EXHIBIT 10.17
AMENDMENT XX. 00
Xxxxxxxxx Xx. 00, dated as of February 20, 2003 (the "Amendment"), to
the Senior Subordinated Credit Agreement, dated as of December 7, 1999, as
amended, among Xxxxxx, Inc. (f/k/a Big Flower Press Holdings, Inc.), a Delaware
corporation (the "Company"), Xxxxxx Holdings, Inc. (f/k/a Big Flower Holdings,
Inc.), a Delaware corporation ("Holdings"), the Subsidiary Guarantors named on
the signature pages hereto, the Lenders named on the signature pages hereto (the
"Lenders") and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust
Company), XX Xxxxxx Xxxxx Bank (f/k/a The Chase Manhattan Bank) and Banc of
America Bridge LLC (f/k/a NationsBridge, L.L.C.) as Agents for the Lenders (in
such capacity, the "Agents") (the "Credit Agreement"). Except as otherwise
indicated herein, capitalized terms used herein have the same meanings as set
forth in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, pursuant to Section 12.6 of the Credit Agreement, the Company
and the Required Lenders desire to amend certain provisions of the Credit
Agreement;
NOW THEREFORE, in consideration of the premises and covenants
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. AMENDMENT. The form of the description of notes attached as
Exhibit XIV to the Credit Agreement is hereby deleted in its entirety and
replaced with the form of the description of notes attached hereto such that
after the date of this Amendment, the Company will be governed by the covenants,
change of control provisions and related definitions contained in Exhibit XIV,
with appropriate modifications thereto to reflect Loans instead of Notes.
2. ADDITIONAL FEES. The Company agrees to pay on demand all costs
and expenses of the Agents and Lenders in connection with the preparation,
execution and delivery of this Amendment, including the reasonable fees and
out-of-pocket expenses of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Agents and
Lenders, with respect thereto.
3. SCOPE OF AMENDMENT. Except as specifically amended hereby, the
Credit Agreement shall remain unchanged. It is declared and agreed by each of
the parties hereto that the Credit Agreement, subject to this Amendment, shall
continue, in full force and effect, and that the Amendment and the Credit
Agreement shall be read as and shall constitute one document.
4. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed
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shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
6. ACKNOWLEDGMENT AND CONSENT BY THE SUBSIDIARY GUARANTORS. Each
Subsidiary Guarantor hereby acknowledges that it has read this Amendment and
consents to the terms hereof and further confirms and agrees that,
notwithstanding the effectiveness of this Amendment, its obligations under its
Guarantee shall not be impaired or affected and its Guarantee is, and shall
continue to be, in full force and effect and is hereby confirmed and ratified in
all respects.
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WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
XXXXXX, INC.
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
XXXXXX HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
SUBSIDIARY GUARANTORS:
PRINTCO., INC.
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
WEBCRAFT, LLC
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
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WEBCRAFT CHEMICALS, LLC
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
ENTERON GROUP, LLC
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
BIG FLOWER DIGITAL SERVICES (DELAWARE),
INC.
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
BIG FLOWER DIGITAL LLC
By: BIG FLOWER DIGITAL SERVICES
(DELAWARE), INC.
By: /s/ Xxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
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AGENTS:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
(F/K/A Bankers Trust Company), as co-agent
By: DB Services New Jersey, Inc.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
XX XXXXXX CHASE BANK
(formerly The Chase Manhattan Bank),
as co-agent
By: /s/ Xxx Xxxxxx
-----------------------------------
Name: Xxx Xxxxxx
Title: Managing Director
BANC OF AMERICA BRIDGE LLC,
as co-agent
By: /s/ S. Xxxx Xxxxxxx, III
-----------------------------------
Name: S. Xxxx Xxxxxxx, III
Title: Managing Director
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LENDERS:
DEUTSCHE BANK TRUST CORPORATION
By: DB Services New Jersey, Inc.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
XX XXXXXX XXXXX BANK
(formerly The Chase Manhattan Bank),
By: /s/ Xxx Xxxxxx
-----------------------------------
Name: Xxx Xxxxxx
Title: Managing Director
BANC OF AMERICA BRIDGE LLC
By:
-----------------------------------
Name:
Title:
ARCHIMEDES FUNDING III, LTD.
By: ING Capital Advisors LLC,
as Collateral Manager
By: /s/ Xxxx Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx Xxxxxx
Title: Managing Director
OAK HILL SECURITIES FUND II, L.P.
By: Oak Hill Securities GenPar II, L.P.,
its General Partner
By:
-----------------------------------
Name:
Title:
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D.K. ACQUISITION PARTNERS, L.P.
By: X.X. Xxxxxxxx & Co.,
its General Partner
By:
-----------------------------------
Name:
Title:
FRANKLIN FLOATING RATE TRUST
By:
-----------------------------------
Name:
Title:
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda), Ltd.,
as General Partner
By:
-----------------------------------
Name:
Title:
By: Investment Management Company,
as Investment Adviser
By:
-----------------------------------
Name:
Title:
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TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW Advisers (Bermuda), Ltd.,
as General Partner
By:
-----------------------------------
Name:
Title:
By: TCW Investment Management
Company,
as Investment Adviser
By:
-----------------------------------
Name:
Title:
FLEET CORPORATE FINANCE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X .Xxxxxx
Title: Vice President
XXXXXXX XXXXX GLOBAL INVESTMENT
SERIES: INCOME STRATEGIES PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By:
-----------------------------------
Name:
Title:
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EXHIBIT XIV
DESCRIPTION OF THE NOTES
The Notes will be issued under an indenture (the "Indenture") among
the Company, the Guarantors and The Bank of New York, as Trustee (the
"Trustee"). The following is a summary of the material provisions of the
Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "TIA"). You can find definitions of certain capitalized
terms used in this description under "--Certain Definitions." For purposes of
this section, references to the "Company" include only Xxxxxx, Inc. and not its
subsidiaries or parent company.
The Notes will be unsecured obligations of the Company, ranking
subordinate in right of payment to all Senior Debt to the extent set forth in
the Indenture.
The Company will issue the Notes in fully registered form in
denominations of $1,000 and integral multiples thereof. The Trustee will
initially act as Paying Agent and Registrar for the Notes. The Notes may be
presented for registration of transfer and exchange at the offices of the
Registrar, which initially will be the Trustee's corporate trust office. The
Company may change any Paying Agent and Registrar without notice to holders of
the Notes (the "Holders"). The Company will pay principal (and premium, if any)
on the Notes at the Trustee's corporate office in New York, New York. At the
Company's option, interest may be paid at the Trustee's corporate trust office
or by check mailed to the registered address of Holders.
Any Notes that remain outstanding after the completion of any
registered exchange offer, together with the new Notes issued in connection with
such registered exchange offer, will be treated as a single class of securities
under the Indenture.
Principal, Maturity and Interest
The Notes are limited in aggregate principal amount to $293.5 million.
The Notes will mature on December 7, 2009. Interest on the Notes will accrue at
the rate of 13.5% per annum and will be payable semi-annually in cash on each
January 1 and July 1, to the persons who are registered Holders at the close of
business on the December 15 and June 15 immediately preceding the applicable
interest payment date. Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from and
including the date of issuance.
The Notes will not be entitled to the benefit of any mandatory sinking
fund.
Redemption
OPTIONAL REDEMPTION. The Notes are not redeemable before January 1,
2005. Thereafter, the Company may redeem the Notes at its option, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on January 1 of the year set
forth below:
YEAR PERCENTAGE
---- ----------
2005............................................. 106.75%
2006............................................. 104.50%
2007............................................. 102.25%
2008 and thereafter.............................. 100.00%
In addition, the Company must pay accrued and unpaid interest on the
Notes redeemed.
Selection and Notice of Redemption
In the event that the Company chooses to redeem less than all of the
Notes, selection of the Notes for redemption will be made by the Trustee either:
7. in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed; or,
8. on a PRO RATA basis, by lot or by such method as the Trustee
shall deem fair and appropriate.
No Notes of a principal amount of $1,000 or less shall be redeemed in part. If a
partial redemption is made with the net cash proceeds of an Equity Offering, the
Trustee will select the Notes only on a PRO RATA basis or on as nearly a PRO
RATA basis as is practicable (subject to DTC procedures). Notice of redemption
will be mailed by first-class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. On and after the redemption date, interest will cease to accrue on
Notes or portions thereof called for redemption as long as the Company has
deposited with the Paying Agent funds in satisfaction of the applicable
redemption price.
Subordination
The payment of all Obligations on or relating to the Notes is
subordinated in right of payment, to the extent described below and in the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Obligations on Senior Debt (including the Obligations with respect to the Senior
Credit Facility).
The holders of Senior Debt will be entitled to receive payment in full
in cash or Cash Equivalents of all Obligations due in respect of Senior Debt
(including interest after the commencement of any bankruptcy or other like
proceeding at the rate specified in the applicable Senior Debt whether or not
such interest is an allowed claim in any such proceeding) before the Holders of
Notes will be entitled to receive any payment or distribution of any kind or
character with respect to any Obligations on, or relating to, the Notes in the
event of any distribution to creditors of the Company:
9. in a liquidation or dissolution of the Company;
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10. in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property;
11. in an assignment for the benefit of creditors; or
12. in any marshalling of the Company's assets and liabilities.
The Company also may not make any payment or distribution of any kind
or character with respect to any Obligations on, or relating to, the Notes or
acquire any Notes for cash or property or otherwise if:
13. a payment default on any Senior Debt occurs and is continuing; or
14. any other default occurs and is continuing on Designated Senior
Debt that permits holders of the Designated Senior Debt to accelerate its
maturity and the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the Representative of any Designated Senior Debt.
Payments on and distributions with respect to any Obligations on, or
with respect to, the Notes may and shall be resumed:
15. in the case of a payment default, upon the date on which such
default is cured or waived; and
16. in case of a nonpayment default, the earliest of (x) the date on
which all nonpayment defaults are cured or waived (so long as no other event
ofdefault exists), (y) 180 days after the date on which the applicable Payment
Blockage Notice is received or (z) the date on which the Trustee receives notice
from the Representative for such Designated Senior Debt rescinding the Payment
Blockage Notice, unless the maturity of any Designated Senior Debt has been
accelerated.
No new Payment Blockage Notice may be delivered unless and until 360
days have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of delivery of such initial
Payment Blockage Notice that in either case would give rise to a default
pursuant to any provisions under which a default previously existed or was
continuing shall constitute a new default for this purpose).
The Company must promptly notify holders of Senior Debt if payment of
the Notes is accelerated because of an Event of Default.
Guarantees
The Company's Domestic Restricted Subsidiaries on the Issue Date will
guarantee, and certain future Domestic Restricted Subsidiaries may guarantee, on
a senior subordinated basis, the Notes. See "Certain Covenants -- Limitation on
Guarantees by Restricted Subsidiaries."
