EXHIBIT 10.44
NFO Worldwide, Inc.
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Note Purchase Agreement
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Dated as of March 15, 1999
$8,000,000 9.84% Senior Subordinated Notes Due November 15, 2008
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NFO Worldwide, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
9.84% Senior Subordinated Notes Due November 15, 2008
Dated as of March 15, 1999
To the Purchasers Named on
the Signature Page Hereto
Ladies and Gentlemen:
NFO Worldwide, Inc., a Delaware corporation (together with its
successors and assigns, the "Company"), agrees with you as follows:
Section 1.
Authorization of Notes.
The Company will authorize the issue and sale of $8,000,000 aggregate
principal amount of its 9.84% Senior Subordinated Notes due November 15,
2008 (the "Notes," such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreement (as
hereinafter defined)). The Notes shall be substantially in the form set out in
Exhibit 1, with such changes therefrom, if any, as may be approved by you and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
Section 2.
Sale and Purchase of Notes.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount specified below your
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into a separate Note Purchase Agreement (the "Other Agreement")
identical with this Agreement with the other purchaser named in Schedule A (the
"Other Purchaser"), providing for the sale at such Closing to the Other
Purchaser of Notes in the principal amount specified below such Other
Purchaser's name in Schedule A. Your obligation hereunder and the obligations of
the Other Purchaser under the Other Agreement are several and not joint
obligations and you shall have no obligation under the Other Agreement and no
liability to any Person for the performance or nonperformance by any Other
Purchaser thereunder.
Section 3.
The Closing.
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The closing of the sale and purchase of $8,000,000 in aggregate
principal amount of the Notes (the "Closing") to be purchased by you and the
Other Purchaser shall occur at the offices of Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, 1285 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, on March
___, 1999 (the "Closing Date"). At the Closing, the Company will deliver to you
the Notes to be purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least $100,000 as you may request), dated
the Closing Date and registered in your name (or in the name of your nominee),
as indicated in Schedule A, against payment by federal funds wire transfer in
immediately available funds of the amount of the purchase price therefor as
directed by the Company in Schedule C. If at the Closing the Company shall fail
to tender such Notes to you as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
Section 4. Conditions to Closing.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by any of Sections 10.1, 10.2, 10.3,
10.5, 10.8, 10.9 or 10.11 had such Sections applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the Closing Date, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you a
certificate of its Secretary or one of its Assistant Secretaries, dated the
Closing Date, certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes, this Agreement and the Other Agreement.
(c) Initial Guarantor Secretary's Certificates. Each of the Initial
Guarantors shall have delivered to you a certificate of its Secretary or one of
its Assistant Secretaries, dated the Closing Date, certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Guaranty Agreement to which such
Initial Guarantor
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is a party.
Section 4.4. Opinions of Counsel. You shall have received opinions in form
and substance satisfactory to you, each dated the Closing Date, from
(a) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the
Company and the Initial Guarantors, substantially in the form set out
in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs such counsel to deliver such
opinion to you), and
(b) Xxxxxxx and Xxxxxx, your special counsel in connection
with such transactions, substantially in the form set out in Exhibit
4.4(b) and covering such other matters incident to such transactions as
you may reasonably request.
Section 4.5. Purchase Permitted by Applicable Law, Etc. On the Closing Date
your purchase of Notes shall (a) be permitted by the laws and regulations of
each jurisdiction to which you are subject, without recourse to provisions (such
as section 1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies without restriction as to the character of
the particular investment, (b) not violate any applicable law or regulation
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing the
Company shall sell to the Other Purchaser and the Other Purchaser shall purchase
the Notes to be purchased by it at the Closing as specified in Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 16.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
Section 4.4(b) to the extent reflected in a statement of such counsel rendered
to the Company at least one Business Day prior to the date of such Closing.
Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in
Schedule 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent interim financial statements
referred to in Schedule 5.5.
Section 4.10. Senior Notes. Contemporaneously with the Closing the Company
shall sell to
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the Senior Note Purchasers, and the Senior Note Purchasers shall purchase, the
Senior Notes to be purchased by them at the Closing under the Senior Note
Purchase Agreements.
Section 4.11. Guaranty Agreements. You shall have received a counterpart of
each of the Guaranty Agreements, duly executed and delivered by each of the
Initial Guarantors, substantially in the form of Exhibit 4.11, and such Guaranty
Agreements shall be in full force and effect.
Section 4.12. Amendments to Existing Agreements. The Company shall have
entered into amendments to each of the Existing Senior Note Purchase Agreements,
the Existing Subordinated Note Purchase Agreements and the Fleet/Chase Debt
Facility, and such amendments shall be satisfactory to you in all respects.
Section 4.13. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
Section 5. Representations and Warranties of the Company.
The Company represents and warrants to you, as of the date of the Closing
Date, that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware, and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it purports to own or
hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Other Agreement and the
Notes and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other Agreement and
the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Xxxxxxx Xxxxx &
Company, has delivered to you and the Other Purchaser a copy of a Private
Placement Memorandum, dated February 10, 1999 (the "Memorandum"), relating to
the transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this
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Agreement, the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one
of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 1997, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and correct
lists of (i) the Company's Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its Capital Stock or similar equity interests
outstanding owned by the Company and each other Subsidiary and (ii) the
Company's Affiliates, other than Subsidiaries.
(b) All of the outstanding shares of Capital Stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
in Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of Capital Stock or similar equity
interests of such
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Subsidiary, except for any such restrictions and agreements that are applicable
to Subsidiaries which, taken together, are not Material.
(e) There are no Unrestricted Subsidiaries.
(f) No Subsidiary other than the Initial Guarantors is a guarantor of the
Fleet/Chase Debt Facility.
Section 5.5. Financial Statements. The Company has delivered to you and the
Other Purchaser copies of the financial statements of the Company and its
Subsidiaries listed in Schedule 5.5. All of said financial statements (including
in each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Company and its Subsidiaries
as of the respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(a) except for any contravention, breach or default that would not have a
Material Adverse Effect, contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of the Company or any Subsidiary under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or by-laws, or any
other agreement or instrument to which the Company or any Subsidiary is bound or
by which the Company or any Subsidiary or any of their respective properties may
be bound or affected,
(b) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Subsidiary, or
(c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a)
There are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any arbitrator
of any kind or before or by any Governmental Authority that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term of
any agreement or instrument to which it is a party or by which it is bound, or
any order, judgment, decree or ruling
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of any court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including, without limitation,
Environmental Laws) of any Governmental Authority, which default or violation,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended December 31, 1992.
Section 5.10. Title to Property, Leases. The Company and its Subsidiaries
have good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Company, no product or practice
of the Company or any Subsidiary infringes in any material respect any
license, permit, franchise, authorization, patent, copyright, service
xxxx, trademark, trade name or other right owned by any other Person;
and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service xxxx,
trademark, trade name or other right owned or used by the
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Company or any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $1,500,000. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA and the terms
"current value" and "present value" have the meaning specified in section 3 of
ERISA.
(c) The Company and the ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
(f) Schedule 5.12 sets forth all ERISA Affiliates and all "employee benefit
plans" maintained by the Company (or any "affiliate" thereof) or in respect of
which the Notes could constitute an "employer security" ("employee benefit plan"
has the meaning specified in section 3 of ERISA, "affiliate" has the meaning
specified in section 407(d) of ERISA and section V of the Department of Labor
Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) and
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"employer security" has the meaning specified in section 407(d) of ERISA).
Section 5.13. 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 31
Institutional Investors (including you and the Other Purchaser), each of which
has been offered the Notes at a private sale for investment. Neither the Company
nor anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of
the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any margin stock within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 1% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 1% of the value of such assets. As used in this
Section, the term "margin stock" shall have the meaning assigned to it in said
Regulation U.
Section 5.15. Existing Debt; Future Liens. (a) Except as described therein,
Schedule 5.15 sets forth a complete and correct list of each issue of
outstanding Debt of the Company and its Subsidiaries with an outstanding
principal amount of at least $1,000,000 as of the Closing Date (and specifying,
as to each such Debt, the collateral, if any, securing such Debt). The aggregate
amount of all Debt of the Company and its Subsidiaries not listed on Schedule
5.15 is less than $2,000,000. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal of or interest on any Debt of the Company or such Subsidiary and no
event or condition exists with respect to any Debt of the Company or any
Subsidiary that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Debt to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act,
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as amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as amended, the
Transportation Acts (49 U.S.C.), as amended, or the Federal Power Act, as
amended.
Section 5.18. Environmental Matters. Neither the Company nor any Subsidiary
has knowledge of any claim or has received any notice of any claim, and no
proceeding has been instituted raising any claim against the Company or any of
its Subsidiaries or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them and has not disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in
each case in any manner that could reasonably be expected to result in
a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
Section 5.19. Year 2000 Matters. The Company has reasonable grounds for
believing that it will be Year 2000 Compliant and Ready on or before December 1,
1999. "Year 2000 Compliant and Ready" means that
(a) the Company's and its Subsidiaries' hardware and software
systems, with respect to the operation of their business, will (i)
handle satisfactorily date information involving any and all dates
before, during and/or after January 1, 2000, including accepting
input, providing output and performing date calculations in whole or in
part and (ii) operate accurately, without Material interruption,
on and in respect of any and all dates before, during and/or after
January 1, 2000 and without any Material change in performance;
and
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(b) the Company has developed alternative plans to ensure
business continuity in all Material respects in the event of the
failure of the items identified in clauses (i) and (ii) in the
foregoing clause (a).
Section 6. Representations of the Purchaser.
Section 6.1. Purchase for Investment. You represent that you are purchasing
the Notes for your own account or for one or more separate accounts maintained
by you or for the account of one or more pension or trust funds and not with a
view to the distribution thereof, provided that the disposition of your or their
property shall at all times be within your or their control. You understand that
the Notes have not been registered under the Securities Act and may be resold
only if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect
thereof you represent that there is no "employee benefit plan" (as
defined in section 3(3) of ERISA and section 4975(e)(1) of the Code,
treating as a single plan all plans maintained by the same employer or
employee organization or affiliate thereof) with respect to which the
amount of the general account reserves and liabilities of all contracts
held by or on behalf of such plan exceeds 10% of the total reserves and
liabilities of such general account (exclusive of separate account
liabilities) plus surplus, as set forth in the National Association of
Insurance Commissioners' Annual Statement filed with your state of
domicile and that such acquisition is eligible for and satisfies the
other requirements of such exemption; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (c), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially
97
owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or
(d) the Source constitutes assets of an "investment fund" (within
the meaning of part V of PTE 84-14 (the "QPAM Exemption")) managed by
a "qualified professional asset manager" or "QPAM" (within the meaning
of part V of the QPAM Exemption), no employee benefit plan's assets
that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained
by the same employer or by an affiliate (within the meaning of section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and
(i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose
assets are included in such investment fund have been
disclosed to the Company in writing pursuant to this
paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit
plan described in section 4975(e) of the Code, other than a plan
exempt from the coverage of ERISA and the provisions of section 4975
of the Code.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
Section 7. Information as to Company.
Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than
the last quarterly fiscal period of each such fiscal year), duplicate
copies of,
(i) consolidated balance sheets of the Company and its
Subsidiaries, and of the Company and the Restricted Subsidiaries,
as at the end of such quarter, and
(ii) consolidated statements of income, shareholders' equity
and cash flows of the Company and its Subsidiaries, and of the
Company and the Restricted Subsidiaries, for such quarter and (in
the case of the second and third quarters) for the portion of the
fiscal year ending with such quarter,
98
setting forth in each case in comparative form the figures for
the corresponding periods in the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP applicable to
quarterly financial statements generally, and certified by a
Senior Financial Officer as fairly presenting, in all material
respects, the consolidated financial position of the companies
being reported on and their consolidated results of operations
and cash flows, subject to changes resulting from year-end
adjustments, provided that, so long as no Unrestricted
Subsidiaries existed at any time during the periods covered by
such financial statements, delivery within the time period
specified above of copies of the Company's Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor
and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements -- within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheets of the Company and its
Subsidiaries, and of the Company and the Restricted Subsidiaries,
as at the end of such year, and
(ii) consolidated statements of income, shareholders' equity
and cash flows of the Company and its Subsidiaries, and of the
Company and the Restricted Subsidiaries, for such year, setting
forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied by
(A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all
material respects, the consolidated financial position of the
companies being reported upon and their consolidated results of
operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that
such audit provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making
their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it
being understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in accordance
with generally accepted auditing standards or did not make such
an audit),
99
provided that, so long as no Unrestricted Subsidiaries existed at
any time during the periods covered by such financial statements,
the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year
prepared in accordance with the requirements therefor and filed
with the Securities and Exchange Commission, together with the
accountant's certificate described in clause (B) above, shall be
deemed to satisfy the requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming available,
one copy of (i) each financial statement, report (including, without
limitation, the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a3 under the Exchange Act), notice or proxy statement
sent by the Company or any Subsidiary to public securities holders
generally, and (ii) each regular or periodic report, each registration
statement (without exhibits except as expressly requested by such holder),
and each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the Company or
any Subsidiary to the public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given
any notice or taken any action with respect to a claimed default hereunder
or that any Person has given any notice or taken any action with respect to
a claimed default of the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days after
a Responsible Officer becoming aware of any of the following, a written
notice setting forth the nature thereof and the action, if any, that the
Company or an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the Closing Date; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in
the incurrence
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of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien, taken together with
any other such liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any Federal or state Governmental Authority relating to
any order, ruling, statute or other law or regulation that could reasonably
be expected to have a Material Adverse Effect;
(g) Actions, Proceedings -- promptly after a Responsible Officer
becomes aware of the commencement thereof, notice of any action or
proceeding relating to the Company or any Subsidiary in any court or before
any Governmental Authority or arbitration board or tribunal as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect; and
(h) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries (including, without limitation, information regarding the
impact of the occurrence of the year 2000 on the Company and its
Subsidiaries and plans of the Company to address any such impact) or
relating to the ability of the Company to perform its obligations hereunder
and under the Notes as from time to time may be reasonably requested by any
such holder of Notes, or such information regarding the Company required to
satisfy the requirements of 17 C.F.R. ss.230.144A, as amended from time to
time, in connection with any contemplated transfer of the Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.1 through 10.12, inclusive
and Section 10.14 through Section 10.16, inclusive, during the quarterly or
annual period covered by the statements then being furnished (including
with respect to each such Section, where applicable, the calculations of
the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
101
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and
its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that such review has not disclosed the existence during
such period of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company, which consent
will not be unreasonably withheld) its independent public accountants, and
(with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be reasonably
requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants (and by this provision the Company authorizes said accountants
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries), all at such times and as often as may be requested.
Section 8. Payment of the Notes.
Section 8.1. Required Prepayments; Payment at Maturity. The Company will
prepay $2,666,666 principal amount of the Notes on November 15, 2006 and
November 15, 2007, all such prepayments to be made at par and without payment of
any MakeWhole Amount. The Company will pay all of the principal amount of the
Notes remaining outstanding, if any, on November 15, 2008. Each partial
prepayment of the Notes pursuant to Section 8.2 will be applied first, to the
amount due on the maturity date of the Notes and second, to the mandatory
prepayments applicable to the Notes, as set forth in this Section 8.1, in the
inverse order of the maturity thereof.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the
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Notes (but if in part, in an amount not less than $1,000,000 or such lesser
amount as shall then be outstanding), at 100% of the principal amount so
prepaid, plus the MakeWhole Amount determined for the prepayment date with
respect to such principal amount. The Company will give each holder of Notes
written notice of each optional prepayment under this Section 8.2 not less than
30 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such prepayment 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 (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. Two Business
Days prior to such prepayment, the Company shall deliver to each holder of Notes
a certificate of a Senior Financial Officer specifying the calculation of such
MakeWhole Amount as of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. 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.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, 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 on such principal amount accrued to such date
and the applicable MakeWhole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5. No Other Optional Prepayments or Purchase of Notes. The
Company will not prepay (whether directly or indirectly by purchase, redemption
or other acquisition) any of the outstanding Notes except (a) upon the payment
or prepayment of the Notes in accordance with the terms of this Section 8 or
upon an acceleration of the maturity of the Notes pursuant to Section 12 or (b)
pursuant to an offer to purchase made by the Company pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions. Any such
offer (i) need not comply with the other provisions of this Section 8
(including, without limitation, the requirement to pay any Make-Whole Amount),
(ii) shall provide each holder with sufficient information to enable it to make
an informed decision with respect to such offer, and (iii) shall remain open for
at least 10 Business Days. The Company will promptly cancel all Notes acquired
by it or any Affiliate pursuant
103
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Section 8 and no Notes may be issued in substitution or exchange for any
such Notes.
Section 8.6. MakeWhole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal, provided that the
MakeWhole Amount may in no event be less than zero. For the purposes of
determining the MakeWhole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, 1.25% (1.50% (the "Adjusted Spread") in the case of a prepayment
of the Notes on or prior to May 20, 2000, from the net proceeds of a public
offering of common stock by the Company (a "Public Offering") as herein
after provided) over the yield to maturity implied by (a) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page UST" on the Bloomberg Financial Market Service
(or such other display as may replace Page UST on the Bloomberg Financial
Market Service) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or (b) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day for
which such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date. Such implied yield will be determined, if necessary,
by (i) converting U.S. Treasury xxxx quotations to bondequivalent yields in
accordance with accepted financial practice and (ii) interpolating linearly
between (1) the actively traded U.S. Treasury security with the duration
closest to and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with the duration closest to and less than
the Remaining Average
104
Life. In the case of any prepayment of the Notes using the Adjusted Spread
in calculating the Make-Whole Amount, the principal amount of the Notes
prepaid using the Adjusted Spread shall not exceed the net proceeds from
the Public Offering. No prepayment of Notes shall be made using the
Adjusted Spread unless concurrently therewith the entire principal amount
of the Notes and the Existing Subordinated Notes then outstanding shall be
prepaid at the applicable Make-Whole Amount. In the case of any concurrent
or substantially concurrent prepayment of the Notes using the Adjusted
Spread and the unadjusted spread, for purposes of calculating the
Make-Whole Amount, the Remaining Average Life shall be the same in each
case.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest onetwelfth year) obtained by
dividing (a) such Called Principal into (b) the sum of the products
obtained by multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (ii) the number
of years (calculated to the nearest onetwelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
Section 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will and will cause each of
its Restricted Subsidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that noncompliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
105
Section 9.2. Insurance. The Company will and will cause each of the
Restricted Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, coinsurance and selfinsurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will and will cause
each of the Restricted Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will and will cause
each of the Restricted Subsidiaries to file all tax returns required to be filed
in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges,
or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes, assessments, charges or levies have become
due and payable and before they have become delinquent and all claims for which
sums have become due and payable that have or might become a Lien on properties
or assets of the Company or any Restricted Subsidiary, provided that neither the
Company nor any Restricted Subsidiary need pay any such tax or assessment or
claims if (a) the amount, applicability or validity thereof is contested by the
Company or such Restricted Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Restricted Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Restricted Subsidiary or (b) the nonpayment of all such
taxes, assessments, charges and levies in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc.. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.10 and 10.11, the Company will at all times preserve and keep in
full force and effect the corporate existence of each of the Restricted
Subsidiaries (unless merged into the Company or a Restricted Subsidiary) and all
rights and franchises of the Company and the Restricted Subsidiaries unless, in
the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
Section 9.6. Line of Business. The Company will not, and will not permit
any of its
106
Restricted Subsidiaries to, engage in any business other than the businesses
described in the Memorandum and businesses reasonably related thereto.
Section 9.7. Additional Guaranty Agreements; Release of Guaranty
Agreements.
(a) Additional Guaranties. The Company will cause each Subsidiary that at
any time becomes liable in respect of any Guaranty of the Company's obligations
under the Fleet/Chase Debt Facility after the Closing Date to become
(simultaneously or prior to becoming liable in respect of such Guaranty of any
of the obligations under the Fleet/Chase Debt Facility) a Guarantor in respect
of this Agreement, the Other Agreement and the Notes by executing and delivering
to each holder of Notes a Guaranty Agreement in the form set out in Exhibit
4.11.
(b) Release of Guaranties. Simultaneously with the release of any
Subsidiary's Guaranty of the Company's obligations under the Fleet/Chase Debt
Facility, such Subsidiary's Guaranty of the Notes shall be deemed to have been
released, it being understood that such Subsidiary's Guaranty of the Company's
obligations under the Senior Notes, the Existing Senior Notes and the Existing
Subordinated Notes shall be released at the same time. The holders of the Notes
shall take such action as shall be reasonably requested by the Company to effect
such release. The Company shall give prompt written notice to all holders of the
Notes upon any Subsidiary's being released from any Guaranty of the Fleet/Chase
Debt Facility.
Section 10. Negative Covenants.
The Company covenants that, on and after the Closing Date and so long as
any of the Notes are outstanding:
Section 10.1. Senior Funded Debt. The Company will not, and will not permit
any Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with respect to,
any Senior Funded Debt (including, without limitation, Senior Funded Debt
incurred under the Fleet/Chase Debt Facility), other than Existing Senior Funded
Debt, the Senior Notes, Inter-Company Debt and Swaps, unless, immediately after
giving effect thereto and to the application of the proceeds thereof (and
without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Senior Funded Debt plus
(B) the greater of
(1) zero, if there shall have been a period of 30
consecutive days during the period of four consecutive fiscal
quarters of the Company then most recently ended when
Consolidated Current Debt was zero, or
(2) the lowest average daily amount of Consolidated Current
Debt outstanding during any period of 30 consecutive days during
the period of four consecutive fiscal quarters of the Company
then most recently ended,
107
if Consolidated Current Debt was not zero during any such period
of 30 consecutive days
to
(ii) Pro Forma EBITDA for such period of four consecutive fiscal
quarters, does not exceed 3.45 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed to
have incurred at such time all of its Debt outstanding at such time.
Section 10.2. Subordinated Funded Debt. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Subordinated Funded Debt, other than Existing Subordinated
Funded Debt, the Notes, Inter-Company Debt and Swaps, unless, immediately after
giving effect thereto and to the application of the proceeds thereof (and
without duplication),
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Funded Debt plus
(B) the greater of
(1) zero, if there shall have been a period of 30
consecutive days during the period of four consecutive fiscal
quarters of the Company then most recently ended when
Consolidated Current Debt was zero, or
(2) the lowest average daily amount of Consolidated Current
Debt outstanding during any period of 30 consecutive days during
the period of four consecutive fiscal quarters of the Company
then most recently ended, if Consolidated Current Debt was not
zero during any such period of 30 consecutive days
to
(ii) Pro Forma EBITDA for such period of four consecutive fiscal
quarters does not exceed 4.0 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed to
have incurred at such time all of its Debt outstanding at such time.
