EXHIBIT 10.11
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NUCO2 INC.
and
SUBSIDIARY GUARANTORS
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SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
Dated as of October 31, 1997
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$25,000,000
12% SENIOR SUBORDINATED NOTES DUE 2004
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TABLE OF CONTENTS
ARTICLE I
Definitions and Accounting Matters
SECTION 1.1 Certain Defined Terms...........................................6
SECTION 1.2 Terms Generally................................................20
SECTION 1.3 Accounting Terms; GAAP.........................................20
ARTICLE II
Amount and Terms of Notes
SECTION 2.1 Commitments....................................................21
SECTION 2.2 Disbursement of Funds..........................................21
SECTION 2.3 Notes..........................................................21
SECTION 2.4 Interest.......................................................21
SECTION 2.5 Several Obligations; Remedies Independent......................22
ARTICLE III
Prepayments: Payments
SECTION 3.1 Optional Prepayments...........................................23
SECTION 3.2 Method and Place of Payment....................................24
ARTICLE IV
Representations of the Investors
SECTION 4.1 Purchase for Investment........................................25
SECTION 4.2 Accredited and Sophisticated Investor..........................25
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ARTICLE V
Conditions Precedent
SECTION 5.1 Conditions Precedent to Notes..................................25
ARTICLE VI
Representations and Warranties
SECTION 6.1 Organization; Powers...........................................27
SECTION 6.2 Authorization: Enforceability..................................28
SECTION 6.3 Governmental Approvals: No Conflicts...........................28
SECTION 6.4 SEC Documents: Financial Condition:
No Material Adverse Change......................29
SECTION 6.5 Properties.....................................................29
SECTION 6.6 Litigation and Environmental Matters...........................30
SECTION 6.7 Compliance with Laws and Agreements............................30
SECTION 6.8 Investment and Holding Company Status..........................30
SECTION 6.9 Taxes..........................................................30
SECTION 6.10 ERISA.........................................................31
SECTION 6.11 Disclosure....................................................31
SECTION 6.12 Debt Agreements...............................................31
SECTION 6.13 Capitalization................................................32
SECTION 6.14 Subsidiaries and Investments..................................32
SECTION 6.15 No Burdensome Restrictions....................................33
SECTION 6.16 Private Offering by the Company...............................33
ARTICLE VII
Affirmative Covenants
SECTION 7.1 Financial Statements and Other Information.....................32
SECTION 7.2 Notices of Material Events.....................................35
SECTION 7.3 Existence: Conduct of Business.................................36
SECTION 7.4 Payment of Obligations.........................................36
SECTION 7.5 Maintenance of Properties: Insurance...........................36
SECTION 7.6 Books and Records: Inspection Rights...........................36
SECTION 7.7 Compliance with Laws...........................................37
SECTION 7.8 Use of Proceeds................................................37
SECTION 7.9 Certain Obligations Affecting
Subsidiaries...................................................37
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ARTICLE VIII
Negative Covenants
SECTION 8.1 Indebtedness...................................................37
SECTION 8.2 Liens..........................................................38
SECTION 8.3 Fundamental Changes............................................39
SECTION 8.4 Investments: Hedging Agreements................................40
SECTION 8.5 Restricted Payments............................................41
SECTION 8.6 Sale and Leasebacks............................................42
SECTION 8.7 Transactions with Affiliates...................................42
SECTION 8.8 Restrictive Agreements.........................................42
SECTION 8.9 Financial Covenants............................................43
SECTION 8.10 Modifications of Certain Documents............................44
SECTION 8.11 Nature of Business............................................44
SECTION 8.12 Sale of Subsidiaries..........................................44
ARTICLE IX
Events of Default
SECTION 9.1 Events of Default: Remedies....................................45
ARTICLE X
Subsidiary Guarantee
SECTION 10.1 The Guarantee.................................................47
SECTION 10.2 Obligations Unconditional.....................................47
SECTION 10.3 Reinstatement.................................................48
SECTION 10.4 Subrogation...................................................49
SECTION 10.5 Remedies......................................................49
SECTION 10.6 Instrument for the Payment of Money...........................49
SECTION 10.7 Continuing Guarantee..........................................49
SECTION 10.8 Rights of Contribution........................................49
SECTION 10.9 General Limitation on Guarantee
Obligations...................................................50
SECTION 10.10 Subordination of Guarantees...................................51
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ARTICLE XI
Subordination
SECTION 11.1 Agreement to Subordinate......................................51
SECTION 11.2 Bankruptcy, Liquidation, Dissolution,
Etc...........................................................51
SECTION 11.3 No Payment in Certain Circumstances...........................53
SECTION 11.4 Payments Otherwise Permitted..................................54
SECTION 11.5 Subrogation...................................................54
SECTION 11.6 Provisions Solely to Define
Relative Rights...............................................55
SECTION 11.7 No Waiver of Subordination Provisions.........................55
SECTION 11.8 Notice to Investors...........................................56
SECTION 11.9 Reliance......................................................56
SECTION 11.10 Reinstatement.................................................57
SECTION 11.11 Subsidiary Guarantees.........................................57
SECTION 11.12 Limitations on Remedies.......................................57
SECTION 11.13 Notices.......................................................57
ARTICLE XII
Miscellaneous
SECTION 12.1 Notices.......................................................58
SECTION 12.2 Waivers; Amendments...........................................58
SECTION 12.3 Expenses; Indemnity; Damage Waiver............................59
SECTION 12.4 Successors and Assigns........................................61
SECTION 12.5 Survival......................................................62
SECTION 12.6 Counterparts; Integration;
Effectiveness.................................................63
SECTION 12.7 Severability..................................................63
SECTION 12.8 Governing Law; Jurisdiction;
Consent to Service of Process.................................63
SECTION 12.9 Waiver of Jury Trial..........................................64
SECTION 12.10 Headings......................................................64
SECTION 12.11 Confidentiality...............................................64
SCHEDULE 6.06(a) - Litigation
SCHEDULE 6.06(b) - Environmental Matters
SCHEDULE 6.10 - ERISA
SCHEDULE 6.12 - Material Agreements
SCHEDULE 6.13 - Capitalization
SCHEDULE 6.14(a) - Subsidiaries
SCHEDULE 6.14(b) - Investments
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SCHEDULE 8.01 - Indebtedness
SCHEDULE 8.02 - Liens
SCHEDULE 8.08 - Restrictive Agreements
EXHIBIT A - Form of Senior Subordinated Note
EXHIBIT B - Form of Opinion of Counsel to the Obligors
EXHIBIT C - Form of Opinion of Special New York Counsel to Chase Capital
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SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT (this
"AGREEMENT"), dated as of October 31, 1997, between:
NUCO2 INC., a corporation duly organized and validly existing
under the laws of the State of Florida (the "COMPANY");
each of the Subsidiaries of the Company appearing under the
caption "SUBSIDIARY GUARANTORS" on the signature pages hereto and/or
which pursuant to Section 7.09 shall hereafter become a Subsidiary
Guarantor (each a "SUBSIDIARY GUARANTOR" and, collectively, the
"SUBSIDIARY GUARANTORS"; and, together with the Company, the
"OBLIGORS"); and
each of the Investors of the Notes (as defined below)
appearing under the caption "INVESTORS" on the signature pages hereto
and each assignee of the rights and obligations of an Investor pursuant
to Section 12.04 (each, an "INVESTOR", and collectively, the
"INVESTORS").
The Company has requested that the Investors acquire the Notes
in an aggregate principal amount of $25,000,000 to refinance certain existing
indebtedness of the Company, to finance future acquisitions, to make capital
expenditures and for working capital and general corporate purposes of the
Company and its Subsidiaries. To induce the Investors to purchase the Notes, the
Obligors and the Investors propose to enter into this Agreement pursuant to
which the Investors will purchase the Notes issued by the Company and the
Subsidiary Guarantors will guarantee the payment in full of the Notes and all
other amounts payable under this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.1 CERTAIN DEFINED TERMS. In addition to the other
terms defined herein, as used herein, the following terms shall have the
following meanings:
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
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Controls or is Controlled by or is under common Control with the Person
specified; PROVIDED that none of the initial Investors (or any of their
Affiliates) shall be deemed to be an Affiliate of the Company.
"ANNUALIZED EBITDA" means, as at any date of determination
thereof, EBITDA for the fiscal quarter ending on or most recently ended prior to
such date, multiplied by four.
"ASSET VALUE" means, with respect to any property or asset of
the Company or any Subsidiary, as of any particular date, an amount equal to the
greater of (i) the then book value of such property or asset as established in
accordance with GAAP and (ii) the then fair market value of such property or
asset as determined in good faith by the board of directors of the Company or
any Subsidiary.
"BANKRUPTCY CODE" means the Federal Bankruptcy Code of 1978,
as amended from time to time or any successor statute thereto.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed.
"CAPITAL EXPENDITURES" means, for any paid, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, property, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such paled computed in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act (42 U.S.C. ss.9601 ET SEQ.).
"CHANGE IN CONTROL" means: (i) the acquisition of ownership,
directly or indirectly (in a single transaction or a sales of related
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transactions), beneficially or of record, by any Person or group (within the
meaning of Section 13(d) and Section 14(d)(2) of the Securities Exchange Act as
in effect on the date hereof) of shares representing more than 40% of the issued
and outstanding common stock of the Company entitled to vote for the members of
the board of directors of the Company; (ii) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Company by
Persons who were neither (x) nominated by the board of directors of the Company
nor (y) appointed by directors so nominated; or (iii) any Person or group (other
than the group in control of the Company on the date hereof) shall otherwise
directly or indirectly Control the Company.
"CHASE CAPITAL" means Chase Equity Associates L.P.
"CLOSING DATE" means October 31, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time and the rules and regulations promulgated thereunder.
"CONSOLIDATED EBIT" means, for any period, an amount equal to
the sum of (a) Consolidated Net Income (or loss) plus (b) to the extent deducted
in determining Consolidated Net Income (or loss), (i) provisions for taxes based
on income of the Company and its Subsidiaries determined on a consolidated basis
in accordance with GAAP, (ii) Interest Expense and (iii) extraordinary items
determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, net income
(or loss) of the Company and its Subsidiaries on a consolidated basis for such
period (taken as a single accounting period), in accordance with GAAP.
"CONSOLIDATED NET WORTH" means, as of the date of
determination, total shareholders' equity of the Company and its Subsidiaries on
a consolidated basis, determined in accordance with GAAP.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
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"DEFAULT" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"DOLLARS" or "$" refers to lawful money of the United States
of America.
"EBITDA" means, for any period, the sum for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) of Consolidated EBIT (i) depreciation and amortization
expenses (to the extent deducted in determining Consolidated EBIT) for such
period; and (ii) the historical consolidated EBITDA for any Person for such
period which accrued prior to the date such Person became a Subsidiary or was
merged into or consolidated with the Company or any of its Subsidiaries or such
Person's assets xxxx acquired by the Company or any of its Subsidiaries (and the
underlying records of such Person shall be audited to the extent the Company is
required pursuant to Regulation S-X of the SEC to present audited financial
information for such Person in documents filed by it with the SEC). If audited
financial records are not available for acquired companies, pro-forma income
statements (subject to review and acceptance by the Required Investors) will be
substituted.
"ENVIRONMENTAL LAWS" means all Federal, state, local and
foreign statutes and codes or regulations, rules or ordinances issued,
promulgated, or approved thereunder, now or hereafter in effect (including,
without limitation, those with respect to asbestos or asbestos containing
material), relating to pollution or protection of the environment and relating
to public health and safety, relating to (i) emissions, discharges, releases or
threatened releases of Hazardous Materials, into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata), or (ii) the manufacture, processing, distribution, use
generation, treatment, storage, disposal, transport or handling of any Hazardous
Materials, and (iii) underground storage tanks and related piping, and
emissions, discharges and releases or threatened releases therefrom, such
Environmental Laws to include, without limitation, (i) the Clean Air Act (42
U.S.C. ss.7401 ET SEQ.), (ii) the Clean Water Act (33 U.S.C. ss.1251 ET SEQ.),
(iii) the Resource Conservation and Recovery Act (42 U.S.C. ss.6901 ET SEQ. (iv)
the Toxic Substances Control Act (15 U.S.C.
ss.2601 ET SEQ.) and (v) CERCLA, each as amended.
