Exhibit 10.12
Execution Version
▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY INTERNATIONAL, INC.
-------------------------------------
NOTE PURCHASE AGREEMENT
-------------------------------------
DATED AS OF SEPTEMBER 30, 2003
$50,000,000 6.08% SENIOR GUARANTIED NOTES DUE OCTOBER 10, 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
1. AUTHORIZATION OF NOTES.................................................... 1
2. SALE AND PURCHASE OF NOTES................................................ 1
3. CLOSING................................................................... 2
4. CONDITIONS TO CLOSING..................................................... 2
4.1. REPRESENTATIONS AND WARRANTIES......................................... 2
4.2. PERFORMANCE; NO DEFAULT................................................ 2
4.3. COMPLIANCE CERTIFICATES................................................ 3
4.4. OPINIONS OF COUNSEL.................................................... 3
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.............................. 3
4.6. SALE OF OTHER NOTES.................................................... 4
4.7. PAYMENT OF SPECIAL COUNSEL FEES........................................ 4
4.8. PRIVATE PLACEMENT NUMBER............................................... 4
4.9. CHANGES IN CORPORATE STRUCTURE......................................... 4
4.10. SUBSIDIARY GUARANTY AGREEMENT....................................... 4
4.11. PLEDGE AGREEMENT.................................................... 5
4.12. BANK CREDIT AGREEMENT............................................... 5
4.13. SHARING AGREEMENT................................................... 5
4.14. PROCEEDINGS AND DOCUMENTS........................................... 5
4.15. OFFEREE LETTER...................................................... 5
5. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS............................. 5
5.1. ORGANIZATION; POWER AND AUTHORITY...................................... 6
5.2. AUTHORIZATION, ETC..................................................... 6
5.3. DISCLOSURE............................................................. 6
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES....... 7
5.5. FINANCIAL STATEMENTS................................................... 8
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC........................... 8
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC....................................... 9
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.............. 9
5.9. TAXES.................................................................. 9
5.10. TITLE TO PROPERTY; LEASES........................................... 10
5.11. LICENSES, PERMITS, ETC.............................................. 10
5.12. COMPLIANCE WITH ERISA............................................... 10
5.13. PRIVATE OFFERING BY THE ISSUERS..................................... 11
5.14. USE OF PROCEEDS; MARGIN REGULATIONS................................. 11
5.15. EXISTING INDEBTEDNESS; FUTURE LIENS................................. 12
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC............................. 12
5.17. STATUS UNDER CERTAIN STATUTES....................................... 13
5.18. ENVIRONMENTAL MATTERS............................................... 13
5.19. PARI PASSU RANKING.................................................. 13
i
5.20. NOT SUBJECT TO IMMUNITY............................................. 13
5.21. DORMANT COMPANIES................................................... 14
5.22. BANK CREDIT AGREEMENT REPRESENTATIONS............................... 14
6. REPRESENTATIONS OF THE PURCHASERS......................................... 14
6.1. PURCHASE FOR INVESTMENT................................................ 14
6.2. SOURCE OF FUNDS........................................................ 14
6.3. PURCHASER ACTION....................................................... 16
7. INFORMATION AS TO ISSUERS................................................. 16
7.1. FINANCIAL AND BUSINESS INFORMATION..................................... 16
7.2. OFFICER'S CERTIFICATES................................................. 19
7.3. INSPECTION............................................................. 20
8. PREPAYMENT OF THE NOTES................................................... 21
8.1. REQUIRED PREPAYMENTS................................................... 21
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT............................ 21
8.3. ALLOCATION OF PARTIAL PREPAYMENTS...................................... 22
8.4. MATURITY; SURRENDER, ETC............................................... 22
8.5. PURCHASE OF NOTES...................................................... 22
8.6. MAKE-WHOLE AMOUNT...................................................... 22
9. AFFIRMATIVE COVENANTS..................................................... 24
9.1. COMPLIANCE WITH LAW.................................................... 24
9.2. INSURANCE.............................................................. 24
9.3. MAINTENANCE OF PROPERTIES.............................................. 25
9.4. PAYMENT OF TAXES AND CLAIMS............................................ 25
9.5. CORPORATE EXISTENCE, ETC............................................... 25
9.6. NEW SUBSIDIARY GUARANTOR; ADDITIONAL PLEDGED STOCK..................... 26
9.7. PARI PASSU RANKING..................................................... 26
9.8. MOST FAVORED LENDER PROVISIONS......................................... 27
9.9. COVENANT TO SECURE NOTES EQUALLY....................................... 28
9.10. POST-CLOSING REQUIREMENTS........................................... 29
9.11. DORMANT COMPANIES................................................... 29
10. NEGATIVE COVENANTS........................................................ 30
10.1. TRANSACTIONS WITH AFFILIATES; DORMANT COMPANIES..................... 31
10.2. MERGER, CONSOLIDATION, ETC.......................................... 31
10.3. LIMITATION ON LIENS................................................. 32
10.4. SALE OF ASSETS, ETC................................................. 35
10.5. LEVERAGE RATIO...................................................... 35
10.6. FIXED CHARGES COVERAGE RATIO........................................ 36
10.7. CONSOLIDATED NET WORTH.............................................. 36
10.8. PRIORITY DEBT....................................................... 37
10.9. LINE OF BUSINESS.................................................... 37
10.10. RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS; ACQUISITIONS........ 37
10.11. LIMITATIONS ON CERTAIN SUBSIDIARY ACTIONS........................... 39
ii
10.12. HEDGING ARRANGEMENTS......................................................... 40
10.13. ACCOUNTING CHANGES; CHANGE OF FISCAL YEAR.................................... 40
10.14. MINIMUM CASH................................................................. 40
10.15. LITIGATION................................................................... 40
10.16. AMENDMENTS TO ORGANIZATIONAL DOCUMENTS....................................... 41
10.17. NO LIMITATION ON PREPAYMENTS OR AMENDMENTS TO CERTAIN FINANCING DOCUMENTS.... 41
11. EVENTS OF DEFAULT................................................................... 41
12. REMEDIES ON DEFAULT, ETC............................................................ 44
12.1. ACCELERATION.................................................................. 44
12.2. OTHER REMEDIES................................................................ 45
12.3. RESCISSION.................................................................... 45
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC............................. 45
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES....................................... 46
13.1. REGISTRATION OF NOTES......................................................... 46
13.2. TRANSFER AND EXCHANGE OF NOTES................................................ 46
13.3. REPLACEMENT OF NOTES.......................................................... 47
14. PAYMENTS ON NOTES................................................................... 48
14.1. PLACE OF PAYMENT.............................................................. 48
14.2. HOME OFFICE PAYMENT........................................................... 48
15. EXPENSES, ETC....................................................................... 48
15.1. TRANSACTION EXPENSES.......................................................... 48
15.2. SURVIVAL...................................................................... 49
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT........................ 49
17. AMENDMENT AND WAIVER................................................................ 50
17.1. REQUIREMENTS.................................................................. 50
17.2. SOLICITATION OF HOLDERS OF NOTES.............................................. 50
17.3. BINDING EFFECT, ETC........................................................... 51
17.4. NOTES HELD BY THE ISSUERS, ETC................................................ 51
18. NOTICES............................................................................. 51
19. REPRODUCTION OF DOCUMENTS........................................................... 52
20. CONFIDENTIAL INFORMATION............................................................ 52
21. SUBSTITUTION OF PURCHASER........................................................... 53
22. MISCELLANEOUS....................................................................... 54
iii
22.1. SUCCESSORS AND ASSIGNS........................................................ 54
22.2. PAYMENTS DUE ON NON-BUSINESS DAYS............................................. 54
22.3. SEVERABILITY.................................................................. 54
22.4. CONSTRUCTION.................................................................. 54
22.5. COUNTERPARTS.................................................................. 55
22.6. JURISDICTION; SERVICE OF PROCESS.............................................. 55
22.7. GOVERNING LAW................................................................. 56
22.8. WAIVER OF TRIAL BY JURY....................................................... 56
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE C -- Investment Guidelines
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 5.18 -- Environmental Matters
SCHEDULE 5.21 -- Assets of Dormant Companies
SCHEDULE 10.3 -- Existing Liens
SCHEDULE 10.10 -- Existing Investments
SCHEDULE 10.11 -- Existing Restrictive Agreements
EXHIBIT 1 -- Form of 6.08% Senior Guarantied Note due October 10,2010
iv
EXHIBIT 4.3(a) -- Form of Officer's Certificate for Company
EXHIBIT 4.3(b) -- Form of Officer's Certificate for Co-Issuer
EXHIBIT 4.3(c) -- Form of Secretary's Certificate for each Issuer and
each Initial Guarantor
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Obligors
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
EXHIBIT 4.10 -- Form of Guaranty Agreement
EXHIBIT 4.11 -- Form of Pledge Agreement
EXHIBIT 4.13 -- Form of Sharing Agreement
v
▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY INTERNATIONAL, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
$50,000,000 6.08% SENIOR GUARANTIED NOTES DUE OCTOBER 10, 2010
September 30, 2003
To Each of the Persons Listed in
the Attached Schedule A (the "PURCHASERS"):
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇ & Company, a Georgia corporation (together with its successors
and assigns, the "COMPANY"), and ▇▇▇▇▇▇▇▇ & Company International, Inc., a
Georgia corporation (together with its successors and assigns, the "CO-ISSUER"
and together with the Company, the "ISSUERS"), jointly and severally agree with
each Purchaser as follows:
1. AUTHORIZATION OF NOTES.
The Issuers will authorize the joint and several issue and sale of
$50,000,000 aggregate principal amount of their joint and several 6.08% Senior
Guarantied Notes due October 10, 2010 (the "NOTES", such term to include any
such notes issued in substitution therefor pursuant to Section 13 of this
Agreement). The Notes shall be substantially in the form set out in Exhibit 1,
with such changes therefrom, if any, as may be approved by the Purchasers and
the Issuers. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, references to a Schedule or an Exhibit attached to this Agreement;
references to Sections are, unless otherwise specified, references to Sections
of this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Issuers will
issue and sell to each Purchaser and each Purchaser will purchase from the
Issuers, at the Closing provided for in Section 3, Notes in the principal amount
specified
opposite each Purchaser's name in Schedule A at the purchase price of 100% of
the principal amount thereof. The obligations of the Purchasers hereunder are
several and not joint and no Purchaser shall have any liability to any Person
for the performance or non-performance by any other Purchaser hereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by each of the
Purchasers shall occur at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 a.m., local time, at a closing (the
"CLOSING") on October 10, 2003 or on such other Business Day thereafter on or
prior to October 31, 2003 as may be agreed upon by the Issuers and the
Purchasers. At the Closing the Issuers will deliver to each Purchaser the Notes
to be purchased by it in the form of a single Note (or such greater number of
Notes in denominations of at least $100,000 as each such Purchaser may request)
dated the date of the Closing and registered in such Purchaser's name (or in the
name of its nominee), against delivery by such Purchaser to the Issuers or their
order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for the account of the
Issuers to account number ___________ at SunTrust Bank, Atlanta, GA, ____
________________________________ for the benefit of ▇▇▇▇▇▇▇▇ & Company. If at
the Closing either Issuer shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in Section
4 shall not have been fulfilled to each Purchaser's satisfaction, such Purchaser
shall, at its election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights each such Purchaser may have by
reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Each Purchaser's obligation to purchase and pay for the Notes to be sold
to it at the Closing is subject to the fulfillment to each such Purchaser's
satisfaction, prior to or at the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of each Obligor contained in the
Financing Documents shall be correct when made and at the time of the Closing.
4.2. PERFORMANCE; NO DEFAULT.
Each Obligor shall have performed and complied with all agreements and
conditions contained in the Financing Documents required to be performed or
complied with by it prior to or at the Closing and after giving effect to the
issuance and sale of the Notes (and the application of the proceeds thereof as
contemplated
-2-
by Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither of the Issuers nor any Subsidiary shall have entered into
any transaction since the date of the Memorandum that would have been prohibited
by Sections 10.1, 10.2, 10.3, 10.4, 10.8, 10.10, 10.11, 10.12, 10.13 or 10.15
hereof had such Sections applied since such date.
4.3. COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. The Company shall have delivered to
each Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections
4.1, 4.2 and 4.9 have been fulfilled, substantially in the
form of Exhibit 4.3(a) hereto.
(b) Officer's Certificate. The Co-Issuer shall have delivered to
each Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections
4.1, 4.2 and 4.9 have been fulfilled, substantially in the
form of Exhibit 4.3(b) hereto.
(c) Secretary's Certificates. Each Issuer and each Initial
Guarantor shall have delivered to each Purchaser a certificate
of its secretary or its assistant secretary (or, in the case
of certain Initial Guarantors, a certificate of the secretary
of its sole shareholder or general partner, as the case may
be) dated the date of the Closing certifying as to the
resolutions attached thereto and other corporate proceedings
relating to the authorization, execution and delivery of the
Financing Documents to which such Person is a party,
substantially in the form of Exhibit 4.3(c) hereto.
4.4. OPINIONS OF COUNSEL.
Each Purchaser shall have received opinions in form and substance
satisfactory to it, dated the date of the Closing (a) from King & Spalding LLP
counsel for the Obligors, covering the matters set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated hereby as
such Purchaser or its counsel may reasonably request (and the Issuers hereby
instruct their counsel to deliver such opinion to each Purchaser) and (b) from
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, the Purchasers' special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as any Purchaser may reasonably
request.
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing, each Purchaser's purchase of Notes shall (a)
be permitted by the laws and regulations of each jurisdiction to which it is
subject,
-3-
without recourse to provisions (such as section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (b) not violate
any applicable law or regulation (including, without limitation, Regulation T, U
or X of the Board of Governors of the United States Federal Reserve System) and
(c) not subject any Purchaser to any tax, penalty or liability under or pursuant
to any applicable law or regulation, which law or regulation was not in effect
on the date hereof. If requested by any Purchaser, such Purchaser shall have
received an Officer's Certificate certifying as to such matters of fact as such
Purchaser may reasonably specify to enable such Purchaser to determine whether
such purchase is so permitted.
4.6. SALE OF OTHER NOTES.
Contemporaneously with the Closing the Issuers shall sell to each
Purchaser and each such Purchaser shall purchase the Notes to be purchased by it
at the Closing as specified in Schedule A.
4.7. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Issuers shall have
paid on or before the Closing the fees, charges and disbursements of the
Purchasers' special counsel referred to in Section 4.4(b) to the extent
reflected in a statement of such counsel rendered to the Issuers at least one
Business Day prior to the Closing.
4.8. PRIVATE PLACEMENT NUMBER.
A Private Placement number issued by the CUSIP Service Bureau of Standard
& Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners (the "SVO")) shall have been obtained for the Notes.
4.9. CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, neither Issuer shall have changed its
jurisdiction of incorporation or been a party to any merger or consolidation and
shall not have succeeded to all or any substantial part of the liabilities of
any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
4.10. SUBSIDIARY GUARANTY AGREEMENT.
Each Initial Guarantor shall have executed and delivered to the
Purchasers a guaranty agreement (as may be amended, restated or modified from
time to time, the "GUARANTY AGREEMENT"), substantially in the form of Exhibit
4.10.
-4-
4.11. PLEDGE AGREEMENT.
The Company shall have executed and delivered to the Purchasers a pledge
agreement (as may be amended, restated or modified from time to time, the
"PLEDGE AGREEMENT"), substantially in the form of Exhibit 4.11.