Section 10.3. Current Debt. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become directly or indirectly liable with respect to,
any Current Debt, other than Existing Current Debt, InterCompany Debt and Swaps,
unless, immediately after giving effect thereto and to the application of the
proceeds thereof,
(a) no Default or Event of Default exists, and
(b) there shall have been a period of 30 consecutive days during the
period of 12 consecutive months then most recently ended on each day of
which either
108
(i) no Consolidated Current Debt was outstanding, or
(ii) the Company or such Restricted Subsidiary could have incurred
(but did not incur) Senior Funded Debt pursuant to Section 10. 1 in an
amount not less than the amount of Consolidated Current Debt outstanding on
such day.
Any Person becoming a Restricted Subsidiary at any time shall be deemed to
have incurred at such time all of its Debt outstanding at such time.
Section 10.4. Interest Coverage Ratio. The Company will not permit the
ratio of (x) Pro Forma EBITDA for any period of four consecutive fiscal quarters
of the Company to (y) Pro Forma Consolidated Interest Expense for such period to
be less than 2.13 to 1.0.
Section 10.5. Liens. The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien on
or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom (whether or not provision
is made for the equal and ratable securing of the Notes in accordance with the
last paragraph of this Section 10.5), or assign or otherwise convey any right to
receive income or profits, except:
(a) Liens existing on the date of this Agreement which secure
Debt of the Company and the Restricted Subsidiaries outstanding on the
Closing Date, which Liens, to the extent not described on Schedule
5.15, secure an aggregate amount of such Debt not in excess of
$2,000,000;
(b) Liens renewing or replacing Liens then in existence and
permitted by paragraph (a) of this Section 10.5 to the extent that the
underlying obligations secured by such existing Liens are being
extended, renewed or refunded, provided that
(i) no such renewal or replacement Lien shall extend to any
property of the Company or any Restricted Subsidiary other than
property already encumbered by the existing Lien being so renewed
or replaced,
(ii) the principal amount of the underlying obligation
secured by such existing Lien which could have been outstanding
at the time of such renewal or replacement shall not be increased
in connection with such renewal or replacement, and
(iii) immediately prior to, and immediately after giving
effect to, such renewal or replacement, no Default or Event of
Default exists or would exist;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business
(i) in connection with workers' compensation, unemployment
insurance and other types of social security or retirement
benefits, or
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(ii) to secure (or to obtain letters of credit that secure)
the performance of tenders, statutory obligations, surety bonds,
bids, leases (other than Capital Leases), performance bonds,
purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with
the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property;
(d) (i) statutoryLiens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each case
incurred in the ordinary course of business for sums not yet due and
payable or the payment of which is not at the time required by Section 9.4,
and
(ii) Liens arising solely by virtue of any statutory or
common law provisions or, in the case of Infratest or any of its
subsidiaries, Liens arising by virtue of any deposit agreement,
in each case relating to bankers' Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution, provided that
such deposit account is not a dedicated cash collateral account
and is not subject to restrictions against access by the Company
or any Restricted Subsidiary in excess of those set forth by
regulations promulgated by the Federal Reserve Board (or, in the
case of Infratest, applicable German statutes or regulations);
(e) Liens arising from judicial attachments or judgments, or securing
appeal bonds, and other similar Liens, provided that
(i) the execution or other enforcement of such Liens is
effectively stayed, and
(ii) the claims secured thereby are being actively contested
in good faith and adequate reserves in respect thereof have been
established by the Company or such Restricted Subsidiary in
accordance with GAAP;
(f) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case
incidental to, and not interfering with, the ordinary conduct of the
business of the Company or any of the Restricted Subsidiaries, provided
that such Liens do not, in the aggregate, materially impair the use of such
property by the Company or such Restricted Subsidiary;
(g) Liens for taxes, assessments or other governmental charges which
are not yet due and payable or the payment of which is not at the time
required by Section 9.4;
(h) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Restricted
Subsidiary, or immediately prior to its becoming a Restricted Subsidiary,
or any Lien existing on any property acquired by the Company or any
Restricted Subsidiary at the time such property is so acquired (whether or
not the Debt secured thereby shall have been assumed), provided that (i) no
such
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Lien shall have been created or assumed in contemplation of such
consolidation or merger or such acquisition of property, and (ii) each such
Lien shall extend solely to the item or items of property so acquired;
(i) Liens on property of a Restricted Subsidiary, provided that such
Liens secure only Debt owing to the Company or a Restricted Subsidiary; and
(j) other Liens not otherwise permitted by paragraphs (a) through (i)
of this Section 10.5, so long as the sum, without duplication, of
(i) the aggregate amount of Indebtedness secured by such Liens,
plus
(ii) the aggregate amount of unsecured Debt of all Restricted
Subsidiaries, including, without limitation, the IBH Debt, outstanding
at such time (other than any such Debt owing to the Company or other
Restricted Subsidiaries), shall not exceed 17.25% of Consolidated
Total Capitalization.
If, notwithstanding the prohibition contained herein, the Company shall, or
shall permit any of the Restricted Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist any Lien, other than those Liens
permitted by the provisions of paragraphs (a) through (j) of this Section 10.5,
it will make or cause to be made effective provision whereby the Notes will be
secured equally and ratably with any and all other obligations thereby secured,
such security to be pursuant to agreements reasonably satisfactory to the
Required Holders and, in any such case, the Notes shall have the benefit, to the
fullest extent that, and with such priority as, the holders of the Notes may be
entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.5 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.5. The filing of a financing statement to evidence for information purposes a
lessor's interest in property leased to the Company or a Restricted Subsidiary
shall be deemed not to constitute the creation of a Lien.
Section 10.6. Restricted Subsidiary Debt. The Company will not at any time
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise be or become directly or indirectly liable with
respect to, any Debt, other than (x) Debt owing to any other Restricted
Subsidiary or to the Company (including any Guaranty of any Debt of any
Restricted Subsidiary) and (y) the Excluded Guaranties, unless (without
duplication)
(a) the aggregate amount of unsecured Debt of all Restricted
Subsidiaries, including, without limitation, the IBH Debt, outstanding at
such time (other than (i) any such Debt owing to the Company or Restricted
Subsidiaries and (ii) the Excluded Guaranties), plus
(b) the aggregate amount of obligations secured by Liens permitted
pursuant to Section 10.5(j) outstanding at such time, does not exceed
17.25% of Consolidated Total Capitalization determined at such time.
Section 10.7. Consolidated Net Worth. The Company will not, at any time,
permit
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Consolidated Net Worth to be less than the sum of (a) $80,750,000 plus (b) an
aggregate amount equal to 50% of Consolidated Net Income (but only if a positive
number) for each completed fiscal quarter as of such time beginning with the
fiscal quarter ending December 31, 1998.
Section 10.8. SaleandLeaseback Transactions. The Company will not, and will
not permit any Restricted Subsidiary to, enter into any SaleandLeaseback
Transaction unless, immediately after giving effect thereto, the aggregate
amount of all Attributable Debt of the Company and the Restricted Subsidiaries,
determined on a consolidated basis, would not exceed $5,750,000.
Section 10.9. Restricted Investments. The Company will not, and will not
permit any of the Restricted Subsidiaries to, declare, make or authorize any
Restricted Investment unless immediately after giving effect to such action:
(a) the aggregate value of all Restricted Investments of the Company
and the Restricted Subsidiaries (valued immediately after such action)
would not exceed 10% of Consolidated Total Capitalization; and
(b) no Default or Event of Default would exist.
Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary
shall be deemed to be the making of a Restricted Investment by the owner of the
Capital Stock of such newly designated Unrestricted Subsidiary in an amount
equal to all the share capital and other Investments in such Unrestricted
Subsidiary held by the Company and each other Restricted Subsidiary. For the
avoidance of doubt, it is understood that any Restricted Investments outstanding
prior to the Closing Date shall be deemed not to have been declared, made or
authorized at a time when this covenant was effective.
Section 10.10. Merger, Consolidation, Etc.. The Company will not, and will
not permit any Restricted Subsidiary to, consolidate with or merge with any
other corporation or convey, transfer or lease substantially all of its assets
in a single transaction or series of transactions to any Person except that:
(a) the Company may consolidate with or merge with another corporation
or convey or transfer (except by lease) all or substantially all of its
assets in a single transaction or series of transactions to another Person
if:
(i) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance or transfer all
or substantially all of the assets of the Company as an entirety, as
the case may be (the "Successor Corporation"), shall be a solvent
corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia;
(ii) if the Company is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of Notes
its assumption of the due and punctual performance and observance of
each covenant and condition of this Agreement and the Notes (pursuant
to such agreements and instruments as shall be reasonably satisfactory
to the Required Holders), and the Company shall have caused
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to be delivered to each holder of Notes an opinion of nationally
recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect that
all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the terms
hereof; and
(iii) immediately after giving effect to such transaction:
(A) no Default or Event of Default would exist, and
(B) the Successor Corporation would be able to incur $1 of
Funded Debt pursuant to both Section 10.1 and Section 10.2;
(b) a Restricted Subsidiary may consolidate with or merge with the
Company (so long as the Company is the surviving corporation) or another
Restricted Subsidiary or convey, transfer or lease all or substantially all
of its assets in a single transaction or series of transactions to the
Company or another Restricted Subsidiary; and
(c) a Restricted Subsidiary may consolidate with or merge with another
corporation or convey, transfer or lease all or substantially all of its
assets in a single transaction or series of transactions to another Person
if:
(i) such transaction is in compliance with Section 10.11 hereof;
or
(ii) immediately after giving effect to such transaction:
(A) no Default or Event of Default would exist, and
(B) the Company would be able to incur $1 of Funded Debt
pursuant to both Section 10.1 and Section 10.2.
No such conveyance or transfer of all or substantially all of the assets of the
Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
Section 10.11. Sale of Assets, Etc.
(a) Sale of Assets. The Company will not, and will not permit any
Restricted Subsidiary to, make any Asset Disposition unless:
(i) in the good faith opinion of the Company, the Asset
Disposition is in exchange for consideration having a Fair Market
Value at least equal to that of the property exchanged and is in the
best interest of the Company or such Restricted Subsidiary;
(ii) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist; and
(iii) immediately after giving effect to the Asset Disposition,
the sum of the Net Proceeds Amounts in respect of all property that
was the subject of any Asset Disposition occurring in the period of
365 days ending with and including the date of such Asset Disposition,
minus the aggregate cost of Capital Assets acquired by the Company and
the Restricted Subsidiaries during such period, would not exceed
17.25% of Consolidated Total
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Assets as of the end of the then most recently ended fiscal year of the
Company.
(b) Disposal of Ownership of a Restricted Subsidiary. The Company will not,
and will not permit any of the Restricted Subsidiaries to, sell or otherwise
dispose of any shares of Restricted Subsidiary Stock (including, without
limitation, pursuant to any merger, consolidation or other transaction specified
in Section 10.10(c) hereof but excluding any transaction permitted by Section
10.10(b)), nor will the Company permit any such Restricted Subsidiary to issue,
sell or otherwise dispose of any shares of its own Restricted Subsidiary Stock,
provided that the foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares by any such Subsidiary;
(ii) any such Transfer of Restricted Subsidiary Stock constituting a
Transfer described in clause (a) of the definition of "Asset Disposition";
and
(iii) the Transfer of all of the Restricted Subsidiary Stock of a
Restricted Subsidiary owned by the Company and the other Restricted
Subsidiaries if:
(A) such Transfer satisfies the requirements of Section 10.11(a)
hereof,
(B) in connection with such Transfer the entire Investment
(whether represented by stock, Debt, claims or otherwise) of the
Company and the other Restricted Subsidiaries in such Restricted
Subsidiary is sold, transferred or otherwise disposed of to a Person
other than (1) the Company, (2) another Restricted Subsidiary not
being simultaneously disposed of, or (3) an Affiliate, and
(C) the Restricted Subsidiary being disposed of has no continuing
Investment in any other Restricted Subsidiary not being simultaneously
disposed of or in the Company.
Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary
shall be deemed to be an Asset Disposition of all of the Restricted Subsidiary
Stock of such newly designated Unrestricted Subsidiary.
(c) Release of Guarantees of Subsidiaries. If, with respect to any
Subsidiary that is a Guarantor,
(i) all of the Company's and any Restricted Subsidiary's Capital Stock
or other equity ownership interests in such Guarantor is Transferred
(including by way of a merger) to a Person other than the Company or a
Restricted Subsidiary in accordance with the requirements of this Section
10.11,
(ii) such Guarantor engages in a transaction permitted by Section
10.10(c) with any such Person and the surviving Person or transferee is not
a Subsidiary, or
(iii) such Guarantor sells all or substantially all of its assets to
another Subsidiary or the Company and, in the case of a sale to another
Subsidiary, such other Subsidiary becomes a Guarantor by executing a
Guaranty Agreement, then the Company may elect to cause the withdrawal of
the Guaranty Agreement of such Guarantor. Such election may be exercised if
(A) no Default or Event of Default exists and (B) such Guarantor
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has no guaranty obligation in respect of any Debt under the Fleet/Chase Debt
Facility, the Existing Senior Notes, the Senior Notes, or the Existing
Subordinated Notes (except any such obligation which is being released
simultaneously with the release of such Guaranty Agreement), and if a Senior
Financial Officer of the Company certifies in writing to each holder of the
Notes that the conditions specified in clauses (A) and (B) have been satisfied.
Thereafter, the Guaranty Agreement of such Guarantor shall be terminated, null
and void and without effect and, upon request of the Company, and in reliance on
the accuracy of the Company's written certification, each holder of Notes shall
acknowledge such termination.
Section 10.12. Limitation on Contribution to Company Financial Performance
by Unrestricted Subsidiaries. (a) The Company will not at any time permit
Consolidated Total Assets to be less than 80% of consolidated total assets of
the Company and its Subsidiaries as reflected on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
(b) The Company will not permit Pro Forma EBITDA for any period of four
consecutive fiscal quarters of the Company to be less than 80% of Pro Forma
EBITDA (determined as if each reference in such definition to "Restricted
Subsidiaries" were to "Subsidiaries") for such period.
Section 10.13. Transactions with Affiliates. Except as set forth in
Schedule 10.13, the Company will not, and will not permit any Restricted
Subsidiary to, enter into directly or indirectly any transaction or group of
related transactions (including, without limitation, the purchase, lease, sale
or exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the Company's
or such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
Section 10.14. Leverage Ratios. (a) Senior Leverage Ratio. The Company will
not permit the ratio of (x) Consolidated Senior Funded Debt, determined at the
end of any fiscal quarter of the Company, to (y) Pro Forma EBITDA for the period
of four consecutive fiscal quarters of the Company ending with, and including,
such fiscal quarter to be greater than 3.74 to 1.0.
(b) Total Leverage Ratio. The Company will not permit the ratio of (x)
Consolidated Funded Debt, determined at the end of any fiscal quarter of the
Company, to (y) Pro Forma EBITDA for the period of four consecutive fiscal
quarters of the Company ending with, and including, such fiscal quarter to be
greater than (i) 4.25 to 1.0 at any time on or before December 31, 1999 and (ii)
3.50 to 1.0 at any time thereafter.
Section 10.15. Limit on Acquisitions. The Company will not, and will not
permit any Restricted Subsidiary to, make any Acquisition, unless:
(a) no Default or Event of Default exists or would result from such
Acquisition;
(b) the Person or assets acquired, as the case may be, involve
substantially the same or similar line of business engaged in by the
Company and its Restricted Subsidiaries;
115
(c) the Company demonstrates that, on a consolidated basis with the
Person and/or assets to be acquired, in accordance with GAAP, the Company
would have been in compliance with Sections 10.4, 10.7, 10.14(a) and
10.14(b) on a trailing four quarters pro forma basis as of the last day of
the then most recently completed fiscal quarter of the Company; and
(d) the aggregate amount expended by the Company and its Restricted
Subsidiaries, whether in cash, Securities or other property, for all
Acquisitions permitted hereunder within any one calendar year exceeds
$20,000,000 or its equivalent in other currencies.
Section 10.16. IBH Debt. The Company will not permit the IBH Debt to be
renewed, replaced, extended or refinanced and shall not permit the maximum
aggregate principal amount thereof which may be outstanding at any time to
exceed the sum of (x) 68,000,000 Deutsche Marks and (y) $10,000,000 (or the
equivalent thereof in other currencies).
Section 10.17. Additional Subordinated Funded Debt . The Company will not
issue any additional Funded Debt which is subordinate or junior in right of
payment to any other Funded Debt of the Company other than Subordinated Funded
Debt.
Section 11. Events of Default.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in any of Sections 10.1 through 10.12, inclusive, Section
10.14 through Section 10.17, inclusive, or Section 7.1 (d); or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b)
and (c) of this Section 11) and such default is not remedied within 30 days
after the earlier of (i) a Responsible Officer obtaining actual knowledge
of such default and (ii) the Company receiving written notice of such
default from any holder of a Note; or
(e) any representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in this Agreement or in any
writing furnished in connection with the transactions contemplated hereby
proves to have been false or incorrect in any material respect on the date
as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole
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amount or interest on any Indebtedness (other than Indebtedness under this
Agreement and the Notes) beyond any period of grace provided with respect
thereto (after giving effect to any consents or waivers in respect
thereof), that individually or together with such other Indebtedness as to
which any such failure exists has an aggregate outstanding principal amount
of at least $2,000,000, or
(ii) the Company or any Restricted Subsidiary is in default in
the performance of or compliance with any term of any evidence of any
Indebtedness (other than Indebtedness under this Agreement and the
Notes), that individually or together with such other Indebtedness as
to which any such failure exists has an aggregate outstanding
principal amount of at least $2,000,000, or of any mortgage, indenture
or other agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such Indebtedness has
become, or has been declared (or, after giving effect to any consents
or waivers in respect thereof, one or more Persons are entitled to
declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or continuation of any
event or condition (other than the passage of time or the right of the
holder of Indebtedness to convert such Indebtedness into equity
interests),
(A) the Company or any Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or
before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $2,000,000, or
(B) one or more Persons have the right to require the
Company or any Subsidiary so to purchase or repay such
Indebtedness; or
(g) the Company or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any Restricted
Subsidiary, a custodian, receiver, trustee or other officer with similar
powers with respect to the Company or any Restricted Subsidiary or with
respect to any substantial part of the property of the Company
117
or any Restricted Subsidiary, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidation of the Company or any Restricted Subsidiary, or any such
petition shall be filed against the Company or any Restricted Subsidiary
and such petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating
in excess of $1,000,000 above the level of coverage provided by any
applicable insurance policy are rendered against one or more of the Company
and the Restricted Subsidiaries and which judgments are not, within 30 days
after entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 30 days after the expiration of such stay; or
(j) except as otherwise specifically permitted by this Agreement
(including without limitation, Section 9.7(c) and 10.11 (c)), or the
Guaranty Agreement,
(i) any of the Guaranty Agreements shall cease to be in full
force and effect or shall be declared by a court or Government
Authority of competent jurisdiction to be void or unenforceable
against the Guarantor thereunder,
(ii) the validity or enforceability of any of the Guaranty
Agreements against the Guarantor thereunder shall be contested by such
Guarantor, the Company or any Person owning, directly or indirectly, a
majority of the common stock of the Company, or
(iii) any Guarantor, the Company or any such Person identified in
clause (ii) of this clause 11(j) shall deny that such Guarantor has
any further liability or obligation under such Guarantor's Guaranty
Agreement; or
(k) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code,
(ii) a notice of intent to terminate any Plan shall have been or
is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a Plan may become a
subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit liabilities"
(within the meaning of section 4001(a)(18) of ERISA) under all Plans,
determined in accordance with Title IV of ERISA, shall exceed
$6,000,000,
(iv) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV
of ERISA or the penalty or excise tax provisions of the Code relating
to employee benefit plans,
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(v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or
(vi) the Company or any Subsidiary establishes or amends any
employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company
or any Subsidiary thereunder; and any such event or events described
in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to
have a Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
Section 12. Remedies on Default, Etc.
Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in paragraph (g) or paragraph (h) of Section 11 (other than an
Event of Default described in clause (i) of paragraph (g) or described in clause
(vi) of paragraph (g) by virtue of the fact that such clause encompasses clause
(i) of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 66-2/3% in principal amount of the Notes at the
time outstanding may, subject to any limitations imposed pursuant to Section 13,
at any time at its or their option, by notice or notices to the Company, declare
all the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of Section 11
has occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may, subject to any limitations
imposed pursuant to Section 13, at any time, at its or their option, by notice
or notices to the Company, declare all the Notes held by it or them to be
immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
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Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may, subject to any limitations imposed
pursuant to Section 13, proceed to protect and enforce the rights of such holder
by an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in any Note, or
for an injunction against a violation of any of the terms hereof or thereof, or
in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or clause (c) of Section 12.1, the
holders of not less than 66-2/3% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, due and
payable on any Notes other than by reason of such declaration, and all interest
on such overdue principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 18, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 16, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys'
fees, expenses and disbursements.
Section 13. Subordination.
