CONFORMED COPY
SWING-N-SLIDE CORP.
NEWCO, INC.
$12,500,000 12% Senior Subordinated Notes due March 13, 2005
of Newco, Inc.
Warrants for 592,177 Shares of Common Stock (subject to adjustment)
of Swing-N-Slide Corp.
______________
SECURITIES PURCHASE AGREEMENT
______________
March 13, 1997
TABLE OF CONTENTS
Page
1. Authorization of Securities; etc. 1
2. Sale and Purchase of Securities 2
3. Closing 2
4. Conditions to Closing 2
4.1. Representations and Warranties Correct 3
4.2. Performance; No Default 3
4.3. Related Transactions 3
4.4. Compliance Certificate 5
4.5. Sale of Securities to Other Purchasers 5
4.6. Opinions of Counsel for the Companies 5
4.7. Opinion of Your Special Counsel 5
4.8. Certain Additional Documents to be Delivered at or Prior to the
Closing 5
4.9. Legal Investment; Certificate 5
4.10. Sale and Purchase Not Forbidden by Law 5
4.11. Payment of Transactions Costs54.12.Proceedings and Documents 5
5. Representations and Warranties by the Companies 6
5.1. Organization, Standing, etc. 6
5.2. Names; Jurisdictions of Incorporation; Subsidiaries, etc. 6
5.3. Qualification 6
5.4. Business, etc. 6
5.5. Shares; Stockholders 7
5.6. Financial Statements 8
5.7. Changes; Solvency, etc. 9
5.8. Tax Returns and Payments 9
5.9. Funded Debt, Current Debt, Liens, Investments, Transactions with
Affiliates, Leases, Derivative Transactions and Insurance
Coverages 9
5.10. Title to Properties; Liens; Leases 10
5.11. Litigation, etc. 10
5.12. Valid and Binding Obligations; Compliance with Other Instruments,
Borrowing Restrictions, etc. 11
5.13. ERISA 12
5.14. Consents, etc.135.15.Proprietary Rights; Licenses 13
5.16. Offer of Securities; Investment Bankers 13
5.17. Government Regulation 14
5.18. Labor Relations; Suppliers, Distributors and Customers 14
5.19. Disclosure 14
6. Use of Proceeds 15
7. Financial Statements and Information 15
8. Inspection. 20
9. Prepayment of Notes 20
9.1. Required Prepayment Without Premium of Notes 20
9.2. Optional Prepayment With Premium of Notes 20
9.3. Required Prepayment With Premium upon Exercise of Call Option 21
9.4. Prepayment Without Premium of the Notes at the Option of the
Required Holders of the Notes Upon a Change of Control 21
9.5. Allocation of Partial Prepayments of Notes 22
9.6. Notice of Optional Prepayments of Notes 22
9.7. Maturity; Accrued Interest; Surrender, etc. of Notes 22
9.8. Purchase of Notes 22
9.9. Payment on Non-Business Days 22
9.10. Application of Notes in Satisfaction of Exercise Price of
Warrants 23
10. Subordination of Notes and Note Guarantees 23
11. Registration, etc. 23
11.1. Registration on Request 23
11.2. Incidental Registration 25
11.3. Permitted Registration; Holdback Agreement; Private
Placement 26
11.4. Registration Procedures 26
11.5. Indemnification 27
11.6. Restrictions on Other Agreements 28
12. Put and Call Rights; Required Exercise of Warrants 29
12.1. Certain Definitions 29
12.2. Put Rights of the Holders of the Put Securities Upon Change of
Control 29
12.3. Call Right of the Holding Company; Required Exercise of
Warrants 30
12.4. Closing; Payment of Put/Call Price; Adjustments to Put/Call
Price 31
12.5. Limitations on Obligations of the Holding Company 32
12.6. Successive Changes of Control, ▇▇▇.▇▇▇▇.▇.▇▇ Limitation on
the Holding Company 33
13. Board Visitation Rights 34
14. Covenants of the Companies 34
14.1. Books of Record and Account; Reserves 34
14.2. Payment of Taxes; Existence; Maintenance of Properties;
Compliance with Laws; Lines of Business; Proprietary Rights 34
14.3. Insurance 35
14.4. Limitation on Discount or Sale of Receivables 36
14.5. Limitation on Funded Debt and Current Debt3614.6.Limitation
on Restricted Investments and Restricted Payments 39
14.7. Financial Covenants; Limitations on Derivative Transactions 41
14.8. Tax Consolidation 42
14.9. Limitation on Liens 43
14.10. Limitation on Transactions with Affiliates 45
14.11. Limitation on Issuance of Preferred Shares and Redeemable Shares
By Subsidiaries 45
14.12. Limitation on Issuance and Disposition of Shares of
Subsidiaries 45
14.13. Limitation on Consolidation or Merger, etc. 46
14.14. Limitation on Sale-and-Leaseback Transactions 47
14.15. Limitation on Disposition of Property 47
14.16. Modification of Certain Documents, Agreements and
Instruments 48
14.17. Further Assurances; Note Guarantees 49
14.18. Certain Additional Covenants of the Holding Company 50
15. Definitions 52
15.1. Definitions of Capitalized Terms 52
15.2. Other Definitions 69
15.3. Accounting Terms and Principles; Laws 70
16. Remedies 71
16.1. Events of Default Defined; Acceleration of Maturity 71
16.2. Suits for Enforcement, etc. 75
16.3. No Election of Remedies 75
16.4. Remedies Not Waived 76
16.5. Application of Payments 76
17. Registration, Transfer and Exchange of Securities 76
18. Replacement of Securities 76
19. Amendment and Waiver 77
20. Method of Payment of Securities 78
21. Expenses; Indemnity 78
22. Taxes 78
23. Communications 79
24. Survival of Agreements, Representations and Warranties, etc. 79
25. Successors and Assigns; Rights of Other Holders 80
26. Purchase for Investment; ERISA 80
27. Governing Law; Jurisdiction; Waiver of Jury Trial 82
28. Rule 144A 82
29. Miscellaneous 82
Schedule I Schedule of Purchasers
Exhibit 1(a) Form of Warrant
Exhibit 1(b)(i) Form of Note
Exhibit 1(b)(ii) Form of Note Guarantee
Exhibit 3 Wire Instructions
Exhibit 4.3(b)(i) Indebtedness of Old Game Time and the Companies to
be Repaid on the Closing Date
Exhibit 4.3(b)(ii) Persons Acquiring Common Stock of the Holding
Company
Exhibit 4.3(b)(iii) Form of Bridge Note
Exhibit 4.6 Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇
Exhibit 4.7 Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
Exhibit 4.8 Additional Documents to be Delivered at or Prior
to the Closing
Exhibit 5.2 Names; Jurisdictions of Incorporation;
Subsidiaries, etc.
Exhibit 5.4 Disclosure Documents
Exhibit 5.5(a) Shares; Stockholders
Exhibit 5.5(b) Other Securities; Commitments; Preemptive and
Registration Rights
Exhibit 5.6(a) Financial Statements
Exhibit 5.6(b) Projections
Exhibit 5.6(c) Pro Forma Unaudited Balance Sheet
Exhibit 5.7 Restricted Payments and Restricted Investments
Exhibit 5.8 Tax Returns and Payments
Exhibit 5.9 Funded Debt, Current Debt, Liens, Investments,
Transactions with Affiliates, Leases, Derivative
Transactions and Insurance Coverages
Exhibit 5.11 Pending Litigation, etc.
Exhibit 5.14 Consents
Exhibit 6 Use of Proceeds
Exhibit 7(c)(v) Information as to New Subsidiaries
Exhibit 15.1 Consolidated EBITDA for Periods Prior to the
Closing Date
SWING-N-SLIDE CORP.
NEWCO, INC.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
March 13, 1997
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SWING-N-SLIDE CORP., a Delaware corporation (the "Holding Company"),
and NEWCO, INC., a Wisconsin corporation and a Wholly-Owned Subsidiary of
the Holding Company (the "Operating Company") (the Holding Company and the
Operating Company are collectively referred to herein as the "Companies"
and each as a "Company"), jointly and severally agree with you as follows.
Certain terms used herein are defined in section 15.
1. Authorization of Securities; etc.
(a) The Holding Company has authorized the issue and sale of
its warrants evidencing rights to purchase 592,177 shares of Holding
Company Class A Common Stock (subject to adjustment) (herein,
together with any warrants issued in exchange therefor or replacement
thereof, called the "Warrants"). The Warrants are to be
substantially in the form of Exhibit 1(a) attached hereto.
(b) The Operating Company has authorized the issue and sale of
its 12% Senior Subordinated Notes due March 13, 2005 (herein,
together with any notes issued in exchange therefor or replacement
thereof, called the "Notes") in the aggregate principal amount of
$12,500,000. The Notes are to be substantially in the form of
Exhibit 1(b)(i) attached hereto. Interest is payable on the Notes,
semi-annually in arrears on the 13th day of March and September of
each year, commencing September 13, 1997 and at maturity. The Notes
shall be guaranteed by the Holding Company and each of the other
Guarantors pursuant to one or more Note Guarantees substantially in
the form of Exhibit 1(b)(ii) attached hereto (each, a "Note
Guarantee", collectively, the "Note Guarantees"), as further provided
in section 14.17. In no event shall the amount paid or agreed to be
paid by the Operating Company as interest and premium on any Note
exceed the highest lawful rate permissible under any law applicable
thereto.
(c) The Securities are to be issued under this Agreement and
separate Securities Purchase Agreements (the "Other Securities
Purchase Agreements") identical herewith (except as to the name and
address of each of the other purchasers) being entered into
concurrently by the Companies with each of the other purchasers (the
"Other Purchasers") named in Schedule I attached hereto. The issue
of Securities to you and the issues of Securities to each of the
Other Purchasers are separate transactions, and you shall not be
liable or responsible for the acts or defaults of the Other
Purchasers.
2. Sale and Purchase of Securities. The Companies will issue and sell
to you and, subject to the terms and conditions hereof and in reliance
upon the representations and warranties of the Companies contained herein
and in the other Operative Documents, you will purchase from the
Companies, at the Closing specified in section 3, such Securities as are
specified on that portion of Schedule I attached hereto as is applicable
to you. The aggregate purchase price of the Securities shall be
$12,500,000, which shall be allocated (a) $9,777,111 to the Notes and
(b) $2,722,889 to the Warrants. The Companies, you and each of the Other
Purchasers agree that the values ascribed to the Securities (which values
shall be used by the Companies, you and each of the Other Purchasers, as
well as any subsequent holder of any of the Securities, for all purposes,
including the preparation of tax returns) shall be determined in
accordance with the foregoing.
3. Closing. The closing of the sale and purchase of the Securities
hereunder (the "Closing") shall take place at the office of Messrs.
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, Exchange Place, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on March 13, 1997 (or such other date (not later than
March 14, 1997) to which you may agree) (the "Closing Date"). The Closing
shall occur not later than 11:00 A.M. Boston time (your reinvestment
deadline) on the Closing Date. At the Closing, the Companies will deliver
to you the Securities to be purchased by you at the Closing against
payment of the purchase price thereof to (or for the benefit of) the
Companies in immediately available funds in accordance with the wire
instructions set forth on Exhibit 3 attached hereto. Delivery of the
Securities to be purchased by you at the Closing shall be made in the form
of one or more Notes and Warrants, in such denominations and registered in
such names as are specified on Schedule I attached hereto, and in each
case dated and, in the case of each Note, bearing interest from, the
Closing Date. If at the Closing the Companies shall fail to tender the
Securities to be delivered to you thereat as provided herein, or if at the
Closing 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 other rights you may have by reason of such failure or such
non-fulfillment.
4. Conditions to Closing. Your obligation to purchase and pay for the
Securities to be purchased by you hereunder at the Closing is subject to
the fulfillment to your satisfaction, prior to or at the Closing, of the
following conditions:
4.1. Representations and Warranties Correct. The
representations and warranties made by the Companies herein and in the
other Operative Documents shall have been correct in all material respects
when made and shall be correct in all material respects at and as of the
time of the Closing (after giving effect to the transactions consummated
at the Closing).
4.2. Performance; No Default. The Companies shall have
performed all agreements and complied with all conditions contained herein
and in the other Operative Documents required to be performed or complied
with by them prior to or at the Closing, and at the time of the Closing,
no Default or Event of Default shall exist and no condition shall exist
which has resulted in, or could reasonably be expected to result in, a
Material Adverse Change.
4.3. Related Transactions.
(a) The Acquisition shall have been consummated in accordance
with the Acquisition Documents. No material term or condition of the
Acquisition Documents shall have been amended, modified, supplemented
or waived. The purchase price of the outstanding Shares of Old Game
Time shall not exceed $27,000,000 and shall be paid at the time of
the Closing as follows: (i) $25,000,000 shall be paid in cash and
(ii) $2,000,000 shall be paid by delivery of the Seller Note. The
aggregate amount of transaction fees and expenses paid in connection
with the Acquisition shall not exceed $5,000,000. The terms of the
Acquisition Documents, including, without limitation, those pursuant
to which the Seller Note is subordinated to the Notes, shall be
satisfactory to you in all material respects.
(b) The debt and equity capitalization of the Holding Company
and each of its Subsidiaries shall be satisfactory to you in all
material respects. Without limiting the generality of the foregoing,
after giving effect to the Acquisition, (i) neither the Holding
Company nor any of its Subsidiaries shall have any outstanding Funded
Debt or Current Debt other than that evidenced by the Notes and the
Note Guarantees and that which is specified on Exhibit 5.9 attached
hereto, (ii) the Indebtedness of Old Game Time and of the Companies
specified on Exhibit 4.3(b)(i) attached hereto shall have been repaid
in full, all related Liens shall have been terminated and you shall
have received evidence of the foregoing satisfactory to you,
(iii) the Persons indicated on Exhibit 4.3(b)(ii) attached hereto
shall have (A) acquired 1,065,598 shares of Holding Company Class A
Common Stock and shall have paid in full not less than $5,000,000 in
cash in the aggregate for such shares and (B) lent the Holding
Company $2,500,000 in cash and the Holding Company shall have issued
its Bridge Note in substantially the form of Exhibit 4.3(b)(iii)
attached hereto (the "Bridge Note") and (iv) the Holding Company
shall have made a capital contribution to the Operating Company of
not less than $7,500,000.
(c) The Fleet Bank Documents shall have been executed and
delivered and shall be in full force and effect. The Operating
Company shall have established pursuant thereto (i) a $20,000,000
senior secured revolving credit facility, (ii) a $45,000,000 senior
secured term loan facility and (iii) a $4,500,000 senior secured term
loan facility. The aggregate amount of the Operating Company's
unused borrowing availability immediately following the Closing under
such revolving credit facility shall be at least $2,000,000 and you
shall have been furnished with a borrowing base certificate
satisfactory in form and substance to you evidencing the same. The
terms of the Fleet Bank Documents shall be satisfactory to you in all
material respects.
(d) The Holding Company shall have furnished to you a copy of
its 1992 Incentive Stock Plan and 1996 Incentive Stock Plan
(collectively, the "Option Plan") providing for the issuance to
officers, directors and employees of and advisors and consultants to
the Holding Company and/or its Subsidiaries of options exercisable
for shares of Holding Company Class A Common Stock. The terms of the
Option Plan and all related agreements, documents and instruments
shall be satisfactory to you in all material respects.
(e) The Organizational Documents of the Holding Company, the
Operating Company and each other Subsidiary of the Holding Company
shall be satisfactory to you in all material respects.
(f) The Companies shall have entered into the Consulting
Agreement with the Consultants, the terms of which shall be
satisfactory to you in all material respects, and you, the Other
Purchasers, the lenders under the Fleet Bank Agreement, the Companies
and the Consultants shall have executed and delivered a letter
agreement (the "Consulting Agreement Side Letter") restricting the
payment of amounts due under the Consulting Agreement.
(g) You shall be satisfied in all material respect as to the
compliance by the Holding Company, the Operating Company and each
other Subsidiary of the Holding Company with all applicable
Environmental Laws. Without limiting the generality of the
foregoing, you shall have received "Phase I" environmental site
assessment reports with respect to the facilities located at ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, and ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, and such reports shall be satisfactory to you in
all material respects.
(h) Each of the Guarantors shall have duly authorized, executed
and delivered to you and the Other Purchasers one or more Note
Guarantees (subordinated on the same terms as the Notes), and the
Note Guarantees shall be in full force and effect.
4.4. Compliance Certificate. At the Closing, you shall have
received an Officers' Certificate from each of the Companies, dated the
Closing Date, certifying that the conditions specified in sections 4.1 and
4.2 have been fulfilled.
4.5. Sale of Securities to Other Purchasers. At the Closing,
the Companies shall issue and sell to the Other Purchasers the Securities
to be purchased at the Closing by the Other Purchasers pursuant to the
Other Securities Purchase Agreements and shall receive payment in full of
the purchase price thereof.
4.6. Opinions of Counsel for the Companies. At the Closing, you
shall have received an opinion, dated the Closing Date, from Messrs. ▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel to the Companies, addressing the matters set forth on
Exhibit 4.6 attached hereto, and such other matters as you may reasonably
request.
4.7. Opinion of Your Special Counsel. At the Closing, you shall
have received an opinion, dated the Closing Date, from your special
counsel, Messrs. ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, substantially in the form of
Exhibit 4.7 attached hereto.
4.8. Certain Additional Documents to be Delivered at or Prior to
the Closing. You shall have received from the Companies the items
specified on Exhibit 4.8 attached hereto, each of which shall be
satisfactory to you in all material respects.
4.9. Legal Investment; Certificate. Your purchase of the
Securities to be issued pursuant hereto shall be permitted under the laws
and regulations of any jurisdiction to which you are subject (without
resort to any provision of any such law permitting limited investments by
you without restriction as to the character of the particular investment),
and you shall, if requested by you, have received an Officers' Certificate
from either or both of the Companies, dated the Closing Date, certifying
as to such matters as you may reasonably request to enable you to
determine whether your purchase is so permitted.
4.10. Sale and Purchase Not Forbidden by Law. The offer, issue,
sale and delivery by the Companies of the Securities to be issued pursuant
hereto and your purchase of such Securities at the Closing shall not be
prohibited by and shall not subject you to any tax, penalty, liability or
other onerous condition under or pursuant to any law, statute, rule or
regulation.
4.11. Payment of Transactions Costs. The Companies shall have
paid in immediately available funds all fees, expenses and disbursements
incurred by you at or prior to the time of the Closing in connection with
the transactions contemplated by the Operative Documents, including,
without limitation, the reasonable fees, expenses and disbursements of
your special counsel.
4.12. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by the Operative Documents and all
agreements, documents and instruments incident to such transactions shall
be satisfactory in substance and form to you and your special counsel, and
you and your special counsel shall have received all such counterpart
originals or copies of such agreements, documents and instruments as you
or they may reasonably request.
5. Representations and Warranties by the Companies. The Companies
jointly and severally represent and warrant that (after giving effect to
the transactions consummated at the Closing, including, without
limitation, the Acquisition):
5.1. Organization, Standing, etc. The Holding Company and each
of its Subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation
and has all requisite power and authority to own, lease and operate its
properties, to carry on its business as now conducted and now proposed to
be conducted as described in the Disclosure Documents referred to in
section 5.4, to execute, deliver and perform each of the Operative
Documents to which it is (or is to be) a party and to consummate the
transactions contemplated by the Operative Documents. No approval of the
stockholders of the Holding Company or any of its Subsidiaries or any
class thereof is required in connection therewith which has not previously
been obtained.
5.2. Names; Jurisdictions of Incorporation; Subsidiaries, etc.
Exhibit 5.2 attached hereto correctly specifies as to the Holding Company
and each of its Subsidiaries (a) its legal name, (b) the jurisdiction of
its incorporation and (c) each jurisdiction (other than its jurisdiction
of incorporation) in which it is qualified to do business. The Holding
Company does not have any Subsidiary that is not named on Exhibit 5.2
attached hereto. The Operating Company is and shall at all times be a
Wholly-Owned Subsidiary of the Holding Company.
5.3. Qualification. The Holding Company and each of its
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the character of the properties
owned or leased or the nature of the activities conducted makes such
qualification or licensing necessary, except for those jurisdictions in
which the failure to be so qualified or licensed or to be in good standing
has not resulted in, and could not reasonably be expected to result in, a
Material Adverse Change.
5.4. Business, etc. The Holding Company and its Subsidiaries
are engaged in the business of designing, manufacturing, marketing and
selling, through home centers, mass merchants or commercial/industrial
trade classes, children's consumer and commercial indoor and outdoor play
products, new products that utilize the Operating Company's metal
fabrication or plastic forming core competencies, or substantially similar
products (the "Business"), as further described in the documents listed on
Exhibit 5.4 attached hereto (the "Disclosure Documents"), true, correct
and complete copies of which have been furnished to you.
5.5. Shares; Stockholders.
(a) Exhibit 5.5(a) attached hereto correctly and fully
specifies as to the Holding Company and each of its Subsidiaries
(after giving effect to the transactions consummated at the Closing)
(i) its authorized, issued and outstanding Shares and (ii) the name
of, and the number (and percentage) of Shares held by, each record
owner of such Shares (or, in the case of the Holding Company, each
record owner of 5% or more of the Shares of the Holding Company) and
indicates if such Person is a member of the Initial Investor Group.
All of the outstanding Shares of the Holding Company and each of its
Subsidiaries are, and all Warrant Shares issued upon exercise of the
Warrants in accordance with the terms thereof will be, duly
authorized, validly issued, fully paid and non-assessable and not
subject to any preemptive right, right of first refusal or similar
right on the part of any other Person, and all of such Shares have
been (or will have been) offered, issued and sold in accordance with
all applicable laws. Except as set forth on Exhibit 5.5(a) attached
hereto, the owners of the Shares indicated on Exhibit 5.5(a) attached
hereto own the Shares indicated on such exhibit free of any Lien,
proxy, voting agreement, voting trust, stockholders agreement or
similar agreement or restriction. Except as set forth on Exhibit
5.5(a) attached hereto, neither the Organizational Documents nor any
other agreement, document or instrument binding on or applicable to
the Holding Company or any of its Subsidiaries or any of its
stockholders contains any provision requiring a higher voting
requirement with respect to action taken (and/or to be taken) by its
board of directors or stockholders than that which would apply in the
absence of such provision. GreenGrass Holdings has the right (by
virtue of its ownership of the Shares of the Holding Company as shown
on Exhibit 5.5(a) attached hereto) to elect or designate for election
a majority of the members of the board of directors of the Holding
Company (and thereby to direct or cause the direction of the
management and policies of the Holding Company and each of its
Subsidiaries), and, except as set forth on Exhibit 5.5(a) attached
hereto, neither GreenGrass Holdings, nor any of its members, nor any
other Person having any direct or indirect interest in GreenGrass
Holdings is subject to any agreement or restriction that affects its
right to vote such Shares or to exercise any other incident of
ownership of such Shares.
