and Consolidated Fixed Charges for such Four Quarter Period shall be
calculated after giving effect on a pro forma basis to such Indebtedness as if
such Indebtedness had been Incurred on the first day of such Four Quarter
Period and the discharge of any other Indebtedness repaid, repurchased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such Four Quarter Period, (2) if
since the beginning of such Four Quarter Period the Borrower or any Restricted
Subsidiary shall have made any Asset Sale, the Consolidated EBITDA for such
Four Quarter Period shall be reduced by an amount equal to the Consolidated
EBITDA (if positive) directly attributable to the assets that are the subject
of such Asset Sale for such Four Quarter Period or increased by an amount
equal to the Consolidated EBITDA (if negative) directly attributable thereto
for such Four Quarter Period and Consolidated Fixed Charges for such Four
Quarter Period shall be reduced by an amount equal to the Consolidated Fixed
Charges directly attributable to any Indebtedness of the Borrower or any
Restricted Subsidiary repaid, repurchased or otherwise discharged with respect
to the Borrower and its continuing Restricted Subsidiaries in connection with
such Asset Sale for such Four Quarter Period (or, if the Equity Interests of
any Restricted Subsidiary are sold, the Consolidated Fixed Charges for such
Four Quarter Period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Borrower and its continuing Restricted
Subsidiaries are no longer liable for such Indebtedness after such sale), (3)
if since the beginning of such Four Quarter Period the Borrower or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment
in any such Restricted Subsidiary (or any Person that becomes a Restricted
Subsidiary) or an Acquisition of assets, including any Acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or
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substantially all of an operating unit or a line of a business or which
constitutes Replacement Assets, Consolidated EBITDA and Consolidated Fixed
Charges for such Four Quarter Period shall be calculated after giving pro
forma effect to (x) such Investment or Acquisition of assets (including the
Incurrence of any Indebtedness) as if such Investment or Acquisition occurred
on the first day of such Four Quarter Period and (y) net cost savings that the
Borrower reasonably believes in good faith could have been achieved during the
Four Quarter Period as a result of such Investment or Acquisition and which
cost savings could then be reflected in pro forma financial statements under
GAAP (provided that both (A) such cost savings were identified and quantified
in an Officer's Certificate delivered to the each of the holders of Senior
Subordinated Notes at the time of the consummation of the Investment or
Acquisition and (B) with respect to each Investment or Acquisition completed
prior to the 90th day preceding such date of determination, actions were
commenced or initiated by the Borrower within 90 days of such Investment or
Acquisition to effect such cost savings identified in such Officer's
Certificate) and (4) if since the beginning of such Four Quarter Period any
Person (that subsequently became a Restricted Subsidiary or was merged with or
into the Borrower or any Restricted Subsidiary since the beginning of such
Four Quarter Period) shall have made any Asset Sale or any Investment or
Acquisition of assets that would have required an adjustment pursuant to
clause (2) or (3) above if made by the Borrower or a Restricted Subsidiary
during such Four Quarter Period, Consolidated EBITDA and Consolidated Fixed
Charges for such Four Quarter Period shall be calculated after giving pro
forma effect thereto as if such Asset Sale, Investment or Acquisition of
assets occurred on, with respect to any Investment or Acquisition, the first
day of such Four Quarter Period and, with respect to any Asset Sale, the day
prior to the first day of such Four Quarter Period. For purposes of this
definition, whenever pro forma effect is to be given to an Acquisition of
assets, the amount of income or earnings relating thereto and the amount of
Consolidated Fixed Charges associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in
accordance with GAAP. If any Indebtedness bears a floating rate of interest
and is being given pro forma effect, the interest expense on such Indebtedness
shall be calculated as if the rate in effect on the date of determination had
been the applicable rate for the entire period (taking into account any
agreement under which Hedging Obligations are outstanding applicable to such
Indebtedness if such agreement under which such Hedging Obligations are
outstanding has a remaining term as at the date of determination in excess of
12 months); provided, however, that the Consolidated Fixed Charges of the
Borrower attributable to interest on any Indebtedness Incurred under a
revolving credit facility computed on a pro forma basis shall be computed
based upon the average daily balance of such Indebtedness during the Four
Quarter Period.
"Consolidated EBITDA" means, for any period, the Consolidated Net
Income for such period, plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Income Tax Expense
for such period; (ii) Consolidated Interest Expense for such period; (iii)
Consolidated Non-Cash Charges for such period; and (iv) expenses relating to
employee profit sharing arising in connection with applicable Mexican
statutory requirements less (A) all non-cash items increasing Consolidated Net
Income for such period and (B) all cash payments during such period relating
to non-cash charges that were added back in determining Consolidated EBITDA in
any prior period.
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"Consolidated Fixed Charge" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense
and (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Equity Interest of such Person (other than dividends paid solely
in Qualified Equity Interests) paid, accrued or scheduled to be paid or
accrued during such period times (y) a fraction, the numerator of which is one
and the denominator of which is one minus the then current effective
consolidated Federal, state and local tax rate of such Person, expressed as a
decimal.
"Consolidated Income Tax Expense" means, with respect to the
Borrower for any period, the provision for Federal, state, local and foreign
income taxes payable by the Borrower and the Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the Borrower
for any period, without duplication, the sum of (i) the interest expense of
the Borrower and the Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP, including, without limitation,
(a) any amortization of debt discount, (b) the net cost under Hedging
Obligations, (c) the interest portion of any deferred payment obligation, (d)
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and (e) all capitalized
interest and all accrued interest and (ii) the interest component of Capital
Lease Obligations paid, accrued and/or scheduled to be paid or accrued by the
Borrower and the Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the consolidated
net income (loss) of the Borrower and the Restricted Subsidiaries; provided,
however, that there shall not be included in such Consolidated Net Income: (i)
any net income (loss) of any Person if such person is not a Restricted
Subsidiary, except (A) to the extent of cash actually distributed by such
Person during such period to the Borrower or a Restricted Subsidiary as a
dividend or other distribution, (B) with respect to foreign joint ventures, to
the extent that cash is available for distribution (without restriction and
not committed for other purposes) during such period to the Borrower or a
Restricted Subsidiary as a dividend or other distribution, but is not
distributed due to adverse tax or other business reasons, such cash shall be
included and (C) the Borrower's equity in a net loss of any such Person (other
than an Unrestricted Subsidiary) for such period shall be included in
determining such Consolidated Net Income; (ii) any net income (loss) of any
person acquired by the Borrower or a Restricted Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition;
(iii) any net income (but not loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on
the payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Borrower to the extent of such
restrictions; (iv) any gain or loss realized upon the sale or other
disposition of any asset of the Borrower or the Restricted Subsidiaries
(including pursuant to any sale/leaseback transaction) outside of the ordinary
course of business; (v) any extraordinary gain or loss; (vi) the cumulative
effect of a change in accounting principles; (vii) any restoration to income
of any contingency reserve of an extraordinary, non-recurring or unusual
nature, except to the extent that provision for such reserve was made out of
Consolidated Net
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Income accrued at any time following the Effective Date; and (viii) gains and
losses resulting from foreign currency transaction adjustments.
"Consolidated Non-Cash Charges" means, with respect to any Person,
for any period the sum of (i) depreciation, (ii) amortization and (iii) other
non-cash expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP
(excluding, for purposes of clause (iii) only, such charges which require an
accrual of or a reserve for cash charges for any future period).
"Credit Agreement" means the Third Amended, Restated and
Consolidated Credit Agreement, dated as of March 5, 2003, as in effect on the
date hereof, between the Borrower, the Subsidiaries of the Borrower identified
on the signature pages thereof and any Subsidiary that is later added thereto,
the lenders named therein, and JPMorgan Chase Bank, as administrative agent,
as further amended, including any deferrals, renewals, extensions,
replacements, refinancings, restructurings or refundings thereof, or
amendments, modifications or supplements thereto and any agreement providing
therefor (including any restatements thereof and any increases in the amount
of the commitment thereunder), whether by or with the same or any other
lender, creditor, group of lenders or group of creditors, and including
related notes, guarantee and note agreements and other instruments and
agreements executed in connection therewith.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debtor Subsidiary" means a Subsidiary of the Borrower that is
subject to the Plan.
"Default" means any event that is or with the passage of time or
giving of notice or both, would be an Event of Default.
"Designated Guarantor Senior Indebtedness" means, with respect to
any Guarantor, any Indebtedness of such Guarantor outstanding under the Credit
Agreement.
"Designated Senior Indebtedness" means (a) any Indebtedness
outstanding under the Credit Agreement, and (b) any other Senior Indebtedness
which, at the time of determination, has an aggregate principal amount
outstanding, together with any commitments to lend additional amounts, of at
least $25,000,000, if the instrument governing such Senior Indebtedness
expressly states that such Indebtedness is "Designated Senior Indebtedness"
for purposes of this Agreement and a resolution of the Borrower's Board of
Directors setting forth such designation by the Borrower has been delivered to
each of the holders of Senior Subordinated Notes.
"Designation" has the meaning set forth in Section 6.01(i).
"Designation Amount" has the meaning set forth in Section 6.01(i).
"Disclosure Statement" means the Amended Modified Disclosure
Statement of the Borrower and its Debtor Subsidiaries.
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"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable, at the option of the
holder thereof (except, in each case, upon the occurrence of a Change of
Control), in whole or in part, or exchangeable into Indebtedness on or prior
to Termination Date.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary of
the Borrower organized under the laws of the United States or any political
subdivision thereof or the operations of which are located substantially
inside the United States.
"Effective Date" has the meaning set forth in the first
introductory paragraph hereto.
"Eligible Assignee" means, (a) any Affiliate of GOF, and (b) any
other Person or Persons approved by GOF, or by an assignee pursuant to this
Agreement, as applicable, and, so long as no Event of Default shall have
occurred and be continuing, approved by the Borrower, which approval shall not
be unreasonably delayed, conditioned or withheld.
"Environmental Claims" means, with respect to any Person, any
written notice, claim, demand or other written communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into
the environment, of any Hazardous Material at any location, whether or not
owned by such Person, or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
Governmental Authority for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law, and
any claim by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from the presence
of Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, technical standards, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation
or reclamation of natural resources, the management, Release or threatened
Release of any Hazardous Material or to health and safety matters.
"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however
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designated) corporate stock or other equity participations, including
partnership interests, whether general or limited, in such Person, including
any Preferred Equity Interests but excluding the Junior Subordinated
Convertible Notes.
"Equity Rights" means, with respect to any Person, any outstanding
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or outstanding
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.
"ERISA Affiliate" means any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or
(c) of the Internal Revenue Code of which the Borrower is a member and (ii)
solely for purposes of potential liability under Section 302(c)(11) of ERISA
and Section 412(c)(11) of the Internal Revenue Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Internal Revenue Code,
described in Section 414(m) or (o) of the Internal Revenue Code of which the
Borrower is a member.
"ERISA Plan" means an employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Event of Default" has the meaning specified in Section 7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as the
same may be amended from time to time.
"Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is
under any compulsion to complete the transaction; provided, however, that the
Fair Market Value of any such asset or assets shall be determined conclusively
by the Board of Directors of the Borrower acting in good faith, and shall be
evidenced by resolutions of the Board of Directors of the Borrower delivered
to each of the holders of Senior Subordinated Notes.
"Foreign Corrupt Practices Act" means the U.S. Foreign Corrupt
Practices Act of 1977, as amended from time to time.
"Foreign Restricted Subsidiary" means a Restricted Subsidiary of
the Borrower not organized under the laws of the United States or any
political subdivision thereof and the operations of which are located
substantially outside of the United States.
"Four Quarter Period" has the meaning set forth in the definition
of Consolidated Coverage Ratio.
10
"Funding Guarantor" has the meaning set forth in Section 3.05.
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GOF" has the meaning set forth in the first introductory paragraph
hereto.
"GOF Nominee" means any member of the Borrower's Board of Directors
that was nominated or designated by GOF pursuant to the Shareholders Agreement
or otherwise.
"Gurantee" has the meaning set forth in Section 3.01.
"Guarantee Obligations" has the meaning set forth in Section 3.01.
"Guarantor(s)" has the meaning set forth in the first introductory
paragraph hereto.
"Guarantor Blockage Period" has the meaning set forth in Section
3.08(a).
"Guarantor Payment Blockage Notice" has the meaning set forth in
Section 3.08(a).
"Guarantor Senior Indebtedness" means, with respect to any
Guarantor, at any date, (a) all Obligations of such Guarantor under the Credit
Agreement; (b) all Hedging Obligations of such Guarantor; (c) all Obligations
of such Guarantor under stand-by letters of credit; and (d) all other
Indebtedness of such Guarantor for borrowed money, including principal,
premium, if any, and interest (including Post-Petition Interest) on such
Indebtedness unless the instrument under which such Indebtedness of such
Guarantor for money borrowed is Incurred expressly provides that such
Indebtedness for money borrowed is not senior or superior in right of payment
to such Guarantor's Guarantee of the Senior Subordinated Notes, and all
renewals, extensions, modifications, amendments or refinancings thereof.
Notwithstanding the foregoing, Guarantor Senior Indebtedness shall not include
(a) to the extent that it may constitute Indebtedness, any Obligation for
Federal, state, local or other taxes; (b) any Indebtedness among or between
such Guarantor and any Subsidiary of such Guarantor or any Affiliate of such
Guarantor or any of such Affiliate's Subsidiaries; unless, and for so long as
such Indebtedness has been pledged to secure obligations under or in respect
of Guarantor Senior Indebtedness; (c) to the extent that it may constitute
Indebtedness, any Obligation in respect of any trade payable Incurred for the
purchase of goods or materials, or for services obtained, in the ordinary
course of business; (d) that portion of any Indebtedness that is Incurred in
violation of this Agreement; (e) Indebtedness evidenced by such Guarantor's
Guarantee of the Senior Subordinated Notes; (f) Indebtedness of such Guarantor
that is expressly subordinate or junior in right of payment to any other
Indebtedness of such Guarantor; (g) to the extent that it may constitute
Indebtedness, any obligation owing under leases (other than Capital Lease
Obligations) or management agreements; (h) any obligation that by operation of
law is subordinate to any general unsecured
11
obligations of such Guarantor; and (i) Indebtedness of a Guarantor to the
extent such Indebtedness is owed to and held by any Federal, state, local or
other governmental authority.
"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.
"Hedging Agreements" means, with respect to any Person, agreements
with respect to all interest rate swap or similar agreements or foreign
currency or commodity hedge, exchange or similar agreements of such Person.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under Hedging Agreements.
"HSR Act" has the meaning set forth in Section 4.01(i).
"Incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or other obligation on the balance
sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall have
meanings correlative to the foregoing). Indebtedness of any Acquired Person or
any of its Subsidiaries existing at the time such Acquired Person becomes a
Restricted Subsidiary (or is merged into or consolidated with the Borrower or
any Restricted Subsidiary), whether or not such Indebtedness was Incurred in
connection with, as a result of, or in contemplation of, such Acquired Person
becoming a Restricted Subsidiary (or being merged into or consolidated with
the Borrower or any Restricted Subsidiary), shall be deemed Incurred at the
time any such Acquired Person becomes a Restricted Subsidiary or merges into
or consolidates with the Borrower or any Restricted Subsidiary.
"Indebtedness" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person
and whether or not contingent, (a) every obligation of such Person for money
borrowed; (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses; (c) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (d) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable
incurred in the ordinary course of business and payable in accordance with
industry practices, or other accrued liabilities arising in the ordinary
course of business which are not overdue or which are being contested in good
faith); (e) every Capital Lease Obligation of such Person; (f) every net
obligation under Hedging Agreements of such Person; (g) every obligation of
the type referred to in clauses (a) through (f) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable for, directly or
12
indirectly, as obligor, guarantor or otherwise; and (h) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (a) through (g) above. Indebtedness (a) shall never be calculated
taking into account any cash and cash equivalents held by such Person; (b)
shall not include obligations of any Person (x) arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business, provided that such obligations are extinguished within two Business
Days of their incurrence, (y) resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business and consistent
with past business practices and (z) under stand-by letters of credit to the
extent collateralized by cash or Cash Equivalents; (c) which provides that an
amount less than the principal amount thereof shall be due upon any
declaration of acceleration thereof shall be deemed to be incurred or
outstanding in an amount equal to the accreted value thereof at the date of
determination; (d) shall include the liquidation preference and any mandatory
redemption payment obligations in respect of any Disqualified Equity Interests
of the Borrower or any Restricted Subsidiary; and (e) shall not include
obligations under performance bonds, performance guarantees, surety bonds and
appeal bonds, letters of credit or similar obligations, incurred in the
ordinary course of business.
"Indenture" means the Indenture, dated as of the date hereof, among
the Borrower, Wilmington Trust Company and the other parties thereto relating
to the Junior Subordinated Convertible Notes.
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding
with respect to such Person, whether voluntary or involuntary.
"Intercompany Notes" means, collectively, the Bonlam Intercompany
Notes (as defined in the Credit Agreement) and the Fabrene Intercompany Notes
(as defined in the Credit Agreement).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance, guarantee or other extension of credit or capital
contribution to (by means of transfers of cash or other property or assets to
others or payments for property or services for the account or use of others,
or otherwise), or purchase or acquisition of capital stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any
other Person. For purposes of the "Limitation on Restricted Payments"
covenant, the amount of any Investment shall be the original cost of such
Investment, plus the cost of all additions thereto, but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment; reduced by the payment of
dividends or distributions in connection with such Investment or any other
amounts received in respect of such Investment; provided, however, that no
such payment of dividends or distributions or receipt of any such other
amounts shall reduce the amount of any Investment if such payment of dividends
or distributions or receipt of any such
13
amounts would be included in Consolidated Net Income. If the Borrower or
any Restricted Subsidiary sells or otherwise disposes of any Voting Equity
Interests of any direct or indirect Restricted Subsidiary such that, after
giving effect to any such sale or disposition, the Borrower no longer owns,
directly or indirectly, greater than 50% of the outstanding Voting Equity
Interests of such Restricted Subsidiary, the Borrower shall be deemed to have
made an Investment on the date of any such sale or disposition.
"Junior Subordinated Convertible Notes" means the 10% convertible
subordinated notes due December 2007 to be issued pursuant to the Plan.
"Letter of Credit" has the meaning set forth in the third whereas
clause.
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrance of any kind (including
any conditional sale or capital lease or other title retention agreement, any
lease in the nature thereof, and agreement to give any security interest).
"Limited Originator Recourse" means a reimbursement obligation to
the Borrower or a Restricted Subsidiary in connection with a drawing on a
letter of credit, revolving loan commitment, cash collateral account or other
such credit enhancement issued to support Indebtedness of a Securitization
Entity under a facility for the financing of trade receivables; provided that
the available amount of any such form of credit enhancement at any time shall
not exceed 15.0% of the principal amount of such Indebtedness at such time.
"Margin Stock" means "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, properties or condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole, or (b) the ability of the
Borrower to perform its material obligations hereunder or under the Senior
Subordinated Note or (c) the validity or enforceability of this Agreement or
the Senior Subordinated Notes, including the rights or remedies of GOF
hereunder or thereunder, other than arising solely as a result of any action
or inaction of GOF.