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"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or based upon (i) violation of any
Environmental Law, (ii) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (iii) exposure to any
Hazardous Materials, (iv) the release or threatened release of any Hazardous
Materials into the environment or (v) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"EQUITY RIGHTS" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shams of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and the rules and regulations promulgated
thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT means: (i) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (ii)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (iii) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding-standard
with respect to any Plan; (iv) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (v) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee
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to administer any Plan; (vi) the incurrence by the Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (vii) the receipt by the Company or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Company or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"ERISA PLAN" means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which the
Company or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"EVENT OF DEFAULT" shall have the meaning assigned to such
term in Section 9.01.
"GAAP" means generally accepted accounting principles in the
United States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory, monetary or administrative powers of a
governmental nature or functions of or pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (ii) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (iii)
to maintain working capital, equity capital or any other financial
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statement condition or liquidity of the primary obliger so as to enable the
primary obligor to pay such Indebtedness or other obligation or (iv) as an
account party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation; PROVIDED that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business.
"HAZARDOUS MATERIALS" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"HEDGING AGREEMENT" means, for any Person, any interest rate
protection agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or commodity
price hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication: (i)
all obligations of such Person for borrowed money; (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments; (iii)
financial obligations as the issuer of capital stock redeemable in whole or in
part at the option of any Person other than such issuer, at a fixed and
determinable date or upon the occurrence of an event or condition not solely
within the control of such issuer; (iv) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person; (v) all financial obligations of such Person in respect
of the deferred purchase price of property or services (excluding current trade
accounts payable on customary tams and incurred in the ordinary course of
business); (vi) financial obligations under purchase money mortgages; (vii) all
Capital Lease Obligations of such Person; (viii) all reimbursement obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty; (ix) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances; (x) financial
obligations under asset securitization vehicles; and (xi) obligations under
direct or indirect Guarantees in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or financial obligations of others of
the kinds referred to in clauses (i) through (x) above, except to the extent
such Guarantees are limited to a lesser
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amount. The Indebtedness of any Person shall include, without duplication, the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"INTEREST COVERAGE RATIO" means, as at any date, the ratio of
(i) EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (ii) Interest Expense for such period.
"INTEREST EXPENSE" means, without duplication, for any period,
for the Company and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP) all interest expense in respect of Indebtedness for such
period (whether or not actually paid during such period and including, without
limitation, interest expense attributable to Capital Lease Obligations).
"INVESTOR'S REPRESENTATIVE" means (i) Chase Capital so long as
it shall be a holder of any of the Notes or (ii) otherwise, an Investor
designated by the Required Investors to act as the Investor's Representative
hereunder.
"INVESTMENT" means, for any Person: (i) the acquisition
(whether for cash, property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale); (ii) the making of any deposit with, or any advance, loan or
other extension of credit to, any other Person (including the purchase of
property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such Person), but excluding
any such advance, loan or extension of credit having a term not exceeding 90
days arising in connection with the sale of inventory or supplies by such Person
in the ordinary course of business; or (iii) the entering into of any Guarantee
of, or other contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any amount committed to
be advanced, lent or extended to such Person.
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"LIEN" means, with respect to any asset, (i) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, assignment, charge or
security interest in, on or of such asset, including without limitation any
agreement to give any of the foregoing, (ii) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset, including any lease or similar
arrangement with a public authority executed in connection with the issuance of
industrial development revenue bonds or pollution control revenue bonds and
(iii) the filing of or the agreement to give any financing statement under the
Uniform Commercial Code (or comparable law) of any jurisdiction naming the owner
of the asset to which such lien applies as a debtor (other than a filing which
does not evidence an outstanding secured obligation, or a commitment to make
advances or to incur any other obligation of any kind).
"MARGIN STOCK" means "margin stock" within the meaning of
Regulations G, T, U and X.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the business, assets, property, operations or condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or (ii) the
ability of any Obligor to perform any of its obligations under the Note
Documents.
"MINIMUM NET WORTH" has the meaning set forth in Section
8.09(c).
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA as to which the Company, any Subsidiary or any ERISA
Affiliate is obligated to make, has made, or will be obligated to make
contributions on behalf of participants who are or were employed by any of them.
"NET WORTH" means, at any date, the net worth of the Company
and its Subsidiaries on a consolidated basis, determined in accordance with
GAAP.
"NOTE DOCUMENTS" means, collectively, this Agreement, the
Notes, the Warrant Agreement and the Warrants.
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"NOTES" has the meaning assigned to such term in Section 2.01,
including any Notes issued in substitution for any Notes theretofore issued
pursuant to this Agreement.
"OBLIGORS" has the meaning assigned to such term in the
preamble of this
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"PERMITTED ENCUMBRANCES" means:
(i) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 7.04;
(ii) carriers', warehousemen's, mechanics', workmen's,
materialmen's, repairmen's, statutory landlord's and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 7.04;
(iii) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations and Liens
thereon;
(iv) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(v) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Company or any
Subsidiary;
(vi) deposits in connection with the prosecution or defense of
any claim in any court or before any administrative commission or
agency; and
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(vii) Liens arising out of judgments or awards with respect to
which the Company or any Subsidiary the time shall in good faith be
diligently prosecuting an appeal or proceedings for review and with
respect to which the Company or any of its Subsidiaries shall have
secured a stay of execution pending such appeal or proceedings for
review.
"PERMITTED INVESTMENTS" means:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(ii) investments in commercial paper maturing within one year
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's; and
(iii) investments in certificates of deposit, banker's
acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any office located in the
United States of any commercial bank or trust company organized under
the laws of the United States of America or any State thereof which has
a combined capital and surplus and undivided profits of not less than
$500,000,000, including without limitation, any such deposits in
Eurodollars issued by a foreign branch of any such commercial bank or
trust company.
"PERSON" means any natural person, corporation, partnership,
limited liability company, trust, joint venture, association, company or other
organization, whether or not legal entity, and any Governmental Authority.
"PLAN" means any employee benefit plan, program, arrangement,
practice or contract, maintained by or on behalf of the Company or an ERISA
Affiliate, which provides benefits or compensation to or on behalf of employees
or former employees, whether formal or informal, whether or not written,
including, but not limited to, the following types of plans:
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(i) EXECUTIVE ARRANGEMENTS. Any bonus, incentive compensation,
stock option, deferred compensation, commission, severance, "golden
parachute", "rabbi trust", or other executive compensation plan,
program, contract arrangement or practice;
(ii) ERISA PLANS. Any "employee benefit plan" as defined in
ERISA, including, but not limited to, any defined benefit pension plan,
profit sharing plan, money purchase pension plan, savings or thrift
plan, stock bonus plan, employee stock ownership plan, Multiemployer
Plan, or any plan, fund, program, arrangement or practice providing for
medical (including post-retirement medical), hospitalization, accident,
sickness, disability, or life insurance benefits;
(iii) OTHER EMPLOYEE FRINGE BENEFITS. Any stock purchase,
vacation, scholarship, day care, prepaid legal services, severance pay
or fringe benefit plan, program, arrangement, contract or practice.
"QUALIFIED INVESTOR" means (i) any initial Investor of the
Notes and (ii) any bank, trust company, savings and loan association, pension
plan, investment company, insurance company, broker, dealer or any other
financial institution or entity, regardless of legal form.
"REGULATIONS G, T, U AND X" means, respectively, Regulations
G. T. U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, partners,
employees, agents and advisors of such Person and such Person's Affiliates.
"RELEASE" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"REQUIRED INVESTORS" means, at any time, Investors holding at
least 51% in aggregate principal amount of the Notes at the time
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outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates).
"RESTRICTED PAVEMENT" means: (i) any dividend or other
distribution (whether in cash, securities or other property) with respect to any
shares of any class of capital stock of the Company or any of its Subsidiaries
other than dividends paid by a Subsidiary to the Company; (ii) any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Company or any of its Subsidiaries or any option, warrant or other right to
acquire any such shares; (iii) any payment on account of the purchase,
redemption, conversion, exchange, retirement, acquisition, defeasance or sinking
fund payment with respect to any Indebtedness that is junior or subordinate to
the Notes; and (iv) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of capital stock of the Company or any of its Subsidiaries.
"S&P" means Standard ~ Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission or any
successor
"SECURITIES ACT" means the Securities Act of 1933, as amended
and in effect
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended and in effect from time to time.
"SENIOR CREDIT AGREEMENT" means the Revolving Credit Agreement
dated as of October 31, 1997 between the Company, the lenders party thereto from
time to time and Suntrust Bank, South Florida, National Association, agent for
such lenders, as executed and delivered on the Closing Date, and any
refinancing, refunding, extension or renewal thereof (whether or not with any of
the lenders or the agent for such lenders then party to the Senior Credit
Agreement), in each case, at any time amended or modified in accordance with
Section 8.1 0(a).
"SENIOR CREDIT DOCUMENTS" means the Senior Credit Agreement
and all other documents and agreements originally executed and delivered
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thereunder, in each case, as the same shall, subject to Section 8.10(a), be
modified and supplemented and in effect from time to time.
"SENIOR DEBT" means the following obligations of the Company
and its
(i) with respect to the Company, all principal of the loans
outstanding under the Senior Credit Agreement, all interest thereon
(including any interest accruing after the date of any filing by the
Company of any petition in bankruptcy or the commencing of any
bankruptcy, insolvency or similar proceedings with respect to the
Company whether or not the same is allowed as a claim in any such
proceeding) and all other amounts outstanding thereunder, including all
expenses (including, without limitation, attorneys' fees), indemnities
and penalties and all commitment, facility and administrative, agency
or other similar fees payable by the Company from time to time under
the Senior Credit Documents, and including any obligations of the
Company in respect of Hedging Agreements owing to one or more of the
lenders under Senior Credit Agreement that are required by the terms of
the Senior Credit Agreement;
(ii) with respect to the Company, additional Indebtedness in
an aggregate principal amount up to but not exceeding $10,000,000 under
or in respect of (x) the Senior Credit Agreement and (y)any other
instrument evidencing such Indebtedness; PROVIDED that, in the case of
clause (y) only, such Indebtedness is specifically designated in such
other instrument as "Senior Debt" for purposes of this Agreement;
(iii) with respect to the Company, additional Indebtedness
under or in respect of (x) the Senior Credit Agreement and (y) any
other instrument evidencing such Indebtedness; PROVIDED that (i) in the
case of clause (y) only, such Indebtedness is specifically designated
in such other instrument as "Senior Debt" for purposes of this
Agreement and (ii) after giving effect to the Incurrence of such
Indebtedness (and the application of the proceeds thereof), the Senior
Debt Incurrence Ratio is less than or equal to 4.00 to 1.00;
(iv) with respect to any Subsidiary Guarantor, the Guarantee
of such Subsidiary Guarantor in respect of any Senior Debt of the
Company; and
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(v) with respect to the Company, any and all refinancings,
replacements or refundings of any of the amounts referred to in clauses
(i), (ii) and (iii) above; PROVIDED that the refinancing, replacement
or refunding of Senior Debt incurred under said clause (iii) shall
constitute Senior Debt only to the extent that, after giving effect to
such refinancing, replacement or refunding (and the application of the
proceeds hereof), the Senior Debt Incurrence Ratio is less than or
equal to 4.00 to 1.00;
PROVIDED that the aggregate principal amount of Senior Debt permitted under
clauses (i) and (ii) above (together with the amount of obligations in respect
of Hedging Agreements referred to in said clause (i)), and any refinancing,
replacement or refunding thereof permitted under clause (v) above (including the
maximum amount of the aggregate commitments of the lenders to extend any
revolving credit facility thereunder) shall not exceed at any time $60,000,000
MINUS the aggregate amount of (x) permanent reductions in revolving credit
commitments thereunder and (y) prepayments of any term loans made from time to
time in respect of the Senior Debt.
"SENIOR DEBT INCURRENCE RATIO" means, for any period, the
ratio of (i) Senior Funded Debt to (ii) Annualized EBITDA.