4.12. BANK CREDIT AGREEMENT.
The Issuers shall have delivered to each Purchaser true and correct copies
of each of the documents constituting the Bank Credit Agreement as in effect on
the date of the Closing, certified as true and correct by a Senior Financial
Officer.
4.13. SHARING AGREEMENT.
The Agent, on behalf of itself and the other lenders under the Bank Credit
Agreement and as collateral agent for the holders of Notes, shall have entered
into a collateral sharing agreement with the Purchasers, in form and substance
satisfactory to each of the Purchasers, substantially in the form of Exhibit
4.13 (as may be amended, restated or modified from time to time, the "SHARING
AGREEMENT").
4.14. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement, the other Financing Documents and all documents
and instruments incident to such transactions shall be satisfactory to each
Purchaser and its special counsel, and each Purchaser and its special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as such Purchaser or its counsel may reasonably request.
4.15. OFFEREE LETTER.
Sun Trust Capital Markets, Inc. shall have delivered to the Issuers,
their counsel, each of the Purchasers and the Purchasers' special counsel an
offeree letter, in form and substance satisfactory to each Purchaser, confirming
the manner of the offering of the Notes by Sun Trust Capital Markets, Inc.
5. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS.
Each of the Issuers represents and warrants, as of the date hereof and as
of the date of the Closing, to each Purchaser that:
-5-
5.1. ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver the
Financing Documents to which it is a party and to perform the provisions hereof
and thereof.
5.2. AUTHORIZATION, ETC.
(a) This Agreement, the Notes and the other Financing Documents to
which either Issuer is a party have been duly authorized by all necessary
corporate action on the part of such Issuer, and the Financing Documents
to which such Issuer is a party constitute, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of such Issuer enforceable against such Issuer in accordance
with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) The Guaranty Agreement has been duly authorized by all necessary
corporate action on the part of each Initial Guarantor, and the Guaranty
Agreement constitutes a legal, valid and binding obligation of each
Initial Guarantor enforceable against each Initial Guarantor in accordance
with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5.3. DISCLOSURE.
The Issuers, through their agent, SunTrust Capital Markets, Inc. have
delivered to each Purchaser a copy of a Confidential Private Placement
Memorandum, dated July 2003 (the "MEMORANDUM"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Issuers and
their Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
-6-
Memorandum, the documents, certificates or other writings delivered to each
Purchaser by or on behalf of the Obligors in connection with the transactions
contemplated hereby and the financial statements listed in Schedule 5.5, taken
as a whole, do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading
in light of the circumstances under which they were made. Except as disclosed in
the Memorandum or as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 2002, there has
been no change in the financial condition, operations, business, properties or
prospects of either of the Issuers or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to the Issuers that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents, certificates and
other writings delivered to each Purchaser by or on behalf of the Issuers
specifically for use in connection with the transactions contemplated hereby.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its
organization, the percentage of shares of each class of its capital stock
or similar equity interests outstanding owned by the Company and each
other Subsidiary and whether or not such Subsidiary is a Dormant Company,
(ii) of the Company's Affiliates, other than Subsidiaries, and (iii) of
each of the Issuer's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and the Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and
clear of any Lien in the case of the capital stock of the Co-Issuer, and
in the case of the capital stock or other equity interests of all other
Subsidiaries, free and clear of any Lien except Liens that would be
permitted by Section 10.3 or as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 other than any
Dormant Company is a corporation or other legal entity duly organized,
validly existing and (to the extent such concept is recognized in such
jurisdiction) in good standing under the laws of its jurisdiction of
organization, and (to the extent such concepts are recognized in such
jurisdictions) is duly qualified as a foreign corporation or other legal
entity
-7-
and (to the extent such concept is recognized in such jurisdictions) is in
good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold
under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact, to execute
and deliver the Financing Documents to which such Subsidiary is a party
and to perform the provisions thereof.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out
of profits or make any other similar distributions of profits to the
Company or any Subsidiary that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.
5.5. FINANCIAL STATEMENTS.
The Company has delivered to each Purchaser copies of the financial
statements of the Company and the Subsidiaries listed on Schedule 5.5. All of
said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of the Company and the Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments) and additional information set forth
in year-end financial statements.
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by each Obligor of the Financing
Documents to which such Obligor is a party will not (a) contravene, result in
any breach of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Subsidiary under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
memorandum or articles of association, corporate charter or by-laws, or any
other agreement or instrument to which the Company or any Subsidiary is bound or
by which the Company or any Subsidiary or any of their respective properties may
be bound or affected, (b) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or
-8-
Governmental Authority applicable to the Company or any Subsidiary or (c)
violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by (a) each of the Issuers of the Financing
Documents to which such Issuer is a party and (b) each Initial Guarantor of the
Guaranty Agreement.
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits
or proceedings pending or, to the knowledge of either Issuer, threatened
against or affecting either of the Issuers or any Subsidiary or any
property of either of the Issuers or any Subsidiary in any court or before
any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(b) Neither of the Issuers nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable
law, ordinance, rule or regulation (including without limitation
Environmental Laws) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
5.9. TAXES.
(a) Each of the Issuers and the Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction except
for any such returns that may be required to be filed in jurisdictions
other than the United States and political subdivisions thereof, which
returns, in the aggregate, would not reflect an amount of Taxes owing that
would be Material. Each of the Issuers and the Subsidiaries has paid all
Taxes required to have been paid on all returns that have been filed and
all other Taxes levied upon them or their properties, assets, income or
franchises, to the extent such Taxes have become due and payable and
before they have become delinquent, except for any Taxes (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which such Issuer or
a Subsidiary, as the
-9-
case may be, has established adequate reserves in accordance with GAAP.
Neither Issuer knows of any basis for any other Tax that could reasonably
be expected to have a Material Adverse Effect.
(b) The charges, accruals and reserves on the books of the Issuers
and their Subsidiaries in respect of all Taxes for all fiscal periods are
adequate. The Federal income tax liabilities of the Company and the
Subsidiaries have been determined by the Internal Revenue Service and paid
for all fiscal years up to and including the fiscal year ended December
31, 1999.
5.10. TITLE TO PROPERTY; LEASES.
Each of the Issuers and the Subsidiaries (other than any Dormant Company)
has good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by either of the Issuers or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
5.11. LICENSES, PERMITS, ETC.
Each of the Issuers and the Subsidiaries owns, or is licensed, or
otherwise has the right, to use, all patents, trademarks, service marks,
tradenames, copyrights and other intellectual property Material to its business,
and the use thereof by the Issuers and the Subsidiaries does not infringe on the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, would not have a Material Adverse Effect.
5.12. COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each US Plan in compliance with all applicable laws except
for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the US
Tax Code relating to employee pension benefit plans (as defined in section
3 of ERISA), and no event, transaction or condition has occurred or exists
that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of
any Lien on any
-10-
of the rights, properties or assets of the Company or any ERISA Affiliate,
in either case pursuant to Title I or IV of ERISA or to such penalty or
excise tax provisions or to section 401(a)(29) or 412 of the US Tax Code,
other than such liabilities or Liens as would not be individually or in
the aggregate Material.
(b) As determined by the Company's actuary, the present value of the
aggregate projected benefit obligation of all underfunded US Plans
determined as of January 1, 2003 (based on the assumptions used for
purposes of Statement of Financial Standards No. 87) did not exceed the
aggregate fair value of the assets of all such underfunded US Plans by
more than $67,000,000 as of such date.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The execution and delivery of this Agreement and the issuance
and sale of the Notes to each Purchaser hereunder will not involve any
transaction that is subject to the prohibitions of section
406(a)(1)(A)-(E) of ERISA or in connection with which a tax could be
imposed by sections 4975(a) and (b) of the US Tax Code by reason of
section 4975(c)(1)(A)-(D) of the US Tax Code. The representation by the
Company in the first sentence of this Section 5.12(d) is made in reliance
upon and subject to the accuracy of the representation in Section 6.2 from
each Purchaser and each transferee of a Note as to the sources of the
funds used to pay the purchase price of the Notes to be purchased by such
Purchaser or acquired by such transferee.
5.13. PRIVATE OFFERING BY THE ISSUERS.
Neither the Issuers nor anyone acting on their behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
in each case within one year of the date of the Closing, any Person other than
the Purchasers, each of whom has been offered the Notes at a private sale for
investment. Neither the Issuers nor anyone acting on their behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of section 5 of the Securities Act or to the
provisions of any securities or Blue Sky law of any applicable jurisdiction.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Issuers will apply the proceeds of the sale of the Notes as set forth
in Schedule 5.14 and none of the proceeds will be used to make any loan or other
-11-
Investment in any Dormant Company. No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of buying
or carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the United States Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Issuers in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 5% of the value of the consolidated assets of the Issuers and their
Subsidiaries and neither Issuer has any present intention that margin stock will
constitute more than 5% of the value of such assets. As used in this Section,
the terms "MARGIN STOCK" and "PURPOSE OF BUYING OR CARRYING" shall have the
meanings assigned to them in said Regulation U.
5.15. EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Issuers and their
Subsidiaries as of August 31, 2003, since which date there has been no
Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Indebtedness of either of the Issuers or any
Subsidiary. Neither of the Issuers nor any Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal
or interest on any Indebtedness of either of the Issuers or any Subsidiary
and no event or condition exists with respect to any Indebtedness of
either of the Issuers or any Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to
cause such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither of the Issuers nor
any Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a Lien that
would not be permitted by Section 10.3.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Issuers hereunder nor their use of
the proceeds thereof will violate the Trading with the Enemy Act of the United
States of America, as amended, or any of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto.
-12-
5.17. STATUS UNDER CERTAIN STATUTES.
Neither of the Issuers nor any Subsidiary:
(a) is subject to regulation under the Investment Company Act of
1940 of the United States of America, as amended, the Public Utility
Holding Company Act of 1935 of the United States of America, as amended,
or the Federal Power Act of 1920 of the United States of America, as
amended;
(b) is or will become a Person or entity described by section 1 of
Executive Order 13224 of September 24, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or
Support Terrorism, 31 CFR Part 595 et seq., and, to the best knowledge and
belief of each Issuer, neither of the Issuers nor any Subsidiary does or
will engage in any dealings or transactions, or be otherwise associated,
with any such Persons or entities; or
(c) is in violation of the USA Patriot Act.
5.18. ENVIRONMENTAL MATTERS.
Except as disclosed in Schedule 5.18 and except for matters which could
not reasonably be expected to have a Material Adverse Effect, neither of the
Issuers nor any Subsidiary (a) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (b) has become subject to any
Environmental Liability, (c) has received notice of any claim with respect to
any Environmental Liability or (d) knows of any basis for any Environmental
Liability in each case.
5.19. PARI PASSU RANKING.
Each of the Issuer's obligations under the Notes and this Agreement do and
will, upon issuance of the Notes, rank at least pari passu, without preference
or priority, with all of its other outstanding unsecured and unsubordinated
obligations, except for those obligations that are mandatorily preferred by law
and not by reason of contract (other than as provided in the Sharing Agreement).
5.20. NOT SUBJECT TO IMMUNITY.
Each of the Issuers represents and warrants that neither it nor any other
Obligor is entitled to immunity from judicial proceedings and agrees that, if
judicial proceedings are brought by any holder of Notes to enforce any right or
remedy under any Financing Documents, no immunity from such proceedings will be
claimed by or on behalf of any Obligor or with respect to it or its respective
properties.
-13-
5.21. DORMANT COMPANIES.
Except as set forth in Schedule 5.21, no Dormant Company owns any Material
assets or has any outstanding Indebtedness or other Material liabilities. The
aggregate revenues and assets of the Dormant Companies are less than 1% of the
aggregate revenue and assets of the Company and its Consolidated Subsidiaries.
5.22. BANK CREDIT AGREEMENT REPRESENTATIONS.
Each of the representations and warranties set forth in section 4 of the
Bank Credit Agreement is true and correct in all Material respects on and as of
the date of the Closing.
6. REPRESENTATIONS OF THE PURCHASERS.
6.1. PURCHASE FOR INVESTMENT.
Each Purchaser represents that (a) it is a Qualified Institutional Buyer
and (b) it is purchasing the Notes for its own account or for one or more
separate accounts or investment funds maintained or managed by such Purchaser or
for the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such Purchaser's property
shall at all times be within such Purchaser's control. Each Purchaser
understands that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Issuers are not required to register the Notes.
6.2. SOURCE OF FUNDS.
Each Purchaser represents that at least one of the following statements is
an accurate representation as to each source of funds (a "SOURCE") to be used by
such Purchaser to pay the purchase price of the Notes to be purchased by it
hereunder:
(a) the Source is an "insurance company general account" (as the
term is defined in the United States Department of Labor's Prohibited
Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) in respect of
which the reserves and liabilities (as defined by the annual statement for
life insurance companies approved by the National Association of Insurance
Commissioners (the "NAIC ANNUAL STATEMENT")) for the general account
contract(s) held by or on behalf of any employee benefit plan together
with the amount of the reserves and liabilities for the general account
contract(s)
-14-
held by or on behalf of any other employee benefit plans maintained by the
same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account 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 such Purchaser's state of domicile; or
(b) the Source is a separate account that is maintained solely in
connection with such Purchaser's fixed contractual obligations under which
the amounts payable, or credited, to any employee benefit plan (or its
related trust) that has any interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant)) are not
affected in any manner by the investment performance of the separate
account; or
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of PTE 91-38 (issued
July 1, 1991, as corrected November 25, 1991) and, except as disclosed by
such Purchaser to the Issuers in writing prior to the Closing (or, in the
case of a transferee of Notes, prior to its acquisition of such Notes)
pursuant to this clause (c), 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
(d) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of PTE 84-14 (issued March 13, 1984, as corrected
October 10, 1985) (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 and 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 Issuer and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to
the Issuers in writing pursuant to this clause (d); or
-15-
(e) the Source constitutes assets of a "plan(s)" (within the meaning
of Section IV of PTE 96-23 (issued April 10, 1996) (the "INHAM
EXEMPTION")) managed by an "in-house asset manager" or "INHAM" (within the
meaning of Part IV of the INHAM exemption), the conditions of Part I(a),
(g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a
person controlling or controlled by the INHAM (applying the definition of
"control" in Section IV(h) of the INHAM Exemption) owns a 5% or more
interest in either Issuer and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source
have been disclosed to the Issuers in writing pursuant to this clause (e);
or
(f) the Source is a governmental plan and the purchase of the Notes
is not otherwise restricted by applicable law; or
(g) 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 Issuers in writing prior to the
Closing (or, in the case of a transferee of Notes, prior to its
acquisition of such Notes) pursuant to this clause (g); or
(h) 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 6.2, the terms "EMPLOYEE BENEFIT PLAN," "GOVERNMENTAL
PLAN," AND "SEPARATE ACCOUNT" shall have the respective meanings assigned to
such terms in section 3 of ERISA.
6.3. PURCHASER ACTION.
No Purchaser has taken or will take any action that would subject the
issuance or sale of the Notes to the registration requirements of section 5 of
the Securities Act or to the provisions of any securities or Blue Sky law of any
applicable jurisdiction.