(b) Except as provided in sections 11 and 12, except for the
Warrants and except as set forth on Exhibit 5.5(b) attached hereto
(after giving effect to the consummation of the transactions
consummated at the Closing), (i) there are no outstanding securities
convertible into or exercisable or exchangeable for any Shares of the
Holding Company or any of its Subsidiaries and no outstanding
agreements for the purchase from, or sale or issuance by, the Holding
Company or any of its Subsidiaries of any of its Shares or any
securities convertible into or exercisable or exchangeable for such
Shares; (ii) there are no agreements on the part of the Holding
Company or any of its Subsidiaries to issue, sell or distribute any
of its Shares, other securities or assets; (iii) neither the Holding
Company nor any of its Subsidiaries has any obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its Shares
or other securities or any interest therein or to pay any dividend or
make any distribution in respect thereof; and (iv) no Person is
entitled to any rights with respect to the registration of any Shares
or other securities of the Holding Company or any of its Subsidiaries
under the Securities Act (or the securities laws of any other
jurisdiction).
(c) The aggregate number of shares of Holding Company Class A
Common Stock issuable upon exercise in full of the Warrants
immediately after the Closing is 592,177, which, if then issued,
would constitute 6.0% of the Holding Company Common Stock (calculated
assuming the conversion, exercise and exchange of all outstanding
securities convertible into and exercisable or exchangeable for
shares of Holding Company Common Stock, including, without
limitation, the Warrants, the Holding Company's 10% Convertible
Subordinated Debentures due 2004, the Bridge Note and any options now
outstanding under the Option Plan, it being agreed that the Warrants
shall be subject to dilution on account of the issuance of not more
than 1,096,513 shares of Holding Company Class A Common Stock
pursuant to the Option Plan upon the exercise of options therefor
granted after the Closing Date). The Holding Company has reserved
592,177 shares of Holding Company Class A Common Stock solely for
issuance upon exercise of the Warrants.
5.6. Financial Statements. You have been furnished with:
(a) the financial statements referred to on Exhibit 5.6(a)
attached hereto, which financial statements are complete and correct
in all material respects, have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby
and present fairly in all material respects the financial position
and the results of operations and cash flows of the Person(s)
purported to be covered thereby as at the respective dates and for
the respective periods indicated in conformity with GAAP (subject, in
the case of any unaudited financial statements, to the absence of
footnote disclosure and normal year-end and audit adjustments);
(b) the projections referred to on Exhibit 5.6(b) attached
hereto, which projections were prepared in good faith, are based upon
assumptions that the Companies believe are reasonable and take into
account all material information regarding the information set forth
therein. Such projections represent a reasonable estimate of the
future financial performance of the Holding Company and its
Subsidiaries; and
(c) the pro forma unaudited consolidated balance sheet of the
Holding Company referred to on Exhibit 5.6(c) attached hereto, which
balance sheet fairly presents the consolidated financial position of
the Holding Company as of December 31, 1996, adjusted on a pro forma
basis to give effect to the consummation of the transactions
contemplated by the Operative Documents as if they had occurred as of
such date, and reflects all known liabilities of the Holding Company
and its Subsidiaries, contingent or other, as at the Closing Date,
required by GAAP to be reflected therein.
5.7. Changes; Solvency, etc. Since December 31, 1995:
(a) there has been no change in the assets, liabilities or financial
condition of the Holding Company or any of its Subsidiaries or of Old Game
Time from that set forth in the balance sheets as at such date referred to
on Exhibit 5.6(a) attached hereto, other than changes in the ordinary
course of business which have not been, either in any case or in the
aggregate, materially adverse; (b) no condition or event has occurred
which has resulted in, or could reasonably be expected to result in, a
Material Adverse Change; and (c) except as set forth on Exhibit 5.7
attached hereto, neither the Holding Company nor any of its Subsidiaries
nor Old Game Time has, directly or indirectly, declared, ordered, paid or
made any Restricted Payment or Restricted Investment. Each of the Holding
Company and its Subsidiaries is (and after giving effect to the
consummation of the transactions at Closing will be) Solvent.
5.8. Tax Returns and Payments. The Holding Company and its
Subsidiaries and Old Game Time have filed all tax returns required by law
to be filed and have paid (and have made adequate provisions for the
payment of) all taxes, assessments and other governmental charges levied
upon their respective properties, assets, income, receipts, franchises or
sales, other than those not yet delinquent and those, not substantial in
aggregate amount, being or about to be contested as provided in section
14.2(a). The income tax liability of the Holding Company and its
Subsidiaries and Old Game Time has been finally determined by all
applicable governmental authorities, including, without limitation, the
Internal Revenue Service, and satisfied, or the time of audit has expired,
for the fiscal years specified on Exhibit 5.8 attached hereto. Neither
the Holding Company nor any of its Subsidiaries nor Old Game Time has
executed any waiver or waivers that would have the effect of extending the
applicable statute of limitations in respect of income tax liabilities.
The charges, accruals and reserves in the financial statements of the
Holding Company and its Subsidiaries and Old Game Time in respect of taxes
for all fiscal periods are adequate, and the Companies know of no unpaid
assessments for additional taxes for any fiscal period or of any basis
therefor.
5.9. Funded Debt, Current Debt, Liens, Investments, Transactions
with Affiliates, Leases, Derivative Transactions and Insurance Coverages.
Exhibit 5.9 attached hereto correctly describes as to the Holding Company
and each of its Subsidiaries (after giving effect to the transactions
consummated at the Closing):
(a) all of its Funded Debt and/or Current Debt to be
outstanding immediately following the Closing (other than that
evidenced by the Notes and the Note Guarantees);
(b) all Liens to which any of its properties and assets will be
subject immediately following the Closing (other than those of the
character described in section 14.9(b)) which individually or in the
aggregate secure Indebtedness of $1,000,000 or more;
(c) all of its Investments (and all agreements and commitments
to make Investments) to be owned or held (or in effect) immediately
following the Closing (other than Investments of the character
described in clauses (c) through (h) of the definition of Permitted
Investment);
(d) all of its Affiliates (other than the Holding Company and
its Subsidiaries) and all transactions with such Affiliates which
were consummated during the 12-month period ended on the Closing Date
or which it is now obligated or now intends to consummate at any time
in the future;
(e) each lease, other than Capital Leases, under which it is
lessee or sublessee and is or shall be obligated to pay $250,000 or
more during any period of twelve consecutive months after the Closing
Date, and, with respect to each such lease, the name of the lessor,
the lessee or sublessee, a general description of the property
leased, the annual Rental Obligations payable thereunder and the term
thereof;
(f) each Derivative Transaction to which it is a party or in
which it is otherwise engaged and each Derivative Transaction in
which it now intends to engage at any time in the future (and a
summary of the nature of each such Derivative Transaction); and
(g) the limits, deductibles and coverages (in summary form) of
its insurance policies.
5.10. Title to Properties; Liens; Leases. The Holding Company
and its Subsidiaries have good and marketable title to all of their
respective properties and assets, including, without limitation, the
properties and assets reflected in the balance sheets dated December 31,
1995 of the Holding Company and of Old Game Time referred to on Exhibit
5.6(a) attached hereto, except properties and assets disposed of since
such date in the ordinary course of business, free of all Liens (other
than the Liens permitted under section 14.9). The only material
properties and assets of the Holding Company are the Shares of the
Operating Company. The Holding Company and its Subsidiaries enjoy
peaceful and undisturbed possession under all material leases under which
they operate, and all of such leases are valid, subsisting and in full
force and effect. None of such leases contains any unusual or burdensome
provision, which, in either case, has resulted in, or could reasonably be
expected to result in, a Material Adverse Change.
5.11. Litigation, etc. There is no action, proceeding or
investigation pending or threatened, including, without limitation, those
referred to on Exhibit 5.11 attached hereto, which questions the validity
of any of the Operative Documents or any action taken or to be taken
pursuant thereto or which has resulted in, or could reasonably be expected
to result in, a Material Adverse Change. There is no outstanding
judgment, decree or order, including, without limitation, those referred
to on Exhibit 5.11 attached hereto, which has resulted in, or could
reasonably be expected to result in, a Material Adverse Change. Exhibit
5.11 attached hereto sets forth a complete list of all pending and
threatened actions, proceedings and investigations and all outstanding
judgments, decrees and orders against or affecting the Holding Company
and/or any of its Subsidiaries.
5.12. Valid and Binding Obligations; Compliance with Other
Instruments, Borrowing Restrictions, etc.
(a) This Agreement has been duly authorized, executed and
delivered by each of the Companies and constitutes the valid and
legally binding obligation of each of the Companies enforceable
against each of the Companies in accordance with its terms. Each of
the other Operative Documents to which either Company and/or any of
their respective Subsidiaries is (or is to be) a party has been duly
authorized by such Person and, when executed and delivered, will
constitute the valid and legally binding obligation of such Person,
enforceable against it in accordance with its terms.
(b) Neither the Holding Company nor any of its Subsidiaries is
in violation of or in default under any term of its Organizational
Documents, or of any agreement, document, instrument, judgment,
decree, order, law, statute, rule or regulation applicable to it or
any of its properties and assets, in any way which has resulted in,
or could reasonably be expected to result in, a Material Adverse
Change. Without limiting the generality of the foregoing, the Holding
Company and each of its Subsidiaries is in compliance with (and
neither it nor any of its predecessors in interest has received any
notice to the contrary) and there is no reasonable possibility of any
liability of or any judgment, decree or order being entered against
or being made applicable to the Holding Company and/or any of its
Subsidiaries or any of their respective properties and assets under
or on account of any Environmental Laws, except where the same has
not resulted in, and could not reasonably be expected to result in, a
Material Adverse Change.
(c) The execution, delivery and performance of and the
consummation of the transactions contemplated by the Operative
Documents will not violate or constitute a default under, or permit
any Person to accelerate or to require the prepayment of any
Indebtedness of the Holding Company or any of its Subsidiaries or to
terminate any material lease or agreement of the Holding Company or
any of its Subsidiaries pursuant to, or result in the creation of any
Lien (other than the Liens created by the Fleet Bank Documents) upon
any of the properties or assets of the Holding Company or any of its
Subsidiaries pursuant to, any term of its Organizational Documents or
of any agreement, document, instrument, judgment, decree, order, law,
statute, rule or regulation applicable to any of them or any of their
respective properties and assets.
(d) Neither the Holding Company nor any of its Subsidiaries is
a party to or bound by or subject to any agreement, document,
instrument, judgment, decree, order, law, statute, rule or regulation
(other than the Operative Documents and the Fleet Bank Documents and
laws, statutes, rules or regulations affecting creditors or
businesses generally) (i) which restricts its right or ability to
incur Indebtedness, to issue securities or to consummate the
transactions contemplated by the Operative Documents; (ii) under the
terms of or pursuant to which its obligation to pay all amounts due
from it and/or to perform all obligations imposed on it and/or to
comply with the terms applicable to it under any of the Operative
Documents is in any way restricted; (iii) which restricts its right
or ability to make any distributions to its stockholders or in
respect of any of its Shares, to mortgage or dispose of its
properties, to consummate any merger, consolidation or acquisition,
to make Investments or capital expenditures, to enter into and
perform leases, to pay executive compensation and/or to conduct its
business as now conducted and now proposed to be conducted, or
(iv) which has resulted in, or could reasonably be expected to result
in, a Material Adverse Change.
5.13. ERISA.
(a) The Holding Company, the Operating Company and each ERISA
Affiliate have operated and administered each Plan in compliance with
all applicable laws except for such instances of noncompliance which
have not resulted in, and could not reasonably be expected to result
in, a Material Adverse Change. Neither the Holding Company, the
Operating 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 Holding Company, the
Operating Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Holding
Company, the Operating 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 individually or in the
aggregate result in a Material Adverse Change.
(b) None of the Plans is an employee pension plan subject to
Title IV of ERISA maintained, or to which contributions have been
made or are required to be made, by the Holding Company, the
Operating Company or any ERISA Affiliate within five years prior to
the date hereof.
(c) Since January 1, 1992, the Holding Company, the Operating
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 could
reasonably be expected to result in a Material Adverse Change. Since
such date, the Holding Company, the Operating Company and the ERISA
Affiliates have made all required contributions to Multiemployer
Plans. Since such date, neither the Holding Company, the Operating
Company nor any ERISA Affiliate has incurred any Withdrawal Liability
upon a complete or partial withdrawal from any Multiemployer Plan
that individually or in the aggregate could result in a Material
Adverse Change. None of the Plans is a Multiemployer Plan
(d) The Holding Company and its Subsidiaries have no expected
post retirement welfare benefit obligation (determined as of the last
day of the most recently ended fiscal year of the Holding Company 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).
(e) The consummation of the transactions contemplated by the
Operative Documents will not involve any transaction that is subject
to the prohibitions of section 406(a) 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 in the first sentence of this section
5.13(e) is made by the Companies in reliance upon and subject to the
accuracy of your representation in section 26(b) as to the sources of
the funds used to pay the purchase price of the Securities to be
purchased by you.
5.14. Consents, etc. No consent, approval or authorization of,
or declaration or filing with, or other action by, any Person (including,
without limitation, any creditor of or lender to the Holding Company or
any of its Subsidiaries and any governmental authority) is required as a
condition precedent to the valid execution, delivery and performance of
and the consummation of the transactions contemplated by the Operative
Documents, other than those specified on Exhibit 5.14 attached hereto, all
of which have been obtained and are unconditional, in full force and
effect and not subject to appeal or review. Without limiting the
generality of the foregoing, no filing under the ▇▇▇▇▇▇▇ Act and/or the
▇▇▇▇-▇▇▇▇▇- ▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and no notice or
payment is required under The Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Section 2101 et seq., is required in
connection with the Acquisition and/or the consummation of the other
transactions contemplated by the Operative Documents.
5.15. Proprietary Rights; Licenses. The Holding Company and its
Subsidiaries have all Proprietary Rights and Licenses as are adequate for
the conduct of their respective businesses as now conducted and now
proposed to be conducted, without any known conflict with the rights of
others. Each such Proprietary Right and License is in full force and
effect, all material obligations with respect thereto have been fulfilled
and performed, and there is no infringement thereon by any other Person.
No default in the performance or observance by the Holding Company and/or
any of its Subsidiaries (or any of their respective predecessors in
interest) of its obligations thereunder has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any Proprietary Right or License or which has resulted in,
or could reasonably be expected to result in, a Material Adverse Change.
5.16. Offer of Securities; Investment Bankers. Neither the
Holding Company nor any of its Subsidiaries nor any Person acting on their
behalf (a) has directly or indirectly offered the Securities or any part
thereof or any similar securities for issue or sale to, or solicited any
offer to buy any of the same from, anyone other than you, the Other
Purchasers and not more than 35 other institutional investors, (b) has
taken or will take any action which would bring the issuance and sale of
the Securities within the provisions of Section 5 of the Securities Act or
the registration or qualification provisions of any applicable blue sky or
other securities laws, (c) has dealt with any broker, finder, commission
agent or other similar Person in connection with the sale of the
Securities and the other transactions contemplated by the Operative
Documents, other than ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation,
▇▇▇▇▇ Capital Management, Inc., Glencoe Growth Closely-Held Business Fund,
L.P. and ▇▇▇▇-▇▇▇▇▇, ▇▇▇▇ & Co., Inc., or (d) is under any obligation to
pay any broker's fee, finder's fee or commission in connection with such
transactions, other than fees to the Persons specified in clause (c),
which fees are the obligation solely of the Holding Company.
5.17. Government Regulation. Neither the Holding Company nor any
of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Investment Company
Act of 1940 or the Interstate Commerce Act, each as amended.
5.18. Labor Relations; Suppliers, Distributors and Customers. No
dispute involving employees of the Holding Company or any of its
Subsidiaries (including, without limitation, employees of Old Game Time
who will become employees of the Operating Company) or the relationship of
the Holding Company or any of its Subsidiaries with such employees has
resulted in, or could reasonably be expected to result in, any Material
Adverse Change. The relationships with the suppliers to and distributors
for and customers of the Holding Company and its Subsidiaries (including,
without limitation, the suppliers, distributors and customers of Old Game
Time who will become suppliers, distributors and customers of the
Operating Company) are satisfactory commercial working relationships and,
during the 12-month period ended on the Closing Date, no such supplier,
distributor or customer has cancelled or otherwise terminated its
relationship with or decreased its services, supplies or materials to or
its usage or purchase of the services or products of the Holding Company
or any of its Subsidiaries (or of Old Game Time) in a manner which has
resulted in, or could reasonably be expected to result in, a Material
Adverse Change. The Companies are not aware of any intention of any such
supplier, distributor or customer to take any such action.
5.19. Disclosure. Neither this Agreement nor any of the other
Operative Documents nor any other document, certificate or written
statement furnished to you by or on behalf of the Holding Company or any
of its Subsidiaries in connection with the transactions contemplated by
the Operative Documents (including, without limitation, the Disclosure
Documents), contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
herein and therein not misleading in the light of the circumstances under
which such statements were made, it being understood that, except as set
forth in section 5.6, no representation or warranty is made with respect
to any projections or other prospective financial information. There is
no fact known to the Companies (other than information concerning general
economic conditions known to the public generally) which has resulted in,
or could reasonably be expected to result in, a Material Adverse Change
which has not been set forth in this Agreement, the other Operative
Documents and the other documents, certificates and written statements
referred to above in this section 5.19.
6. Use of Proceeds.
(a) The proceeds of the sale of the Securities will be used by
the Companies on the Closing Date to partially refinance existing
Indebtedness of the Operating Company (including Indebtedness of Old
Game Time assumed by the Operating Company), to pay certain fees and
expenses incurred in connection with the issue and sale of the Notes,
to make certain capital expenditures and to partially fund the
purchase price paid in the Acquisition, all as further specified on
Exhibit 6 attached hereto.
(b) The Companies do not own, and will not, and will not
permit any of their respective Subsidiaries to, directly or
indirectly, use any part of the proceeds of the sale of the
Securities for the purpose of purchasing or carrying any "margin
stock" within the meaning of Regulation G (12 CFR Part 207) of the
Board of Governors of the Federal Reserve System (herein called a
"margin security") or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might constitute the
transactions contemplated by the Operative Documents a "purpose
credit" within the meaning of said Regulation G or cause this
Agreement or any of the other Operative Documents to violate
Regulation G or any other regulation of the Board of Governors of the
Federal Reserve System, or the Exchange Act or any other applicable
law, statute, regulation, rule, order or restriction.
7. Financial Statements and Information. The Companies will furnish to
you in duplicate, so long as you shall be obligated to purchase Securities
hereunder or shall hold any of the Securities, and to each other
institutional holder from time to time of any of the Securities:
(a) as soon as available and in any event within 45 days after
the end of each quarterly accounting period in each fiscal year of
the Holding Company and of the Operating Company:
(i) the consolidated and consolidating balance sheets of
the Holding Company and its Subsidiaries as at the end of such
period, the related consolidated and consolidating statements of
income, and the related consolidated statements of stockholders'
equity and cash flows for such period and for the portion of the
fiscal year of the Holding Company then ended; and
(ii) the consolidated and consolidating balance sheets of
the Operating Company and its Subsidiaries as at the end of such
period, the related consolidated and consolidating statements of
income, and the related consolidated statements of stockholders'
equity and cash flows for such period and for the portion of the
fiscal year of the Operating Company then ended;
in each case setting forth in comparative form the corresponding
figures for the same period and portion of the next preceding fiscal
year and the corresponding figures from the budgets for such period
and for the fiscal year which includes such period;
(b) as soon as available and in any event within 90 days after
the end of each fiscal year of the Holding Company and of the
Operating Company:
(i) the consolidated and consolidating balance sheets of
the Holding Company and its Subsidiaries as at the end of such
year, the related consolidated and consolidating statements of
income, and the related consolidated statements of stockholders'
equity and cash flows for such year; and
(ii) the consolidated and consolidating balance sheets of
the Operating Company and its Subsidiaries as at the end of such
year, the related consolidated and consolidating statements of
income, and the related consolidated statements of stockholders'
equity and cash flows for such year;
in each case setting forth in comparative form the corresponding
figures for the next preceding fiscal year and the corresponding
figures from the budgets for such fiscal year, all in reasonable
detail and accompanied by the standard unqualified report on such
consolidated financial statements of the Holding Company and its
Subsidiaries and of the Operating Company and its Subsidiaries of
Ernst & Young LLP (or other accountants of recognized national
standing selected by the Holding Company or the Operating Company, as
applicable, and reasonably satisfactory to the Required Holders of
each class of Securities), which report shall (i) state that the
audit of such accountants in connection with such consolidated
financial statements has been conducted in accordance with generally
accepted auditing standards and that such accountants believe that
such audit provides a reasonable basis for their opinion, (ii)
contain the other statements required from time to time by the
American Institute of Certified Public Accountants for an auditor's
standard unqualified opinion (and shall not contain any additional
explanatory paragraph concerning uncertainties or other matters),
(iii) include the opinion of such accountants that such consolidated
financial statements present fairly in all material respects the
consolidated financial position of the Holding Company and its
Subsidiaries or of the Operating Company and its Subsidiaries, as
applicable, as at the end of such fiscal year and the consolidated
results of operations and cash flows for such fiscal year, in
conformity with GAAP, (iv) state that each holder of the Securities
may rely upon such report and (v) be accompanied by a separate
certificate from such accountants which shall state (A) that such
accountants are familiar with the terms of the Operative Documents
and provide negative assurance relative to compliance with the
applicable covenants of the Operative Documents as they relate to
accounting matters and (B) if their examination has disclosed the
existence, during or at the end of the fiscal year covered by such
financial statements and/or the date of such certificate, of (x) any
"reportable condition" (as defined in Statement on Auditing Standards
No. 60 issued by the Auditing Standards Board of the American
Institute of Certified Public Accountants) in the internal control
structure of the Holding Company or any of its Subsidiaries, (y) any
Change of Control or (z) any Default or Event of Default and, if
their examination has disclosed such a condition or event, specifying
in reasonable detail the nature and period of existence thereof,
provided that in issuing such certificate such accountants shall not
be required to go beyond normal accounting procedures conducted in
connection with issuing their report referred to above;
(c) together with each delivery of quarterly and annual
financial statements pursuant to sections 7(a) and 7(b), an Officers'
Certificate of the Holding Company which shall:
(i) certify that such financial statements have been
prepared in accordance with GAAP (subject, in the case of any
unaudited financial statements, to normal year-end and audit
adjustments and the omission of footnotes) applied on a
consistent basis throughout the periods covered thereby and
present fairly in all material respects the consolidated
financial position and the consolidated results of operations
and cash flows of the Holding Company and its Subsidiaries or of
the Operating Company and its Subsidiaries, as applicable, as at
the end of and for the periods covered thereby in conformity
with GAAP;
(ii) state that, after due inquiry, the signers do not have
knowledge of the existence, during the fiscal period covered by
such financial statements or as at the date of such Officers'
Certificate, of (A) any "reportable condition" (as so defined)
in the internal control structure of the Holding Company or any
of its Subsidiaries, (B) any Change of Control or (C) any
Default or Event of Default, or, if such is not the case,
specifying in reasonable detail the nature and period of
existence thereof and what action has been taken, is being taken
and is proposed to be taken with respect thereto;
(iii) show in reasonable detail all computations
required to demonstrate compliance, during and at the end of the
fiscal period covered by such financial statements, with the
provisions of sections 14.5, 14.6, 14.7, 14.8, 14.9, 14.10,
14.13, 14.14, 14.15 and 14.18;
(iv) include in reasonable detail management's discussion
and analysis of the results of operations and the financial
condition of the Holding Company and its Subsidiaries and of the
Operating Company and its Subsidiaries as at the end of and for
the fiscal period covered by such financial statements,
including a discussion of any significant variation from the
budgets for such period delivered pursuant to section 7(h); and
(v) if there shall exist any Subsidiary of the Holding
Company and/or the Operating Company as of the date of such
Officers' Certificate which did not exist as of the date of the
last Officers' Certificate delivered pursuant to this section
7(c), specify with respect to each such Subsidiary the
information called for by Exhibit 7(c)(v), contain a brief
description of the nature of each such Subsidiary's business and
certify that such new Subsidiary (if it is a Significant
Subsidiary) is a party to a Note Guarantee;
(d) as promptly as practicable (but in any event not later than
five Business Days) after receipt thereof, copies of all reports or
written comments (including, without limitation, audit reports, so-
called management letters and any other reports or communications
with respect to the internal control structure of the Holding Company
or any of its Subsidiaries) submitted by independent accountants or
other management consultants;
(e) as promptly as practicable (but in any event not later than
five Business Days) after the same are available, copies of (i) all
material press releases issued by the Holding Company or any
Subsidiary of the Holding Company, and all notices, proxy statements,
financial statements, reports and documents as the Holding Company
shall send or make available generally to its stockholders or as any
Subsidiary of the Holding Company shall send or make available
generally to its stockholders other than the Holding Company and (ii)
all periodic and special reports, documents and registration
statements (other than on Form S-8) which the Holding Company or any
Subsidiary of the Holding Company furnishes or files, or any officer
or director or stockholder of the Holding Company or any of its
Subsidiaries furnishes or files with respect to the Holding Company
or any of its Subsidiaries, with the Commission (or any analogous
foreign governmental authority) or any securities exchange;
(f) as promptly as practicable (but in any event not later than
five Business Days) after the occurrence of any of the following
conditions or events, an Officers' Certificate from the applicable
Company specifying in reasonable detail the nature and period of
existence thereof, and what action has been taken, is being taken and
is proposed to be taken with respect thereto: (i) with respect to
any Plan, any reportable event, as defined in section 4043(b) of
ERISA and the regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in effect on the date
hereof; (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 Holding
Company, the Operating 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 of any
liability by the Holding Company, the Operating 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 Holding Company, the Operating 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, has resulted in, or could
reasonably be expected to result in, a Material Adverse Change;
(g) as promptly as practicable (but in any event not later than
three Business Days) after the occurrence of any Default or Event of
Default, or of any condition or event which has resulted in, or could
reasonably be expected to result in, a Material Adverse Change,
including, without limitation, the commencement of any litigation or
governmental investigation or the assertion of any material claim
against or default by the Holding Company, the Operating Company or
any of their respective Subsidiaries, an Officers' Certificate from
the applicable Company specifying in reasonable detail the nature and
period of existence thereof, what action has been taken, is being
taken and is proposed to be taken with respect thereto and the date,
if any, on which it is estimated the same will be remedied;
(h) as promptly as practicable (but in any event not later than
30 days) prior to the end of each fiscal year of the Holding Company
and of the Operating Company, an annual budget prepared on a
quarterly basis for the Holding Company and its Subsidiaries and for
the Operating Company and its Subsidiaries for the succeeding fiscal
year (displaying anticipated balance sheets and statements of income,
stockholders' equity and cash flows) and, promptly upon preparation
thereof, any other significant budgets which the Holding Company, the
Operating Company or any of their respective Subsidiaries prepares
and any revisions of such annual or other budgets;
(i) such other material information and notices relating to the
Holding Company, the Operating Company and/or any of their respective
Subsidiaries as shall be furnished to or received from (i) any other
party to any of the Acquisition Documents or (ii) any Person to which
the Holding Company, the Operating Company or any of their respective
Subsidiaries is indebted for borrowed money in an aggregate amount of
$1,000,000 or more (other than that relating solely to collateral for
such Indebtedness), including, without limitation, any notice
relating to any adjustment to the purchase price or any claim for
indemnification under any of the Acquisition Documents or any notice
of default or event of default under any of the Fleet Bank Documents,
such information and notices to be furnished to the holders of the
Securities at the same time as it is furnished to, or immediately
after it is received from, any such Person; and
(j) such other information as from time to time may reasonably
be requested.