"Maturity Date" means December 1, 2007.
"Moody's" means Xxxxx'x Investors Service, Inc. and its
successors.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower
or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Cash Proceeds" means the aggregate proceeds in the form of
cash or Cash Equivalents received by the Borrower or any Restricted Subsidiary
in respect of any Asset Sale, including all cash or Cash Equivalents received
upon any sale, liquidation or other exchange of proceeds of Asset Sales
received in a form other than cash or Cash Equivalents, net of (a) the direct
costs relating to such Asset Sale (including, without limitation, legal,
accounting and
14
investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale; (d) amounts deemed, in good faith, appropriate by the Board
of Directors of the Borrower to be provided as a reserve, in accordance with
GAAP, against any liabilities associated with such assets which are the
subject of such Asset Sale; including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an Officer's Certificate delivered to
each of the holders of Senior Subordinated Notes (provided that the amount of
any such reserves shall be deemed to constitute Net Cash Proceeds at the time
such reserves shall have been reversed or are not otherwise required to be
retained as a reserve); and (e) with respect to Asset Sales by Restricted
Subsidiaries, the portion of such cash payments attributable to Persons
holding a minority interest in such Restricted Subsidiary.
"New Investment" means the purchase by certain creditors of the
Borrower and its Debtor Subsidiaries of Junior Subordinated Convertible Notes
for a total purchase price of $50,000,000 pursuant to the terms and conditions
of the Plan.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Borrower nor any Restricted Subsidiary (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other
than the Senior Subordinated Notes) of the Borrower or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Borrower or any of its
Restricted Subsidiaries.
"NPL" has the meaning set forth in Section 5.01(m)(iii).
"Obligations" means any principal, interest (including, without
limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Obligors" has the meaning set forth in the first introductory
paragraph hereto.
"Officer's Certificate" means a certificate signed by the
Borrower's or Guarantor's president, chief executive officer, chief operating
officer, or its chief financial officer (or, if no such officer exists, an
officer or manager with substantially similar authority) on behalf of the
Borrower or a Guarantor, as applicable, stating that (i) the officer signing
such certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's actual
knowledge, after making the investigations required by clause (i), does not
15
misstate any material fact and does not omit to state any fact necessary to
make the certificate not misleading.
"Operating Divisions" means the Nonwovens, Oriented Polymers and
Corporate operating divisions of the Borrower and its Subsidiaries.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to GOF; provided that if GOF shall assign all of its
interest in the Senior Subordinated Note, such counsel shall be reasonably
acceptable to the holders of a majority of the principal amount outstanding
under all Senior Subordinated Notes. The counsel may be an employee of or
counsel to the Borrower, GOF or any other holder of a Senior Subordinated
Note.
"Organizational Documents" means the certificate of incorporation,
articles of organization, bylaws, operating agreement, partnership agreement,
and/or other organizational and governing documents (including all those that
govern or impact the appointment, election, and/or removal of directors,
managers, managing partners or persons of equivalent authority), as the case
may be, of a Person (other than an individual).
"Other Taxes" has the meaning specified in Section 2.05(b).
"Payment Blockage Notice" has the meaning set forth in Section
8.02(a).
"Payment Blockage Period" has the meaning set forth in Section
8.02(a).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Holder" means MatlinPatterson Global Opportunities
Partners L.P. and its Affiliates, The InterTech Group, Inc. and its
Affiliates, Golder, Thoma, Xxxxxxx Fund III Limited Partnership and its
Affiliates, Xxxxx Xxxxxx and Xxxxx X. Xxxx and members of either of their
immediate families and trusts of which such persons are the beneficiaries.
"Permitted Indebtedness" has the meaning set forth in Section
6.01(c).
"Permitted Investments" means (a) Cash Equivalents; (b) Investments
in prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits; (c)
Hedging Obligations; (d) bonds, notes, debentures or other securities received
as a result of Asset Sales permitted under Section 6.01(d) not to exceed 35%
of the total consideration for such Asset Sales; (e) Investments in the
Borrower and Investments in a Restricted Subsidiary or a Person that, as a
result of or in connection with such Investment, becomes a Restricted
Subsidiary or is merged with or into or consolidated with the Borrower or
another Restricted Subsidiary; (f) Investments existing as of the Effective
Date; and (g) any Investment consisting of a guarantee by a Restricted
Subsidiary of Senior Indebtedness or any guarantee of Indebtedness otherwise
permitted by this Agreement.
"Permitted Junior Securities" means any securities of the Borrower
or any other Person that are (i) equity securities without special covenants
or (ii) debt securities expressly
16
subordinated in right of payment to the Senior Subordinated Notes and all
Senior Indebtedness that may at the time be outstanding, to substantially the
same extent as, or to a greater extent than, the Junior Subordinated
Convertible Notes are subordinated as provided in the Indenture, in any event
pursuant to a court order so providing as to which (a) the rate of interest on
such securities shall not exceed the effective rate of interest on the Senior
Subordinated Notes on the date of this Agreement, (b) such securities shall
not be entitled to the benefits of covenants or defaults materially more
beneficial to the holders of such securities than those in effect with respect
to the Senior Subordinated Notes on the date of this Agreement and (c) such
securities shall not provide for amortization (including sinking fund and
mandatory prepayment provisions) commencing prior to the date six months
following the final scheduled maturity date of the Senior Subordinated Notes
and Senior Indebtedness (as modified by the plan of reorganization pursuant to
which such securities are issued).
"Permitted Liens" means (a) Liens on property of a Person existing
at the time such Person is merged into or consolidated with the Borrower or
any Restricted Subsidiary; provided, however, that such Liens were in
existence prior to the contemplation of such merger or consolidation and do
not secure any property or assets of the Borrower or any Restricted Subsidiary
other than the property or assets subject to the Liens prior to such merger or
consolidation; (b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith and by appropriate proceedings; (c)
Liens existing on the Effective Date; (d) Liens securing only the Senior
Subordinated Notes, the Guarantees or the Junior Subordinated Convertible
Notes or guarantees thereof; (e) Liens in favor of the Borrower or any
Restricted Subsidiary (including any such Liens securing Indebtedness, to the
extent and for so long as such Indebtedness is pledged to secure Senior
Indebtedness); (f) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded;
provided, however, that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (g) easements,
reservation of rights of way, restrictions and other similar easements,
licenses, restrictions on the use of properties, or minor imperfections of
title that in the aggregate do not in any case materially detract from the
properties subject thereto or interfere with the ordinary conduct of the
business of the Borrower and the Restricted Subsidiaries; (h) Liens resulting
from the deposit of cash or notes in connection with contracts, tenders or
expropriation proceedings, or to secure workers' compensation, surety or
appeal bonds, costs of litigation when required by law and public and
statutory obligations or obligations under franchise arrangements entered into
in the ordinary course of business; (i) Liens securing Indebtedness consisting
of Capital Lease Obligations, Purchase Money Indebtedness, mortgage
financings, industrial revenue bonds or other monetary obligations, in each
case incurred solely for the purpose of financing all or any part of the
purchase price or cost of construction or installation of assets used in the
business of the Borrower or the Restricted Subsidiaries, or repairs, additions
or improvements to such assets, provided, however, that (I) such Liens secure
Indebtedness in an amount not in excess of the original purchase price or the
original cost of any such assets or repair, addition or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with
the incurrence of such Indebtedness), (II) such Liens do not extend to any
other assets of the
17
Borrower or the Restricted Subsidiaries (and, in the case of repair, addition
or improvements to any such assets, such Lien extends only to the assets (and
improvements thereto or thereon) repaired, added to or improved), (III) the
Incurrence of such Indebtedness is permitted by Section 6.01(c) and (IV) such
Liens attach within 90 days of such purchase, construction, installation,
repair, addition or improvement; and (j) Liens to secure any refinancings,
renewals, extensions, modifications or replacements (or successive
refinancings), in whole or in part, of any Indebtedness secured by Liens
referred to in the clauses above so long as such Lien does not extend to any
other property (other than improvements thereto).
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, limited
liability partnership, trust, unincorporated organization, or a government or
any agency or political subdivision thereof.
"Plan" has the meaning set forth in the second whereas clause.
"Post-Petition Interest" means, with respect to any Indebtedness of
any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person
in accordance with and at the contract rate (including, without limitation,
any rate applicable upon default) specified in the agreement or instrument
creating, evidencing or governing such Indebtedness, whether or not, pursuant
to applicable law or otherwise, the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding.
"Preferred Equity Interest" in any Person, means an Equity Interest
of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.
"Property" means any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Money Indebtedness" means Indebtedness of the Borrower or
any Restricted Subsidiary Incurred for the purpose of financing all or any
part of the purchase price, or the cost of construction or improvement of any
property used in the business of the Borrower; provided, however, that the
aggregate principal amount of such Indebtedness does not exceed the lesser of
the Fair Market Value of such property or such purchase price or cost,
including any refinancing of such Indebtedness that does not increase the
aggregate principal amount (or accreted amount, if less) thereof as of the
date of refinancing.
"Purchase Money Note" means a promissory note of a Securitization
Entity evidencing a line of credit, which may be irrevocable, from the
Borrower or any Restricted Subsidiary in connection with a Qualified
Securitization Transaction, which note shall be repaid from cash available to
the Securitization Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owning to such investors and amounts
paid in connection with the purchase of newly generated receivables.
18
"Qualified Equity Interest" in any Person means any Equity Interest
in such Person other than any Disqualified Equity Interest.
"Qualified Securitization Transaction" means any transaction or
series of transactions pursuant to which the Borrower or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Entity (in the case of a transfer by the Borrower or any of its Restricted
Subsidiaries) and (b) any other Person (in case of a transfer by a
Securitization Entity), or may grant a security interest in, any receivables
(whether now existing or arising or acquired in the future) of the Borrower or
any of its Restricted Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such receivables, all contracts
and contract rights and all guarantees or other obligations in respect of such
receivables, proceeds of such receivables and other assets (including contract
rights) which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving receivables (collectively, "Transferred Assets");
provided that in the case of any such transfer by the Borrower or any of its
Restricted Subsidiaries, the transferor receives cash or Purchase Money Notes
in an amount which (when aggregated with the cash and Purchase Money Notes
received by the Borrower and its Restricted Subsidiaries upon all other such
transfers of Transferred Assets during the 90 days preceding such transfer) is
at least equal to 75% of the aggregate face amount of all receivables so
transferred during such day and the 90 preceding days.
"Regulations A, D, U and X" means, respectively, Regulations A, D,
U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified or supplemented and in effect from
time to time.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"Replacement Assets" has the meaning set forth in Section 6.01(d).
"Restricted Payment" has the meaning set forth in Section 6.01(e).
"Restricted Subsidiary" means any Subsidiary of the Borrower that
has not been designated by the Board of Directors of the Borrower, by a
resolution of the Board of Directors of the Borrower delivered to each of the
holders of Senior Subordinated Notes, as an Unrestricted Subsidiary pursuant
to Section 6.01(i). Any such designation may be revoked by a resolution of the
Board of Directors of the Borrower delivered to each of the holders of Senior
Subordinated Notes, subject to the provisions of such covenant.
"Revocation" has the meaning set forth in Section 6.01(i).
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies; and its successors.
19
"Securitization Entity" means either a Wholly Owned Restricted
Subsidiary of the Borrower (or another Person in which the Borrower or any
Restricted Subsidiary makes an Investment and to which the Borrower or any
Restricted Subsidiary transfers receivables and related assets) or an
Unrestricted Subsidiary that engages in no activities other than in connection
with the financing of receivables and that is designated by the Board of the
Directors of the Borrower (as provided below) as a Securitization Entity (a)
no portion of the Indebtedness or any other Obligations (contingent or
otherwise) of which (i) is guaranteed by the Borrower or any Restricted
Subsidiary other than pursuant to Standard Securitization Undertakings or
Limited Originator Recourse, (ii) is recourse to or obligates the Borrower or
any Restricted Subsidiary (other than the Securitization Entity) in any way
other than pursuant to Standard Securitization Undertakings or Limited
Originator Recourse or (iii) subjects any property or asset of the Borrower or
any Restricted Subsidiary (other than the Securitization Entity), directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings or Limited Originator
Recourse, (b) with which neither the Borrower nor any Restricted Subsidiary
has any material contract, agreement, arrangement or understanding other than
on terms no less favorable to the Borrower or such Restricted Subsidiary than
those that might be obtained at the time from Persons that are not Affiliates
of the Borrower, other than fees payable in the ordinary course of business in
connection with servicing receivables of such entity and (c) to which neither
the Borrower nor any Restricted Subsidiary of the Borrower has any obligation
to maintain or preserve such entity's financial condition or cause such entity
to achieve certain levels of operating results. Any such designation by the
Board of Directors of the Borrower shall be evidenced to each of the holders
of Senior Subordinated Notes by delivery thereto of a certified copy of the
resolution of the Board of Directors of the Borrower giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the foregoing conditions.
"Senior Indebtedness" means, at any date, (a) all Obligations of
the Borrower under the Credit Agreement; (b) all Hedging Obligations of the
Borrower; (c) all Obligations of the Borrower under stand-by letters of
credit; and (d) all other Indebtedness of the Borrower for borrowed money,
including principal, premium, if any, and interest (including Post-Petition
Interest) on such Indebtedness, unless the instrument under which such
Indebtedness of the Borrower for money borrowed is Incurred expressly provides
that such Indebtedness for money borrowed is not senior or superior in right
of payment to the Senior Subordinated Notes, and all renewals, extensions,
modifications, amendments or refinancings thereof. Notwithstanding the
foregoing, Senior Indebtedness shall not include (a) to the extent that it may
constitute Indebtedness, any Obligation for Federal, state, local or other
taxes; (b) any Indebtedness among or between the Borrower and any Subsidiary
of the Borrower or any Affiliate of the Borrower or any of such Affiliate's
Subsidiaries; unless and for so long as such Indebtedness has been pledged to
secure obligations under or in respect of Senior Indebtedness; (c) to the
extent that it may constitute Indebtedness, any Obligation in respect of any
trade payable incurred for the purchase of goods or materials, or for services
obtained, in the ordinary course of business; (d) Indebtedness of the Borrower
that is pari passu with, or expressly subordinate or junior in right of
payment to, the Senior Subordinated Notes; (e) to the extent that it may
constitute Indebtedness, any obligation owing under leases (other than Capital
Lease Obligations) or management agreements; (f) any obligation that by
operation of law is subordinate to any general
20
unsecured obligations of the Borrower; and (g) Indebtedness of the Borrower to
the extent such Indebtedness is owed to and held by any Federal, state, local
or other governmental authority.
"Senior Subordinated Note(s)" has the meaning set forth in Section
2.01.
"Shareholders Agreement" means the Shareholders Agreement dated as
of March 5, 2003, between the Borrower, GOF and the other parties identified
therein.
"Shareholder Rights Plan" means the Borrower's shareholder rights
plan or "poison pill" embodied in the Rights Agreement, dated as of April 15,
1996, by and among the Borrower and First Union Nation Bank of North Carolina.
"Significant Restricted Subsidiary" means, at any date of
determination, (a) any Restricted Subsidiary that, together with its
Subsidiaries that constitute Restricted Subsidiaries (i) for the most recent
fiscal year of the Borrower accounted for more than 20.0% of the consolidated
revenues of the Borrower and the Restricted Subsidiaries or (ii) as of the end
of such fiscal year, owned more than 20.0% of the consolidated assets of the
Borrower and the Restricted Subsidiaries, all as set forth on the consolidated
financial statements of the Borrower and the Restricted Subsidiaries for such
year prepared in conformity with GAAP and (b) any Restricted Subsidiary which,
when aggregated with all other Restricted Subsidiaries that are not otherwise
Significant Restricted Subsidiaries and as to which any event described in
clause (h) of Section 7.01 has occurred, would constitute a Significant
Restricted Subsidiary under clause (a) of this definition.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Borrower or any
Subsidiary of the Borrower that are reasonably customary in receivables
securitization transactions.
"Subordinated Indebtedness" means, with respect to the Borrower or
any Guarantor, any Indebtedness of the Borrower or such Guarantor, as the case
may be, which is pari passu with, or expressly subordinated in right of
payment to, the Senior Subordinated Notes or such Guarantor's Guarantee, as
the case may be, including without limitation, the Junior Subordinated
Convertible Notes.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which the outstanding Voting Equity Interests having at least a majority of
the votes entitled to be cast in the election of directors shall at the time
be owned, directly or indirectly, through one or more Persons by such Person,
or (b) any other Person of which at least a majority of Voting Equity
Interests are at the time, directly or indirectly, owned by such first named
Person.
"Surviving Person" means, with respect to any Person involved in or
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"Taxes" has the meaning specified in Section 2.05(a).
21
"Termination Date" means the date and time at which each of the
following conditions are satisfied: (a) the passage of the dates December 31,
2003, June 30, 2004 and December 31, 2004, regardless of whether the Borrower
has timely made the payments due to the Administrative Agent under the Credit
Agreement thereon; (b) the payment by the Obligors of all amounts owed to GOF
and any other holders of Senior Subordinated Notes hereunder and under the
Senior Subordinated Notes (including any and all costs and expenses), to the
reasonable satisfaction of GOF, or, if GOF shall have assigned all of its
interest in the Senior Subordinated Note, to the reasonable satisfaction of
the holders of a majority of the principal amount outstanding under all Senior
Subordinated Notes immediately prior to such payment; and (c) the termination
of the Letter of Credit.
"Transferred Assets" has the meaning set forth in the definition of
Qualified Securitization Transaction.
"United States" and "U.S." each means United States
of America.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower
designated as such pursuant to Section 6.01(i). Any such designation may be
revoked by a resolution of the Board of Directors of the Borrower delivered to
each of the holders of Senior Subordinated Notes, subject to Section 6.01(i).
"Unutilized Net Cash Proceeds" has the meaning set forth in Section
6.01(d)(iii).
"Voting Equity Interests" means Equity Interests in a corporation
or other Person with voting power under ordinary circumstances entitling the
holders thereof to elect the Board of Directors or other governing body of
such corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than
directors' qualifying shares) of which are owned, directly or indirectly, by
the Borrower and/or one or more Wholly Owned Restricted Subsidiaries.
Section 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding".
Section 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles ("GAAP").
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Section 1.04. References to Credit Agreement. Wherever this
Agreement defines a term by reference to the Credit Agreement, such term shall
have the definition ascribed to it in the Credit Agreement, and, in the event
the Credit Agreement is terminated, or amended, modified or restated to remove
the definition of such term, then the term so defined shall have the meaning
ascribed thereto in the version of the Credit Agreement existing immediately
prior to such termination, amendment, modification or restatement.
ARTICLE II
AMOUNT AND TERMS OF THE SENIOR SUBORDINATED NOTE
Section 2.01. Initial Issuance of Senior Subordinated Note;
Aggregate Principal Amount. Simultaneously with the execution and delivery of
this Agreement, the Borrower is issuing and delivering to GOF a note in
substantially the form of Exhibit E hereto (the "Senior Subordinated Note",
and, together with any additional Senior Subordinated Notes issued pursuant to
Section 9.06(d), if any, the "Senior Subordinated Notes") with a principal
amount of TWENTY FIVE MILLION DOLLARS ($25,000,000.00); provided, however,
that in accordance with Section 2.03 and the terms of the Senior Subordinated
Note, the Borrower shall only be required to pay such amount thereof as equals
the sum of each drawing under the Letter of Credit by the Administrative Agent
(each such drawing being referred to herein as a "Borrowing"), plus accrued
interest and any other costs and expenses due hereunder or under the Senior
Subordinated Notes.