7. INFORMATION AS TO ISSUERS.
7.1. FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements -- within 45 days after the end of each
quarterly fiscal period in each Fiscal Year (other than the last quarterly
fiscal period of each such Fiscal Year), duplicate copies of,
-16-
(i) an unaudited consolidated balance sheet of the Company and the
Subsidiaries as at the end of such quarter, and
(ii) unaudited consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its Consolidated
Subsidiaries, for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements -- within 90 days after the end of each Fiscal Year,
duplicate copies of,
(i) a consolidated balance sheet of the Company and the
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and the Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances (without a
"going concern" or like qualification, exception or explanation and without any
qualification or exception as to scope of such audit), and provided that the
delivery within the time period
-17-
specified above of the Company's Annual Report on Form 10-K for such
Fiscal Year (together with the Company's annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the Securities
and Exchange Commission shall be deemed to satisfy the requirements of
this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming available,
one copy of (i) each financial statement, report, notice, proxy statement
or circular sent by the Company to public securities holders generally or
its creditors generally (or any class thereof generally), and (ii) each
regular or periodic report, each registration statement (without exhibits
except as expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company with the Securities and Exchange
Commission;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five Business Days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person has
given any notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a
written notice specifying the nature and period of existence thereof and
what action the Company is taking or proposes to take with respect
thereto;
(e) ERISA Matters - promptly, and in any event within fifteen days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any US Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations thereunder,
for which notice thereof has not been waived; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any US Plan, or the receipt by the Company
or any ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA
Affiliate
-18-
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the US Tax Code relating to employee pension benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions,
if such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be expected to
have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to either of
the Issuers or any Subsidiary from any Governmental Authority relating to
any order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
(g) Rule 144A - promptly after any holder of Notes so requests, such
information regarding the Issuers required to satisfy the requirements of
17 C.F.R. Section 230.144A, as amended from time to time, in connection
with any contemplated transfer of the Notes, provided that the delivery of
the Company's Annual Report on Form 10-K pursuant to Section 7.1(b) for
the most recent Fiscal Year shall be deemed to satisfy the requirements of
this Section 7.1(g);
(h) Bank Credit Agreement -- to the extent not provided above in
this Section 7.1, all reports, statements, certificates, notices or other
writings required to be delivered pursuant to section 5.2 of the Bank
Credit Agreement only so long as the Bank Credit Agreement (or any
equivalent provision following any amendment or refinancing of the
original Bank Credit Agreement) remains operative within the times
required therein; and
(i) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of either of the Issuers or any
Subsidiary or relating to the ability of any Obligor to perform its
obligations hereunder and under the Financing Documents to which such
Obligor is a party, as from time to time may be reasonably requested by
any such holder of Notes.
7.2. OFFICER'S CERTIFICATES.
Each set of financial statements delivered to a holder of Notes pursuant
to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate
of a Senior Financial Officer of the Company setting forth:
-19-
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Issuers were in
compliance with the requirements of Section 10.3 through Section 10.8,
inclusive, Section 10.10 and Section 10.14 hereof, during the quarterly or
annual period covered by the statements then being furnished (including
with respect to each such Section, where applicable, the calculations of
the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed
the relevant terms hereof and has made, or caused to be made, under his or
her supervision, a review of the transactions and conditions of the
Issuers and their Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date
of the certificate and that such review shall not have disclosed the
existence during such period of any condition or event that constitutes a
Default or an Event of Default or, if any such condition or event existed
or exists (including, without limitation, any such event or condition
resulting from the failure of either of the Issuers or any Subsidiary to
comply with any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken or proposes
to take with respect thereto.
7.3. INSPECTION.
Each of the Issuers shall permit the representatives of each holder of
Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the
applicable Issuer, to visit the principal executive office of such Issuer,
to discuss the affairs, finances and accounts of such Issuer and its
Subsidiaries with such Issuer's officers, and (with the consent of such
Issuer, which consent will not be unreasonably withheld) its independent
public accountants, and (with the consent of such Issuer, which consent
will not be unreasonably withheld) to visit the other offices and
properties of such Issuer and each Subsidiary, all at such reasonable
times and as often as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Issuers to visit and inspect any of the offices or
properties of either of the Issuers or any Subsidiary, to examine all
their respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with
-20-
their respective officers and independent public accountants (and by this
provision each of the Issuers authorizes said accountants to discuss the
affairs, finances and accounts of such Issuer and its Subsidiaries), all
at such times and as often as may be requested.
8. PREPAYMENT OF THE NOTES.
8.1. REQUIRED PREPAYMENTS.
On October 10, 2006 and on April 10, 2007 and each October 10 and April 10
thereafter to and including April 10, 2010, the Issuers will prepay
$5,555,555.56 principal amount (or such lesser principal amount as shall then be
outstanding) of the Notes at par and without payment of the Make-Whole Amount or
any premium, provided that upon any partial prepayment of the Notes pursuant to
Section 8.2 the principal amount of each required prepayment of the Notes
becoming due under this Section 8.1 on and after the date of such prepayment or
any purchase thereof pursuant to Section 8.5 shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such prepayment or purchase. Subject to Section 12.1, any remaining
principal of, and the interest then accrued and unpaid on, the Notes shall be
due and payable on October 10, 2010.
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Issuers may, at their option, upon notice as provided below, prepay at
any time all, or from time to time any part of, the Notes, in an aggregate
principal amount of not less than $1,000,000 in the case of a partial
prepayment, at 100% of the principal amount so prepaid, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Issuers will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Issuers shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
-21-
8.3. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes pursuant to Section
8.2 and each purchase of Notes pursuant to Section 8.5, the principal amount of
the Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.
8.4. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Issuers shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Issuers and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.5. PURCHASE OF NOTES.
Neither Issuer will, and neither Issuer will permit any Affiliate to,
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes except (a) upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes or (b) pursuant to an
offer to purchase made by the Issuers or an Affiliate pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions. Any such
offer shall provide each holder with sufficient information to enable it to make
an informed decision with respect to such offer, and shall remain open for at
least 30 days. If the holders of more than 50% of the principal amount of the
Notes then outstanding accept such offer, the Issuers shall promptly notify the
remaining holders of such fact and the expiration date for the acceptance by
holders of Notes of such offer shall be extended by the number of days necessary
to give each such remaining holder at least five (5) Business Days from its
receipt of such notice to accept such offer. The Issuers will promptly cancel
all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or
purchase of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.
8.6. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining
-22-
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or
is declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on such Note is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (a) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal on the
display designated as "Page 678" on the Moneyline Telerate Service (or
such other display as may replace Page 678 on the Moneyline Telerate
Service) for actively traded on the run US Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as
of such Settlement Date, or (b) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day for
which such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded US Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (i) converting US Treasury ▇▇▇▇ quotations to
bond-equivalent yields in accordance with accepted financial practice and
(ii) interpolating linearly between (x) the actively traded US Treasury
Security with the maturity closest to and greater than the Remaining
Average Life and (y) the actively traded US Treasury Security with the
maturity closest to and less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-
-23-
twelfth year) obtained by dividing (a) such Called Principal into (b) the
sum of the products obtained by multiplying (i) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal by
(ii) the number of years (calculated to the nearest one-twelfth year) that
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of such
Note, then the amount of the next succeeding scheduled interest payment
will be reduced by the amount of interest accrued to such Settlement Date
and required to be paid on such Settlement Date pursuant to Section 8.2 or
Section 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
Each of the Issuers covenants that so long as any of the Notes are
outstanding:
9.1. COMPLIANCE WITH LAW.
Each of the Issuers will and will cause each Subsidiary to comply with all
laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA and Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. INSURANCE.
-24-
Each of the Issuers will and will cause each Subsidiary to maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.
9.3. MAINTENANCE OF PROPERTIES.
Each of the Issuers will and will cause each Subsidiary other than any
Dormant Company to maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly conducted at all times, provided that this Section shall not
prevent either of the Issuers or any Subsidiary from discontinuing the operation
and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and such Issuer has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.4. PAYMENT OF TAXES AND CLAIMS.
Each of the Issuers will and will cause each Subsidiary to file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes required to be paid on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and all claims for
which sums have become due and payable that have or might become a Lien on
properties or assets of either of the Issuers or any Subsidiary, provided that
neither of the Issuers nor any Subsidiary need pay any such tax or assessment or
claims if (a) the amount, applicability or validity thereof is contested by such
Issuer or such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and such Issuer or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of such Issuer or such Subsidiary
or (b) the nonpayment of all such taxes and assessments in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
9.5. CORPORATE EXISTENCE, ETC.
Each of the Issuers will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 9.3, 10.2 and 10.4, each of
the Issuers will at all times preserve and keep in full force and effect the
corporate existence of
-25-
each Subsidiary other than any Dormant Company (unless merged into an Issuer or
a Subsidiary (other than a Dormant Company)) and all rights and franchises of
such Issuer and its Subsidiaries (other than a Dormant Company) unless, in the
good faith judgment of such Issuer, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.
9.6. NEW SUBSIDIARY GUARANTOR; ADDITIONAL PLEDGED STOCK.
(a) The Issuers will (i) cause each Person that, after the date of
the Closing, becomes a Domestic Subsidiary that is a "significant
subsidiary" within the meaning of Regulation S-X of the Exchange Act, and
each Subsidiary that ceases to be a Dormant Company pursuant to Section
9.11, to become, promptly and in any event within fifteen (15) Business
Days of becoming a Domestic Subsidiary or ceasing to be a Dormant Company,
as the case may be, an additional guarantor pursuant to the terms of the
Guaranty Agreement and (ii) deliver to each of the holders of Notes, to
the extent reasonably requested by the Required Holders, copies of
authorizing resolutions, bylaws and other constitutive documents and
financial information of such Person, as well as an opinion of independent
counsel reasonably satisfactory to the Required Holders, as to the due
execution, delivery and enforceability of such Person's obligations as a
Guarantor, in form and substance reasonably satisfactory to the Required
Holders.
(b) The Company will promptly, and in any event within fifteen (15)
Business Days of any Person becoming (i) a Foreign Subsidiary of the
Company or (ii) a Foreign Subsidiary that is not a Wholly-Owned Subsidiary
of either Issuer that, in each case, is a "significant subsidiary" within
the meaning of Regulation S-X of the Exchange Act, after the date of the
Closing, (A) pledge, or cause to be pledged, the Applicable Pledge Amount
of any equity interests of such Foreign Subsidiary pursuant to the Pledge
Agreement, and (B) deliver or cause to be delivered to the Agent, on
behalf of the holders of Notes, the original stock or membership
certificate(s) evidencing such equity interests and undated stock powers
executed in blank.
9.7. PARI PASSU RANKING.
Each of the Issuers shall ensure that its payment obligations under this
Agreement and the Notes rank and will at all times rank at least pari passu in
all respects with the claims of all of its other unsecured and unsubordinated
creditors, respectively, except as may be otherwise provided for in the Sharing
Agreement with respect to the Debt under the Bank Credit Agreement, save those
whose claims are preferred by any bankruptcy, insolvency, liquidation,
administration or other similar laws of general application.
-26-
9.8. MOST FAVORED LENDER PROVISIONS.
(a) NEW AND AMENDED COVENANTS. If at any time and from time to time
on or after the date of the Closing either of the Issuers or any
Subsidiary enters into, assumes or otherwise becomes bound or obligated
under, or agrees to any new agreement with the lenders under the Bank
Credit Agreement or, without derogating from any of the restrictions
contained herein, any amendment, modification of or supplement to the Bank
Credit Agreement or any agreement which relates to the Bank Credit
Agreement in any manner the effect of which would be (i) to create, amend
or add covenants or obligations of the Issuers and the Subsidiaries which
are in addition to those contained in the Bank Credit Agreement (as in
effect on the date of the Closing) or (ii) more restrictive on the Issuers
or any Subsidiary than are the equivalent covenants (other than the
Specified Financial Covenants) contained herein (the "NEW/AMENDED COVENANT
PROVISIONS"), then this Agreement shall, without any further action on the
part of either Issuer, any Subsidiary or any holder of Notes, be deemed to
be amended automatically to include each such New/Amended Covenant
Provision, effective as of the effective date of such New/Amended Covenant
Provision; provided, that the Required Holders and the Issuers may agree
in writing not to so amend this Agreement. For the purposes of clause (ii)
above, in the event that (A) any such amendment, modification or
supplement reduces a sum certain dollar amount in the Bank Credit
Agreement, which reduction has the effect of making a covenant in the Bank
Credit Agreement more restrictive than a covenant contained herein and (B)
the corresponding covenant contained herein is a percentage rather than a
sum certain dollar amount, then such percentage contained herein shall be
reduced and shall thereafter be equal to the product (expressed as a
percentage) of (x) such percentage herein immediately before giving effect
to such amendment, modification or supplement, multiplied by (y) a
fraction, the numerator of which is the sum certain dollar amount in the
Bank Credit Agreement immediately after giving effect to such amendment,
modification or supplement and the denominator of which is the sum certain
dollar amount stated in the Bank Credit Agreement immediately prior to
giving effect to such amendment, modification or supplement. By way of
example, if the definition of the "Permitted Acquisition Basket" in the
Bank Credit Agreement were amended to reduce the sum certain dollar amount
from $15,000,000 to $9,000,000 (a 40% reduction), then the percentage in
the definition of Permitted Acquisition herein would be reduced to 6% from
10% (a 40% reduction).
(b) SPECIFIED FINANCIAL COVENANTS. If at any time and from time to
time after the date of the Closing, either Issuer or any Subsidiary enters
-27-
into, assumes or otherwise becomes bound or obligated under, or agrees to,
any modification of or amendment or supplement to the Bank Credit
Agreement in respect of or that contains provisions (the "SPECIFIED
PROVISIONS") that are the same as or similar to the covenants set forth in
Sections 10.5, 10.6 or 10.7 (as in effect from time to time after giving
effect to this Section 9.8, the "SPECIFIED FINANCIAL COVENANTS"), and one
or more of such Specified Provisions is more restrictive on the Issuers or
any Subsidiary than the equivalent Specified Financial Covenants, then
such equivalent Specified Financial Covenants shall, without any further
action on the part of either Issuer, any Subsidiary or any holder of
Notes, be deemed to be amended automatically to be as restrictive as the
relevant Specified Provision as of the effective date of such Specified
Provision; provided, however, that at all times subsequent to the date of
the DOJ Settlement Payment, the required ratios of Consolidated Funded
Debt to Consolidated EBITDA set forth in Section 10.5 shall each have a
numerator that is the lesser of (i) the relevant numerator set forth in
such section (as of the date of the Closing) or (ii) a numerator that is
0.25 higher than that specified in the Bank Credit Agreement (after giving
effect to any applicable Specified Provision) for the relevant time period
(after converting, if necessary, the ratios in the Bank Credit Agreement
to the method of presentation in Section 10.5).
(c) WRITTEN AMENDMENT; SUCCESSIVE CHANGES. Each of the Issuers
further covenants to promptly, and in any event within 30 days, execute
and deliver at its expense (including, without limitation, the fees and
expenses of counsel for the holders of the Notes) a document which amends
this Agreement in form and substance satisfactory to the Required Holders
to reflect any change to this Agreement made effective by this Section
9.8, provided that the execution and delivery of such document shall not
be a precondition to the effectiveness of such amendment, waiver or
termination. The provisions of this Section 9.8 shall apply successively
to each New/Amended Covenant Provision and each change in a Specified
Provision.
9.9. COVENANT TO SECURE NOTES EQUALLY.
Each Issuer covenants that, if it or any Subsidiary shall create or assume
any Lien to secure the Debt under the Bank Credit Agreement upon any of its
property or assets, whether now owned or hereafter acquired, it will make or
cause to be made effective provision whereby the Notes will be secured by such
Lien equally and ratably with any and all Debt under the Bank Credit Agreement
thereby secured so long as any such other Debt shall be so secured.