The Indebtedness evidenced by the Notes shall at all times be subordinate
and junior in right of payment to all Senior Debt, whether now or hereafter
outstanding, all in the manner and with the force and effect hereinafter set
forth:
(a) In the event of any liquidation, dissolution or winding up of the
Company, or of any execution, sale, receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization, or other similar proceeding
relative to the Company or its property, all Senior Debt shall first be
paid in full before any payment is made upon the debt evidenced by the
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Notes; and in any such event any payment or distribution of any kind or
character, whether in cash, property or Securities (other than in
Securities, including equity securities, or other evidences of debt, the
payment of which is subordinated to the payment of all Senior Debt which
may at the time be outstanding to the same extent as the Notes) which shall
be made upon or in respect of any Note shall be paid over to the holders of
such Senior Debt, pro rata, for application in payment thereof unless and
until such Senior Debt shall have been paid or satisfied in full;
(b) In the event that the Notes are declared or become due and payable
because of the occurrence of any Event of Default hereunder (under
circumstances when clauses (a), (c), (d) or (e) of this Section 13 shall
not be applicable), the holders of the Notes shall be entitled to payments
only after there shall first have been paid in full all Senior Debt
outstanding at the time the Notes are declared or become due and payable
because of any such Event of Default, or payment shall have been provided
for in a manner satisfactory to the holders of such Senior Debt;
(c) In the event that any Specified Senior Debt is declared due and
payable because of the occurrence of any event of default applicable to any
Specified Senior Debt, then no payment shall be made on any Note from the
date that such declaration has been given in writing to the Company by any
Required Senior Debt Holders until there shall first have been paid in full
all Specified Senior Debt outstanding at such time, or payment shall have
been provided for in a manner satisfactory to the holders of such Specified
Senior Debt;
(d) During the continuance of any default in the payment of either
principal or interest on any Specified Senior Debt (under circumstances
when clause (c) of this Section 13 shall not be applicable), no payment
shall be made on any Note during a period of 180 consecutive days (unless
such event of default is cured or waived in writing by the requisite
holders of such Specified Senior Debt) from the date that written notice of
such default has been given to the Company by the Required Senior Debt
Holders and such notice shall specify that it constitutes a "blockage
notice" pursuant to this Section 13;
(e) If any event of default shall have occurred as a result of a
breach of Section 10 of the Senior Note Purchase Agreements or the Existing
Senior Note Purchase Agreements (other than Sections 10.8, 10.12 and 10.13)
or any comparable covenants from time to time applicable to the Fleet/Chase
Debt Facility (under circumstances when neither clause (c) nor clause (d)
of this Section 13 shall be applicable) and the Required Senior Debt
Holders have given notice of such event to the Company, then no payment
shall be made on any Note during a period of 180 consecutive days (unless
such event of default is cured or waived in writing by the requisite
holders of such Specified Senior Debt) from the date that written notice of
such default has been given to the Company by the Required Senior Debt
Holders and such notice shall specify that it constitutes a "blockage
notice"
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pursuant to this Section 13;
(f) Notwithstanding the foregoing, (i) payment on the Notes shall not
be blocked pursuant to clauses (d) and (e) of this Section 13 on more than
one occasion in any period of 360 consecutive days, and (ii) the holders of
Specified Senior Debt shall not be entitled to give notice pursuant to
clauses (d) and (e) of this Section 13 more than once with respect to any
event of default which was specified in such a blockage notice and which
has continued without interruption since the date such notice was given (it
being understood that each failure to make a scheduled payment of principal
or interest on Senior Debt shall be deemed to constitute a new event of
default), nor shall such holders be entitled to give a separate blockage
notice with respect to any event of default not so specified which was
known by such holders to exist on the date the blockage notice shall have
been given pursuant to clause (d) or (e) and which has continued without
interruption from the date such notice was given. No more than three
blockage notices can be given pursuant to clauses (d) and (e) of this
Section 13. Upon receipt of any notice pursuant to clause (c) of this
Section 13 or any blockage notice from the Required Senior Debt Holders
pursuant to clause (d) or (e) of this Section 13, the Company shall
forthwith send a copy thereof to each holder of the Notes at the time
outstanding; and
(g) During the Standstill Period (as hereinafter defined), the holders
of the Notes shall be prohibited from exercising any remedies under this
Agreement, including accelerating the Notes or filing or participating in
the filing of an involuntary bankruptcy petition against the Company. Upon
the termination of any Standstill Period and subject to the provisions of
clauses (a), (b), (c), (d) and (e) of this Section 13, the holders of the
Notes may, at their sole election, exercise any and all remedies (including
the acceleration of the maturity of the Notes) available to them under this
Agreement or applicable law. As used in this Section 13, "Standstill
Period" means in the case of the receipt by the Company of a blockage
notice pursuant to clauses (d) or (e) of this Section 13 (a "Blockage
Notice"), the 180 day period from and after the date of receipt of such
notice. In addition to the passage of time, the Standstill Period shall
expire on the first to occur of (i) the date on which the Required Senior
Debt Holders which shall have delivered a Blockage Notice shall have
expressly withdrawn such Blockage Notice in writing, (ii) the date on which
there is commenced, either by or against the Company, any proceeding
described in clause (a) of this Section 13, (iii) the date on which the
holders of Senior Debt shall have accelerated such Senior Debt, and (iv)
the date on which the holders of Senior Debt shall have instituted
foreclosure or other proceedings relating to the liquidation of collateral
which secures such Senior Debt.
If any payment or distribution shall be paid to or collected or received by
any holders of the Notes in contravention of any of the terms of this Section
13, the last paragraph of Section 10.2 of the Senior Note Purchase Agreement or
of the Existing Senior Note Purchase Agreements or any
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similar provision under the Fleet/Chase Debt Facility, then such holders of the
Notes will deliver such payment or distribution, to the extent necessary to pay
all such Senior Debt in full, in cash, to the holders of the Senior Debt,
ratably in accordance with the respective amounts owing to them, and, until so
delivered, the same shall be held in trust by such holders of the Notes as the
property of the holders of such Senior Debt. If any amount is delivered to the
holders of the Senior Debt pursuant to this Section 13, whether or not such
amounts have been applied to the payment of Senior Debt, and the outstanding
Senior Debt shall thereafter be paid in full, in cash, by the Company or
otherwise other than pursuant to this Section 13, the holders of Senior Debt
shall return to such holders of the Notes an amount equal to the amount
delivered to such holders of Senior Debt pursuant to this Section 13, so long as
after the return of such amounts the Senior Debt shall remain indefeasibly paid
in full, in cash.
Upon the payment in full of the Senior Debt as in this Section 13 provided,
the holders of the Notes will be subrogated to the rights of the holders of
Senior Debt to receive payments or distributions of assets of the Company
applicable to the Senior Debt until the principal of, premium, if any, and
interest on the Notes shall be paid in full; and no payments or distributions
(direct or indirect) to the holders of the Senior Debt of cash, property or
Securities to which the holders of the Notes would be entitled except for the
provisions of this Section 13 shall, as between the Company, its creditors
(other than the holders of Senior Debt) and the holders of the Notes, be deemed
to be a payment by the Company to or on account of the Senior Debt.
Each and every holder of the Notes by its acceptance thereof undertakes and
agrees for the benefit of each holder of Senior Debt to execute, verify, deliver
and file any proofs of claim which any holder of Senior Debt may at any time
require in order to prove and realize upon any rights or claims pertaining to
the Notes and to effectuate the full benefit of the subordination contained
herein; and upon failure of any holder of the Notes so to do, any such holder of
Senior Debt shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the holder of the Notes to execute, verify, deliver and file
any such proofs of claim.
The Company agrees, for the benefit of the holders of Senior Debt, that in
the event that any Note is declared due and payable before its expressed
maturity because of the occurrence of an Event of Default hereunder, (i) the
Company will give prompt notice in writing of such happening to the holders of
Senior Debt and (ii) upon demand made at the option of the holders of the Senior
Debt, such Senior Debt shall forthwith become immediately due and payable
regardless of the expressed maturity thereof.
No right of any holder of any Senior Debt to enforce subordination as
herein provided shall at any time or in any way be affected or impaired by any
failure to act on the part of the Company or the holders of Senior Debt, or by
any noncompliance by the Company with any of the terms, provisions and covenants
of the Notes or this Agreement, regardless of any knowledge thereof that any
such holder of Senior Debt may have or be otherwise charged with.
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Each holder of the Notes waives any and all notices of the acceptance of
the provisions of this Section 13 or of the creation, renewal, extension or
accrual, now or at any time in the future, of any Senior Debt.
The obligations of each holder of the Notes under the provisions set forth
in this Section 13 shall continue to be effective, or be reinstated, as the case
may be, as to any payment in respect of any Senior Debt that is rescinded or
must otherwise be returned by the holder of such Senior Debt upon the occurrence
or as a result of any bankruptcy or judicial proceeding, all as though such
payment had not been made.
Each holder of the Notes by its acceptance thereof shall be deemed to
acknowledge and agree that the foregoing subordination provisions are, and are
intended to be, an inducement to and a consideration of each holder of any
Senior Debt, whether such Senior Debt was created or acquired before or after
the creation of the Notes, to acquire and hold, or to continue to hold, such
Senior Debt, and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt. Each such holder of Senior Debt is
intended to be, and is, a third party beneficiary of this Section 13. Each
holder of the Notes acknowledges and agrees that the provisions set forth in
this Section 13 shall be enforceable against such Persons by the holders of
Senior Debt. Notwithstanding anything contained in this Agreement to the
contrary, none of the provisions of this Section 13 or the definitions of
"Required Senior Debt Holders" and "Requisite Senior Debt" may, directly or
indirectly, be amended, modified, supplemented or waived without the prior
written consent of the holders of the Senior Debt.
The foregoing provisions are solely for the purpose of defining the
relative rights of the holders of Senior Debt on the one hand, and the holders
of the Notes on the other hand, and nothing herein shall impair, as between the
Company and the holders of the Notes, the obligation of the Company which is
unconditional and absolute, to pay the principal, premium, if any, and interest
on the Notes in accordance with their terms, nor shall anything herein prevent
the holders from exercising all remedies otherwise permitted by applicable law
or hereunder upon default hereunder, subject to the rights of the holders of
Senior Debt as herein provided for.
Section 14. Registration; Exchange; Substitution of Notes.
Section 14.1. Registration of Notes. 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 an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
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Section 14.2. Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or his attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. 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 $100,000, 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 $100,000. 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
Section 6.2 and in the second sentence of Section 6.1.
Section 14.3. Replacement of Notes. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
nominee for, an original purchaser or a Qualified Institutional Buyer, such
Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof, the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated
Note or dated the date of such lost, stolen, destroyed or mutilated Note if
no interest shall have been paid thereon.
Section 15. Payments on Notes.
Section 15.1. Place of Payment. Subject to Section 15.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Greenwich, Connecticut at the principal office of the
Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction
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or the principal office of a bank or trust company in such jurisdiction.
Section 15.2. Home Office Payment. So long as you or your nominee shall be
the holder of any Note, and notwithstanding anything contained in Section 15.1
or in such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, Make-Whole Amount, if any, and interest by the method
and at the address specified for such purpose below your name in Schedule A, or
by such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 15.1. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
14.2. The Company will afford the benefits of this Section 15.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 15.2.
Section 16. Expenses, Etc.
Section 16.1 Transaction Expenses. The Company will pay all costs and
expenses (including any judgment or settlement approved by the Company,
reasonable attorneys' fees of a special counsel and, if reasonably required,
local or other counsel) incurred by you and the Other Purchaser or holder of a
Note in connection with (a) the negotiation, execution and documentation of the
transactions contemplated hereby, (b) any amendments, waivers or consents under
or in respect of this Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), and (c) any actual or threatened
proceeding relating to any action the Company has taken, or will take, as to
which the Company has made a representation and warranty hereunder, including,
without limitation: (x) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (y) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by you).
Section 16.2. Survival. The obligations of the Company under this Section
16 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this
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Agreement or the Notes, and the termination of this Agreement.
Section 17. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
Section 18. Amendment and Waiver.
Section 18.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of any of Sections 1, 2, 3, 4, 5, 6 and 22, or any defined
term (as it is used therein), will be effective as to you unless consented to by
you in writing, and (b) no such amendment or waiver may, without the written
consent of the holder of each Note at the time outstanding affected thereby, (i)
subject to the provisions of Section 12 relating to acceleration or rescission,
change the amount or time of any payment or prepayment of principal of, or
reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 18 and 21.
Notwithstanding the provisions of the immediately preceding paragraph, you
and the Other Purchaser agree, and each other holder of Notes by its acceptance
of any Note shall be deemed to have agreed, to grant its written consent,
promptly following the receipt of written request by the Company for such
consent, to any amendment of, or waiver with respect to (prospectively only),
clause (ii) of Section 10.14(b), Section 10.15 or Section 10.16 in a manner
consistent with any one or more amendments of, or waivers with respect to, the
covenants in the Fleet/Chase Debt Facility that correspond to clause (ii) of
Section 10.14(b), Section 10.15 or Section 10.16, as the case may be (the
"Fleet/Chase Equivalent Provisions"); provided that (A) the Company shall have
delivered to each holder of Notes a copy of such amendment or waiver relating to
the Fleet/Chase Debt Facility, together with a certificate of a Responsible
Officer of the Company to the effect that such copy is true and complete and
that such amendment or waiver relating to the Fleet/Chase Debt Facility has
become effective in accordance with the terms of the Fleet/Chase Debt Facility
and (B) the effect of the requested amendment or waiver relating to clause (ii)
of Section 10.14(b),
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Section 10.15 or Section 10.16, as the case may be, shall be no less favorable
(and no more onerous) to the holders of Notes than the corresponding amendment
or waiver relating to the Fleet/Chase Debt Facility is to the banks that are
parties thereto. In addition, if any or all of the Fleet/Chase Equivalent
Provisions are deleted from the Fleet/Chase Debt Facility, or such facility is
terminated and not replaced by a substantially similar facility containing
provisions equivalent to the Fleet/Chase Equivalent Provisions, then one or more
of clause (ii) of Section 10.14(b), Section 10.15 and Section 10.16, whichever
shall correspond to the provisions eliminated from the Fleet/Chase Debt Facility
(or all such Sections if the Fleet/Chase Debt Facility shall be terminated and
not replaced, as stated above), shall be deemed to have been automatically
deleted from this Agreement without the need for any action by the Company or
the holders of the Notes.