"SENIOR DEBT REPRESENTATIVE" means (i) initially, Suntrust
Bank, South Florida, National Association and (ii) thereafter, such other holder
of Senior Debt notified in writing to each Investor pursuant to Section 11.13.
"SENIOR FUNDED DEBT" means, for the Company and its
Subsidiaries, on a consolidated basis, indebtedness for borrowed money, purchase
money mortgages, capitalized leases, outstandings under asset securitization
vehicles, conditional sales contracts and similar title retention debt
instruments, including any current maturities of such indebtedness, MINUS cash
and cash equivalents and excluding Indebtedness hereunder and under the Notes.
"SUBSIDIARY" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which
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securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held. Unless otherwise specified, "Subsidiary" and "Subsidiaries"
shall mean a Subsidiary and Subsidiaries, respectively, of the Company.
"TAX" means, with respect to any Person, any Federal, state or
foreign tax, assessment, customs duties or other governmental charge, levy or
assessment (including any withholding tax) upon such Person or upon such
Person's assets, revenues, income or profits.
"TOTAL NET FUNDED DEBT" means, for the Company and its
Subsidiaries on a consolidated basis, indebtedness for borrowed money, purchase
money mortgages, capitalized leases, outstandings under asset securitization
vehicles, conditional sales contracts and similar title retention debt
instruments, including any current maturities of such indebtedness, which by its
terms matures more than one year from the date of any calculation thereof and/or
which is renewable or extendable at the option of the obligor(s) thereof to a
date beyond one year from such date, MINUS cash and cash equivalents.
"TOTAL NET FUNDED DEBT COVERAGE RATIO" means, for any period,
the ratio of (i) Total Net Funded. Debt to (ii) Annualized EBITDA.
"TRANSACTIONS" means the execution, delivery and performance
by the Obligors of this Agreement, the issuance of the Notes and the w of the
proceeds thereof in accordance with the preamble of this Agreement, and the
execution, delivery and performance by the Company of the Warrant Agreement and
the issuance of the Warrants thereunder.
"WARRANT AGREEMENT" means the Warrant Agreement dated as of
the date hereof between the Company and the holders of the Warrants party
thereto pursuant to which the Warrants are issued, as amended and in effect from
time to time.
"WARRANTS" means each of the warrants issued to the holders of
the Warrants on the Closing Date pursuant to the Warrant Agreement, including
any warrants issued in replacement or substitution thereof.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer
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Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.3 ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Company notifies the Investors that (be Company requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Required Investors notify the Company
that they request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
G^AP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith. To enable the ready and consistent
determination of compliance with the covenants set forth in Article VIII, the
Company will not change the last day of its fiscal year from June 30 of each
year, or the last days of the first three
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fiscal quarters in each of its fiscal years from September 30, December 31, and
March 31 of each year, respectively.
ARTICLE II
AMOUNT AND TERMS OF NOTES
SECTION 2.1 COMMITMENTS. Subject to and upon the terms and
conditions set forth herein, each Investor severally agrees to purchase from the
Company, and the Company agrees to issue to such Investor, its 12% Senior
Subordinated Note (each a "Not_" and, collectively, the "Notes"), which Note (i)
shall be issued on the Closing Date and (ii) shall be purchased at par by such
Investor in an amount equal to the principal amount sod forth opposite its name
on the signature pages hereto.
SECTION 2.2 DISBURSEMENT OF FUNDS. Each Investor shall make
available all amounts to be funded by such Investor under this Agreement on the
Closing Date in immediately available funds to the account specified by the
Company.
SECTION 2.3 NOTES.
(a) The Company's obligation to pay the principal of and
interest on all the Notes issued by it shall be evidenced by a Note,
substantially in the form of Exhibit A, duly executed and delivered by the
Company with blanks appropriately completed in conformity herewith.
(b) Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of any Note, and (in case of loss,
theft or destruction) of indemnity satisfactory to it (the relevant Investor's
undertaking shall be satisfactory indemnity in case of loss, theft or
destruction of any Note owned by such Investor), and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of such Note, if mutilated, the Company will pay any unpaid
principal, interest and prepayment charge then or theretofore due and payable on
such Note and will deliver in lieu of such Note a new Note in the remaining
unpaid principal amount thereof and carrying the same rights to interest (unpaid
and to accrue).
(c) Except to the extent otherwise provided herein, each
payment of principal of Notes by the Company shall be made for account
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of the Investors pro rata in accordance with the respective unpaid principal
amounts of the Notes held by them and each payment of interest on Notes by the
Company shall be made for account of the Investors pro rata in accordance with
the amounts of interest on such Notes then due and payable to the respective
Investors.
SECTION 2.4 INTEREST.
(a) The unpaid principal amount of each Note shall bear
interest from the Closing Date until maturity (whether by acceleration or
otherwise) at the rate of 12% PER ANNUM.
(b) Any amount that is not paid when due hereunder (without
giving effect to grace periods, if any) shall bear interest from the date such
amount was due through the date of payment at a rate equal to 14% PER ANNUM.
Without limiting the foregoing (but without duplication), upon the occurrence
and during the continuance of any Event of Default, the principal amount of the
Notes, and all other amounts then owing hereunder, shall bear interest for each
day during the period from and including the occurrence of such Event of Default
to but excluding the date such Event of Default shall have been cured or waived
at a rate equal to 14% PER ANNUM.
(c) Interest shall accrue from and including the Closing Date
to but excluding the date of any payment thereof and shall be payable, in
immediately available funds, semiannually in arrears on the 30th day of each
April and 31st day of each October, commencing on April 30, 1998, and on any
prepayment (on the amount prepaid), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(d) All computations of interest hereunder and under the Notes
shall be made on the basis of a 360-day year consisting of twelve 30-day months
and shall be payable for the actual number of days elapsed (including the first
day but excluding the date of payment thereof).
SECTION 2.5 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The
failure of any Investor to purchase the Note to be purchased by it on the
Closing Date shall not relieve any other Investor of its obligation to purchase
its Note on such date, but no Investor shall be responsible for the failure of
the other Investor to purchase its Note, and no Investor shall have any
obligation to any other Investor for the failure by such Investor to purchase
any Note required to be purchased by such
-26-
Investor. The amounts payable by the Company at any time hereunder and under the
Notes to each Investor shall be a separate and independent debt and each
Investor shall be entitled to protect and enforce its rights arising out of this
Agreement and the Notes held by it, and it shall not be necessary for any other
Investor to consent to, or be joined as an additional party in, any proceedings
for such purposes.
ARTICLE III
PREPAYMENTS: PAYMENTS
SECTION 3.1 OPTIONAL PREPAYMENTS.
(a) The Company may, at its option, upon notice as provided
below, prepay all or, from time to time, part of the Notes at any time at the
following prices (expressed in percentages of principal amount) in each of the
years listed below, in each case, together with interest accrued and unpaid on
the Notes (or part thereof, as the case may be) to the prepayment date:
YEAR PRICE
From the Closing Date through 106%
October 31, 1998
From November 1, 1998 through 104%
October 31, 1999
From November 1, 1999 through 102%
October 31, 2000
From November 1, 2000 and 100%
thereafter
(b) The Company will give each holder of the Notes notice of
each optional prepayment under paragraph (a) of this Section 3.01 not less than
20 days prior to the date fixed for such prepayment, specifying such date, the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid the interest to
be prepaid to the prepayment date with respect to such principal amount being
prepaid and the premium (if any) due in connection with such prepayment.
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(c) In the case of each partial prepayment of the Notes, the
principal amount of the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment. At the request of the Company, any Note which is to prepaid only in
part shall be surrendered to the Company by the holder thereof, and the Company
shall issue to such holder a new Note equal in principal amount to the unpaid
portion of the surrendered Note (after giving effect to such prepayment) and in
the form of Exhibit A.
(d) In the event of a Change in Control, any Investor shall
have the option to require the Company to repurchase the Notes held by such
Investor at a price equal to 101% of the principal amount of such Notes if such
Change in Control occurs prior to the third anniversary of the date hereof and
thereafter at a price equal to 100% of the principal amount of such Notes, in
each case, together with interest accrued and unpaid on the Notes (or part
thereof, as the case may be) to the payment date. Not less than 20 days prior to
the anticipated date of consummation of any transaction that would result in a
Change in Control, the Company will give each Investor written notice of such
pending transaction (with a copy to the Senior Debt Representative in the manner
set forth in Section 11.13). Any Investor may exercise its right to require the
Company to repurchase the Note(s) held by it in accordance with this Section
3.01(d) by delivering written notice of such exercise within 20 days after
receipt of the written notice from the Company of the pending transaction and
the Company shall repurchase all of the Notes of the Investors so exercising
such rights not later than the date of consummation of such Change in Control.
(e) In the case of each prepayment of Notes pursuant to this
Section 3.01, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment, together with
interest and premium (if any) on such principal amount accrued to such date.
From and after such date, unless the Company shall fail to pay such principal
amount when so due and payable, together with the interest thereon, interest on
such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and canceled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
(f) The Company will not and will not permit any of its
Affiliates to purchase, redeem, prepay or otherwise acquire, directly or
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indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement or otherwise on
terms identical to those offered to all the other Investors (whether or not such
terms have actually been accepted by all the Investors). The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
SECTION 3.2 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made to
any Investor, not later than 1:00 p.m. (New York time) on the date when due, and
shall be made in immediately available funds in dollars to the account specified
therefor by such Investor. Any payments under this Agreement and the Notes which
are made by the Company later than 1:00 p.m. (New York time) shall be deemed to
have been made on the next succeeding Business Day. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of, or
premium or interest on any Note that is due on a date other than a Business Day
shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next
succeeding Business Day.
ARTICLE IV
REPRESENTATIONS OF THE INVESTORS
Each Investor severally represents to the Company as follows:
SECTION 4.1 PURCHASE FOR INVESTMENT. Such Investor is purchasing the
Notes to be purchased by it on the Closing Date for its own general account
and/or for one or more separate accounts maintained by it and not with a view to
any distribution of the Notes that would be in violation of the securities laws
of the United States of America or any State thereof, without prejudice,
however, to such Investor's right at all times to sell or otherwise dispose of
all or any part of the Notes under an exemption from such registration available
under the Securities Act (including, without limitation, Rules 144 and 144A
promulgated thereunder), and subject, nevertheless, to the disposition of its
property being at all times within its control and subject to the terms of
Section 12.04.
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SECTION 4.2 ACCREDITED AND SOPHISTICATED INVESTOR. Such
Investor (a) is an "accredited investor" as defined in Rule 501(a) of the
Securities Act, and (b) by reason of its business and financial experience, has
such knowledge, sophistication and experience in business and financial matters
so as to be capable of evaluating the merits and risks of the prospective
investment in the Notes, is able to bear the economic risk of such investment
and is able to afford a complete loss of such investment, and (c) has been
afforded the opportunity to make inquiries of management of the Company and has
made its own investigation whether or not to purchase Notes and in making its
decision has not relied in any way on the fact that any other Person has decided
to purchase Notes under this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1 CONDITIONS PRECEDENT TO NOTES. The obligations of
the Investors to purchase the Notes issued by the Company hereunder are subject,
at the time of the purchase of the Notes, to the satisfaction of the following
conditions:
(a) CORPORATE DOCUMENTS. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor and of all corporate authority
for each Obligor (including, without limitation, board of director resolutions
and evidence of the incumbency, including specimen signatures, of officers) with
respect to the execution, delivery and performance of such of the Note Documents
to which such Obligor is intended to be a party and each other document to be
delivered by such Obligor from time to time in connection herewith and the Notes
hereunder (each Investor may conclusively rely on such certificate until it
receives notice in writing from such Obligor to the contrary).
(b) OFFICER'S CERTIFICATE. A certificate of a senior officer
of the Company, dated the Closing Date, to the effect set forth in clauses (a)
and (b) of Section 5.02.
(c) OPINION OF COUNSEL TO THE OBLIGORS. An opinion, dated the
Closing Date, of Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP, counsel to the
Obligors, and/or other counsel satisfactory to the Required Lenders
substantially in the form of Exhibit B (and each Obligor hereby instructs such
counsel to deliver such opinion to the Investors).