-28-
9.10. POST-CLOSING REQUIREMENTS.
No later than 60 days following the date of the Closing, the Issuers will
deliver or cause to be delivered to the holders of Notes (a) certificates of
good standing from the office of the Secretary of State from each jurisdiction
where the ownership of property or the conduct of its business requires the
Company to be qualified to transact business as a foreign corporation and (b)
certificates of good standing from the office of the Secretary of State of the
jurisdiction of incorporation of Qirra Custom Software, Inc. and the
jurisdiction where such Subsidiary maintains its principal place of business. No
later than 75 days following the date of the Closing, the Issuers will cause the
following Subsidiaries to be dissolved and shall provide the Required Holders
with reasonably satisfactory evidence of such dissolution: (i) Brocklehursts,
Inc., (ii) ▇▇▇▇▇▇▇▇▇▇▇▇ Holdings, Inc. and (iii) ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. No later
than 30 days following the date of the Closing, the Issuers will cause all Liens
in favor of the Royal Bank of Canada set forth on Schedule 10.3 to be terminated
and released of record, and will promptly provide each holder of Note written
evidence of such termination and release. The Issuers will, within 30 days
following a request therefore by the Required Holders, cause the documents and
instruments described on Schedule 10.11 as item 1, to be terminated, or
otherwise cause the restrictive agreements or arrangements therein requiring
such items to be disclosed pursuant to Section 10.11 to be terminated and
released, and will promptly provide the holders of Notes written evidence of
such termination and release.
9.11. DORMANT COMPANIES.
(a) If, at any time after the date of the Closing, the Company
decides that any Subsidiary that is a Dormant Company at such time shall
cease being a Dormant Company, such Subsidiary shall cease to be a Dormant
Company for all purposes of this Agreement and the other Financing
Documents upon the satisfaction of the following conditions:
(i) the Company shall notify the holders of Notes of the
proposed change in the status of such Subsidiary, which notice shall
contain a certification by a Responsible Officer to the effect that
(A) such Subsidiary is in full compliance with all provisions of
this Agreement applicable to it as a Subsidiary that is not a
Dormant Company, (B) each of the representations and warranties set
forth in Section 5 that are applicable to a Subsidiary that is not a
Dormant Company is true and correct with respect to such Subsidiary
as of the date of such notice, and (C) no Default or Event of
Default would result from such change in status of such Subsidiary;
-29-
(ii) if such Subsidiary is a Domestic Subsidiary and is not
already a Guarantor, the Issuers shall cause it to become a
Guarantor pursuant to Section 9.6(a);
(iii) Schedule 5.4 hereto shall be revised to reflect that
such Subsidiary is no longer a Dormant Company; and
(iv) the Issuers shall have delivered such information as is
required by Section 9.6(a).
(b) If, at any time after the date of the Closing, the Company
decides that any Subsidiary that is not a Dormant Company at such time
shall become a Dormant Company, such Subsidiary shall become a Dormant
Company for all purposes of this Agreement and the other Financing
Documents upon the satisfaction of the following conditions:
(i) the Company shall notify the holders of Notes of the
proposed change in the status of such Subsidiary, which notice shall
contain a certification by a Responsible Officer to the effect that
(A) such Subsidiary is in full compliance with all provisions of
this Agreement applicable to it as a Subsidiary that is a Dormant
Company, (B) after giving effect to such Subsidiary becoming a
Dormant Company, the aggregate revenues and assets of all Dormant
Companies is less than 1% of the aggregate revenues and assets of
the Company and its Consolidated Subsidiaries, and (C) no Default or
Event of Default would result from such change in status of such
Subsidiary;
(ii) if the Subsidiary is a party to the Guaranty Agreement
and is not a "significant subsidiary" within the meaning of
Regulations S-X of the Exchange Act, the Required Holders shall
release it from the Guaranty Agreement;
(iii) Schedule 5.4 hereto shall be revised to reflect that
such Subsidiary has after such time become a Dormant Company; and
(iv) the Issuers shall have delivered such information
(financial and otherwise) as is reasonably requested by the Required
Holders with respect to such Subsidiary.
10. NEGATIVE COVENANTS.
Each of the Issuers covenants that so long as any of the Notes are
outstanding:
-30-
10.1. TRANSACTIONS WITH AFFILIATES; DORMANT COMPANIES.
Neither Issuer will, and neither Issuer will permit any Subsidiary to,
enter into directly or indirectly any transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or exchange
of properties of any kind or the rendering of any service) with any Affiliate
(other than an Issuer or a Wholly-Owned Subsidiary subject to the limitations
set forth in Section 10.10(b)), except (a) in the ordinary course and pursuant
to the reasonable requirements of an Issuer's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to such Issuer or such
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate and (b) any Restricted Payment permitted by
Section 10.10(a). Notwithstanding the foregoing, the Issuers will not, and will
not permit any Subsidiaries to, sell, lease or otherwise transfer any property
or assets to, or purchase, lease or otherwise acquire any property or assets
from, make any Investment in, or otherwise engage in any other transactions
with, any Dormant Company unless (i) such transaction is at prices and on terms
and conditions no less favorable to the Issuers or such Subsidiary (other than
the Dormant Company) than could be obtained on an arm's-length basis from
unrelated third parties or involves maintaining the corporate existence, good
standing or properties of any Dormant Company and (ii) after giving effect to
such transaction, the representations and warranties contained in Section 5.21
shall be deemed remade and shall be true and correct.
10.2. MERGER, CONSOLIDATION, ETC.
Neither Issuer will, and neither Issuer will permit any Subsidiary (other
than any Dormant Company) to, consolidate with or merge with any other Person or
convey, Transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person or liquidate or dissolve
(except that if at the time thereof and immediately after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing (i) subject
to Section 10.4, any Subsidiary may liquidate or dissolve if the Issuers
determine in good faith that such liquidation or dissolution is in the best
interests of the Issuers and is not materially disadvantageous to the holders of
Notes, (ii) any Subsidiary (other than a Dormant Company) may merge with any
Person that is not a Subsidiary if such Subsidiary is the surviving Person,
(iii) any Subsidiary may merge into another Subsidiary (other than a Dormant
Company), provided, that if any party to such merger is a Guarantor (other than
a Dormant Company), such Guarantor shall be the surviving Person, (iv) any
Subsidiary may sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to an Issuer or to a Subsidiary (other than a
Dormant Company); provided, that a Guarantor may only sell, lease or otherwise
dispose of all or substantially all of its assets to an Issuer or another
Guarantor (other than a Dormant Company), and (v) any Subsidiary may be sold so
long as such sale is
-31-
permitted under Section 10.4; provided, that any merger involving a Person that
is not a Wholly-Owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 10.10(b)), provided that the
foregoing restriction does not apply to the consolidation or merger of either
Issuer with, or the conveyance, transfer or lease of all or substantially all of
the assets of either Issuer in a single transaction or series of transactions
to, any Person so long as:
(a) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, Transfer or lease
all or substantially all of the assets of such Issuer as an entirety, as
the case may be (the "SUCCESSOR CORPORATION"), shall be a solvent
corporation organized and existing under the laws of the United States or
any state thereof (including the District of Columbia);
(b) if such Issuer is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of Notes its
assumption of the due and punctual performance and observance of each
covenant and condition of this Agreement, the Notes and each other
Financing Document to which such Issuer is a party (pursuant to such
agreements and instruments governed by New York law and otherwise in form
and substance as shall be reasonably satisfactory to the Required
Holders), and the Company shall have caused to be delivered to each holder
of Notes an opinion of nationally recognized independent counsel, or other
independent counsel reasonably satisfactory to the Required Holders, to
the effect that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with the terms
hereof; and
(c) immediately prior to and after giving effect to such transaction
no Default or Event of Default would exist.
No such conveyance, Transfer or lease of all or substantially all of the assets
of either Issuer shall have the effect of releasing such Issuer or any Successor
Corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under the Financing Documents to which such
Issuer is a party.
10.3. LIMITATION ON LIENS.
Neither Issuer will, and neither Issuer will permit any Subsidiary to,
directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any
property (including, without limitation, any document or instrument in respect
of goods or accounts receivable or book debts) of either of the Issuers or any
such Subsidiary, whether now owned or held or hereafter acquired, or any income
or profits therefrom or
-32-
assign or otherwise convey any right to receive income or profits, except:
(a) Liens for taxes or assessments or other governmental charges or
levies not yet due and payable or which are being contested as permitted
by Section 9.4;
(b) statutory liens, common law liens, carriers', warehousemen's,
mechanics', materialmen's, landlord's, repairmen's or other like Liens
arising in the ordinary course of business and securing obligations (other
than Debt) which are not overdue for a period of more than sixty (60) days
or which are actively being contested in good faith by appropriate
proceedings and for which reasonable book reserves in accordance with GAAP
have been established;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other types of social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements, provided, however, that such Liens were not
incurred or made in connection with the borrowing of money or the
obtaining of advances or credit;
(d) Liens incurred or deposits to secure the performance of bids,
tenders, contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business,
provided, however, that such Liens were not incurred or made in connection
with the borrowing of money or the obtaining of advances or credit;
(e) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after the expiration of any such stay;
(f) Liens on any property of the Company and the Subsidiaries in
existence on the date of the Closing including Liens securing the Notes
and the Debt evidenced by the Bank Credit Agreement and other Liens so
long as such Liens are described on Schedule 10.3; provided, such Lien
shall not apply to any other property of either of the Issuers or any
Subsidiary;
(g) leases or subleases granted to others, zoning restrictions,
easements, rights-of-way, restrictions and other similar charges or
encumbrances, in each case incidental to, and not interfering with, the
ordinary conduct of the business of the Issuers or any of their
Subsidiaries,
-33-
provided that such Liens do not, in the aggregate, materially detract from
the value of such property;
(h) any Lien created to secure all or any part of the purchase price
or cost of construction, of property (or any improvement thereon) acquired
or constructed by either of the Issuers or a Subsidiary after the date of
the Closing, provided that
(i) any such Lien shall extend solely to the item or items of
such property (or improvement thereon) so acquired or constructed
(and replacement assets of the same type) and, if required by the
terms of the instrument originally creating such Lien, other
property (or improvement thereon) which is an improvement to or is
acquired for specific use in connection with such acquired or
constructed property (or improvement thereon) or which is real
property being improved by such acquired or constructed property (or
improvement thereon),
(ii) the principal amount of the Debt secured by any such Lien
shall at no time exceed an amount equal to 100% of the lesser of (A)
the cost to such Issuer or such Subsidiary of the property (or
improvement thereon) so acquired or constructed and (B) the Fair
Market Value (as determined in good faith by the board of directors
of such Issuer or such Subsidiary) of such property (or improvement
thereon) at the time of such acquisition or construction, and
(iii) any such Lien shall be created contemporaneously with,
or within 90 days after, the acquisition or construction of such
property;
(i) any Liens renewing extending or refunding any Lien permitted by
the foregoing clauses (a) through (h), provided that
(i) the principal amount of Debt secured by such Lien
immediately prior to such extension, renewal or refunding is not
increased or the maturity thereof reduced,
(ii) such Lien is not extended to any other property, and
(iii) immediately after such extension, renewal or refunding
no Default or Event of Default would exist;
(j) Liens created under the Pledge Agreement in favor of the Agent
as collateral agent for the Creditors (as defined in the Pledge
Agreement); and
-34-
(k) other Liens (not otherwise permitted by clauses (a) through (j))
so long as the Debt secured by such Liens is permitted by Section 10.8.
10.4. SALE OF ASSETS, ETC.
Except as permitted under Section 10.2, neither Issuer will, and neither
Issuer will permit any Subsidiary (other than any Dormant Company) to, make any
Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset Disposition
is in exchange for consideration having a Fair Market Value at least equal
to that of the property exchanged and is in the best interest of such
Issuer or such Subsidiary; and
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition, the
aggregate Disposition Value of all Asset Dispositions made (i) during the
period commencing with the first day of the then current Fiscal Year to
and including the date of such Transfer does not exceed an amount equal to
5% of Consolidated Net Worth determined as of the last day of the then
most recently ended fiscal quarter of the Company and (ii) during the
period commencing on the date of the Closing to and including the date of
such Transfer does not exceed an amount equal to 25% of Consolidated Net
Worth determined as of the last day of the then most recently ended fiscal
quarter of the Company; except that the Disposition Value of an Asset
Disposition will be excluded from this clause (c) at such time as the Net
Proceeds Amount with respect to such transaction is applied to a Property
Reinvestment Application within 120 days after such Transfer.
10.5. LEVERAGE RATIO.
The Issuers will not, as of the last day of the fiscal quarter of the
Company ending on (or closest to) each date specified below, permit the ratio of
Consolidated Funded Debt outstanding on such day to Consolidated EBITDA for the
four consecutive fiscal quarter period ending on such day to be greater than the
ratio set forth below opposite such date:
Fiscal Quarter Ending Dates Ratio
--------------------------------------------------------- ------------
September 30, 2003, December 31, 2003, March 31, 2004 and 2.75 to 1.00
June 30, 2004
-35-
September 30, 2004, December 31, 2004, 2.50 to 1.00
March 31, 2005, June 30, 2005, and the
last day of each fiscal quarter of the
Company thereafter if such last day is
subsequent to the DOJ Settlement Payment
September 30, 2005, if such date is 2.25 to 1.00
prior to the DOJ Settlement Payment,
and the last day of each fiscal quarter
of the Company thereafter, if such last
day is prior to the DOJ Settlement
Payment
10.6. FIXED CHARGES COVERAGE RATIO.
The Issuers will not, as of the last day of the fiscal quarter of the
Company ending on (or closest to) each date specified below, permit the Fixed
Charges Coverage Ratio to be less than the ratio set forth below opposite such
date:
Fiscal Quarter Ending Dates Ratio
-------------------------------------- ------------
September 30, 2003, December 31, 2003, 1.25 to 1.00
March 31, 2004 and June 30, 2004
September 30, 2004 and the last day of 1.50 to 1.00
each fiscal quarter of the Company
thereafter
10.7. CONSOLIDATED NET WORTH.
The Issuers will not, as of the last day of each fiscal quarter of the
Company commencing with the fiscal quarter ending September 30, 2003, permit
Consolidated Net Worth to be less than the sum of (a) $135,516,350, plus (b) an
aggregate amount equal to 50% of its Consolidated Net Income (but, in each case,
only if a positive number) accrued after December 31, 2002 plus (c) to the
extent, but only to the extent that such aggregate amount was not included in
the computation of Consolidated Net Worth for such period, 100% of the net
proceeds received from the sale, pursuant to an effective registration
statement, of the Company's capital stock (an "EQUITY OFFERING"); provided, that
the net proceeds of an Equity Offering of a debt Security that is convertible
into or exchangeable for capital stock of the Company or a debt Security that is
issued with a warrant or
-36-
other instrument to purchase capital stock of the Company shall not be required
to be added under this clause (c) unless and until such debt Security is
converted into or exchanged for, or such warrant or other instrument is
exercised for, capital stock of the Company. For purposes of determining
Consolidated Net Worth on any date after December 31, 2002, (i) any non-cash
adjustment after December 31, 2002 (whether such adjustment is an increase or
decrease) to shareholders' investment related to pension fund liabilities, (B)
any non-cash adjustment after December 31, 2002 (whether such adjustment is an
increase or decrease) to shareholders' investment related to goodwill and (C)
any non-cash adjustment after December 31, 2002 (whether such adjustment is an
increase or decrease) to shareholders' investment related to foreign currency
translations shall, in each case, be excluded.
10.8. PRIORITY DEBT.
The Issuers will not, at any time, permit Priority Debt determined at such
time to exceed 15% of Consolidated Net Worth determined as of the last day of
the then most recently ended fiscal quarter of the Company.