The Guarantors will jointly and severally guarantee (each a
"Guarantee" and collectively the "Guarantees") the Company's obligations under
the Indenture and the Notes on a senior subordinated basis. Each Guarantee will
be subordinated to Guarantor Senior Debt on the same basis as the Notes are
subordinated
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to Senior Debt. The obligations of each Guarantor under its Guarantee will be
limited as necessary to prevent the Guarantee from constituting a fraudulent
conveyance or fraudulent transfer under applicable law.
Each Guarantor may consolidate with or merge into or sell its assets
to the Company or another Guarantor that is a Wholly Owned Subsidiary of the
Company without limitation, or with other Persons upon the terms and conditions
set forth in the Indenture. See "Certain Covenants -- Merger, Consolidation and
Sale of Assets." In the event all of the Capital Stock of a Guarantor is sold by
the Company and the sale complies with the provisions set forth in "Certain
Covenants -- Limitation on Asset Sales," the Guarantor's Guarantee will be
released.
Change of Control
Upon the occurrence of a Change of Control, each Holder will have the
right to require that the Company purchase all or a portion of such Holder's
Notes pursuant to the offer described below (the "Change of Control Offer"), at
a purchase price equal to 101% of the principal amount thereof plus accrued
interest to the date of purchase.
Within 30 days following the date upon which the Company obtains
actual knowledge that a Change of Control occurred, the Company must send, by
first class mail, a notice to each Holder, with a copy to the Trustee, which
notice shall govern the terms of the Change of Control Offer. Such notice shall
state, among other things, the purchase date, which must be no earlier than 30
days nor later than 60 days from the date such notice is mailed, other than as
may be required by law or stock exchange rule (the "Change of Control Payment
Date"). Holders electing to have a Note purchased pursuant to a Change of
Control Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third business day prior to the Change of Control Payment Date.
Prior to the mailing of the notice referred to above, but in any event
within 30 days following the date upon which the Company obtains actual
knowledge of any Change of Control, the Company covenants to:
17. repay in full and terminate all commitments under Indebtedness
under the Senior Credit Facility and all other Senior Debt the terms of which
require repayment upon a Change of Control or offer to repay in full and
terminate all commitments under all Indebtedness under the Senior Credit
Facility and all other such Senior Debt and to repay the Indebtedness owed to
each lender which has accepted such offer; or
18. obtain the requisite consents under the Senior Credit Facility
and all other Senior Debt to permit the repurchase of the Notes as provided
below.
The Company shall first comply with the covenant in the immediately
preceding paragraph before it shall be required to repurchase Notes pursuant to
the provisions described above. The Company's failure to comply with the
covenant described in the immediately preceding paragraph (and any failure to
mail the notice referred to above as a result of a prohibition in the
immediately preceding paragraph) shall (with notice and lapse of time)
constitute an Event of Default described in clause (3), but shall not constitute
an Event of Default described in clause (2), under "Events of Default" below.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the "Change
of Control" provisions of the Indenture, the Company
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shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under the "Change of Control"
provisions of the Indenture by virtue thereof.
Certain Covenants
The Indenture will contain, among others, the following covenants:
LIMITATION ON RESTRICTED PAYMENTS. (a) The Company will not, and will
not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly:
19. declare or pay any dividend or make any distribution (other than
dividends or distributions payable in Qualified Capital Stock or options,
warrants and other rights to purchase the same) on or in respect of shares of
Capital Stock of the Company to holders of such Capital Stock;
20. purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any warrants, rights or options to purchase or
acquire shares of any class of such Capital Stock;
21. make any principal payment on, purchase, defease, redeem, prepay
or otherwise acquire or retire for value, prior to any scheduled final maturity,
scheduled repayment or scheduled sinking fund payment, any Subordinated
Obligation; or
22. make any Investment (other than Permitted Investments) in any
other Person (each of the foregoing actions set forth in clauses (1), (2), (3)
and (4) being referred to as a "Restricted Payment");
if at the time of such Restricted Payment or immediately after giving effect
thereto:
(i) a Default or an Event of Default shall have occurred and
be continuing; or
(ii) the Company is not able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with the "Limitation on Incurrence of Additional
Indebtedness" covenant; or
(iii) the aggregate amount of Restricted Payments made
subsequent to June 24, 2002 (the amount expended for such purposes, if
other than cash, being the fair market value of such property as
determined in good faith by the Board of Directors of the Company),
shall exceed the sum of (the "Restricted Payment Basket"):
(v) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss) of the Company earned subsequent to June 30, 2002 and
on or prior to the date the Restricted Payment occurs (the
"Reference Date") (treating such period as a single accounting
period); plus
(w) 100% of the aggregate Net Cash Proceeds received by
the Company from any Person (other than a Subsidiary of the
Company) from the issuance and sale subsequent to June 24, 2002
and on or prior to the Reference Date of Qualified Capital Stock
of the Company (including Capital Stock issued upon the
conversion of convertible Indebtedness or in exchange for
outstanding Indebtedness but excluding aggregate net cash
proceeds from the sale of Capital Stock to the extent used to
repurchase or acquire shares of Capital Stock of the Company or a
Subordinated Obligation
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of the Company or a Guarantor pursuant to clause (2) of
paragraph (b) below); plus
(x) without duplication of any amounts included in
clause (iii) (w) above, 100% of the aggregate net cash proceeds
of any equity contribution received by the Company from a holder
of the Company's Capital Stock subsequent to June 24, 2002; plus
(y) to the extent that any Investment (other than a
Permitted Investment) that was made after June 24, 2002 is sold
for cash or otherwise liquidated or repaid for cash, the Net Cash
Proceeds received with respect to such sale, liquidation or
repayment of such Investment, but only to the extent not included
in the calculation of Consolidated Net Income.
(b) Notwithstanding the foregoing, the provisions set forth in
paragraph (a) do not prohibit:
23. the payment of any dividend within 60 days after the date of
declaration of such dividend if the dividend would have been permitted on the
date of declaration;
24. the acquisition of any shares of Capital Stock of the Company or
the repurchase, redemption or other repayment of any Subordinated Obligation of
the Company or any Guarantor in exchange for or solely out of the proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company) of
shares of Qualified Capital Stock of the Company;
25. the repurchase, redemption or other repayment of any Subordinated
Obligation of the Company or any Guarantor in exchange for or solely out of the
proceeds of the substantially concurrent issuance (other than to a Subsidiary of
the Company) of a Subordinated Obligation of the Company or such Guarantor with
no payments of principal required until at least six months following the
maturity date of the Notes;
26. the making of distributions, loans or advances in an amount not
to exceed (x) $5.0 million to pay the ordinary operating costs of Holdings
(including, without limitation, directors, fees, indemnification obligations,
professional fees and expenses) related to Holdings' ownership of Capital Stock
of the Company (other than to the Equity Investors or their Affiliates) in any
fiscal year plus (y) any other amounts of corporate overhead expenses payable by
Holdings which were deducted in calculating the Consolidated Net Income of the
Company in accordance with GAAP;
27. the payment by the Company of cash dividends to Holdings in the
amounts and at the times of any payment by Holdings in respect of taxes,
PROVIDED that (x) the amount of cash dividends paid pursuant to this clause (5)
to enable Holdings to pay federal and state income taxes at any time shall not
exceed the lesser of (A) the amount of such federal and state income taxes owing
by Holdings at such time for the respective period and (B) the amount of such
federal and state income taxes that would be owing by the Company and its
Subsidiaries on a consolidated basis for such period if determined without
regard to Holdings' ownership of the Company and (y) any refunds shall promptly
be returned by Holdings to the Company;
28. payments for the purpose of and in an amount equal to the amount
required to permit Holdings to redeem or repurchase Holdings' common equity or
options in respect thereof, in each case in connection
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with the repurchase, put or call provisions under employee stock option,
management subscription, retained share or stock purchase agreements or other
agreements to compensate management employees; PROVIDED that such redemptions or
repurchases pursuant to this clause (6) shall not exceed $10.0 million per
annum; PROVIDED that amounts not used pursuant to this clause (6) in prior years
shall not be carried forward for use in future years;
29. so long as no Default or Event of Default shall have occurred and
be continuing, payments not to exceed $500,000 in the aggregate to enable
Holdings to make payments to holders of its Capital Stock in lieu of issuance of
fractional shares of its Capital Stock;
30. payments made to the Equity Investors allowed pursuant to the
"Limitation on Transactions with Affiliates" covenant;
31. repurchases of Capital Stock deemed to occur upon the exercise of
stock options if such Capital Stock represents a portion of the exercise price
thereof; and
32. additional Restricted Payments in an aggregate amount not to
exceed $13.0 million
(c) In determining the aggregate amount of the Restricted Payment
Basket in accordance with clause (iii) of paragraph (a) above, amounts expended
pursuant to clauses (1), (6) and (10) of paragraph (b) above shall be included
in such calculation.
LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS. (a) The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively, "incur") any Indebtedness (other than Permitted
Indebtedness); PROVIDED, HOWEVER, that if no Default or Event of Default shall
have occurred and be continuing at the time or as a consequence of the
incurrence of any such Indebtedness, the Company or any Guarantor may incur
Indebtedness if on the date of the incurrence of such Indebtedness, after giving
effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio
of the Company would have been greater than 2.25 to 1.0 if such Indebtedness is
incurred before January 1, 2005, or greater than 2.5 to 1.0 if such Indebtedness
is incurred on or after January 1, 2005.
No Indebtedness incurred pursuant to the Consolidated Fixed Charge
Coverage Ratio test of the preceding sentence (including, without limitation,
Indebtedness under the Senior Credit Facility) shall reduce the amount of
Indebtedness which may be incurred pursuant to any clause of the definition of
Permitted Indebtedness (including, without limitation, Indebtedness under the
Senior Credit Facility pursuant to clause (2) of the definition of Permitted
Indebtedness).
(b) For purposes of determining compliance with this covenant, (1) in
the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described in the definition of "Permitted
Indebtedness," the Company, in its sole discretion, will classify such item of
Indebtedness at the time of incurrence and will be entitled to divide and
classify an item of Indebtedness in more than one of the types of Indebtedness
described in the definition of "Permitted Indebtedness" and (2) the Company will
be entitled from time to time to reclassify any Indebtedness incurred pursuant
to any clause in the definition of "Permitted Indebtedness."
LIMITATION ON TRANSACTIONS WITH AFFILIATES. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of
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related transactions (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (an "Affiliate Transaction"), other than (x)
Affiliate Transactions permitted under paragraph (b) below and (y) Affiliate
Transactions entered into on terms that are fair and reasonable to, and in the
best interests of, the Company or such Restricted Subsidiary, as the case may
be, as determined in good faith by the Company's Board of Directors; PROVIDED,
HOWEVER, that for a transaction or series of related transactions with an
aggregate value of $5.0 million or more, at the Company's option (i) such
determination shall be made in good faith by a majority of the disinterested
members of the Board of the Directors of the Company or (ii) the Board of
Directors of the Company or any such Restricted Subsidiary party to such
Affiliate Transaction shall have received a favorable opinion from a nationally
recognized investment banking firm that such Affiliate Transaction is fair from
a financial point of view to the Company or such Restricted Subsidiary;
PROVIDED, FURTHER, that for a transaction or series of related transactions with
an aggregate value of $20.0 million or more, the Board of Directors of the
Company shall have received a favorable opinion from a nationally recognized
investment banking firm that such Affiliate Transaction is fair from a financial
point of view to the Company or such Restricted Subsidiary.