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(d) OPINION OF SPECIAL NEW YORK COUNSEL TO THE INVESTORS. An
opinion, dated the Closing Date, of Milbank, Tweed, Xxxxxx & XxXxxx, special New
York counsel to Chase Capital, substantially in the forth of Exhibit C.
(e) NOTES. One or more Notes, duly completed and executed for
each Investor.
(f) WARRANT AGREEMENT. The Warrant Agreement, duly executed
and delivered by each of the parties thereto, and the Warrants required to be
issued under Section 2.02 of the Warrant Agreement as of the Closing Date duly
issued and delivered to each of the initial holders of the Warrants as provided
in the Warrant Agreement, and each of the other agreements and instruments
contemplated to be executed and/or delivered thereunder, in each case duly
executed and/or delivered.
(g) SENIOR CREDIT AGREEMENT. Evidence that the Senior Credit
Agreement providing for commitments to extend credit to the Company in an
aggregate principal amount of at least $50,000,000 and otherwise in form and
substance satisfactory to the Investors shall have been executed and delivered
by each of the parties thereto and shall be in effect, and that the initial
loans thereunder shall have been made to the Company (or contemporaneously with
the purchase of the Notes hereunder shall be made), and the Investors shall have
received copies of the Senior Credit Agreement and, upon the request of the
Investors, each of the other Senior Credit Documents delivered thereunder in
connection with the initial borrowing thereunder, in each case certified by a
senior officer of the Company.
(h) REPAYMENT OF EXISTING INDEBTEDNESS. Evidence that the
principal of and interest on, and all other amounts owing in respect of, the
Indebtedness (including, without limitation, any contingent or other amounts
payable in respect of letters of credit), if any, indicated on Schedule 8.01
that is to be repaid on the Closing Date shall have been (or shall be
simultaneously) paid in full, that any commitments to extend credit under the
agreements or instruments relating to such Indebtedness shall have been canceled
or terminated and that all Guarantees in respect of, and all Liens securing, any
such Indebtedness shall have been released (or arrangements satisfactory to the
Required Lenders for such release shall have been made).
(i) FINANCIAL STATEMENTS. The Investors shall have received
the financial statements referred to in Section 6.04.
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(j) OTHER DOCUMENTS. Such other documents as any Investor or
special New York counsel to the Investors may reasonably request.
The obligation of any Investor to purchase its Note hereunder is also subject to
the payment or delivery by the Company of such fees and other consideration as
the Company shall have agreed to pay or deliver to any Investor or an Affiliate
thereof in connection herewith, including, without limitation, the reasonable
fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel
to Chase Capital, in connection with the negotiation, preparation, execution and
delivery of the Note Documents and the issuance of the Notes hereunder and of
the Warrants under the Warrant Agreement (to the extent that statements for such
fees and expenses have been delivered to the Company).
SECTION 5.2 OTHER CONDITIONS PRECEDENT. The obligation of any
Investor to purchase its Note hereunder is subject to the further conditions
precedent that, both immediately prior to the purchase of such Note and also
after giving effect thereto and to the intended use thereof:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company in
Article VI shall be true and correct on and as of the Closing Date with the same
force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Investors that:
SECTION 6.1 ORGANIZATION; POWERS. Each of the Company and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its respective organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required. The Company
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and its Subsidiaries are adequately capitalized for the purposes of conducting
their respective businesses, and the Company was not formed solely for the
purpose of acting as agent for, or as an instrumentality of, any Subsidiary.
SECTION 6.2 AUTHORIZATION: ENFORCEABILITY. The Transactions
are within each Obligor's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. Each of this Agreement
and the Notes have been duly executed and delivered by each Obligor and
constitutes a legal, valid and binding obligation of each Obligor, enforceable
in accordance with its respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 6.3 GOVERNMENTAL APPROVALS: NO CONFLICTS. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority by the Company
and its Subsidiaries, except such as have been obtained or made and are in full
force and effect, (b) will not violate any applicable law or regulation or the
charta, by-laws or other organizational documents of the Company or of any of
its Subsidiaries or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other material
instrument binding upon the Company or of any of its Subsidiaries or its assets,
or give rise to a right thereunder to require any payment to be made by the
Company or of any of its Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Company or of any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is a party to or
otherwise subject to any provision contained in, any instrument evidencing
Indebtedness of the Company and its Subsidiaries, any agreement relating thereto
or any other contract or agreement, other than the Senior Credit Agreement
(including the charter, by-laws or other organizational documents of the Company
and its Subsidiaries) which limits the amount of, or otherwise imposes
restrictions on the incurring of Indebtedness of the type to be evidenced by the
Notes.
SECTION 6.4 SEC DOCUMENTS: FINANCIAL CONDITION: NO MATERIAL
ADVERSE CHANGE.
(a) The Company has filed in a timely manner all documents
that the Company was required to file with the Commission under Sections
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13, 14(a) and 15(d) of the Securities Exchange Act, since its initial public
offering. As of their respective filing dates, all documents filed by the
Company with the SEC ("SEC Documents") complied in all material respects with
the requirements of the Securities Exchange Act or the Securities Act, as
applicable. None of the SEC Documents as of their respective dates contained any
untrue statement of a material fact or omitted to state material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The fiducial
statements of the Company included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto.
(b) The Company has heretofore furnished to the Investors its
audited consolidated balance sheet, statements of income (including supporting
footnote disclosures) and cash flows as of and for the fiscal year ended June
30, 1997, with the opinion of Xxxxxx, Xxxxxx & Xxxxxxxxxx LLP, independent
public accountants.
(c) The financial statements included in the SEC Documents and
the referred to in paragraph (b) above present fairly, in all material respects,
the financial position and results of operations and cash flows of the Company
and its consolidated Subsidiaries as of the respective dates and for the
respective periods in accordance with GAAP (subject, in the case of any
unaudited financial statements, to customary year-end adjustments).
(d) Since June 30, 1997, there has been no material adverse
change in the business, property or assets, operations or condition, financial
or otherwise, of the Company and its Subsidiaries, taken as a whole.
SECTION 6.5 PROPERTIES. (a) Each of the Company and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for (i) Permitted
Encumbrances and (ii) minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Company and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use
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thereof by the Company and its Subsidiaries, to the best of the Company's
knowledge, does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
SECTION 6.6 LITIGATION AND ENVIRONMENTAL MATTERS. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority now pending against or, to the knowledge of any Obliger, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, except as disclosed in
Schedule 6.06(a), or (ii) that involve this Agreement or the Transactions.
(b) Except as disclosed in Schedule 6.06(b) and except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Company nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
SECTION 6.7 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Company and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 6.8 INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Company nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 6.9 TAXES. Each of the Company and its Subsidiaries
has timely filed or caused to be filed all tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes
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required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the Company or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 6.10 ERISA. Except as disclosed in Schedule 6.10:
(a) IDENTIFICATION OF PLANS. (i) Neither the Company nor any
ERISA Affiliate maintains or contributes to, or has maintained or contributed
to, any Plan that is an ERISA Plan and (ii) neither the Company nor any of its
Subsidiaries maintains or contributes to, or has maintained or contributed to,
any Plan that is an "Executive Arrangement" (as that term is used in the
definition of "Plane);
(b) COMPLIANCE. Each Plan has at all times been maintained, by
its terms and in operation, in accordance with all applicable laws, except where
such noncompliance (when taken as a whole) would not have a Material Adverse
Effect;
(c) LIABILITIES. Neither the Company nor any of its
Subsidiaries is currently making, nor has in the last 6 years been obligated to
make, contributions (directly or indirectly) to a Multiemployer Plan, nor is it
currently nor will it become subject to any liability (including withdrawal
liability), tax or penalty whatsoever to any Person whomsoever with respect to
any Plan including, but not limited to, any tax, penalty or liability arising
under Title I or Title IV or ERISA or Chapter 43 of the Code, except where such
liabilities (when taken as a whole) would not have a Material Adverse Effect;
and
(d) FUNDING. The Company and each ERISA Affiliate has made
full and timely payment of all amounts (i) required to be contributed under the
terms of each Plan and applicable law and (ii) required to be paid as expenses
of each Plan. No Plan has an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA).
SECTION 6.11 DISCLOSURE. Neither this Agreement or any other
Note Document (including the Private Placement Memorandum, dated August 1997
delivered to the Investors by Xxxxxxxxxx Securities, relating to the
transactions contemplated hereby) nor any other document, certificate or
statement furnished to the Investors by or on behalf of the Company or any
Subsidiary in connection herewith or therewith
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contains any untrue statement of a fact or omits to state a fact necessary to
make the statements contained herein and therein not misleading, if, in either
case, such fact is material to an understanding of the financial condition,
business, prospects or property of the Company or any Subsidiary, or the ability
of any Obligor to fulfill its obligations under any Note Document to which it is
a party.
SECTION 6.12 DEBT AGREEMENTS.
(a) Schedule 6.12 is a complete and correct list of each
credit agreement, loan agreement, indenture, purchase agreement, Guarantee,
letter of credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or Guarantee by, the Company or any of its Subsidiaries, outstanding
on the date hereof, and the aggregate principal or face amount outstanding or
that may become outstanding under each such arrangement is correctly described
in Schedule 6.12. There exists no default under the provisions of any instrument
evidencing or securing any Indebtedness of the Company and its Subsidiaries or
of any agreement otherwise relating thereto which has had or would reasonably be
expected to have a Material Adverse Effect.
(b) Schedule 8.02 is a complete and correct list of each Lien
securing Indebtedness of any Person outstanding on the date hereof and covering
any property of the Company or any of its Subsidiaries, and the aggregate
Indebtedness secured (or that may be secured) by each such Lien and the property
covered by each such Lien is correctly described in Schedule 8.02.
SECTION 6.13 CAPITALIZATION. The authorized capital stock of
the Company consists, on the date hereof, of an aggregate of 35,000,000 shares
consisting of (i) 30,000,000 shares of common stock, par value $0.001 per share,
of which 7,197,718 shares are duly and validly issued and outstanding, each of
which shares is fully paid and nonassessable and (ii) 5,000,000 shares of blank
check preferred stock, of which no shares are duly and validly issued and
outstanding. As of the date hereof, (x) except as disclosed in Schedule 6.13 and
except as provided in the Warrant Agreement, there are no outstanding Equity
Rights with respect to the Company and (y) there are no outstanding obligations
of the Company or any of its Subsidiaries to repurchase, redeem, or otherwise
acquire any shares of capital stock of the Company nor are
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there any outstanding obligations of the Company or any of its Subsidiaries to
make payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
the Company or any of its Subsidiaries.
SECTION 6.14 SUBSIDIARIES AND INVESTMENTS.
(a) Set forth in Schedule 6.14(a) is a complete and correct
list of all of the Subsidiaries of the Company as of the date hereof together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 6.14(a), (x) each of the Company and
its Subsidiaries owns, free and clear of Liens, and has the unencumbered right
to vote, all outstanding ownership interests in each Person shown to be held by
it in Schedule 6.14(a), (y) all of the issued and outstanding capital stock of
each such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect to
such Person.
(b) Set forth in Schedule 6.14(b) is a complete and correct
list of all Investments (other than Permitted Investments) held by the Company
in any Person on the date hereof and, for each such Investment, (x) the identity
of the Person or Persons holding such Investment and (y) the nature of such
Investment. Except as disclosed in Schedule 6.14(b), the Company owns, free and
clear of all Liens, all such Investments.
SECTION 6.15 NO BURDENSOME RESTRICTIONS. Neither the Company
nor any of its Subsidiaries is party to any contract or agreement that would
result in any burdensome restrictions that might reasonably be expected have a
Material Adverse Effect, including, but not limited to, any collective
bargaining agreements.