8. Inspection. Each Company will permit any Person designated by any
institutional holder of any of the Securities on reasonable notice and at
such holder's expense (unless a Default or Event of Default shall have
occurred and be continuing, in which case, at the Companies' expense), to
visit and inspect any of the properties of such Company and its
Subsidiaries, to examine its and their books and records (and to make
copies thereof and take extracts therefrom) and to discuss its and their
affairs, finances and accounts with and to be advised as to the same by,
its and their officers, consultants, counsel and accountants, all at such
reasonable times and intervals as such holder may desire.
9. Prepayment of Notes.
9.1. Required Prepayment Without Premium of Notes. In addition
to paying the entire outstanding principal amount of and the interest due
on the Notes on the maturity date thereof, on each of the dates specified
below (until the Notes have been paid in full), the Operating Company will
prepay without premium the aggregate principal amount of the Notes
specified below for such date (or such lesser principal amount thereof as
shall then be outstanding), together with all accrued and unpaid interest
thereon:
Aggregate
Date Principal Amount
September 13, 2002 $ 50,000
March 13, 2003 250,000
September 13, 2003 250,000
March 13, 2004 5,700,000
provided that the Operating Company may, at its option, make any of the
prepayments specified above on any date during the 30-day period ending on
the date specified above for such prepayment, so long as the Operating
Company notifies each holder of any Notes to such effect in writing not
less than 10 days prior to the date on which such prepayment is to be made
(which date shall be specified in such notice). If any partial prepayment
of the Notes is made pursuant to section 9.2, then the amount of each
subsequent prepayment which is required to be made pursuant to this
section 9.1 shall be reduced in the same proportion as the aggregate
unpaid principal amount of the Notes is reduced as a result of such
partial prepayment pursuant to section 9.2.
9.2. Optional Prepayment With Premium of Notes. At any time and
from time to time after the Closing Date, the Operating Company may, at
its option, upon notice as set forth in section 9.6, prepay all or any
part (in an integral multiple of $500,000 and a minimum of $1,000,000 or
such lesser principal amount thereof as shall then be outstanding) of the
Notes, together with all accrued and unpaid interest thereon, upon the
concurrent payment of a premium (a percentage of the principal amount so
prepaid) applicable in accordance with the following table depending on
the period in which such prepayment occurs:
If the Prepayment Occurs Premium
From and after the Closing Date
to and including March 12, 1998 10%
From and after March 13, 1998
to and including March 12, 1999 8%
From and after March 13, 1999
to and including March 12, 2000 6%
From and after March 13, 2000
to and including March 12, 2001 4%
From and after March 13, 2001
to and including March 12, 2002 2%
From and after March 13, 2002
to and including March 12, 2003 1%
From and after March 13, 2003 0%
Any partial prepayment of Notes pursuant to this section 9.2 which is made
prior to the date on which the prepayment required under section 9.1 is
made shall be applied as provided in section 9.1.
9.3. Required Prepayment With Premium upon Exercise of Call
Option. If at any time the Holding Company shall have exercised its Call
Option (as hereinafter defined) with respect to the Warrants as provided
in section 12.3(a), the Operating Company shall, on or before the Call
Closing Date (as hereinafter defined), prepay in full all of the Notes at
the time outstanding, together with all accrued and unpaid interest
thereon and a premium equal to the premium that would be payable upon a
prepayment at such time pursuant to section 9.2.
9.4. Prepayment Without Premium of the Notes at the Option of
the Required Holders of the Notes Upon a Change of Control.
(a) If any Change of Control is to occur, then not less than 30
days nor more than 60 days prior to the occurrence of such Change of
Control, the Operating Company will notify each holder of any Notes
of such pending Change of Control and the date upon which it is
scheduled to occur. If the Required Holders of the Notes furnish a
written request for prepayment to the Operating Company (in
accordance with section 23) not more than 30 days after receipt by
such holders of such notice of such Change of Control from the
Operating Company, the Operating Company will prepay without premium
all of the Notes then outstanding, together with all accrued and
unpaid interest thereon. Each such prepayment shall occur on the
date upon which the Change of Control occurs, unless the Operating
Company and the Required Holders of the Notes agree to a different
date, and no prepayment requested pursuant to this section 9.4 shall
be due unless the Change of Control shall occur.
(b) Each notice from the Operating Company pursuant to this
section 9.4 shall make explicit reference to this section 9.4 and
shall state that the right of the Required Holders of the Notes to
require prepayment of the Notes must be exercised within 30 days of
the receipt of such notice.
9.5. Allocation of Partial Prepayments of Notes. In the case of
each partial prepayment of the Notes under sections 9.1 or 9.2, the
principal amount to be prepaid shall be allocated among all of the Notes
at the time outstanding (excluding any Notes at the time owned by the
Operating Company or any Affiliate of the Operating Company) in
proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof, with adjustments, to the extent practicable, to
compensate for any prior prepayments not made exactly in such proportion.
9.6. Notice of Optional Prepayments of Notes. In the case of
each prepayment under sections 9.2, 9.3 or 9.4, the Operating Company
shall give written notice thereof to each holder of any Notes not less
than 30 (10, in the case of any prepayment under section 9.4) nor more
than 60 days prior to the date fixed for such prepayment. Each such
notice shall set forth: (a) the date fixed for prepayment; (b) the
aggregate principal amount of Notes to be prepaid on such date; (c) the
aggregate principal amount of Notes held by such holder to be prepaid on
such date; and (d) the amount of the accrued interest and premium, if any,
to be paid to such holder on such date.
9.7. Maturity; Accrued Interest; Surrender, etc. of Notes. In
the case of each prepayment of all or any part of any Note, the principal
amount 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 premium, if any, due thereon. Any Note
prepaid in full shall be marked "paid in full", surrendered to the
Operating Company at the Operating Company's principal place of business
promptly following prepayment and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any
Note.
9.8. Purchase of Notes. The Operating Company will not, and
will not permit any Affiliate of the Operating Company to, directly or
indirectly, purchase or otherwise acquire, or offer to purchase or
otherwise acquire, any outstanding Notes except by way of payment or
prepayment in accordance with the provisions of the Notes and this
Agreement.
9.9. Payment on Non-Business Days. If any amount hereunder or
under the Notes shall become due on a day which is not a Business Day,
such payment shall be due on the next succeeding Business Day.
9.10. Application of Notes in Satisfaction of Exercise Price of
Warrants. In the event that any holder of any Note shall apply all or any
portion of the principal amount of such Note in satisfaction (in whole or
in part) of the payment of the Exercise Price (as defined in the
Warrants), any partial application of the principal amount of any such
Note shall be applied to the payment of installments of principal due
thereunder in the inverse order of maturity.
10. Subordination of Notes and Note Guarantees. Payments on the Notes
and the Note Guarantees, and the rights of the holders of the Notes and
the Note Guarantees, are subordinated to payments on, and the rights of
the holders of, Superior Indebtedness (as defined in the Notes), all as
further provided in the Notes and the Note Guarantees.
11. Registration, etc.
11.1. Registration on Request.
(a) In case the Holding Company shall receive from one or more
holders of any Registrable Shares a written request or requests that
the Holding Company effect any registration, qualification and/or
compliance of any Registrable Shares held by (or issuable to) such
holder or holders, and specifying the intended method of offering,
sale and distribution, the Holding Company will:
(i) promptly give written notice of the proposed
registration, qualification and/or compliance to each holder of
any Registrable Shares; and
(ii) as soon as practicable, effect such registration,
qualification and/or compliance (including, without limitation,
the execution of an undertaking for post-effective amendments,
appropriate qualification under applicable blue sky or other
state securities laws and appropriate compliance with exemptive
regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested
and as would permit or facilitate the sale and distribution of
such amount of Registrable Shares as is specified in a written
request or requests, made within 30 days after receipt of such
written notice from the Holding Company, by any holder or
holders of any Registrable Shares.
(b) The obligations of the Holding Company under this section
11.1 are subject to the following qualifications:
(i) except as provided in section 11.1(b)(v), the Holding
Company shall only be obligated to effect two registrations
pursuant to this section 11.1;
(ii) the Holding Company shall not be obligated to effect
any registration pursuant to this section 11.1 unless (A) the
Holding Company shall have been requested to do so by the holder
or holders of at least 50% of the Registrable Shares at the time
outstanding and/or issuable and (B) the aggregate gross proceeds
(before all fees, expenses and disbursements related thereto and
all underwriters' discounts and commissions) from the sale of
the Registrable Shares requested to be registered and sold in
such registration (determined reasonably by the Holding Company
and the holder or holders of 66-2/3% or more of the Registrable
Shares to be included in such registration) is at least
$2,500,000;
(iii) the Holding Company shall not be obligated to
cause any registration statement relating to a registration
requested pursuant to this section 11.1 to become effective
prior to March 13, 2000;
(iv) the Holding Company shall pay all Registration
Expenses related to any registration, qualification and
compliance requested pursuant to this section 11.1;
(v) if, in connection with any registration of Registrable
Shares pursuant to this section 11.1, the holders of Registrable
Shares requesting registration are unable for any reason to
include in such registration at least 85% of the Registrable
Shares for which registration has been requested (including on
account of any limitation on the number or kind of securities
that may be included in such registration which limitation is
imposed by the managing underwriter(s) for such registration
because, in its (or their) reasonable judgment, such limitation
is necessary to effect an orderly public distribution), then the
holders of the Registrable Shares shall be entitled to one
additional registration of Registrable Shares pursuant to this
section 11.1; and
(vi) if the Holding Company shall furnish to each holder of
Registrable Shares an Officers' Certificate certifying that the
Holding Company has determined, as evidenced by a written
resolution of the board of directors of the Holding Company,
that it is necessary to delay the filing of the registration
statement related to a registration requested pursuant to this
section 11.1 because such a filing at the time requested, or the
offering of securities pursuant thereto, would materially
interfere with any pending material transaction to which the
Holding Company or any of its Subsidiaries is a party, the
Holding Company shall have the right to delay such filing for a
period ending not more than 90 days following the first date
upon which it shall have received a written request or requests
for such registration from the holder or holders of at least 50%
of the Registrable Shares at the time outstanding and/or
issuable; provided that (A) the Holding Company may not exercise
this right to delay the filing of a registration statement on
more than one occasion and (B) without limiting the generality
of any other provision of this Agreement, the Holding Company
shall reimburse each holder of Registrable Shares for all
expenses (including, without limitation, fees, expenses and
disbursements of counsel) incurred in connection with any such
registration prior to receipt of any such Officers' Certificate.
11.2. Incidental Registration.
(a) If the Holding Company at any time or from time to time
shall determine to effect the registration, qualification and/or
compliance of any of its Shares (whether in connection with an
offering by the Holding Company or others) (otherwise than pursuant
to a registration on Form S-4 or S-8 under the Securities Act or any
other similar form which is inappropriate for an offering of the
Registrable Shares), then, in each such case, the Holding Company
will:
(i) promptly give written notice of the proposed
registration, qualification and/or compliance (which shall
include a list of the jurisdictions in which the Holding Company
intends to register or qualify such securities under the
applicable blue sky or other state securities laws) to each
holder of any Registrable Shares; and
(ii) include among the Shares which it then registers or
qualifies all Registrable Shares specified by any holder thereof
in a written request or requests, made within 30 days after
receipt of such written notice from the Holding Company.
(b) The obligations of the Holding Company under this section
11.2 are subject to the following qualifications:
(i) the Holding Company shall pay all Registration
Expenses related to any registration, qualification or
compliance requested pursuant to this section 11.2; and
(ii) if, in connection with any underwritten offering
pursuant to this section 11.2, the managing underwriter(s) shall
impose a limitation on the number or kind of securities which
may be included in any such registration because, in its (or
their) reasonable judgment, such limitation is necessary to
effect an orderly public distribution, then the Holding Company
shall be obligated to include in such registration statement
only such limited portion of the Registrable Shares (which may
be none) as is determined in good faith by such managing
underwriter(s), provided that, if any securities are being
offered for the account of any Person other than the Holding
Company and the holders of the Registrable Shares, the reduction
in the number of Registrable Shares included in such
registration shall not represent a greater percentage of the
amount of Registrable Shares originally requested to be
registered and sold in such registration than the lowest such
percentage reduction imposed upon any such other Person.
11.3. Permitted Registration; Holdback Agreement; Private
Placement.
(a) If and to the extent that any holder or holders of any
Registrable Shares shall have, at the time of delivery of the written
request referred to in section 11.2, no present intention of selling
or distributing such securities, the Holding Company shall be
obligated to effect the registration, qualification and compliance of
such securities of such holder or holders only if and to the extent,
in each case, that such registration, qualification and compliance
are at the time permitted by the applicable statutes or rules and
regulations thereunder or the practices of the governmental authority
concerned.
(b) If a registration to be effected pursuant to section 11.1
or 11.2 involves an underwritten offering, each holder of Registrable
Shares agrees, whether or not such holder's Registrable Shares are to
be included in such registration, that, upon the written request of
the managing underwriter(s) for such registration, such holder shall
enter into a written agreement to not effect any public sale or
distribution of any Warrants or any Registrable Shares (other than
pursuant to Rule 144 of the Commission under the Securities Act or as
part of such underwritten offering) without the consent of such
managing underwriter(s) during the period commencing seven days
before the effective date of the registration statement related to
such underwritten offering and ending 180 days after such effective
date (or any other period to which such managing underwriter(s) and
the holders of the Registrable Shares may agree), provided that each
other Person holding Shares of the Holding Company (or securities
convertible into or exercisable or exchangeable for such Shares) and
having registration rights with respect thereto shall have entered
into such agreement (or another agreement which is, in all material
respects, the same as such agreement).
(c) Notwithstanding the provisions of section 11.1, in lieu of
effecting any registration requested pursuant to sections 11.1, the
Holding Company may elect to effect a private placement of the
Registrable Shares requested to be so registered, provided that
(i) the aggregate proceeds of such private placement paid to the
holders of such Registrable Shares shall not be less than the Fair
Value thereof (less an underwriting discount of not more than 5%),
which calculation of Fair Value shall be acceptable to each holder of
Registrable Shares to be included in such private placement, (ii) the
Holding Company notifies each holder of Registrable Shares requesting
registration of the election by the Holding Company to effect such
private placement within 30 days of its having received a request for
such registration from such holder, (iii) such private placement is
consummated not later than 90 days after its having received such
request for such registration and (iv) such private placement is
effected in compliance with the Securities Act and other applicable
laws.
11.4. Registration Procedures. In the case of each registration,
qualification and/or compliance contemplated by this section 11, the
Holding Company will keep the holder or holders of Registrable Shares
advised in writing as to the initiation of proceedings for such
registration, qualification and compliance and as to the completion
thereof, and will advise each such holder, upon request, of the progress
of such proceedings. In addition, the Holding Company will follow
procedures customarily observed by issuers in registered public offerings,
and accord to the holder or holders of such Registrable Shares all rights
(including, without limitation, the right to perform appropriate "due
diligence") customarily accorded to selling stockholders in secondary
distributions and to managing underwriters if the transaction in question
is or were an underwritten public offering. At the expense of the Holding
Company or of the party or parties bearing the expenses of such
registration, qualification and compliance, the Holding Company will (a)
keep such registration, qualification and compliance current and effective
by such action as may be necessary or appropriate, including, without
limitation, the filing of post-effective amendments and supplements to any
registration statement or prospectus, for such period as is necessary to
permit the exercise of the Warrants and the sale and distribution of the
Registrable Shares pursuant thereto, (b) take all necessary action under
any applicable blue sky or other state securities law to permit such sale
and/or distribution, all as requested by the holder or holders of
Registrable Shares included therein, provided that the Holding Company
shall not be required to so register or qualify the Registrable Shares in
any jurisdiction if, solely as a result thereof, the Holding Company must
qualify generally to do business therein or consent to general service of
process therein, (c) comply with applicable requirements of all regulatory
entities, including, without limitation, the National Association of
Securities Dealers, Inc., (d) furnish each holder of Registrable Shares
included therein such number of registration statements, prospectuses,
supplements, amendments, offering circulars and other documents incidental
thereto as such holder from time to time may reasonably request, (e) list
all Registrable Shares on each securities exchange on which securities of
the same class are then listed and (f) furnish (or cause to be furnished)
to each holder of Registrable Shares, all undertakings, agreements,
certificates, opinions, financial statements and "comfort letters" of the
sort customarily provided to selling stockholders in secondary
distributions and to managing underwriters if the transaction in question
is or were an underwritten public offering. Each holder of Registrable
Shares will furnish to the Holding Company upon request by the Holding
Company such information regarding such holder and any distribution of
Registrable Shares proposed by such holder as may be required or
appropriate to consummate any registration, qualification and/or
compliance contemplated by this section 11.
11.5. Indemnification. Without limiting the generality of
section 21, the Holding Company will indemnify, defend and hold harmless
each holder of Registrable Shares included in any registration,
qualification and/or compliance contemplated by this section 11 and each
underwriter of such securities, and each Person, if any, who controls each
such holder and underwriter within the meaning of the Securities Act, and
their respective directors, officers, employees, agents, advisors and
Affiliates (each, an "Indemnified Person"), to the fullest extent
enforceable under applicable law against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, supplement,
amendment, offering circular or other document related to any
registration, qualification or compliance or any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any
violation (or alleged violation) of the Securities Act or other securities
laws in connection with any such registration, qualification or
compliance, and will reimburse each such Indemnified Person for any legal
or any other expenses reasonably incurred in connection with investigating
and/or defending (and/or preparing for any investigation or defense of)
any such claim, loss, damage, liability, action or violation; provided
that the Holding Company will not be liable in any such case to any such
Indemnified Person if, but only to the extent that, any such claim, loss,
damage, liability, action, violation or expense is finally determined to
arise out of or result from any untrue statement in or omission from
written information furnished to the Holding Company by an instrument duly
executed by such Indemnified Person and stated to be specifically for use
therein. Each holder of Registrable Shares will, if securities held by
such holder are included in a registration effected pursuant to this
section 11, indemnify, defend and hold harmless the Holding Company, each
of its directors and officers who signs the related registration
statement, and each Person, if any, who controls the Holding Company
within the meaning of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, supplement,
amendment, offering circular or other document or any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse the Holding Company and such directors, officers or Persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending (and/or preparing for any investigation or
defense of) any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) was made in
(or omitted from) such registration statement, prospectus, supplement,
amendment, offering circular or other document in reliance upon and in
conformity with written information furnished to the Holding Company by an
instrument duly executed by such holder and stated to be specifically for
use therein; provided that the liability of any such holder under this
section 11.5 shall be limited to the net sales proceeds actually received
by such holder as a result of the sale by it of securities in such
registration.
11.6. Restrictions on Other Agreements. The Holding Company will
not grant any right relating to the registration of its securities if the
exercise thereof interferes with or is inconsistent with or will delay (or
could reasonably be expected to interfere with or be inconsistent with or
delay) the exercise and enjoyment of any of the rights granted under this
section 11, without the written consent of holders of 66-2/3% or more of
the Registrable Shares at the time outstanding and/or issuable, which
consent may be given or withheld in the sole discretion of such holders.