Section 18.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 18 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
Section 18.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 18 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 18.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding
128
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
Section 19. Notices.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified
for such communications in Schedule A, or at such other address as you or
it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of Xxxxxxx X. Xxxxx, Executive Vice
President, Finance & Chief Financial Officer, telecopier: 2036298883, or at
such other address as the Company shall have specified to the holder of
each Note in writing.
Notices under this Section 19 will be deemed given on the earlier of the date of
actual receipt thereof or the third Business Day after such notice shall have
been sent in the manner provided above.
Section 20. Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 20
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
Section 21. Confidential Information.
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For the purposes of this Section 21, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that
(a) was publicly known or otherwise known to you prior to the time of
such disclosure,
(b) subsequently becomes publicly known through no act or omission by
you or any person acting on your behalf,
(c) otherwise becomes known to you other than through disclosure by
the Company or any Subsidiary or by any other holder of a Note if the
disclosure of such Confidential Information to such other holder was made
subject to this Section 21, or
(d) constitutes financial statements delivered to you under Section
7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, provided that you may deliver or
disclose Confidential Information to
(i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes),
(ii) your financial advisors and other professional advisors who agree
to hold confidential the Confidential Information substantially in
accordance with the terms of this Section 20,
(iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or offer to sell
such Note or any part thereof or any participation therein (if such Person
has agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 21),
(v) any Person from which you offer to purchase any Security of the
Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 21),
(vi) any federal or state regulatory authority having jurisdiction
over you, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that
requires access to information about your investment portfolio or
(viii) any other Person to which such delivery or disclosure may be
necessary or appropriate (w) to effect compliance with any law, rule,
regulation or order applicable to you, (x) in response to any subpoena or
other legal process, (y) in connection with any
130
litigation to which you are a party or (z) it an Event of Default has
occurred and is continuing, to the extent you may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement
or for the protection of the rights and remedies under your Notes and this
Agreement.
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 21 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 21.
Section 22. Substitution of Purchaser.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 22), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
22), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
Section 23. Miscellaneous.
Section 23.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 23.2. Payments Due on NonBusiness Days; When Payments Deemed
Received. (a) Payments Due on NonBusiness Days. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
MakeWhole Amount 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.
(b) Payments, When Received. Any payment to be made to the holders of Notes
hereunder or under the Notes shall be deemed to have been made on the Business
Day such payment actually becomes available to such holder at such holder's bank
prior to 12:00 noon (local time of such bank).
131
Section 23.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 23.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary or where the context clearly
would indicate otherwise) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision or where the context clearly would indicate
otherwise) be deemed to excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person.
Section 23.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
Section 23.6. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choiceoflaw principles of the law of such
state that would require the application of the laws of a jurisdiction other
than such state.
[Remainder of page intentionally blank. Next page is signature page.]
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If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
NFO Worldwide, Inc.
By
Name:
Title:
Allstate Life Insurance Company
By
Name:
By
Name:
Authorized Signatories
Allstate Life Insurance Company of New
York
By
Name:
By
Name:
Authorized Signatories
133
Defined Terms
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"Acquisition" means any transaction (including any merger or consolidation,
but not including the formation of new Subsidiaries after the Closing Date)
pursuant to which the Company or any of its Restricted Subsidiaries (a) acquires
equity Securities (or warrants, options or other rights to acquire such
Securities) of any Person, other than the Company or any Person which is then a
Subsidiary, pursuant to a solicitation of tenders therefor, or in one or more
negotiated block, market or other transactions not involving a tender offer, or
a combination of any of the foregoing, or (b) makes any Person (other than a
Subsidiary of the Company) a Restricted Subsidiary, or causes any such Person to
be merged into or consolidated with the Company or any of its Restricted
Subsidiaries, in any case pursuant to a merger, a purchase of assets or any
reorganization providing for the delivery or issuance to the holders of such
Person's then outstanding Securities, in exchange for such Securities, of cash
or Securities of the Company or any of its Restricted Subsidiaries, or a
combination thereof, or (c) purchases all or substantially all of the business
or assets of any Person (other than a Subsidiary of the Company).
"Affiliate" means at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly through
one or more intermediaries Controls, or is Controlled by, or is under
common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or indirectly,
10% or more of any class of voting or equity interests of the Company or
any Subsidiary or any corporation of which the Company and its Subsidiaries
beneficially own or hold, in the aggregate, directly or indirectly, 10% or
more of any class of voting or equity interests.
As used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"Agreement, this" is defined in Section 18.3.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the Company or
another Restricted Subsidiary, and
(ii) Transfer from the Company to a Restricted Subsidiary, so
long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists; and
(b) any Transfer made in the ordinary course of business and involving
only
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property that is either (i) inventory held for sale or (ii) equipment,
fixtures, supplies or materials no longer required in the operation of the
business of the Company or any of the Restricted Subsidiaries or that is
obsolete. "Attributable Debt" means, as to any particular lease relating to
a Sale-and-Leaseback
Transaction, the present value of all Long Term Lease Rentals required to be
paid by the Company or any Subsidiary under such lease during the remaining term
thereof (determined in accordance with generally accepted financial practice
using a discount factor equal to the interest rate implicit in such lease if
known or, if not known, of 7% per annum).
"Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, Connecticut, Illinois or
Massachusetts are required or authorized to be closed.
"Capital Assets" means all property and equipment of the Company and the
Restricted Subsidiaries (after deducting any reserves applicable thereto) which
would be shown as such on a consolidated balance sheet of such Persons prepared
in accordance with GAAP.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a liability on a
balance sheet of such Person.
"Capital Stock" means any class of capital stock, share capital or similar
equity interest of a Person.
"Closing" is defined in Section 3.
"Closing Date" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" is defined in the introductory sentence of this Agreement.
"Confidential Information" is defined in Section 21.
"Consolidated Current Debt" means all Current Debt of the Company and the
Restricted Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Funded Debt" means the sum of Consolidated Senior Funded Debt
plus Consolidated Subordinated Funded Debt.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course
135
of the preparation of consolidated financial statements of the Company and the
Restricted Subsidiaries in accordance with GAAP, provided that there shall be
excluded:
(a) the income (or loss) of any Person accrued prior to the date it
becomes a Restricted Subsidiary or is merged into or consolidated with the
Company or a Restricted Subsidiary, and the income (or loss) of any Person,
substantially all of the assets of which have been acquired in any manner,
realized by such other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest, except to the extent that any such income has been
actually received by the Company or such Restricted Subsidiary in the form
of cash dividends or similar cash distributions,
(c) the undistributed earnings of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time permitted by
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary,
(d) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of income accrued
during such period,
(e) any aggregate net gain, or any aggregate net loss, during such
period arising from the sale, conversion, exchange or other disposition of
Capital Assets,
(f) any gains resulting from any writeup of any assets, or any loss
resulting from any writedown of any assets,
(g) any net gain from the collection of the proceeds of life insurance
policies,
(h) any gain arising from the acquisition of any Security, or the
extinguishment, under GAAP, of any Debt, of the Company or any Restricted
Subsidiary,
(i) any net income or gain, or any net loss, during such period from
(i) any change in accounting principles in accordance with GAAP, (ii) any
prior period adjustments resulting from any change in accounting principles
in accordance with GAAP, (iii) any extraordinary items, or (iv) any
discontinued operations or the disposition thereof,
(j) in the case of a successor to the Company by consolidation or
merger or as a transferee of its assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets, and
(k) any portion of such net income that cannot be freely converted
into United States Dollars. "Consolidated Net Worth" means, at any time,
(a) Consolidated Total Assets minus
(b) the total liabilities of the Company and the Restricted
Subsidiaries which
136
would be shown as liabilities on a consolidated balance sheet of the
Company and the Restricted Subsidiaries as of such time prepared in
accordance with GAAP.
"Consolidated Senior Funded Debt" means all Senior Funded Debt of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Subordinated Funded Debt" means all Subordinated Funded Debt
of the Company and the Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Assets" means the total assets of the Company and the
Restricted Subsidiaries that would appear on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
"Consolidated Total Capitalization" means, at any time, the sum, without
duplication, of:
(a) Consolidated Funded Debt;
(b) the amount of all deferred income tax liabilities of the Company
and the RestrictedSubsidiaries, determined on a consolidated basis in
accordance with GAAP;
(c) all amounts properly attributable to minority interests, if any,
in the stock and surplus of Restricted Subsidiaries; and
(d) Consolidated Net Worth.
"Current Debt" means, with respect to any Person, all Debt of such Person
which by its terms or by the terms of any instrument or agreement relating
thereto matures on demand or within one year from the date of the creation
thereof and is not directly or indirectly renewable or extendible at the option
of the obligor in respect thereof to a date one year or more from such date,
provided that (a) Debt outstanding under a revolving credit or similar agreement
which obligates the lender or lenders to extend credit over a period of one year
or more and (b) Current Maturities of Funded Debt shall constitute Funded Debt
and not Current Debt, even though such Debt by its terms matures on demand or
within one year from such date.
"Current Maturities of Funded Debt" means, at any time and with respect to
any item of Funded Debt, the portion of such Funded Debt outstanding at such
time which by the terms of such Funded Debt or the terms of any instrument or
agreement relating thereto is due on demand or within one year from such time
(whether by sinking fund, other required prepayment or final payment at
maturity) and is not directly or indirectly renewable, extendible or refundable
at the option of the obligor under an agreement or firm commitment in effect at
such time to a date one year or more from such time.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including, without limitation, all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
137
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases; and
(d) any Guaranty of such Person with respect to liabilities of a type
described in clauses (a) to (c), inclusive, hereof.
Without limitation of the foregoing, Debt of any Person shall include all
obligations of such Person of the character described in clauses (a) through (c)
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP. Any Person extending, renewing or refunding any Debt (other than Existing
Debt) shall be deemed to have incurred such Debt at the time of such extension,
renewal or refunding.
"Debt Facility" means any agreement pursuant to which the Company or a
Restricted Subsidiary may incur Debt, as such agreement may be amended,
modified, restated or replaced by another agreement providing for the incurrence
of Debt by any such Person, except for any such amendment, modification,
restatement or replacement that provides for an increase in the amount of Debt
to an amount greater than that which could have been outstanding on the Closing
Date.
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means that rate of interest that is the greater of (i) 2%
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (ii) 2% over the rate of interest publicly announced from time
to time by The Chase Manhattan Bank in New York, New York (or its successor) as
its "base" or "prime" rate.