SECTION 6.16 PRIVATE OFFERING BY THE COMPANY. Neither the
Company nor anyone acting on its behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any person other
than the Investors and certain other institutional investors, each of which has
been offered the Notes at a
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private sale for investment, which offer or sale would not require registration
under the Securities Act. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the issuance or sale of
the Notes to the registration requirements of Section 5 of the Securities Act.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Investors that, so
long as any Note is outstanding and until payment in full of all amounts payable
by the Company hereunder and thereunder, unless the Required Investors shall
otherwise consent pursuant to Section 12.02:
SECTION 7.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Company will furnish to each Investor:
(a) within 90 days after the end of each fiscal year of the
Company, its audited consolidated balance sheet and related statements of income
and cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, with the opinion
thereon by Xxxxxx, Xxxxxx ~ Xxxxxxxxxx LLP or such other independent public
accountants of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, its consolidated balance
sheet and related statements of income and cash flows as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, together with a certificate from the chief financial
officer of the Company certifying that such financial statements present fairly
in all material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with
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GAAP consistently applied, subject to customary year-end audit adjustments and
the absence of footnotes;
(c) as soon as available and in any event within 45 days after
the end of each month, the consolidated balance sheet and related statement of
income of the Company for such month;
(d) concurrently with any delivery of financial statements
under clause (a) or (b)above, a certificate of the chief financial officer of
the Company (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 8.09 and (iii)
stating whether any material change in GAAP or in the application thereof which
would effect the financial statements in any material respect has occurred since
the date of the audited financial statements referred to in Section 6.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether any Default has occurred and is
continuing (which certificate may be limited to the extent required by
accounting rules or guidelines);
(f) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed by
the Company or any Subsidiary with the SEC or with any national securities
exchange, or distributed by the Company to its shareholders generally, as the
case may be;
(g) promptly upon receipt thereof, copies of all significant
reports submitted to the Company by independent public accountants in connection
with each annual, interim or special audit of the financial statements of the
Company made by such accountants, including the comment letter submitted by such
accountants to management in connection with their annual audit;
(h) promptly upon receipt thereof, copies of all notices given
or received by the Company with respect to noncompliance with any term or
condition related to any Senior Debt;
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(i) at least 15 days prior to the closing of any acquisition
permitted under Section 8.03(b), the adjusted pro forma consolidated balance
sheet and statement of income of the Company, reflecting the financial condition
of the Company and its Subsidiaries after giving effect to such acquisition, all
in accordance with GAAP;
(j) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Company or any Subsidiary that is in the Company's or its Subsidiary's
possession, as any Investor may reasonably request.
SECTION 7.2 NOTICES OF MATERIAL EVENTS. The Company will
furnish to each Investor prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Company or any Affiliate thereof in which the amount in
controversy is $1,000,000 or more or that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and its Subsidiaries in an aggregate amount
exceeding $500,000;
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect; and
(e) a copy of any notice of default furnished by the Company
under the Senior Credit Agreement (or any agreement replacing the Senior Credit
Agreement in effect from time to time) simultaneously with the delivery thereof
to the lenders party thereto (or their agent).
Each notice delivered under this Section 7.02 shall be accompanied by a
statement of the chief financial officer or other executive officer of the
Company setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken with respect thereto.
SECTION 7.3 EXISTENCE: CONDUCT OF BUSINESS. The Company will,
and will cause each of its Subsidiaries to, do or cause to be done
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all things necessary to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; PROVIDED that the foregoing shall not
prohibit (i) any merger, consolidation, liquidation or dissolution permitted
under Section 8.03 or (ii) any other action permitted under Section 8.11.
SECTION 7.4 PAYMENT OF OBLIGATIONS. The Company will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could reasonably be expected to result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Company or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 7.5 MAINTENANCE OF PROPERTIES: INSURANCE. The Company
will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property which is material to the conduct of its business in good working order
and condition, ordinary wear and tear excepted, except where such failure could
not reasonably be expected to result in a Material Adverse Effect, PROVIDED that
the Company and each Subsidiary shall not be under any obligation to repair or
replace any such property which has become obsolete or has become unsuitable or
inadequate for the purpose for which they are used, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.
SECTION 7.6 BOOKS AND RECORDS: INSPECTION RIGHTS. The Company
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Company will, and
will cause each of its Subsidiaries to, permit any representatives designated by
any Investor, upon reasonable prior notice, to visit and inspect its properties,
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and during normal business hours and as often as
reasonably requested.
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SECTION 7.7 COMPLIANCE WITH LAWS. The Company will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 7.8 USE OF PROCEEDS. The proceeds of the Notes will be
used only for the purposes specified in the second paragraph of this Agreement.
Neither the Company nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying Margin
Stock, and no part of the proceeds of the Notes hereunder will be used to buy or
carry any Margin Stock.
SECTION 7.9 CERTAIN OBLIGATIONS AFFECTING SUBSIDIARIES.
(a) In the event that the Company or any of its Subsidiaries
shall form or acquire any new Subsidiary after the date hereof, the Company will
cause such Subsidiary to become a "Subsidiary Guarantor" (and, thereby an
"Obligor") hereunder pursuant to a written instrument in form and substance
satisfactory to the Required Investors and to deliver such proof of corporate
action, incumbency of officers, opinions of counsel and other documents as is
consistent with those delivered by each Obligor pursuant to Section 5.01 upon
the Closing Date as any Investor shall have requested.
(b) The Company will, and will cause each of its Subsidiaries
to, take such action from time to time as shall be necessary to ensure that each
of its Subsidiaries is a wholly-owned Subsidiary.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees with the Investors that, so
long as any Note is outstanding and until payment in full of all amounts payable
by the Company hereunder or thereunder:
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SECTION 8.1 INDEBTEDNESS. The Company will not, and will not
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder and under the Notes;
(b) Indebtedness (including, without limitation Capital Lease
Obligations) constituting Senior Debt, including, without limitation, Senior
Debt incurred pursuant to the Senior Debt Incurrence Ratio referred to in
clauses (iii) and (v) of the definition of "Senior Debt";
(c) Indebtedness existing on the date hereof and set forth in
Schedule 8.01, but not any extensions, renewals or replacements of any such
Indebtedness;
(d) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary;
(e) Guarantees by the Company of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Company or any other
Subsidiary; and
(f) additional Indebtedness of the Company or any of its
Subsidiaries incurred after the Closing Date in an aggregate principal amount
not exceeding $2,000,000.
SECTION 8.2 LIENS. The Company will not, and will not permit
any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Subsidiary existing on the date hereof and set forth in Schedule 8.02; PROVIDED
that (i) such Lien shall not apply to any other property or asset of the Company
or any Subsidiary and (ii) such Lien shall secure only those obligations which
it secures on the date hereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any property
or asset of any Person that becomes a Subsidiary after the date
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hereof prior to the time such Person becomes a Subsidiary; PROVIDED that (i)
such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such
Lien shall not apply to any other property or assets of the Company or any
Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be;
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Company or any Subsidiary; PROVIDED that (i) such security
interests secure Indebtedness permitted by Section 8.01(b), (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
180 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets and (iv) such
security interests shall not apply to any other property or assets of the
Company or any Subsidiary;
(e) Liens securing Senior Debt; and
(f) additional Liens securing Indebtedness or other
obligations of the Company and its Subsidiaries incurred after the Closing Date
in an aggregate amount not exceeding $2,000,000.
SECTION 8.3 FUNDAMENTAL CHANGES. The Company will not, and
will not permit any of its Subsidiaries to:
(a) merge or consolidate with any other entity, except that:
(i) any Subsidiary may merge into the Company in a transaction
in which the Company is the surviving corporation;
(ii) any Subsidiary may merge into any Subsidiary Guarantor;
PROVIDED that if any such transaction shall be between a Subsidiary
Guarantor and a Subsidiary not a Subsidiary Guarantor, and such
Subsidiary Guarantor is not the continuing or surviving corporation,
then the continuing or surviving corporation shall have assumed all of
the obligations of such Subsidiary Guarantor hereunder; and
(iii) any Person that is engaged in the business in which the
Company is engaged as of the Closing Date or substantially related
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thereto may merge into the Company or any Subsidiary in a transaction
in which the Company or a wholly-owned Subsidiary is the surviving
corporation; PROVIDED that, at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing
and shall comply with Section 7.09;
(b) purchase, lease or otherwise acquire for cash, stock or
other consideration, the stock of any Person or all or any substantial portion
of the assets of any Person where such stock, assets or other consideration have
an aggregate fair market value of more than $15,000,000, PROVIDED that, so long
as no Event of Default has occurred (or will be caused by such acquisition), the
Company or any Subsidiary may request Mat the Required Investors consent to such
acquisition for consideration greater than $15,000,000 in any one transaction
(PROVIDED that, notwithstanding anything herein to the contrary, the decision
whether or not to so consent shall remain solely at the discretion of the
Investors). Consistent with such request, the Company shall provide the
Investors with an information package to include, but not limited to, the
following:
(i) historical financial statements showing the impact of the
acquisition on the Company's historical operating performance and
existing balance sheet;
(ii) projections detailing the expected performance of the
combined company going forward; and
(iii) a detailed listing of the assets proposed to be
purchased and liabilities, if any, proposed to be assumed in the
transaction;
(c) enter into a partnership or joint venture with any other
Person; PROVIDED that, so long as no Event of Default has occurred, the Company
or any Subsidiary may request that the Required Investors consent to its
entering into a partnership or joint venture for the purposes of carrying on its
business;
(d) sell, lease, transfer or other dispose of any assets,
except that (except as otherwise prohibited under Section 8.12) this Section
8.03(d) shall not prohibit any disposition of (i) any asset if on the date such
asset is sold, the Asset Value of all assets sales occurring after the Closing
Date, taking into account the Asset Value of the proposed asset sale, would not
exceed on an aggregate basis 10% of
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the Consolidated Net Worth of the Company on the Closing Date and such sale is
in the ordinary course of business, (ii) any obsolete or retired assets not used
or useful in its business (such assets to include high-pressure tanks, motorized
vehicles, including cars and trucks, and lines of business other than carbon
dioxide that may be obtained by the Company as part of the group of assets of
any corporation or other business entity which the Company may acquire) and
(iii) other sales of assets approved by the Required Investors.
SECTION 8.4 INVESTMENTS: HEDGING AGREEMENTS. (a) The Company
will not, and will not permit any of its Subsidiaries to, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a
wholly-owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to (not including accounts receivable), Guarantee any obligations of,
or make or permit to exist any Investment or any other interest in, any other
Person, or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person, except:
(i) Permitted Investments;
(ii) Investments by the Company existing on the date hereof in
the capital stock of its Subsidiaries;
(iii) loans or advances made by the Company to any Subsidiary
and made by any Subsidiary to the Company or any other Subsidiary;
(iv) Guarantees constituting Indebtedness permitted by Section
8.01;
(v) Investments in Plans;
(vi) advances made by the Company or any of its Subsidiaries
to its employees in the ordinary course of business, and loans made by
the Company to its employees to allow such employees to purchase stock
of the Company; PROVIDED that the sum of (i) the aggregate total of
such advances made by the Company to its employees under this clause
(vi) Bad (ii) the aggregate amount paid by the Company with respect to
the repurchase or redemption of its capital stock under Section 8.05(c)
shall not exceed $2,000,000 at any one time outstanding;
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(vii) deposits made by the Company in connection with
acquisitions permitted under Section 8.03(b); and
(viii) Investments by the Company from the net proceeds of an
equity issuance after the Closing Date that are not used to prepay
Senior Debt (to the extent required by the terms thereof) or to pay
dividends or other distributions under Section 8.05(d).
(b) The Company will not, and will not permit any of its
Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements
entered into in the ordinary course of business to hedge or mitigate risks to
which the Company or any Subsidiary is exposed in the conduct of its business or
the management of its liabilities or as required by the Senior Credit Agreement.
SECTION 8.5 RESTRICTED PAYMENTS. The Company will not, and
will not permit any of its Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except (a) the Company may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, (b) the Company may make Restricted
Payments pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of the Company and its Subsidiaries, (c) the
Company may repurchase or redeem shares of any class of capital stock of the
Company issued pursuant to and in accordance with stock option plans or other
benefit plans for management or employees or under other option plans of the
Company not exceeding $1,000,000 in the aggregate and (d) the Company may
declare and pay dividends with respect to its capital stock in an aggregate
amount not exceeding the net proceeds of any equity issuance by the Company
after the Closing Date (MINUS the aggregate amount of any Investments made from
such proceeds under Section 8.04(a)(viii)).