10.9. LINE OF BUSINESS.
Neither Issuer will, and neither Issuer will permit any Subsidiary to,
engage to any substantial extent in any business other than businesses of the
type in which the Issuers and the Subsidiaries are engaged on the date of the
Closing, as described in the Memorandum, and businesses reasonably related
thereto or in furtherance thereof. Neither Issuer will permit (a) any Dormant
Company to own any Material assets or have any outstanding Indebtedness or other
Material liabilities and (b) the aggregate revenues and assets of the Dormant
Companies at any time to be more than 1% of the aggregate revenue and assets of
the Company and its Consolidated Subsidiaries.
10.10. RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS; ACQUISITIONS.
(a) RESTRICTED PAYMENTS. Neither Issuer will, and neither Issuer
will permit any Subsidiary to, at any time, declare or make, or incur any
liability to declare or make, any Restricted Payment (other than (i)
Distributions payable by the Company solely in shares of any class of its
capital stock; provided, that prior to, and immediately after giving
effect to any such Distribution, no Default or Event of Default exists,
and (ii) Restricted Payments made by any Subsidiary to either of the
Issuers or any other Subsidiary (other than a Dormant Company) so long as
Restricted Payments may only be made to an Obligor during the existence of
a Default or an Event of Default), unless immediately after giving effect
to such actions the aggregate amount of all Restricted Payments of the
Company and the
-37-
Subsidiaries declared or made during the current Fiscal Year would not exceed
100% of Consolidated Net Income (if greater than $0) for the immediately
preceding Fiscal Year and no Default or Event of Default would exist.
(b) RESTRICTED INVESTMENTS; ACQUISITIONS. Neither Issuer will, and neither
Issuer will permit any Subsidiary to, make or authorize any Restricted
Investment or consummate any Acquisition; provided, that the following
Restricted Investments and Acquisitions are permitted:
(i) Guaranties; provided, that the aggregate principal amount of
Indebtedness of Subsidiaries that are not Guarantors that is Guarantied by
either of the Issuers or any Guarantor shall be subject to the limitations
set forth in clause (iii) hereof;
(ii) Investments made by any Consolidated Subsidiary (other than a
Dormant Company) in either of the Issuers or any Guarantor;
(iii) Investments made by either Issuer in the form of Indebtedness
owed by any Consolidated Subsidiary to either Issuer and Guaranties by
either Issuer of Indebtedness of any Consolidated Subsidiary; provided,
that (A) the aggregate amount of Investments (determined at book value
(except for Guaranties) without giving effect to any consolidation of
accounts) by the Issuers in Indebtedness of any Consolidated Subsidiary
(including by means of Guaranties thereof which shall be valued at the
amount of their maximum contingent obligation) that is not a Guarantor
(excluding Investments existing on the date of the Closing and which are
identified on Schedule 10.10 hereto) shall not exceed an amount equal to
15% of Consolidated Net Worth (determined as of the end of the then most
recently ended fiscal quarter of the Company at the time of any such
Investment) in any period of 12 consecutive months and not more than 50%
of Consolidated Net Worth (determined as of the end of the then most
recently ended fiscal quarter of the Company at any time of determination)
in the aggregate subsequent to the date of the Closing and (B) the
aggregate amount of Investments (determined at book value (except for
Guaranties) without giving effect to any consolidation of accounts) by the
Issuers in Indebtedness of any single Consolidated Subsidiary (including
by means of Guaranties thereof which shall be valued at the amount of
their maximum contingent obligation) that is not a Guarantor (excluding
Investments existing on the date of the Closing and which are identified
on Schedule 10.10 hereto) shall not exceed at any time $10,000,000;
-38-
(iv) loans or advances to employees, officers or directors of either
Issuer or any Consolidated Subsidiary (other than a Dormant Company) in
the ordinary course of business for travel, relocation and other business
related expenses;
(v) Investments permitted by Section 10.12;
(vi) Permitted Investments;
(vii) Permitted Acquisitions;
(viii) other Investments existing on the date of the Closing and set
forth on Schedule 10.10 (including Investments in Consolidated
Subsidiaries); provided, that any Investment set forth on Schedule 10.10
consisting of Indebtedness owing by a Subsidiary that is not an Obligor to
any Obligor or any other Consolidated Subsidiary may not be reborrowed
after repayment;
(ix) Investments in joint ventures that are not Subsidiaries made
after the date of the Closing; provided, that (A) no Default or Event of
Default shall exist prior to or after giving effect to such Investment and
(B) the total amount of all Investments (determined at book value) made
under this clause (ix) during the preceding 12 month period, when
aggregated with such Investment, does not exceed the lesser of (1)
$5,000,000 and (2) the result (if positive) of 10% of Consolidated Net
Worth (determined as of the end of the then most recently ended fiscal
quarter of the Company) minus the aggregate amount of Total Acquisition
Consideration of all Acquisitions consummated by the Issuers and the
Consolidated Subsidiaries during such preceding 12 month period; and
(x) other Investments in and to any Domestic Subsidiary that is an
Obligor (other than a Dormant Company).
10.11. LIMITATIONS ON CERTAIN SUBSIDIARY ACTIONS.
Neither Issuer will, and neither Issuer will permit any Subsidiary to, be
a party to any contract, agreement or business arrangement that restricts or
limits in any manner, or incur or permit to exist any restriction (other than
customary restrictions imposed by corporate law) on, any Subsidiary's ability to
(i) create, incur or permit any Lien upon any of its assets or properties,
whether now owned or hereafter acquired, (ii) pay dividends or make other
Distributions on or with respect to its capital stock to either of the Issuers
or any Subsidiary, (iii) pay any Debt or other obligations owing to either of
the Issuers or any Subsidiary or (iv) transfer
-39-
property to either of the Issuers or any Subsidiary, except for such limitations
or restrictions existing under or by reason of:
(a) applicable law;
(b) the Financing Documents or the Bank Credit Agreement or those
agreements in the form existing on the date of the Closing and listed on
Schedule 10.11;
(c) customary restrictions and conditions of any contract relating
to the Transfer of any Subsidiary permitted by this Agreement or any lease
governing a leasehold interest of any Subsidiary; or
(d) Liens permitted by Section 10.3.
10.12. HEDGING ARRANGEMENTS.
Neither Issuer will, and neither Issuer will permit any Subsidiary to,
enter into any Swap, commodity, foreign exchange risk, currency risk, or other
hedging or risk protection arrangements which are for speculative purposes or
which are not effected in the ordinary course of business of such Issuer or such
Subsidiary.
10.13. ACCOUNTING CHANGES; CHANGE OF FISCAL YEAR.
Neither Issuer will, and neither Issuer will permit any Subsidiary to,
change its fiscal year end or make any significant change in accounting
treatment or reporting practices, except as permitted or required by GAAP or as
required by applicable law.
10.14. MINIMUM CASH.
At all times prior to the DOJ Settlement Payment, the Issuers will not, at
any time, permit cash on hand to be less than $10,000,000 less any amount paid
in satisfaction of the DOJ Settlement Payment.
10.15. LITIGATION.
Neither Issuer will, and neither Issuer will permit any Subsidiary to,
settle or compromise, or enter into any agreement to settle or compromise, any
pending or threatened suit, investigation, cause of action or other proceeding
described in Schedule 5.8 with any Person or Governmental Authority, as to any
single or related series of claims, involving payment by an Obligor or a
Consolidated Subsidiary (or a group of them) of $10,000,000 or more, without
obtaining the prior written consent of the Required Holders.
-40-
10.16. AMENDMENTS TO ORGANIZATIONAL DOCUMENTS.
Neither Issuer will, and neither Issuer will permit any Subsidiary to,
amend, modify or waive any of its rights in a manner materially adverse to the
holders of Notes under its articles or certificate of incorporation, bylaws or
other organizational documents.
10.17. NO LIMITATION ON PREPAYMENTS OR AMENDMENTS TO CERTAIN FINANCING
DOCUMENTS.
Neither Issuer will, and neither Issuer will permit any Subsidiary to, be
a party to any agreement or instrument limiting its rights (a) to make payments
or prepayments on the Notes, whether optional or mandatory, under this Agreement
or (b) to amend or waive any term or provision of this Agreement, the Notes or
the Guaranty Agreement.
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) either Issuer defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) either Issuer defaults in the payment of any interest on any
Note for more than three Business Days after the same becomes due and
payable; or
(c) either Issuer defaults in the performance of or compliance with
any term contained in Sections 7.1, 7.2, 9.6, 9.10 and 10; or
(d) either of the Issuers or any Subsidiary defaults in the
performance of or compliance with any term contained herein (other than
those referred to in paragraphs (a), (b) and (c) of this Section 11) or in
any other Financing Document (other than the Sharing Agreement) and such
default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and (ii)
the Company receiving written notice of such default from any holder of a
Note (any such written notice to be identified as a "notice of default"
and to refer specifically to this paragraph (d) of Section 11); or
-41-
(e) any representation or warranty made in writing by or on behalf
of any Obligor or any other Subsidiary or by any officer of any Obligor in
this Agreement or any other Financing Documents or in any writing
furnished in connection with the transactions contemplated hereby proves
to have been false or incorrect in any material respect on the date as of
which made; or
(f) (i) any Obligor or any other Consolidated Subsidiary is in
default (as principal or as guarantor or other surety) in the payment of
any principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at
least $5,000,000 (or its equivalent) beyond any period of grace provided
with respect thereto, or (ii) any Obligor or any other Consolidated
Subsidiary is in default in the performance of or compliance with any term
of any evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $5,000,000 (or its equivalent) or of any mortgage,
indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its
stated maturity or before its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x) any
Obligor or any other Consolidated Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before its
regularly scheduled dates of payment in an aggregate outstanding principal
amount of at least $5,000,000 (or its equivalent), or (y) one or more
Persons have the right to require an Obligor or any other Consolidated
Subsidiary so to purchase or repay such Indebtedness; or
(g) any Obligor or any Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due, (ii)
files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition
in bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect to
any substantial part of its property, (v) is adjudicated as bankrupt or
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
-42-
(h) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by any Obligor or any
Subsidiary, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property (or any such Person is appointed by one or more creditors of any
Obligor or any Subsidiary), or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency, law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of any Obligor or any Subsidiary, or any such
petition shall be filed against any Obligor or any Subsidiary and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $10,000,000 (or its equivalent) are rendered
against one or more of the Obligors or any other Consolidated Subsidiary
and which judgments are not, within 30 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 30 days
after the expiration of such stay; or
(j) any non-monetary judgment shall have been rendered against any
Obligor or other Consolidated Subsidiary that could reasonably be expected
to have a Material Adverse Effect and there shall be a period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(k) any Financing Document shall for any reason cease to be valid
and binding on, or enforceable against, any Obligor that is a party
thereto or any Obligor shall so state in writing, or any Obligor or other
Person shall challenge the validity of or seek to terminate any Financing
Document or any provision of this Agreement or the Notes; or
(l) any Obligor or any other Consolidated Subsidiary is enjoined,
restrained or in any way prevented by the order of any Governmental
Authority from conducting all or a material part of its business and such
order continues for more than 30 days; or
(m) a Change in Control shall occur or exist; or
(n) an "Event of Default" under and as defined in the Bank Credit
Agreement shall have occurred; or
(o) if (i) any US Plan shall fail to satisfy the minimum funding
standards of ERISA or the US Tax Code for any plan year or part thereof or
a waiver of such standards or extension of any amortization period is
sought or
-43-
granted under section 412 of the US Tax Code, (ii) a notice of intent to
terminate any US Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA section 4042 to terminate or appoint a trustee to administer any US
Plan or the PBGC shall have notified the Company or any ERISA Affiliate
that a US Plan may become a subject of any such proceedings, (iii) there
shall exist with respect to any US Plan an "accumulated funding
deficiency" (as defined in section 412 of the US Tax Code or section 302
of ERISA, (iv) the Company or any ERISA Affiliate shall have incurred or
is reasonably expected to incur any liability pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the US Tax Code relating
to employee benefit plans, or (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan; and any such event or events
described in clauses (i) through (v) above, either individually or
together with any other such event or events, could reasonably be expected
to have a Material Adverse Effect.
As used in Section 11(o), the term "EMPLOYEE BENEFIT PLAN" shall have the
meaning assigned to such term in section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. ACCELERATION.
(a) If an Event of Default described in paragraph (g) or (h) of
Section 11 (other than an Event of Default described in clause (i) of
paragraph (g) or described in clause (vi) of paragraph (g) by virtue of
the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become
immediately due and payable.
(b) If any other Event of Default has occurred and is continuing,
the Required Holders may at any time at its or their option, by notice or
notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes
at the time outstanding affected by such Event of Default may at any time,
at its or their option, by notice or notices to the Company, declare all
the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
-44-
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. Each of the Issuers
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Issuers
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Issuers in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3. RESCISSION.
At any time after any Notes have been declared due and payable pursuant to
clause (b) or (c) of Section 12.1, the Required Holders, by written notice to
the Company, may rescind and annul any such declaration and its consequences if
(a) the Issuers have paid all overdue interest on the Notes, all principal of
and Make-Whole Amount, if any, on any Notes that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy
-45-
conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Issuers under Section 15, the Issuers will pay
to the holder of each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
The Issuers shall keep at the Company's principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Issuers shall not be
affected by any notice or knowledge to the contrary. The Issuers shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Issuers shall
execute and deliver, at the Issuers' expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Issuers may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $100,000 and there shall be no more
than twenty-five holders of Notes at any time, provided that any group of two or
more holders whose investments in the Notes are managed by the same Person
-46-
shall be deemed to be one holder of Notes solely for purposes of determining
whether such limitation on the number of holders has been exceeded, provided
further that if necessary to enable the registration of transfer by a holder of
its entire holding of Notes, one Note may be in a denomination of less than
$100,000. Subject to the provisions of this Section 13.2, any Purchaser may
transfer or exchange any Note if, in the case of a transfer, the representations
set forth in Section 6.1 (except that a transferee shall not be deemed to have
made the representation that its purchase of such Notes is not with a view to
distribution thereof) and Section 6.2 are true and correct, with the word
"Purchaser" used in such section referring to the transferee. The Company shall
not be obligated to register a transfer of Notes pursuant to this Section 13.2
if the transferee has given notice to the Company of the names of employee
benefit plans pursuant to Section 6.2(c) or Section 6.2(g) and the Company has
determined that an acquisition of Notes by the insurance company pooled separate
account or bank collective investment fund in which such employee benefit plans
have an interest, or by the employee benefit plan disclosed pursuant to Section
6.2(g), is reasonably likely to result in a transaction prohibited by section
406 of ERISA, provided that the Company gives notice of such determination to
the registered holder of such Notes and the proposed transferee within 5
Business Days after delivery to the Company of such notice setting forth the
names of the relevant employee benefit plans and a brief written description of
the prohibited transaction that the Company has determined is reasonably likely
to result from such transfer.
13.3. REPLACEMENT OF NOTES.
Upon receipt by the Issuers of evidence reasonably satisfactory to them of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a Note
with a minimum net worth of at least $50,000,000, such Person's own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Issuers at their own expense shall execute and deliver, in lieu thereof, a
new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date of
such lost, stolen, destroyed or mutilated Note if no interest shall have been
paid thereon.
-47-
14. PAYMENTS ON NOTES.
14.1. PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if any,
and interest becoming due and payable on the Notes shall be made in Atlanta,
Georgia at the principal office of the Company in such jurisdiction. The Company
may at any time, by notice to each holder of a Note, change the place of payment
of the Notes so long as such place of payment shall be either the principal
office of the Company in such jurisdiction or the principal office of a bank or
trust company in such jurisdiction.