(b) The foregoing restrictions shall not apply to:
33. transactions exclusively between or among the Company and any of
its Restricted Subsidiaries or exclusively between or among such Restricted
Subsidiaries, PROVIDED such transactions are not otherwise prohibited by the
Indenture;
34. transactions effected as part of a Qualified Receivables
Transaction;
35. any agreement as in effect as of the Issue Date or any amendment
thereto or any transaction contemplated thereby (including pursuant to any
amendment thereto) or in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the Holders in
any material respect than the original agreement as in effect on the Issue Date;
36. Restricted Payments permitted by the Indenture;
37. loans or advances to officers, directors or employees of the
Company or its Restricted Subsidiaries not in excess of $10.0 million at any one
time outstanding;
38. Permitted Investments or Permitted Liens;
39. transactions with Persons solely in their capacity as holders of
Indebtedness or Capital Stock of the Company or any of its Restricted
Subsidiaries, where such Persons are treated no more favorably than holders of
Indebtedness or Capital Stock of the Company or such Restricted Subsidiary
generally;
40. reasonable and customary fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, consultants or employees
of Holdings or any of its Restricted Subsidiaries (other than the THL Affiliates
and the ECP Affiliates, which are set forth in clauses 9, 10 and 11 below), as
determined by the Board of Directors of the Company or any such Restricted
Subsidiary or the senior management thereof in good faith, including, without
limitation, issuances of stock, payment of bonuses and other transactions
pursuant to employment or compensation agreements, stock option agreements,
indemnification agreements and other arrangements in effect on the Issue Date or
substantially similar thereto;
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41. the payment, on a quarterly basis, of management fees to (A) THL
and/or the THL Affiliates not to exceed $250,000 in any fiscal quarter and (B)
ECP and/or the ECP Affiliates not to exceed $62,500 in any fiscal quarter, in
each case in accordance with the management agreement between THL, the THL
Affiliates, ECP and/or the ECP Affiliates and Holdings;
42. the reimbursement of THL, the THL Affiliates, ECP and/or the ECP
Affiliates for the reasonable out-of-pocket expenses incurred by them in
connection with performing management services to Holdings and its Restricted
Subsidiaries;
43. the payment of one-time fees to THL, the THL Affiliates, ECP
and/or the ECP Affiliates in connection with acquisition transactions not
prohibited by the Indenture, such fees to be payable at the time of each such
acquisition and not to exceed (for all fees paid pursuant to this clause (10))
2.5% of the aggregate consideration paid by Holdings and its Restricted
Subsidiaries for any such acquisition or such lesser amount as is then permitted
pursuant to the Senior Credit Facility; and
44. reasonable and customary fees paid to members of the Board of
Directors of the Company, other than THL, the THL Affiliates, ECP and the ECP
Affiliates.
Notwithstanding the foregoing, the Company shall only pay one-half of
any management or other fees or expenses permitted under clauses (9), (10) and
(11) to the Equity Investors or their Affiliates at a time when a Default or an
Event of Default exists; PROVIDED, that such unpaid fees and/or expenses shall
be paid at such time as such Default or Event of Default shall have been cured
or waived.
LIMITATION ON LIENS. The Company will not, and will not permit any of
its Restricted Subsidiaries to, create, incur, assume or suffer to exist any
Liens (other than Permitted Liens) of any kind against or upon any of their
respective property or assets, or any proceeds, income or profit therefrom which
secure Senior Subordinated Indebtedness or Subordinated Obligations, unless:
45. in the case of Liens securing Subordinated Obligations, the Notes
are secured by a Lien on such property, assets, proceeds, income or profit that
is senior in priority to such Liens; and
46. in the case of Liens securing Senior Subordinated Indebtedness,
the Notes are equally and ratably secured by a Lien on such property, assets,
proceeds, income or profit.
PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT. Neither the
Company nor any Guarantor will incur Indebtedness that is senior in right of
payment to the Notes or such Guarantor's Guarantee and subordinate in right of
payment to any other Indebtedness of the Company or such Guarantor, as the case
may be.
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:
47. pay dividends or make any other distributions on or in respect of
its Capital Stock;
48. make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company; or
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49. transfer any of its property or assets to the Company or any
other Restricted Subsidiary of the Company,
50. except for such encumbrances or restrictions existing under or by
reason of:
(a) applicable law;
(b) the Loan Documents (as defined in the
Senior Subordinated Credit
Agreement), the Indenture or encumbrances or restrictions substantially
similar to the encumbrances and restrictions contained in the Loan
Documents (as defined in the
Senior Subordinated Credit Agreement) and
Indenture, as the case may be, taken as a whole;
(c) non-assignment provisions of any contract or any lease entered
into in the ordinary course of business;
(d) any instrument governing Acquired Indebtedness, which encumbrance
or restriction is not applicable to the Company or any Restricted
Subsidiary of the Company, or the properties or assets of any such Person,
other than the Person or the properties or assets of the Person so
acquired; PROVIDED, HOWEVER, that such Acquired Indebtedness was not
incurred in connection with, or in anticipation or contemplation of an
acquisition by the Company or the Restricted Subsidiary;
(e) agreements existing on the Issue Date;
(f) the Senior Credit Facility and the A/R Facility;
(g) restrictions on the transfer of assets subject to any Lien
permitted under the Indenture imposed by the holder of such Lien;
(h) restrictions imposed by any agreement to sell assets permitted
under the Indenture to any Person pending the closing of such sale;
(i) Indebtedness or other contractual requirements of a Receivables
Entity in connection with a Qualified Receivables Transaction; PROVIDED
that such restrictions apply only to such Receivables Entity;
(j) agreements governing Indebtedness permitted to be incurred
pursuant to the "Limitation on the Incurrence of Additional Indebtedness"
covenant, provided that the provisions relating to such encumbrances or
restrictions contained in such Indebtedness are no less favorable to the
Company in any material respect as determined by the Board of Directors of
the Company in their reasonable and good faith judgment than the provisions
contained in the Senior Credit Facility as in effect on the Issue Date; or
(k) an agreement effecting a refinancing, replacement or substitution
of Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clause (b), (d), (e) or (f) above; PROVIDED, HOWEVER, that
the provisions relating to such encumbrance or restriction contained in any
such refinancing, replacement or substitution agreement are no less
favorable to the Company or the Holders in any material respect as
determined by the Board of Directors of the Company than the provisions
relating
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to such encumbrance or restriction contained in agreements referred to
in such clause (b), (d), (e) or (f).
LIMITATION ON PREFERRED STOCK OF SUBSIDIARIES. The Company will not
permit any of its Restricted Subsidiaries that is not a Guarantor to issue any
Preferred Stock (other than to the Company or to a Restricted Subsidiary of the
Company) or permit any Person (other than the Company or a Restricted Subsidiary
of the Company) to own any Preferred Stock of any Restricted Subsidiary of the
Company that is not a Guarantor.
MERGER, CONSOLIDATION AND SALE OF ASSETS. The Company will not, in a
single transaction or a series of related transactions, consolidate with or
merge with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of (or cause or permit any Restricted Subsidiary of the Company to sell,
assign, transfer, lease, convey or otherwise dispose of) all or substantially
all of the Company's assets to, another Person or Persons unless:
51. either:
(a) the Company shall be the surviving or continuing corporation of
such merger or consolidation; or
(b) the surviving Person is a corporation existing under the laws of
the United States, any state thereof or the District of Columbia and such
surviving Person shall expressly assume all the obligations of the Company
under the Notes and the Indenture;
52. immediately after giving effect to such transaction (on a PRO
FORMA basis, including any Indebtedness incurred or anticipated to be incurred
in connection with such transaction and the other adjustments that are referred
to in the definition of "Consolidated Fixed Charge Coverage Ratio"), the Company
or the surviving Person is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with the
"Limitation on Incurrence of Additional Indebtedness" covenant;
53. immediately before and immediately after giving effect to such
transaction (including any Indebtedness incurred or anticipated to be incurred
in connection with the transaction), no Default or Event of Default shall have
occurred and be continuing; and
54. the Company or the surviving entity, as the case may be, has
delivered to the Trustee an officers' certificate and opinion of counsel, each
stating that such consolidation, merger or transfer complies with the Indenture,
that the surviving Person agrees to be bound thereby and by the Notes and the
Registration Rights Agreement, and that all conditions precedent in the
Indenture relating to such transaction have been satisfied.
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 of the properties and assets of one or more Subsidiaries of
the Company, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.
Notwithstanding the foregoing clauses (1), (2) and (3):
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(a) any Restricted Subsidiary of the Company may consolidate with,
merge into or transfer all or part of its properties and assets to the
Company; and
(b) the Company may merge with an Affiliate that is (x) a corporation
that has no material assets or liabilities and which was incorporated
solely for the purpose of reincorporating the Company in another
jurisdiction or (y) a Restricted Subsidiary of the Company that is a
Guarantor so long as all assets of the Company and the Restricted
Subsidiaries immediately prior to such transaction are owned by such
Restricted Subsidiary and its Restricted Subsidiaries immediately after the
consummation thereof.
The Indenture will provide that upon any consolidation, combination or
merger or any transfer of all or substantially all of the assets of the Company
in accordance with the foregoing, the surviving entity shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Indenture and the Notes with the same effect as if such surviving entity had
been named as such.
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Indenture) will not, and the
Company will not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Company or any other Guarantor unless:
55. the entity formed by or surviving any such consolidation or
merger (if other than the Guarantor) or to which such sale, lease, conveyance or
other disposition shall have been made is a corporation organized and existing
under the laws of the United States or any State thereof or the District of
Columbia;
56. such entity assumes by supplemental indenture all of the
obligations of the Guarantor on the Guarantee;
57. immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and
58. immediately after giving effect to such transaction and the use
of any net proceeds therefrom on a PRO FORMA basis, the Company could satisfy
the provisions of clause (2) of the first paragraph of this covenant.
Any merger or consolidation of a Restricted Subsidiary with and into
the Company (with the Company being the surviving entity) or another Guarantor
that is a Wholly Owned Subsidiary of the Company need only comply with clause
(4) of the first paragraph of this covenant.