SECTION 8.6 SALE AND LEASEBACKS. The Company will not, and
will not permit any of its Subsidiaries to, enter into any transaction with any
other Person whereby such Person leases assets sold or otherwise transferred to
it by the Company or such Subsidiary if the aggregate value of the assets sold
or transferred pursuant to such a transaction shall exceed $1,000,000.
SECTION 8.7 TRANSACTIONS WITH AFFILIATES. The Company will
not, and will not permit any of its Subsidiaries to (a) enter into any material
transaction or series of transactions which in the aggregate would be material,
whether or not in the ordinary course of business,
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with any Affiliate of the Company or any Subsidiary except (i) in the ordinary
course of business at prices and on tams and conditions not less favorable to
the Company or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, (ii) transactions between or among Me Company and
its wholly-owned Subsidiaries not involving any other Affiliate and (iii) any
Restricted Payment permitted by Section 8.05, or (b) convey or transfer to any
other Person (including the Company or any Subsidiary) any real property,
buildings, or fixtures used in the manufacturing or production operations of the
Company or any Subsidiary, or convey or transfer to the Company or any
Subsidiary any other assets (excluding conveyances or transfer in the ordinary
course of business) if at the time of such conveyance or transfer any Default or
Event of Default exists or would exist as a result of such conveyance or
transfer.
SECTION 8.8 RESTRICTIVE AGREEMENTS. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Company or any of
its Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to the Company or any other Subsidiary or to
Guarantee Indebtedness of the Company or any other Subsidiary; PROVIDED that (i)
the foregoing shall not apply to restrictions and conditions imposed by law or
by this Agreement, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof under the Senior Credit Agreement as in
effect on the date hereof or otherwise identified on Schedule 8.08 (but shall
apply to any extension, renewal, amendment or modification thereof which expands
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts entered into in the ordinary course of business restricting the
assignment thereof.
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SECTION 8.9 FINANCIAL COVENANTS.
(a) INTEREST COVERAGE RATIO. The Company will not permit the
Interest Coverage Ratio to be less than the following respective ratios as at
the last day of each fiscal quarter during the following respective periods:
PERIOD RATIO
From the Closing Date through
October 31, 1998 2.00 to 1.00
From November 1, 1998 through
October 31, 2000 2.50 to 1.00
From November 1, 2000 and at 3.00 to 1.00
all times thereafter
(b) TOTAL NET FUNDED DEBT COVERAGE RATIO.
The Company will not permit the Total Net Funded Debt Coverage
Ratio to exceed the following respective ratios at any time
during the following respective periods:
PERIOD RATIO
From the Closing Date through
October 31, 1998 5.25 to 1.00
From November 1, 1998 through
October 31, 2000 4.50 to 1.00
From November 1, 2000 and at 4.00 to 1.00
all times thereafter
(c) MINIMUM NET WORTH. The Company shall at
all times maintain Consolidated Net Worth of not less than the
sum of (a) $45,000,000 (increasing to $50,000,000 on December
31, 1999), (b) Ban 50% of the cumulative Consolidated Net
Income for each fiscal quarter ending on or after December 31,
1997 (but specifically not including any Consolidated Net Loss
for any such fiscal quarter) plus (c) the cumulative net
proceeds of all equity offerings (if any) made by the Company
for each fiscal quarter ending on or after September 30, 1997.
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SECTION 8.10 MODIFICATIONS OF CERTAIN DOCUMENTS.
(a) The Company will not, and will not permit any of its
Subsidiaries to, change, amend, supplement or otherwise modify the terms of the
Senior Credit Documents, or refund or refinance the same, without the prior
consent of the Required Investors, if the effect of such amendment or such
refunding or refinancing is to:
(i) impose upon the Company, directly or indirectly, any
prohibition or limitation on its ability to make regularly scheduled
payments of principal of or interest on the Notes, or any other amounts
owing to the Investors under this Agreement, except as provided in the
subordination provisions set forth in Article XI; and
(ii) extend or shorten the scheduled maturity of any payment
of any principal amount of the loans under the Senior Credit Agreement,
except (x) altering or modifying the payment schedule of such loans so
as to cause the average life to maturity of such loans to be not more
than three years longer than the average life to maturity of such loans
as of the date hereof or (y) extending the final maturity date of such
loans by more than three years.
(b) The Company will not, and will not permit any of its
Subsidiaries to, consent to any modification, supplement or waiver of any of the
provisions of its certificate of incorporation, certificates of designation of
preferred stock or by-laws, if such modification, supplement or waiver could
reasonably be expected to be adverse to the interests of the Investors, in each
case without the prior consent of the Required Investors.
SECTION 8.11 NATURE OF BUSINESS. The Company will not, and
will not permit any of its Subsidiaries to, engage to any material extent in any
business other than businesses of the type conducted by the Company and its
Subsidiaries on the date hereof and businesses reasonably related thereto;
PROVIDED that nothing herein shall prevent the Company and its Subsidiaries from
(i) expanding the location of its business or businesses in the United States,
(ii) ceasing or omitting to exercise any rights, licenses, permits or franchises
which in good faith in the judgment of the Company and its Subsidiaries can no
longer be profitably exercised or (iii) engaging in a business or businesses
that are ancillary to those engaged in by the Company or such Subsidiary on the
date hereof.
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SECTION 8.12 SALE OF SUBSIDIARIES. The Company will not, and
will not permit any of its Subsidiaries to, sell or otherwise dispose of any
shares of capital stock of or other ownership interest in any Subsidiary (except
in connection with any acquisition, merger or consolidation permitted by Section
8.03) or permit any Subsidiary to issue any additional shares of its capital
stock or other incidents of ownership except on a pro rata basis to all its
stockholders, partners or owners, as the case may be.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 EVENTS OF DEFAULT: REMEDIES. If any of the
following events ("EVENTS OF DEFAULT") shall occur:
(a) the Company shall fail to pay any principal of any Note
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Company shall fail to pay any interest on any Note or
any fee or any other amount (other than an amount referred to in clause (a) of
this Section 9.01) payable under this Agreement or the Notes, when and as the
same shall become due and payable, and such failure shall continue unremedied
for a paled of five days;
(c) any representation or warranty made or deemed made by or
on behalf of the Obligors in or in connection with this Agreement or any
amendment or modification hereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this
Agreement or any amendment or modification hereof, shall prove to have been
incorrect in any material respect when made or deemed made;
(d) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 7.01(a) through (d) and such failure
shall continue unremedied for a period of ten days after notice thereof from any
Investor to the Company;
(e) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Article VII and Article VIII;
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(f) the Company shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clauses (a) through (e), inclusive, of this Article), and such failure shall
continue unremedied for a period of 30 days after notice thereof from any
Investor to the company;
(g) the Company or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) at final
maturity in respect of any Indebtedness (other than the Notes) having an
aggregate unpaid principal balance in excess of $1,000,000, when and as the same
shall become due and payable, or any default, event or condition occurs or
exists with respect to such Indebtedness, or under any agreement or instrument
evidencing, securing or related to such Indebtedness, that results in such
Indebtedness becoming due prior to its stated maturity date;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Company or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receive, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordain" any of the
foregoing shall be entered;
(i) the Company or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Section 9.01, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any Subsidiary
or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
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(j) the Company or any Subsidiary shall become unable, admit
in writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $1,000,000 (not fully covered by insurance) shall
be rendered against the Company, any Subsidiary or any combination thereof and
the same shall remain undischarged for a period of 60 consecutive days during
which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the Company or
any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the reasonable
opinion of the Required Investors, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in a Material
Adverse Effect; or
(m) the actual or asserted invalidity of the Guarantee of any
Subsidiary under this Agreement;
then, and in every such event (other than an event with respect to any Obligor
described in clause (h) or (i) of this Section 9.01), and at any time thereafter
during the continuance of such event, the Required Investors may, by notice to
the Company (with a copy to the Senior Debt Representative in the manner set
forth in Section 11.13, PROVIDED that the failure to provide such copy, or any
delay in so providing such copy, shall not affect the validity of such notice),
declare the Notes then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Notes so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Company accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Obligors; and in case of any
event with respect to any Obligor described in clause (h) or (i) of this Section
9.01, the principal of the Notes then outstanding, together with accrued
interest thereon and all fees and other obligations of the Company accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Company.
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ARTICLE X
SUBSIDIARY GUARANTEE
SECTION 10.1 THE GUARANTEE. The Subsidiary Guarantors hereby
jointly and severally guarantee to each Investor and its successors and assigns
the prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and interest on the Note(s) held by each
Investor of, the Company and all other amounts from time to time owing to the
Investors by the Company under this Agreement and the Notes, in each case
strictly in accordance with the terms thereof (such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). The Subsidiary Guarantors
hereby further jointly and severally agree that if the Company shall fail to pay
in full when due (whether at stated maturity, by acceleration or otherwise) any
of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the
same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the tams of such extension or
renewal.
SECTION 10.2 OBLIGATIONS UNCONDITIONAL. The obligations of the
Subsidiary Guarantors under Section 10.01 are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the Notes
or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 10.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not altar or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or
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compliance with any of the Guaranteed Obligations Hall be extended,
or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
any Investor as security for any of the Guaranteed Obligations shall
fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Investor exhaust any right, power or remedy or proceed against the Company under
this Agreement or the Notes or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
SECTION 10.3 REINSTATEMENT. The obligations of the Subsidiary
Guarantors under this Article X shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Company in respect
of the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise and the Subsidiary
Guarantors jointly and severally agree that they will indemnify each Investor on
demand for all reasonable costs and expenses (including, without limitation,
reasonable fees of counsel) incurred by such Investor in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
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SECTION 10.4 SUBROGATION. Each Subsidiary Guarantor hereby
waives all rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Bankruptcy Code) or otherwise by reason of any payment by it pursuant to the
provisions of this Article X and further agrees with the Company for the benefit
of each of its creditors (including, without limitation, each Investor) that any
such payment by it shall constitute a contribution of capital by such Subsidiary
Guarantor to the Company (or an investment in the equity capital of the Company
by such Subsidiary Guarantor).
SECTION 10.5 REMEDIES. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and the Investors,
the obligations of the Company under this Agreement and the Notes may be
declared to be forthwith due and payable as provided in Article IX (and shall be
deemed to have become automatically due and payable in the circumstances
provided in Article IX) for purposes of Section 10.01 notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Company and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by the Company) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of Section 10.01.
SECTION 10.6 INSTRUMENT FOR THE PAYMENT OF MONEY. Each
Subsidiary Guarantor hereby acknowledges that the guarantee in this Article X
constitutes an instrument for the payment of money, and consents and agrees that
any Investor, at its sole option, in the event of a dispute by such Subsidiary
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
SECTION 10.7 CONTINUING GUARANTEE. The guarantee in this
Article X is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 10.8 RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such
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Excess Funding Guarantor an amount equal to such Subsidiary Guarantor's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the property, debts and liabilities of such Excess Funding Guarantor) of the
Excess Payment (as defined below) in respect of such Guaranteed Obligations. The
payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor
under this Section 10.08 shall be subordinate and subject in right of payment to
the prior payment in full of the obligations of such Subsidiary Guarantor under
the other provisions of this Article X and such Excess Funding Guarantor shall
not exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations.
For purposes of this Section 10.08, (i) "EXCESS FUNDING
GUARANTOR" means, in respect of any Guaranteed Obligations, a Subsidiary
Guarantor that has paid an amount in excess of its Pro Rata Share of such
Guaranteed Obligations, (ii) "EXCESS PAYMENT" means, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations and (iii) "PRO RATA SHARE"
means, for any Subsidiary Guarantor, the ratio (expressed as a parentage) of (x)
the amount by which the aggregate present fair saleable value of all property of
such Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all property of all of the Subsidiary
Guarantors exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Subsidiary Guarantors hereunder) of the Subsidiary
Guarantors, determined (A) with respect to any Subsidiary Guarantor that is a
party hereto on the Closing Date, as of the Closing Date, and (B) with respect
to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor
becomes a Subsidiary Guarantor hereunder.
SECTION 10.9 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In
any action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of the Subsidiary Guarantors under
Section 10.01 would otherwise, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any
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other creditors, on account of the amount of its liability under Section 10.01,
then, notwithstanding any other provision hereof to the contrary, the amount of
such liability shall, without any further action by any Subsidiary Guarantor,
any Investor or any other Person, be automatically limited and reduced to the
highest amount that is valid and enforceable and not subordinated to the claims
of other creditors as determined in such action or proceeding.