The Holding Company will not permit any of its Subsidiaries to effect, or
to grant any right relating to, the registration of its Shares or other
securities.
12. Put and Call Rights; Required Exercise of Warrants.
12.1. Certain Definitions. As used in this section 12, the
following terms have the following respective meanings:
"Call Closing Date", "Call Notice" and "Call Option" shall have the
respective meanings specified in section 12.3.
"Call Securities" shall mean the Warrants, each of which is a Call
Security.
"Put/Call Price" of any Put Security or Call Security at any date
shall mean the Fair Value of such Security on such date.
"Put/Call Price Adjustment Event" shall mean (a) any Change of
Control or (b) any purchase or sale by the Holding Company or GreenGrass
Holdings (or any of their respective Affiliates) of any Shares of the
Holding Company in any transaction (or series of related transactions) in
which the aggregate purchase price for such Shares is $1,000,000 or more,
which occurs, in the case of clause (a) or (b), following the repurchase
of any Put Securities or Call Securities pursuant to section 12.2 or
12.3(a).
"Put Securities" shall mean the Warrants and the Warrant Shares, each
of which is a "Put Security".
"Put Closing Date", "Put Notice" and "Put Option" shall have the
respective meanings specified in section 12.2.
"Required Exercise Date" and "Required Exercise Option" shall have
the respective meanings specified in section 12.3.
12.2. Put Rights of the Holders of the Put Securities Upon Change
of Control.
(a) The Required Holders of the Put Securities shall have the
option (the "Put Option") to require the Holding Company to purchase
all (but not less than all) of the Put Securities then outstanding at
a purchase price equal to the Put/Call Price for the Put Securities
concurrently with the occurrence of any Change of Control.
(b) To exercise the Put Option, the Required Holders of the Put
Securities must deliver to the Holding Company a notice (a "Put
Notice") specifying that the Put Securities are to be purchased by
the Holding Company and such notice must be given not more than 30
days after receipt by the holders of the Put Securities of the notice
of a Change of Control pursuant to section 12.2(c). Upon receipt of
such Put Notice, the Holding Company shall be obligated to purchase
the Put Securities on the date of the occurrence of such Change of
Control (the "Put Closing Date"), unless in any case the Holding
Company and the Required Holders of the Put Securities agree to a
different date or the Required Holders of the Put Securities revoke
the Put Notice.
(c) Promptly after receipt of a Put Notice, the Holding Company
will notify each holder of Put Securities of receipt of such Put
Notice. The Holding Company shall notify each holder of any Put
Securities of the occurrence of any event which will, or could
reasonably be expected to, result in a Change of Control at least 30
days (but not more than 60 days) prior to the occurrence of such
Change of Control.
(d) The obligation of the Holding Company to pay the Put/Call
Price pursuant to this section 12.2 is hereby subordinated to the
payment of the Superior Indebtedness (as defined in the Notes) upon
the terms of subordination set forth in the Notes as in effect on the
Closing Date (which terms are incorporated herein by this reference),
and, for such purposes, all references in such terms of subordination
(i) to "Operating Company" shall mean the Holding Company, (ii) to
"Subordinated Indebtedness" shall mean the payment of the Put/Call
Price due pursuant to this section 12.2, and (iii) to "holders of the
Subordinated Indebtedness" shall mean the holders of the Put
Securities.
12.3. Call Right of the Holding Company; Required Exercise of
Warrants.
(a) At any time on or after March 13, 1999, the Holding Company
shall have the option (the "Call Option") to purchase all (but not
less than all) of the Call Securities outstanding on the Call Closing
Date (as hereinafter defined) at a purchase price equal to the
Put/Call Price; provided that:
(i) the Holding Company may not exercise such Call Option
(A) if the Required Holders of the Put Securities have exercised
and not revoked their Put Option pursuant to section 12.2 or
(B) unless on or before the Call Closing Date (as defined below)
it shall have prepaid in full all of the Notes at the time
outstanding pursuant to section 9.3; and
(ii) if at any time prior to March 13, 1999 the Required
Holders of the Put Securities shall have exercised the Put
Option and, by virtue of the operation of section 12.5, the
Holding Company shall not have purchased such Put Securities on
the date specified in section 12.2(b), then the first date upon
which the Holding Company may exercise the Call Option shall not
be March 13, 1999 but rather the date which follows March 13,
1999 by the number of days which is equal to the number of days
during which the repurchase obligation of the Holding Company
under section 12.2 was delayed by operation of section 12.5.
The Holding Company shall exercise the Call Option by delivering to
each holder of any Call Securities a notice (a "Call Notice")
specifying that the Call Securities are to be purchased by the
Holding Company and certifying that no Put/Call Price Adjustment
Event is then proposed to be consummated, or, if such is not the
case, describing in reasonable detail all proposed Call Price
Adjustment Events. Following delivery of such Call Notice, the
Holding Company shall be obligated to purchase all of the Call
Securities as may be outstanding and unexercised on the date
specified in such notice (the "Call Closing Date"), which date shall
not be earlier than 30 days nor later than 45 days following the date
of receipt by each holder of Call Securities of such Call Notice.
The Holding Company may not exercise such option unless the Holding
Company can pay the Put/Call Price in full in immediately available
funds on the applicable Call Closing Date.
(b) At any time on or after March 13, 1999, the Holding Company
shall have the option (the "Required Exercise Option") to require
that all (but not less than all) of the Warrants then outstanding be
exercised; provided that if at any time prior to March 13, 1999 the
Required Holders of the Put Securities shall have exercised the Put
Option and, by virtue of the operation of section 12.5, the Holding
Company shall not have purchased such Put Securities on the date
specified in section 12.2(b), then the first date upon which the
Holding Company may exercise the Required Exercise Option shall not
be March 13, 1999 but rather the date which follows March 13, 1999 by
the number of days which is equal to the number of days during which
the repurchase obligation of the Holding Company under section 12.2
was delayed by operation of section 12.5. The Holding Company shall
exercise the Required Exercise Option by delivering to each holder of
any Warrants a notice (a "Required Exercise Notice") specifying that
all of the Warrants then held by such holder shall be deemed
exercised as of a date specified in such Required Exercise Notice
(the "Required Exercise Date"), which date shall not be earlier than
30 days nor later than 45 days following the date of receipt by each
holder of Warrants of such Required Exercise Notice. Each holder of
Warrants shall, not later than 25 days following receipt by it of
such Required Exercise Notice, notify the Holding Company of the
manner by which such holder shall pay the Exercise Price due upon
such exercise, provided that, if such holder shall fail to give such
notice to the Holding Company on or before the expiration of such 25-
day period, then such holder shall be deemed to have elected to pay
the Exercise Price by applying that portion of the Warrant Shares
issuable upon such exercise to such holder (at a value per share
equal to the then Fair Value thereof) equal to the aggregate Exercise
Price which is due upon such exercise.
12.4. Closing; Payment of Put/Call Price; Adjustments to Put/Call
Price.
(a) The closing for any payment of the Put/Call Price due to
any holder of Put Securities or Call Securities under this section 12
shall occur at the principal office of such holder, unless the
Holding Company and such holder agree to a different location. The
payment of the Put/Call Price which is due to any holder of any Put
Securities or Call Securities pursuant to this section 12 shall be
paid by the Holding Company, against delivery of the certificates
evidencing such Put Securities or Call Securities, in immediately
available funds.
(b) If at any time during the 180-day period following the
repurchase of any Put Securities or Call Securities pursuant to
section 12.2 or 12.3(a), any Put/Call Price Adjustment Event occurs
or an agreement in principle concerning the material terms of any
Put/Call Price Adjustment Event is reached, then the Holding Company
shall immediately notify each holder of Put Securities or Call
Securities, as the case may be, and, contemporaneously with the
consummation of such Put/Call Price Adjustment Event, the Holding
Company shall pay to each former holder of Put Securities or Call
Securities, as the case may be, from which such Securities were
repurchased pursuant to sections 12.2 or 12.3(a) an amount equal to
the excess, if any, of (i) the aggregate Fair Value of the Put
Securities or Call Securities, as the case may be, repurchased from
such former holder, determined as of the date upon which such
Put/Call Price Adjustment Event is consummated and on the basis of
the per share price (or imputed per share price) paid in connection
with the Put/Call Price Adjustment Event (and assuming that such
Securities had not previously been repurchased pursuant to section
12.2 or 12.3(a)) over (ii) the aggregate Put/Call Price paid to such
former holder pursuant to section 12.2 or 12.3(a). All computations
made pursuant to this section 12.4(b) of the amount, if any, to be
paid to any former holder of Put Securities or Call Securities, as
the case may be, pursuant to this section 12.4(b) shall be in writing
and shall be satisfactory to such former holder.
12.5. Limitations on Obligations of the Holding Company.
Notwithstanding anything to the contrary contained in this section 12, if
the Holding Company is unable to pay to the holders of the Put Securities
the full amount of the Put/Call Price which is due to such holders
pursuant to section 12.2(a) in respect of the Put Securities on the
applicable Put Closing Date in immediately available funds without
violating applicable law, then:
(a) the Holding Company shall (i) use its best efforts to
obtain financing for such payment and to obtain all necessary
consents and waivers to permit such payment and (ii) pay in
immediately available funds the largest portion of such payment (pro
rata to each of the holders of Put Securities in proportion to the
Put Securities held by each holder) on the Put Closing Date that the
Holding Company is able to pay without causing any such violation;
(b) the Holding Company shall, and shall cause each of its
Subsidiaries to, conduct its business in the ordinary course, and the
Holding Company shall not, directly or indirectly, make any
Restricted Payment, until the Put/Call Price shall have been paid in
full in immediately available funds;
(c) the Holding Company shall furnish to each holder of Put
Securities an Officers' Certificate specifying (i) the nature of the
event or condition on account of which the Holding Company is so
precluded from making such payment, (ii) the action that the Holding
Company is taking to remedy such failure (including the action which
the Holding Company is taking to obtain financing for the payment of
the Put/Call Price and/or to obtain all necessary consents and
waivers) and (iii) the date, which shall not be later than 12 months
following the originally scheduled Put Closing Date, on which the
Put/Call Price shall be paid in full in immediately available funds,
it being agreed that if, on any date subsequent to the originally
scheduled Put Closing Date, the Holding Company is able to pay the
unpaid balance of the Put/Call Price (or any portion thereof) without
causing any such violation, then the Holding Company immediately
shall notify each holder of any Put Securities and shall pay (pro
rata as aforesaid) such unpaid balance (or the largest portion
thereof that may be so paid) in immediately available funds;
(d) from and after the originally scheduled Put Closing Date,
until the Put/Call Price shall have been paid in full in immediately
available funds, the unpaid balance of the Put/Call Price shall bear
interest at 18% per annum (compounded semi-annually), which interest
shall, to the extent permitted by law, be due and payable to the
holders of the Put Securities (pro rata as aforesaid) monthly in
arrears on the last day of each month, commencing on the first such
date following the originally scheduled Put Closing Date, and on the
date on which any portion (or all) of the unpaid balance of the
Put/Call Price is paid; and
(e) unless earlier paid in full, the Put/Call Price shall be
paid in full in immediately available funds not later than 12 months
following the originally scheduled Put Closing Date.
The Required Holders of the Put Securities may revoke any Put Notice at
any time prior to payment in full of the amount due to such holder in
connection therewith, without prejudice to such holder's rights under this
section 12.
12.6. Successive Changes of Control, etc. The provisions of this
section 12 are applicable to successive Changes of Control. No failure on
the part of any holder of any Put Securities to exercise any right under
this section 12 arising on account of any Change of Control shall affect
or impair any right of such holder arising on account of any subsequent
Change of Control or any other right of such holder under any of the
Operative Documents. The covenants contained in this section 12 shall
survive the payment, prepayment and/or replacement of any Notes and any
merger, consolidation, recapitalization, sale of assets or other similar
transaction or event involving the Holding Company and/or any of its
Subsidiaries.
12.7. No Limitation on the Holding Company. The Holding Company
is not now and, without the consent of the Required Holders of the Put
Securities and Call Securities, the Holding Company shall not be or become
bound by any agreement or other contractual restriction other than the
Fleet Bank Documents which prohibits, limits or delays (or could
reasonably be expected to prohibit, limit or delay) the performance of its
obligations under this section 12.
13. Board Visitation Rights. The Required Holders of the Warrants and
Warrant Shares shall have the right, as a group, to appoint one
representative who shall: (a) receive notice of all meetings (both
regular and special and including any executive or "private" session) of
the board of directors (or other governing body) of the Holding Company
and of each of its Subsidiaries and each committee of any such board (such
notice to be delivered or mailed as specified in section 23 at the same
time as notice is given to the members of any such board and/or committee
but in no event later than seven days prior to the date of such meeting
(or 48 hours in the case of telephone meetings)); (b) be entitled to
attend (or, in the case of telephone meetings, monitor) all such meetings;
(c) receive all notices, information and reports which are furnished to
the members of any such board and/or committee at the same time and in the
same manner as the same is furnished to such members; (d) be entitled to
participate in all discussions conducted at such meetings and (e) receive
as soon as available (but in any event not later than 30 days after such
meeting) copies of the minutes of all such meetings. If any action is
proposed to be taken by any such board and/or committee by written consent
in lieu of a meeting, the Holding Company will, or will cause the
applicable Subsidiary to, give written notice thereof to such
representative, which notice shall describe in reasonable detail the
nature and substance of such proposed action and shall be delivered not
less than seven Business Days (or 48 hours in the case of telephone
meetings) prior to the date upon which such action is proposed to be
taken. The Holding Company will, or will cause the applicable Subsidiary
to, furnish such representative with a copy of each such written consent
not later than five days after it has been signed by its last signatory.
Such representative shall not constitute a member of any such board and/or
committee and shall not be entitled to vote on any matters presented at
meetings of any such board and/or committee or to consent to any matter as
to which the consent of any such board and/or committee shall have been
requested. The board of directors of the Holding Company shall meet not
less frequently than semi-annually. The Holding Company will pay the
reasonable out-of-pocket expenses of such representative incurred in
connection with attending such meetings and/or exercising any rights
hereunder.
14. Covenants of the Companies. From and after the date of this
Agreement, and thereafter so long as any of the Notes shall remain
outstanding, the Holding Company and the Operating Company will duly
perform and observe, for the benefit of the holders of the Notes, each and
all of the covenants and agreements applicable to it as hereinafter set
forth:
14.1. Books of Record and Account; Reserves. Each of the
Companies will, and will cause each of its Subsidiaries to (a) at all
times keep proper books of record and account in which full, true and
correct entries shall be made of its transactions in accordance with GAAP
and (b) set aside on its books from its earnings for each fiscal year all
such proper reserves as shall be required in accordance with GAAP in
connection with its business.
14.2. Payment of Taxes; Existence; Maintenance of Properties;
Compliance with Laws; Lines of Business; Proprietary Rights. Each of the
Companies will, and will cause each of its Subsidiaries to:
(a) pay and discharge promptly as they become due and payable
all taxes, assessments and other governmental charges or levies
imposed upon it or its income or upon any of its property, as well as
all claims of any kind (including claims for labor, materials and
supplies) which, if unpaid, might by law become a Lien upon its
property; provided that no such Person shall be required to pay any
such tax, assessment, charge, levy or claim if the amount,
applicability or validity thereof shall currently be contested in
good faith by appropriate proceedings promptly initiated and
diligently conducted and if it shall have set aside on its books such
reserves, if any, with respect thereto as are required by GAAP;
provided, further, that the Operating Company will, and will cause
each of its Subsidiaries to, pay or bond over any such tax,
assessment, charge, levy or claim prior to the commencement of any
proceeding to foreclose any Lien securing the same;
(b) do or cause to be done all things necessary to preserve and
keep in full force and effect its existence;
(c) maintain and keep its material properties in good repair,
working order and condition, so that the business carried on in
connection therewith may be properly and advantageously conducted at
all times;
(d) comply in all material respects with all applicable laws,
statutes, rules, regulations and orders of, and all applicable
restrictions imposed by, all governmental authorities in respect of
the conduct of its business and the ownership of its property
(including, without limitation, all Environmental Laws); provided
that no such Person shall be required by reason of this section
14.2(d) to comply therewith at any time while it shall be contesting
its obligation to do so in good faith by appropriate proceedings
promptly initiated and diligently conducted, and if it shall have set
aside on its books such reserves, if any, with respect thereto as are
required by GAAP;
(e) engage only in the Business (and other related businesses)
and conduct substantially all its business and keep substantially all
its property in the United States of America; and
(f) own or have a valid license for all material Proprietary
Rights and Licenses used by it in the conduct of the Business.
14.3. Insurance. The Operating Company will, and will cause each
of its Subsidiaries to, maintain with financially sound and reputable
insurers, insurance with respect to its properties and businesses against
casualties and contingencies of the kinds customarily insured against by
Persons of established reputation engaged in the same or a similar
business and similarly situated, in such amounts and by such methods as
shall be customary for such Persons and reasonably deemed adequate by the
Operating Company; provided that such insurance shall be in amounts not
less than those maintained by the Operating Company on the date hereof.
14.4. Limitation on Discount or Sale of Receivables. The
Operating Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, discount or sell any of their accounts
receivable, except that the Operating Company and any Subsidiary of the
Operating Company may offer discounts in the ordinary course of business
and settle doubtful accounts in the ordinary course of business.
14.5. Limitation on Funded Debt and Current Debt. The Operating
Company will not, and will not permit any of its Subsidiaries to, be
liable or create, assume, incur, guarantee, or in any manner become
liable, contingently or otherwise, in respect of any Funded Debt or
Current Debt other than:
(a) in the case of the Operating Company:
(i) Funded Debt evidenced by the Notes;
(ii) Funded Debt and/or Current Debt under the Fleet Bank
Agreement, provided that the aggregate outstanding principal
amount thereof, including, without limitation, all amounts due
(contingently or otherwise) in respect of reimbursement
obligations under letters of credit, interest rate protection
agreements or similar instruments (and all related reimbursement
agreements) does not exceed the greater of (A) $75,000,000,
minus the aggregate amount of all principal payments made
thereon from time to time (other than any principal payment made
under the revolving credit facility established thereunder which
may be reborrowed under such facility), and (B) four times
Consolidated EBITDA for the most recently completed four
consecutive fiscal quarters of the Operating Company;
(iii) Funded Debt and/or Current Debt outstanding on
the Closing Date and specified on Exhibit 5.9 attached hereto,
provided that the aggregate outstanding principal thereof does
not exceed at any time the amount outstanding on the Closing
Date minus the aggregate amount of all principal payments made
thereon from time to time;
(iv) Funded Debt and Current Debt in respect of Capital
Leases, provided that the aggregate liabilities of the Operating
Company with respect thereto do not exceed at any time
$1,000,000;
(v) Funded Debt and Current Debt under (A) any Permitted
Derivative Transaction, (B) performance bonds or trade letters
of credit (or reimbursement obligations in respect thereof)
issued in the ordinary course of business, (C) letters of credit
issued to secure workers' compensation insurance and/or (D) any
bank overdraft that is repaid within three Business Days;
(vi) additional Funded Debt and/or Current Debt not
otherwise permitted under this section 14.5(a), provided that:
(A) the aggregate outstanding principal amount of
Funded Debt and/or Current Debt permitted by this clause
(vi) does not exceed at any time $3,000,000; and
(B) both at the time of and immediately after giving
effect to the incurrence of any such Funded Debt and/or
Current Debt and the retirement of any Funded Debt and/or
Current Debt which is concurrently being retired, no
Default or Event of Default shall exist;
(vii) Funded Debt and/or Current Debt not otherwise
permitted under this section 14.5(a), provided that:
(A) both at the time of and immediately after giving
effect to the incurrence of such Funded Debt and/or Current
Debt and the retirement of any other Funded Debt and/or
Current Debt which is concurrently being retired, no
Default or Event of Default shall exist; and
(B) immediately after giving effect to the incurrence
of such Funded Debt and/or Current Debt and the retirement
of any other Funded Debt and/or Current Debt which is
concurrently being retired:
(1) the Pro Forma Consolidated Leverage Ratio
does not exceed 4.50 to 1.00; and
(2) the Pro Forma Consolidated Fixed Charges
Coverage Ratio shall not be less than 2.50 to 1.00; and
(viii) Funded Debt and/or Current Debt incurred to
extend, refinance, refund or renew (the "Refinancing Debt") any
other outstanding Funded Debt and/or Current Debt permitted
under this section 14.5(a) (the "Refinanced Debt"), provided
that:
(A) the aggregate outstanding principal amount of the
Refinancing Debt shall not at any time exceed (1) that of
the Refinanced Debt immediately prior to such refinancing
or (2) in the case of any extensions, refinancings,
refundings or renewals of the Funded Debt and Current Debt
under the Fleet Bank Agreement or any Refinancing Debt
thereof, the amount permitted under section 14.5(a)(ii);
(B) the scheduled final maturity date of the
Refinancing Debt is not earlier than that of the Refinanced
Debt;
(C) the Weighted Average Life to Maturity of the
Refinancing Debt is not less than that of the Refinanced
Debt;
(D) the Refinancing Debt has a ranking which is not
senior to that of the Refinanced Debt and, without limiting
the generality of the foregoing, in the event that the
Refinanced Debt is Junior Subordinated Debt, then the
subordination provisions applicable to the Refinancing Debt
must have been approved in writing by the Required Holders
of the Notes, which approval may not be unreasonably
withheld;
(E) the Refinancing Debt bears interest at market
rates prevailing at its date of issuance;
(F) the other terms and conditions of the Refinancing
Debt are not more restrictive in any material respect upon
the Operating Company and its Subsidiaries nor more adverse
in any material respect to the interests of any holder of
any of the Securities than those of the Refinanced Debt;
and
(G) other than in the case of any extension,
refinancing, refunding or renewal of the Funded Debt and
Current Debt under the Fleet Bank Agreement or any
Refinancing Debt therefor, both at the time of and
immediately after giving effect to the incurrence of the
Refinancing Debt and the retirement of the Refinanced Debt,
no Default or Event of Default shall exist; and
(b) in the case of any Subsidiary of the Operating Company:
(i) Funded Debt evidenced by the Note Guarantees; and
(ii) Guarantees of Funded Debt and Current Debt under the
Fleet Bank Agreement which is permitted under section
14.5(a)(ii) and Guarantees of any Refinancing Debt incurred to
extend, refinance, refund or renew any Funded Debt and/or
Current Debt under the Fleet Bank Agreement which is permitted
under section 14.5(a)(viii).
The Company shall not incur any Indebtedness that would cause the
Notes to be "expressly subordinated in right of payment to a substantial
amount of unsecured indebtedness," within the meaning of section 279 of
the Code and the regulations promulgated thereunder.
For purposes of this section 14.5, any Person becoming a Subsidiary
of the Operating Company after the date hereof shall be deemed, at the
time it becomes a Subsidiary, to have incurred all of its then outstanding
Funded Debt and Current Debt, and any Person extending, refinancing,
refunding or renewing any Funded Debt or Current Debt shall be deemed to
have incurred such Funded Debt or Current Debt, as the case may be, at the
time of such extension, refinancing, refunding or renewal.
14.6. Limitation on Restricted Investments and Restricted
Payments.