LIMITATION ON ASSET SALES. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
59. the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least equal to
the fair market value of the assets sold or otherwise disposed of (as determined
in good faith by the Company's Board of Directors);
60. at least 75% of the consideration received by the Company or such
Restricted Subsidiary, as the case may be, from such Asset Sale shall be cash or
Cash Equivalents and is received at the time of such disposition; PROVIDED that
the amount of (x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) of the Company
or such Restricted Subsidiary
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(other than liabilities that are by their terms subordinated to the Notes and
other than liabilities consisting of Disqualified Capital Stock) (i) that are
assumed by the transferee of any such assets and from which the Company and its
Restricted Subsidiaries are unconditionally released or (ii) in respect of which
neither the Company nor any Restricted Subsidiary following such sale has any
obligation and (y) any notes or other obligations received by the Company or
such Restricted Subsidiary from such transferee that are promptly, but in no
event more than 60 days after receipt, converted by the Company or such
Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash
or Cash Equivalents received), shall be deemed to be cash for purposes of this
provision; and
61. upon the consummation of an Asset Sale, the Company shall apply,
or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to
such Asset Sale within 360 days of receipt thereof either:
(a) to prepay any Senior Debt or Guarantor Senior Debt and, in the
case of any Senior Debt or Guarantor Senior Debt under any revolving credit
facility, effect a permanent reduction in the availability under such
revolving credit facility;
(b) to reinvest in Productive Assets (and to the extent such
reinvestment constitutes an Investment, such reinvestment complies with the
"Limitation on Restricted Payments" covenant); or
(c) a combination of prepayment and investment permitted by the
foregoing clauses (3)(a) and (3)(b).
On the 361st day after an Asset Sale or such earlier date, if any, as
the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence
(each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the
immediately preceding sentence (each a "Net Proceeds Offer Amount") shall be
applied by the Company or such Restricted Subsidiary to make an offer to
purchase for cash (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 30 nor more than 60 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders on a PRO RATA basis, that
amount of Notes equal to the Net Proceeds Offer Amount at a price in cash equal
to 100% of the principal amount of the Notes to be purchased, plus accrued and
unpaid interest thereon, if any, to the date of purchase; PROVIDED, HOWEVER,
that if at any time any non-cash consideration received by the Company or any
Restricted Subsidiary of the Company, as the case may be, in connection with any
Asset Sale is converted into or sold or otherwise disposed of for cash (other
than interest, dividends or other earnings received with respect to any such
non-cash consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder as of the date of such conversion or
disposition and the Net Cash Proceeds thereof shall be applied in accordance
with this covenant.
(b) Notwithstanding the foregoing, if a Net Proceeds Offer Amount is
less than $20 million, the application of the Net Cash Proceeds constituting
such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until
such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by the
Company and its Restricted Subsidiaries aggregates at least $10 million, at
which time the Company or such Restricted Subsidiary shall apply all Net Cash
Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred
to make a Net Proceeds Offer (the first date
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the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $20
million or more shall be deemed to be a Net Proceeds Offer Trigger Date).
(c) Notwithstanding the immediately preceding paragraphs of this
covenant, the Company and its Restricted Subsidiaries will be permitted to
consummate an Asset Sale without complying with such paragraphs to the extent
that:
62. at least 75% of the consideration for such Asset Sale constitutes
Productive Assets (and to the extent any of such Productive Assets constitutes
an Investment, such Investment complies with the "Limitation on Restricted
Payments" Covenant); and
63. such Asset Sale is for at least fair market value (as determined
in good faith by the Company's Board of Directors); PROVIDED that any
consideration not constituting Productive Assets received by the Company or any
of its Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds and shall be
subject to the provisions of this covenant with respect to the application of
Net Cash Proceeds; PROVIDED, that at the time of entering into such transaction
or immediately after giving effect thereto, no Default or Event of Default shall
have occurred or be continuing or would occur as a consequence thereof.
Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in the Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of tendering
Holders will be purchased on a PRO RATA basis (based on amounts tendered). A Net
Proceeds Offer shall remain open for a period of 20 business days or such longer
period as may be required by law. To the extent that the aggregate amount of
Notes tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds
Offer Amount, the Company may use any remaining Net Proceeds Offer Amount for
general corporate purposes. Upon completion of any such Net Proceeds Offer, the
Net Proceeds Offer Amount shall be reset at zero.
In the event of the transfer of substantially all of the property and
assets of the Company and its Restricted Subsidiaries as an entirety to a Person
in a transaction permitted under "--Merger, Consolidation and Sale of Assets"
above, which transaction does not constitute a Change of Control, the successor
Person shall be deemed to have sold the properties and assets of the Company and
its Subsidiaries not so transferred for purposes of this covenant, and shall
comply with the provisions of clause (a)(3) of this covenant with respect to
such deemed sale as if it were an Asset Sale.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the "Asset Sale"
provisions of the Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the "Asset Sale" provisions of the Indenture by virtue
thereof.
LIMITATION OF GUARANTEES BY RESTRICTED SUBSIDIARIES. The Company will
not permit any of its Domestic Restricted Subsidiaries that is not a Guarantor
(whether formed or acquired before or after the Issue Date), directly or
indirectly, by way of the pledge of any intercompany note or otherwise, to
assume, guarantee or in any other manner become liable with respect to any
Indebtedness of the Company (other than: (1) Indebtedness
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under Currency Agreements in reliance on clause ((5)) of the definition of
Permitted Indebtedness; or (2) Interest Swap Obligations incurred in reliance on
clause ((4)) of the definition of Permitted Indebtedness), unless, in any such
case:
64. such Restricted Subsidiary executes and delivers a supplemental
indenture to the Indenture, providing a guarantee of payment of the Notes by
such Restricted Subsidiary, and
65. (a) if any such assumption, guarantee or other liability of such
Restricted Subsidiary is provided in respect of Senior Debt, the guarantee or
other instrument provided by such Restricted Subsidiary in respect of such
Senior Debt may be superior to such guarantee of the Notes pursuant to
subordination provisions no less favorable to the Holders of the Notes than
those contained in the Indenture and (b) if such assumption, guarantee or other
liability of such Restricted Subsidiary is provided in respect of Indebtedness
that is expressly subordinated to the Notes, the guarantee or other instrument
provided by such Restricted Subsidiary in respect of such Subordinated
Obligation shall be subordinated to such guarantee at least to the same extent
that the Notes are subordinated to Senior Debt.
Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any further
action required on the part of the Trustee or any Holder, upon:
66. the unconditional release of such Restricted Subsidiary from its
liability in respect of the Indebtedness in connection with which such Guarantee
was executed and delivered pursuant to the preceding paragraph and all other
Indebtedness which would require that a Guarantee be executed and delivered
pursuant to the preceding paragraph;
67. any sale or other disposition (by merger or otherwise) to any
Person which is not a Restricted Subsidiary of the Company of all of the
Company's Capital Stock in, or all or substantially all of the assets of, such
Restricted Subsidiary; PROVIDED that (a) such sale or disposition of such
Capital Stock or assets is otherwise in compliance with the terms of the
Indenture and (b) such assumption, guarantee or other liability of such
Restricted Subsidiary has been released by the holders of the other Indebtedness
of the Company so guaranteed;
68. the Legal Defeasance of the Notes as described under "Legal
Defeasance and Covenant Defeasance"; or
69. such Restricted Subsidiary being designated as an Unrestricted
Subsidiary as in compliance with the Indenture.
CONDUCT OF BUSINESS. The Company and its Restricted Subsidiaries will
not engage in any businesses which are not the same, similar, related or
ancillary to the businesses in which the Company and its Restricted Subsidiaries
are engaged on the Issue Date.
REPORTS TO HOLDERS. The Indenture will provide that, whether or not
required by the rules and regulations of the Commission, so long as any Notes
are outstanding, the Company will furnish the Holders of Notes:
70. all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms; and
-15-
71. all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports, in
each case within the time periods specified in the Commission's rules and
regulations.
In addition, following the consummation of the exchange offer
contemplated by the Registration Rights Agreement, whether or not required by
the rules and regulations of the Commission, the Company will file a copy of all
such information and reports with the Commission for public availability within
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act if at the time of such request the
Company is not subject to Section 13 of 15(d) of the Exchange Act.
Events of Default
The following events are defined in the Indenture as "Events of
Default":
72. the failure to pay interest on any Notes when the same becomes
due and payable and the default continues for a period of 30 days (whether or
not such payment shall be prohibited by the subordination provisions of the
Indenture);
73. the failure to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Notes tendered pursuant to
a Change of Control Offer or a Net Proceeds Offer) (whether or not such payment
shall be prohibited by the subordination provisions of the Indenture);
74. a default in the observance or performance of any other covenant
or agreement contained in the Indenture which default continues for a period of
30 days after the Company receives written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the Holders of at
least 25% of the outstanding principal amount of the Notes;
75. the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Restricted Subsidiary (other than a
Receivables Entity) of the Company, or the acceleration of the final stated
maturity of any such Indebtedness (which acceleration is not rescinded, annulled
or otherwise cured within 30 days of receipt by the Company or such Restricted
Subsidiary of notice of any such acceleration) if the aggregate principal amount
of such Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at final stated maturity or
which has been accelerated (in each case with respect to which the 30-day period
described above has elapsed), aggregates $20.0 million or more at any time;
76. one or more judgments in an aggregate amount in excess of $20.0
million shall have been rendered against the Company or any of its Significant
Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a
period of 60 days after such judgment or judgments become final and
non-appealable;
77. certain events of bankruptcy affecting the Company or any of its
Significant Subsidiaries; or
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78. any Guarantee of a Significant Subsidiary ceases to be in full
force and effect or any Guarantee of a Significant Subsidiary is declared to be
null and void and unenforceable or any Guarantee of a Significant Subsidiary is
found to be invalid or any Guarantor that is a Significant Subsidiary denies its
liability under its Guarantee (other than by reason of release of a Guarantor in
accordance with the terms of the Indenture).
If an Event of Default (other than an Event of Default specified in
clause (6) above with respect to the Company) shall occur and be continuing, the
Trustee or the Holders of at least 25% in principal amount of outstanding Notes
may declare the principal of and accrued interest on all the Notes to be due and
payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same:
79. shall become immediately due and payable; or
80. if there are any amounts outstanding under the Senior Credit
Facility, shall become immediately due and payable upon the first to occur of an
acceleration under the Senior Credit Facility or 5 business days after receipt
by the Company and the Representative under the Senior Credit Facility of such
Acceleration Notice but only if such Event of Default is then continuing.
If an Event of Default specified in clause (6) above with respect to
the Company occurs and is continuing, then all unpaid principal of, and premium,
if any, and accrued and unpaid interest on all of the outstanding Notes shall
IPSO FACTO become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
The Indenture will provide that, at any time after a declaration of
acceleration with respect to the Notes as described in the preceding paragraph,
the Holders of a majority in principal amount of the Notes may rescind and
cancel such declaration and its consequences:
81. if the rescission would not conflict with any judgment or decree;
82. if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely because of
the acceleration;
83. to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid;
84. if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances; and
85. in the event of the cure or waiver of an Event of Default of the
type described in clause (6) of the description above of Events of Default, the
Trustee shall have received an officers' certificate to the effect that such
Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
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The Holders of a majority in principal amount of the Notes may waive
any existing Default or Event of Default under the Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any Notes.
Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture and under the TIA. Subject to the provisions of the
Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request, order or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable indemnity. Subject to all provisions of the
Indenture and applicable law, the Holders of a majority in aggregate principal
amount of the then outstanding Notes have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee.
Under the Indenture, the Company is required to provide an officers'
certificate to the Trustee promptly upon any such officer obtaining knowledge of
any Default or Event of Default (provided that such officers shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.