Section 2.02. Interest.
(a) Interest. The Borrower shall pay to GOF and its assigns
interest on the amount of each Borrowing from the date thereof, semi-annually
in arrears on January 1 and July 1 of each year, at a rate of 10% per annum,
subject to adjustment pursuant to Section 2.02(b).
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on the
aggregate unpaid principal amount of the Borrowings at the rate per annum set
forth in Section 2.02(a) plus 2% on demand. The Borrower shall, to the extent
lawful, pay interest on overdue interest at the rate of 12% per annum.
(c) Computations. All computations of interest shall be made on the
basis of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable.
Section 2.03. Repayment.
(a) Repayment on Maturity. Subject to Article VIII, on the Maturity
Date, the Borrower shall be liable to pay to GOF and its assigns in US Dollars
an amount equal to the sum of each Borrowing, together with all accrued and
unpaid interest and any other amounts then owing to GOF and its assigns in
respect thereof (including for costs and expenses).
(b) Mandatory Prepayment. Subject to Article VIII and the terms and
provisions of the Credit Agreement, within 1 Business Day of the consummation
of a Change of
23
Control transaction, the Borrower shall prepay in US Dollars the aggregate
principal amount of all Borrowings, together with all accrued and unpaid
interest outstanding under the Senior Subordinated Notes, together with all
other amounts then owing to GOF and its assigns in respect thereof (including
for costs and expenses).
(c) Optional Prepayment. Subject to Article VIII and the terms and
provisions of the Credit Agreement, the Borrower may, at its option, prepay
its obligations under this Agreement and the Senior Subordinated Notes in
whole or in part at any time, without penalty, upon 3 Business Days prior
notice to the holders of the Senior Subordinated Notes; provided that all
accrued and unpaid interest and any costs or expenses owing to GOF and its
assigns in respect of the prepaid amount shall be simultaneously paid.
Section 2.04. Proceeds of Letter of Credit. The Borrower shall have
no direct access to the proceeds of drawings under the Letter of Credit, and
such proceeds shall be received directly by the Administrative Agent and
applied in accordance with the Credit Agreement.
Section 2.05. Taxes.
(a) Any and all payments by the Obligors hereunder or under the
Senior Subordinated Notes shall be made, or applied in accordance with Section
2.03, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto ("Taxes") excluding Taxes based on the net
income of a Person. Notwithstanding the foregoing, if the Obligors shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Senior Subordinated Notes, (i) the sum payable, or
applied in accordance with Section 2.03, shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.05), GOF receives
or is entitled to receive or have applied under Section 2.03 an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Obligors shall make such deductions and (iii) the Obligors shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Obligors shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Senior
Subordinated Notes or from the execution, delivery or registration of,
performing under, or otherwise with respect to, this Agreement or the Senior
Subordinated Notes (hereinafter referred to as "Other Taxes").
(c) The Obligors shall indemnify GOF and any other holders of
Senior Subordinated Notes for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes imposed by any jurisdiction on
amounts payable under this Section 2.05) imposed on or paid by GOF and such
other holders and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. Any indemnification payment shall
be made within 30 days from the date GOF or such other holders make written
demand therefor.
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(d) Within 30 days after the date of any payment of Taxes and Other
Taxes, the Obligors shall furnish GOF and any other holders of Senior
Subordinated Notes the original or a certified copy of a receipt evidencing
payment thereof.
Section 2.06. Increased Costs. If, due to either (i) the
introduction of or any change after the date hereof, in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request introduced after the date hereof, from any central bank
or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to GOF and any other holders of Senior
Subordinated Notes of making or keeping the Letter of Credit available or
carrying the Senior Subordinated Notes (excluding for purposes of this Section
2.06 any such increased costs resulting from (i) Taxes or Other Taxes (as to
which Section 2.05 shall govern) and (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States), then the
Borrower shall from time to time, upon demand by GOF or such other holders,
pay to GOF and such other holders additional amounts sufficient to compensate
GOF and any such other holders for such increased cost. A certificate as to
the amount of such increased cost, submitted to the Borrower by GOF or any
such other holder, shall be conclusive and binding for all purposes, absent
manifest error.
ARTICLE III
GUARANTEE
Section 3.01. Unconditional Guarantee.
(a) Each Guarantor hereby unconditionally, jointly and severally,
guarantees (each, a "Guarantee") to GOF and any other holders of Senior
Subordinated Notes that the principal of, interest on and all other amounts
owing in respect of the Senior Subordinated Notes will be promptly paid in
full when due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and interest
on any overdue interest on the Senior Subordinated to the extent lawful, and
all other obligations of the Borrower to GOF and its successors and assigns
under the Senior Subordinated Notes will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof (all of the
foregoing being hereinafter called the "Guarantee Obligations"); subject,
however, to the limitations set forth in Section 3.04. Each Guarantor hereby
agrees that its obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Senior Subordinated Notes or
this Agreement, the absence of any action to enforce the same, any waiver or
consent by GOF or its successors or assigns with respect to any provisions
hereof or thereof, the recovery of any judgment against the Borrower, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Borrower,
any right to require a proceeding first against the Borrower, protest, notice
and all demands whatsoever and covenants that the Guarantee will not be
discharged except by complete performance of the obligations continued in the
Senior Subordinated Notes, this Agreement, and this Guarantee. If GOF or its
successors or assigns is required by any court or otherwise to return to the
Borrower, any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Borrower or any Guarantor, any
amount paid by the Borrower or any Guarantor to GOF or
25
such successor or assign, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor
further agrees that, as between each Guarantor, on the one hand, and GOF and
its successors and assigns, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VII
for the purpose of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article VII, such obligations (whether or not due
and payable) shall become due and payable by each Guarantor for the purpose of
this Guarantee.
Each Guarantor further agrees that the Guarantee Obligations may be
extended or renewed, in whole or in part, without notice or further assent
from such Guarantor and that such Guarantor will remain bound under this
Article III notwithstanding any extension or renewal of any Guarantee
Obligation.
(b) Each Guarantor waives notice of any default under the Senior
Subordinated Notes or the Guarantee Obligations. The obligations of each
Guarantor hereunder shall not be affected by (i) any extension or renewal of
any thereof; (ii) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Agreement, the Senior Subordinated Notes or
any other agreement; (iii) the release of any security held by any holder of
Senior Subordinated Notes for the Guarantee Obligations or any of them; (iv)
the failure of any holder of Senior Subordinated Notes to exercise any right
or remedy against any other guarantor of the Guarantee Obligations; or (v)
except as set forth in Section 3.03, any change in ownership of such
Guarantor.
(c) Each Guarantor further agrees that its Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and
not a guarantee of collection) and waives any right to require that any resort
be had by any holder of Senior Subordinated Notes to any security held for
payment of the Guarantee Obligations.
(d) The obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Guarantee Obligations in full), including any claim
of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of
the Guarantee Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any holder of Senior
Subordinated Notes to assert any claim or demand or to enforce any remedy
under this Agreement, the Senior Subordinated Notes or any other agreement, by
any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Guarantee Obligations, or by
any other act or thing or omission or delay to do any other act or thing that
may or might in any manner or to any extent vary the risk of such Guarantor or
would otherwise operate as a discharge of such Guarantor as a matter of law or
equity.
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(e) In furtherance of the foregoing and not in limitation of any
other right that any holder of Senior Subordinated Notes has at law or at
equity against any Guarantor by virtue hereof, upon the failure of the
Borrower to pay the principal of or interest on any Guarantee Obligation when
and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guarantee
Obligation, each Guarantor hereby promises to and shall, upon receipt of
written demand by GOF, forthwith pay, or cause to be paid, in cash, to the
holders of Senior Subordinated Notes Holders an amount equal to the sum of (i)
the unpaid amount of such Guarantee Obligations, (ii) accrued and unpaid
interest on such Guarantee Obligations (but only to the extent not prohibited
by law) and (iii) all other monetary Guarantee Obligations of the Borrower to
the holders of the Senior Subordinated Notes.
Section 3.02. Severability. In case any provision of this Guarantee
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 3.03. Release of a Guarantor. If the Senior Subordinated
Notes are defeased in accordance with the terms of this Agreement, or if
Section 6.02(b) is complied with, or if, subject to the requirements of
Section 6.02(a), all or substantially all of the assets of any Guarantor or
all of the Equity Interests of any Guarantor are sold (including by issuance
or otherwise) by the Borrower in a transaction constituting an Asset Sale and
(x) the Net Cash Proceeds from such Asset Sale are used in accordance with
Section 6.01(d) or (y) the Borrower delivers to each holder of Senior
Subordinated Notes an Officer's Certificate to the effect that the Net Cash
Proceeds from such Asset Sale shall be used in accordance with Section 6.01(d)
and within the time limits specified by Section 6.01(d), then each Guarantor
(in the case of defeasance) or such Guarantor (in the case of compliance with
Section 6.02(b) or in the event of a sale or other disposition of all of the
Equity Interests of such Guarantor) or the corporation acquiring such assets
(in the event of a sale or other disposition of all or substantially all of
the assets of such Guarantor) shall be released and discharged from all
obligations under this Article III without any further action required on the
part of GOF or its successors or assigns. GOF or its successors or assigns
shall, at the sole cost and expense of the Borrower and upon receipt at the
reasonable request of GOF of an Opinion of Counsel that the provisions of this
Section 3.03 have been complied with, deliver an appropriate instrument
evidencing such release upon receipt of a request by the Borrower accompanied
by an Officer's Certificate certifying as to the compliance with this Section
3.03. Any Guarantor not so released remains liable for the full amount of
principal of and interest on the Senior Subordinated Notes and the other
obligations of the Borrower hereunder as provided in this Article III.
Section 3.04. Limitation of a Guarantor's Liability. Each
Guarantor, and by its acceptance hereof GOF, hereby confirms that it is the
intention of all such parties that the guarantee by such Guarantor pursuant to
its Guarantee not constitute a fraudulent transfer or conveyance for purposes
of title 11 of the United States Code, as amended, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S.
Federal or state or other applicable law. To effectuate the foregoing
intention, GOF and each Guarantor hereby irrevocably agree that the
obligations of each Guarantor under its Guarantee shall be listed
27
to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor (including any Senior Indebtedness
Incurred after the Effective Date) and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to Section
3.05, result in the obligations of such Guarantor under its Guarantee not
constituting such a fraudulent transfer or conveyance under Federal or state
law.
Section 3.05. Contribution. In order to provide for just and
equitable contribution among the Guarantors, the Guarantors agree, inter se,
that in the event any payment or distribution is made by any Guarantor (a
"Funding Guarantor") under the Guarantee, such Funding Guarantor shall be
entitled to a contribution from all other Guarantors in a pro rata amount,
based on the net assets of each Guarantor (including the Funding Guarantor),
determined in accordance with GAAP, subject to Section 3.04, for all payments,
damages and expenses incurred by such Funding Guarantor in discharging the
Borrower's obligations with respect to the Senior Subordinated Notes or any
other Guarantor's obligations with respect to the Guarantee.
Section 3.06. Subordination of Subrogation and Other Rights. Each
Guarantor hereby agrees that any claim against the Borrower that arises from
the payment, performance or enforcement of such Guarantor's obligations under
its Guarantee or this Agreement, including, without limitation, any right of
subrogation, shall be subject and subordinate to, and no payment with respect
to any such claim of such Guarantor shall be made before, the payment in full
in cash of the outstanding Senior Subordinated Notes in accordance with the
provisions provided therefor in this Agreement.
Section 3.07. Guarantee Obligations Subordinated to Guarantor
Senior Indebtedness. Each Guarantor covenants and agrees, and GOF by his
acceptance thereof likewise covenants and agrees, that the Guarantee of such
Guarantor shall be issued subject to the provisions of this Article III; and
each person holding any Senior Subordinated Note, whether GOF upon original
issue to or upon transfer, assignment or exchange thereof, accepts and agrees
that all payments of the principal of and interest on the Senior Subordinated
Notes, and all other amounts payable under this Agreement, pursuant to the
Guarantee made by or on behalf of any Guarantor shall, to the extent and in
the manner set forth in this Article III, be subordinated and junior in right
of payment to the prior payment in full in cash of all amounts payable under
Guarantor Senior Indebtedness of such Guarantor.
Section 3.08. No Payment on Guarantees in Certain
Circumstances.
(a) No direct or indirect payment (excluding any payment or
distribution of Permitted Junior Securities but including any payment
constituting any distribution in respect of any other Indebtedness that is
subordinated to the Guarantees) by or on behalf of any Guarantor of principal
of or interest on the Senior Subordinated Notes pursuant to such Guarantor's
Guarantee, whether pursuant to the terms of the Senior Subordinated Note, upon
acceleration or otherwise, shall be made if, at the time of such payment,
there exists a default in the payment of all or any portion of the obligations
on any Designated Guarantor Senior Indebtedness of such Guarantor, whether at
maturity, on account of mandatory redemption or prepayment, acceleration
28
or otherwise, and such default shall not have been cured or waived or the
benefits of this sentence waived by or on behalf of the holders of such
Designated Guarantor Senior Indebtedness. In addition, during the continuance
of any nonpayment event of default with respect to any Designated Guarantor
Senior Indebtedness pursuant to which the maturity thereof may be immediately
accelerated, and upon receipt by the Trustee of written notice (the "Guarantor
Payment Blockage Notice") from the holder or holders of such Designated
Guarantor Senior Indebtedness or the trustee or agent acting on behalf of such
Designated Guarantor Senior Indebtedness, then, unless and until such
nonpayment event of default has been cured or waived or has ceased to exist or
such Designated Guarantor Senior Indebtedness has been discharged or paid in
full in cash or the benefits of these provisions have been waived by the
holders of such Designated Guarantor Senior Indebtedness, no direct or
indirect payment (excluding any payment or distribution of Permitted Junior
Securities) shall be made by or on behalf of such Guarantor of principal or
interest on the Senior Subordinated Notes during a period (a "Guarantor
Blockage Period") commencing on the date of receipt of such notice by GOF and
its successors and assigns and ending 179 days thereafter; provided however,
that so long as any Indebtedness remains outstanding under the Credit
Agreement or any replacement, renewal, refinancing or extension thereof, no
Guarantor Payment Blockage Notice may be initiated to block payment of
principal or interest on the Senior Subordinated Notes pursuant to the terms
of this Section 3.08(a) except by the Administrative Agent (or similar
authorized party) under the Credit Agreement or any replacement, renewal,
refinancing or extension thereof.
(b) Notwithstanding anything herein or in the Senior Subordinated
Notes to the contrary, (x) in no event shall a Guarantor Blockage Period
extend beyond 179 days from the date the Guarantor Payment Blockage Notice in
respect thereof was given, (y) there shall be a period of at least 181
consecutive days in each 360 day period when no Guarantor Blockage Period is
in effect and (z) not more than one Guarantor Blockage Period may be commenced
with respect to any Guarantor during any period of 360 consecutive days. No
nonpayment event of default that existed or was continuing on the date of
commencement of any Guarantor Blockage Period with respect to the Designated
Guarantor Senior Indebtedness initiating such Guarantor Blockage Period (to
the extent the holder of Designated Guarantor Senior Indebtedness, or trustee
or agent, giving notice commencing such Guarantor Blockage Period had
knowledge of such existing or continuing event of default) may be, or be made,
the basis for the commencement of any other Guarantor Blockage Period by the
holder or holders of such Designated Guarantor Senior Indebtedness or the
trustee or agent acting on behalf of such Designated Guarantor Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such nonpayment event of default has been cured or waived for a period of not
less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, any payment
shall be made directly to the holders of Senior Subordinated Notes when such
payment is prohibited by Section 3.08(a), such payment shall be held in trust
for the benefit of, and shall be paid over or delivered by the recipient
thereof (if notice of the conditions prohibiting such payment under Section
3.08(a) has been received by the holders of Senior Subordinated Notes) to the
holders of such Designated Guarantor Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Designated Guarantor Senior Indebtedness may have been
issued, as their respective interests may appear, but only to
29
the extent that, upon notice from the holders of Senior Subordinated Notes to
the holders of such Designated Guarantor Senior Indebtedness that such
prohibited payment has been made, the holders of such Designated Guarantor
Senior Indebtedness (or their representative or representatives or a trustee
or trustees) notify the holders of Senior Subordinated Notes in writing of the
amounts then due and owing on such Designated Guarantor Senior Indebtedness,
if any, and only the amounts specified in such notice to the holders of Senior
Subordinated Notes shall be paid to the holders of such Designated Guarantor
Senior Indebtedness.
Section 3.09 Payment Over Proceeds upon Dissolution, Etc.
(a) Upon any payment or distribution of assets or securities of any
Guarantor of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities), upon
any dissolution or winding up or total liquidation or reorganization of such
Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Guarantor Senior Indebtedness of such
Guarantor shall first be paid in full in cash before the holders of Senior
Subordinated Notes shall be entitled to receive any payment by such Guarantor
of the principal of or interest on the Senior Subordinated Notes pursuant to
such Guarantor's Guarantee, or any payment to acquire any of the Senior
Subordinated Notes for cash, property or securities, or any distribution with
respect to the Senior Subordinated Notes of any cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities). Before
any payment may be made by, or on behalf of, any Guarantor of the principal of
or interest on the Senior Subordinated Notes upon any such dissolution or
winding up or total liquidation or reorganization, any payment or distribution
of assets or securities of such Guarantor of any kind or character, whether in
cash, property or securities (excluding any payment or distribution of
Permitted Junior Securities), to which GOF or its successors or assigns would
be entitled in respect of the Senior Subordinated Notes, but for the
subordination provisions of this Agreement, shall be made by such Guarantor or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, directly to the holders of the
Guarantor Senior Indebtedness of such Guarantor (pro rata to such holders on
the basis of the respective amounts of such Guarantor Senior Indebtedness held
by such holders) or their representatives or to the trustee or trustees or
agent or agents under any agreement or indenture pursuant to which any of such
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Guarantor Senior
Indebtedness in full in cash after giving effect to any prior or concurrent
payment, distribution or provision therefor to or for the holders of such
Guarantor Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of
assets or securities of any Guarantor of any kind or character, whether in
cash, property or securities (excluding any payment or distribution of
Permitted Junior Securities), shall be made directly to holders of the Senior
Subordinated Notes at a time when such payment or distribution is prohibited
by Section 3.09(a) and before all obligations in respect of the Guarantor
Senior Indebtedness of such Guarantor are paid in full in cash, such payment
or distribution shall be received and held in trust for the benefit of, and
shall be paid over or delivered by the recipient thereof (if notice of the
conditions
30
prohibiting such payment under Section 3.09(a) has been received thereby) to,
the holders of such Guarantor Senior Indebtedness (pro rata to such holders on
the basis of the respective amounts of such Guarantor Senior Indebtedness held
by such holders) or their respective representatives, or to the trustee or
trustees or agent or agents under any indenture pursuant to which any of such
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of such Guarantor Senior
Indebtedness remaining unpaid until all such Guarantor Senior Indebtedness has
been paid in full in cash after giving effect to any prior or concurrent
payment, distribution or provision therefor to or for the holders of such
Guarantor Senior Indebtedness.