SECTION 10.10 SUBORDINATION OF GUARANTEES. The obligations of
the Subsidiary Guarantors under this Article X to the Investors are subordinated
as provided in Section 11.11.
ARTICLE XI
SUBORDINATION
SECTION 11.1 AGREEMENT TO SUBORDINATE. The Company covenants
and agrees, and each Investor likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article XI, the payment of the
principal of and interest and premium (if any) on the Notes, and all other sums
due and payable by the Company to the Investors hereunder (for purposes of this
Article XI, collectively, the "Subordinated Debt"), are hereby expressly made
subordinate and subject in right of payment to the prior payment in full in cash
of all Senior Debt. Each Investor hereby agrees not to amend or otherwise modify
any provision of this Article XI (and any defined term used in this Article XI)
without the prior written consent of the requisite number of holders of Senior
Debt as provided in the Senior Credit Agreement. The holders of Senior Debt and
their agent under the Senior Credit Agreement are third-party beneficiaries of
the provisions of this Article XI and are entitled to rely thereon.
SECTION 11.2 BANKRUPTCY, LIQUIDATION, DISSOLUTION, ETC. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event:
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(i) the holders of Senior Debt shall be entitled to receive
payment in full in cash of all amounts due or to become due on or in
respect of all Senior Debt, before any Investor is entitled to receive
any payment on account of the Subordinated Debt; and
(ii) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, by
set-off or otherwise, to which any Investor would be entitled but for
the provisions of this Article XI, including any such payment or
distribution which may be payable or deliverable by reason of the
payment of any other Indebtedness of the Company being subordinated to
the payment of the Subordinated Debt (other than any payment or
distribution in the form of equity or debt securities of the Company or
any successor obliger of Senior Debt provided for by a plan of
reorganization or readjustment which, in the case of any such debt
securities, are (x) subordinated in right of payment to all Senior Debt
that may at the time be outstanding to the same extent as, or to a
greater extent than, the Subordinated Debt is subordinate to the Senior
Debt as provided in this Article XI and (y) are not payable prior to
the payment in full of the Senior Debt) shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior
Debt or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the principal of and
interest and premium (if any) on, the Senior Debt held or represented
by each, to the extent necessary to make payment in full in cash of all
Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt; and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 11.02, any Investor shall have received any
such payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other Indebtedness of the Company being
subordinated to the payment of the Subordinated Debt (but excluding any
payment of the character described in the parenthetical clause in the
foregoing clause (ii)) before all
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Xxxxxx Xxxx is paid in full in cash, then and in such event such
payment or distribution shall be held in trust for the holders of
Senior Debt and paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other Person making payment or distribution of assets of the Company
for application to the payment of all Senior Debt remaining unpaid, to
the extent necessary to pay all Senior Debt in full in cash, after
giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
If the Investors shall have failed to file proper claims or
proofs of claim with respect to the Notes in any proceeding of the type referred
to in the first sentence of this Section 11.02 prior to 30 days before the
expiration of the time to file such claims or proofs of claim, the Investors
hereby appoint and empower the Senior Debt Representative to file such claims or
proofs of claim, and if the Investors shall fail to vote any such claim at least
15 days prior to the expiration of the time to vote such claim, the Investors
hereby appoint and empower the Senior Debt Representative to vote such claim;
PROVIDED that the Senior Debt Representative shall have no obligation to file
and/or vote any such claim. If the Senior Debt Representative votes any such
claim in accordance with the provisions of this paragraph no Investor shall be
entitled to modify, revoke or withdraw such vote. The Investors shall execute
and deliver, at the expense of the holders of the Senior Debt, such agreements,
instruments and documents as the Senior Debt Representative may reasonably
request to carry out the provisions of this paragraph.
SECTION 11.3 NO PAYMENT IN CERTAIN CIRCUMSTANCES.
(a) In the event that any principal of or interest on the
Senior Debt is not paid when due, whether at stated maturity, by mandatory
prepayment, by acceleration or otherwise, but after expiration of any applicable
grace period (each a "SENIOR DEBT PAYMENT DEFAULT") and the Senior Debt
Representative shall have given written notice of such non-payment (a "Payment
Default Notice"), then no payment shall be made by the Company, or accepted by
any Investor, on account of the Subordinated Debt unless and until such payment
shall have been made or such Senior Debt Payment Default is waived in accordance
with the tams of such Senior Debt.
(b) In the event that any Event of Default under, and as
defined in, the Senior Credit Agreement (other than a Senior Debt
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Payment Default) (each a "SENIOR DEBT NONPAYMENT DEFAULT") shall have occurred
and be continuing and the Company and the Investors shall have received written
notice of such Senior Debt Non-Payment Default from the Senior Debt
Representative (a "Payment Blockage Notice"), then no payment shall be made by
the Company, or accepted by any Investor, on account of the Subordinated Debt
(including any repurchase of the Notes) during the period (a "PAYMENT BLOCKAGE
PERIOD") commencing on the date the Company and the Investors received such
Payment Blockage Notice and ending on the earlier of (i) the date 180 days
thereafter and (ii) the date on which the Senior Debt NonPayment Default giving
rise to the Payment Blockage Period is cured or waived in accordance with the
terms of the Senior Credit Documents; PROVIDED that (x) the holders of Senior
Debt shall not be entitled to institute a Payment Blockage Period more often
than once within any period of 360 consecutive days and (y) no Senior Debt
Non-Payment Default or event which, with the giving of notice and/or lapse of
time, would become a Senior Debt Non-Payment Default which existed on the date
of the commencement of any such blockage period may be used as the basis for any
subsequent Payment Blockage Notice unless such Senior Debt NonPayment Default or
event, as the case may be, shall in the interim have been cured or waived for a
period of not less than 90 consecutive days.
(c) The failure of the Company to make any payment with
respect to the Subordinated Debt by reason of the operation of this Section
11.03 shall not be construed as preventing the occurrence of an Event of Default
hereunder. Immediately upon the expiration of any period under this Section
11.03 during which no payment may be made on account of the Subordinated Debt,
the Company may resume making any and all payments on account of the
Subordinated Debt (including any payment of principal, interest (including
interest at the applicable post-default interest rate specified in Section
2.04(b)) or any other amount missed during such period).
(d) The Company will not make any optional or mandatory
prepayment of the Notes as provided for under Section 3.01 and the Investors
shall not accept any such prepayment to the extent that such prepayment is
prohibited under the Senior Credit Agreement, unless the lenders under the
Senior Credit Agreement shall have given their written consent thereto.
(e) In the event that, notwithstanding the foregoing, the
Investors shall have received any payment prohibited by the foregoing provisions
of this Section 11.03, then and in such event such payment
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shall be held in trust for the holders of the Senior Debt and paid over or
delivered forthwith to the agent for the holders of the Senior Debt for
application to the Senior Debt remaining unpaid after giving effect to any
concurrent payment or distribution to the holders of Senior Debt in respect of
the Savior Debt. No amount paid by the Company to the Investors and paid ova by
the Investors to the holders of the Senior Debt pursuant to this Article XI
shall, as between Me Company and the Investors, be deemed to be a payment by the
Company to or on account of the Subordinated Debt.
(f) The provisions of this Section 11.03 shall not apply to
any payment with respect to which Section 11.02 would be applicable.
SECTION 11.4 PAYMENTS OTHERWISE PERMITTED. Nothing contained
in this Article XI or elsewhere in this Agreement or in the Notes shall prevent
the Company, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company referred
to in Section 11.02 or under the conditions described in Section 11.03, from
making payments at any time of the Subordinated Debt.
SECTION 11.5 SUBROGATION. Subject to the payment in full in
cash of all Senior Debt, the Investors shall be subrogated to the rights of the
holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of and
interest on the Notes shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of Senior Debt of any cash, property
or securities to which the Investors would be entitled except for the provisions
of this Article XI, and no payments over pursuant to the provisions of this
Article XI to the holders of Senior Debt by the Investors shall, as among the
Company, its creditors (other than holders of Senior Debt), and the Investors be
deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
SECTION 11.6 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this Article XI are and are intended solely for the purpose of
defining the relative rights of the Investors on the one hand and the holders of
Senior Debt on the other hand. Nothing contained in this Article XI or elsewhere
in this Agreement or the Notes is intended to or shall (a) impair, as among the
Company, its creditors (other than holders of Senior Debt) and the Investors,
the obligation of the
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Company, which is absolute and unconditional, to pay to the Investors the
principal of and interest or premium (if any) on, and any other amount payable
by the Company under, the Notes or this Agreement as and when the same shall
become due and payable in accordance with their respective tams; or (b) affect
the relative rights against the Company of the Investors and creditors of the
Company (other than the holders of Senior Debt); or (c) prevent the Investors
from exercising all remedies otherwise permitted by applicable law upon default
under this Agreement, subject to the rights of the holders of Senior Debt (i) in
any case, proceeding, dissolution, liquidation or other winding up, assignment
for the benefit of creditors or other marshalling of assets and liabilities of
the Company referred to in Section 11.02, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable or
deliverable to the Investors or (ii) under the conditions specified in Section
11.03, to prevent any payment prohibited by Section 11.03.
SECTION 11.7 NO WAIVER OF SUBORDINATION PROVISIONS. No right
of any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any non-compliance by the Company
with the tams, provisions and covenants of this Agreement, regardless of any
knowledge thereof any such holder may have or be otherwise charged with. Without
in any way limiting the generality of the foregoing sentence, the holders of
Senior Debt may, at any time and from time to time, without the consent of or
notice to the Investors, without incurring responsibility to the Investors and
without impairing or releasing the subordination provided in this Article XI or
the obligations hereunder of the Investors to the holders of Senior Debt, do any
one or more of the following: (a) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt, or waive any provision
thereof or the occurrence of any default thereunder; (c) release any Person
liable in any manner for the collection of Senior Debt; and (d) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 11.8 NOTICE TO INVESTORS. Notwithstanding the
provisions of this Article XI or any other provision of this Agreement,
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the Investors shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment to it in respect of the
Subordinated Debt, unless and until the Investors shall have received written
notice thereof from an Obligor or a holder of Senior Debt or from any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Investors shall be entitled in all respects to assume that no such
facts exist. The Investors shall be entitled to rely on the delivery to it of a
written notice by a Person representing itself to be a holder of Senior Debt (or
a trustee, fiduciary or agent therefor) to establish that such notice has been
given by a holder of Senior Debt (or a trustee, fiduciary or agent therefor). In
the event that the Investors determine in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article XI, the
Investors may request such Person to furnish evidence to the reasonable
satisfaction of the Investors as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XI and if such evidence is not furnished, the
Investors may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 11.9 RELIANCE. Upon any payment or distribution of
assets of the Company referred to in this Article XI, the Investors shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Investors for the purpose
of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XI.
SECTION 11.10 REINSTATEMENT. If, at any time, all or part of
any payment with respect to Senior Debt theretofore made by the Company or any
other Person is rescinded or must otherwise be returned by the holders of Senior
Debt for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of the Company or such other Person), the
subordination provisions set forth in this
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Article XI shall continue to be effective or be reinstated, as the case may be,
all as though such payment had not been made.
SECTION 11.11 SUBSIDIARY GUARANTEES. The obligations of each
Subsidiary Guarantor under Article X are subordinate and subject in right of
payment in full in cash of any Senior Debt of such Subsidiary Guarantor to the
same extent and in the same manner set forth in the preceding provisions of this
Article XI and, for purposes of applying this Section 11 . 11, references in
such preceding sections to "the Company" shall be deemed to refer to the
relevant Subsidiary Guarantor.
SECTION 11.12 LIMITATIONS ON REMEDIES.