14.2. HOME OFFICE PAYMENT.
So long as any Purchaser or its nominee shall be the holder of any Note,
and notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Issuers will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below each Purchaser's name in Schedule A, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Issuers made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by it pursuant to Section 14.1. Prior
to any sale or other disposition of any Note held by any Purchaser or its
nominee such Purchaser will, at its election, either endorse thereon the amount
of principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Issuers in exchange for a new Note or
Notes pursuant to Section 13.2. The Issuers will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by any Purchaser under this Agreement and that
has made the same agreement relating to such Note as such Purchaser has made in
this Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated, the
Issuers will pay all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by each Purchaser or
holder of a Note in
-48-
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or any other Financing
Document (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement or any other Financing Document or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or any other Financing Document, or by reason of
being a holder of any Note, and (b) the costs and expenses, including, without
limitation, financial advisors' and accountants' fees, incurred in connection
with the insolvency or bankruptcy of either of the Issuers or any Subsidiary or
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Issuers will pay, and will save each
Purchaser and each other holder of a Note harmless from, all claims in respect
of any fees, costs or expenses if any, of brokers and finders (other than those
retained by any Purchaser).
The Issuers will promptly pay or reimburse each Purchaser or holder of a
Note (upon demand, in accordance with each such Purchaser's or holder's written
instructions) for all fees and costs paid or payable by such Purchaser or holder
to the SVO in connection with the initial filing of this Agreement and all
related documents and financial information, and all subsequent annual and
interim filings of documents and financial information related to this
Agreement, with the SVO or any successor organization acceding to the authority
thereof.
15.2. SURVIVAL.
The joint and several obligations of the Issuers under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or any other Financing Document, and
the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement, the Notes and the other Financing
Documents, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon
by any subsequent holder of a Note, regardless of any investigation made at any
time by or on behalf of such Purchaser or any other holder of a Note. All
statements contained in any certificate or other instrument delivered by or on
behalf of any Obligor pursuant to any Financing Document shall be deemed
representations and warranties of the Issuers under this Agreement. Subject to
the preceding sentence, this Agreement and the other Financing Documents embody
the entire agreement
-49-
and understanding among each Purchaser and the Obligors and supersede all prior
agreements and understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Issuers and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Sections 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to each Purchaser unless consented to by
each Purchaser in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or change the rate or the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Issuers will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is
required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The Issuers will
deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. Neither Issuer will directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes
as consideration for or as an inducement to the entering into by any
holder of Notes or any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each
holder of Notes then outstanding even if such holder did not consent to
such waiver or amendment.
-50-
17.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon each of the Issuers without regard to whether
such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between either Issuer and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "THIS AGREEMENT" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
17.4. NOTES HELD BY THE ISSUERS, ETC.
Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by either of the Issuers or any
of its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (i) by telecopy if the sender on the same day sends a confirming copy
of such notice by a nationally recognized overnight delivery service (charges
prepaid), or (ii) by registered or certified mail with return receipt requested
(postage prepaid), or (iii) by a nationally recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(a) if to a Purchaser or its nominee, to such Purchaser or its
nominee at the address specified for such communications in Schedule A, or
at such other address as such Purchaser or its nominee shall have
specified to the Issuers in writing,
(b) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(c) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of ▇▇▇ ▇▇▇▇▇▇▇▇ at fax number
404-845-
-51-
3127, or at such other address as the Company shall have specified to the
holder of each Note in writing; or
(d) if to the Co-Issuer, to the Co-Issuer at the address specified
in clause (c) above (or such other address as the Co-Issuer shall have
specified to the holder of each Note in writing).
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) Financing Documents and documents received by each Purchaser at
the Closing (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to each
Purchaser, may be reproduced by each Purchaser by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process and each
Purchaser may destroy any original document so reproduced. The Issuers agree and
stipulate that, to the extent permitted by applicable law, any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by each Purchaser in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Issuers or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to any Purchaser by or on behalf of either of the Issuers
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
such Purchaser as being confidential information of the Issuers or such
Subsidiary, provided that such term does not include information that (a) was
publicly known or otherwise known to such Purchaser prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by such Purchaser or any Person acting on its behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by the Issuers or any
Subsidiary or (d) constitutes financial statements delivered to such Purchaser
under Section 7.1 that are otherwise publicly available. Each Purchaser will
maintain the confidentiality
-52-
of such Confidential Information in accordance with procedures adopted by such
Purchaser in good faith to protect confidential information of third parties
delivered to it, provided that such Purchaser may deliver or disclose
Confidential Information to (i) its directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by its Notes), (ii) its
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which such Purchaser sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which such Purchaser offers
to purchase any Security of either Issuer (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser's investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to such Purchaser, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which such Purchaser is a party or (z) if an Event of Default has
occurred and is continuing, to the extent such Purchaser may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under such
Purchaser's Notes and this Agreement. Each holder of a Note, by its acceptance
of a Note, will be deemed to have agreed to be bound by and to be entitled to
the benefits of this Section 20 as though it were a party to this Agreement. On
reasonable request by the Issuers in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an agreement with
the Issuers embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute, prior to the Closing,
any one of its Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Issuers, which notice
shall be signed by such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6 as to such Affiliates and an affirmation
of the acknowledgment contained in such Notes. Upon
-53-
receipt of such notice, wherever the word "Purchaser" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of such original Purchaser. In the event that such Affiliate
is so substituted as a purchaser hereunder and such Affiliate thereafter
transfers to such Purchaser all of the Notes then held by such Affiliate in
accordance with Section 13.2, upon the effectiveness of such transfer, wherever
the word "Purchaser" is used in this Agreement (other than in this Section 21),
such word shall no longer be deemed to refer to such Affiliate, but shall refer
to the original Purchaser, and such Purchaser shall have all the rights of an
original holder of the Notes under this Agreement.
22. MISCELLANEOUS.
22.1. SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary notwithstanding,
any payment of principal of or Make-Whole Amount or interest on any Note that is
due on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.
22.3. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4. CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is
-54-
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
22.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6. JURISDICTION; SERVICE OF PROCESS.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY NOTE OR OTHER
FINANCING DOCUMENT, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE
ANY JUDGMENT IN RESPECT OF ANY BREACH THEREOF, BROUGHT BY ANY HOLDER OF A NOTE
AGAINST ANY OBLIGOR OR ANY OF ITS PROPERTY, MAY BE BROUGHT BY SUCH HOLDER OF A
NOTE IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
OR ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN AS SUCH HOLDER
OF A NOTE MAY IN ITS SOLE DISCRETION ELECT, AND, BY THE EXECUTION AND DELIVERY
OF THIS AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE
JURISDICTION OF EACH SUCH COURT; AND AGREES THAT PROCESS SERVED EITHER
PERSONALLY OR BY REGISTERED MAIL SHALL, TO THE EXTENT PERMITTED BY LAW,
CONSTITUTE ADEQUATE SERVICE OF PROCESS IN ANY SUCH SUIT. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY NOTE OR OTHER
FINANCING DOCUMENT BROUGHT IN THE SAID COURTS, AND HEREBY IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED
TO LIMIT THE ABILITY OF ANY HOLDER OF A NOTE TO SERVE ANY SUCH WRITS, PROCESS OR
SUMMONSES, IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION
OVER THE ISSUERS, IN SUCH OTHER JURISDICTION, AND IN SUCH MANNER, AS MAY BE
PERMITTED BY APPLICABLE LAW.
-55-
22.7. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
22.8. WAIVER OF TRIAL BY JURY.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT,
THE NOTES, THE FINANCING DOCUMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION
HEREWITH OR THEREWITH.
[Remainder of page intentionally left blank; next page is signature page.]
-56-
If each Purchaser is in agreement with the foregoing please sign the form
of agreement on the accompanying counterpart of this Agreement and return it to
the Issuers, whereupon the foregoing shall become a binding agreement between
the Purchasers and the Issuers.
Very truly yours,
▇▇▇▇▇▇▇▇ & COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇▇▇▇ & COMPANY INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
-1-
The foregoing is hereby
agreed to as of the
date thereof.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
RGA REINSURANCE COMPANY
RELIASTAR LIFE INSURANCE COMPANY
BY: PRUDENTIAL PRIVATE PLACEMENT INVESTORS, L.P.,
AS INVESTMENT ADVISOR
BY: PRUDENTIAL PRIVATE PLACEMENT INVESTORS, INC.,
GENERAL PARTNER
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
-2-
SCHEDULE A
PURCHASER NAME THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
-------------- -------------------------------------------
Name in Which Notes are to be Registered THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
Note Registration Number; Principal Amount R-1; $20,782,000
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Bank of New York
New York, New York
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No. ____________
Re: (see "Accompanying Information" below)
Accompanying Information Names of Issuers: ▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY
INTERNATIONAL, INC.
Description of 6.08% Senior Guarantied Notes
Security: Due October 10, 2010
PPN: 22464# AA 7
Accompanying Due Date and Application (as among
Information: principal, Make-Whole Amount and
interest) of the payment being made
Address for Notices Related to Payments The Prudential Insurance Company of America
c/o Prudential Investment Management, Operations & Systems
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, ▇▇▇▇▇▇▇▇ and Collections
For telephonic prepayment notices:
Manager, Trade Management Group
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Address for All Other Notices (including The Prudential Insurance Company of America
copies of all notices relating to payments) c/o Prudential Capital Group
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Managing Director
Schedule A-1
PURCHASER NAME THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
-------------- -------------------------------------------
Signature Block THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: __________________________________
Instructions re Delivery of Notes The Prudential Insurance Company of America
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Tax Identification Number ▇▇-▇▇▇▇▇▇▇
Schedule A-2
PURCHASER NAME THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
-------------- -------------------------------------------
Name in Which Notes are to be Registered THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
Note Registration Number; Principal Amount R-2; $9,650,000
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Bank of New York
New York, New York
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No. ____________
Re: (see "Accompanying Information" below)
Accompanying Information Names of Issuers: ▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY
INTERNATIONAL, INC.
Description of 6.08% Senior Guarantied Notes
Security: Due October 10, 2010
PPN: 22464# AA 7
Accompanying Due Date and Application (as among
Information: principal, Make-Whole Amount and interest)
of the payment being made
Address for Notices Related to Payments The Prudential Insurance Company of America
c/o Prudential Investment Management, Operations & Systems
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, ▇▇▇▇▇▇▇▇ and Collections
For telephonic prepayment notices:
Manager, Trade Management Group
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Address for All Other Notices (including The Prudential Insurance Company of America
copies of all notices relating to payments) c/o Prudential Capital Group
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Managing Director
Signature Block THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: __________________________________
Schedule A-3
PURCHASER NAME THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
-------------- -------------------------------------------
Instructions re Delivery of Notes The Prudential Insurance Company of America
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Tax Identification Number ▇▇-▇▇▇▇▇▇▇
Schedule A-4
PURCHASER NAME PRUCO LIFE INSURANCE COMPANY
-------------- ----------------------------
Name in Which Notes are to be Registered PRUCO LIFE INSURANCE COMPANY
Note Registration Number; Principal Amount R-3; $3,218,000
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Bank of New York
New York, New York
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No. ____________
Re: (see "Accompanying Information" below)
Accompanying Information Names of Issuers: ▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY
INTERNATIONAL, INC.
Description of 6.08% Senior Guarantied Notes
Security: Due October 10, 2010
PPN: 22464# AA 7
Accompanying Due Date and Application (as among
Information: principal, Make-Whole Amount and
interest) of the payment being made
Address for Notices Related to Payments Pruco Life Insurance Company
c/o Prudential Investment Management, Operations & Systems
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, ▇▇▇▇▇▇▇▇ and Collections
For telephonic prepayment notices:
Manager, Trade Management Group
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Address for All Other Notices (including The Prudential Insurance Company of America
copies of all notices relating to payments) c/o Prudential Capital Group
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Managing Director
Signature Block PRUCO LIFE INSURANCE COMPANY
By: __________________________________
Schedule A-5
PURCHASER NAME PRUCO LIFE INSURANCE COMPANY
-------------- ----------------------------
Instructions re Delivery of Notes The Prudential Insurance Company of America
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Tax Identification Number ▇▇-▇▇▇▇▇▇▇
Schedule A-6
PURCHASER NAME PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
-------------- ------------------------------------------
Name in Which Notes are to be Registered PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Note Registration Number; Principal Amount R-4; $1,000,000
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Bank of New York
New York, New York
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No. ____________
Re: (see "Accompanying Information" below)
Accompanying Information Names of Issuers: ▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY
INTERNATIONAL, INC.
Description of 6.08% Senior Guarantied Notes
Security: Due October 10, 2010
PPN: 22464# AA 7
Accompanying Due Date and Application (as among
Information: principal, Make-Whole Amount and
interest) of the payment being made
Address for Notices Related to Payments Pruco Life Insurance Company of New Jersey
c/o Prudential Investment Management, Operations & Systems
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, ▇▇▇▇▇▇▇▇ and Collections
For telephonic prepayment notices:
Manager, Trade Management Group
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Address for All Other Notices (including The Prudential Insurance Company of America
copies of all notices relating to payments) c/o Prudential Capital Group
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Managing Director
Signature Block PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
By: __________________________________
Schedule A-7
PURCHASER NAME PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
-------------- ------------------------------------------
Instructions re Delivery of Notes The Prudential Insurance Company of America
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Tax Identification Number ▇▇-▇▇▇▇▇▇▇
Schedule A-8
PURCHASER NAME RGA REINSURANCE COMPANY
-------------- -----------------------
Name in Which Notes are to be Registered HARE & CO.
Note Registration Number; Principal Amount R-5; $8,100,000
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Bank of New York
New York, New York
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No. ______ RGA Private Placement Account
Re: (see "Accompanying Information" below)
Accompanying Information Names of Issuers: ▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY
INTERNATIONAL, INC.
Description of 6.08% Senior Guarantied Notes
Security: Due October 10, 2010
PPN: 22464# AA 7
Accompanying Due Date and Application (as among
Information: principal, Make-Whole Amount and
interest) of the payment being made
Address for Notices Related to Payments RGA Reinsurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Banking Department
Address for All Other Notices Prudential Private Placement Investors, L.P.
Gateway Center Four
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, Senior Vice President
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Signature Block RGA REINSURANCE COMPANY
By: Prudential Private Placement Investors, L.P.,
As Investment Advisor
By: Prudential Private Placement Investors,
Inc., General Partner
By: __________________________________
Instructions re Delivery of Notes The Prudential Insurance Company of America
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Schedule A-9
PURCHASER NAME RGA REINSURANCE COMPANY
-------------- -----------------------
Tax Identification Number ▇▇-▇▇▇▇▇▇▇
Schedule A-10
PURCHASER NAME RELIASTAR LIFE INSURANCE COMPANY
-------------- --------------------------------
Name in Which Notes are to be Registered RELIASTAR LIFE INSURANCE COMPANY
Note Registration Number; Principal Amount R-6; $7,250,000
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Bank of New York
New York, New York
ABA No.: ▇▇▇-▇▇▇-▇▇▇
IOC566 - Inst'l Custody
Ref: ReliaStar Life Insurance Company, Account No. ______
and "Accompanying Information" below.
Accompanying Information Names of Issuers: ▇▇▇▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇ & COMPANY
INTERNATIONAL, INC.