No Personal Liability of Directors, Officers,
Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the
Company shall have any liability for any obligations of the Company under the
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability.
Legal Defeasance and Covenant Defeasance
The Company may, at its option and at any time, elect to have its
obligations and the obligations of the Guarantors discharged with respect to the
outstanding Notes ("Legal Defeasance"). Such Legal Defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, except for:
86. the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payments;
87. the rights, powers, trust, duties and immunities of the Trustee
and the Company's obligations in connection therewith; and
88. the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to
have the obligations of the Company released with respect to certain covenants
that are described in the Indenture ("Covenant Defeasance") and thereafter any
omission to comply with such obligations shall not constitute a Default or Event
of Default with respect to the Notes. In the event Covenant Defeasance occurs,
certain events (not including non-payment, bankruptcy, receivership,
reorganization and insolvency events) described under "Events of Default" will
no longer constitute an Event of Default with respect to the Notes.
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In order to exercise either Legal Defeasance or Covenant Defeasance:
89. the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders cash in U.S. dollars, non-callable U.S.
government obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the Notes
on the stated date for payment thereof or on the applicable redemption date, as
the case may be;
90. in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an opinion of counsel in the United States reasonably acceptable
to the Trustee confirming that:
(a) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling; or
(b) since the date of the Indenture, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and based thereon such opinion of counsel
shall confirm that, the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
91. in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
92. no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
with respect to the Indenture resulting from the incurrence of Indebtedness, all
or a portion of which will be used to defease the Notes concurrently with such
incurrence);
93. such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under the Indenture, the
Senior Credit Facility or any other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound;
94. the Company shall have delivered to the Trustee an officers'
certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others;
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95. the Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
96. the Company shall have delivered to the Trustee an opinion of
counsel to the effect that:
(a) the trust funds will not be subject to any rights of holders of
Senior Debt, including, without limitation, those arising under the
Indenture; and
(b) assuming no intervening bankruptcy of the Company between the
date of deposit and the 91st day following the date of deposit and
that no Holder is an insider of the Company, after the 91st day following
the date of deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally.
Notwithstanding the foregoing, the opinion of counsel required by
clause (2) above with respect to a Legal Defeasance need not be delivered if all
Notes not theretofore delivered to the Trustee for cancellation (1) have become
due and payable or (2) will become due and payable on the maturity date within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Notes, as expressly provided for in the Indenture) as to all outstanding
Notes when:
97. either:
(a) all the Notes theretofore authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid and Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to the Trustee
for cancellation; or
(b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together
with irrevocable instructions from the Company directing the Trustee to
apply such funds to the payment thereof at maturity or redemption, as the
case may be;
98. the Company has paid all other sums payable under the Indenture
by the Company; and
99. the Company has delivered to the Trustee an officers' certificate
and an opinion of counsel stating that all conditions precedent under the
Indenture relating to the satisfaction and discharge of the Indenture have been
complied with.
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Modification of the Indenture
From time to time, the Company, the Guarantors and the Trustee,
without the consent of the Holders, may amend the Indenture for certain
specified purposes, including curing ambiguities, defects or inconsistencies, so
long as such change does not adversely affect the rights of any of the Holders
in any material respect. Other modifications and amendments of the Indenture may
be made with the consent of the Holders of a majority in principal amount of the
then outstanding Notes issued under the Indenture, except that, without the
consent of each Holder affected thereby, no amendment may:
100. reduce the amount of Notes whose Holders must consent to an
amendment;
101. reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
102. reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may be
subject to redemption or reduce the redemption price therefor;
103. make any Notes payable in money other than that stated in the
Notes;
104. make any change in provisions of the Indenture protecting the
right of each Holder to receive payment of principal of and interest on such
Note on or after the due date thereof or to bring suit to enforce such payment,
or permitting Holders of a majority in principal amount of Notes to waive
Defaults or Events of Default;
105. amend, change or modify any provisions of the Indenture or the
related definitions affecting the Company's obligation to make a Change of
Control Offer in a manner which adversely affects the Holders;
106. after the Company's obligation to purchase Notes arises
thereunder, amend, change or modify in any material respect the obligation of
the Company to make and consummate a Net Proceeds Offer with respect to any
Asset Sale that has been consummated or, after such Asset Sale has been
consummated, modify any of the provisions or definitions with respect thereto;
107. modify or change any provision of the Indenture or the related
definitions affecting the subordination or ranking of the Notes or any Guarantee
in a manner which adversely affects the Holders; or
108. release any Guarantor that is a Significant Subsidiary from any
of its obligations under its Guarantee or the Indenture otherwise than in
accordance with the terms of the Indenture.
Governing Law
The Indenture will provide that it, the Notes and any Guarantees will
be governed by, and construed in accordance with, the laws of the State of
New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the law of another jurisdiction would be
required thereby.
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The Trustee
The Indenture will provide that, except during the continuance of an
Event of Default, the Trustee will perform only such duties as are specifically
set forth in the Indenture. During the existence of an Event of Default, the
Trustee will exercise such rights and powers vested in it by the Indenture, and
use the same degree of care and skill in its exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
The Indenture and the provisions of the TIA contain certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payments of claims in certain cases or to realize on certain
property received in respect of any such claim as security or otherwise. Subject
to the TIA, the Trustee will be permitted to engage in other transactions;
PROVIDED that if the Trustee acquires any conflicting interest as described in
the TIA, it must eliminate such conflict or resign.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in
the Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"ACQUIRED INDEBTEDNESS" means Indebtedness (1) of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or (2) assumed in connection with the acquisition of
assets from such Person, in each case not incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such acquisition. Acquired Indebtedness shall be
deemed to have been incurred, with respect to clause (1) of the preceding
sentence, on the date such Person becomes a Restricted Subsidiary of the Company
and, with respect to clause (2) of the preceding sentence, on the date of
consummation of such acquisition of assets.
"AFFILIATE" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing. Notwithstanding the foregoing, no Person (other than the Company or
any Subsidiary of the Company) in whom a Receivables Entity makes an Investment
in connection with a Qualified Receivables Transaction shall be deemed to be an
Affiliate of the Company or any of its Subsidiaries solely by reason of such
Investment.
"A/R FACILITY" means the Receivables Purchase Agreement dated as of
March 19, 1996, as amended, among the Company, certain subsidiaries of the
Company and BFP Receivables Corporation in each case as such agreement may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the term
thereof, and any successor or replacement agreement, including, without
limitation, any agreement or agreements governing a Qualified Receivables
Transaction.
"ASSET ACQUISITION" means (1) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or of any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (2) the acquisition by the Company or
any Restricted Subsidiary of the
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Company of the assets of any Person (other than a Restricted Subsidiary of the
Company) which constitute all or substantially all of the assets of such Person
or comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other disposition for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Restricted Subsidiary of the Company of:
(1) any Capital Stock of any Restricted Subsidiary of the Company; or (2) any
other property or assets of the Company or any Restricted Subsidiary of the
Company other than in the ordinary course of business; provided, however, that
asset sales or other dispositions shall not include:
(a) any transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration of
less than $2.5 million;
(b) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of the Company as permitted under
"Merger, Consolidation and Sale of Assets";
(c) the sale or discount, in each case without recourse, of accounts
receivable arising in the ordinary course of business;
(d) the factoring of accounts receivable arising in the ordinary
course of business pursuant to arrangements customary in the industry;
(e) the licensing of intellectual property;
(f) disposals or replacements of obsolete equipment in the ordinary
course of business;
(g) the sale, lease, conveyance, disposition or other transfer by the
Company or any Restricted Subsidiary of assets or property in transactions
constituting Permitted Investments or Restricted Payments that are not
prohibited under the "Limitation on Restricted Payments" covenant;
(h) sales of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables Transaction" to a
Receivables Entity (for the purposes of this clause (h), Purchase Money
Notes shall be deemed to be cash);
(i) transfers of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables Transaction" (or a
fractional undivided interest therein) by a Receivables Entity in a
Qualified Receivables Transaction;
(j) leases or subleases to third persons not interfering in any
material respect with the business of the Company or any of its Restricted
Subsidiaries; and
(k) the surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claims of any kind.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
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"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"CAPITAL STOCK" means:
109. with respect to any Person that is a corporation, any and all
shares, interests, participations or other equivalents (however designated and
whether or not voting) of corporate stock, including each class of Common Stock
and Preferred Stock of such Person; and
110. with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CASH EQUIVALENTS" means:
111. marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or any member state of the European
Union or issued by any agency thereof and backed by the full faith and credit of
the United States or any member state of the European Union, in each case
maturing within one year from the date of acquisition thereof;
112. marketable direct obligations issued by any state of the United
States of America or any member state of the European Union or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Ratings Group ("S&P") or Xxxxx'x Investors Service, Inc.
("Moody's");
113. commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's;
114. time deposits, certificates of deposit or bankers' acceptances
(or with respect to foreign banks, similar instruments) maturing within one year
from the date of acquisition thereof issued by any bank organized under the laws
of the United States of America or any state thereof or the District of Columbia
or any member state of the European Union or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of not
less than $200.0 million;
115. certificates of deposit or bankers' acceptances or similar
instruments maturing within one year from the date of acquisition thereof issued
by any foreign bank that is a lender under the Senior Credit Facility having at
the date of acquisition thereof combined capital and surplus of not less than
$500.0 million;
116. repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (1) or (2) above
entered into with any bank meeting the qualifications specified in clause (4)
above;
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117. demand deposit accounts maintained in the ordinary course of
business; and
118. investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through (7)
above;
PROVIDED, that for purposes of the subordination provisions in the Indenture,
the term "Cash Equivalents" shall not include the Cash Equivalents referred to
in clause (6) above.
"CHANGE OF CONTROL" means the occurrence of one or more of the
following events:
119. any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets
of the Company to any Person or group of related Persons for purposes of Section
13(d) of the Exchange Act (a "Group"), together with any Affiliates thereof
(other than one or more Permitted Holders);
120. the approval by the holders of Capital Stock of the Company of
any plan or proposal for the liquidation or dissolution of the Company;
121. any Person or Group (other than one or more Permitted Holders)
shall become the beneficial owner (as defined in Rules 13d-3 and 13d-5 or any
successor rule or regulation promulgated under the Exchange Act), directly or
indirectly, of shares representing more than 25% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of Holdings
or the Company, unless at such time the Equity Investors beneficially own,
directly or indirectly, in the aggregate, shares representing not less than a
majority of the voting power represented by the issued and outstanding Capital
Stock of the Company; or
122. the first day on which a majority of the Board of Directors of
the Company are not Continuing Directors.