(a) The Operating Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, at any time, authorize,
declare or make, or incur any liability to make, any Restricted
Investment or any Restricted Payment, unless in each case both at the
time of and after giving effect to such action:
(i) the sum of (x) the aggregate value of all Restricted
Investments of the Operating Company and its Subsidiaries
(valued, in the manner provided in section 14.6(f), immediately
after such action) plus (y) the aggregate amount of all
Restricted Payments of the Operating Company and its
Subsidiaries, declared or made during the period commencing on
the Closing Date and ending on the date such action is taken,
would not exceed the sum of:
(A) 50% of Consolidated Net Income (minus 100% of
losses) for the period commencing on the first day of the
first fiscal quarter of the Operating Company which begins
after the Closing Date and ending on the last day of the
most recently completed fiscal quarter of the Operating
Company immediately prior to the date such action is taken
(the "Test Period"), plus
(B) 50% of the aggregate amount of Net Proceeds of
Capital Stock for the Test Period; and
(ii) no Default or Event of Default would exist.
(b) The Operating Company will not, and will not permit any of
its Subsidiaries to, authorize a Restricted Payment that is not
payable within 60 days of authorization.
(c) The Operating Company will not, and will not permit any of
its Subsidiaries to, enter into or be or become bound by any
agreement which encumbers or restricts, or create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction
upon, the right or ability of any Subsidiary of the Operating Company
to:
(i) pay dividends or make any other distribution on its
Shares (or any participation in its profit) owned by the
Operating Company or any other Subsidiary of the Operating
Company;
(ii) pay any Indebtedness owed to the Operating Company or
any other Subsidiary of the Operating Company;
(iii) make loans or advances to or Investments in the
Operating Company or any other Subsidiary of the Operating
Company; or
(iv) transfer any of its properties or assets to the
Operating Company or any other Subsidiary of the Operating
Company.
(d) Notwithstanding the provisions of section 14.6(a), the
Operating Company and its Subsidiaries may:
(i) pay dividends in cash to the Holding Company solely
for the purpose of making payments in cash to purchase Shares of
the Holding Company (or options to acquire such Shares) from any
employee of the Operating Company or one of its Subsidiaries
upon the termination of such employee's employment, provided
that (A) the aggregate amount of such dividends paid during any
fiscal year of the Operating Company does not exceed $200,000,
(B) both at the time of and immediately after giving effect to
each such dividend, no Default or Event of Default shall exist
and (C) all such dividends shall be deemed to have been
Restricted Payments and shall be counted for purposes of all
subsequent computations pursuant to section 14.6(a);
(ii) make payments in cash on Junior Subordinated Debt out
of the proceeds of any Refinancing Debt incurred to refinance or
refund such Junior Subordinated Debt, provided that such
refinancing or refunding is permitted under section
14.5(a)(viii) and under any terms of subordination applicable
thereto;
(iii) pay dividends in cash to the Holding Company in
lieu of paying income taxes, provided such payments are made
pursuant to a tax sharing agreement or arrangement permitted
under section 14.8; and
(iv) pay dividends in cash to the Holding Company solely
for the purpose of making the cash interest payments required to
be made on the Holding Company's 10% Convertible Subordinated
Debentures due 2004, provided that (A) the aggregate amount of
such dividends during any fiscal year of the Operating Company
does not exceed the lesser of (1) $1,100,000 and (2) 10% of the
then aggregate outstanding principal amount of such 10%
Convertible Subordinated Debentures due 2004, (B) both at the
time of and immediately after giving effect to each such
dividend, no Default or Event of Default shall exist and (C) all
such dividends shall be deemed to have been Restricted Payments
and shall be counted for purposes of all subsequent computations
pursuant to section 14.6(a).
(e) Each Person which becomes a Subsidiary of the Operating
Company after the Closing Date will be deemed to have made, on the
date such Person becomes a Subsidiary of the Operating Company, all
Restricted Investments of such Person in existence on such date.
Investments in any Person that ceases to be a Subsidiary of the
Operating Company after the Closing Date (but in which the Operating
Company or another Subsidiary continues to maintain an Investment)
will be deemed to have been made on the date on which such Person
ceases to be a Subsidiary of the Operating Company.
(f) For purposes of this section 14.6 and for purposes of
clause (k) of the definition of Permitted Investment, as of any date
of determination, each Restricted Investment and each Investment made
pursuant to clause (k) of the definition of Permitted Investment
shall be valued at the greater of:
(i) the amount at which such Investment is shown on
the books of the Operating Company or any of its Subsidiaries
(or zero if such Investment is not shown on any such books); and
(ii) either
(A) in the case of any Guarantee of the obligation of
any Person, the amount which the Operating Company or any
of its Subsidiaries has paid (or is obligated to pay) on
account of such obligation less any recoupment by the
Operating Company or such Subsidiary of any such payments,
or
(B) in the case of any other Investment, the excess
of (x) the greater of (1) the amount originally entered on
the books of the Operating Company or any of its
Subsidiaries with respect thereto and (2) the cost thereof
to the Operating Company or its Subsidiary over (y) any
return of capital (after income taxes applicable thereto)
upon such Investment through the sale or other liquidation
thereof or part thereof or otherwise.
14.7. Financial Covenants; Limitations on Derivative
Transactions.
(a) Consolidated Net Worth. The Operating Company will not
permit Consolidated Net Worth on and as of the last day of any fiscal
quarter of the Operating Company which commences on or after April 1,
1997 to be less than the sum of (a) $3,500,000 plus (b) an aggregate
amount equal to the sum of (i) 40% of Consolidated Net Income for the
period commencing on April 1, 1997 and ending on such last day (but
without any adjustment for any losses during such period) and
(ii) 50% of the aggregate amount of Net Proceeds of Capital Stock for
such period.
(b) Fixed Charges Coverage Ratio. The Operating Company will
not permit the Consolidated Fixed Charges Coverage Ratio on and as of
the last day of any fiscal quarter of the Operating Company ended
during any period specified below to be less than the applicable
ratio specified below:
Period Ratio
From and after July 1, 1997
through and including December 31, 1997 2.00 to 1.00
From and after January 1, 1998 2.25 to 1.00;
provided that the Consolidated Fixed Charges Coverage Ratio for the
period of four fiscal quarters ended on September 30, 1997 and
December 31, 1997 will be calculated using the actual Fixed Charges
of the Operating Company and its Subsidiaries during the period
commencing on April 1, 1997 and ending on each such date multiplied
by (i) for the period ended on September 30, 1997, 2.0, and (ii) for
the period ended on December 31, 1997, 1.4. Not later than September
30, 1997, the Operating Company shall deliver to the holders of the
Notes an Officers' Certificate setting forth a calculation of
Consolidated EBITDA for the fiscal quarter ended on March 31, 1997
which amount shall be calculated in the same manner in which the
amounts specified on Exhibit 15.1 attached hereto were calculated.
(c) Derivative Transactions. The Operating Company will not,
and will not permit any of its Subsidiaries to, enter into any
Derivative Transaction other than a Permitted Derivative Transaction.
14.8. Tax Consolidation. The Operating Company will not consent
to or permit the filing of or be a party to any consolidated income tax
return on behalf of itself or any of its Subsidiaries with any Person
(other than a consolidated return of the Operating Company and its own
Subsidiaries) except pursuant to a tax sharing agreement or arrangement
(a) which takes appropriate account of any tax benefits
(whether arising from a net operating loss, capital loss, deduction,
credit or otherwise) accruing to the other members of the affiliated
group (as such term is defined in section 1504(a) of the Code) as a
result of the inclusion of the Operating Company and its Subsidiaries
in such group's consolidated return, and
(b) pursuant to which the Operating Company and its
Subsidiaries
(i) will not make or agree to make any payments in respect
of income taxes if and to the extent that (A) the cumulative sum
of such payments made by the Operating Company and its
Subsidiaries less the cumulative sum of such payments received
by the Operating Company and its Subsidiaries exceeds (B) the
cumulative sum of income taxes which the Operating Company and
its Subsidiaries would have paid if the Operating Company and
its Subsidiaries had always filed income tax returns on a
consolidated basis as a separate affiliated group of
corporations consisting of only the Operating Company and its
Subsidiaries, and
(ii) shall be entitled to receive payments in respect of
tax benefits contributed by the Operating Company and its
Subsidiaries if and to the extent that (A) the cumulative sum of
payments received by such group from the Operating Company and
its Subsidiaries in respect of income taxes less the cumulative
sum of payments made by such group to the Operating Company and
its Subsidiaries in respect of income taxes exceeds (B) the
additional tax liability incurred by such group as a result of
the inclusion of the Operating Company and its Subsidiaries in
such group's consolidated tax return.
14.9. Limitation on Liens. The Operating Company will not, and
will not permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien in respect of any property of any character of
the Operating Company or any of its Subsidiaries (whether owned on the
date hereof or hereafter acquired), including, without limitation, any
assignment of any right to receive any income or profits or any other
payment or amount, other than:
(a) Liens securing Indebtedness of any Subsidiary owing to the
Operating Company or to a Wholly-Owned Subsidiary;
(b) Liens (other than any Lien created by any Environmental Law
or by Section 4068 of ERISA), charges and encumbrances which (i) are
incurred in the ordinary course of business and which are incidental
to the conduct of the business of the Operating Company and its
Subsidiaries and the ownership of its and their property, (ii) are
not incurred in connection with the borrowing of money or the
obtaining of advances or credit, (iii) do not in the aggregate
materially detract from the value of the property of the Operating
Company or its Subsidiaries or materially impair the use thereof in
the operation of its or their business and (iv) do not (and could not
reasonably be expected to) materially adversely affect the rights of
the holders of the Notes, including, without limitation, but subject
to the foregoing provisions of this section 14.9(b) and to all other
applicable provisions of the Operative Documents:
(A) Liens for taxes, assessments or governmental
charges or levies on property if the same shall not at the
time be delinquent or thereafter can be paid without
penalty or interest, or (if foreclosure, distraint, sale or
other similar proceedings shall not have been commenced)
are being contested in good faith and by appropriate
proceedings diligently conducted and for which proper
reserve or other provision has been made in accordance with
GAAP;
(B) ▇▇▇▇▇ imposed by law, such as carriers',
warehousemen's and mechanics' liens, bankers' setoff rights
and other similar Liens arising in the ordinary course of
business, for sums not yet due or being contested in good
faith by appropriate proceedings diligently conducted and
for which proper reserve or other provision has been made
in accordance with GAAP;
(C) Liens arising in the ordinary course of business
out of pledges or deposits under worker's compensation
laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar
legislation;
(D) Liens arising from or upon any judgment or award,
provided that (1) such judgment or award is being contested
in good faith by proper appeal proceedings and only so long
as execution thereon shall be stayed and (2) proper reserve
or other provision has been made in accordance with GAAP;
(E) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases,
statutory obligations, surety bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business; and
(F) easements, rights of way, restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not material in
amount, and which do not in any case materially detract
from the value of the property subject thereto or interfere
with the ordinary conduct of business by the Operating
Company and its Subsidiaries;
(c) any Lien securing Funded Debt and Current Debt outstanding
on the Closing Date and specified on Exhibit 5.9 attached hereto,
provided that such Funded Debt and Current Debt is paid in accordance
with the terms thereof as in effect on the Closing Date (without
extension, refinancing, refunding, renewal or amendment, except to
the extent permitted under section 14.5(a)(viii));
(d) any Lien constituting a purchase money security interest,
or other Liens of a conditional vendor, securing Indebtedness
incurred to finance the acquisition and/or improvement of any real or
personal property, or any Lien securing any refinancing or refunding
thereof, provided that (i) no Lien permitted under this clause (d)
shall extend to or cover any property other than the property so
acquired, (ii) the aggregate amount of Indebtedness secured by all
Liens permitted under this clause (d) shall not exceed $2,000,000 at
any time and (iii) the aggregate amount of Indebtedness secured by
any individual Lien permitted under this clause (d) shall not exceed
at any time the lower of the fair market value of the related
property at the time of its acquisition or the cost of such property;
(e) Liens securing Funded Debt and Current Debt, including
amounts due (contingently or otherwise) in respect of reimbursement
obligations under letters of credit, interest rate protection
agreements or similar instruments and all related reimbursement
agreements, under the Fleet Bank Documents to the extent permitted
under section 14.5(a)(ii) or any Refinancing Debt incurred to
refinance or refund the same to the extent permitted under section
14.5(a)(viii); and
(f) Liens in addition to those permitted under the foregoing
provisions of this section 14.9, provided that the aggregate amount
of Indebtedness secured thereby does not exceed $1,000,000 at any
time.
14.10. Limitation on Transactions with Affiliates. The Companies
will not, and will not permit any of their respective Subsidiaries to,
engage in any transaction (including, without limitation, the purchase,
sale or exchange of any properties and assets or the rendering of any
services) with an Affiliate of either Company or of any of their
respective Subsidiaries, other than any transaction entered into in the
ordinary course of business on terms no less favorable to such Company or
such Subsidiary in any material respect than would be obtainable at the
time in comparable transactions with a Person not such an Affiliate,
provided that the Companies may pay management fees to the Consultants
pursuant to the Consulting Agreement in an aggregate amount not exceeding
$300,000 during any fiscal year if, both at the time of and after giving
effect to any such payment, (a) no Default or Event of Default shall exist
and (b) the Holding Company's repurchase obligation under section 12.2
shall not then be delayed by virtue of the operation of section 12.5.
14.11. Limitation on Issuance of Preferred Shares and Redeemable
Shares By Subsidiaries. The Operating Company will not permit any of its
Subsidiaries to have any outstanding Preferred Shares or Redeemable Shares
(other than Preferred Shares or Redeemable Shares owned by the Operating
Company).
14.12. Limitation on Issuance and Disposition of Shares of
Subsidiaries. The Operating Company will not permit any of its
Subsidiaries to (a) issue, sell or otherwise dispose of any Shares of such
Subsidiary (or any securities convertible into or exercisable or
exchangeable for such Shares), except to the Operating Company or to a
Wholly-Owned Subsidiary of the Operating Company or (b) sell, transfer or
otherwise dispose of any Shares of any other Subsidiary of the Operating
Company (or any securities convertible into or exercisable or exchangeable
for such Shares), except to the Operating Company or to a Wholly-Owned
Subsidiary of the Operating Company, provided that nothing in this section
14.12 shall prohibit the sale, transfer or other disposition of the Shares
of any Subsidiary of the Operating Company (or any securities convertible
into or exercisable or exchangeable for such Shares) owned by the
Operating Company and its other Subsidiaries if (w) both before and after
giving effect to such disposition, no Default or Event of Default shall
exist; (x) such disposition is permitted under section 14.15,
(y) simultaneously with such disposition, the entire Investment (whether
represented by ▇▇▇▇▇▇, Indebtedness, claims or otherwise) of the Operating
Company and its other Subsidiaries in the Subsidiary being disposed of is
sold, transferred or otherwise disposed of and (z) following such
disposition, the Subsidiary being disposed of shall have no continuing
Investment in the Operating Company or any other Subsidiary of the
Operating Company not being simultaneously disposed of.
14.13. Limitation on Consolidation or Merger, etc. The Operating
Company will not, and will not permit any of its Subsidiaries to,
consolidate with or merge into any other Person or sell, lease or
otherwise dispose of all or substantially all of its property in a single
transaction or series of transactions to any Person or Persons (except
that any Subsidiary of the Operating Company may (x) merge into, or sell,
lease or otherwise dispose of all or substantially all of its property in
a single transaction or series of transactions to, the Operating Company
(if the Operating Company is the surviving corporation of such
transaction) or a Wholly-Owned Subsidiary of the Operating Company (if the
surviving corporation to such transaction is a Wholly-Owned Subsidiary of
the Operating Company) or (y) sell, lease or otherwise dispose of its
property in compliance with section 14.15 (other than 14.15(d)), provided
that the Operating Company may consolidate with or merge into, or sell,
lease or otherwise dispose of all or substantially all of its property to,
any other Person so long as:
(a) the successor formed by such consolidation or the survivor
of such merger or the Person that acquires all or substantially all
of the property of the Operating Company, 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 and having all or
substantially all its property in the United States of America;
(b) if the Operating Company is not the Successor Corporation,
the Successor 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
each of the other Operative Documents (pursuant to such agreements
and instruments as shall be reasonably satisfactory to the Required
Holders of Notes), and the Operating Company shall have caused to be
delivered to each holder of Notes an opinion of independent counsel
reasonably satisfactory to the Required Holders of the Notes, to the
effect that all agreements or instruments effecting such assumption
are legal, valid and binding obligations of such Successor
Corporation enforceable against it in accordance with their
respective terms (except as such enforcement may be limited by
insolvency, bankruptcy, reorganization or other laws of general
application relating to the enforcement of creditors' rights or by
general equity principles) and covering such other matters as the
Required Holders of the Notes may reasonably request;
(c) both before and immediately after giving effect to such
transaction, no Default or Event of Default would exist; and
(d) after giving effect to such transaction, (i) the Successor
Corporation shall have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of the Operating Company immediately
prior to such transaction and (ii) the Successor Corporation shall be
permitted to incur at least $1.00 of additional Funded Debt or
Current Debt under section 14.5(a)(vii).
No sale, lease or other disposition by the Operating Company shall have
the effect of releasing the Operating Company (or any successor
corporation that shall theretofore have become such in the manner
prescribed in this section 14.13) or any of its Subsidiaries from its
liability under this Agreement or any of the other Operative Documents.
14.14. Limitation on Sale-and-Leaseback Transactions. The
Operating Company will not, and will not permit any of its Subsidiaries
to, consummate any Sale-and-Leaseback Transaction unless:
(a) both before and immediately after giving effect to such
Sale-and-Leaseback Transaction, no Default or Event of Default shall
exist;
(b) all property sold or otherwise transferred pursuant to such
Sale-and-Leaseback Transaction shall have been acquired or
constructed after the Closing Date;
(c) such Sale-and-Leaseback Transaction is consummated not more
than 180 days following the date upon which the property sold or
otherwise transferred in such Sale-and-Leaseback Transaction shall
have been acquired or constructed; and
(d) the Operating Company and/or any Subsidiary effecting such
Sale-and-Leaseback Transaction shall receive, upon the consummation
thereof, cash consideration equal to the fair market value of the
property sold or otherwise transferred pursuant thereto.
14.15. Limitation on Disposition of Property. The Operating
Company will not, and will not permit any of its Subsidiaries to, directly
or indirectly, sell, lease or otherwise dispose of any of their respective
properties and assets (including any right, title or interest in any
property or asset), whether owned on the date hereof or hereafter acquired
and whether real, personal or mixed, tangible or intangible, including,
without limitation, Shares, securities or Indebtedness of any Subsidiary
of the Operating Company, except:
(a) any sale of inventory made in the ordinary course of
business;
(b) any sale of idle or obsolete equipment that is no longer
used or useful in the business of the Operating Company and its
Subsidiaries;
(c) any Sale-and-Leaseback Transaction permitted under section
14.14;
(d) any transaction permitted under section 14.13; and/or
(e) any other sale by the Operating Company and its
Subsidiaries of their respective properties and assets, if, in the
case of this clause (e),
(i) such properties and assets are sold for cash
consideration equal to the fair market value of such properties
and assets;
(ii) the aggregate net book value of properties and assets
sold pursuant to this clause (e) during any fiscal year of the
Operating Company does not exceed $500,000; and
(iii) both before and immediately after giving effect
to such sale, no Default or Event of Default shall exist;
provided that, if the proceeds of a sale made pursuant to this clause
(e) (net of all costs and out-of-pocket expenses in connection
therewith) are applied within 180 days of the consummation of such
sale to (x) the purchase by the Operating Company (or the Subsidiary
effecting such sale) of other property and assets used and useful in
the ordinary course of business of the Operating Company or such
Subsidiary, (y) the prepayment (and permanent reduction) of the
Funded Debt under the Fleet Bank Agreement (or any Refinancing Debt
incurred to refinance or refund such Funded Debt) or (z) the
prepayment of the Notes pursuant to section 9.2, then, from and after
the date such net proceeds are so applied, such sale shall be
disregarded for purposes of any subsequent computation under this
clause (e).
14.16. Modification of Certain Documents, Agreements and
Instruments. The Holding Company will not, and will not permit any of its
Subsidiaries to:
(a) file any resolution of its board of directors (or other
governing body) with the Secretary of State of the jurisdiction of
its organization to establish or create a series of Preferred Shares
or a separate class of equity securities;
(b) have a fiscal year which ends on any date other than
December 31;
(c) amend, modify, supplement or waive any term, condition
or provision of its Organizational Documents or any of the
agreements, documents or instruments referred to in section 4.3
(other than the Fleet Bank Documents as to which the following
section 14.16(d) applies) or enter into any agreement, document or
instrument or transaction, if the effect thereof is, or could
reasonably be expected to be, adverse to the interests of any holder
of any of the Notes or to impose restrictions upon the Holding
Company or any of its Subsidiaries that are more restrictive in any
material respect than those set forth in its Organizational Documents
or such other agreements, documents and instruments as in effect on
the Closing Date; or
(d) amend, supplement, modify or waive any term of the Fleet
Bank Documents (or the documents related to any Refinancing Debt
therefor) unless after giving effect thereto the terms of the Fleet
Bank Documents (or the documents related to any Refinancing Debt
therefor) are not more restrictive in any material respect upon the
Holding Company and its Subsidiaries nor more adverse in any material
respect to the interests of any holder of any of the Securities.
14.17. Further Assurances; Note Guarantees.
(a) From time to time hereafter, the Operating Company will
execute and deliver, or will cause to be executed and delivered, such
additional agreements, documents and instruments and will take all
such other actions as any holder or holders of the Notes may
reasonably request for the purpose of implementing or effectuating
the provisions of the Operative Documents.
(b) Without limiting the generality of the foregoing, the
Operating Company shall cause each Significant Subsidiary to deliver
a Note Guarantee to each holder of any Notes not later than 10 days
following the first day upon which such Subsidiary shall constitute a
Significant Subsidiary, provided that, if the Operating Company at
any time or from time to time shall elect to organize or acquire any
Subsidiary, then and in each such case the Operating Company will
promptly (but in any event not later than 20 days prior to
consummating any such transaction) notify each holder of Securities
and, if, upon the consummation of such transaction such Subsidiary
shall constitute a Significant Subsidiary, the Operating Company will
cause such Subsidiary, not later than the date upon which such
transaction is consummated, to execute and deliver a Note Guarantee
to each holder of any Notes. At the time any Note Guarantees are
delivered to the holders of Notes pursuant to this section 14.17, the
Operating Company shall also cause to be delivered to such holders an
opinion of independent counsel reasonably satisfactory to the
Required Holders of the Notes to the effect that such Note Guarantees
have been duly authorized, executed and delivered by the applicable
Significant Subsidiary and that such Note Guarantees constitute the
legal, valid and binding obligations of such Significant Subsidiary
enforceable against it in accordance with its terms and covering such
other matters as the Required Holders of the Notes may reasonably
request.