"Dollars" or "$" means lawful currency of the United States of America.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Excluded Guaranties" means (i) the Guaranties of the Restricted
Subsidiaries issued on the Closing Date in respect of the Notes and the Senior
Notes, (ii) the Guaranties of the Restricted Subsidiaries issued on November 20,
1998 in respect of the Existing Senior Notes, the Existing Subordinated Notes
and the Debt under the Fleet/Chase Debt Facility, (iii) any other Guaranties of
Subsidiaries issued thereafter in respect of the Debt identified in the
foregoing clauses (i) and (ii),
138
(iv) Guaranties of any refinancing, replacement or renewal of such Debt so long
as the aggregate principal amount of such Debt is not in excess of that
outstanding or, in the case of the Fleet/Chase Debt Facility, available to be
borrowed, immediately after giving effect to the sale of the Notes and the
Senior Notes on the Closing Date and the holders of such Debt (other than any
holders of Subordinated Funded Debt) are parties to the Sharing Agreement, and
(v) any Guaranties of Subsidiaries of the Existing Senior Notes, the Existing
Subordinated Notes, the Senior Notes, the Notes or the obligations of the
Company under the Fleet/Chase Debt Facility if Guaranties of such Subsidiaries
shall also have been issued in respect of the Notes pursuant to Section 9.7(a).
"Existing Current Debt" means Existing Debt which is Current Debt.
"Existing Debt" means
(a) Debt of the Company or any Restricted Subsidiary outstanding on
the Closing Date and identified on Schedule 5.15 (or included in the
aggregate amount set forth in Section 5.15), and any renewal, refinancing
or replacement thereof so long as there shall be no increase in the
principal amount of such Debt outstanding at the time of such renewal,
refinancing or replacement; and
(b) Debt incurred pursuant to a Debt Facility identified in Schedule
5.15 to which the Company or any Restricted Subsidiary is a party on the
Closing Date (regardless of whether any Debt is outstanding thereunder on
thc Closing Date), so long as the aggregate amount of Debt so incurred at
any time is not in excess of the maximum amount of Debt permitted to be
incurred thereunder on the Closing Date (assuming satisfaction of all
funding conditions on such date); and
(c) the Excluded Guaranties.
"Existing Senior Funded Debt" means Existing Debt which is Senior Funded
Debt.
"Existing Senior Note Purchase Agreements" means the March 1998 Senior Note
Purchase Agreements and the November 1998 Senior Note Purchase Agreements.
"Existing Senior Notes" means the March 1998 Senior Notes and the November
1998 Senior Notes.
"Existing Subordinated Funded Debt" means Existing Debt which is
Subordinated Funded Debt.
"Existing Subordinated Note Purchase Agreements" means the separate Note
Purchase Agreements dated as of November 20, 1998, among the Company and the
purchasers of the Existing Subordinated Notes, as amended, supplemented or
restated from time to time.
"Existing Subordinated Notes" means the Senior Subordinated Notes issued
under the Existing Subordinated Note Purchase Agreements, as such notes may be
amended, supplemented or restated from time to time other than any amendment
that would increase the principal amount thereof above the principal amount
outstanding as of the date of any such amendment.
"Fair Market Value" means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm's-length sale
at such time between an informed and
139
willing buyer and an informed and willing seller (neither being under a
compulsion to buy or sell).
"Fleet/Chase Debt Facility" means the Debt Facility evidenced by that
certain Credit Agreement dated as of March 9, 1998 among the Company, Fleet
National Bank and The Chase Manhattan Bank, as coagents, Fleet National Bank, as
administrative agent, and the other banks party thereto, providing for a
borrowing availability of up to $75 million.
"Funded Debt" means, with respect to any Person, all Debt of such Person
which by its terms or by the terms of any instrument or agreement relating
thereto matures, or which is otherwise payable or unpaid, one year or more from,
or is directly or indirectly renewable or extendible at the option of the
obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement (including the
Fleet/Chase Debt Facility) on any date shall be deemed to be the average daily
amount outstanding under such facility during the period of 365 consecutive days
ending on and including such date, and not the actual amount outstanding on such
date; provided, however, that, (i) as used in the definitions of "Consolidated
Senior Funded Debt" and "Consolidated Funded Debt," but only as such terms are
used in Section 10.14, the amount of Funded Debt outstanding under any such
revolving credit or similar agreement (including the Fleet/Chase Debt Facility)
on any date shall be the actual amount outstanding on such date, and (ii) for
purposes of Sections 10.1, 10.2, 10.3 and 10.10 from and after the Closing Date,
the amount of Funded Debt outstanding under the Fleet/Chase Debt Facility during
the period beginning on November 20, 1998 and ending on the Closing Date, shall
not include an amount equal to the March 1999 Retired Funded Debt Amount.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any state or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or that asserts jurisdiction
over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"Guarantor" means, at any time, each Person (including, without limitation,
each of the Initial Guarantors) that at such time is a Guarantor under a
Guaranty Agreement.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person
140
guaranteeing or in effect guaranteeing any indebtedness, dividend or other
obligation of any other Person in any manner, whether directly or indirectly,
including, without limitation, obligations incurred through an agreement,
contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof. In any computation of the indebtedness or
other liabilities of the obligor under any Guaranty, the indebtedness or
other obligations that are the subject of such Guaranty shall be assumed to
be direct obligations of such obligor.
"Guaranty Agreements" shall mean each of the Guaranty Agreements executed
by the Initial Guarantors pursuant to Section 4.14 and each of the other
Guaranty Agreements executed and delivered from time to time pursuant to Section
9.7, in each case as amended or supplemented from time to time.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
14.1.
"IBH Debt" means the Debt of Infratest and its subsidiaries in the
aggregate principal amount that could have been incurred under the credit
facilities to which Infratest is a party as of November 20, 1998.
"Indebtedness" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement
141
with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and
other financial institutions (whether or not representing obligations for
borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
Without limitation of the foregoing, Indebtedness of any Person shall include
all obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"Infratest" means Infratest Xxxxx Aktiengesellschaft Holding, a German
Aktiengesellschaft (stock corporation).
"Initial Guarantor" means each of Xxxxxxxx/Xxxxxx Associates, Inc., a
Delaware corporation, NFO Research, Inc., a Delaware corporation, Plog Research
Inc., a Delaware corporation, Prognostics Corp., a Delaware corporation, PSI
Holding Corp., a Delaware corporation, and Xxxx-Xxxxxx-Xxxx, Inc., a Delaware
corporation.
"Institutional Investor" means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"InterCompany Debt" means Debt of the Company owing to any WhollyOwned
Restricted Subsidiary or Debt of any Restricted Subsidiary owing to the Company
or one or more WhollyOwned Restricted Subsidiaries.
"Investment" means any investment, made in cash or by delivery of property,
by the Company or any of the Restricted Subsidiaries in any Person, whether by
acquisition of stock, Debt or other obligation or Security, or by loan,
Guaranty, advance, capital contribution or otherwise.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock,
142
stockholder agreements, voting trust agreements and all similar arrangements to
the extent that such arrangements affect control of the issuer of such stock or
the payment of dividends by such issuer).
"Long Term Lease Rentals" means, for a lease (other than a Capital Lease)
arising from a Sale-and-Leaseback Transaction having a term (including terms of
renewal or extension at the option of the lessor or the lessee, whether or not
such option has been exercised) expiring more than two (2) years after the
commencement of the initial term thereof, the sum of the minimum amount of
rental and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee, excluding any amounts required to be paid
by the lessee (whether or not therein designated as rent or additional rent) (a)
which are on account of maintenance and repairs, insurance, taxes, assessments,
water rates and similar charges, or (b) which are based on profits, revenues or
sales realized by the lessee from the leased property or otherwise based on the
performance of the lessee.
"MakeWhole Amount" is defined in Section 8.6.
"March 1998 Senior Note Purchase Agreements" means the separate Note
Purchase Agreements dated as of March 9, 1998, among the Company and the
purchasers of the March 1998 Senior Notes, as amended November 20, 1998, as
amended, supplemented or restated from time to time.
"March 1998 Senior Notes" means the Senior Notes issued under the March
1998 Senior Note Purchase Agreements, as such notes may be amended, supplemented
or restated from time to time other than any amendment that would increase the
principal amount thereof above the principal amount outstanding as of the date
of any such amendment.
"March 1999 Retired Funded Debt Amount" means the aggregate principal
amount of Funded Debt outstanding under the Fleet/Chase Debt Facility which
shall be repaid on the Closing Date from the proceeds of the issuance and sale
of the Notes and the Senior Notes.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in section 4001 (a)(3) of ERISA).
"Net Proceeds Amount" means, with respect to any Transfer of any Property
by any Person, an amount equal to the difference of:
(a) the aggregate amount of the consideration (valued at the Fair
Market Value of such consideration at the time of the consummation of such
Transfer) received by such Person in respect of such Transfer, minus
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(b) all ordinary and reasonable outofpocket costs and expenses
actually incurred by such Person in connection with such Transfer, and all
taxes arising on account of any gains in respect of such Transfer which are
actually payable by such Person.
"Notes" is defined in Section 1.
"November 1998 Senior Note Purchase Agreements" means the separate Note
Purchase Agreements dated as of November 20, 1998, among the Company and the
purchasers of the November 1998 Senior Notes, as amended, supplemented or
restated from time to time.
"November 1998 Senior Notes" means the Senior Notes issued under the
November 1998 Senior Note Purchase Agreements, as such notes may be amended,
supplemented or restated from time to time other than any amendment that would
increase the principal amount thereof above the principal amount outstanding as
of the date of any such amendment.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"Other Agreement" is defined in Section 2.
"Other Purchaser" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a trust, an unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) or other plan that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability which is covered by Title IV of ERISA.
"Preferred Stock" means any class of Capital Stock of a Person that is
preferred over any other class of Capital Stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.
"Pro Forma Consolidated Interest Expense" means, in respect of any period,
all interest in respect of Debt of the Company and the Restricted Subsidiaries
(including imputed interest on Capital Lease Obligations) deducted in
determining Consolidated Net Income for such period, determined as if
(a) all Persons which became or ceased to be Restricted Subsidiaries
during such period had become or ceased to be Restricted Subsidiaries on
the first day of such period, and
(b) all acquisitions or dispositions of all or substantially all of
the assets of any Person or Restricted Subsidiary which occurred during
such period had occurred on the first
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day of such period (and all incurrences or retirements of Debt in
connection with any such acquisition or disposition had occurred on such
first day).
For purposes of this definition, in determining the interest that would have
accrued during any period on Debt which bears a floating rate of interest, the
interest rate in effect for all of such period shall be deemed to be the
interest rate that would have been in effect on the first day of such period had
such Debt been outstanding on such day.
"Pro Forma EBITDA" means, in respect of any period, Consolidated Net Income
for such period plus, to the extent deducted in the determination thereof for
such period, each of the following:
(a) Pro Forma Consolidated Interest Expense;
(b) all depreciation and amortization allowances and other noncash
expenses of the Company and the Restricted Subsidiaries; and
(c) all taxes imposed on or measured by income or excess profits; in
each case determined as if (i) all Persons which became or ceased to be
Restricted Subsidiaries during such period had become or ceased to be
Restricted Subsidiaries on the first day of such period, (ii) all
acquisitions or dispositions of all or substantially all of the assets of
any Person or Restricted Subsidiary which occurred during such period had
occurred on the first day of such period (and all incurrences or
retirements of Debt in connection with any such acquisition or disposition
had occurred on such first day), and (iii) all planned future reductions in
the compensation paid during such period to the owners of the equity
interests in any Person referred to in the foregoing clauses (i) and (ii)
had been in effect on the first day of such period. For purposes of the
immediately preceding clause (iii), a planned future reduction in the
compensation of any such owner shall be deemed to mean the amount by which
the salary and bonus payable to such owner in respect of the period for
which Pro Forma EBITDA is to be determined (the "Reference Period") exceeds
the salary and bonus the Company intends to pay such owner for the
equivalent period immediately following the Reference Period, as evidenced
by the written agreement of such owner.