"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"CONSOLIDATED EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of:
123. Consolidated Net Income; and
124. to the extent Consolidated Net Income has been reduced thereby:
(a) all income taxes of such Person and its Restricted Subsidiaries
paid or accrued in accordance with GAAP for such period (other than income
taxes attributable to extraordinary, unusual or nonrecurring gains or
losses or taxes attributable to sales or dispositions outside the ordinary
course of business);
(b) Consolidated Interest Expense;
(c) Consolidated Non-cash Charges;
-25-
(d) the amount of any restructuring reserve or charge recorded during
such period in accordance with GAAP;
(e) any fees permitted pursuant to clause (b)(10) of the "Limitation
on Transactions with Affiliates" covenant;
(f) amounts paid as a spread payment in connection with a cashless
exercise of options by a director or employee of Holdings or any of its
Restricted Subsidiaries (I.E., a payment equal to the spread of the then
fair market value of Holdings' Common Stock which may be purchased with
such options over the aggregate exercise price of such options); and
(g) less, without duplication, non-cash items increasing Consolidated
Net Income of such Person and its Restricted Subsidiaries for such period
in each case determined in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio for which financial statements are available (the
"Transaction Date") to Consolidated Fixed Charges of such Person for the Four
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a PRO FORMA basis for the
period of such calculation to:
125. the incurrence or repayment of any Indebtedness of such Person or
any of its Restricted Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof), other than
the incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period;
126. any asset sales or other dispositions or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the need to
make such calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being liable
for Acquired Indebtedness and also including any Consolidated EBITDA (including
PRO FORMA expense and cost reductions calculated on a basis consistent with
Regulation S-X under the Exchange Act) attributable to the assets which are the
subject of the Asset Acquisition or asset sale during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to the last
day of the Four Quarter Period and on or prior to the Transaction Date, as if
such asset sale or Asset Acquisition (including the incurrence, assumption or
liability for any such Indebtedness or Acquired Indebtedness) occurred on the
first day of the Four Quarter Period; and
127. any asset sales or asset acquisitions (including any Consolidated
EBITDA (including PRO FORMA expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Exchange Act) attributable to the
assets which are the subject of the Asset Acquisition or asset sale during the
Four Quarter Period) that have been made by any Person that has become a
Restricted Subsidiary of the Company or has been merged with or into the Company
or any Restricted Subsidiary of the Company during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date that
-26-
would have constituted asset sales or Asset Acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary of the Company or
subsequent to such Person's merger into the Company, as if such asset sale or
Asset Acquisition (including the incurrence, assumption or liability for any
Indebtedness or Acquired Indebtedness in connection therewith) occurred on the
first day of the Four Quarter Period;
PROVIDED that to the extent that clause (2) or (3) of this sentence requires
that PRO FORMA effect be given to an asset sale or Asset Acquisition, such PRO
FORMA calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed of for which financial information is
available. If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes
of this "Consolidated Fixed Charge Coverage Ratio" interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Swap Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such
agreements.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of:
128. Consolidated Interest Expense; plus
129. the product of (x) the amount of all dividend payments on any
series of Preferred Stock of such Person and its Restricted Subsidiaries (other
than dividends paid in Qualified Capital Stock and dividends paid on Preferred
Stock of Unrestricted Subsidiaries) 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; provided that to the extent that such dividend payments are tax
deductible, then this clause (2) shall equal the amount set forth in clause (x)
hereof without giving effect to clause (y) hereof.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication:
130. the aggregate of all cash and non-cash interest expense with
respect to all outstanding Indebtedness of such Person and its Restricted
Subsidiaries, including the net costs associated with Interest Swap Obligations
for such period determined on a consolidated basis in conformity with GAAP but
excluding amortization or original issued discount and amortization of any
deferred financing costs; and
131. the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its Restricted
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED NET INCOME" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
PROVIDED that there shall be excluded therefrom:
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132. gains and losses from Asset Sales (without regard to the $2.5
million limitation set forth in the definition thereof) or abandonments or
reserves relating thereto and the related tax effects according to GAAP;
133. gains and losses due solely to fluctuations in currency values
and the related tax effects according to GAAP;
134. extraordinary, unusual or nonrecurring gains, losses, income or
expense, and the related tax effects;
135. the net income (or loss) of any Person acquired in a "pooling of
interests" transaction accrued prior to the date it becomes a Restricted
Subsidiary of the Company or is merged or consolidated with the Company or any
Restricted Subsidiary of the Company;
136. the net income of any Restricted Subsidiary of the Company to the
extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is restricted by a contract, operation of
law or otherwise;
137. the net loss of any Person other than a Restricted Subsidiary of
the Company;
138. the net income of any Person, other than a Restricted Subsidiary
of the Company, except to the extent of cash dividends or distributions paid to
the Company or to a Restricted Subsidiary of the Company by such Person unless,
in the case of a Restricted Subsidiary of the Company who receives such
dividends or distributions, such Restricted Subsidiary is subject to clause (5)
above;
139. (A) all non-cash charges (PROVIDED that any cash payments
actually made with respect to the liabilities for which such cash charges were
created shall be deducted from Consolidated Net Income in the period when made)
and (B) all deferred financing costs written off in connection with the early
extinguishment of any Indebtedness, in each case incurred by the Company or any
of its Restricted Subsidiaries in connection with the Recapitalization (as
defined in the
Senior Subordinated Credit Agreement) and the related financing
transactions;
140. non-cash compensation charges, including any arising from
existing stock options resulting from any merger or recapitalization transition;
and
141. the cumulative effect of a change in accounting principle.
"CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and 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 any such charges
constituting an extraordinary item or loss or any such charge which requires an
accrual of or a reserve for cash charges for any future period).
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who:
142. was a member of such Board of Directors on the Issue Date;
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143. was nominated for election or elected to such Board of Directors
with, or whose election to such Board of Directors was approved by, the
affirmative vote of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election; or
144. is any designee of a Permitted Holder or was nominated by a
Permitted Holder or any designees of a Permitted Holder on the Board of
Directors.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DESIGNATED SENIOR DEBT" means (1) Indebtedness under or in respect of
the Senior Credit Facility and (2) any other Indebtedness constituting Senior
Debt which, at the time of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof, are committed to lend up to, at least $25.0 million and is specifically
designated in the instrument evidencing such Senior Debt as "Designated Senior
Debt" by the Company.
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital Stock
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 (other than an event which would
constitute a Change of Control), matures (excluding any maturity as the result
of an optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole
option of the holder thereof (except, in each case, upon the occurrence of a
Change of Control) on or prior to the final maturity date of the Notes.
"DOMESTIC RESTRICTED SUBSIDIARY" means a Restricted Subsidiary
incorporated or otherwise organized or existing under the laws of the United
States, any state thereof or any territory or possession of the United States.
"ECP" shall mean Evercore Capital Partners L.P., a Delaware limited
partnership.
"ECP AFFILIATES" shall mean any Affiliate of ECP.
"ECP INVESTORS" shall mean ECP, Evercore Capital Partners (NQ) L.P.
and EBF Group L.L.C., or any limited or general partner, stockholder, officer or
employee of such ECP Investor.
"EQUITY INVESTORS" shall mean THL, THL Investors, ECP, ECP Investors
and their respective Affiliates, taken as a whole.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
price 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 whom is
under undue pressure or compulsion to complete the transaction. Fair market
value
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shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"GUARANTOR" means (1) each of the Company's Domestic Restricted
Subsidiaries that is a guarantor under the Senior Credit Facility on the Issue
Date and (2) each of the Company's Domestic Restricted Subsidiaries that in the
future executes a supplemental indenture in which such Domestic Restricted
Subsidiary agrees to be bound by the terms of the Indenture as a Guarantor;
PROVIDED that any Person constituting a Guarantor as described above shall cease
to constitute a Guarantor when its respective Guarantee is released in
accordance with the terms of the Indenture.
"GUARANTOR SENIOR DEBT" means, with respect to any Guarantor: the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of a Guarantor, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Guarantee of such Guarantor. Without limiting the generality of the foregoing,
"Guarantor Senior Debt" shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing in respect of:
(x) all monetary obligations of every nature of such Guarantor under,
or with respect to, the Senior Credit Facility and the A/R Facility,
including, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities (and guarantees thereof);
(y) all Interest Swap Obligations of such Guarantor (and guarantees
thereof by such Guarantor); and
(z) all obligations of such Guarantor (and guarantees thereof by such
Guarantor) under Currency Agreements;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall not
include:
145. any Indebtedness of such Guarantor to a Subsidiary of the
Company;
146. Indebtedness to, or guaranteed on behalf of, any shareholder,
director, officer or employee of such Guarantor or any Subsidiary of such
Guarantor (including, without limitation, amounts owed for
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compensation) other than a shareholder who is also a lender (or an Affiliate of
a lender) under the Senior Credit Facility;
147. Indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services;
148. Indebtedness represented by Disqualified Capital Stock;
149. any liability for federal, state, local or other taxes owed or
owing by such Guarantor;
150. that portion of any Indebtedness incurred in violation of the
Indenture provisions set forth under "Limitation on Incurrence of Additional
Indebtedness" (but, as to any such obligation, no such violation shall be deemed
to exist for purposes of this clause (6) if the holder(s) of such obligation or
their representative shall have received an officers' certificate of the Company
to the effect that the incurrence of such Indebtedness does not (or, in the case
of revolving credit indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of the Indenture); provided that the
foregoing shall not apply to any incurrence under the Senior Credit Facility
pursuant to clause (2) of the definition of "Permitted Indebtedness" which
incurrence was in violation of such clause (2) solely as a result of the
increase in Attributed Receivables Facility Indebtedness (as defined in the
Senior Credit Facility as in effect on June 24, 2002) and the lenders under the
Senior Credit Facility extended such additional amounts in good faith without
knowledge of such increase;
151. Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to such Guarantor; and
152. any Indebtedness which is, by its express terms, subordinated or
junior in right of payment to any other Indebtedness of such Guarantor.
"HOLDINGS" means Xxxxxx Holdings, Inc., a Delaware corporation and the
parent of the Company.
"INDEBTEDNESS" means with respect to any Person, without duplication:
153. all Obligations of such Person for borrowed money;
154. all Obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
155. all Capitalized Lease Obligations of such Person;
156. all Obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all Obligations
under any title retention agreement (but excluding trade accounts payable and
other accrued liabilities arising in the ordinary course of business);
157. all Obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction;
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158. guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause (8) below;
159. all Obligations of any other Person of the type referred to in
clauses (1) through (6) which are secured by any lien on any property or asset
of such Person, but which Obligations are not assumed by such Person, the amount
of such Obligation being deemed to be the lesser of the fair market value of
such property or asset or the amount of the Obligation so secured;
160. all Obligations under currency agreements and interest swap
agreements of such Person; and
161. all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any.
For purposes hereof, (x) the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital Stock
and (y) any transfer of accounts receivable or other assets which constitute a
sale for purposes of GAAP shall not constitute Indebtedness hereunder. Accrual
of interest, accretion or amortization of original issue discount and the
payment of any interest on any Indebtedness in the form of additional
Indebtedness with the same terms will not be deemed to be an incurrence of
Indebtedness for the purposes of the "Limitation on Incurrence of Additional
Indebtedness" covenant.