14.18. Certain Additional Covenants of the Holding Company.
(a) The Holding Company will not, and will not permit any of
its Subsidiaries to, be liable or create, assume, incur, guarantee,
or in any manner become liable, contingently or otherwise, in respect
of any Funded Debt or Current Debt, unless both at the time of and
immediately after giving effect to the incurrence of such Funded Debt
and/or Current Debt and the retirement of any other Funded Debt
and/or Current Debt which is concurrently being retired:
(i) no Default or Event of Default shall exist; and
(ii) the ratio of (A) Total Debt of the Holding Company and
its Subsidiaries outstanding on such date (including all Funded
Debt and Current Debt the incurrence of which gives rise to the
need for such determination) to (B) EBITDA of the Holding
Company and its Subsidiaries for the period of four consecutive
fiscal quarters of the Holding Company ending on, or most
recently ended prior to, such date (calculated on a pro forma
basis to give effect as of the first day of such period to the
incurrence of all Funded Debt and Current Debt giving rise to
the need for such determination and the retirement of any Funded
Debt and/or Current Debt which is concurrently being retired),
all determined on a consolidated basis in accordance with GAAP,
does not exceed 5.00 to 1.00.
(b) The Holding Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, at any time, authorize,
declare or make, or incur any liability to make, any Restricted
Investment or any Restricted Payment, unless, in each case both at
the time of and immediately after giving effect to such action:
(i) the sum of (x) the aggregate value of all Restricted
Investments of the Holding Company and its Subsidiaries (valued,
in the manner provided in section 14.6(f), immediately after
such action (all references in section 14.6(f) to Operating
Company being deemed, for purposes of this section 14.18(b), to
refer to the Holding Company)) plus (y) the aggregate amount of
all Restricted Payments of the Holding Company and its
Subsidiaries, declared or made during the period commencing on
the Closing Date and ending on the date such action is taken,
would not exceed 75% of Net Income (minus 100% of losses) of the
Holding Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP for the period
commencing on the first day of the first fiscal quarter of the
Holding Company which begins after the Closing Date and ending
on the last day of the most recently completed fiscal quarter of
the Holding Company immediately prior to the date such action is
taken; and
(ii) no Default or Event of Default would exist.
(c) The Holding Company will not consolidate with or merge
into, or sell, lease or otherwise dispose of all or substantially all
of its property in a single transaction or a series of transactions
to, any other Person unless:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires all or
substantially all of the property of the Holding Company, as the
case may be (the "Survivor") 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 and
having all or substantially all its property in the United
States of America;
(ii) if the Holding Company is not the Survivor, the
Survivor shall have executed and delivered to each holder of
Securities its assumption of the due and punctual performance
and observance of each covenant and condition of this Agreement
and each of the other Operative Documents (pursuant to such
agreements and instruments as shall be reasonably satisfactory
to the Required Holders of each class of the Securities), and an
opinion of independent counsel reasonably satisfactory to the
Required Holders of each class of the Securities, to the effect
that all agreements or instruments effecting such assumption are
legal, valid and binding obligations of such Survivor
enforceable against it in accordance with their respective terms
(except as such enforcement may be limited by insolvency,
bankruptcy, reorganization or other laws of general application
relating to the enforcement of creditors' rights or by general
equity principles) and covering such other matters as the
Required Holders of each class of the Securities may reasonably
request;
(iii) both before and immediately after giving effect
to such transaction, no Default or Event of Default would exist;
and
(iv) immediately after giving effect to such transaction
(A) the Survivor shall have a Net Worth equal to or greater than
the Net Worth of the Holding Company immediately prior to such
transaction and (B) the Survivor shall be permitted to incur at
least $1.00 of additional Funded Debt or Current Debt under
section 14.18(a).
(d) All calculations of EBITDA, Net Income and Net Worth for
purposes of this section 14.18 shall be made in a manner consistent
with the calculations of Consolidated EBITDA, Consolidated Net Income
and Consolidated Net Worth (including the adjustments thereto set
forth in the proviso contained in the definitions of Consolidated
EBITDA, Consolidated Net Income and Consolidated Net Worth).
(e) The consummation of any transaction permitted under section
14.18(c) may, notwithstanding compliance with the provisions thereof,
constitute a Change of Control.
15. Definitions. Note: Bracketed items are cross-references to the
section or sections of this Agreement in which the specified definitions
are used; they appear for purpose of convenience only and do not affect
the meaning of such definitions.
15.1. Definitions of Capitalized Terms. The terms defined in
this section 15.1, whenever used in this Agreement, shall, unless the
context otherwise requires, have the following respective meanings:
"Acquisition" shall mean (a) the acquisition by the Operating Company
of all of the outstanding Shares of Old Game Time, and of all outstanding
securities, convertible into and exercisable or exchangeable for Shares of
Old Game Time and (b) the contemporaneous merger of Old Game Time with and
into the Operating Company, pursuant to the Acquisition Documents.
"Acquisition Agreement" shall mean the Amended and Restated Stock
Purchase Agreement dated as of March 13, 1997 by and among the Operating
Company, Old Game Time, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
"Acquisition Documents" shall mean the Acquisition Agreement, the
Merger Agreement and the other agreements, documents and instruments
related thereto, including, without limitation, the Seller Note.
"Affiliate" of any Person shall mean any other Person which, directly
or indirectly, controls or is controlled by or is under common control
with such first-mentioned Person, or any individual, in the case of a
Person who is an individual, who has a relationship by blood, marriage or
adoption to such first-mentioned Person not more remote than first cousin,
and, without limiting the generality of the foregoing, shall include (a)
any Person beneficially owning or holding, directly or indirectly, 5% or
more of any class of Voting Stock or other Shares of such first-mentioned
Person, (b) any Person of which such first-mentioned Person owns or holds,
directly or indirectly, 5% or more of any class of Voting Stock or other
Shares and (c) any director or officer of such first-mentioned Person;
provided that, for purposes hereof, in no event shall you or any other
institutional holder of Securities be deemed to be an Affiliate of the
Holding Company, the Operating Company or any of their respective
Subsidiaries. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock or by contract or otherwise.
"Bridge Note" shall have the meaning specified in section 4.3.
"Business" shall have the meaning specified in section 5.4.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day which shall be in Boston, Massachusetts or Janesville, Wisconsin
a legal holiday or a day on which banking institutions therein are
authorized by law to close.
"Call Closing Date," "Call Notice" and "Call Option" shall have the
respective meanings specified in section 12.3.
"Call Securities" shall have the meaning specified in section 12.1.
"Capital Lease" shall mean any lease or similar arrangement which is
of such a nature that payment obligations of the lessee or obligor
thereunder are required to be capitalized and shown as liabilities upon a
balance sheet of such lessee or obligor prepared in accordance with GAAP
or for which the amount of the asset and liability thereunder as if so
capitalized should be disclosed in a note to such balance sheet.
"Change of Control" shall mean and shall be deemed to have occurred
if at any time for whatever reason:
(a) any Person (other than any member of the Initial Investor
Group), together with "affiliates" and "associates" of such Person,
within the meaning of Rule 12b-2 of the Commission under the Exchange
Act, shall acquire control or beneficial ownership (including
beneficial ownership resulting from the formation of a "group" within
the meaning of Rule 13d-5 of the Commission under the Exchange Act)
of more than 33% of the Shares of any class of Voting Stock of the
Holding Company; or
(b) the Holding Company ceases to own and control beneficially
and of record all of the outstanding Shares of the Operating Company
and all securities convertible into or exercisable or exchangeable
for such Shares; or
(c) all or substantially all the assets of the Operating
Company shall have been sold, leased or otherwise disposed of
(directly or indirectly, through one or more transactions whether or
not concurrent).
"Closing" and "Closing Date" shall have the respective meanings
specified in section 3.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency from time to time administering the Securities Act
and/or the Exchange Act.
"Companies" and "Company" shall have the respective meanings
specified in section 1.
"Consolidated EBITDA" [14.5], "Consolidated Fixed Charges",
"Consolidated Net Income" [14.7], "Consolidated Net Worth" [14.7, 14.13],
"Consolidated Rental Obligations", "Consolidated Total Assets" and
"Consolidated Total Debt" shall mean the EBITDA, Fixed Charges, Net
Income, Net Worth, Rental Obligations, Total Assets and Total Debt, as the
case may be, of the Operating Company and its Subsidiaries (whether or not
ordinarily consolidated in consolidated financial statements of the
Operating Company and Subsidiaries), all consolidated in accordance with
GAAP, and after giving appropriate effect to outside minority interests,
if any, in Subsidiaries, provided that:
(a) Consolidated EBITDA and Consolidated Net Income shall be
reduced by the amount of all dividends and other distributions paid
to the Holding Company except to the extent such dividends or
distributions are permitted to be paid hereunder;
(b) in determining Consolidated EBITDA and Consolidated Net
Income there shall be excluded:
(i) the income (or loss) of any Person accrued prior to
the date such Person becomes a Subsidiary of the Operating
Company or is merged into or consolidated with the Operating
Company or any of its Subsidiaries;
(ii) the income (or loss) of any Person (other than a
Subsidiary) in which the Operating Company or any of its
Subsidiaries has an ownership interest; provided, however, that
(A) Consolidated EBITDA and Consolidated Net Income shall
include amounts in respect of the income of such Person when
actually received in cash by the Operating Company or such
Subsidiary in the form of dividends or similar distributions and
(B) Consolidated EBITDA and Consolidated Net Income shall be
reduced by the aggregate amount of all Investments, regardless
of the form thereof, made by the Operating Company or any of its
Subsidiaries in such Person for the purpose of funding any
deficit or loss of such Person;
(iii) all amounts included in computing such net income
(or loss) in respect of (A) the write-up of any asset on or
after December 31, 1995, including the subsequent amortization
or expensing of the written-up portion of assets on account of
the Acquisition or (B) the retirement of any Indebtedness or
equity at less than face value after December 31, 1995;
(iv) extraordinary and nonrecurring gains;
(v) the income of any Subsidiary of the Operating Company
to the extent the payment of such income in the form of a
dividend or repayment of Indebtedness to the Borrower or a
Wholly-Owned Subsidiary of the Operating Company is not
permitted, whether on account of any restriction in any
Organizational Document of, or any agreement, instrument, deed
or lease or any law, statute, judgement, decree or governmental
order, rule or regulation applicable to, such Subsidiary;
(vi) any after-tax gains or losses attributable to returned
surplus assets of any Plan;
(vii) the write off after the Closing Date of
capitalized financing costs incurred prior to the Closing Date;
(viii) any deferred or other credit representing the
excess of the equity in any Subsidiary of the Operating Company
at the date of acquisition thereof over the cost of the
investment in such Subsidiary;
(ix) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made
out of income accrued during the same period;
(x) any aggregate net gain (but not any aggregate net
loss) arising from the sale, conversion, exchange or other
disposition of capital assets, including, without limitation,
(A) all non-current assets and, without duplication, (B) the
following, whether or not current: (1) fixed assets, whether
tangible or intangible, (2) all inventory sold in conjunction
with the disposition of fixed assets and (3) all Shares or other
securities;
(xi) any net gain from the collection of any proceeds of
life insurance policies;
(xii) any gain arising from the acquisition of any
Shares or other securities or the extinguishment, under GAAP, of
any Indebtedness, of the Operating Company or any Subsidiary of
the Operating Company;
(xiii) any Net Income or gain (but not any net loss)
from (A) any change in accounting principles in accordance with
GAAP, (B) any prior period adjustments resulting from any change
in accounting principles in accordance with GAAP and (C) any
discontinued operations or the disposition thereof;
(xiv) any portion of Net Income that cannot be freely
converted into United States Dollars;
(xv) any other non-cash gain included in the Net Income of
any such Person;
(c) Consolidated Net Worth shall be reduced by the amount by
which stockholders' equity of the Operating Company and its
Subsidiaries has been increased after December 31, 1995 by the items
described in subclauses (i) through (xv) of the foregoing clause (b)
or by ▇▇▇▇▇▇▇▇; and
(d) Consolidated EBITDA for periods prior to the Closing Date
shall be the amounts indicated on Exhibit 15.1 attached hereto.
"Consolidated Fixed Charges Coverage Ratio" [14.7] shall mean, on any
date, the ratio of (a) the sum of (i) Consolidated EBITDA for the period
of four consecutive fiscal quarters of the Operating Company ending on
such date, plus (ii) one-third of Consolidated Rental Obligations in
respect of leases (other than Capital Leases) for such period to
(b) Consolidated Fixed Charges for such period.
"Consultants" shall mean Glencoe Investment Corporation and ▇▇▇▇▇
Capital Management Incorporated.
"Consulting Agreement" shall mean the Management Consulting Agreement
dated February 16, 1996 between the Holding Company, the Operating Company
and the Consultants.
"Consulting Agreement Side Letter" shall have the meaning specified
in section 4.3.
"Current Debt" of any Person shall mean, at any date, without
duplication of amounts, (a) all Indebtedness for borrowed money or in
respect of Capital Leases or the deferred purchase price of property
(including, without limitation, all Indebtedness of the kind referred to
in clauses (b), (c), (d) and (e) of the definition of Indebtedness),
whether or not interest bearing and whether secured or unsecured, of such
Person at such date which would, in accordance with GAAP, be classified as
short-term Indebtedness at such date, but specifically excluding the
current maturities of such Person's Funded Debt and (b) all Guarantees by
such Person at such date of Current Debt of others.
"Default" shall mean any condition or event which constitutes or,
after notice or lapse of time or both, would constitute an Event of
Default.
"Derivative Transactions" shall mean (a) any rate, basis, commodity,
currency, debt or equity swap, (b) any cap, collar or floor agreement,
(c) any rate, basis, commodity, currency, debt or equity exchange or
forward agreement, (d) any rate, basis, commodity, currency, debt or
equity option, (e) any other similar agreement, (f) any option to enter
into any of the foregoing, (g) any master agreement or other agreement
providing for any of the foregoing and (h) any combination of any of the
foregoing.
"Disclosure Documents" shall have the meaning specified in section
5.4.
"EBITDA" of any Person shall mean, for any period, the Net Income of
such Person for such period after restoring thereto amounts deducted for
(a) Interest Charges, (b) taxes in respect of income and profits,
(c) depreciation and amortization, and (d) all other non-cash charges,
determined in accordance with GAAP.
"Environmental Laws" shall mean any law, statute, rule, regulation or
other governmental standard or requirement relating or pertaining to (a)
the generation, manufacture, management, handling, use, sale,
transportation, treatment, storage, disposal, delivery, discharge, release
or emission of any waste, pollutant or toxic, hazardous or other
substance, or (b) any other act, omission or condition affecting or
involving the environment or air or water pollution or soil or groundwater
contamination.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and rulings
thereunder.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) that, together with the Holding Company or the Operating
Company, would be treated as a single employer under section 4001(b) of
ERISA, or that is a member of a group of which the Holding Company or the
Operating Company is a member and that is a controlled group within the
meaning of section 4971(e)(2)(B) of the Code.
"Event of Default" shall have the meaning specified in section 16.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in
effect from time to time.
"Fair Value" shall have the meaning specified in the Warrants.
"Fixed Charges" of any Person shall mean, for any period, the sum
(without duplication of amounts) of (a) all Interest Charges of such
Person for such period, and (b) one-third of all Rental Obligations of
such Person for such period in respect of leases other than Capital
Leases, in each case determined in accordance with GAAP.
"Fleet Bank Agreement" shall mean the Credit Agreement dated as of
March 13, 1997 among the Operating Company, Fleet National Bank, as Agent,
and Fleet National Bank and certain other lenders, as from time to time in
effect.
"Fleet Bank Documents" shall mean the Fleet Bank Agreement and the
other agreements, documents and instruments related thereto.
"Funded Debt" of any Person shall mean, at any date, without
duplication of amounts, (a) all Indebtedness for borrowed money or in
respect of Capital Leases or the deferred purchase price of property
(including, without limitation, all Indebtedness of the kind referred to
in clauses (b), (c), (d) and (e) of the definition of Indebtedness),
whether or not interest-bearing, of such Person which would, in accordance
with GAAP, be classified as long-term Indebtedness at such date, but in
any event including all such Indebtedness, whether secured or unsecured,
of such Person which matures (or which, pursuant to the terms of a
revolving credit agreement or otherwise, is directly or indirectly
renewable or extendible at the option of such Person for a period ending)
more than one year after the date of the creation thereof, notwithstanding
the fact that payments in respect thereof (whether installment, serial
maturity or sinking fund payments or otherwise) are required to be made by
such Person not more than one year after the date as of which the amount
of Funded Debt is being determined, other than any amount thereof which is
at the time included in Current Debt of such Person, and (b) all
Guarantees by such Person at such date of Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles as in
effect in the United States from time to time, consistently applied.
"GreenGrass Capital" shall mean GreenGrass Capital, LLC, a Delaware
limited liability company.
"GreenGrass Holdings" shall mean GreenGrass Holdings, a Delaware
general partnership.
"Guarantee" of any Person shall mean, at any date, any obligation of
such Person at such date guaranteeing, directly or indirectly, any
Indebtedness, liability or other obligation of any other Person in any
manner, but in any event including all endorsements (other than for
collection or deposit in the ordinary course of business), all discounts
with recourse and all obligations incurred through an agreement,
contingent or otherwise, (a) to purchase the obligations of any other
Person or any security therefor or to advance or supply funds for the
payment or purchase of such obligations, or (b) to purchase, sell or lease
(as lessee or lessor) property, products, materials or supplies or to
purchase or sell transportation or services, primarily for the purpose of
enabling the obligor to make payment of such obligations or to assure the
owner of such obligations against loss, regardless of the delivery or
non-delivery of the property, products, materials or supplies or the
furnishing or nonfurnishing of the transportation or services, or (c) to
provide funds for the payment of, or obligating such Person to make, any
loan, advance, capital contribution or other investment in the obligor for
the purpose of assuring a minimum equity, asset base, working capital or
other balance sheet condition for any date or to provide funds for the
payment of any obligation, dividend or stock liquidation payment, or
otherwise to supply funds to or in any manner invest in the obligor. The
amount of any Guarantee shall be equal to the amount of all Indebtedness,
liabilities and other obligations directly or indirectly guaranteed
thereby.
"Guarantors" shall mean the Holding Company and each of the
Subsidiary Guarantors. At the time of the Closing, the only Guarantor is
the Holding Company.
"Holding Company" shall mean Swing-N-Slide Corp., a Delaware
corporation.
"Holding Company Class A Common Stock" shall mean the Common Stock,
$.01 par value, of the Holding Company as constituted on the Closing Date
and any Shares into which such Common Stock shall have been changed or any
Shares resulting from any reclassification of such Common Stock.
"Holding Company Class B Common Stock" shall mean the Class B Common
Stock, $.01 par value, of the Holding Company as constituted on the
Closing Date and any Shares into which such Class B Common Stock shall
have been changed or any Shares resulting from any reclassification of
such Class B Common Stock.
"Holding Company Common Stock" shall mean the Holding Company Class A
Common Stock and the Holding Company Class B Common Stock.
"Indebtedness" of any Person shall mean, at any date, all
indebtedness, liabilities and other obligations of such Person at such
date (other than items of shareholders' equity) which would, in accordance
with GAAP, be classified as liabilities of such Person, but in any event
including (without duplication):
(a) all Guarantees of such Person;
(b) all indebtedness, liabilities and other obligations secured
by any Lien in respect of property owned by such Person, whether or
not such Person has assumed or become liable for the payment of such
obligations;
(c) all indebtedness, liabilities and other obligations of such
Person arising under any conditional sale or other title retention
agreement, whether or not the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such property;
(d) the amount of the obligation required to be recorded by the
lessee in respect of any Capital Lease under which such Person is
lessee; and
(e) all indebtedness, liabilities and other obligations arising
in connection with letters of credit, bankers acceptances or other
credit enhancement facilities.
"Indemnified Costs" and "Indemnitee" shall have the respective
meanings specified in section 21.
"Indemnified Person" shall have the meaning specified in section
11.5.
"Initial Investor Group" shall mean GreenGrass Holdings and its
members and Affiliates as of the Closing Date.
"Interest Charges" of any Person shall mean, for any period, the
aggregate amount of all interest paid, payable or guaranteed during such
period by such Person in respect of Funded Debt and Current Debt,
including, without limitation, Rental Obligations on Capital Leases, and
all commitment and other fees paid in respect of the Funded Debt and
Current Debt under the Fleet Bank Documents or any Refinancing Debt
incurred to refinance such Funded Debt and Current Debt, determined in
accordance with GAAP.
"Investment" of any Person shall mean any investment made by such
Person in any other Person by stock purchase, capital contribution, loan,
advance, acquisition of Indebtedness, Guarantee or otherwise.
"Junior Subordinated Debt" shall mean unsecured Indebtedness of the
Operating Company and/or any of its Subsidiaries which has been
subordinated to the Notes and the Note Guarantees upon terms of
subordination approved in writing by the Required Holders of the Notes.
"Licenses" shall mean certificates of public convenience and
necessity, franchises, licenses and other permits and authorizations from
governmental authorities.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, lien (statutory or otherwise), preference, priority,
security interest, chattel mortgage or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor
and any easement, right of way or other encumbrance on title to real
property and any lease having substantially the same effect as any of the
foregoing.
"Material Adverse Change" shall mean a material adverse change in or
effect upon any of (a) the condition (financial or otherwise), business,
performance, operations, properties, profits or prospects of the Holding
Company or the Operating Company or the Holding Company and its
Subsidiaries taken as one enterprise, (b) the legality, validity or
enforceability of this Agreement, the Securities or any of the other
Operative Documents, (c) the rights and remedies of any holder of
Securities with respect to the Securities or (d) the ability of the
Holding Company or any of its Subsidiaries to perform its obligations
under any of the Operative Documents and/or to comply with any of the
terms thereof applicable to it.
"Merger Agreement" shall mean the Plan of Merger dated as of March
13, 1997 by and between Newco, Inc. and Old Game Time.
"Multiemployer Plan" shall mean any Plan that is a "multiemployer
plan" as defined in section 4001(a)(3) of ERISA.
"Net Income" of any Person shall mean, for any period, the net income
(or net loss) of such Person for such period, determined in accordance
with GAAP.
"Net Proceeds of Capital Stock" shall mean, for any period, all cash
proceeds (net of all costs and out-of-pocket expenses in connection
therewith, including, without limitation, placement, underwriting and
brokerage fees and expenses) received by the Operating Company during such
period, from the sale of Shares (but not, for purposes of
section 14.6(a)(i)(B), the sale of Redeemable Shares) of the Operating
Company, including in such net proceeds:
(a) the net amount paid to the Operating Company upon issuance
and exercise during such period of any right to acquire any Shares
(other than, for purposes of section 14.6(a)(i)(B), Redeemable
Shares) of the Operating Company, or paid during such period to
convert a convertible debt security to Shares (other than Redeemable
Shares) of the Operating Company (but excluding any amount paid to
the Operating Company upon issuance of such convertible debt
security); and
(b) any amount paid to the Operating Company upon issuance of
any convertible debt security issued after the Closing Date and
thereafter converted to Shares (but not, for purposes of
section 14.6(a)(i)(B), a conversion to Redeemable Shares) of the
Operating Company during such period.
"Net Worth" of any Person shall mean, at any date, such Person's
stockholders' equity determined in accordance with GAAP (but excluding the
effect of any foreign currency translation adjustments).
"Note Guarantees" shall have the meaning specified in section 1.
"Notes" shall have the meaning specified in section 1.