(c) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution
of any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided in Section 6.02 shall not be deemed a
dissolution, winding up, liquidation or reorganization for the purposes of
this Section 3.09 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Section 6.02.
Section 3.10 Subrogation.
(a) Upon the payment in full in cash of all Guarantor Senior
Indebtedness of a Guarantor, or provision for payment, GOF and its successors
or assigns shall be subrogated to the rights of the holders of such Guarantor
Senior Indebtedness to receive payments or distributions of cash, property or
securities of such Guarantor made on such Guarantor Senior Indebtedness until
the principal of and interest on the Senior Subordinated Notes shall be paid
in full in cash; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Guarantor Senior Indebtedness of any
cash, property or securities to which GOF and its successors and assigns would
be entitled except for the provisions of this Article III, and no payment over
pursuant to the provisions of this Article III to the holders of such
Guarantor Senior Indebtedness by GOF and its successors and assigns, as
between such Guarantor, its creditors other than holders of such Guarantor
Senior Indebtedness, and GOF and its successors and assigns, be deemed to be a
payment by such Guarantor to or on account of such Guarantor Senior
Indebtedness. It is understood that the provisions of this Article III are and
are intended solely for the purpose of defining the relative rights of the
holders of the Senior Subordinated Notes solely in their capacity as such, on
the one hand, and the holders of Guarantor Senior Indebtedness of each
Guarantor, on the other hand.
(b) If any payment or distribution to which the GOF or its
successors or assigns would otherwise have been entitled but for the
provisions of this Article III shall have been applied, pursuant to the
provisions of this Article III, to the payment of all amounts payable under
Guarantor Senior Indebtedness, then and in such case, GOF and it successors or
assigns shall be entitled to receive from the holders of such Guarantor Senior
Indebtedness any payments or distributions received by such holders of
Guarantor Senior Indebtedness in excess of the amount required to make payment
in full in cash of such Guarantor Senior Indebtedness.
Section 3.11 Obligations of Guarantors Unconditional.
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(a) Nothing contained in this Article III or elsewhere in this
Agreement or in the Senior Subordinated Notes or the Guarantees is intended to
or shall impair, as among each of the Guarantors and GOF or its successors and
assigns, the obligation of each Guarantor, which is absolute and
unconditional, to pay to GOF and/or its successors and assigns the principal
of, interest on the Senior Subordinated Notes as and when the same shall
become due and payable in accordance with the terms of the Guarantee of such
Guarantor, or is intended to or shall affect the relative rights of GOF and/or
its successors and assigns and creditors of any Guarantor other than the
holders of Guarantor Senior Indebtedness of such Guarantor, nor shall anything
herein or therein prevent GOF and/or its successors and assigns from
exercising all remedies otherwise permitted by applicable law upon default
under this Agreement, subject to the rights, if any, under this Article III of
the holders of Guarantor Senior Indebtedness in respect of cash, property or
securities of any Guarantor received upon the exercise of any such remedy.
(b) Without limiting the generality of the foregoing, nothing
contained in this Article III shall restrict the right of GOF or its
successors or assigns to take any action to declare the Senior Subordinated
Notes to be due and payable prior to its stated maturity pursuant to Sections
7.01 and 7.02 or to pursue any rights or remedies hereunder; provided,
however, that all Guarantor Senior Indebtedness of any Guarantor then due and
payable shall first be paid in full before GOF and/or its successors and
assigns are entitled to receive any direct or indirect payment from such
Guarantor of principal of, interest on the Senior Subordinated Notes pursuant
to such Guarantor's Guarantee.
Section 3.12 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities of
a Guarantor referred to in this Article III, GOF and/or its successors or
assigns shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy, dissolution, winding up,
liquidation or reorganization proceedings are pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, delivered to GOF and/or its
successors or assigns for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Guarantor Senior Indebtedness
of such Guarantor and other indebtedness of such Guarantor, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article III.
Section 3.13 Subordination Rights Not Impaired by Acts or Omissions
of the Guarantors or Holders of Guarantee Senior Indebtedness. No right of any
present or future holders of any Guarantor Senior Indebtedness to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Guarantor or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by any Guarantor with the terms of this Agreement, regardless of
any knowledge thereof which any such holder may have or otherwise be charged
with. The provisions of this Article III are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Guarantor Senior
Indebtedness.
32
Section 3.14 This Article Not to Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the Senior
Subordinated Notes by reason of any provision of this Article III shall not be
construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 7.01.
Section 3.15 No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 3.13, the holders of
Guarantor Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to GOF and/or its successors or assigns, without
incurring responsibility to GOF and/or its successors or assigns and without
impairing or releasing the subordination provided in this Article III or the
obligations hereunder of GOF and/or its successors and assigns to the holders
of Guarantor Senior Indebtedness, 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, Guarantor Senior Indebtedness or any instrument evidencing
the same or any agreement under which Guarantor Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (c) release any Person liable in any manner for the collection
of Guarantor Senior Indebtedness; and (d) exercise or refrain from exercising
any rights against any Guarantor and any other Person.
Section 3.16 Payments May be Paid Prior to Dissolution. Nothing
contained in this Article III or elsewhere in this Agreement shall prevent a
Guarantor, except under the conditions described in Section 3.08, from making
payments of principal of and interest on the Senior Subordinated Notes unless
at least two Business Days prior to the date upon which such payment becomes
due and payable, the Borrower and such Guarantor shall have received the
written notice provided for in Section 3.08(b). The Guarantors shall give
prompt written notice to GOF and/or its successors and assigns of any
dissolution, winding up, liquidation or reorganization of such Guarantor.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent. The obligation of GOF to cause
the Letter of Credit to be issued is subject to the satisfaction of the
following conditions precedent, each to the reasonable satisfaction of GOF, or
the waiver thereof by GOF in its sole discretion:
(a) Borrower's Certificate of Incorporation. The Certificate
Incorporation shall have been filed with the Secretary of State of the State
of Delaware and, in any event, shall have been amended to satisfy the
requirements of the Plan and the Bankruptcy Code, including, without
limitation, to contain the following terms and provisions, each to the
reasonable satisfaction of GOF:
(i) The Borrower's authorized Capital Stock, and the
designated shares in each class or series of Capital
Stock, shall be limited to such number of shares as is
necessary for the issuances contemplated by the Plan,
including conversion or exercise of all
33
convertible or exercisable securities to be issued
thereunder, including applicable anti-dilution protection;
(ii) The stockholders of the Borrower shall be authorized to
take action by written consent in lieu of a meeting
thereof;
(iii)The Borrower's Board of Directors shall not
be classified;
(iv) The provisions of the Borrower's certificate of
incorporation as of May 11, 2002 that require an
affirmative vote of 80% of the voting Capital Stock for
the taking of certain actions shall be amended to provide
that such actions may be taken with the affirmative vote
of 50% of the voting Capital Stock; and
(v) The issuance of non-voting capital equity securities
shall be prohibited, but only to the extent required by
Section 1123(a)(6) of the Bankruptcy Code.
(b) Borrower's Bylaws. The Bylaws shall have been adopted by the
Borrower, and, in any event, shall have been amended to satisfy the
requirements of the Plan and the Bankruptcy Code, including, without
limitation, to contain the following terms and provisions, each to the
reasonable satisfaction of GOF:
(i) Shareholders holding a minimum of 25% of the Borrower's
Common Stock shall be authorized to call special meetings
of the shareholders;
(ii) The notice requirements for shareholders to place matters
on the ballot for consideration at annual and special
meetings shall not be unduly prohibitive and, in any
event, shall be to GOF's reasonable satisfaction;
(iii) Shareholders shall be authorized to take action by
written consent in lieu of a meeting thereof; and
(iv) The Borrower's officers shall be prohibited from
exercising voting rights of any securities held by the
Borrower without express authorization from the
Borrower's Board of Directors.
(c) Organizational Documents of Debtor Subsidiaries. The
certificate or articles of incorporation and by-laws of each Debtor
Subsidiary shall be amended as necessary to satisfy the provisions of the
Plan and the Bankruptcy Code, and shall include, among other things, pursuant
to Section 1123(a)(6) of the Bankruptcy Code, a provision prohibiting the
issuance of non-voting equity securities, but only to the extent required by
Section 1123(a)(6) of the Bankruptcy Code.
34
(d) Organization Documents of Subsidiaries and Certain Affiliates.
In addition to the requirements of Section 4.01(c) above, the Organizational
Documents of the Borrower's Subsidiaries and Affiliates (excluding GOF) shall,
to the reasonable satisfaction of GOF:
(i) prohibit their respective officers from exercising voting
rights of any securities by such Subsidiaries and
Affiliates without express authorization from such
Subsidiary's or Affiliate's Board of Directors or other
applicable governing body; and
(ii) provide that the shareholders, members, partners or other
equity holders, as the case may be, of such Subsidiary or
Affiliate shall be permitted to remove as of the
Effective Date, at any time and from time to time
thereafter, any director, manager, managing partner or
person of equivalent authority, with or without cause at
any time, through action by a majority in interest of
such shareholders, members, partners or other equity
holders (which action may, at the option thereof and to
the extent permissible by law, be taken in writing or
pursuant to a meeting thereof).
(e) Shareholder Rights Plan. The Shareholder Rights Plan shall have
been rejected by the Bankruptcy Court and terminated.
(f) Shareholders Agreement. The Shareholders Agreement shall have
been executed and delivered by each of the parties thereto.
(g) Documents to be Delivered. GOF shall have received the
following documents, each dated the Effective Date (unless otherwise provided
herein or unless previously provided in accordance with this Section 4.01), in
form and substance satisfactory to GOF:
(i) The Senior Subordinated Note to the order of GOF in the
amount of $25,000,000.00, subject to the terms hereof and
thereof;
(ii) Certified copies of all documents and instruments,
including all authorizations, consents and approvals of,
evidence of all other actions by, and notices and filings
with, all governmental authorities and regulatory bodies
or other Persons to whom the Obligors have contractual
obligations as shall be required for the execution,
delivery and performance of this Agreement by the
Obligors, including those consents and approvals required
by Section 4.01(i);
(iii)An Officer's Certificate (the statements made in which
certificate shall be true on and as of the Effective
Date), of each Obligor certifying as to: (A) the truth of
the representations and warranties made by such Obligor
in this
35
Agreement immediately before and immediately after giving
effect to the execution and delivery hereof and the
issuance of the Senior Subordinated Note; and (B) the
satisfaction, as of the Effective Date, of all conditions
precedent set forth in this Section 4.01 that are to be
performed or satisfied by such Obligor; provided that the
Borrower's Officer's Certificate shall certify the
satisfaction of all conditions precedent set forth in
this Section 4.01;
(iv) A signed copy of a certificate of the Secretary or an
Assistant Secretary or other appropriate officer of the
Borrower certifying (A) as to true and complete copies of
the Certificate of Incorporation and Bylaws and the
Organizational Documents of each of the Borrower's
Subsidiaries as in effect on the Effective Date and the
absence of any amendments to the charter or by-laws since
such dates; and (B) the names and true signatures of the
officers of the Borrower authorized to sign this
Agreement, and the other documents to be delivered
hereunder; and
(v) A signed copy of a certificate of the Secretary or an
Assistant Secretary or other appropriate officer or
manager of each Obligor (other than the Borrower)
certifying (A) as to true and complete copies of the
Organizational Documents of such Obligor as in effect on
the Effective Date and the absence of any amendments to
the charter or by-laws since such dates; and (B) the
names and true signatures of the officers of such Obligor
authorized to sign this Agreement, and the other
documents to be delivered hereunder.
(h) Environmental Due Diligence. GOF shall not have given the
Borrower written notice that GOF, in its sole discretion, has determined that
the results of its environmental diligence review were not reasonably
satisfactory.
(i) Consents and Approvals. The Borrower, its Debtor Subsidiaries
and the other Obligors, if any, shall have obtained all governmental consents
and made all governmental filings required or reasonably advisable in
connection with the transactions contemplated by the Plan (including without
limitation, any consents and filings required or reasonably advisable pursuant
to the Xxxx-Xxxxx-Xxxxxx Antitrust Act (the "HSR Act"), any applicable foreign
antitrust law or regulation, and the New Jersey Industrial Site Recovery Act)
prior to the applicable deadlines, filing periods or other timeframes
associated with such consents and filings, and the applicable waiting period
under the HSR Act or any applicable foreign antitrust law or regulation, if
any, shall have expired or been terminated.
36
(j) Credit Agreement. The closing of the Credit Agreement shall
have occurred, or shall occur substantially simultaneously with the execution
and delivery hereof.
(k) New Investment. The closing of the New Investment shall have
occurred, or shall occur substantially simultaneously with the execution and
delivery hereof.
(l) Management Letters. On or before the Confirmation Date, Xxxxx
Xxxxxx and Xxxxx Xxxx shall have executed and delivered a letter in the form
of Exhibit L and Exhibit M, respectively, to the Disclosure Statement, unless
this condition is waived in writing by GOF.
(m) Compliance with Plan. The Borrower and its Debtor Subsidiaries
shall be in compliance with the material terms and provisions of the Plan
immediately prior to the execution and delivery of this Agreement.
(n) Additional Information and Documents. Each Obligor shall have
provided GOF with such additional information and shall have executed and
delivered such additional documents as may be reasonably requested by GOF.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties of the Borrower. The
Borrower and each Obligor hereby jointly and severally represents and warrants
to GOF as of the Effective Date as follows:
(a) Corporate Existence. The Borrower and each of its Subsidiaries
(a) is a corporation, partnership, limited liability company, or other entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power and authority, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry
on its business as now being or as proposed to be conducted; and (c) is
qualified to do business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such qualification necessary
and where failure so to qualify could have a Material Adverse Effect.
(b) Financial Condition. The Borrower has heretofore furnished to
GOF the following financial statements: (i) the audited consolidated balance
sheets of the Borrower and its consolidated Subsidiaries and the related
audited consolidated statements of operations, shareholders' equity (deficit)
and cash flows of the Borrower and its consolidated Subsidiaries for the
fiscal year ended December 29, 2001, reported on by Ernst & Young LLP; (ii)
the unaudited consolidated balance sheets of the Borrower and its consolidated
Subsidiaries and the related unaudited consolidated statements of operations,
shareholders' equity (deficit) and cash flows of the Borrower and its
consolidated Subsidiaries for the nine-month period ended September 28, 2002;
and (iii) pro forma consolidated balance sheets of the Borrower and its
consolidated
37
Subsidiaries, and related consolidated statements of shareholders' equity
(deficit) as at December 28, 2002, which balance sheets and statements reflect
the consummation of the Plan as if the same had been consummated on said date.
All such financial statements fairly present the respective actual or
pro forma financial condition, as applicable, of the Borrower and its
consolidated Subsidiaries as at the respective dates, and the respective
actual results of operations for the respective periods ended on said
respective dates, all in accordance with GAAP and practices applied on a
consistent basis; provided that, as to projections, the Borrower and its
consolidated Subsidiaries represent only that such projections have been
prepared in good faith based on estimates and assumptions believed by the
Borrower and its consolidated subsidiaries to be reasonable as of the date
such projections were prepared. None of the Borrower or any of its
Subsidiaries has on the date hereof any material contingent liabilities,
material liabilities for Taxes, material unusual forward or long-term
commitments or material unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
respective balance sheets as at said respective dates. Since September 28,
2002, there has been no material adverse change in the financial condition,
operation, business or prospects of the Borrower and its consolidated
Subsidiaries taken as a whole from that set forth in the respective financial
statements as at such date.
(c) Litigation. Except as set forth in Schedule 5.01(c) hereto,
there are no legal or arbitral proceedings, or any proceedings by or before
any governmental or regulatory authority or agency, now pending or (to the
knowledge of any Obligor) threatened against the Borrower or any of the
Borrower's Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.
(d) No Breach. None of the execution and delivery of this Agreement
and the Senior Subordinated Note, the consummation of the transactions herein
and therein contemplated or compliance with the terms and provisions hereof
and thereof will conflict with or result in a breach of, or require any
consent under, the Organizational Documents of the Borrower, any other Obligor
or any of the Borrower's other Subsidiaries, if any, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
Governmental Authority, or any agreement or instrument to which the Borrower,
any other Obligor or any of the Borrower's other Subsidiaries, if any, is a
party or by which any of them or any of their Property is bound or to which
any of them is subject, or constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any
Property of the Borrower, any other Obligor, or any of the Borrower's other
Subsidiaries, if any, pursuant to the terms of any such agreement or
instrument.
(e) Action. Each Obligor has all necessary corporate or other
power, authority and legal right to execute, deliver and perform its
obligations under this Agreement and the Senior Subordinated Note, as the case
may be; the execution, delivery and performance by each Obligor of this
Agreement and the Senior Subordinated Note, as the case may be, has been duly
authorized by all necessary corporate or other action on the part of each
Obligor (including, without limitation, any required shareholder approvals);
and this Agreement has been duly and
38
validly executed and delivered by each Obligor and constitutes, and the Senior
Subordinated Note, as the case may be, constitutes, its legal, valid and
binding obligation, enforceable against each Obligor in accordance with the
terms hereof and thereof, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(f) Approvals. No authorizations, approvals (other than the approval
of the Bankruptcy Court, which has previously been obtained) or consents of
(including any exchange control approval), and no filings or registrations
with, any governmental or regulatory authority or agency, or any securities
exchange, are necessary for the execution, delivery or performance by each
Obligor of this Agreement or by the Borrower of the Senior Subordinated Note
or for the legality, validity or enforceability hereof or thereof.
(g) Use of Credit. None of the Obligors 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 any extension of credit hereunder
will be used to buy or carry any Margin Stock in violation of the applicable
provisions of Regulations U and X.
(h) ERISA. Each ERISA Plan, and, to the knowledge of each Obligor,
each Multiemployer Plan, is in compliance in all material respects with, and
has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Internal Revenue Code and any other
Federal or state law, and no event or condition has occurred and is continuing
as to which any Obligor would be under an obligation to furnish a report to
GOF under Section 6.01(a) hereof.
(i) Taxes. The Borrower and its Subsidiaries (other than their
respective Foreign Subsidiaries) are members of an affiliated group of
corporations filing consolidated returns for Federal income tax purposes, of
which the Borrower is the "common parent" (within the meaning of Section 1504
of the Internal Revenue Code) of such group. There is no tax sharing, tax
allocation or similar agreement currently in effect providing for the manner
in which tax payments owing by the members of such affiliated group (whether
in respect of Federal, state or foreign income or other Taxes) are allocated
among the members of the group. The Borrower and its Subsidiaries have filed
(either directly, or indirectly through the Borrower) all United States
Federal, and all foreign, income tax returns and all other material tax
returns that are required to be filed by them and have paid (either directly,
or indirectly through the Borrower) all Taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower or any of its
Subsidiaries. The charges, accruals and reserves on the books of the Borrower
and the Borrower's Subsidiaries in respect of Taxes and other governmental
charges are, in the opinion of the Borrower, adequate.