Description of 6.08% Senior Guarantied Notes
Security: Due October 10, 2010
PPN: 22464# AA 7
Accompanying Due Date and Application (as among
Information: principal, Make-Whole Amount and
interest) of the payment being made
Address for Notices Related to Payments ING Investment Management LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Securities Accounting
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Address for All Other Notices (including Prudential Private Placement Investors, L.P.
copies of all notices relating to payments) Gateway Center Four
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, Senior Vice President
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Signature Block RELIASTAR LIFE INSURANCE COMPANY
By: Prudential Private Placement Investors, L.P.,
As Investment Advisor
By: Prudential Private Placement Investors,
Inc., General Partner
By: __________________________________
Schedule A-11
PURCHASER NAME RELIASTAR LIFE INSURANCE COMPANY
-------------- --------------------------------
Instructions re Delivery of Notes The Prudential Insurance Company of America
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Tax Identification Number ▇▇-▇▇▇▇▇▇▇
Schedule A-12
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"ACQUISITION" means any acquisition, whether by cash, stock (or other
equity purchase), asset purchase, merger, consolidation or otherwise of a
Person, all or substantially all of the property of a Person or a business line
or division of a Person.
"AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of either
of the Issuers or any Subsidiary or any Person of which one or more of the
Issuers and the Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests.
As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of an Issuer.
"AGENT" means SunTrust Bank or its successors or assigns acting as
administrative agent for all lenders under the Bank Credit Agreement.
"AGREEMENT, THIS" is defined in Section 17.3.
"APPLICABLE PLEDGE AMOUNT" means, in respect of the amount of capital
stock or other equity interest of any Foreign Subsidiary to be pledged to the
Agent, for the benefit of the holders of Notes, pursuant to the Pledge
Agreement, the lesser of (a) 65% of all outstanding capital stock or other
equity interest of such Foreign Subsidiary and (b) the total amount of all
outstanding capital stock or other equity interest of such Foreign Subsidiary
owned by the Issuers and their other Subsidiaries.
"ASSET DISPOSITION" means any Transfer (including, without limitation, a
Transfer in connection with a Sale and Leaseback Transaction) except:
(a) any
Schedule B-1
(i) Transfer from a Subsidiary to an Issuer or a Wholly-Owned
Subsidiary (other than a Dormant Company);
(ii) Transfer from an Issuer to a Wholly-Owned Subsidiary (other
than a Dormant Company) ; and
(iii) Transfer from an Issuer to a Subsidiary (other than a
Wholly-Owned Subsidiary that is not a Dormant Company) or from a
Subsidiary to another Subsidiary (other than a Dormant Company), which in
either case is for Fair Market Value,
so long as immediately before and immediately after the consummation of any such
Transfer and after giving effect thereto, no Default or Event of Default exists;
and
(b) any Transfer made in the ordinary course of business and involving
only property that is either (i) inventory held for sale or (ii) equipment,
fixtures, supplies or materials of a type no longer required in the operation of
the business of an Issuer or any Subsidiary or that are obsolete.
"ATTRIBUTABLE DEBT" means as to any particular lease relating to a Sale
and Leaseback Transaction, the greater of (a) the present value of all Lease
Rentals required to be paid by the Company or any Subsidiary under such lease
during the remaining term thereof (determined in accordance with generally
accepted financial practice using a discount factor equal to the interest rate
implicit in such lease if known or, if not known, of 8% per annum) and (b) the
Fair Market Value of the property subject to such Sale and Leaseback Transaction
as determined at the time of consummation of such Sale and Leaseback
Transaction.
"BANK CREDIT AGREEMENT" means the Revolving Credit Agreement by and among
the Company and the Co-Issuer as borrowers, the Agent and the various lenders
party thereto, dated the date of the Closing, as amended from time to time,
together with all agreements and documents related thereto as the same may be
refinanced or refunded from time to time in accordance with the provisions
thereof and hereof (except that "Bank Credit Agreement" shall mean the Revolving
Credit Agreement in effect on the date of the Closing where so specified).
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Atlanta, Georgia or New York, New York are
required or authorized to be closed.
Schedule B-2
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a liability on a
balance sheet of such Person.
"CHANGE IN CONTROL" means the occurrence of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in a single transaction
or a series of related transactions) of all or substantially all of the assets
of the Company to any Person or "group" (within the meaning of the Exchange Act
and the rules of the Securities and Exchange Commission from time to time issued
thereunder); (b) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or "group" (as defined immediately
above) of 30% or more of the outstanding shares of the voting stock of the
Company; (c) the Company ceases to own 100% of the outstanding capital stock of
the Co-Issuer; or (d) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Company by persons who were neither (i)
nominated by the then current board of directors or (ii) appointed by directors
so nominated.
"CLOSING" is defined in Section 3.
"CO-ISSUER" is defined in the introductory paragraph of this Agreement.
"COMPANY" is defined in the introductory paragraph of this Agreement.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED EBITDA" means, for any period, the sum of:
(a) Consolidated Net Income for such period; plus
(b) to the extent, and only to the extent, that such amount was deducted
in the computation of Consolidated Net Income for such period, the amount of:
(i) Consolidated Interest Expense for such period;
(ii) with respect to the pending litigation involving the Department
of Justice as described in Schedule 5.8, any non-recurring charges related
to the costs and settlement of such litigation (including the DOJ
Settlement Payment), provided that the amount added back to Consolidated
Net Income
Schedule B-3
subsequent to the date of the Closing pursuant to this clause (ii) does
not exceed $10,000,000 (or its equivalent);
(iii) income tax expense, depreciation expense and amortization
expense of the Issuers and their Consolidated Subsidiaries, in each case,
for such period; and
(iv) other non-cash charges as approved by the Required Holders
(including, if so approved, non-cash charges for such period taken for the
impairment of goodwill in accordance with Statement of Financial
Accounting Standards No. 142 "Goodwill and Other Intangible Assets" issued
by the Financial Accounting Standards Board) minus
(c) all software costs that are capitalized in respect of such period
(other than software purchased or acquired from software vendors),
in each case determined on a consolidated basis in accordance with GAAP for such
period.
"CONSOLIDATED EBITR" means, for any period, the sum of:
(a) Consolidated Net Income for such period; plus
(b) to the extent, and only to the extent, that such amount was deducted
in the computation of Consolidated Net Income for such period, the amount of:
(i) Consolidated Interest Expense for such period;
(ii) with respect to the pending litigation involving the Department
of Justice as described in Schedule 5.8, any non-recurring charges related
to the costs and settlement of such litigation (including the DOJ
Settlement Payment), provided that the amount added back to Consolidated
Net Income subsequent to the date of the Closing pursuant to this clause
(ii) does not exceed $10,000,000 (or its equivalent);
(iii) income tax expense of the Issuers and their Consolidated
Subsidiaries, in each case, for such period;
(iv) Consolidated Lease Expense for such period; and
(v) other non-cash charges as approved by the Required Holders
(including, if so approved, non-cash charges for such period taken for the
impairment of goodwill in accordance with Statement of Financial
Schedule B-4
Accounting Standards No. 142 "Goodwill and Other Intangible Assets" issued
by the Financial Accounting Standards Board) minus
(c) all software costs that are capitalized in respect of such period
(other than software purchased or acquired from software vendors),
in each case determined on a consolidated basis in accordance with GAAP
for such period.
"CONSOLIDATED FUNDED DEBT" means, as of any date of determination, the
total of all Indebtedness of the Issuers and their Consolidated Subsidiaries
outstanding on such date, after eliminating all offsetting debits and credits
between the Issuers and their Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial statements
of the Issuers and their Subsidiaries in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for the Issuers and their
Consolidated Subsidiaries, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Issuers and their Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Issuers and their Consolidated Subsidiaries in
accordance with GAAP): (a) all interest paid in cash in respect of Debt of the
Issuers and their Subsidiaries (including, however, imputed interest on Capital
Lease Obligations whether paid in cash or capitalized or expensed during such
period) and (b) the net amount payable (or minus the net amount receivable)
under Swaps during such period (whether or not actually paid or received during
such period).
"CONSOLIDATED LEASE EXPENSE" means, for the Issuers and their Consolidated
Subsidiaries, with respect to any period, the sum of the fixed and contingent
Lease Rentals determined on a consolidated basis in accordance with GAAP for
such period, provided that, if at the date of determination, any such rental or
other obligations (or portion thereof) are contingent or not otherwise
definitely determinable by the terms of the related lease, the amount of such
obligations (or such portion thereof) (a) shall be assumed to be equal to the
amount of such obligations for the period of 12 consecutive calendar months
immediately preceding the date of determination or (b) if the related lease was
not in effect during such preceding 12-month period, shall be the amount
estimated by a Senior Financial Officer on a reasonable basis and in good faith.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Issuers and their Consolidated Subsidiaries for such
period (taken as a cumulative whole), as determined in accordance with GAAP,
after
Schedule B-5
eliminating all offsetting debits and credits between the Issuers and their
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Issuers and their
Subsidiaries in accordance with GAAP, provided that there shall be excluded (to
the extent otherwise included therein):
(a) any extraordinary gains or losses,
(b) any gains resulting from any write-up of any assets (but not any loss
resulting from any write-down of any assets),
(c) the income (or loss) of any Person (other than a Subsidiary) in which
the Issuers or any Consolidated Subsidiary has an ownership interest, except to
the extent that any such income has been actually received by either of the
Issuers or such Consolidated Subsidiary in the form of cash dividends or similar
cash distributions,
(d) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with an Issuer or a
Subsidiary, and the income (or loss) of any Person, substantially all of the
assets of which have been acquired in any manner, realized by such other Person
prior to the date of acquisition, and
(e) the undistributed earnings of any Subsidiary (other than any
Guarantor) to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Subsidiary.
"CONSOLIDATED NET WORTH" means, at any time,
(a) the sum of (i) the par value (or value stated on the books of the
corporation) of the capital stock (but excluding treasury stock and capital
stock subscribed and unissued) of the Company and the Subsidiaries plus (ii) the
amount of the paid-in capital and retained earnings of the Company and the
Subsidiaries, in each case as such amounts would be shown on a consolidated
balance sheet of the Company and the Subsidiaries as of such time prepared in
accordance with GAAP, minus,
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Subsidiaries,
Schedule B-6
"CONSOLIDATED SUBSIDIARY" means, at any date, any Person that, in
accordance with GAAP, would or should be consolidated in the Company's
consolidated financial statements on such date.
"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property acquired
by such Person (excluding accounts payable arising in the ordinary course of
business but including, without limitation, all liabilities created or arising
under any conditional sale or other title retention agreement with respect to
any such property);
(c) its Capital Lease Obligations;
(d) its liabilities (whether or not contingent) for borrowed money secured
by any Lien with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"DEFAULT" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"DEFAULT RATE" means that rate of interest that is the greater of (a)
8.08% per annum or (b) 2% over the rate of interest publicly announced by The
Bank of New York in New York, New York as its "base" or "prime" rate.
"DISPOSITION VALUE" means, at any time, with respect to any property
(a) in the case of property that does not constitute Subsidiary Stock, the
book value thereof, valued at the time of such disposition in good faith by the
Company, and
Schedule B-7
(b) in the case of property that constitutes Subsidiary Stock, an amount
equal to that percentage of the book value of the assets of the Subsidiary that
issued such stock as is equal to the percentage that the book value of such
Subsidiary Stock represents of the book value of all of the outstanding capital
stock of such Subsidiary (assuming, in making such calculations, that all
Securities convertible into such capital stock are so converted and giving full
effect to all transactions that would occur or be required in connection with
such conversion) determined at the time of the disposition thereof, in good
faith by the Company.
"DISTRIBUTION" means, in respect of any Person:
(a) dividends or other distributions or payments on capital stock or other
equity interests of such Person (except distributions in such stock or other
equity interest); and
(b) the redemption or acquisition of such stock or other equity interests
or of warrants, rights or other options to purchase such stock or other equity
interests (except when solely in exchange for such stock or other equity
interests) unless made, contemporaneously, from the net proceeds of a sale of
such stock or other equity interests.
"DOJ SETTLEMENT PAYMENT" means the payment and satisfaction in full by the
Issuers of all claims made by the Department of Justice or any Governmental
Authority in respect of the Department of Justice litigation described in
Schedule 5.8.
"DOLLARS" OR "$" means the lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY" means a direct or indirect Subsidiary of an Issuer
organized under the laws of, or holding any assets located in any jurisdiction
of, the United States of America, any State thereof or the District of Columbia.
"DORMANT COMPANY" means each of the Subsidiaries of the Company
specifically designated as "dormant" on Schedule 5.4 hereto, as amended from
time to time.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
Schedule B-8
"ENVIRONMENTAL LIABILITY" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight, fines, natural
resource damages, penalties or indemnities), of either Issuer or any Subsidiary
directly or indirectly resulting from or based upon (a) any actual or alleged
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
any actual or alleged exposure to any Hazardous Materials, (d) the Release or
threatened Release of any Hazardous Materials or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
As used in this definition, "RELEASE" means any release, spill,
emission, leaking, dumping, injection, pouring, deposit, disposal,
discharge, dispersal, leaching or migration into the environment
(including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.
"EQUITY OFFERING" is defined in Section 10.7.
"EQUIVALENT" means, on any given date when one currency (the "FIRST
CURRENCY") of a certain amount is denominated in another currency (the "SECOND
CURRENCY"), the amount of the First Currency which could be purchased with the
amount of the Second Currency at the spot rate of exchange quoted by The Bank of
New York at or about 9:15 a.m. (New York time) on such date for the purchase of
the First Currency with the Second Currency.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with an Issuer (a)
under Section 414(b) or (c) of the US Tax Code or (b) solely for the purpose of
section 302 of ERISA and section 412 of the US Tax Code, under section 414 of
the US Tax Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means, at any time with respect to any property, the
sale value of such property that would be realized in an arm's-length sale at
such time between an informed and willing buyer, and an informed and willing
seller, under no compulsion to buy or sell, respectively.
Schedule B-9
"FINANCING DOCUMENTS" means the Notes, this Agreement, the Guaranty
Agreement, the Sharing Agreement and the Pledge Agreement, as each may be
amended, restated or otherwise modified from time to time.
"FISCAL YEAR" means the 12 month period of the Company ending on the 31st
day of December in each year.
"FIXED CHARGES" means, with respect to the Issuers and their Consolidated
Subsidiaries for any period, the sum of (a) Consolidated Interest Expense for
such period and (b) Consolidated Lease Expense for such period.
"FIXED CHARGES COVERAGE RATIO" means, as of the last day of each fiscal
quarter, the ratio of (a) Consolidated EBITR for the period of four consecutive
fiscal quarters ending on such day to (b) Fixed Charges for such period.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the laws of, or
holding any assets located in (other than inventory it has acquired for shipment
to the United States), any jurisdiction other than the United States of America,
any state thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which either of the Issuers or any
Subsidiary other than any Dormant Company conducts all or any part of its
business, or which asserts jurisdiction over any properties of either of
the Issuers or any Subsidiary other than any Dormant Company, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
"GUARANTORS" means each Initial Guarantor and each other Person that
enters into the Guaranty Agreement pursuant to Section 9.6(a).
Schedule B-10
"GUARANTY" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
Indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily
for the purpose of assuring the owner of such Indebtedness or obligation of the
ability of any other Person to make payment of the Indebtedness or obligation;
or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENT" is defined in Section 4.10.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Issuers pursuant to Section
13.1.