"Officers' Certificate" shall mean a certificate signed on behalf of
the Holding Company or the Operating Company, as applicable, by the
President or one of the Vice Presidents of the Holding Company or the
Operating Company, as applicable, and by the Treasurer or one of the
Assistant Treasurers of the Holding Company or the Operating Company, as
applicable.
"Old Game Time" shall mean Game Time, Inc., an Alabama corporation.
"Operating Company" shall mean Newco, Inc., a Wisconsin corporation.
The Operating Company is the surviving corporation of the merger on the
Closing Date of Old Game Time with and into Newco, Inc.
"Operating Company Common Stock" shall mean the Common Stock, no par
value, of the Operating Company as constituted on the Closing Date and any
Shares into which such Common Stock shall have been changed or any Shares
resulting from any reclassification of such Common Stock.
"Operative Documents" shall mean this Agreement, the Other Securities
Purchase Agreements, the Securities, the Note Guarantees, the Consulting
Agreement Side Letter and each of the other agreements, documents and
instruments executed in connection herewith and therewith, each as it may
from time to time be amended, modified or supplemented.
"Option Plan" shall have the meaning specified in section 4.3.
"Organizational Documents" of any Person shall mean such Person's
charter and by-laws, partnership agreement, operating agreement, trust
agreement, as applicable, and/or any other similar agreement, document or
instrument.
"Other Securities Purchase Agreements" and "Other Purchasers" shall
have the respective meanings specified in section 1.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"Permitted Derivative Transaction" shall mean any Derivative
Transaction (a) arising under the Fleet Bank Documents or (b) which is
approved in writing by the Required Holders of the Notes.
"Permitted Investment" shall mean any of the following Investments:
(a) advances to employees for business expenses or personal
needs, provided that the aggregate outstanding amount of such
advances (i) to any individual employee shall not exceed $200,000 at
any time and (ii) to all employees shall not exceed $500,000 at any
time;
(b) loans to key employees of the Operating Company the
proceeds of which are used to purchase Holding Company Class A Common
Stock, provided that the aggregate outstanding amount of such loans
to all employees shall not exceed $250,000 at any time;
(c) readily marketable obligations (having a maturity not in
excess of 12 months from the date of acquisition thereof) of, or
fully and unconditionally guaranteed (as to both principal and
interest) by, the United States of America or an agency thereof;
(d) negotiable certificates of deposit (having a maturity not
in excess of 12 months from the date of acquisition thereof)
evidencing direct obligations of any federally insured commercial
bank or trust company organized and operating in the United States of
America having capital and surplus and undivided profits of at least
$100,000,000 and whose long term unsecured debt obligations have the
highest or second highest rating available from ▇▇▇▇▇'▇ Investors
Service, Inc., Standard & Poor's Corporation or Fitch Investors
Service;
(e) commercial paper (having a maturity not in excess of 270
days from the date of acquisition thereof) evidencing the direct
obligation of any corporation organized and operating in the United
States of America and having the highest or second highest rating
available from ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's
Corporation;
(f) shares of so-called "money market funds" registered under
the Investment Company Act of 1940, as amended, organized and
operating in the United States of America, having total net assets of
$1,000,000,000 or more and investing primarily in securities of the
character described in the preceding clauses (c) through (e) of this
definition;
(g) accounts or notes receivable arising from transactions in
the ordinary course of business; contingent liabilities represented
by endorsements of negotiable instruments for collection or deposit
in the ordinary course of business; advances (other than advances to
employees), deposits, down payments and prepayments on account of
firm purchase orders, in each case made in the ordinary course of
business;
(h) Investments in the Operating Company or any Wholly-Owned
Subsidiary of the Operating Company (or in any Person which
simultaneously therewith becomes a Wholly-Owned Subsidiary of the
Operating Company) made by stock purchase, capital contribution, loan
or advance, provided that (i) both at the time of and immediately
after giving effect to any such Investment, no Default or Event of
Default shall exist and (ii) all such Investments are made only in
Solvent entities (A) which are organized under the laws of and
conduct substantially all of their respective businesses in the
United States of America or a state thereof or the District of
Columbia and (B) engaged in the Business (or in other related
businesses);
(i) Investments existing on the Closing Date and referred to in
Exhibit 5.9 attached hereto;
(j) Investments made in connection with a Permitted Derivative
Transaction;
(k) other Investments made after the Closing Date not otherwise
permitted under the preceding clauses of this definition, provided
that both at the time of and after giving effect to such Investment
(i) no Default or Event of Default shall exist and (ii) the aggregate
value (determined as provided in section 14.6) of all Investments
made pursuant to this clause (k) does not exceed $1,000,000.
"Person" shall mean an individual, a corporation, an association, a
joint-stock company, a business trust or other similar organization, a
partnership, a limited liability company, a joint venture, a trust, an
unincorporated organization or a government or any agency, instrumentality
or political subdivision thereof.
"Plan" shall mean an "employee benefit plan" (as defined in section
3(3) of ERISA) 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
Holding Company or the Operating Company or any ERISA Affiliate or with
respect to which the Holding Company or the Operating Company or any ERISA
Affiliate may have any liability.
"Preferred Shares", as applied to any Person, shall mean Shares of
such Person which shall be entitled to preference or priority over any
other Shares of such Person in respect of either the payment of dividends
or the distribution of assets upon liquidation.
"Pro Forma Consolidated EBITDA", "Pro Forma Consolidated Fixed
Charges" and "Pro Forma Consolidated Rental Obligations" shall mean, as of
the date of determination thereof, for any period, Consolidated EBITDA for
such period or the maximum aggregate amount of Consolidated Fixed Charges
or Consolidated Rental Obligations which would have been paid, payable or
guaranteed by the Operating Company and its Subsidiaries in respect of
such period, in each case determined on a pro forma basis to give effect
as of the first day of such period to the incurrence of all Funded Debt
and Current Debt giving rise to the need for such determination and the
retirement of any Funded Debt and/or Current Debt which is concurrently
being retired. For purposes hereof, Interest Charges and/or Rental
Obligations which are payable at a floating or variable rate shall be
determined on the basis of the rate in effect on the date as of which Pro
Forma Consolidated Fixed Charges and/or Pro Forma Consolidated Rental
Obligations is to be determined.
"Pro Forma Consolidated Fixed Charges Coverage Ratio" [14.5] shall
mean, as of the date of determination thereof, the ratio of (a) the sum of
(i) Pro Forma Consolidated EBITDA for the period of four consecutive
fiscal quarters of the Operating Company ending on, or most recently ended
prior to, such date, plus without duplication (ii) one-third of all Pro
Forma Consolidated Rental Obligations in respect of leases (other than
Capital Leases) for such period to (b) Pro Forma Consolidated Fixed
Charges for such period.
"Pro Forma Consolidated Leverage Ratio" [14.5] shall mean, as of the
date of determination thereof, the ratio of (a) Consolidated Total Debt
outstanding on such date (including all Funded Debt and Current Debt the
incurrence of which gives rise to the need for such determination) to
(b) Pro Forma Consolidated EBITDA for the period of four consecutive
fiscal quarters of the Operating Company ending on, or most recently ended
prior to, such date.
"Proprietary Rights" shall mean any patents, registered and common
law trademarks, service marks, trade names, brand names, copyrights,
licenses and other similar rights (including, without limitation,
know-how, trade secrets and other confidential information) and
applications for each of the foregoing, if any.
"Put/Call Price", "Put/Call Price Adjustment Event" and "Put
Securities" shall have the respective meanings specified in section 12.1.
"Put Closing Date", "Put Notice" and "Put Option" shall have the
respective meanings specified in section 12.2.
"Redeemable" shall mean, with respect to any Shares of any Person,
each Share of such Person that is (a) redeemable, payable or required to
be purchased or otherwise retired or extinguished, or convertible into
Funded Debt or Current Debt of such Person, (i) at a fixed or determinable
date, whether by operation of any sinking fund or otherwise, (ii) at the
option of any Person other than such Person or (iii) upon the occurrence
of a condition not solely within the control of such Person or
(b) convertible into other Redeemable Shares.
"Refinanced Debt" shall have the meaning specified in section 14.5.
"Refinancing Debt" shall have the meaning specified in section 14.5.
"Registrable Shares" shall mean the Warrant Shares, except that, as
to any particular Registrable Shares, such securities, once issued, will
cease to be Registrable Shares when (a) a registration statement covering
such securities has been declared effective and such securities have been
disposed of pursuant to an effective registration statement or (b) such
securities are sold to the public in accordance with Rule 144 (or any
similar provision then in force) under the Securities Act. A Person shall
be deemed to be a "holder of Registrable Shares" for purposes of section
11 if such Person is the holder of any Warrants and/or any Warrant Shares.
"Registration Expenses" shall mean all fees, expenses and
disbursements related to any registration, qualification or compliance
pursuant to section 11, including, without limitation, all registration,
filing, rating and listing fees, blue sky fees and expenses, printing
expenses, fees and disbursements of counsel (including, without
limitation, the fees, expenses and disbursements of counsel for the holder
or holders of the Registrable Shares), and expenses of any special audits
incident to or required by any registration, qualification or compliance,
except that Registration Expenses shall not include any underwriters'
discounts or commissions attributable to any Registrable Shares registered
and sold pursuant to any such registration.
"Rental Obligations" of any Person shall mean, for any period, all
rents and other amounts (including as such, all payments which such Person
is obligated to make to the lessor on termination of any lease and/or on
surrender of the leased property other than payments for which such Person
is contingently liable on account of early termination or breach of such
lease) paid, payable or guaranteed during such period by such Person, as
lessee or sublessee under any lease, excluding any amount required to be
paid by such Person (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes, utilities and
similar charges, determined in accordance with GAAP. Whenever it is
necessary to determine the amount of Rental Obligations for any period, to
the extent that such Rental Obligations are not definitely determinable by
the terms of the lease, the Rental Obligations not so definitely
determinable shall be estimated in good faith and in such reasonable
manner as the board of directors of the Operating Company may determine
(as evidenced by a certified resolution of such board of directors
promptly delivered to the holder or holders of the Notes).
"Required Exercise Date" and "Required Exercise Option" shall have
the respective meanings specified in section 12.3.
"Required Holders" as applied to describe the requisite holder or
holders of any class of the Securities, shall mean, at any date, the
holder or holders of 51% or more in interest of such class of Securities
at the time outstanding (excluding all Securities at the time owned by the
Companies or any Affiliate of the Companies).
"Restricted Investment" shall mean any Investment other than a
Permitted Investment.
"Restricted Payment" as applied to any Person shall mean:
(a) any dividend or other distribution or payment, direct or
indirect, on account of any Shares of such Person now or hereafter
outstanding (including, without limitation, Preferred Shares) or any
securities convertible into or exercisable or exchangeable for such
Shares or any rights, options or warrants to acquire any such Shares,
except (i) any such dividend or distribution or payment payable to
the Operating Company and/or any Wholly-Owned Subsidiary of the
Operating Company and (ii) a pro rata distribution payable to all of
the holders of Operating Company Common Stock solely in shares of
Operating Company Common Stock and as a result of which there is no
change in the relative ownership interest of any stockholder in the
Operating Company or any of such stockholder's rights;
(b) any redemption, retirement, purchase or other acquisition,
direct or indirect, of any Shares of such Person now or hereafter
outstanding (including, without limitation, Preferred Shares) or any
securities convertible into or exercisable or exchangeable for such
Shares or any rights, options or warrants to acquire any such
Shares; and
(c) any payment, including, without limitation, any defeasance,
redemption, repurchase or other acquisition or retirement, direct or
indirect, on or in respect of (i) any Junior Subordinated Debt prior
to the scheduled maturity thereof other than scheduled payments of
interest and principal in respect of the Seller Note as in effect on
the date hereof or (ii) the Bridge Note, other than scheduled
payments of interest and principal in respect of the Bridge Note as
in effect on the date hereof which are made solely with shares of
Holding Company Class A Common Stock or with the proceeds of Holding
Company Class A Common Stock sold after the Closing Date;
provided that, notwithstanding the foregoing, the term "Restricted
Payment" shall not include any dividend or other distribution or payment
on, or any redemption, retirement, purchase or other acquisition of, any
of the Securities. For purposes of this Agreement, the amount of any
Restricted Payment made in property other than cash shall be the greater
of (x) the fair market value of such property (as reasonably determined in
good faith by the board of directors (or equivalent governing body) of the
Person making such Restricted Payment) and (y) the net book value thereof
on the books of such Person, in each case determined as of the date on
which such Restricted Payment is made.
"Sale-and-Leaseback Transaction" shall mean a transaction or series
of transactions pursuant to which the Operating Company or any Subsidiary
of the Operating Company shall sell or transfer to any Person any
property, whether now owned or hereafter acquired, and, as part of the
same transaction or series of transactions, the Operating Company or any
Subsidiary of the Operating Company shall rent or lease as lessee, 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" shall mean the Notes, the Warrants and, unless the
context clearly requires otherwise, the Warrant Shares, each of which is a
"Security".
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect from
time to time.
"Seller Note" shall mean the Operating Company's 10% Subordinated
Notes dated March 13, 1997 and due March 13, 2005, in the original
aggregate principal amount of $2,000,000, issued pursuant to the
Acquisition Agreement.
"Shares" of any Person shall include any and all shares of capital
stock, partnership interests, membership interests, or other shares,
interests, participations or other equivalents (however designated and of
any class) in the capital of, or other ownership interests in, such
Person.
"Significant Subsidiary" shall mean, on any date, any Subsidiary of
the Operating Company that (a) has (or together with its Subsidiaries has)
assets having a net book value or fair market value equal to 5% or more of
Consolidated Total Assets as at such date and/or (b) generated (or
together with its Subsidiaries generated) gross revenues during its most
recently completed fiscal quarter in an amount equal to 5% or more of the
consolidated gross revenues of the Operating Company and its Subsidiaries
for the most recently completed fiscal quarter of the Operating Company.
If a Subsidiary shall, under this definition, be or become a Significant
Subsidiary on any date, then it shall at all times thereafter constitute a
Significant Subsidiary (notwithstanding that at any later date its assets
and/or gross revenues shall be less than the amounts specified in this
definition).
"Solvent" as applied to any Person at any date shall mean that on and
as of such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities on and as of any date shall be computed as the
amount that, in the light of all the facts and circumstances existing on
and as of such date, represents the amount that can reasonably be expected
to become an actual or matured liability. For purposes of this
definition, "Person" shall mean, where so required by the context in which
the term "Solvent" appears, such Person and its Subsidiaries taken as a
whole.
"Source" shall have the meaning specified in section 26.
"Subsidiary" of any Person at any date shall mean (a) any other
Person a majority (by number of votes) of the Voting Stock of which is
owned by such first-mentioned Person and/or by one or more other
Subsidiaries of such first-mentioned Person and (b) any other Person with
respect to which such first-mentioned Person and/or any one or more other
Subsidiaries of such first-mentioned Person (i) is entitled to more than
50% of such Person's profits or losses or more than 50% of such Person's
assets on liquidation or (ii) holds an equity interest in such Person of
more than 50%; provided that "Subsidiary" shall not include any
Unrestricted Subsidiary. As used herein, unless the context clearly
required otherwise, the term "Subsidiary" refers to a Subsidiary of the
Operating Company.
"Subsidiary Guarantor" shall mean each Significant Subsidiary,
whether existing at the time of the Closing or thereafter organized or
acquired.
"Successor Corporation" shall have the meaning specified in section
14.13.
"Survivor" shall have the meaning specified in section 14.18.
"Test Period" shall have the meaning specified in section 14.6.
"Total Assets" of any Person shall mean, at any date, the total
assets of such Person which would be shown as assets on a balance sheet as
of such date prepared in accordance with GAAP after eliminating all
amounts properly attributable to minority interests, if any, in the stock
or surplus of any Subsidiary of such Person.
"Total Debt" of any Person shall mean, at any date, all Funded Debt
and Current Debt of such Person at such date, determined in accordance
with GAAP.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Operating
Company which is organized or acquired after the date hereof and in which
the only Investment made by the Operating Company and/or any of its other
Subsidiaries is cash permitted to be used for Restricted Investments under
section 14.6.
"Voting Stock", when used with reference to any Person, shall mean
Shares (however designated) of such Person having ordinary voting power
for the election of a majority of the members of the board of directors
(or other governing body) of such Person, other than Shares having such
power only by reason of the happening of a contingency.
"Warrant Shares" shall mean any Shares (or Other Securities (as
defined in the Warrants)) issued (or issuable, as applicable) upon
exercise of any Warrants, each of which is an "Warrant Share".
"Warrants" shall have the meaning specified in section 1.
"Weighted Average Life to Maturity" of any Indebtedness or obligation
shall mean, at any date, the number of years obtained by dividing the then
Remaining Dollar-years of such Indebtedness or obligation by the then
outstanding principal amount of such Indebtedness or obligation. For
purposes of this definition, the "Remaining Dollar-years" of any
Indebtedness or obligation shall mean, at any date, the total of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment,
including payment at final maturity, in respect thereof, by (b) the number
of years (calculated to the nearest one-twelfth) which will elapse between
such date and the making of such payment.
"Wholly-Owned Subsidiary" of any Person at any date shall mean any
Subsidiary all of the outstanding Shares of which, other than directors'
qualifying Shares, shall at the time be owned by such Person and/or by one
or more other Wholly-Owned Subsidiaries of such Person and the accounts of
which are consolidated with those of such Person in accordance with GAAP.
"Withdrawal Liability" shall have the meaning given such term under
Part 1 of Subtitle E of Title IV of ERISA.
15.2. Other Definitions. The terms defined in this section 15.2,
whenever used in this Agreement, shall, unless the context otherwise
requires, have the respective meanings hereinafter specified.
"this Agreement" (and similar references to any of the other
Operative Documents) shall mean, and the words "herein" (and "therein"),
"hereof" (and "thereof"), "hereunder" (and "thereunder") and words of
similar import shall refer to, such instruments as they may from time to
time be amended, modified or supplemented.
"beneficial ownership" of any Shares or other securities of any
Person shall be determined in the manner set forth in Rule 13d-3 of the
Commission under the Exchange Act.
a "class" of Securities shall refer to the Notes, the Warrants and/or
the Warrant Shares, as the case may be, each of which is a separate class.
"corporation" shall include an association, joint stock company,
business trust or other similar organization.
"premium" when used in conjunction with references to principal of
and interest on the Notes, shall mean any amount due upon any payment or
prepayment of any of the Notes, other than principal and interest and
shall include the premium specified in section 9.2.
"qualification" or "compliance" as used in section 11 refer to the
qualification or compliance of all Registrable Shares included in any
registration pursuant to section 11 under all applicable blue sky or other
state securities laws.
"register", "registered" and "registration" as used in section 11
refer to a registration effected by filing a registration statement in
compliance with the Securities Act to permit the sale and disposition of
the Registrable Shares and any amendment filed or required to be filed to
permit any such disposition.
15.3. Accounting Terms and Principles; Laws.
(a) All accounting terms used herein which are not expressly
defined in this Agreement shall have the respective meanings given to
them in accordance with GAAP, all computations made pursuant to this
Agreement shall be made in accordance with GAAP and all financial
statements shall be prepared in accordance with GAAP.
(b) All references herein to laws, statutes, rules and
regulations shall, unless the context clearly requires otherwise, be
deemed to refer to any law, statute, rule, regulation and any other
governmental restriction, standard and/or requirement promulgated,
issued and/or enforced by any domestic or foreign federal, state or
local government, governmental agency, authority, court,
instrumentality or regulatory body, including, without limitation,
those of the United States of America or any state thereof or the
District of Columbia.