39
(j) Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
(k) Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(l) Material Agreements and Liens.
(i) Indebtedness. Part A of Schedule 4.01(l) hereto is a
complete and correct list, as of the date of this
Agreement (and after giving effect to the transactions
contemplated to occur on the Effective Date), of each
credit agreement, loan agreement, indenture, purchase
agreement, lease, guarantee, letter of credit or other
arrangement (excluding this Agreement) providing for or
otherwise relating to any Indebtedness or any extension
of credit (or commitment for any extension of credit) to,
or guarantee by, the Borrower and its Subsidiaries, the
aggregate principal or face amount of which equals or
exceeds (or may equal or exceed) U.S. $100,000, and the
aggregate principal or face amount outstanding or that
may become outstanding under each such arrangement is
correctly described in Part A of said Schedule 4.01(l).
(ii) Liens. Part B of Schedule 4.01(l) hereto is a complete
and correct list, as of the date of this Agreement (and
after giving effect to the transactions contemplated to
occur on the Effective Date), of each Lien securing
Indebtedness of any Person the aggregate principal or
face amount of which equals or exceeds (or may equal or
exceed) U.S. $100,000 and covering any Property of the
Borrower or its Subsidiaries, and the aggregate
Indebtedness secured (or which may be secured) by each
such Lien and the Property covered by each such Lien is
correctly described in Part B of said Schedule 4.01(l).
(m) Environmental Matters. The Borrower and each of its
Subsidiaries has obtained all environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws to
carry on its business as now being or as proposed to be conducted, except to
the extent failure to have any such permit, license or authorization would not
have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and the Borrower and each of its
Subsidiaries is in compliance with the terms and conditions thereof, and is
also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation, code,
plan, order, decree, judgment,
40
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply therewith would not have a
Material Adverse Effect.
In addition, except as set forth in Schedule 4.01(m) hereto:
(i) No Pending Environmental Matters. No notice,
notification, demand, request for information, citation,
summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation
or review is pending or threatened by any governmental or
other entity with respect to any alleged failure by the
Borrower or any of its Subsidiaries to have any
environmental, health or safety permit, license or other
authorization required under any Environmental Law in
connection with the conduct of the business of the
Borrower or any of its Subsidiaries or with respect to
any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any Release of
any Hazardous Materials generated by the Borrower or any
of its Subsidiaries which alleged failure, generation,
treatment, storage, recycling, transportation, discharge
or disposal or Release would have a Material Adverse
Effect.
(ii) No Treatment Facilities or Releases. Except to the extent
the same could not reasonably be expected to have a
Material Adverse Effect: (A) neither the Borrower nor any
of its Subsidiaries owns, operates or leases a treatment,
storage or disposal facility requiring a permit under the
Resource Conservation and Recovery Act of 1976, as
amended, or under any comparable state or local statute;
(B) no polychlorinated biphenyls (PCB's) is or has been
present at any site or facility now or previously owned,
operated or leased by the Borrower or any of its
Subsidiaries; (C) no asbestos or asbestos-containing
materials is or has been present at any site or facility
now or previously owned, operated or leased by the
Borrower or any of its Subsidiaries; (D) there are no
underground storage tanks or surface impoundments for
Hazardous Materials, active or abandoned, at any site or
facility now or previously owned, operated or leased by
the Borrower or any of its Subsidiaries; (E) no Hazardous
Materials have been Released at, on or under any site or
facility now or previously owned, operated or leased by
the Borrower or any of its Subsidiaries in a reportable
quantity established by statute, ordinance, rule,
regulation or order; and (F) no Hazardous Materials have
been otherwise Released at, on or under any site or
facility now or previously owned, operated or leased by
the Borrower or any of its Subsidiaries.
41
(iii)No Hazardous Material Transported to NPL Sites. Neither
the Borrower nor any of its Subsidiaries has transported
or arranged for the transportation of any Hazardous
Material to any location that is listed on the National
Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible
inclusion on the NPL by the Environmental Protection
Agency in the Comprehensive Environmental Response and
Liability Information System, as provided for by 40
C.F.R. ss. 300.5 ("CERCLIS"), or on any similar state,
local or foreign list or that is the subject of Federal,
state, local or foreign enforcement actions or other
investigations that may lead to Environmental Claims
against the Borrower or any of its Subsidiaries, in each
case to the extent such Environmental Claims could
reasonably be expected to have a Material Adverse Effect.
(iv) No Notifications or Listings. No oral or written
notification of a Release of a Hazardous Material has
been filed by or on behalf of the Borrower or any of its
Subsidiaries and no site or facility now or previously
owned, operated or leased by the Borrower or any of its
Subsidiaries is listed or proposed for listing on the
NPL, CERCLIS or any similar state or foreign list of
sites requiring investigation or clean-up.
(v) No Liens or Restrictions. No Liens have arisen under or
pursuant to any Environmental Laws on any site or
facility owned, operated or leased by the Borrower or any
of its Subsidiaries, and neither the Borrower nor any of
its Subsidiaries has received any notification (or
otherwise has any knowledge) of any government action
that has been taken or is in process that could subject
any such site or facility to such Liens, and neither the
Borrower nor any of its Subsidiaries would be required to
place any notice or restriction relating to the presence
of Hazardous Materials at any site or facility owned by
it in any deed to the real property on which such site or
facility is located.
(vi) Full Disclosure. There have been no so-called "Phase I"
or "Phase II" environmental investigations or other
analyses conducted by or that are in the possession of
the Borrower or any of its Subsidiaries in relation to
any site or facility now or previously owned, operated or
leased by the Borrower or any of its Subsidiaries which
have not been made available to GOF.
42
(n) Capitalization.
(i) Outstanding Equity. The authorized Capital Stock of the
Borrower and each of the Subsidiaries will consist as of
the Effective Date, after giving effect to the
transactions contemplated to occur on or before the
Effective Date, of the aggregate number of shares of
common and preferred stock, having the respective par
values and series, in each case as listed in Schedule
4.01(n) hereto. On the Effective Date, after giving
effect to the transactions contemplated to occur on or
before the Effective Date, the number of shares of common
stock and each series of preferred stock of the Borrower
and each of its Subsidiaries will be duly and validly
issued and outstanding as listed in said Schedule 4.01(n)
and will be owned beneficially and of record by the
Persons as listed in said Schedule 4.01(n).
(ii) Outstanding Equity Rights. As of the Effective Date,
after giving effect to the transactions contemplated to
occur on or before the Effective Date, except as set
forth in Schedule 4.01(n) hereto, (A) there will be no
outstanding Equity Rights with respect to the Borrower or
any of its Subsidiaries and (B) there will be no
outstanding obligations of the Borrower or any of its
Subsidiaries to repurchase, redeem, or otherwise acquire
any shares of Capital Stock of the Borrower or any of its
Subsidiaries nor will there be any outstanding
obligations of the Borrower 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
Borrower or any of its Subsidiaries.
(o) Subsidiaries and Investments.
(i) Subsidiaries. Set forth in Part A of Schedule 4.01(o)
hereto is a complete and correct list of all of the
Borrower's Subsidiaries as of the Effective Date after
giving effect to the transactions contemplated to occur
on or before the Effective Date, together with, for each
such Subsidiary, (A) the jurisdiction of organization of
such Subsidiary, (B) each Person holding ownership
interests in such Subsidiary and (C) the nature of the
ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by
such ownership interests. Except as disclosed in Part A
of Schedule 4.01(o) hereto, (x) the Borrower and its
Subsidiaries own, or will own on the Effective Date, free
and clear of Liens, and have the unencumbered right to
vote, all outstanding ownership interests in each Person
shown to be held by
43
them in Part A of Schedule 4.01(o) hereto, (y) all of the
issued and outstanding Capital Stock of each such Person
organized as a corporation is validly issued, fully paid
and nonassessable and (z) (except as disclosed in
Schedule 4.01) there are no outstanding Equity Rights
with respect to such Person.
(ii) Investments. Set forth in Part B of Schedule 4.01(o)
hereto is a complete and correct list of all Investments
(other than Investments disclosed in Part A of said
Schedule 4.01(o) hereto and Permitted Investments) held
by the Borrower and its Subsidiaries in any Person on the
date hereof, or that will be held on the Effective Date
after giving effect to the transactions contemplated to
occur on or before the Effective Date, and, for each such
Investment, (x) the identity of the Person or Persons
holding such Investment and (y) the nature of such
Investment. Except as disclosed in Part B of Schedule
4.01 hereto, the Borrower and each of its Subsidiaries
owns, or will own, free and clear of all Liens, all such
Investments.
(iii) Absence of Certain Restrictions. Except as provided for
in the Intercompany Notes Agreements (as defined in the
Credit Agreement), neither the Borrower nor any of its
Subsidiaries is, on the date hereof, subject to any
indenture, agreement, instrument or other arrangement of
the type described in Section 9.16(e) of the Credit
Agreement.
(p) Title to Assets. The Borrower and each of its Subsidiaries on
the Effective Date will own and have good and marketable title (subject only
to Permitted Liens) to the material Properties shown to be owned in the most
recent financial statements referred to in Section 5.01(b)(iii) hereof (other
than Properties disposed of in the ordinary course of business or otherwise
permitted to be disposed of pursuant to Section 6.01(d) hereof or in
accordance with the Plan). The Borrower and each of its Subsidiaries on the
Effective Date will own (or have available for use under lease, license or
other arrangements entered into with any other Person) good and marketable
title to, and enjoy on the Effective Date, peaceful and undisturbed possession
of, all Properties (subject only to Permitted Liens) that are necessary for
the operation and conduct of their businesses.
(q) True and Complete Disclosure. All written information furnished
after the date hereof by the Obligors to GOF, in its capacity as a holder of
the Senior Subordinated Note, in connection with this Agreement and the Senior
Subordinated Note and the transactions contemplated hereby and thereby will be
true, complete and accurate in every material respect, or (in the case of
projections) based on reasonable estimates, on the date as of which such
information is stated or certified.
(s) Real Property. Set forth on Schedule 4.01(s) attached hereto is
a list of all of the real property interests of the Borrower and its
Subsidiaries on the Effective Date, after
44
giving effect to the transactions contemplated to occur on or before the
Effective Date, indicating in each case whether the respective Property is
owned or leased, the identity of the owner or lessee and the location of the
respective Property. All such leases necessary for the conduct of the business
of the Borrower or its Subsidiaries are valid and subsisting and are in full
force and effect, except for such failures to be valid, subsisting and in full
force and effect as would not, individually or in the aggregate, have a
Material Adverse Effect. Each of the Borrower and its Subsidiaries enjoys
peaceful and undisturbed possession under all such leases, and each of the
Borrower and its Subsidiaries has complied with all material obligations under
all leases to which it is a party, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.
Section 5.02. Representations and Warranties of GOF. GOF hereby
represents and warrants as of the Effective Date as follows:
(a) Due Organization, Etc. GOF is a limited partnership duly
organized and validly existing under the laws of the State of Delaware.
(b) Corporate Power, Etc. GOF has full power and authority to enter
into, deliver and perform its obligations under this Agreement and the Senior
Subordinated Note and to consummate each of the transactions contemplated
hereby and thereby, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
(c) No Conflict. Neither the execution and delivery of this
Agreement, nor the performance by GOF of its obligations hereunder, will
conflict in any material respect with or result in a material breach of, or
constitute a material default under, any applicable laws or any indenture,
mortgage, deed of trust or other material instrument or agreement to which GOF
is a party or is bound.
(d) Approvals, Etc. No order, license, consent, authorization or
approval of, or exemption by, or notice to or registration with, any
Governmental Authority or regulatory body, and no filing, recording,
publication or registration in any public office or any other place, is
required in connection with the execution, delivery and performance by GOF of
any this Agreement, or for the legality, validity, binding effect or
enforceability hereof, except such orders, licenses, consents, authorizations
and approvals as have been duly obtained or made and are in full force and
effect, or will be obtained and made after the date hereof, as permitted by
the applicable Governmental Authority or regulatory body.
ARTICLE VI
COVENANTS
Section 6.01. General Covenants. The Borrower and the other
Obligors, as the case may be, covenant and agree as follows:
(a) Delivery of Information. The Obligors shall deliver to GOF
(provided, however, that GOF may suspend delivery of any of the information
set forth in the following
45
clauses (i) through (xii), or any subset of such information, by delivering
written notice to the Borrower, with such suspension to continue until GOF
delivers written notice to the Borrower directing the resumption of the
delivery thereof):
(i) as soon as available and in any event within (x) 45 days
after the end of each monthly accounting period for the fiscal year of the
Borrower ending January 3, 2004 and (y) 30 days after the end of each monthly
accounting period of each fiscal of the Borrower commencing with the fiscal
year ending January 1, 2005 (unless such monthly accounting period ends on the
end of a fiscal quarter or fiscal year, in which case the provisions of
paragraph (ii) and (iii) below shall apply), consolidated statements of
income, retained earnings and cash flows of the Borrower and its Restricted
Subsidiaries (and, separately stated, of the Borrower and its Restricted
Subsidiaries, and, with respect to statements of income, Operating Divisions)
for such period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated balance sheets of
the Borrower and its Restricted Subsidiaries as at the end of such period
(and, separately stated, of the Borrower and its Restricted Subsidiaries, and,
with respect to statements of income, Operating Divisions), setting forth in
each case in comparative form the corresponding consolidated figures for the
corresponding period in the preceding fiscal year, accompanied by a
certificate of a senior financial officer of the Borrower, which certificate
shall state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the Borrower and
its Restricted Subsidiaries (or of the Borrower and its Restricted
Subsidiaries and Operating Divisions, as the case may be), in each case in
accordance with GAAP, consistently applied, as at the end of, and for, such
period (subject to the absence of footnote disclosures and to normal year-end
audit adjustments);
(ii) as soon as available and in any event within (x) 60 days
after the end of each quarterly fiscal period for the fiscal year ending
January 3, 2004 and (y) 45 days after the end of each quarterly fiscal period
of each fiscal year of the Borrower commencing with the fiscal year ending
January 1, 2005 (unless such quarterly fiscal period ends on the end of a
fiscal year, in which case the provisions of paragraph (iii) below shall
apply), consolidated statements of income, retained earnings and cash flows of
the Borrower and its Restricted Subsidiaries (and, separately stated, of the
Borrower and its Restricted Subsidiaries, and, with respect to statements of
income, Operating Divisions) for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related consolidated balance sheets of the Borrower and its Restricted
Subsidiaries as at the end of such period (and, separately stated, of the
Borrower and its Restricted Subsidiaries, and, with respect to statements of
in come, Operating Divisions), setting forth in each case in comparative form
the corresponding consolidated figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a senior financial
officer of the Borrower, which certificate shall state that said consolidated
financial statements fairly present the consolidated financial condition and
results of operations of the Borrower and its Restricted Subsidiaries (or of
the Borrower, its Restricted Subsidiaries and Operating Divisions, as the case
may be), in each case in accordance with GAAP, consistently applied, as at the
end of, and for, such period (subject to the absence of footnote disclosures
and to normal year-end audit adjustments);
46
(iii)as soon as available and in any event within (x) 120 days
after the end of the fiscal year of the Borrower ending January 3, 2004 and
(y) 90 days after the end of each fiscal year of the Borrower commencing with
the fiscal year ending January 1, 2005, consolidated statements of income,
retained earnings and cash flows of the Borrower and its Restricted
Subsidiaries (and, separately stated, of the Borrower and its Restricted
Subsidiaries and Operating Divisions) for such fiscal year and the related
consolidated balance sheets of the Borrower and its Restricted Subsidiaries
(and, separately stated, of the Borrower and its Restricted Subsidiaries and
Operating Divisions) as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding consolidated figures for the
preceding fiscal year, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which opinion
shall state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the Borrower and
its Restricted Subsidiaries (or of the Borrower and its Restricted
Subsidiaries and Operating Divisions, as the case may be) as at the end of,
and for, such fiscal year in accordance with GAAP, consistently applied;
(iv) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which any of the
Borrower or its Subsidiaries shall have filed with the Securities and Exchange
Commission (or any governmental agency substituted therefor) or any national
securities exchange;
(v) promptly upon the mailing thereof to the holders of any
publicly-traded debt or equity securities of any of the Borrower or its
Subsidiaries, copies of all financial statements, certificates, reports, proxy
statements and other notices or information so mailed;
(vi) as soon as possible, and in any event within 10 days
after any Obligor knows or has reason to believe that any of the events or
conditions specified below with respect to any ERISA Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior financial officer
of such Obligor or its Subsidiary setting forth details respecting such event
or condition and the action, if any, that the Obligors and their ERISA
Affiliates propose to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by the Borrower or an ERISA
Affiliate with respect to such event or condition): (A) any reportable event,
as defined in Section 4043(c) of ERISA and the regulations issued thereunder,
with respect to an ERISA Plan, as to which the PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within
30 days of the occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code or
Section 302 of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of the
Internal Revenue Code or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with Section 412(d) of
the Internal Revenue Code); and any request for a waiver under Section 412(d)
of the Internal Revenue Code for any ERISA Plan; (B) the distribution under
Section 4041 of ERISA of a notice of intent to terminate any ERISA Plan or any
action taken by the Borrower or an ERISA Affiliate to terminate any ERISA
Plan; (C) the institution by the PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any ERISA Plan, or the receipt by
47
the Borrower or any ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by the PBGC with respect to such Multiemployer
Plan; (D) the complete or partial withdrawal from a Multiemployer Plan by the
Borrower or any ERISA Affiliate that results in liability under Section 4201
or 4204 of ERISA (including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA; (E) the institution
of a proceeding by a fiduciary of any Multiemployer Plan against the Borrower
or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is
not dismissed within 30 days; and (F) the adoption of an amendment to any
ERISA Plan that, pursuant to Section 401(a)(29) of the Internal Revenue Code
or Section 307 of ERISA, would require security to be provided to the ERISA
Plan in accordance with the provisions of said Sections;
(vii)as soon as available and in any event within 30 days
after the beginning of each fiscal year of the Borrower, (A) a projection
(setting forth an itemization of the principal assumptions relating thereto)
for such fiscal year of the Borrower of the anticipated income statement, cash
flow statement and changes in financial position of the Borrower, and the
related balance sheets and (B) promptly after any material change in such
projections (either positive or negative) becomes known, notice of such
change;
(viii) promptly after any Obligor has reason to believe that
any Default has occurred under this Agreement or the Senior Subordinated
Notes, a notice of such Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a description of
the action that such Obligor has taken or proposes to take with respect
thereto;
(ix) promptly after the Borrower has reason to believe that
any default has occurred under the Credit Agreement, and in any event no later
than notice thereof is delivered to the Administrative Agent, a notice of such
default describing the same in reasonable detail and, together with such
notice or as soon thereafter as possible, a description of the action that the
Borrower has taken or proposes to take with respect thereto;
(x) immediately after the Borrower or any of its Subsidiaries
has reason to believe that it may not timely make any of the payments due
under the Credit Agreement from the Borrower to the Administrative Agent on
December 31, 2003, June 30, 2004 and December 31, 2004, a notice of such fact,
describing the reason for such determination in reasonable detail and,
together with such notice or as soon thereafter as possible, a description of
the action that the Borrower has taken or proposes to take to remedy such
situation;
(xi) immediately upon the addition of any guarantor under the
Credit Agreement pursuant to Section 9.16(b) thereof or otherwise, notice of
such addition, copies of the Guaranty Agreement executed by such additional
guarantor and a statement of the basis for such addition;
48
(xii) from time to time such other information regarding the
financial condition, operations, business or prospects of the Borrower or any
of its Subsidiaries (including, without limitation, any ERISA Plan or
Multiemployer Plan and any reports or other information required to be filed
under ERISA) as GOF may reasonably request; and
(xiii) the Borrower shall deliver to GOF, within 120 days
after the close of each fiscal year a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
stating that a review of the activities of the Borrower has been made under
the supervision of the signing officers with a view to determining whether a
Default or Event of Default has occurred and whether or not the signers know
of any Default or Event of Default by the Borrower that occurred during such
fiscal year. If they do know of such a Default or Event of Default, the
certificate shall describe all such Defaults or Events of Default, their
status and the action the Borrower is taking or proposes to take with respect
thereto. The first certificate to be delivered by the Borrower pursuant to
this Section 6.01(a) shall be for the fiscal year ending January 3, 2004.