(a) Notwithstanding anything contained herein to the contrary,
during any period commencing on the date of receipt of a Payment Default Notice
under Section 11.03(a) or a Payment Blockage Notice under Section 11.03(b) and
ending on the earlier of (i) the date the default that is the subject of such
Payment Default Notice or Payment Blockage Notice, as the case may be, is cured
or waived or (ii) 90 days after receipt by the Investors of such Payment Default
Notice or Payment Blockage Notice, as the case may be, the Investors shall not
(A) accelerate the Notes as provided in Section 9.01, (B) initiate any judicial
proceeding or action to collect the Notes or (C) initiate any case, proceeding
or other action in respect of any Obligor of the type referred to in clause (a)
or (b) of Section 11.02 unless, prior to the expiration of such period, (x) the
holder or holders (or their respective agent(s)) of any Senior Debt shall take
any action of the type referred to in clauses (A), (B) and (C) above in respect
of such Senior Debt or (y) any Senior Debt and/or the Subordinated Debt shall
have become automatically due payable in accordance with their respective tams.
(b) Prior to taking any action of the type referred to in
clauses (A), (B) and (C) of Section 11.12(a), the Investors shall give the
Senior Debt Representative not less than 5 Business Days' notice of the
Investors' intent to take any such action (which notice may be given during the
continuation of any paled during which the Investors are blocked from receiving
payments under Section 11.03).
SECTION 11.13 NOTICES. All notices or other communications
required or permitted to be made by the holders of Senior Debt or the Senior
Debt Representative to the Investors shall be made to the Investor's
Representative, at its address provided under Section 12.01
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(and upon receipt of any such notice or communication, the Investor's
Representative shall furnish a copy thereof to each Investor, and receipt
thereof by the Investor's Representative shall be deemed to satisfy the
requirements of this Article XI for delivery thereof to the Investors). By
acceptance of the benefits of this Article XI, the holders of Senior Debt agree
with the Investors that (i) all notices or other communications required or
permitted to be made to the holders of Senior Debt under this Article XI by the
Investors or the Investor's Representative may be made to the Senior Debt
Representative at its address specified in Section 10.03 of the Senior Credit
Agreement and (ii) SunTrust Bank, South Florida, National Association
("SunTrust") shall be the Senior Debt Representative for all purposes hereof
until such time as the Investor's Representative shall have received notice in
writing from SunTrust or the then current Senior Debt Representative specifying
a new Servitor Debt Representative, following which the Investor's
Representative and each Investor shall be fully protected in dealing solely with
such Senior Debt Representative for purposes of this Article XI.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, to the intended recipient thereof at its
respective address (or telecopy number) set forth beneath its name on the
signature pages hereto. Any party hereto may change its address or telecopy
number for notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt or if mailed by certified mail or registered mail,
on the date three days after the date of mailing.
SECTION 12.2 WAIVERS; AMENDMENTS.
(a) No failure or delay by any Investor in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any
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abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Investors hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Obligors therefrom shall in any event be effective unless the
same shall be patted by paragraph (b) of this Section 12.02, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
issuance of a Note shall not be construed as a waiver of any Default, regardless
of whether any Investor may have had notice or knowledge of such Default at the
time.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Obligors and the Required Investors; PROVIDED that
no such agreement shall (i) increase the commitment of any Investor without the
written consent of such Investor, (ii) reduce the principal amount of any Note
or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Investor affected thereby, (iii) postpone
the scheduled date of payment of the principal amount of any Note, or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment, or postpone the scheduled date of expiration of any
commitment of any Investor, without the written consent of each Investor
affected thereby, (iv) change any provision of this Agreement that would alter
the pro rata sharing of payments required thereunder, without the written
consent of each Investor, or (v) change any of the provisions of this Section
12.02 or the definition of "Required Investors" or any other provision hereof
specifying the number or percentage of Investors required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Investor. Notwithstanding
anything herein to the contrary, in the event that within 60 days after the
Closing Date the Company requests the Investors to amend or modify this
Agreement to increase the aggregate principal amount of the Notes issued
hereunder, such amendment will require the consent of each Investor.
SECTION 12.3 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) The Company shall pay (i) all reasonable out-of-pocket
expenses incurred by any Investor and its Affiliates, including the
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reasonable fees, charges and disbursements of Milbank, Tweed, Xxxxxx & XxXxxx,
special New York counsel to Chase Capital, in connection with the preparation,
negotiation, execution and delivery of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated, subject, in
the case of Chase Capital and its Affiliates only, to the limitation set forth
in the letter between the Company and Chase Capital Partners dated October 1,
1997 and (ii) all out-of-pocket expenses incurred by any Investor, including the
above fees, charges and disbursements of any counsel for any Investor, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section 12.03, or in connection
with the Notes issued hereunder, including in connection with any workout,
restructuring or negotiations in respect thereof.
(b) The Company shall indemnify each Investor, and each
Related Party of any of the foregoing Poisonous (each such Person being called
an "INDEMNITEE") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Note or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; PROVIDED that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee. Promptly after receipt by an Indemnitee of notice
of any complaint or the commencement of any action or proceeding with respect to
which indemnification is being sought hereunder, such Indemnitee will notify the
Company in writing of such complaint or of the commencement of such action or
proceeding, but failure so to notify the Company will not
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relieve the Company from any liability which the Company may have hereunder or
otherwise, except to the extent that such failure materially prejudices the
Company's rights. If the Company so elects or is requested by such Indemnitee,
the Company will assume the defense of such action or proceeding, including the
employment of counsel reasonably satisfactory to such Indemnitee and the payment
of the fees and disbursements of such counsel, and in such event such Indemnitee
will cooperate in connection therewith as reasonably requested by the Company
(subject to the expenses of such Indemnitee being reimbursed by the Company as
provided above). In the event, however, such Indemnitee reasonably determines
that having common counsel would present such counsel with a conflict of
interest or if the Company fails to assume the defense of the action or
proceeding in a timely manner, then such Indemnitee may employ separate counsel
to represent or defend it in any such action or proceeding and the Company will
pay the reasonable fees and disbursements of such counsel, PROVIDED, HOWEVER,
that the Company will not be required to pay the fees and disbursements of more
than one separate counsel for all Indemnified Parties in any jurisdiction in any
single action or proceeding. In any action or proceeding the defense of which
the Company assumes, any Indemnitee will have the right to participate in such
litigation and to retain its own counsel at such Indemnitee's own expense.
(c) To the extent permitted by applicable law, the Obligors
shall not assert, and hereby waive, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Note or the use of the proceeds thereof.
(e) All amounts due under this Section 12.03 shall be payable
promptly after written demand therefor.
SECTION 12.4 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto, all future holders of the Notes, and
their respective successors and assigns permitted hereby, except that no Obligor
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Investor (and any attempted assignment
or transfer by any Obliger without such consent shall be null and void). Nothing
in this Agreement,
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expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Investors and, to the extent expressly provided in Article XI, the holders
of Senior Debt and the Senior Debt Representative) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Notwithstanding anything herein to the contrary, no
Investor may assign all or any portion of its rights under this Agreement and
the Note(s) held by such Investor (i) to a Person engaged in the operation of
any business involving the sale of carbonic gas or the rental of bulls CO2
cylinders or high pressure cylinders, (ii) to any Person other than a Qualified
Investor and (iii) unless such assignment complies with the registration
requirements (or an applicable exemption therefrom) under the Securities Act and
any applicable state securities laws. From and after the effective date of any
transfer of a Note by any holder thereof to another Person, such Person shall
become a party to this Agreement, be an "Investor" for all purposes hereof and,
to the extent of the interest assigned pursuant to such transfer, have the
rights and obligations of an Investor under this Agreement, and the relevant
transferring Investor shall, to the extent of the interest assigned thereby, be
released from its obligations under this Agreement (and, in the case of any
transfer covering all of such transferring Investor's rights and obligations
under this Agreement, such Investor shall cease to be a party hereto but shall
continue to be entitled to the benefits of Section 12.03).
(c) The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is a Qualified Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
(d) Upon surrender of any Note at the principal executive
office of the Company for registration of transfer or exchange (and in
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the case of a surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or his attorney duly authorized in writing and accompanied
by the address for notices of each transferee of such Note or part thereof), the
Company shall execute and deliver, at the Company's expense (except as provided
below), one or more new Notes (as requested by the holder thereof) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note shall be payable to such Person as
such holder may request and shall be substantially in the form of Exhibit A.
Each such new Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $3,000,000, PROVIDED that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $3,000,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representations set forth in
Article IV.
SECTION 12.5 SURVIVAL. All covenants, agreements,
representations and warranties made by the Obligors herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
issuance of any Note regardless of any investigation made by any such other
party or on its behalf and notwithstanding that any Investor may have had notice
or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Note or any fee or any
other amount payable under this Agreement is outstanding and unpaid. The
provisions of Section 12.03 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Notes or the termination of this Agreement or any provision
hereof.
SECTION 12.6 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an
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original, but all of which when taken together shall constitute a single
contract. This Agreement constitutes the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof Delivery of an executed counterpart of a signature page of this Agreement
by telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 12.7 SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 12.8 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Obligor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any Investor may otherwise
have to bring any action or proceeding relating to this Agreement against any
Obligor or its properties in the courts of any jurisdiction.
(c) Each Obligor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
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objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in Section 12.08(b). Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 12.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 12.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.09.
SECTION 12.10 HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 12.11 CONFIDENTIALITY. Each of the Investors agrees to
maintain the confidentiality of the Information (-as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process (and the Investor or the Investor's
Representative shall promptly notify the Company of any such disclosure), (d) to
any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to
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this Agreement or the enforcement of rights hereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section
12.11, to any transferee permitted under Section 12.04 (including prospective
transferee) of its rights or obligations under this Agreement, (g) with the
consent of the Company or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 12.11 or
(ii) becomes available to any Investor on a nonconfidential basis from a source
other than the Company. For the purposes of this Section 12.11, "INFORMATION"
means all information received from the Company relating to the Company or any
Subsidiary or their respective business, other than any such information that is
available to any Investor on a nonconfidential basis prior to disclosure by the
Company; PROVIDED that, in the case of information received from the Company
after the date hereof, such information is clearly identified at the time of
delivery as confidential unless such information is received pursuant to an
inspection under Section 7.06. Any Person required to maintain the
confidentiality of Information as provided in this Section 12.11 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information and
has taken measures to cause its representatives to do the same. Each holder of a
Note, by its acceptance of a Note, will be deemed to have agreed to be bound by
and to be entitled to the benefits of this Section 12.11 as though it were a
party to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
NUCO2 INC.
By:/S/ XXXXXX XXXXXXXXX
-----------------------
Title: President
Address for Notices:
NuCo2 Inc.
0000 X.X. Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
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SUBSIDIARY GUARANTORS
NUCO2 ACQUISITION CORP.
By: /S/XXXXXX XXXXXXXXX
-----------------------
Title: Vice President
XXXX COMPRESSED GASES, INC.
By:/S/ XXXXXX XXXXXXXXX
-----------------------
Title: Vice President
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INVESTORS
AMOUNT OF NOTE CHASE EQUITY ASSOCIATES L.P.
$15,000,000 By Chase Capital Partners, its general
partner
By:/S/ XXXXXXX X. XXXXXX
------------------------
Title:
Address for Notices:
Chase Capital Partners
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx, Xx.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
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AMOUNT OF NOTE DK ACQUISITION PARTNERS, L.P.
$5,000,000 By X.X. Xxxxxxxx & Co.,
its general partner
By: /S/ XXXXXX X. XXXXXXX
-------------------------
Title: General Partner
Address for Notices:
DK ACQUISITION PARTNERS, L.P.
c/o X.X. Xxxxxxxx & Co.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx, Xx.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
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AMOUNT OF NOTE
$2,000,000 EMPIRE INSURANCE COMPANY, as executed on
their behalf by their Investment Manager,
Cohanzick Management, L.L.C.
By: /S/ XXXXX XXXXXXX
---------------------
Title: President
Address for Notices:
Empire Insurance Company
000 Xxxxx Xxx.
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to:
c/o Cohanzick Management, L.L.C.
000 X. 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxxx Xxxxxxx
Fax No. (000) 000-0000
Telephone No.: (000) 000-0000
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AMOUNT OF NOTE ORIX USA CORPORATION
$3,000,000
By: /S/ XXXXXXXX XXXXXX
-----------------------
Title: President & CEO
Address for Notices:
Orix USA Corporation
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxxx Xxxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
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