"INTERCOMPANY INDEBTEDNESS" means any Indebtedness of the Company or
any Guarantor or Wholly-Owned Restricted Subsidiary of the Company that is not a
Guarantor which, in the case of the Company, is owing to any Guarantor or
Wholly-Owned Restricted Subsidiary of the Company that is not a Guarantor and
which, in the case of any such Subsidiary, is owing to the Company or any
Guarantor or Wholly-Owned Restricted Subsidiary of the Company that is not a
Guarantor; PROVIDED that if as of any date any Person other than the Company or
a Guarantor or a Wholly-Owned Restricted Subsidiary of the Company that is not a
Guarantor, a lender under the Senior Credit Facility or a creditor under any
interest rate protection or other hedging agreement (or any collateral agent
acting on behalf of such lenders and/or creditors) owns or holds such
Indebtedness, or holds any Lien in respect thereof (other than a Lien in favor
of the Holders, the lenders under the Senior Credit Facility, the creditors
under any interest rate protection or other hedging agreement or any collateral
agent for such lenders and/or creditors), such Indebtedness shall no longer be
Intercompany Indebtedness.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount.
"INVESTMENT" by any Person in any other Person means, with respect to
any Person, any direct or indirect loan or other extension of credit (including,
without limitation, a guarantee) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account
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or use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, such other Person. "Investment" shall exclude extensions of trade
credit by the Company and its Restricted Subsidiaries on commercially reasonable
terms in accordance with normal trade practices of the Company or such
Restricted Subsidiary, as the case may be. For the purposes of the "Limitation
on Restricted Payments" covenant:
162. the Company shall be deemed to have made an "Investment" equal to
the fair market value of the net assets of any Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary and the
aggregate amount of Investments made subsequent to the Issue Date shall exclude
(to the extent the designation as an Unrestricted Subsidiary was included as a
Restricted Payment) the fair market value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary, not to exceed the amount of the Investment deemed made at
the date of designation thereof as an Unrestricted Subsidiary; and
163. the amount of any Investment shall be the original cost of such
Investment plus the cost of all additional Investments by the Company or any of
its Restricted Subsidiaries, without any adjustments for increases or decreases
in value, or write-ups, writedowns or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions (including tax
sharing payments) in connection with such Investment or any other amounts
received in respect of such Investment; PROVIDED 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 amounts would be included in Consolidated Net Income. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Common Stock of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, the
Company no longer owns, directly or indirectly, more than 50% of the outstanding
Common Stock of such Restricted Subsidiary, the Company shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the fair
market value of the Common Stock of such Restricted Subsidiary not sold or
disposed of.
"ISSUE DATE" means the date of the Indenture.
"LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"NET CASH PROCEEDS" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of:
164. out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions);
165. taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and any
tax sharing arrangements;
166. any repayment of debt under the
Senior Subordinated Credit
Agreement to the extent such repayment is required thereunder;
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167. any relocation expenses and severance, pension and shutdown costs
incurred as a result thereof;
168. the repayment of Indebtedness that is secured by a Lien on the
property or assets that are subject of such Asset Sale and such Lien is
permitted by the Indenture; and
169. any portion of cash proceeds which the Company determines in good
faith should be reserved for post-closing adjustments, it being understood and
agreed that on the day that all such post-closing adjustments have been
determined, the amount (if any) by which the reserved amount in respect of such
Asset Sale exceeds the actual post-closing adjustments payable by the Company or
any of its Subsidiaries shall constitute Net Cash Proceeds on such date;
PROVIDED that, in the case of the sale by the Company of an asset constituting
an Investment made after the Issue Date (other than a Permitted Investment), the
"Net Cash Proceeds" in respect of such Asset Sale shall not include the lesser
of (x) the cash received with respect to such Asset Sale and (y) the initial
amount of such Investment, less, in the case of clause (y), all amounts (up to
an amount not to exceed the initial amount of such Investment) received by the
Company with respect to such Investment, whether by dividend, sale, liquidation
or repayment, in each case prior to the date of such Asset Sale.
"OBLIGATIONS" means all obligations for (a) principal, premium,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law),
penalties, fees, and (b) to the extent liquidated and quantifiable at the time
of determination, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"PERMITTED HOLDERS" shall mean and include (i) THL, THL Affiliates and
THL Investors and (ii) ECP, ECP Affiliates and ECP Investors.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
170. Indebtedness under the Notes and the Indenture and under the
Senior Subordinated Credit Agreement (including the guarantees made thereunder)
in an aggregate principal amount not to exceed $293.5 million;
171. Indebtedness incurred pursuant to the Senior Credit Facility
(including but not limited to Indebtedness in respect of letters of credit or
bankers' acceptances issued or created thereunder) (including the guarantees
made thereunder) in a maximum principal amount not to exceed in the aggregate
the amount equal to $670 million less (x) the amount of any proceeds from any
incurrence by the Company or any of its Restricted Subsidiaries of Attributed
Receivables Facility Indebtedness (as defined in the Senior Credit Facility as
in effect on June 24, 2002) pursuant to the A/R Facility in excess of $150.0
million and (y) the amount of all mandatory repayments of term loans actually
made under, and permanent commitment reductions actually made in the revolving
credit portion of, the Senior Credit Facility with Net Cash Proceeds of Asset
Sales applied thereto as required by the "Limitation on Asset Sales" covenant;
172. other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Issue Date reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or permanent
reductions thereon;
173. Interest Swap Obligations of the Company or any Restricted
Subsidiary of the Company covering Indebtedness of the Company or any of its
Restricted Subsidiaries; PROVIDED that any Indebtedness
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to which any such Interest Swap Obligations correspond is otherwise permitted to
be incurred under the Indenture;
174. Indebtedness of the Company or any of its Restricted Subsidiaries
under (i) Currency Agreements entered into, in the judgment of the Company, to
protect the Company or such Restricted Subsidiary from foreign currency exchange
rates and (ii) Raw Material Hedge Agreements;
175. Intercompany Indebtedness of the Company or any of its Restricted
Subsidiaries;
176. Acquired Indebtedness of any Restricted Subsidiary of the Company
that is not a Guarantor to the extent the Company could have incurred such
Indebtedness in accordance with the Consolidated Fixed Charge Coverage Ratio of
the "Limitation on Incurrence of Additional Indebtedness" covenant on the date
such Indebtedness became Acquired Indebtedness; PROVIDED that such Acquired
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Company;
PROVIDED, FURTHER, that the aggregate amount of Indebtedness (including
refinancings thereof) pursuant to this clause (7) and clause (10) shall not
exceed $40.0 million in the aggregate;
177. Indebtedness 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;
178. any refinancing, modification, replacement, renewal, restatement,
refunding, deferral, extension, substitution, supplement, reissuance or resale
of existing or future Indebtedness (other than pursuant to clauses (2), (4),
(5), (6), (7), (8), (10), (11), (12), (13), (14) and (15) of this definition),
including any additional Indebtedness incurred to pay interest or premiums
required by the instruments governing such existing or future Indebtedness as in
effect at the time of issuance thereof or other premiums to the extent the
Company reasonably determines that such premiums are necessary to effect the
refinancing ("Premiums") and fees in connection therewith; PROVIDED that any
such event shall not (1) result in an increase in the aggregate principal amount
of Permitted Indebtedness (except to the extent such increase is a result of a
simultaneous incurrence of additional Indebtedness (A) to pay Premiums and
related fees or (B) otherwise permitted to be incurred under the Indenture) of
the Company and its Restricted Subsidiaries and (2) create Indebtedness with a
Weighted Average Life to Maturity at the time such Indebtedness is incurred that
is less than the Weighted Average Life to Maturity at such time of the
Indebtedness being refinanced, modified, replaced, renewed, restated, refunded,
deferred, extended, substituted, supplemented, reissued or resold; PROVIDED that
no Restricted Subsidiary of the Company may refinance any Indebtedness pursuant
to this clause (9) other than its own Indebtedness;
179. (x) Indebtedness incurred by the Company and its Restricted
Subsidiaries to finance the purchase, lease or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets) and (y) Capitalized Lease
Obligations in an aggregate principal amount outstanding for both clauses (x)
and (y) (including refinancings thereof), together with any Indebtedness
pursuant to clause (7), not to exceed $40.0 million at the time of any
incurrence thereof;
180. Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including, without limitation,
letters of credit in respect of workers' compensation claims or self-insurance,
or other Indebtedness with respect to reimbursement type obligations regarding
workers' compensation claims;
-35-
181. Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification, adjustment
of purchase price, earn out or other similar obligations, in each case, incurred
or assumed in connection with the disposition or acquisition of any business,
assets or a Restricted Subsidiary of the Company;
182. obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary of
the Company in the ordinary course of business;
183. Indebtedness consisting of guarantees (i) by the Company of
Indebtedness and any other obligation or liability permitted to be incurred
under the Indenture by Restricted Subsidiaries of the Company, and (ii) subject
to the provisions of "Limitation on Guarantees by Restricted Subsidiaries," by
Restricted Subsidiaries of the Company of Indebtedness and any other obligation
or liability permitted to be incurred by the Company or other Restricted
Subsidiaries of the Company;
184. additional Indebtedness of the Company or any Restricted
Subsidiary in an aggregate principal amount not to exceed $35.0 million at any
one time outstanding (which amount may, but need not be incurred in whole or in
part under the Senior Credit Facility); and
185. Indebtedness of the Company represented by the Senior Notes in an
aggregate principal amount not to exceed $350.0 million and the related
guarantees by the Guarantors.
Notwithstanding anything in the Indenture to the contrary,
transactions contemplated pursuant to the A/R Facility shall not be deemed to be
the incurrence of Indebtedness by the Company or by any Restricted Subsidiary.
"PERMITTED INVESTMENTS" means:
186. Investments by the Company or any Restricted Subsidiary of the
Company in any Restricted Subsidiary of the Company that is a Guarantor or any
Wholly Owned Subsidiary of the Company that is not a Guarantor (whether existing
on the Issue Date or created thereafter) and Investments in the Company by any
Restricted Subsidiary of the Company;
187. cash and Cash Equivalents;
188. Investments existing on the Issue Date;
189. loans and advances to employees, officers and directors of the
Company and its Restricted Subsidiaries not in excess of $10.0 million at any
one time outstanding;
190. accounts receivable owing to the Company or any Restricted
Subsidiary created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; PROVIDED, HOWEVER, that
such trade terms may include concessionary trade terms as the customary trade
terms;
191. Currency Agreements, Interest Swap Obligations and Raw Material
Hedge Agreements entered into by the Company or any of its Restricted
Subsidiaries for bona fide business reasons and not for speculative purposes,
and otherwise in compliance with the Indenture;
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192. Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
193. guarantees by the Company or any of its Restricted Subsidiaries
of Indebtedness otherwise permitted to be incurred by the Company or any of its
Restricted Subsidiaries under the Indenture and the creation of Liens on the
assets of the Company or any of its Restricted Subsidiaries in compliance with
the "Limitation on Liens" covenant;
194. Investments by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment (a) such Person becomes a
Restricted Subsidiary of the Company and a Guarantor or a Wholly Owned
Subsidiary of the Company that is not a Guarantor or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company that is a Guarantor or any Wholly Owned
Subsidiary of the Company that is not a Guarantor;
195. additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (10) that
are at the time outstanding, not exceeding $20.0 million at the time of such
Investment (with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value);
196. any Investment by the Company or a Restricted Subsidiary of the
Company in a Receivables Entity or any Investment by a Receivables Entity in any
other Person in connection with a Qualified Receivables Transaction; PROVIDED
that any Investment in a Receivables Entity is in the form of a Purchase Money
Note or an equity interest;
197. Investments received by the Company or its Restricted
Subsidiaries as consideration for asset sales, including Asset Sales; PROVIDED
that such Asset Sale is effected in compliance with the "Limitation on Asset
Sales" covenant; and
198. that portion of any Investment where the consideration provided
by the Company is Capital Stock of the Company (other than Disqualified Capital
Stock).