"property or properties" means, unless otherwise specifically limited, real
or personal property of any kind, tangible or intangible, xxxxxx or inchoate.
"PTE" is defined in Section 6.2(a).
"QPAM Exemption" is defined in Section 6.2(d).
"Qualified Institutional Buyer" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"Required Holders" means, at any time, the holder or holders of at least
51% in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).
"Required Senior Debt Holders" means as of the date of any determination
under this Agreement, (a) in the case of any notice pursuant to Section 13(c) or
(d), either (x) the holders of 35% in aggregate principal amount of the Senior
Notes and the Existing Senior Notes voting as a
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single class, or (y) the Administrative Agent under the Fleet/Chase Debt
Facility (including any successor to Fleet National Bank, as Administrative
Agent), and (b) in the case of any notice pursuant to Section 13(e) a
notice from the holders of the Requisite Senior Debt,
No notice shall be effective:
(i) pursuant to Section 13(c) unless, in the case of any notice from
the holders of the Senior Notes and the Existing Senior Notes, the
aggregate unpaid principal amount of such Senior Debt then outstanding
shall be more than $10,000,000 and in the case of any notice from the
Administrative Agent under the Fleet/Chase Debt Facility, the aggregate
unpaid principal amount of Senior Debt outstanding under the Fleet/Chase
Debt Facility shall be more than $10,000,000, provided that if neither
group of holders of Senior Debt shall hold an amount in excess of the
required minimum set forth in this clause (i), then the minimum outstanding
principal amount for each group shall be reduced to $5,000,000, and
(ii) pursuant to Section 13(d) unless, in the case of any notice from
the holders of the Senior Notes and the Existing Senior Notes, the
aggregate unpaid principal amount of such Senior Debt then outstanding
shall be more than $15,000,000 and in the case of any notice from the
Administrative Agent under the Fleet/Chase Debt Facility, the aggregate
unpaid principal amount of Senior Debt outstanding under the Fleet/Chase
Debt Facility shall be more than $15,000,000, provided that if neither
group of holders of Senior Debt shall hold an amount in excess of the
required minimum set forth in this clause (ii), then the minimum
outstanding principal amount for each group shall be reduced to $5,000,000.
"Requisite Senior Debt" shall mean (x) in the case of the Senior Notes and
the Existing Senior Notes, the holders of 51% in aggregate unpaid principal
amount of such Senior Debt voting as a single class, and (y) in the case of the
Fleet/Chase Debt Facility, the vote of the Administrative Agent and in each case
voting in accordance with the following:
(i) a vote from both classes of Senior Debt if, (x) the Senior Notes
and the Existing Senior Notes shall be outstanding in the aggregate unpaid
principal amount equal to or more than $15,000,000, and the aggregate
unpaid principal amount of Senior Debt outstanding under the Fleet/Chase
Debt Facility shall be equal to or more than $15,000,000; or (y) the Senior
Notes and the Existing Senior Notes shall be outstanding in an aggregate
unpaid principal amount less than $15,000,000 but more than $5,000,000 and
the aggregate unpaid principal amount of Senior Debt outstanding under the
Fleet/Chase Debt Facility shall be less than $15,000,000 but more than
$5,000,000;
(ii) a vote from only the Senior Notes and the Existing Senior Notes
if the Senior Notes and the Existing Senior Notes shall be outstanding in
the aggregate unpaid principal amount equal to or more than $15,000,000,
and the aggregate unpaid principal amount of Senior Debt outstanding under
the Fleet/Chase Debt Facility shall be less than $15,000,000;
(iii) a vote from only the Administrative Agent if the Senior Debt
outstanding
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under the Fleet/Chase Debt Facility shall be outstanding in an aggregate
unpaid principal amount equal to or more than $15,000,000 and the aggregate
unpaid principal amount of Senior Notes and the Existing Senior Notes shall
be less than $15,000,000;
(iv) a vote from only the Senior Notes and the Existing Senior Notes
if the Senior Notes and the Existing Senior Notes shall be outstanding in
the aggregate unpaid principal amount less than $15,000,000 but equal to or
more than $5,000,000, and the aggregate unpaid principal amount of Senior
Debt outstanding under the Fleet/Chase Debt Facility shall be less than
$5,000,000;
(v) a vote from only the Administrative Agent if the Senior Debt
outstanding under the Fleet/Chase Debt Facility shall be outstanding in the
aggregate unpaid principal amount less than $15,000,000 but equal to or
more than $5,000,000, and the aggregate unpaid principal amount of Senior
Notes and the Existing Senior Notes shall be less than $5,000,000; and
(vi) a vote of a majority in aggregate principal amount of both
classes of Senior Debt (voting as a single class) if the aggregate unpaid
principal amount of the Senior Notes and the Existing Senior Notes is less
than $5,000,000 and the unpaid principal amount of Senior Debt outstanding
under the Fleet/Chase Debt Facility is less than $5,000,000.
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Investments" means all Investments except the following:
(a) current assets arising from the sale of goods and services in the
ordinary course of business of the Company and the Restricted Subsidiaries;
(b) Investments in the Company or one or more Restricted Subsidiaries
in the ordinary course of business;
(c) Investments in any Person which, after giving effect to such
transaction, would be a Restricted Subsidiary;
(d) advances to officers, directors and employees of the Company or
any of the Restricted Subsidiaries for expenses incurred in the ordinary
course of business of the Company or such Restricted Subsidiary;
(e) Investments in United States Governmental Securities;
(f) Investments in certificates of deposit or banker's acceptances
issued by an Acceptable Bank;
(g) Investments in debt obligations of issuers organized under the
laws of the United States of America, any state thereof or the District of
Columbia and rated "A" or better by S&P, "A2" or better by Moody's, or an
equivalent rating by any other credit rating agency of recognized national
standing;
(h) Investments in preferred stock of issuers organized under the laws
of the United States of America, any state thereof or the District of
Columbia and rated "A" or
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better by S&P, "A2" or better by Moody's or an equivalent rating by any
other credit rating agency of recognized national standing;
(i) Investments in obligations of any state of the United States of
America, or any governmental subdivision of any such state, in each case
rated "A" or better by S&P, "A2" or better by Moody's or an equivalent
rating by any other credit rating agency of recognized national standing;
(j) Investments which are incurred in connection with transactions
permitted by Section 10.10; and
(k) to the extent not included in the foregoing clauses (a) to (j),
inclusive, cash and cash equivalents.
As of any date of determination, each Restricted Investment shall be valued
at the greater of:
(x) the amount at which such Restricted Investment is shown on the
books of the Company or any of the Restricted Subsidiaries (or zero if such
Restricted Investment is not shown on any such books); and
(y) either
(i) in the case of any Guaranty of the obligation of any Person,
the amount which the Company or any of the Restricted Subsidiaries has
paid on account of such obligation less any recoupment by the Company
or such Restricted Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment, the excess
of (x) the greater of (A) the amount originally entered on the books
of the Company or any of the Restricted Subsidiaries with respect
thereto and (B) the cost thereof to the Company or the Restricted
Subsidiary over (y) any return of capital (after income taxes
applicable thereto) upon such Restricted Investment through the sale
or other liquidation thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"Acceptable Bank" means any bank or trust company (i) which is organized
under the laws of the United States of America or any State thereof, (ii) which
has capital, surplus and undivided profits aggregating at least $50,000,000, and
(iii) which has outstanding senior unsecured Debt rated "A" or better by S&P,
"A2" or better by Moody's or an equivalent rating by any other credit rating
agency of recognized national standing.
"Moody's" means Xxxxx'x Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
"United States Governmental Security" means any direct obligation of, or
obligation guaranteed by, the United States of America, or any agency controlled
or supervised by or acting as an instrumentality of the United States of America
pursuant to authority granted
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by the Congress of the United States of America, so long as such obligation or
guarantee shall have the benefit of the full faith and credit of the United
States of America which shall have been pledged pursuant to authority granted by
the Congress of the United States of America.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Restricted Subsidiary Stock" means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Restricted Subsidiary owned
by such Person.
"SaleandLeaseback Transaction" means a transaction or series of
transactions pursuant to which the Company or any Restricted Subsidiary shall
sell or transfer to any Person (other than the Company or a Restricted
Subsidiary) any property, whether now owned or hereafter acquired, and, as part
of the same transaction or series of transactions, the Company or any Restricted
Subsidiary shall rent or lease as lessee (other than pursuant to a Capital
Lease), or similarly acquire the right to possession or use of, such property or
one or more properties which it intends to use for the same purpose or purposes
as such property.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Security" has the meaning set forth in section 2(1) of the Securities Act.
"Senior Debt" shall mean all Indebtedness for borrowed money of the Company
other than Subordinated Funded Debt. For purposes of the subordination
provisions set forth in Section 13, all trade or accounts payable of the Company
shall be specifically excluded from the definition of Senior Debt.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"Senior Funded Debt" means (a) any Funded Debt of the Company (other than
Subordinated Funded Debt) and (b) any Funded Debt of any Restricted Subsidiary.
"Senior Note Purchase Agreement" means the separate Note Purchase
Agreements, dated as of March 15, 1999, among the Company and the purchasers of
the Senior Notes issued thereunder as amended, supplemented or restated from
time to time.
"Senior Note Purchasers" means the purchasers of the Senior Notes.
"Senior Notes" means the senior promissory notes issued under the Senior
Note Purchase Agreement, as such notes may be amended, supplemented or restated
from time to time other than any amendment that would increase the principal
amount thereof above the principal amount outstanding as of the date of any such
amendment.
"Sharing Agreement" means that certain Amended and Restated Sharing
Agreement, dated as of March 15, 1999, among the holders of the Existing Senior
Notes, the Senior Notes and the banks party to the Fleet/Chase Credit Facility,
as further amended, supplemented or restated from time to time, including
without limitation, amendments which add additional parties thereto.
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"Source" is defined in Section 6.2.
"Specified Senior Debt" means the Existing Senior Notes, the Senior Notes,
and the loans outstanding under the Fleet/Chase Debt Facility.
"Subordinated Funded Debt" means the Notes, the Existing Subordinated Notes
and any other unsecured Funded Debt that is subordinated in right of payment or
security to the Debt of the Company substantially in the manner set forth in
Section 13 or in such other manner as shall be satisfactory to the Required
Holders.
"Subsidiary" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Successor Corporation" is defined in Section 10.10.
"Swaps" means, with respect to any Person, payment obligations with respect
to interest rate swaps, currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof as of the end
of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined.
"Transfer" means, with respect to any Person, any transaction in which such
Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Restricted Subsidiary Stock.
"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such by the Company by written notice to the holders of the Notes given within 5
Business Days of such designation, provided that, at the time of such
designation,
(a) such Subsidiary does not own any Funded Debt or Capital Stock
of the Company or any Restricted Subsidiary,
(b) no Default or Event of Default would exist, and
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(c) the Company would be able to incur $1 of Funded Debt pursuant
to both Section 10.1 and Section 10.2;
provided further that such notice shall contain a statement to the effect that
all conditions to such designation have been satisfied and shall set forth the
calculations reasonably necessary to show satisfaction of the condition set
forth in the foregoing clause (c). Any Subsidiary of the Company designated as
an Unrestricted Subsidiary may not thereafter be a Restricted Subsidiary.
"WhollyOwned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary 100% of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other WhollyOwned Restricted Subsidiaries at such
time.
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