(b) Transactions with Affiliates. The Borrower shall not, and shall
not cause or permit any Restricted Subsidiary to, directly or indirectly,
conduct any business or enter into any transaction (or series of related
transactions) with or for the benefit of any of their respective Affiliates or
any officer, director or employee of the Borrower or any Restricted Subsidiary
(each an "Affiliate Transaction"), unless (i) such Affiliate Transaction is on
terms which are no less favorable to the Borrower or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction with an unaffiliated third party and (ii) (A) if such Affiliate
Transaction (or series of related Affiliate Transactions) involves aggregate
payments or the transfer of other consideration between the Borrower and an
Affiliate of the Borrower having a Fair Market Value in excess of $25,000,000,
such Affiliate Transaction is in writing and the Borrower delivers an
Officer's Certificate to each holder of Senior Subordinated Notes certifying
that such Affiliate Transaction (or series of Affiliate Transactions) complies
with the foregoing provisions, (B) if such Affiliate Transaction (or series of
related Affiliate Transactions) involves aggregate payments or the transfer of
other consideration between the Borrower and an Affiliate of the Borrower
having a Fair Market Value in excess of $25,000,000, such Affiliate
Transaction is in writing and a majority of the disinterested members of the
Board of Directors of the Borrower shall have approved such Affiliate
Transaction and determined that such Affiliate Transaction complies with the
foregoing provisions.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) transactions with or among the Borrower and
any Wholly Owned Restricted Subsidiary or between or among Wholly Owned
Restricted Subsidiaries; (ii) reasonable fees and compensation paid to and
indemnity provided on behalf of, officers, directors, employees, consultants
or agents of the Borrower or any Subsidiary as determined in good faith by the
Borrower's Board of Directors; (iii) any transactions undertaken pursuant to
any contractual obligations or rights in existence on the Effective Date (as
in effect on the Effective Date), including without limitation redemption
features in any outstanding securities or the issuance of, or the payment of
the principal, interest or any other amounts due on, the Junior Subordinated
Convertible Notes; (iv) any Restricted Payments made in compliance with
Section 6.01(e); (v)
49
loans and advances to officers, directors and employees of the Borrower or any
Restricted Subsidiary for travel, entertainment, moving and other relocation
expenses, in each case made in the ordinary course of business for bona fide
business purposes of the Borrower or a Restricted Subsidiary; (v) entering
into by the Borrower and any of its consolidated Restricted Subsidiaries of a
tax sharing or similar arrangement; and (vii) entering into by the Borrower
and any Restricted Subsidiary a Qualified Securitization Transaction.
(c) Limitation on Indebtedness. The Borrower shall not, and shall
not cause or permit any Restricted Subsidiary to, directly or indirectly,
Incur any Indebtedness (including Acquired Indebtedness), except for Permitted
Indebtedness; provided, however, that the Borrower and any Restricted
Subsidiary may Incur Indebtedness if, at the time of and immediately after
giving pro forma effect to such Incurrence of Indebtedness and the application
of the proceeds therefrom, the Consolidated Coverage Ratio would be greater
than 1.0 to 1.0.
The foregoing limitations will not apply to the Incurrence by the
Borrower or any Restricted Subsidiary of any of the following (collectively,
"Permitted Indebtedness"), each of which shall be given independent effect:
(A) Indebtedness under the Senior Subordinated Notes, the Junior Subordinated
Convertible Notes and other indebtedness outstanding on the Effective Date;
(B) Indebtedness Incurred pursuant to (i) the Credit Agreement and/or (ii) any
other agreements or indentures governing Senior Indebtedness if at the time of
and immediately after giving effect thereto, the aggregate consolidated
Indebtedness Incurred under both clauses (i) and (ii) would not exceed
$800,000,000 at any one time outstanding; provided, however, that such
$800,000,000 shall be reduced (without duplication) by the amount of any
repayment of Indebtedness under the Credit Agreement pursuant to Section
5.01(g) and any drawing under the Letter of Credit; (C) Indebtedness of any
Subsidiary of the Borrower owed to and held by the Borrower or any Guarantor,
other Indebtedness of the Borrower owed to and held by any Guarantor which is
unsecured and subordinated in right of payment to the payment and performance
of the Borrower's obligations under any Senior Indebtedness and the Senior
Subordinated Notes and Indebtedness of a Foreign Restricted Subsidiary that is
not a Guarantor owed to and held by any other Restricted Subsidiary that is
not a Guarantor; provided, however, that an Incurrence of Indebtedness that is
not permitted by this clause (C) shall be deemed to have occurred upon (i) any
sale or other disposition of any Indebtedness of the Borrower or any
Restricted Subsidiary referred to in this clause (C) to a Person (other than
the Borrower or a Guarantor), (ii) any sale or other disposition of Equity
Interests of any Guarantor which holds Indebtedness of the Borrower or another
Subsidiary of the Borrower such that such Guarantor ceases to be a Guarantor,
and (iii) the designation of a Restricted Subsidiary that is a Guarantor and
which holds Indebtedness of the Borrower or any other Restricted Subsidiary as
an Unrestricted Subsidiary; (D) the Guarantees and guarantees by any Guarantor
of Indebtedness of the Borrower permitted under this Section 6.01(c);
provided, however, that if such guarantee is of Subordinated Indebtedness,
then the Guarantee of such Guarantor shall be senior to such Guarantor's
guarantee of Subordinated Indebtedness; (E) Hedging Obligations of the
Borrower or any Guarantor entered into in the ordinary course of business; (F)
Purchase Money Indebtedness and Capital Lease Obligations which do not exceed
$50,000,000 in the aggregate at any one time outstanding; (G) Indebtedness to
the extent representing a replacement, renewal, refinancing or extension
(collectively for purposes of this Section 6.01(c), a "refinancing") of
outstanding Indebtedness Incurred in compliance with the Consolidated Coverage
Ratio of the
50
first paragraph of this Section 6.01(c) or clause (B) of this paragraph of
this Section 6.01(c); provided, however, that (i) any such refinancing shall
not exceed the sum of the principal amount (or accreted amount (determined in
accordance with GAAP), if less) of the Indebtedness being refinanced, plus the
amount of accrued interest thereon, plus the amount of any reasonably
determined prepayment premium necessary to accomplish such refinancing and
such reasonable fees and expenses Incurred in connection therewith, (ii)
Indebtedness representing a refinancing of Indebtedness other than Senior
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness being
refinanced, (iii) Indebtedness that is pari passu with the Senior Subordinated
Notes may only be refinanced with Indebtedness that is made pari passu with or
subordinate in right of payment to the Senior Subordinated Notes and
Subordinated Indebtedness may only be refinanced with Subordinated
Indebtedness, (iv) no Restricted Subsidiary that is not a Guarantor may Incur
Indebtedness to refinance Indebtedness of the Borrower or any Guarantor and
(v) Indebtedness of the Borrower may only be refinanced by Indebtedness of the
Borrower and Indebtedness of a Restricted Subsidiary may only be refinanced by
Indebtedness of such Restricted Subsidiary or by the Borrower; (H) in addition
to the items referred to in clauses (A) through (G) above, Indebtedness of the
Borrower (including any Indebtedness under the Credit Agreement that utilizes
this subparagraph (H)) having an aggregate principal amount not to exceed
$200,000,000 at any one time outstanding; and (I) Indebtedness of a
Securitization Entity in a Qualified Securitization Transaction that is
Non-Recourse Debt with respect to the Borrower and its other Restricted
Subsidiaries (except for Standard Securitization Undertakings and Limited
Originator Recourse).
(d) Disposition of Proceeds of Asset Sales.
(i) The Borrower shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, make any Asset Sale, unless
(A) the Borrower or such Restricted Subsidiary, as the case may be, receives
consideration for such Asset Sale at least equal to the Fair Market Value of
the assets sold or otherwise disposed of and (B) at least 65% of such
consideration consists of (I) cash or Cash Equivalents, or (II) properties,
capital assets and interests in joint ventures (however structured) that
replace the properties and assets that were the subject of such Asset Sale or
in properties and capital assets that will be used in the business of the
Borrower and its Restricted Subsidiaries as existing at such time or in
businesses reasonably related thereto (as determined in good faith by the
Borrower's Board of Directors) ("Replacement Assets"). The amount of any
Indebtedness (other than any Subordinated Indebtedness) of the Borrower or any
Restricted Subsidiary that is actually assumed by the transferee in such Asset
Sale and from which the Borrower and the Restricted Subsidiaries are fully and
unconditionally released shall be deemed to be cash for purposes of
determining the percentage of cash consideration received by the Borrower or
the Restricted Subsidiaries.
(ii) The Borrower or such Restricted Subsidiary, as the case
may be, may (A) apply the Net Cash Proceeds of any Asset Sale to repay Senior
Indebtedness and permanently reduce any related commitment, or (B) make an
Investment in Replacement Assets, in each case, within 270 days of receipt
thereof.
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(iii) To the extent all or part of the Net Cash Proceeds of any
Asset Sale are not applied within 270 days of such Asset Sale as described in
clause (A) or (B) of the immediately preceding paragraph (such Net Cash
Proceeds, the "Unutilized Net Cash Proceeds"), the Borrower shall, within 45
days after such 270th day, prepay the Senior Subordinated Notes up to a
maximum principal amount equal to the amount of such Unutilized Net Cash
Proceeds in accordance with Section 2.02(c) irrespective of whether or not an
Event of Default has occurred and is continuing.
(iv) In the event GOF has assigned any portion of the Senior
Subordinated Note in accordance with the provisions hereof, any prepayment
effected pursuant to this covenant, to the extent the aggregate principal
amount outstanding under the Senior Subordinated Notes and accrued and unpaid
interest and other amounts owing in respect thereof exceeds the Unutilized Net
Cash Proceeds to be applied to the prepayment thereof, the prepayment shall be
made pro rata based on the aggregate principal amount of the Senior
Subordinated Notes held by GOF and any assignees. To the extent the Unutilized
Net Cash Proceeds exceed the aggregate principal amount outstanding under the
Senior Subordinated Notes and accrued and unpaid interest and other amounts
owing in respect thereof, the Borrower may retain and utilize any portion of
the Unutilized Net Cash Proceeds not applied to prepay Senior Subordinated
Notes for any purpose consistent with the other terms hereof.
(e) Limitation on Restricted Payments. The Borrower shall not, and
shall not cause or permit any Restricted Subsidiary to, directly or
indirectly, to:
(i) declare or pay any dividend or any other distribution on
any Equity Interests of the Borrower or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders (in their capacities
as such) of Equity Interests of the Borrower or any Restricted Subsidiary
(other than Class C Dividends and any dividends, distributions and payments
made to the Borrower or any Restricted Subsidiary and dividends or
distributions payable to any Person solely in Qualified Equity Interests of
the Borrower or in options, warrants or other rights to purchase Qualified
Equity Interests of the Borrower);
(ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Borrower or any Restricted Subsidiary (other than
the Senior Subordinated Notes, Junior Subordinated Convertible Notes and any
Equity Interests owned by the Borrower or any Restricted Subsidiary);
(iii) purchase, redeem, defease or retire for value, or make
any principal payment on, prior to any scheduled maturity, scheduled repayment
or scheduled sinking fund payment, any Subordinated Indebtedness; or
(iv) make any Investment in any Person (other than Permitted
Investments)
(any such payment or any other action (other than any exception thereto)
described in (i), (ii), (iii) or (iv) each, a "Restricted Payment"), unless:
52
(i) no Default or Event of Default shall have occurred and be
continuing at the time or immediately after giving effect to such Restricted
Payment;
(ii) immediately after giving effect to such Restricted
Payment, the Borrower would be able to Incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the Consolidated Coverage Ratio of
the first paragraph of Section 6.01(c); and
(iii) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments declared or made on
or after the Effective Date does not exceed an amount equal to the sum of (A)
50% of cumulative Consolidated Net Income determined for the period (taken as
one period) from the Effective Date and ending on the last day of the most
recent fiscal quarter immediately preceding the date of such Restricted
Payment for which consolidated financial information of the Borrower is
available (or if such cumulative Consolidated Net Income shall be a loss,
minus 100% of such loss), plus (B) the aggregate net cash proceeds received by
the Borrower either (x) as capital contributions to the Borrower after the
Effective Date or (y) from the issue and sale (other than to a Restricted
Subsidiary) of its Qualified Equity Interests after the Effective Date
(excluding the net proceeds from any issuance and sale of Qualified Equity
Interests financed, directly or indirectly, using funds borrowed from the
Borrower or any Restricted Subsidiary until and to the extent such borrowing
is repaid), plus (C) the principal amount (or accreted amount (determined in
accordance with GAAP), if less) of any Indebtedness of the Borrower or any
Restricted Subsidiary Incurred after the Effective Date which has been
converted into or exchanged for Qualified Equity Interests of the Borrower,
plus (D) without duplication of any amounts included in clause (i) above, in
the case of the disposition or repayment of, or the receipt by the Borrower or
any Restricted Subsidiary of any dividends or distributions from, any
Investment constituting a Restricted Payment made after the Effective Date, an
amount equal to the lesser of the amount of such Investment and the amount
received by the Borrower or any Restricted Subsidiary upon such disposition,
repayment, dividend or distribution, plus (E) in the event the Borrower or any
Restricted Subsidiary makes any Investment in a Person that, as a result of or
in connection with such Investment, becomes a Restricted Subsidiary, an amount
equal to the Borrower's or any Restricted Subsidiary's existing Investment in
such Person that was previously treated as a Restricted Payment, plus (F)
$100,000,000.
The foregoing provisions will not prevent (i) the payment of any
dividend or distribution on, or redemption of, Equity Interests within 60 days
after the date of declaration of such dividend or distribution or the giving
of formal notice of such redemption, if at the date of such declaration or
giving of such formal notice such payment or redemption would comply with the
provisions hereof; (ii) the purchase, redemption, retirement or other
acquisition of any Equity Interests of the Borrower in exchange for, or out of
the net cash proceeds of the substantially concurrent issue and sale (other
than to a Restricted Subsidiary) of, Qualified Equity Interests of the
Borrower; provided, however, that any such net cash proceeds and the value of
any Qualified Equity Interests issued in exchange for such retired Equity
Interests are excluded from clause (iii)(B) of the preceding paragraph (and
were not included therein at any time) and are not used to prepay the Senior
Subordinated Notes; (iii) the purchase, redemption, retirement, defeasance or
53
other acquisition of Subordinated Indebtedness, or any other payment thereon,
made in exchange for, or out of the net cash proceeds of, a substantially
concurrent issue and sale (other than to a Restricted Subsidiary) of (x)
Qualified Equity Interests of the Borrower; provided, however, that any such
net cash proceeds and the value of any Qualified Equity Interests issued in
exchange for Subordinated Indebtedness are excluded from clauses (iii)(B) and
(iii)(C) of the preceding paragraph (and were not included therein at any
time) and are not used to prepay the Senior Subordinated Notes or (y)
Subordinated Indebtedness permitted to be Incurred pursuant to clause (G) of
the second paragraph of Section 6.01(c); (iv) the making of loans or advances
to officers and directors of the Borrower or any Restricted Subsidiary entered
into in the ordinary course of business in an amount not to exceed $5,000,000
at any one time outstanding; (v) the repurchase, redemption, defeasance,
retirement, refinancing or acquisition for value or payment of principal of
Subordinated Indebtedness at a purchase price not greater than 110% of the
principal amount of such Subordinated Indebtedness in the event of a Change of
Control; and (vi) Investments in joint ventures (however structured) not to
exceed $100.0 million at any one time outstanding; provided, however, that in
the case of each of clauses (ii), (iii), (v) and (vi) no Default or Event of
Default shall have occurred and be continuing or would arise therefrom.
In determining the amount of Restricted Payments permissible under
this Section 6.01(e), amounts expended pursuant to clauses (i) and (iv) of the
immediately preceding paragraph shall be included as Restricted Payments. The
amount of any noncash Restricted Payment shall be deemed to be equal to the
Fair Market Value thereof at the date of the making of such Restricted
Payment.
(f) Corporate Existence. Subject to Section 6.02, the Borrower
shall do or shall cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence and the corporate,
partnership or other existence of each Restricted Subsidiary in accordance
with the respective organizational documents of each such Restricted
Subsidiary and the rights (charter and statutory) and material franchises of
the Borrower and the Restricted Subsidiary, provided, however, that the
Borrower shall not be required to preserve any such right or franchise, or the
corporate existence of any Restricted Subsidiary, if the Board of Directors of
the Borrower shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower and the Restricted
Subsidiaries, taken as a whole and the loss thereof is not materially adverse
to the Borrower and the Restricted Subsidiaries, taken as a whole; provided,
further, however, that a determination of the Board of Directors of the
Borrower shall not be required in the event of a merger of one or more Wholly
Owned Restricted Subsidiaries with or into another Wholly Owned Restricted
Subsidiary or another Person, if the surviving Person is a Wholly Owned
Restricted Subsidiary organized under the laws of the United States or a State
thereof or of the District of Columbia or, in the case of a Foreign Restricted
Subsidiary, the jurisdiction of incorporation or organization of such Foreign
Restricted Subsidiary. This Section 6.01(f) shall not prohibit the Borrower
from taking any other action otherwise permitted by, and made in accordance
with, the provisions hereof.
(g) Limitation on Liens. The Borrower shall not, and shall not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
Incur any Liens of any kind against or upon any of their respective properties
or assets now owned or hereafter acquired, or any proceeds therefrom or any
income or profits therefrom, to secure any Indebtedness unless
54
contemporaneously therewith effective provision is made, (i) in the case of
the Borrower, to secure the Senior Subordinated Notes and all other amounts
due hereunder, and (ii) in the case of a Restricted Subsidiary which is a
Guarantor, to secure such Restricted Subsidiary's Guarantee of the Senior
Subordinated Notes and all other amounts due under hereunder, in each case,
equally and ratably with such Indebtedness (or, in the event that such
Indebtedness is subordinated in right of payment to the Senior Subordinated
Notes or such Restricted Subsidiary's Guarantee, prior to such Indebtedness)
with a Lien on the same properties and assets securing such Indebtedness for
so long as such Indebtedness is secured by such Lien, except for (A) Liens
securing Senior Indebtedness (including, without limitation, Indebtedness
incurred under the Credit Agreement); (ii) Liens securing Indebtedness
Incurred in a Qualified Securitization Transaction by the Borrower and its
Restricted Subsidiaries; (iii) Permitted Liens and (iv) Liens under Hedging
Agreements.