"PERMITTED LIENS" means the following types of Liens:
199. Liens securing the Notes and the Guarantees;
200. Liens securing Acquired Indebtedness incurred in reliance on
clause (7) of the definition of Permitted Indebtedness; PROVIDED that such Liens
do not extend to or cover any property or assets of the Company or of any of its
Restricted Subsidiaries other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary of the Company;
201. Liens existing on the Issue Date, together with any Liens
securing Indebtedness incurred in reliance on clause (9) of the definition of
Permitted Indebtedness in order to refinance the Indebtedness secured by Liens
existing on the Issue Date; PROVIDED that the Liens securing the refinancing
Indebtedness shall not extend to property other than that pledged under the
Liens securing the Indebtedness being refinanced; and
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202. Liens in favor of the Company on the property or assets, or any
proceeds, income or profit therefrom, of any Restricted Subsidiary.
"PERSON" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof or any other entity.
"PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"PRODUCTIVE ASSETS" means assets (including Capital Stock) of a kind
used or usable in the businesses of the Company and its Restricted Subsidiaries
as, or related to such business, conducted on the Issue Date or in businesses
reasonably related thereto.
"PURCHASE MONEY NOTE" means a promissory note of a Receivables Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Subsidiary of the Company in connection with a Qualified Receivables Transaction
to a Receivables Entity, which note shall be repaid from cash available to the
Receivables 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 owing to such investors and amounts owing to such
investors and amounts paid in connection with the purchase of newly generated
receivables.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or series of
transactions that may be entered into by the Company or any of its Subsidiaries
pursuant to which the Company or any or its Subsidiaries may sell, convey or
otherwise transfer to (a) a Receivables Entity (in the case of a transfer by the
Company or any of its Subsidiaries) and (b) any other Person (in the case of a
transfer by a Receivables Entity), or may grant a security interest in, any
accounts receivable (whether now existing or arising in the future) of the
Company or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"RAW MATERIAL HEDGE AGREEMENTS" means agreements designed to hedge
against fluctuations in the cost of raw materials entered into in the ordinary
course of business in connection with the operation of the Company's and its
Restricted Subsidiaries' business.
"RECEIVABLE" means a right to receive payment arising from a sale or
lease of goods or services by a Person pursuant to an arrangement with another
Person pursuant to which such other Person is obligated to pay for goods or
services under terms that permit the purchase of such goods and services on
credit, as determined in accordance with GAAP.
"RECEIVABLES ENTITY" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Subsidiary of the Company makes
an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable and related assets) which engages in no activities
other than in connection with the financing of accounts receivable, all proceeds
thereof and all rights (contractual or other), collateral and other assets
relating thereto, and any business or activities incidental or related to such
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business, and which is designated by the Board of Directors of the Company (as
provided below) as a Receivables Entity:
203. no portion of the Indebtedness or any other Obligations
(contingent or otherwise) of which:
(i) is guaranteed by the Company or any Subsidiary of the
Company (excluding guarantees of Obligations (other than the principal
of, and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings);
(ii) is recourse to or obligates the Company or any Subsidiary
of the Company in any way other than pursuant to Standard
Securitization Undertakings; or
(iii) subjects any property or asset of the Company or any
Subsidiary of the Company, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;
204. with which neither the Company nor any Subsidiary of the Company
has any material contract, agreement, arrangement or understanding other than on
terms no less favorable to the Company or such Subsidiary than those that might
be obtained at the time from Persons that are not Affiliates of the Company,
other than (i) pursuant to documents which evidence a Qualified Receivables
Transaction and (ii) fees payable in the ordinary course of business in
connection with servicing accounts receivable; and
205. to which neither the Company nor any Subsidiary of the Company
has any obligation to maintain or preserve such entity's financial condition or
cause such entity to achieve certain levels of operating results other than
through the contribution of additional Receivables, related security and
collections thereto and proceeds of the foregoing.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Debt; PROVIDED that if,
and for so long as, any Designated Senior Debt lacks such a representative, then
the Representative for such Designated Senior Debt shall at all times constitute
the holders of a majority in outstanding principal amount of such Designated
Senior Debt in respect of any Designated Senior Debt.
"RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such property.
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"SENIOR CREDIT FACILITY" means the Credit Agreement dated as of
December 7, 1999, among the Company, certain of its subsidiaries, the lenders
party thereto in their capacities as lenders thereunder and X.X. Xxxxxx
Securities, Inc. (f/k/a Chase Securities, Inc.) and Deutsche Bank Securities
Inc., as Joint Lead Arrangers and Joint Book Managers, XX Xxxxxx Xxxxx Bank
(f/k/a The Chase Manhattan Bank), as Administrative Agent, Deutsche Bank Trust
Company Americas (f/k/a Bankers Trust Company), as Syndication Agent, Bank of
America, N.A., as Documentation Agent, and various co-agents, together with the
related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding Restricted
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"SENIOR DEBT" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes. Without limiting the generality
of the foregoing, "Senior Debt" shall also include the principal of, premium, if
any, interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of:
206. all monetary obligations of every nature of the Company under, or
with respect to, the Senior Credit Facility and the A/R Facility, including,
without limitation, obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and indemnities (and
guarantees thereof);
207. all Interest Swap Obligations of the Company (and guarantees
thereof by the Company); and
208. all obligations of the Company (and guarantees thereof by the
Company) under Currency Agreements;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include:
209. any Indebtedness of the Company to a Subsidiary of the Company;
210. Indebtedness to, or guaranteed on behalf of, any shareholder,
director, officer or employee of the Company or any Subsidiary of the Company
(including, without limitation, amounts owed for compensation) other than a
shareholder who is also a lender (or an Affiliate of a lender) under the Senior
Credit Facility;
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211. Indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services;
212. Indebtedness represented by Disqualified Capital Stock;
213. any liability for federal, state, local or other taxes owed or
owing by the Company;
214. that portion of any Indebtedness incurred in violation of the
Indenture provisions set forth under "Limitation on Incurrence of Additional
Indebtedness" (but, as to any such obligation, no such violation shall be deemed
to exist for purposes of this clause (6) if the holder(s) of such obligation or
their representative shall have received an officers' certificate of the Company
to the effect that the incurrence of such Indebtedness does not (or, in the case
of revolving credit indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of the Indenture); provided that the
foregoing shall not apply to any incurrence under the Senior Credit Facility
pursuant to clause (2) of the definition of "Permitted Indebtedness" which
incurrence was in violation of such clause (2) solely as a result of the
increase in Attributed Receivables Facility Indebtedness (as defined in the
Senior Credit Facility as in effect on June 24, 2002) and the lenders under the
Senior Credit Facility extended such additional amounts in good faith without
knowledge of such increase;
215. Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to the Company; and
216. any Indebtedness which is, by its express terms, subordinated or
junior in right of payment to any other Indebtedness of the Company.
"SENIOR NOTES" means the Company's $350,000,000 aggregate principal
amount at maturity of 10 7/8% Senior Notes due 2009.
"
SENIOR SUBORDINATED CREDIT AGREEMENT" shall mean the
Senior
Subordinated Credit Agreement dated as of December 7, 1999 by and among
Holdings, the Company, the subsidiary guarantors named therein, the lenders
party thereto, and the agent banks named therein, as the same may be amended
from time to time.
"SENIOR SUBORDINATED INDEBTEDNESS" means the Notes and any other
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank PARI PASSU with the Notes and is not by its express terms subordinate in
right of payment to any Indebtedness of the Company which is not Senior Debt.
"SIGNIFICANT SUBSIDIARY", with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Exchange Act.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which, taken as a whole, are reasonably customary in
an accounts receivable transaction (including, without limitation, all such
representations, warranties, covenants and indemnities included in the documents
evidencing the A/R Facility as in effect on the Issue Date).
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"SUBORDINATED OBLIGATION" means (x) with respect to the Company, any
Indebtedness of the Company (whether outstanding on the Issue Date or thereafter
incurred) which is expressly subordinate in right of payment to the notes,
pursuant to a written agreement and (y) with respect to a Guarantor, any
Indebtedness of such Guarantor (whether outstanding on the Issue Date or
thereafter incurred) which is expressly subordinate in right of payment to the
Guarantee of such Guarantor, pursuant to a written agreement.
"SUBSIDIARY", with respect to any Person, means:
217. any corporation of which the outstanding Capital Stock having at
least a majority of the votes entitled to be cast in the election of directors
under ordinary circumstances shall at the time be owned, directly or indirectly,
by such Person; or
218. any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or indirectly,
owned by such Person.
"THL" shall mean Xxxxxx X. Xxx Partners, L.P., a Delaware limited
partnership.
"THL AFFILIATES" shall mean any Affiliate of THL, PROVIDED that for
purposes of the definition of "Change of Control," the term THL Affiliate shall
not include any portfolio company of either THL or any Affiliate of THL.
"THL INVESTOR" shall mean and include Xxxxxx X. Xxx Equity Fund, IV,
L.P., Xxxxxx X. Xxx Foreign Fund, IV, L.P., Xxxxxx X. Xxx Equity Fund IV, L.P.,
1997 Xxxxxx X. Xxx Nominee Trust and Xxxxxx X. Xxx Charitable Investment, L.P.,
or any limited or general partner, stockholder, officer, employee or consultant
of such THL Investor, or any officer, employee or consultant of THL; provided
that for the purposes of making calculations under the definition of "Change of
Control," the aggregate amount of equity of Holdings attributable to consultants
of THL Investors may not exceed $3 million.
"UNRESTRICTED SUBSIDIARY" of any Person means:
219. any Subsidiary of such Person that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the Board of
Directors of such Person in the manner provided below; and
220. any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; PROVIDED that:
221. the Company certifies to the Trustee that such designation
complies with the "Limitation on Restricted Payments" covenant; and
222. each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Company or any of its Restricted Subsidiaries.
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The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary only if:
223. immediately after giving effect to such designation, the Company
is able to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with the "Limitation on Incurrence of Additional
Indebtedness" covenant; and
224. immediately before and immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an officers' certificate certifying that
such designation complied with the foregoing provisions.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED SUBSIDIARY" means any Restricted Subsidiary of the
Company all the outstanding voting interests or voting Capital Stock of which
(other than directors' qualifying shares or an immaterial amount of shares
required to be owned by other Persons pursuant to applicable law) are owned,
directly or indirectly, by the Company.
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