16. Remedies.
16.1. Events of Default Defined; Acceleration of Maturity. If
any one or more of the following events ("Events of Default") shall occur
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body), that is to say:
(a) if default shall be made in the due and punctual payment of
all or any part of the principal of, or premium (if any) on, any Note
when and as the same shall become due and payable, whether at the
stated maturity thereof, by notice of or demand for prepayment, or
otherwise; or
(b) if default shall be made in the due and punctual payment of
any interest on any Note when and as such interest shall become due
and payable and such default shall have continued for a period of
five Business Days; or
(c) if default shall be made in the performance or observance
of any covenant, agreement or condition contained in (i) sections
7(g), 8, 9.7, 13, 14.2(b), 14.2(e), 14.5 to 14.8, inclusive, or 14.10
to 14.18, inclusive, or (ii) section 14.9 and, in the case of this
clause (ii), such default shall have continued for five days; or
(d) if default shall be made in the performance or observance
of any other of the covenants, agreements or conditions of or
applicable to the Operating Company or the Holding Company contained
in this Agreement or any of the other Operative Documents and such
default shall have continued for a period of 30 days; or
(e) if the Holding Company or any of its Subsidiaries shall
make a general assignment for the benefit of creditors, or shall not
pay its debts as they become due, or shall admit in writing its
inability to pay its debts as they become due, or shall file a
voluntary petition in bankruptcy, or shall be adjudicated bankrupt or
insolvent, or shall file any petition or answer seeking for itself
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation, or shall file any answer admitting
or not contesting the material allegations of a petition filed
against it in any such proceeding, or shall seek or consent to or
acquiesce in the appointment of any trustee, custodian, receiver,
liquidator or fiscal agent for it or for all or any substantial part
of its properties, or shall (or its directors or stockholders shall)
take any action looking to its dissolution or liquidation; or
(f) if (i) within 60 days after the commencement of an action
against the Holding Company or any of its Subsidiaries seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute,
law or regulation, such action shall not have been dismissed, stayed
or vacated or (ii) within 60 days after the appointment without the
consent or acquiescence of the Holding Company or any of its
Subsidiaries of any trustee, custodian, receiver, liquidator or
fiscal agent for any such Person or for all or any substantial part
of their respective properties, such appointment shall not have been
vacated; or
(g) if, under the provisions of any law for the relief or aid
of debtors, any court or governmental agency of competent
jurisdiction shall assume custody or control of the Holding Company
or any of its Subsidiaries or of all or any substantial part of their
respective properties and such custody or control shall not be
terminated within 60 days from the date of assumption such custody or
control; or
(h) if the Holding Company or any of its Subsidiaries shall
fail (after giving effect to any applicable grace period originally
provided with respect thereto) to (i) make any payment due on any
Indebtedness (other than the Notes) or other obligation (including
any in respect of any lease or any Shares upon the exercise by any
Person of any put or call option or other similar right of redemption
or repurchase with regard to such Shares), if the aggregate
outstanding amount thereof (and of any other Indebtedness or other
obligation as to which the Holding Company or any of its Subsidiaries
is in default) exceeds $1,000,000 (or the equivalent thereof, as at
any date of determination, in any other currency) or (ii) perform,
observe or discharge any covenant, condition or obligation in any
agreement, document or instrument evidencing, securing or relating to
such Indebtedness or other obligation, if the effect of any such
failure of the character described in this clause (ii) is to cause,
or any other Person shall cause, any payment in an aggregate amount
of $1,000,000 (or the equivalent thereof, as at any date of
determination, in any other currency) or more to become due and
payable, or if any such Indebtedness or other obligation in aggregate
amount of $1,000,000 (or the equivalent thereof, as at any date of
determination, in any other currency) or more shall become due and
payable by its terms and shall not be paid or extended; or
(i) if a final judgment for the payment of money which,
together with all other outstanding final judgments for the payment
of money against the Holding Company or any of its Subsidiaries,
exceeds an aggregate of $1,000,000 (or the equivalent thereof, as at
any date of determination, in any other currency) shall be rendered
by a court of record against the Holding Company or any of its
Subsidiaries, and the Holding Company or any of its Subsidiaries
shall not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereof
within 60 days from the date of entry thereof and within such period
of 60 days, or such longer period during which execution of such
judgment shall have been stayed, move to vacate such judgment or
appeal therefrom and cause the execution thereof to be stayed pending
determination of such motion or during such appeal; or
(j) the Holding Company or any of its Subsidiaries shall:
(i) default in making any payment, delivery or exchange, or in the
performance of any of its other obligations, under one or more
agreements or instruments (individually or collectively) governing or
otherwise relating to one or more Derivative Transactions, which
default shall have resulted in early termination, liquidation or
other similar payments in an aggregate amount of $1,000,000 (or the
equivalent thereof, as at any date of determination, in any other
currency) or more becoming, or becoming capable at such time of being
declared or designated, due and payable by the Holding Company or any
of its Subsidiaries; or (ii) default in making any payment or
delivery due on the last payment, delivery or exchange date of, or on
the early termination or liquidation of, one or more Derivative
Transactions and such default relates to one or more payments or
deliveries of cash or property having an aggregate value of
$1,000,000 (or the equivalent thereof, as at any date of
determination, in any other currency) or more;
(k) if any representation or warranty made by or on behalf of
the Holding Company or any of its Subsidiaries in this Agreement or
in any of the other Operative Documents or in any agreement, document
or instrument delivered under or pursuant to any provision hereof or
thereof shall prove to have been materially false or incorrect on the
date as of which made; or
(l) if, at any time, this Agreement or any of the other
Operative Documents shall for any reason (other than the scheduled
termination thereof in accordance with its terms) expire, fail to be
in full force and effect or be disaffirmed, repudiated, cancelled,
terminated or declared to be unenforceable, null and void; or
(m) 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 section 4042 of ERISA to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the
Holding 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 $250,000 (or the equivalent thereof,
as at any date of determination, in any other currency), (iv) the
Holding 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, (v) the Holding Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Holding
Company or any Subsidiary of the Holding Company establishes or
amends any employee welfare benefit plan that provides post-
employment welfare benefits in a manner that would increase the
liability of the Holding Company and/or its Subsidiaries 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, has resulted in, or could reasonably be expected to result
in, a Material Adverse Change; or
then, in the case of any Event of Default (other than one of the character
described in subdivisions (e), (f) or (g) of this section 16.1) and at the
option of the Required Holders of the Notes at the time outstanding
(excluding any Notes at the time owned by the Companies or any Affiliate
of the Companies), exercised by written notice to the Operating Company,
the principal of all Notes shall forthwith become due and payable,
together with interest accrued thereon, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly
waived, and the Operating Company shall forthwith upon any such
acceleration pay to the holder or holders of all the Notes then
outstanding (i) the entire principal of and interest accrued on the Notes,
and (ii) in addition, to the extent permitted by applicable law, an amount
equal to the premium that would be payable upon a prepayment of the Notes
pursuant to section 9.2 at such time, as liquidated damages and not as a
penalty; provided that, in the case of an Event of Default of the
character described in subdivisions (a) or (b) of this section 16.1 and
irrespective of whether all of the Notes have been declared due and
payable by the Required Holders of the Notes at the time outstanding, any
holder of Notes who or which has not consented to any waiver with respect
to such Event of Default may, at the option of such holder, by written
notice to the Operating Company, declare all Notes then held by such
holder to be, and such Notes shall thereupon become, forthwith due and
payable, together with interest accrued thereon, without presentment,
demand, protest or other notice of any kind, all of which are hereby
expressly waived, and the Operating Company shall forthwith upon any such
acceleration pay to such holder (i) the entire principal of and interest
accrued on such Notes, and (ii) in addition, to the extent permitted by
applicable law, an amount equal to the premium that would be payable upon
a prepayment of the Notes pursuant to section 9.2 at such time, as
liquidated damages and not as a penalty; provided, further, that, in the
case of an Event of Default of the character described in subdivisions
(e), (f) or (g) of this section 16.1, the principal of all Notes shall
forthwith become due and payable, together with interest accrued thereon
(including any interest accruing after the commencement of any action or
proceeding under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable domestic or foreign federal or state
bankruptcy, insolvency or other similar law, and any other interest that
would have accrued but for the commencement of such proceeding, whether or
not any such interest is allowed as an enforceable claim in such
proceeding), without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, and the Operating Company
shall forthwith upon any such acceleration pay to the holder or holders of
all the Notes then outstanding (i) the entire principal of and interest
accrued on the Notes, and (ii) in addition, to the extent permitted by
applicable law, an amount equal to the premium that would be payable upon
a prepayment of the Notes pursuant to section 9.2 at such time, as
liquidated damages and not as a penalty.
Notwithstanding the foregoing provisions, at any time after the
occurrence of any Event of Default and of notice thereof, if any, by any
holder or holders of Notes and before any judgment, decree or order for
payment of the money due has been obtained by or on behalf of any holder
or holders of the Notes, the Required Holders of the Notes by written
notice to the Operating Company, may rescind and annul such Event of
Default and/or notice of such Event of Default and the consequences
thereof with respect to all of the Notes (including any Notes which were
accelerated pursuant to the first proviso in the preceding paragraph by
any holder or holders on account of an Event of Default of the character
described in subdivision (a) or (b) of this section 16.1) if:
(1) the Operating Company has paid a sum sufficient to pay
(A) all overdue installments of interest on all Notes at
the rate specified in the Notes;
(B) the principal of (and premium, if any, on) any Notes
which have become due otherwise than by such Event of Default or
notice thereof and interest thereon at the rate for overdue
amounts specified in such Notes; and
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate for overdue amounts
specified in such Notes; and
(2) all Defaults and Events of Default, other than the
non-payment of the principal of Notes which have become due solely by
such acceleration, have been cured or waived as provided in section
19.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
16.2. Suits for Enforcement, etc. In case any one or more of the
Events of Default specified in section 16.1 shall have occurred, and
irrespective of whether any Notes have become or have been declared
immediately due and payable under section 16.1, the holder of any Note may
proceed to protect and enforce its rights either by suit in equity or by
action at law, or both. Each Company stipulates that the remedies at law
of the holder or holders of the Securities in the event of any default or
threatened default by it in the performance of or compliance with any
covenant or agreement in this Agreement or any of the other Operative
Documents are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for
the specific performance thereof, whether by an injunction against a
violation thereof or otherwise.
16.3. No Election of Remedies. No remedy conferred in this
Agreement or in any of the other Operative Documents upon the holder of
any Security is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or thereunder or now or hereafter existing at
law or in equity or by statute or otherwise.
16.4. Remedies Not Waived. No course of dealing between either
Company and/or any of its Subsidiaries, on the one hand, and any holder of
any Security, on the other hand, and no delay by any such holder in
exercising any rights hereunder or under any of the other Operative
Documents shall operate as a waiver of any rights of any such holder.
16.5. Application of Payments. In case any one or more of the
Events of Default specified in section 16.1 shall have occurred, all
amounts to be applied to the prepayment or payment of any Notes, shall be
applied, after the payment of all related costs and expenses incurred by
the holders of the Notes (including, without limitation, compensation to
any and all trustees, liquidators, receivers or similar officials and
reasonable fees, expenses and disbursements of counsel) in such order of
priority as is determined by the Required Holders of the Notes.
17. Registration, Transfer and Exchange of Securities. Securities issued
hereunder shall be issued in registered form. Each Company shall keep at
its principal executive office (which is now located at the address set
forth at the beginning of this Agreement), registers in which it shall
provide for the registration and transfer of the Securities issued by it.
The name and address of each holder of the Securities shall be registered
in such registers. Each Company shall give to any institutional holder of
any Security promptly (but in any event within 10 days) following request
therefor, a complete and correct copy of the names and addresses of all
registered holders of the Securities issued by it and the amount and kind
of Securities held by each. Whenever any Security or Securities shall be
surrendered for transfer or exchange, the Company that issued such
Security, at its expense, will execute and deliver in exchange therefor a
new Security or Securities (in such denominations and registered in such
name or names as may be requested by the holder of the surrendered
Security or Securities), in the same aggregate unpaid principal amount (in
the case of the Notes) or exercisable for the same aggregate number of
Shares (in the case of any Warrants) or in the same aggregate number of
Shares (in the case of any Warrant Share), as applicable, as that of the
Security or Securities so surrendered. 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 Companies may treat the Person
in whose name any Security is registered as the owner of such Security for
all purposes.
18. Replacement of Securities. Upon receipt of satisfactory evidence of
the loss, theft, destruction or mutilation of any Security and (in the
case of loss, theft or destruction) of satisfactory indemnity, and (in the
case of mutilation) upon surrender of such Security, the Company that
issued such Security, at its expense, will execute and deliver in lieu of
such Security a new Security of like tenor and, in the case of any new
Note, dated so as not to result in any loss of interest. Your unsecured
agreement to indemnify and/or affidavit and that of any other
institutional holder shall constitute satisfactory indemnity and/or
satisfactory evidence of loss, theft or destruction for the purpose of
this section 18.
19. Amendment and Waiver.
(a) Any term of this Agreement and, unless explicitly provided
otherwise therein, of any of the other Operative Documents may, with
the consent of the Companies, be amended, or compliance therewith may
be waived, in writing only, by the Required Holders of each class of
Securities entitled to the benefits of such term, provided that (i)
without the consent of the holders of all of the Notes at the time
outstanding, no such amendment or waiver shall (A) change the amount
of the principal of or any rate of interest on or the amount of any
premium payable with respect to any of the Notes or change the
payment terms of any of the Notes, or, except as provided in the
Notes (and the Note Guarantees), subordinate the obligation of the
Operating Company (or any Guarantor) to pay any amount due on the
Notes (or on the Note Guarantees) to any other obligation, or (B)
change the percentage of holders of Notes required to approve any
such amendment, effectuate any such waiver or accelerate payment of
the Notes; (ii) without the consent of the holders of all of the
Warrants and Warrant Shares at the time outstanding, no such
amendment or waiver shall (A) modify any of the provisions of section
11 or section 12, or (B) change the percentage of holders of the
Warrants and Warrant Shares required to approve any such amendment or
effect any such waiver; and (iii) no such amendment or waiver shall
extend to or affect any obligation not expressly amended or waived or
impair any right consequent thereon. Executed or true and correct
copies of any amendment, waiver or consent effected pursuant to this
section 19 shall be delivered by the Companies to each holder of
Securities forthwith (but in any event not later than five days)
following the effective date thereof.
(b) The Companies will not, directly or indirectly, request or
negotiate for, or offer or pay any remuneration or grant any security
as an inducement for, any proposed amendment or waiver of any of the
provisions of this Agreement or any of the other Operative Documents
unless each holder of the Securities (irrespective of the kind and
amount of Securities then owned by it) shall be informed thereof by
the Companies and, if such holder is entitled to the benefit of any
such provision proposed to be amended or waived, shall be afforded
the opportunity of considering the same, shall be supplied by the
Companies with sufficient information to enable it to make an
informed decision with respect thereto and shall be offered and paid
such remuneration and granted such security on the same terms.
(c) In determining whether the requisite holders of Securities
have given any authorization, consent or waiver under this section
19, any Securities owned by the Companies or any of their Affiliates
shall be disregarded and deemed not to be outstanding.
20. Method of Payment of Securities. Irrespective of any provision
hereof or of the other Operative Documents to the contrary, so long as you
or any other institutional holder shall hold any Security, all payments
due on such Security shall be made to you or such other institutional
holder by the method and at the address for such purpose specified in
Schedule I attached hereto or by such other method or at such other
address as you or such institutional holder may designate in writing
(given as provided in section 23), without requiring any presentation or
surrender of such Security, except that if any Security shall be paid,
prepaid and/or repurchased in full, such Security shall be surrendered to
the Company that issued such Security promptly following such payment,
prepayment or repurchase and cancelled.
21. Expenses; Indemnity. Whether or not the transactions contemplated by
any of the Operative Documents shall be consummated, the Companies,
jointly and severally, will pay or cause to be paid (or reimbursed, as the
case may be) and will defend, indemnify and hold you (and each other
holder of any of the Securities) and each of your (and such other
holder's) directors, officers, employees, agents, advisors and Affiliates
(each, an "Indemnitee") harmless in respect of all reasonable costs,
losses, expenses (including, without limitation, the reasonable fees,
costs, expenses and disbursements of counsel) and damages (collectively,
"Indemnified Costs") incurred by or asserted against any Indemnitee in
connection with the negotiation, execution, delivery, performance and/or
enforcement of this Agreement or any of the other Operative Documents
(including, without limitation, so- called work-outs and/or restructurings
and all amendments, waivers and consents hereunder and thereunder, whether
or not effected) and/or the consummation of the transactions contemplated
hereby and thereby or which may otherwise be related in any way to this
Agreement or any other Operative Documents or such transactions or such
Indemnitee's relationship to the Companies or any of their Affiliates or
any of their respective properties and assets, including, without
limitation, any and all Indemnified Costs related in any way to the
requirements of any Environmental Laws (as the same may be amended,
modified or supplemented from time to time) or to any environmental
investigation, assessment, site monitoring, containment, clean up,
remediation, removal, restoration, reporting and sampling, whether or not
consented to, or requested or approved by, any Indemnitee, and whether or
not such Indemnified Cost is attributable to an event or condition
originating from any properties or assets of the Holding Company or any of
its Subsidiaries or any other properties previously or hereafter owned,
leased, occupied or operated by the Holding Company or any of its
Subsidiaries. Notwithstanding the foregoing, the Companies shall not have
any obligation to an Indemnitee under this section 21 with respect to any
Indemnified Cost which is finally determined by a court of competent
jurisdiction to have arisen solely and directly as a result of the willful
misconduct or bad faith of such Indemnitee.
22. Taxes. The Companies, jointly and severally, will pay all taxes and
fees (including interest and penalties), including, without limitation,
all issuance and documentary stamp and similar taxes, which may be payable
in respect of the execution and delivery of this Agreement and each of the
other Operative Documents.
23. Communications. All communications provided for herein and,
unless explicitly provided otherwise therein, in any of the other
Operative Documents shall be in writing and sent (a) by telecopy if the
sender on the same day sends a confirming copy of such communication by a
recognized overnight delivery service (charges prepaid), (b) by a
recognized overnight delivery service (charges prepaid), or (c) by
messenger. Any such communication must be sent (i) if to the Companies
(or any Subsidiary of the Holding Company), to the Companies (or such
Subsidiary) at:
Swing-N-Slide Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman, President and CEO
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address (or telecopy number) as may be furnished in
writing by the Companies to each holder of any Security and (ii) if to
you, at your address for such purpose set forth in Schedule I attached
hereto, with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and if to any other holder of any Security, at the address of such holder
as it appears on the applicable register maintained pursuant to section
17, or at such other address as may be furnished in writing by you or by
any other holder to the Companies. Communications under this section 23
shall be deemed given only when actually received.
24. Survival of Agreements, Representations and Warranties, etc. All
agreements, representations and warranties contained herein and in the
other Operative Documents shall be deemed to have been relied upon by you
and shall survive the execution and delivery of this Agreement and each of
the other Operative Documents, the issue, sale and delivery of the
Securities and payment therefor and any disposition of the Securities by
you, whether or not any investigation at any time is made by you or on
your behalf. All indemnification provisions, including, without
limitation, those contained in sections 11.5, 21 and 22, shall survive the
date upon which none of the Securities shall be outstanding and the
termination of this Agreement and each of the other Operative Documents.
25. Successors and Assigns; Rights of Other Holders. This Agreement and,
unless explicitly provided otherwise therein, each of the other Operative
Documents shall bind and inure to the benefit of and be enforceable by the
Companies and you, successors to the Companies and your successors and
assigns, and, in addition, shall inure to the benefit of and be
enforceable by each holder from time to time of any Securities who, upon
acceptance thereof, shall, without further action, be entitled to enforce
the applicable provisions and enjoy the applicable benefits hereof and
thereof. Neither Company may assign any of its rights or obligations
hereunder or under any of the other Operative Documents without the
written consent of the Required Holders of each class of Securities then
outstanding.
26. Purchase for Investment; ERISA.
(a) You represent and warrant (i) that you are an "accredited
investor" as defined in Rule 501 of Regulation D under the Securities
Act, (ii) that you have been furnished with all information that you
have requested for the purpose of evaluating your proposed
acquisition of the Securities to be issued to you pursuant hereto and
(iii) that you will acquire such Securities for your own account for
investment and not for distribution in any manner that would violate
applicable securities laws, but without prejudice to your rights to
dispose of such Securities or a portion thereof to a transferee or
transferees, in accordance with such laws if at some future time you
deem it advisable to do so. The acquisition of such Securities by
you at the Closing shall constitute your confirmation of the
foregoing representations and warranties. You understand that such
Securities are being sold to you in a transaction which is exempt
from the registration requirements of the Securities Act, and that,
in making the representations and warranties contained in section
5.16, the Companies are relying, to the extent applicable, upon your
representations and warranties contained herein.
(b) 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 Securities to be
purchased by you hereunder:
(i) the Source is an "insurance company general account"
as defined in Section V(e) of Prohibited Transaction Exemption
("PTE") 95-60 (issued July 12, 1995) and, except as you have
disclosed to the Companies in writing pursuant to this section
(i), the amount of reserves and liabilities for the general
account contract(s) held by or on behalf of any employee benefit
plan or group of plans maintained by the same employer or
employee organization do not exceed 10% of the total reserves
and liabilities of the general account (exclusive of separate
account liabilities) plus surplus as set forth in the NAIC
Annual Statement filed with the state of domicile of the
insurer; or
(ii) the Source is a separate account of an insurance
company maintained by you in which an employee benefit plan (or
its related trust) has an interest, which separate account 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
(iii) the Source is either (A) an insurance company
pooled separate account, within the meaning of PTE 90-1 (issued
January 29, 1990), or (B) 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 Companies in writing
pursuant to this section (iii), no employee benefit plan or
group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective
investment fund; or
(iv) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of 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 either Company and (A) the identity of such
QPAM and (B) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed
to the Companies in writing pursuant to this section (iv); or
(v) the Source is a governmental plan; or
(vi) 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
Companies in writing pursuant to this section (vi); or
(vii) the Source does not include assets of any
employee benefit plan, other than a plan exempt from the
coverage of ERISA.
As used in this section 26(b), the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall
have the respective meanings assigned to such terms in Section 3 of
ERISA, and the term "QPAM Exemption" means PTE 84-14 (issued March
13, 1984).
27. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
and, unless explicitly provided otherwise therein, each of the other
Operative Documents, including the validity hereof and thereof and the
rights and obligations of the parties hereunder and thereunder, and all
amendments and supplements hereof and thereof and all waivers and consents
hereunder and thereunder, shall be construed in accordance with and
governed by the domestic substantive laws of The Commonwealth of
Massachusetts without giving effect to any choice of law or conflicts of
law provision or rule that would cause the application of the domestic
substantive laws of any other jurisdiction. Each Company, to the extent
that it may lawfully do so, hereby consents to service of process, and to
be sued, in The Commonwealth of Massachusetts and consents to the
jurisdiction of the courts of The Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts, as well as
to the jurisdiction of all courts to which an appeal may be taken from
such courts, for the purpose of any suit, action or other proceeding
arising out of any of its obligations hereunder or thereunder or with
respect to the transactions contemplated hereby or thereby, and expressly
waives any and all objections it may have as to venue in any such courts.
Each Company further agrees that a summons and complaint commencing an
action or proceeding in any of such courts shall be properly served and
shall confer personal jurisdiction if served personally or by certified
mail to it at its address set forth in section 23 or as otherwise provided
under the laws of The Commonwealth of Massachusetts. Notwithstanding the
foregoing, each Company agrees that nothing contained in this section 27
shall preclude the institution of any such suit, action or other
proceeding in any jurisdiction other than The Commonwealth of
Massachusetts. EACH COMPANY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST IT
IN RESPECT OF ITS OBLIGATIONS HEREUNDER OR THEREUNDER OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
28. Rule 144A. The Companies will take, or will cause to be taken, such
action as any holder of Securities may reasonably request from time to
time to facilitate any sale or disposition by any such holder of any
Securities without registration under the Securities Act and/or any
applicable securities laws within the limitation of the exemptions
provided by any rule or regulation thereunder, including, without
limitation, Rule 144A under the Securities Act.
29. Miscellaneous. The headings in this Agreement and in each of the
other Operative Documents are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof or thereof. This Agreement
(together with the other Operative Documents) embodies the entire
agreement and understanding among you and the Companies and supersedes all
prior agreements and understandings relating to the subject matter hereof.
Each covenant contained herein and in each of the other Operative
Documents shall be construed (absent an express provision to the contrary)
as being independent of each other covenant contained herein and therein,
so that compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other
covenant. If any provision in this Agreement or in any of the other
Operative Documents refers to any action taken or 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, whether or not expressly specified in such provision. In
case any provision in this Agreement or any of the other Operative
Documents shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby. This Agreement and, unless
explicitly provided otherwise therein, each of the other Operative
Documents, may be executed in any number of counterparts and by the
parties hereto or thereto, as the case may be, on separate counterparts
but all such counterparts shall together constitute but one and the same
instrument.
[The remainder of this page is intentionally left blank.]
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterparts of this letter, whereupon this
letter shall become a binding agreement under seal among you and the
Companies. Please then return one of such counterparts to the Companies.
Very truly yours,
SWING-N-SLIDE CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
NEWCO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
The foregoing Agreement is hereby
agreed to as of the date thereof.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterparts of this letter, whereupon this
letter shall become a binding agreement under seal among you and the
Companies. Please then return one of such counterparts to the Companies.
Very truly yours,
SWING-N-SLIDE CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
NEWCO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
MASSMUTUAL CORPORATE INVESTORS
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Investment Officer
The foregoing is executed on behalf of
MassMutual Corporate Investors, organized
under a Declaration of Trust, dated
September 13, 1985, as amended from time
to time. The obligations of such Trust are
not personally binding upon, nor shall resort
be had to the property of, any of the Trustees,
shareholders, officers, employees or agents of
such Trust, but the Trust's property only shall
be bound.
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterparts of this letter, whereupon this
letter shall become a binding agreement under seal among you and the
Companies. Please then return one of such counterparts to the Companies.
Very truly yours,
SWING-N-SLIDE CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
NEWCO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
MASSMUTUAL PARTICIPATION INVESTORS
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Investment Officer
The foregoing is executed on behalf of MassMutual
Participation Investors, organized under a
Declaration of Trust, dated April 7, 1988, as
amended from time to time. The obligations of
such Trust are not personally binding upon, nor
shall resort be had to the property of, any of
the Trustees, shareholders, officers, employees
or agents of such Trust, but the Trust's property
only shall be bound.
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterparts of this letter, whereupon this
letter shall become a binding agreement under seal among you and the
Companies. Please then return one of such counterparts to the Companies.
Very truly yours,
SWING-N-SLIDE CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
NEWCO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Finance
MASSMUTUAL CORPORATE VALUE
PARTNERS LIMITED
By Massachusetts Mutual Life Insurance
Company, as Investment Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director