"INDEBTEDNESS" means, with respect to any Person at any time, without
duplication,
Schedule B-11
(a) its obligations for borrowed money (whether evidenced by bonds,
debentures, notes or similar instruments);
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement with
respect to any such property);
(c) its Capital Lease Obligations;
(d) its liabilities (whether or not contingent) in respect of
letters of credit or instruments serving a similar function issued or
accepted for its account by banks and other financial institutions
(whether or not representing obligations for borrowed money);
(e) its liabilities (whether or not contingent) for borrowed money
secured by any Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable for such
liabilities);
(f) its redemption obligations (whether or not contingent) in
respect of redeemable capital stock or other Security of such Person;
(g) any off-balance sheet liability it has retained in connection
with asset securitization programs, synthetic leases, sale and leaseback
transactions or other similar obligations arising with respect to any
other transaction which is the functional equivalent of or takes the place
of borrowing but which does not constitute a liability on the consolidated
balance sheet of such Person and its Subsidiaries;
(h) Swaps of such Person; and
(i) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (h) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (i) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"INHAM EXEMPTION" is defined in Section 6.2(e).
Schedule B-12
"INITIAL GUARANTORS" means each The Garden City Group, Inc., Crawford-THG,
Inc., ▇▇▇▇▇▇▇▇ Leasing Services, Inc., ▇▇▇▇▇▇▇▇ & Company Healthcare Management,
Inc., The PRISM Network, Inc., Crawford Investigation Services, Inc., Calesco,
Inc., ▇▇▇▇▇▇▇▇ & Company of New York, Inc., Risk Sciences Group, Inc., ▇▇▇▇▇▇▇▇
& Company of California, ▇▇▇▇▇▇▇▇ & Company, L.P., ▇▇▇▇▇▇▇▇ & Company of
Illinois, ▇▇▇▇▇▇▇▇ & Company of Florida, ▇▇▇▇▇▇▇▇ & Company Employment Services,
Inc., Crawford Healthcare Management of Norfolk and Baltimore, Inc., Qirra
Custom Software, Inc. and ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INVESTMENT" means any investment, made in cash or by delivery of
property, by the Company or any Subsidiary (a) in any Person, whether by
acquisition of stock, Indebtedness or other obligation or Security, or by loan,
Guaranty, advance, capital contribution or otherwise, or (b) in any property.
"ISSUERS" is defined in the introductory paragraph of this Agreement.
"LEASE RENTALS" means, with respect to any period, the sum of the rental
and other obligations required to be paid during such period by the Issuers or
any Consolidated Subsidiary as lessee under all leases of real or personal
property (other than Capital Leases).
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and the Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company
Schedule B-13
and the Subsidiaries taken as a whole, or (b) the ability of either Issuer to
perform its obligations under any Financing Document to which it is a party, or
(c) the ability of any Guarantor to perform its obligations under the Guaranty
Agreement, or (d) the validity or enforceability of any Financing Document.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any US Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NAIC ANNUAL STATEMENT" is defined in Section 6.2(a).
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any property
by any Person, an amount equal to the difference of:
(a) the aggregate amount of the consideration (valued at the Fair
Market Value of such consideration at the time of the consummation of such
Transfer) received by such Person in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and expenses,
and taxes in respect of, such Transfer actually incurred by such Person,
minus
(c) all amounts applied to Debt secured by such property which is
repaid contemporaneously and in connection with such Transfer.
"NEW/AMENDED COVENANT PROVISIONS" is defined in Section 9.8(a).
"NOTES" is defined in Section 1.
"OBLIGORS" means, collectively, both Issuers, all Guarantors and each
Person that becomes a pledgor under Section 9.6(b).
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERMITTED ACQUISITIONS" means any Acquisition so long as (a) at the time
of such Acquisition, no Default or Event of Default is in existence, (b) such
acquisition has been approved or recommended by the board of directors of the
Person being
Schedule B-14
acquired and (c) the Total Acquisition Consideration of such Acquisition, when
aggregated with the Total Acquisition Consideration of all Acquisitions
consummated by the Company and the Consolidated Subsidiaries during the
preceding 12 month period does not exceed 10% of Consolidated Net Worth
determined as of the last day of the then most recently ended fiscal quarter of
the Company.
"PERMITTED INVESTMENTS" means the following Investments:
(a) Investments in United States Governmental Securities, provided
that such obligations mature within one year from the date of acquisition
thereof;
(b) Investments in certificates of deposit or banker's acceptances
issued by an Acceptable Bank, provided that such obligations mature within
180 days from the date of acquisition thereof;
(c) Investments in commercial paper given the highest rating by a
credit rating agency of recognized national standing and maturing not more
than one year from the date of creation thereof;
(d) Investments in fully collateralized Repurchase Agreements;
(e) mutual funds investing solely in one or more of the Investments
permitted in clauses (a) through (d) above; and
(f) any Investment made pursuant to, and in accordance with, the
"Investment Guidelines" of the Company set forth on Schedule C hereto.
As used in this definition of "Permitted Investments":
"Acceptable Bank" means any bank or trust company (i) which is
organized under the laws of the United States of America or any
State thereof, (ii) which has capital, surplus and undivided profits
aggregating at least $500,000,000, and (iii) whose long-term
unsecured debt obligations (or the long-term unsecured debt
obligations of the bank holding company owning all of the capital
stock of such bank or trust company) shall have been given a rating
of "A" or better by S&P, "A2" or better by Moody's or an equivalent
rating by any other credit rating agency of recognized national
standing.
"Acceptable Broker-Dealer" means any Person other than a
natural person (i) which is registered as a broker or dealer
pursuant to the Exchange Act and (ii) whose long-term unsecured debt
obligations
Schedule B-15
shall have been given a rating of "A" or better by S&P, "A2" or
better by Moody's or an equivalent rating by any other credit rating
agency of recognized national standing.
"Moody's" means ▇▇▇▇▇'▇ Investors Service.
"Repurchase Agreement" means any written agreement that
provides for (i) the transfer of one or more United States
Governmental Securities in an aggregate principal amount at least
equal to the amount of the Transfer Price (defined below) to the
Company or any Subsidiary from an Acceptable Bank or an Acceptable
Broker-Dealer against a transfer of funds (the "Transfer Price") by
the Company or such Subsidiary to such Acceptable Bank or Acceptable
Broker-Dealer, and (ii) a simultaneous agreement by the Company or
such Subsidiary, in connection with such transfer of funds, to
transfer to such Acceptable Bank or Acceptable Broker-Dealer the
same or substantially similar United States Governmental Securities
for a price not less than the Transfer Price plus a reasonable
return thereon at a date certain not later than 30 days after such
transfer of funds.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies.
"United States Governmental Security" means any direct
obligation of, or obligation guaranteed by, the United States of
America, or any agency controlled or supervised by or acting as an
instrumentality of the United States of America pursuant to
authority granted by the Congress of the United States of America,
so long as such obligation or guarantee shall have the benefit of
the full faith and credit of the United States of America which
shall have been pledged pursuant to authority granted by the
Congress of the United States of America.
"PERSON" means an individual, partnership, corporation, limited liability
company, firm, association, joint venture, trust, unincorporated organization,
or a government or agency or political subdivision thereof.
"PLEDGE AGREEMENT" is defined in Section 4.11 and shall include each
additional Pledge Agreement that is required by Section 9.6(b).
"PREFERRED STOCK" means any class of capital stock or other equity
interests of a Person that is preferred over any other class of capital stock or
equity interests of
Schedule B-16
such Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.
"PRIORITY DEBT" means as of any date, without duplication, the sum of (a)
all Debt of the Obligors secured by any Lien with respect to any property owned
by the Company or any Subsidiary (other than pursuant to the Pledge Agreement),
(b) all Debt of Subsidiaries (except Debt of the Co-Issuer or a Guarantor or
Debt of any Subsidiary owing solely to the Company or a Wholly-Owned
Subsidiary), and (c) Attributable Debt of the Company and the Subsidiaries.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇ or
inchoate.
"PROPERTY REINVESTMENT APPLICATION" means, with respect to any Transfer of
property, the application of an amount equal to the Net Proceeds Amount with
respect to such Transfer to the acquisition by either of the Issuers or any
Guarantor of machinery, equipment or other similar operating assets of either of
the Issuers or any Guarantor to be used in the ordinary course of business of
such Person (excluding, for the avoidance of doubt, cash and cash equivalents).
"PTE" is defined in Section 6.2(a).
"PURCHASERS" is defined at the commencement of this Agreement.
"QPAM EXEMPTION" is defined in Section 6.2(d).
"QUALIFIED INSTITUTIONAL BUYER" means a "Qualified Institutional Buyer" as
defined in Rule 144A under the Securities Act and any investment company or fund
that invests on a discretionary basis at least $100,000,000 in Securities of
issuers that are not affiliated with such investment company or fund.
"REQUIRED HOLDERS" means, at any time, the holders of at least a majority
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Issuers or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments, including without
limitation, Investments in joint ventures and in Subsidiaries that are not
Consolidated Subsidiaries.
Schedule B-17
"RESTRICTED PAYMENTS" means:
(a) any Distribution in respect of the Company or any Subsidiary of the
Company (other than on account of capital stock or other equity interests of a
Subsidiary of the Company owned legally and beneficially by the Company or
another Subsidiary of the Company), including, without limitation, any
Distribution resulting in the acquisition by the Company of Securities which
would constitute treasury stock, and
(b) any payment, repayment, redemption, retirement, repurchase or other
acquisition, direct or indirect, by the Company or any Subsidiary of, on account
of, or in respect of, the principal of any Subordinated Debt (or any installment
thereof) prior to the regularly scheduled maturity date thereof (as in effect on
the date such Subordinated Debt was originally incurred).
For purposes of this Agreement, the amount of any Restricted Payment made
in property shall be the greater of (x) the Fair Market Value of such property
(as 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" means a transaction or series of
transactions pursuant to which an Issuer or any Subsidiary shall sell or
transfer to any Person (other than the Issuers or a Subsidiary) any property,
whether now owned or hereafter acquired, and, as part of the same transaction or
series of transactions, such Issuer or such Subsidiary shall rent or lease as
lessee (other than pursuant to a Capital Lease), or similarly acquire the right
to possession or use of, such property or one or more properties which it
intends to use for the same purpose or purposes as such property.
"SECURITIES ACT" means the Securities Act of 1933 of the United States of
America, as amended from time to time.
"SECURITY" is defined in section 2(a) of the Securities Act.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SHARING AGREEMENT" is defined in Section 4.13.
"SOURCE" is defined in Section 6.2.
Schedule B-18
"SPECIFIED FINANCIAL COVENANTS" is defined in Section 9.8(b).
"SPECIFIED PROVISIONS" is defined in Section 9.8(b).
"SUBORDINATED DEBT" means any Debt that is in any manner subordinated in
right of payment or security in any respect to Debt evidenced by the Notes.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"SUBSIDIARY STOCK" means, with respect to any Person, the share capital or
other equity interest (or any options or warrants to purchase share capital or
other equity interests or other securities exchangeable for or convertible into
share capital or other equity interests) of any Subsidiary of such Person.
"SUCCESSOR CORPORATION" is defined in Section 10.2(a).
"SVO" is defined in Section 4.8.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TAX" means any present or future tax, levy, impost, withholding, duty,
charge, assessment or fee of any nature that is imposed by any Governmental
Authority or any taxing authority thereof.
Schedule B-19
"TOTAL ACQUISITION CONSIDERATION" means as at the date of any Acquisition,
the sum of the following without duplication: (a) the amount of any cash and
Fair Market Value of other property given as consideration, including at such
date the deferred payment of any such amounts, (b) the amount (determined by
using the outstanding amount or the amount payable at maturity, whichever is
greater) of any obligations for money borrowed incurred, assumed or acquired by
either of the Issuers or any Subsidiary in connection with such Acquisition, (c)
all amounts paid in respect of covenants not to compete and consulting
agreements that should be recorded on the financial statements of the Company
and the Subsidiaries in accordance with GAAP, and (d) the aggregate Fair Market
Value of all other consideration given by either of the Issuers or any
Subsidiary (including any shares of capital stock of either of the Issuers or
any Subsidiary) in connection with such Acquisition.
"TRANSFER" means and includes, with respect to any property, any sales,
exchanges, conveyances, leases, transfers, assignments or other dispositions of
such property; the term "Transfer," when used as a verb with respect to any
property, means to sell, exchange, convey, lease as lessor, transfer, assign or
otherwise dispose of such property; and the term "Transferred" has a correlative
meaning.
"USA PATRIOT ACT" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
Act of 2001 of the United States of America.
"US PLAN" means an "employee pension benefit plan" (as defined in section
3(2) of ERISA) subject to the provisions of Title IV of ERISA, section 412 of
the US Tax Code or section 302 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
Company or any ERISA Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.
"US TAX CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Issuers and each of such Issuer's other Wholly-Owned Subsidiaries at such time.
Schedule B-20
SCHEDULE C
INVESTMENT GUIDELINES
1. INTRODUCTION
The main goal of ▇▇▇▇▇▇▇▇ & Company's (the "Company") investment strategy
is to provide a competitive return on the operating funds of the Company,
while providing safety of principal and providing for the Company's
regular cash needs.
2. INVESTMENT OBJECTIVES
A. The primary investment objective shall be safety of principal.
B. The secondary investment objective shall be to maximize income and
investment returns.
C. The overall character of the portfolio shall be of above average
quality, and holdings shall be well diversified as to issuer and
maturity.
D. It is anticipated that liquidity needs generally will be met through
maturities and portfolio structure rather than depend upon the
marketability of individual holdings.
3. GENERAL INVESTMENT GUIDELINES
A. The Treasurer is authorized and responsible for the investment
decisions and changes as deemed necessary and in accordance with the
objectives and guidelines set forth herein.
4. SPECIFIC INVESTMENT GUIDELINES
A. The average maturity of the portfolio shall not exceed two (2.0)
years.
B. The maturity of any individual holding shall not exceed three (3.0)
years.
C. At least twenty-five percent (25%) of the portfolio shall have a
maturity of 90 days or less.
D. For purpose of determining maturities, the next reset date will be
used for floating rate securities.
Schedule C-1
E. Investments shall be limited to the following classes of securities:
1. Obligations of the U.S. Government and Government Agencies including
but not limited to U.S. Treasury Notes and bills, Federal Mortgage
Association, Student Loan Marketing Association and the Federal Home
Loan Bank Board.
2. Debt obligations of U.S. Corporations.
3. U.S. Dollar denominated Debt obligations of multi-national
corporations.
4. Short term Investment Company (STIC) or other institutional money
market fund shares (i.e. ▇▇▇▇▇▇ Brothers Money Market Funds, Dreyfus
Institutional Funds).
5. Permissible investment instruments shall include:
a. Repurchase Agreements
b. Commercial paper (A3A paper) including private placement
commercial paper (4-2 paper)
c. Certificates of deposit and time deposits
d. Loan Sales Participation
e. Variable rate demand notes
f. Eurodollar commercial paper
g. Eurodollar and time deposits of domestic and foreign banks
h. U.S. dollar denominated foreign commercial paper
i. Bankers' Acceptances
j. Master Notes
F. Corporate obligations with long-term debt rating of single A or better by
at least one recognized rating agency and short-term ratings of A1 or P1.
Schedule C-2
5. RESTRICTIONS
A. Except for U.S. Treasury securities (securities backed by the full
faith and credit of the U.S. Government), and money-market mutual
funds, no more than 15% of the total assets of the account may be
invested in the securities of any single issuer.
B. Investment in Eurodollar securities shall be limited to 10% of the
portfolio.
C. Investment in any form of hedging, interest swaps and/or derivatives
which hedge interest rates (either floating to fixed rate or fixed
to floating rate) must have the prior approval of the Chief
Financial Officer (CFO) and the Chief Executive Officer (CEO) of the
Company.
Schedule C-3