(h) Future Domestic Restricted Subsidiary Guarantors. In the event
that the Borrower causes or permits any Domestic Restricted Subsidiary that is
not a Guarantor to, directly or indirectly, guarantee the payment of any
Indebtedness of the Borrower under the Credit Agreement then the Borrower
shall cause such Domestic Restricted Subsidiary to simultaneously execute and
deliver a guarantee, substantially in form and substance as the guarantee
executed thereby with respect to its guarantee of indebtedness under the
Credit Agreement, pursuant to which it will become a Guarantor under this
Agreement.
(i) Designation of Unrestricted Subsidiaries.
(i) The Borrower may designate after the Effective Date any
Subsidiary of the Borrower as an Unrestricted Subsidiary under this Agreement
(a "Designation") only if: (A) no Default or Event of Default shall have
occurred and be continuing at the time of or after giving effect to such
Designation; (B) at the time of and after giving effect to such Designation,
the Borrower could Incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the Consolidated Coverage Ratio of the first
paragraph of Section 6.01(c); and (C) the Borrower would be permitted to make
an Investment (other than a Permitted Investment) at the time of Designation
(assuming the effectiveness of such Designation) pursuant to the first
paragraph of Section 6.01(e) in an amount (the "Designation Amount") equal to
the amount of the Borrower's Investment in such Subsidiary on such date.
(ii) Neither the Borrower nor any Restricted Subsidiary shall
at any time (x) provide credit support for, subject any of its property or
assets (other than the Equity Interests of any Unrestricted Subsidiary) to the
satisfaction of, or guarantee, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of
any Unrestricted Subsidiary, or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the
occurrence of a default with respect to any Indebtedness of any Unrestricted
Subsidiary, except for any nonrecourse guarantee given solely to support the
pledge by the Borrower or any Restricted Subsidiary of the capital stock of
any Unrestricted Subsidiary. For purposes of the
55
foregoing, the Designation of a Subsidiary of the Borrower as an Unrestricted
Subsidiary shall be deemed to include the Designation of all of the
Subsidiaries of such Subsidiary.
(iii) The Borrower may revoke any Designation of a Subsidiary
as an Unrestricted Subsidiary (a "Revocation") only if: (A) no Default or
Event of Default shall have occurred and be continuing at the time of and
after giving effect to such Revocation; and (B) all Liens and Indebtedness of
such Unrestricted Subsidiary outstanding immediately following such Revocation
would, if Incurred at such time, have been permitted to be Incurred for all
purposes of this Agreement.
(iv) All Designations and Revocations must be evidenced by
Board Resolutions of the Borrower, delivered to each holder of Senior
Subordinated Notes, certifying compliance with the foregoing provisions.
Section 6.02 Mergers; Successor Corporation.
(a) Mergers, Sale of Assets, etc. The Borrower shall not
consolidate with or merge with or into any other entity and the Borrower shall
not and shall not cause or permit any Restricted Subsidiary to, sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of
the Borrower's and the Restricted Subsidiaries properties and assets
(determined on a consolidated basis for the Borrower and the Restricted
Subsidiaries) to any entity in a single transaction or series of related
transactions, unless: either (i) the Borrower shall be the Surviving Person or
(ii) the Surviving Person (if other than the Borrower) shall be a corporation
organized and validly existing under the laws of the United States of America
or any State thereof or the District of Columbia or, if any such Restricted
Subsidiary was a Foreign Restricted Subsidiary, under the laws of the United
States of America or any state thereof or the District of Columbia or the
jurisdiction under which such Foreign Restricted Subsidiary was organized, and
shall, in any such case, expressly assume by supplemental agreement, the due
and punctual payment of the principal of and interest on the Senior
Subordinated Notes and the performance and observance of every covenant in
this Agreement to be performed or observed on the part of the Borrower;
provided, however, that if such transaction results in a Change of Control,
the Senior Subordinated Notes shall be prepaid if required pursuant to Section
2.02(b).
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all
or substantially all the properties and assets of one or more Restricted
Subsidiaries the Equity Interests of which constitutes all or substantially
all the properties and assets of the Borrower shall be deemed to be the
transfer of all or substantially all the properties and assets of the
Borrower.
(b) Guarantors. No Guarantor (other than a Guarantor whose
Guarantee is to be released in accordance with the terms of Section 3.03)
shall consolidate with or merge with or into another Person, whether or not
such Person is affiliated with such Guarantor and whether or not such
Guarantor is the Surviving Person, unless (i) the Surviving Person (if other
than such Guarantor) is a corporation organized and validly existing under the
laws of the United States, any State thereof or the District of Columbia or,
if any such Guarantor was a Foreign Restricted Subsidiary, under the laws of
the United States of America or any state thereof or the District of
56
Columbia or the jurisdiction under which the Foreign Restricted Subsidiary
was organized; (ii) the Surviving Person (if other than such Guarantor)
expressly assumes by supplemental indenture all the obligations of such
Guarantor under its Guarantees of the Senior Subordinated Notes and the
performance and observance of every covenant of the Indenture to be performed
or observed by such Guarantor; (iii) at the time of and immediately after such
Disposition, no Default or Event of Default shall have occurred and be
continuing; and (iv) immediately after giving effect to any such transaction
involving the Incurrence by such Guarantor, directly or indirectly, of
additional Indebtedness (and treating any Indebtedness not previously an
obligation of such Guarantor in connection with or as a result of such
transaction as having been Incurred at the time of such transaction), the
Borrower could Incur, on a pro forma basis after giving effect to such
transaction as if it had occurred at the beginning the latest fiscal quarter
for which consolidated financial statements of the Borrower are available, at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
under the Consolidated Coverage Ratio of the first paragraph of Section
6.01(c); provided, however, that this paragraph shall not be a condition to a
merger or consolidation of a Guarantor if such merger or consolidation only
involves the Borrower and/or one or more other Guarantors. Notwithstanding the
foregoing, nothing in this covenant shall prohibit the consolidation or merger
with or into or the sale of all or substantially all of the assets or
properties of a Guarantor to any other Restricted Subsidiary that is a
Guarantor.
(c) Successor Corporation Substituted. In the event of any
transaction (other than a lease) described in and complying with the
conditions listed in Section 6.02(a) and (b) in which the Borrower or a
Guarantor, as the case may be, is not the Surviving Person and the Surviving
Person is to assume all the Obligations of the Borrower under the Senior
Subordinated Notes, this Agreement or of such Guarantor under its Guarantee
and this Agreement, as the case may be, pursuant to supplemental agreements,
such Surviving Person shall succeed to, and be substituted for, and may
exercise every right and power of, the Borrower or such Guarantor, as the case
may be, and the Borrower shall be discharged from its Obligations under this
Agreement and the Senior Subordinated Notes or such Guarantor shall be
discharged from its Obligations under this Agreement and its Guarantee, as the
case may be.
Section 6.03. Termination of Covenants. The covenants set forth in
this Article VI shall terminate and be of not further force or effect upon the
Termination Date.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. Each of the following shall be an
"Event of Default" for purposes of this Indenture:
(a) failure to pay principal of the Senior Subordinated Notes when
due (whether or not prohibited by the provisions of Article VIII);
(b) failure to pay any interest on any Senior Subordinated Notes
when due, continued for 30 days or more (whether or not prohibited by the
provisions of Article VIII);
57
(c) default in the payment of principal of, or interest on, any
Senior Subordinated Notes required to be prepaid by this Agreement (whether or
not prohibited by the provisions of Article VIII);
(d) failure to perform or comply with any of the provisions of
Section 6.02;
(e) failure to perform any other covenant or agreement of the
Borrower under this Agreement or in the Senior Subordinated Note or of the
Guarantors under this Agreement for 30 days or more after written notice to
the Borrower by GOF;
(f) Default or defaults under the terms of one or more instruments
evidencing or securing Indebtedness of the Borrower or any of its Restricted
Subsidiaries having an outstanding principal amount of $50,000,00 or more
individually or in the aggregate that has resulted in the acceleration of the
payment of such Indebtedness or failure by the Borrower or any of its
Restricted Subsidiaries to pay principal of at least $50,000,000 when due at
the stated maturity of any such Indebtedness and such default or defaults
shall have continued after any applicable grace period and shall not have been
cured or waived within 10 days after the occurrence thereof;
(g) the rendering of a final judgment or judgments (not subject to
appeal) against the Borrower or any of its Restricted Subsidiaries in an
amount of $50,000,000 or more (net of any amounts covered by reputable and
creditworthy insurance companies) which remains undischarged or unstayed for a
period of 60 days after the date on which the right to appeal has expired;
(h) the Borrower or any Significant Restricted Subsidiary pursuant
to or within the meaning of any Bankruptcy Law: (i) admits in writing its
inability to pay its debts generally as they become due; (ii) commences a
voluntary case or proceeding; (iii) consents to the entry of an order for
relief against it in an involuntary case or proceeding; (iv) consents or
acquiesces in the institution of a bankruptcy or insolvency proceeding against
it; (v) consents to the appointment of a Custodian of it or for all or
substantially all of its property; or (vi) makes a general assignment for the
benefit of its creditors, or takes any action to authorize or effect any of
the foregoing;
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Borrower or any
Significant Restricted Subsidiary in an involuntary case or proceeding or (ii)
appoints a Custodian of the Borrower or any Significant Restricted Subsidiary
of the Borrower for all or substantially all of its properties, or orders the
liquidation of the Borrower or any Significant Restricted Subsidiary, and, in
each case the order or decree remains unstayed and in effect for 60 days; or
(j) other than as provided in or pursuant to any Guarantee or this
Agreement, the Guarantee of any Guarantor that constitutes a Significant
Restricted Subsidiary ceases to be in full force and effect or is declared
null and void and unenforceable or found to be invalid or any Guarantor that
is a Significant Restricted Subsidiary denies its liability under its
Guarantee
58
(other than by reason of a release of such Guarantor from its Guarantee in
accordance with the terms of the Indenture and such Guarantee).
Section 7.02 Acceleration. If an Event of Default with respect to
the Senior Subordinated Notes (other than an Event of Default with respect to
the Borrower described in clause (h) of Section 7.01) occurs and is
continuing, GOF by notice in writing to the Borrower may declare the unpaid
principal of, accrued interest to the date of acceleration on all outstanding
Senior Subordinated Notes to be due and payable immediately and, upon any such
declaration, such principal amount, accrued interest, notwithstanding anything
contained in this Agreement or the Senior Subordinated Notes to the contrary,
shall become immediately due and payable; provided, however, that so long as
the Credit Agreement shall be in full force and effect, if an Event of Default
shall have occurred and be continuing (other than an Event of Default with
respect to the Borrower described in clause (h) of Section 7.01), the Senior
Subordinated Notes shall not become due and payable until the earlier to occur
of (x) five Business Days following delivery of a written notice of such
acceleration of the Senior Subordinated Notes to the agent under the Credit
Agreement and (y) the acceleration (ipso facto or otherwise) of any
Indebtedness under the Credit Agreement. If an Event of Default specified in
clause (h) of Section 7.01 with respect to the Borrower occurs, the Senior
Subordinated Notes will ipso facto become immediately due and payable without
any declaration or other act on the part of GOF.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Senior Subordinated Notes has been
obtained, GOF by written notice to the Borrower may rescind an acceleration
and its consequences if all existing Events of Default (other than the,
nonpayment of principal of and interest on the Senior Subordinated Notes which
has become due solely by virtue of such acceleration) have been cured or
waived and if the rescission would not conflict with any judgment or decree.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
Section 7.03 Other Remedies. If an Event of Default occurs and is
continuing, GOF may pursue any available remedy by proceeding at law or in
equity to collect the payment of principal of or interest on the Senior
Subordinated Notes or to enforce the performance of any provision of the
Senior Subordinated Notes or this Agreement. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
Section 7.04 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Agreement, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 7.04 shall not
apply to a suit instituted by GOF for the enforcement or the payment of the
principal or interest on any Senior Subordinated Notes on or after the
respective due dates expressed in the Senior Subordinated Note.
59
ARTICLE VIII
SUBORDINATION
Section 8.01 Senior Subordinated Notes Subordinated to Senior
Indebtedness. The Borrower covenants and agrees, and GOF by its acceptance
thereof likewise covenants and agrees, that the Senior Subordinated Notes
shall be issued subject to the provisions of this Article VIII; and each
person holding any Senior Subordinated Notes, whether GOF upon original issue
or upon transfer, assignment or exchange thereof, accepts and agrees that all
payments of the principal of and interest on the Senior Subordinated Notes,
and all other amounts payable under this Agreement, by the Borrower shall, to
the extent and in the manner set forth in this Article VIII, be subordinated
and junior in right of payment to the prior payment in full in cash of all
amounts payable under Senior Indebtedness.
Section 8.02 No Payment on Senior Subordinated Notes
in Certain Circumstances.
(a) No direct or indirect payment (excluding any payment or
distribution of Permitted Junior Securities but including any payment
constituting any distribution in respect of any other Indebtedness that is
subordinated to the Senior Subordinated Notes) by or on behalf of the Borrower
of principal of or interest on the Senior Subordinated Notes, whether pursuant
to the terms of the Senior Subordinated Notes, upon acceleration, pursuant to
an obligation under Article II to prepay or otherwise, shall be made if, at
the time of such payment, there exists a default in the payment of all or any
portion of the obligations on any Designated Senior Indebtedness, whether at
maturity, on account of mandatory redemption or prepayment, acceleration or
otherwise, and such default shall not have been cured or waived or the
benefits of this sentence waived by or on behalf of the holders of such
Designated Senior Indebtedness. In addition, during the continuance of any
non-payment event of default with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be immediately
accelerated, and upon receipt by the holders of Senior Subordinated Notes of
written notice (a "Payment Blockage Notice") from the holder or holders of
such Designated Senior Indebtedness or the trustee or agent acting on behalf
of such Designated Senior Indebtedness, then, unless and until such event of
default has been cured or waived or has ceased to exist or such Designated
Senior Indebtedness has been discharged or repaid in full in cash or the
benefits of these provisions have been waived by the holders of such
Designated Senior Indebtedness, no direct or indirect payment (excluding any
payment or distribution of Permitted Junior Securities) shall be made by or on
behalf of the Borrower of principal of or interest on the Senior Subordinated
Notes during a period (a "Payment Blockage Period") commencing on the date of
receipt of such notice by the holders of Senior Subordinated Notes and ending
179 days thereafter; provided however, that so long as any Indebtedness
remains outstanding under the Credit Agreement or any replacement, renewal,
refinancing or extension thereof, no Payment Blockage Notice may be initiated
to block payment of principal or interest on the Senior Subordinated Notes
pursuant to the terms of this Section 8.02(a) except by the Administrative
Agent (or similar authorized party) under the Credit Agreement or any
replacement, renewal, refinancing or extension thereof.
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(b) Notwithstanding anything herein or in the Senior Subordinated
Notes to the contrary, (x) in no event shall a Payment Blockage Period extend
beyond 179 days from the date the Payment Blockage Notice in respect thereof
was given, (y) there shall be a period of at least 181 consecutive days in
each 360-day period when no Payment Blockage Period is in effect and (z) not
more than one Payment Blockage Period may be commenced with respect to the
Senior Subordinated Notes during any period of 360 consecutive days. No event
of default that existed or was continuing on the date of commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period (to the extent the holder of
Designated Senior Indebtedness, or trustee or agent, giving notice commencing
such Payment Blockage Period had knowledge of such existing or continuing
event of default) may be, or be made, the basis for the commencement of any
other Payment Blockage Period by the holder or holders of such Designated
Senior Indebtedness or the trustee or agent acting on behalf of such
Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such event of default has been cured or waived for a
period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Borrower
shall have made payment to the holders of Senior Subordinated Notes when such
payment is prohibited by Section 8.02(a), such payment shall be held in trust
for the benefit of, and shall be paid over or delivered by the recipient of
such payment (if notice of the conditions prohibiting such payment under
Section 8.02(a) has been received by the holders of Senior Subordinated Notes)
to, the holders of Designated Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Designated Senior Indebtedness may have been issued, as
their respective interests may appear, but only to the extent that, upon
notice from the holders of Senior Subordinated Notes to the holders of
Designated Senior Indebtedness that such prohibited payment has been made, the
holders of the Designated Senior Indebtedness (or their representative or
representatives or a trustee or trustees) notify each of the holders of Senior
Subordinated Notes in writing of the amounts then due and owing on the
Designated Senior Indebtedness, if any, and only the amounts specified in such
notice to each of the holders of Senior Subordinated Notes shall be paid to
the holders of Designated Senior Indebtedness.
Section 8.03 Payment Over of Proceeds upon Dissolution, Etc.
(a) Upon any payment or distribution of assets or securities of the
Borrower of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities), upon
any dissolution or winding-up or total liquidation or reorganization of the
Borrower, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Senior Indebtedness shall first be paid
in full in cash before any payment is made in respect of the Senior
Subordinated Notes (excluding any payment or distribution of Permitted Junior
Securities). Before any payment may be made by, or on behalf of, the Borrower
of the principal of or interest on the Senior Subordinated Notes upon any such
dissolution or winding-up or total liquidation or reorganization, any payment
or distribution of assets or securities of the Borrower of any kind or
character, whether in cash, property or securities (excluding any payment or
distribution of Permitted Junior Securities) payment shall be made by the
Borrower or by any receiver, trustee in bankruptcy, liquidation
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trustee, agent or other Person making such payment or distribution, directly
to the holders of the Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders)
or their representatives or to the trustee or trustees or agent or agents
under any agreement or indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear,
to the extent necessary to pay all such Senior Indebtedness in full in cash
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of
assets or securities of the Borrower of any kind or character, whether in
cash, property or securities (excluding any payment or distribution of
Permitted Junior Securities), shall be paid by the Borrower to the holders of
Senior Subordinated Notes at a time when such payment or distribution is
prohibited by Section 8.03(a) and before all obligations in respect of Senior
Indebtedness are paid in full in cash, such payment or distribution shall be
received and held in trust for the benefit of, and shall be paid over or
delivered by the recipient of such payment (if notice of the conditions
prohibiting such payment under Section 8.03(a) has been received by the
holders of Senior Subordinated Notes) to the holders of Senior Indebtedness
(pro rata to such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders) or their respective representatives, or to
the trustee or trustees or agent or agents under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash after giving effect to any prior or concurrent payment,
distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(c) The consolidation of the Borrower with, or the merger of the
Borrower with or into, another corporation or the liquidation or dissolution
of the Borrower following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided in Section 6.02 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of
this Section 8.03 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Section 6.02.
Section 8.04 Subrogation.
(a) Upon the payment in full in cash of all Senior Indebtedness, or
provision for payment, the holders of the Senior Subordinated Notes shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Borrower made
on such Senior Indebtedness until the principal of and interest on the Senior
Subordinated Notes shall be paid in full in cash; and, for the purposes of
such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which such holders of the
Senior Subordinated Notes would be entitled except for the provisions of this
Article VIII, and no payment over pursuant to the provisions of this Article
VIII to the holders of Senior Indebtedness by holders of the Senior
Subordinated Notes, as between the Borrower, its creditors other than holders
of Senior Indebtedness, and such holders
62
of the Senior Subordinated Notes, be deemed to be a payment by the Borrower to
or on account of the Senior Indebtedness. It is understood that the provisions
of this Article VIII are and are intended solely for the purpose of defining
the relative rights of such holders of the Senior Subordinated Notes, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
(b) If any payment or distribution to which the holders of the
Senior Subordinated Notes would otherwise have been entitled but for the
provisions of this Article VIII shall have been applied, pursuant to the
provisions of this Article VIII, to the payment of all amounts payable under
Senior Indebtedness, then and in such case, the holders of the Senior
Subordinated Notes shall be entitled to receive from the holders of such
Senior Indebtedness any payments or distributions received by such holders of
Senior Indebtedness in excess of the amount required to make payment in full
in cash of such Senior Indebtedness.
Section 8.05 Obligations of Borrower Unconditional.
(a) Nothing contained in this Article VIII or elsewhere in this
Agreement or in the Senior Subordinated Notes is intended to or shall impair,
as among the Borrower and GOF, the obligation of the Borrower, which is
absolute and unconditional, to pay to GOF and its successors and assigns the
principal of and interest on the Senior Subordinated Notes as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the Senior
Subordinated Notes and creditors of the Borrower other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent GOF and its
successors or assigns from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the rights, if
any, under this Article VIII of the holders of the Senior Indebtedness in
respect of cash, property or securities of the Borrower received upon the
exercise of any such remedy.
(b) Without limiting the generality of the foregoing, nothing
contained in this Article VIII shall restrict the right of GOF and its
successors and assigns to take any action to declare the Senior Subordinated
Notes to be due and payable prior to its stated maturity pursuant to Sections
7.01 and 7.02 or to pursue any rights or remedies hereunder; provided,
however, that all Senior Indebtedness then due and payable shall first be paid
in full in cash before GOF or its successors and assigns are entitled to
receive any direct or indirect payment from the Borrower of principal of or
interest on the Senior Subordinated Notes.
Section 8.06 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article VIII, the holders of the Senior Subordinated Notes
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, delivered to the holders of the
Senior Subordinated Notes for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness
and other indebtedness of the Borrower, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article VIII.
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Section 8.07 Subordination Rights Not Impaired by Acts or Omissions
of the Borrower or Holders of Senior Indebtedness. No right of any present or
future holders of any Senior Indebtedness to enforce subordination as provided
herein shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Borrower or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Borrower with
the terms of this Agreement, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The provisions of this
Article VIII are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Indebtedness.
Section 8.08 This Article Not to Prevent Events of Default. The
failure to make a payment on account of principal of, interest on or other
amounts owing in respect of the Senior Subordinated Notes by reason of any
provision of this Article VIII shall not be construed as preventing the
occurrence of an Event of Default specified in clauses (a), (b) or (c) of
Section 7.01.
Section 8.09 No Waiver of Subordination Provisions. Without in any
way limiting the generality of Section 8.07, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to the holders of the Senior Subordinated Notes, without incurring
responsibility to the holders of the Senior Subordinated Notes and without
impairing or releasing the subordination provided in this Article VIII or the
obligations hereunder of the holders of the Senior Subordinated Notes to the
holders of Senior Indebtedness, 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 Indebtedness or any instrument evidencing the same
or any agreement under which Senior Indebtedness is outstanding or secured;
(b) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness; (c) release any Person
liable in any manner for the collection of Senior Indebtedness; and (d)
exercise or refrain from exercising any rights against the Borrower and any
other Person.
Section 8.10 Acceleration of the Senior Subordinated Notes. If
payment of the Senior Subordinated Notes is accelerated because of an Event of
Default, the Borrower shall promptly notify holders of the Senior Indebtedness
of the acceleration.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Senior Subordinated Notes, nor consent to
any departure by any party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Borrower and GOF, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
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Section 9.02. Notices, Etc.
(a) Any notice or demand authorized or required by this Agreement
to be given or made shall be sufficiently given or made when and if delivered
in person, by telecopier with a confirmation of good transmission, by FedEx
or United Parcel Service or by registered or certified U.S. mail, addressed
to the office of the party expressly designated by such party as its office
for purposes of this Agreement (until otherwise notified in accordance with
this Section), as follows:
To the Borrower or any Guarantor, to it at:
Polymer Group, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel and Chief Financial
Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: H. Xxxx xxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
To GOF:
MatlinPatterson Global Opportunities Partners LP
C/O: MatlinPatterson Global Advisers LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel and Xxxxx Betolaza
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000;
(b) Unless otherwise specified herein, such notices or other
communications shall be deemed effective (a) on the date delivered, if
delivered personally, (b) one Business Day after being delivered, if delivered
by telecopier with confirmation of good transmission, (c) one
65
Business Day after being sent by Federal Express or United Parcel Service, if
sent by Federal Express or United Parcel Service and delivered thereto prior
to their deadline for next-day delivery, or (d) seven Business Days after
being sent, if sent by registered or certified mail. Each of the parties
hereto shall be entitled to specify a different address by giving notice as
aforesaid to each of the other parties hereto.
Section 9.03. No Waiver; Remedies. No failure on the part of any
party to exercise, and no delay in exercising, any right hereunder or under
the Senior Subordinated Notes shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 9.04. Costs and Expenses. The Obligors jointly and
severally agree to pay on demand all reasonable costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses), of GOF
and its successors and assigns in connection with the enforcement (whether
through negotiations or in any action, suit or litigation, any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights generally
or otherwise) of this Agreement or the Senior Subordinated Notes, including,
without limitation, reasonable counsel fees and expenses in connection, with
the enforcement of rights under this Section 9.04.
Section 9.05. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Obligors and GOF and thereafter shall
be binding upon and inure to the benefit of the Obligors and GOF and their
respective successors and assigns, except that the Borrower shall not have the
right to assign or otherwise transfer all or any part of its rights or
obligations hereunder or any interest herein, whether by agreement, merger,
change of control, by operation of law or otherwise, without the prior written
consent of GOF.
Section 9.06. Assignments. (a) GOF, and any assignee permitted
pursuant to this Agreement, may assign to one or more Persons all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of the Senior Subordinated Note held by it),
provided, however, that (i) each such assignment shall be to an Eligible
Assignee, and (ii) the parties to each such assignment shall execute and
deliver to the Borrower an Assignment and Acceptance, together with any Senior
Subordinated Note subject to such assignment. Upon such execution and
delivery, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of the
assignor hereunder and (y) the assignor shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of the assignor's rights and obligations under this
Agreement, the assignor shall cease to be a party hereto).
(b) Any Assignment and Acceptance shall contain the provisions set
out in Exhibit B of this Agreement, including without limitation the
following: (i) other than as provided in such Assignment and Acceptance, the
assignor makes no representation or warranty
66
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the Senior
Subordinated Note or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the Senior Subordinated
Note; (ii) the assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or the Senior Subordinated Note; (iii) such assignee confirms that
it has received a copy of this Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the assignor and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee confirms that it is an Eligible Assignee; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations that by the terms of this Agreement are required to be
performed by it. If GOF or any Assignee wishes to assign the right to
repayment arising out of any future drawing under the Letter of Credit, the
Assignment and Assumption will so state and will further state the percentage
of such rights to repayment that are being assigned and all other agreements
and information reasonably required in connection therewith. The parties
hereto hereby agree to be bound by, and give full recognition to, such
Assignment and Acceptance.
(c) The assignor may, in connection with any assignment or proposed
assignment pursuant to this Section 9.06, disclose to the assignee or proposed
assignee, any information relating to the Borrower furnished to such assignor
by or on behalf of the Borrower provided such proposed assignee agrees in
writing to be bound by Section 9.12 as if it were such assignor.
(d) Upon any assignment of all of a Senior Subordinated Note, upon
surrender of such Senior Subordinated Note to the Borrower, the Borrower
promptly shall issue, at is sole expense, a new Senior Subordinated Note
payable to the assignee. Upon any assignment of a portion of a Senior
Subordinated Note, upon surrender of such Senior Subordinated Note to the
Borrower, the Borrower promptly shall issue, at its sole expense, one or more
new Senior Subordinated Notes in accordance with the instructions of the
assignor. Proper provision shall be made in any new Senior Subordinated Notes
for the apportionment of the right to repayment arising out of any future
drawing under the Letter of Credit, in accordance with the terms of the
Assignment and Assumption; provided that in no event shall the aggregate face
amount under all notes issued pursuant to this Section 9.06(d) exceed
$25,000,000, and, in no event, shall the actual principal amount outstanding
under any such notes exceed the aggregate principal amount outstanding
immediately prior to such surrender.
Section 9.07. Governing Law. This Agreement and the Senior
Subordinated Notes shall be governed by, and construed in accordance with, the
laws of the State of New York.
Section 9.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties thereto in
separate counterparts, each of which
67
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 9.09. Consent to Jurisdiction. (a) The Obligors hereby
irrevocably submit to the jurisdiction of any New York State or Federal court
sitting in the City of New York, New York County and any court with
jurisdiction to hear appeals from decisions of such courts, in any action or
proceeding arising out of or relating to this Agreement or the Senior
Subordinated Notes, and the Obligors hereby irrevocably agree that all claims
in respect of such action or proceeding may be heard and determined in such
court. The Obligors hereby irrevocably waive, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The Obligors hereby irrevocably consent to the
service of copies of any summons and complaint and any other process which may
be served in any such action or proceeding by certified mail, return receipt
requested, or by delivering a copy of such process to any Obligor, at its
address specified in Section 9.02 or by any other method permitted by law. The
Obligors agree that a final judgment in any such action or proceeding may be
enforced in other jurisdictions by suit on the judgment or by any other manner
provided by law.
(b) Nothing in this Section 9.09 shall affect the right of any
party to serve legal process in any other manner permitted by law or affect
the right of any party to bring any action or proceeding against the Borrower
or their property in the courts of other jurisdictions.
Section 9.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, AND GOF
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE SENIOR SUBORDINATED NOTES, ANY DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER, OR THE ACTIONS OF THE OBLIGORS AND GOF IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 9.11. Publicity and Confidentiality.
(a) Publicity. The Obligors agree that none of them will make any
press release or statement regarding the transactions contemplated hereby
without the consent of GOF. Additionally, the Obligors shall not make any
statement which is inconsistent with any press release agreed to by GOF.
Notwithstanding the foregoing, each of the parties hereto may, in documents
required to be filed by it with any regulatory body, make such statements with
respect to the transactions contemplated hereby as each may be advised is
legally necessary upon advice of its counsel.
(b) Confidentiality. Except as otherwise required by law or
judicial order or decree or by any governmental regulatory agency or
authority, or any self-regulatory organization, GOF will use its best efforts
to maintain the confidentiality of all nonpublic information obtained by it
hereunder, such efforts being no less than GOF employs with respect to
maintaining the confidentiality of similar non-public information about GOF.
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Section 9.12. Termination. Subject to the repayment by the Borrower
of all outstanding amounts, whether in the form of principal, interest or any
costs and expenses payable under this agreement and other than Sections 1 (to
the extent a definition is used in another section referred to in this Section
9.12), 9.02, 9.04 (to the extent this section is relevant to the other
sections referred to in this Section 9.12), 9.11 and this Section 9.12, the
provisions of this Agreement shall terminate on the Termination Date. Sections
1 (to the extent a definition is used in another section referred to in this
Section 9.12), 9.02, 9.04 (to the extent this section is relevant to the other
sections referred to in this Section 9.12), 9.11 and this Section 9.12, shall
survive the Termination Date.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWER
POLYMER GROUP, INC.
By:_____________________________________
Name:
Title:
GOF
MATLINPATTERSON GLOBAL OPPORTUNITIES
PARTNERS LP
By: MatlinPatterson Global
Opportunities Advisers LLC, its
Investment Advisor
By:_____________________________________
Name:
Title:
[Execution Page to Senior Subordinated Note Purchase Agreement]
THE GUARANTORS
PGI POLYMER, INC.
PGI EUROPE, INC.
PNA CORP.
FNA POLYMER CORP.
FABRENE CORP.
FABRENE GROUP, L.L.C.
FIBERTECH GROUP, INC.
TECHNETICS GROUP, INC.
FIBERGOL CORPORATION
CHICOPEE, INC.
DOMINION TEXTILE (USA) INC.
POLY-BOND INC.
LORETEX CORPORATION
FNA ACQUISITION, INC.
FABPRO ORIENTED POLYMERS, INC.
PGI ASSET MANAGEMENT COMPANY
PGI SERVICING COMPANY
PRISTINE BRANDS CORPORATION
POLYIONIX SEPARATION TECHNOLOGIES, INC.
BONLAM (S.C.), INC.
as Guarantors
By:_____________________________________
Name:
Title:
[Execution Page to Senior Subordinated Note Purchase Agreement]
EXHIBIT A
LETTER OF CREDIT
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Senior Subordinated Note Purchase
Agreement dated as of March 5, 2003 (as amended or modified from time to time,
the "Agreement") among POLYMER GROUP, INC., a Delaware corporation (the
"Borrower"), each of the entities identified under the caption "GUARANTORS" on
the signature pages thereto (individually, a "Guarantor", and, together with
the Borrower, the "Obligors") and MATLINPATTERSON GLOBAL OPPORTUNITIES
PARTNERS LP, a Delaware limited partnership ("GOF"). Capitalized terms used
herein and not defined shall have the meanings ascribed thereto in the
Agreement.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Agreement. After giving effect to
such sale and assignment, the Assignee's pro rata share of the outstanding
Borrowings owing to the Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or the Senior Subordinated Note or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Agreement
or the Senior Subordinated Note, or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Agreement or the Senior Subordinated Note or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Senior Subordinated Note
held by the Assignor and requests that the Borrower exchange such Senior
Subordinated Note for a new Senior Subordinated Note payable to the order of
the Assignee in an amount equal to the amount of the Assignee's pro rata share
of the outstanding Borrowings owing to the Assignee pursuant hereto or new
Senior Subordinated Notes payable to the order of the Assignee in an amount
equal to the amount of the Assignee's pro rata share owing to the Assignee
pursuant hereto and the Assignor in an amount equal to the amount of the
Assignor's pro rata share of the outstanding Borrowings owing to the Assignor
under the Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
Agreement thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Assignor and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Agreement are required to be performed by the Assignor; and (vi)
attaches any U.S. Internal Revenue Service forms required under Section 2.05
of the Agreement.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Borrower. The effective date for this Assignment and
Acceptance (the "Assignment Effective Date") shall be the date of receipt by
the Borrower, unless otherwise specified on Schedule 1 hereto.
5. Upon such receipt by the Borrower, as of the Assignment
Effective Date, (i) the Assignee shall be a party to the Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of the Assignor thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Agreement.
6. From and after the Assignment Effective Date, the Borrower shall
make all payments under the Agreement and the Senior Subordinated Note in
respect of the interest assigned hereby (including, without limitation, all
payments of principal and interest with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Agreement and the Senior Subordinated Note for periods prior to the
Assignment Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to the principals of conflicts of law thereof.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart
of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _________%
Aggregate outstanding principal amount of
outstanding Borrowings assigned: $__________
Principal amount of Senior Subordinated Note
payable to Assignee: $__________
Principal amount of Senior Subordinated Note
payable to Assignor: $__________
Assignment Effective Date*: ___________________, 200__
[NAME OF ASSIGNOR], as Assignor
By__________________________________
Title:
Dated: ____________________, 200__
[NAME OF ASSIGNEE], as Assignee
By__________________________________
Title:
-------------------------
* This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to GOF.
EXHIBIT C
BYLAWS
EXHIBIT D
CERTIFICATE OF INCORPORATION
EXHIBIT E
SENIOR SUBORDINATED PROMISSORY NOTE
$25,000,000.00 MARCH 5, 2003
FOR VALUE RECEIVED, POLYMER GROUP, INC., a Delaware corporation (the
"Maker"), hereby promises to pay to the order of MATLINPATTERSON GLOBAL
OPPORTUNITIES PARTNERS LP, a Delaware corporation (the "Payee"), on the terms
set forth below, the sum of TWENTY FIVE MILLION UNITED STATES DOLLARS (U.S.
$25,000,000.00), or such lesser amount as equals the sum of all Borrowings,
together with interest on the unpaid principal balance of each Borrowing from
the date thereof at 10% per annum, payable in cash, semi-annually on January 1
and July 1 of each year. All capitalized terms in this Senior Subordinated
Promissory Note (this "Senior Subordinated Note") shall have the same meaning
as in the Senior Subordinated Note Purchase Agreement dated as of March 5,
2003 between the Maker and the Payee (the "Agreement").
The unpaid principal balance of, and any and all accrued and unpaid
interest on, this Senior Subordinated Note (the "Aggregate Amount") shall be
payable in cash, subject to any repayment made by the Maker in accordance with
Section 2.03 of the Agreement, at the Maturity Date.
If the Events of Default specified in Section 7.01(e) of the Agreement
or a Change of Control occurs, the unpaid principal and interest of this
Senior Subordinated Note, and all other amounts due hereunder, shall, at the
option of the Payee, ipso facto become and be immediately due and payable in
cash without any declaration or other act on the part of the Payee. Upon the
occurrence of any other Event of Default set forth in Section 7.01, the unpaid
principal and interest of this Senior Subordinated Note, and all other amounts
due hereunder, shall, at the option of the Payee upon notice to the Borrower,
become and be immediately due and payable in cash. During the period following
the occurrence of an Event of Default until either (a) such Event of Default
is remedied to the satisfaction of the Payee, or (b) the principal and
interest of this Senior Subordinated Note is paid, default interest at a rate
of 2% per annum will be payable on the principal amount in addition to the
existing 10% rate. The Borrower shall, to the extent lawful, pay interest on
overdue interest at the rate of 12% per annum.
The Maker agrees to pay on demand all reasonable costs and expenses,
including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel to the Payee in connection with the enforcement, collection,
protection or preservation (whether through negotiations, legal proceedings or
otherwise) of any of its rights under this Senior Subordinated Note.
The Maker hereby waives demand, presentment for payment, notice of
extensions, nonpayment and protest, and agrees that any extensions or renewals
hereof shall not affect its liability, whether has notice of such extensions
or renewals or not, and waives any and all defenses and counterclaims with
respect to this Note Senior Subordinated.
No waiver of any right granted hereunder or amendment hereto shall be
effective unless expressly waived or agreed to in writing by the party whose
waiver or agreement to such amendment is alleged.
This Senior Subordinated Note and the Agreement constitute the entire
agreement of the parties with respect to the matters contained herein and
therein.
The provisions hereof shall bind and inure to the benefit of the
respective successors and assigns of the Maker and the Payee.
This Senior Subordinated Note shall be governed by, and interpreted
under, the laws of the State of New York without giving effect to the
principles of conflict of laws.
IN WITNESS WHEREOF, the Maker has caused this instrument to be duly
executed as of the date first written above.
POLYMER GROUP, INC.
By: __________________________
Name:
Title:
