EXHIBIT 4.7
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MOBILE STORAGE GROUP, INC.
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AMENDED AND RESTATED
SUBORDINATED NOTE AGREEMENT
Dated as of November 13, 2001
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TABLE OF CONTENTS
ARTICLE I AMENDMENT AND RESTATEMENT; DEFINITIONS............................................2
Section 1.1. Amendment and Restatement..................................................2
Section 1.2. Interpretation.............................................................2
Section 1.3. Definitions................................................................3
ARTICLE II SUCCESSOR COMPANY...............................................................19
Section 2.1. When the Company May Merge or Transfer Assets.............................19
ARTICLE III SALE OF THE NOTES..............................................................19
Section 3.1. Sale of the Notes.........................................................19
Section 3.2. Legends...................................................................22
Section 3.3. Mandatory Repayment of the Notes..........................................22
Section 3.4. Optional Prepayment of the Notes..........................................22
Section 3.5. Optional Prepayment of the Notes Following Equity Offering................23
Section 3.6. Optional Prepayment of the Notes Following Public or 144A Debt
Offering ...............................................................23
Section 3.7. Prepayment Right of Holders Upon Change of Control........................23
Section 3.8. Allocation of Prepayments.................................................24
Section 3.9. Notice of Prepayment of the Notes.........................................24
Section 3.10. Restrictions on Optional Prepayments......................................25
Section 3.11. Method of Payment on the Notes............................................25
ARTICLE IV COVENANTS.......................................................................25
Section 4.1. Payment of the Notes......................................................25
Section 4.2. Limitation on Debt........................................................25
Section 4.3. Limitation on Restricted Payments.........................................28
Section 4.4. Limitation on Liens.......................................................32
Section 4.5. Restrictions on Distributions from Subsidiaries of the Company............33
Section 4.6. Limitation on Transactions with Affiliates................................34
Section 4.7. Notice of Default.........................................................35
Section 4.8. Authorizations and Approvals..............................................35
Section 4.9. Provision of Periodic Financial Information...............................35
Section 4.10. Visits and Inspections....................................................36
Section 4.11. Limitation on Issuance Certain Preferred Stock............................37
Section 4.12. Future Subsidiary Guaranty................................................37
Section 4.13. Board Observation.........................................................37
ARTICLE V EVENTS OF DEFAULT; REMEDIES......................................................38
Section 5.1. Events of Default.........................................................38
Section 5.2. Acceleration..............................................................39
Section 5.3. Rights and Remedies Cumulative............................................40
Section 5.4. Delay or Omission Not Waiver..............................................40
Section 5.5. Waiver of Stay or Extension Laws..........................................40
Section 5.6. Waiver of Past Defaults...................................................40
Section 5.7. Rights of Holders To Receive Payment......................................41
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ARTICLE VI SUBORDINATION...................................................................41
Section 6.1. Agreement To Subordinate..................................................41
Section 6.2. Liquidation, Dissolution, Bankruptcy......................................41
Section 6.3. Default on Senior Debt....................................................41
Section 6.4. Acceleration of Payment of Notes and Exercise of Remedies.................43
Section 6.5. When Distribution Must Be Paid Over.......................................43
Section 6.6. Subrogation...............................................................43
Section 6.7. Relative Rights...........................................................44
Section 6.8. Subordination May Not Be Impaired by Company..............................44
Section 6.9. Reinstatement.............................................................44
Section 6.10. Proofs of Claim...........................................................44
Section 6.11. Non-Impairment............................................................45
Section 6.12. No Modification...........................................................45
Section 6.13. Waivers; Reliance by Holders of Senior Debt...............................46
Section 6.14. Enforcement of Rights.....................................................46
Section 6.15. Note Reference to Subordination...........................................46
ARTICLE VII TRANSFER OF THE NOTES..........................................................46
Section 7.1. Registration of Transfer..................................................46
Section 7.2. Register..................................................................47
ARTICLE VIII TERMINATION...................................................................47
Section 8.1. Termination...............................................................47
Section 8.2. Liability.................................................................47
ARTICLE IX AMENDMENTS......................................................................48
Section 9.1. Amendments................................................................48
Section 9.2. Revocation and Effect of Consents and Waivers.............................48
Section 9.3. Notation on or Exchange of Notes..........................................49
Section 9.4. Payment for Consent.......................................................49
ARTICLE X MISCELLANEOUS....................................................................49
Section 10.1. Notices ...............................................................49
Section 10.2. Parties ...............................................................51
Section 10.3. Governing Law; Forum Selection; Consent to Jurisdiction...................52
Section 10.4. Waiver of Jury Trial......................................................52
Section 10.5. Replacement Note..........................................................52
Section 10.6. Successors and Assigns....................................................53
Section 10.7. Severability Clause.......................................................53
Section 10.8. Further Assurances........................................................53
Section 10.9. Entire Agreement..........................................................53
Section 10.10.Headings ...............................................................53
Section 10.11.Counterparts..............................................................53
Section 10.12.Original Notes............................................................53
ARTICLE XI INDEMNIFICATION.................................................................54
Section 11.1. Indemnity of Holders of the Notes by the Company..........................54
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SCHEDULES AND EXHIBITS
SCHEDULE I Purchaser Information
SCHEDULE 3.1(a) Capitalization of the Company
EXHIBIT A Form of Original Note
EXHIBIT B Form of New Note
EXHIBIT C Form of Loan Stock Instrument
EXHIBIT D Form of Monthly Operating Statement
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AMENDED AND RESTATED SUBORDINATED NOTE AGREEMENT
AMENDED AND RESTATED SUBORDINATED NOTE AGREEMENT, dated as of November
13, 2001 (this "AGREEMENT"), by and among Mobile Storage Group, Inc., a
California corporation (the "COMPANY"), The Northwestern Mutual Life Insurance
Company, a Wisconsin corporation ("NORTHWESTERN MUTUAL"), Capital d'Amerique
CDPQ Inc., a Quebec corporation ("CDPQ"), ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, a
Massachusetts corporation ("▇▇▇▇ ▇▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇▇ Variable Life Insurance
Company ("VARIABLE"), Investors Partner Life Insurance Company ("PARTNER"),
Signature 5 L.P. ("SIGNATURE"), and New York Life Insurance Company, a New York
corporation ("NEW YORK LIFE") (collectively with each other Person which may
acquire any Note in accordance with the terms of this Agreement, the
"PURCHASERS" and each a "PURCHASER").
RECITALS
WHEREAS, the Company, Northwestern Mutual and CDPQ are parties to that
certain Subordinated Note Agreement, dated as of June 30, 2000 (as amended prior
to the date hereof, the "ORIGINAL SUBORDINATED NOTE AGREEMENT") pursuant to
which each of Northwestern Mutual and CDPQ purchased 12% Subordinated Notes Due
2010 (the "ORIGINAL NOTES") of the Company in a principal amount set forth
opposite such Purchaser's name in Column 4 of SCHEDULE I and in an aggregate
principal amount of $25,000,000. The Original Notes are in the form set forth on
Exhibit A attached hereto.
WHEREAS, (i) the Company desires to sell, and Windward/MSG Co-Invest,
LLC, a Delaware limited liability company ("WCI"), and Windward/MSG Co-Invest
II, LLC, a Delaware limited liability company ("WCI II"), desire to purchase and
acquire, the Common Stock and the Associated Common Stock (each as defined in
the Purchase Agreement referred to below and, together with the Company's common
stock heretofore issued to WCI and WCI II, collectively referred to as the
"SHARES"), in accordance with the terms and conditions set forth in the Stock
and Unit Purchase Agreement, dated as of the date hereof (the "PURCHASE
AGREEMENT"), by and among the Company, WCI, WCI II and the Purchasers, (ii) the
Company desires to sell, and each of the Purchasers desires to purchase, on a
several basis, additional 12% Subordinated Notes Due 2010 of the Company (the
"NEW NOTES") in a principal amount set forth opposite such Purchaser's name in
Column 6 of SCHEDULE I and in an aggregate principal amount of $55,000,000, to
be sold in investment units together with an aggregate of 14,604.4808 shares of
Common Stock of the Company, par value $1.00 per share (the "ASSOCIATED COMMON
STOCK") (each $1,000.00 in principal amount of the New Notes and 0.2655 shares
of Associated Common Stock shall comprise one investment unit), (iii) the
Company, WCI and Northwestern Mutual agree that 3,983.0402 shares of Associated
Common Stock shall be beneficially held for Northwestern Mutual by WCI upon the
terms set forth in the Second Amended and Restated Operating Agreement of WCI
dated as of the date hereof, and that, in order to effect the foregoing,
membership interests in WCI (the "WCI MEMBERSHIP INTERESTS") shall be issued to
Northwestern Mutual and 3,983.0402 shares of Associated Common Stock shall be
issued by the Company to WCI, in all cases in accordance with the terms hereof
and of the Purchase Agreement, and (iv) the Company, WCI II, CDPQ, ▇▇▇▇ ▇▇▇▇▇▇▇
and New York LIFE agree that 10,621.4406 shares of Associated Common Stock shall
be beneficially held for CDPQ, ▇▇▇▇
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▇▇▇▇▇▇▇ and New York Life by WCI II upon the terms set forth in the Amended and
Restated Operating Agreement of WCI II dated as of the date hereof and that, in
order to effect the foregoing, membership interests in WCI II (the "WCI II
MEMBERSHIP INTERESTS") shall be issued to CDPQ, ▇▇▇▇ ▇▇▇▇▇▇▇, Variable, Partner,
Signature, and New York Life and 10,621.4406 shares of Associated Common Stock
shall be issued by the Company to WCI II, in all cases in accordance with the
terms hereof and of the Purchase Agreement. The New Notes shall be in the form
set forth on Exhibit B attached hereto.
WHEREAS, the Company intends to use the proceeds from the sale and
issuance of the Notes for the acquisition, directly or indirectly, of all of the
outstanding capital stock of Raven Hire Limited, a company organized under the
laws of England (the "RAVEN ACQUISITION"), and for other general corporate
purposes.
WHEREAS, in connection with the transactions contemplated by the
foregoing recitals, the parties hereto desire to amend and restate the Original
Subordinated Note Agreement in accordance with the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and agreements
contained in this Agreement, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
ARTICLE I
AMENDMENT AND RESTATEMENT; DEFINITIONS
Section 1.1. Amendment and Restatement. The Original Subordinated Note
Agreement is hereby amended and restated to be in the form of this Agreement;
provided that such amendment and restatement shall cease to be effective upon
prepayment of the New Notes pursuant to the second sentence of SECTION 3.3.
Section 1.2. Interpretation. For all purposes of this Agreement and the
Notes, except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article and elsewhere in this
Agreement include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles that are consistently applied and, except as otherwise herein
expressly provided, the term "GAAP" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States as of the date hereof; and
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
Section 1.3. Definitions.
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"Acquired Debt" means Debt of a Subsidiary of the Company issued and
outstanding on or prior to the date on which such Subsidiary was acquired by
either the Company or any other Subsidiary of the Company (other than Debt
issued as consideration in, or to provide all or any portion of the funds or
credit support utilized in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary of the Company became a
Subsidiary or was acquired by either the Company or any other Subsidiary of the
Company).
"Affiliate" of any specified Person means (i) any other Person
which, directly or indirectly, is in control of, is controlled by or is under
common control with such specified Person or (ii) any other Person who is a
director or officer (A) of such specified Person, (B) of any Subsidiary of such
specified Person or (C) of any Person described in clause (i) above. For
purposes of this definition, control of a Person means the direct or indirect
power to direct or cause the direction of the management and policies of such
Person whether through the ownership of Voting Stock or other equity interests,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent" means The Bank of Nova Scotia (or any entity serving as
administrative or collateral agent under the Credit Agreement at such time), as
Administrative and Collateral Agent for the Lenders (as defined in the Credit
Agreement) under the Credit Agreement, and, if there is no Person serving in
such capacity under the Credit Agreement at such time, any agent or trustee
under any refinancing or replacement thereof, in whole or in part. The
designation in writing by the Company to the Holders from time to time of the
identity of the Agent for purposes of this Agreement and the Notes shall be
conclusive for all purposes hereof and thereof.
"Agreement" means this Amended and Restated Subordinated Note
Agreement among the Company and the Purchasers and all Schedules and Exhibits
attached hereto.
"Amendment and Restatement Date" means November 13, 2001.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
shares of Capital Stock of a Subsidiary of the Company, property or other assets
(each referred to for the purposes of this definition as a "disposition") by the
Company or any of its Subsidiaries (including any disposition by means of a
merger, consolidation or similar transaction) other than (i) a disposition by
any of the Company's Subsidiaries to the Company or by the Company or any of its
Subsidiaries to any of the Company's Wholly Owned Subsidiaries, (ii) any sales
or leases of assets in the ordinary course of business consistent with past
practices (it being understood that sales of leased equipment to lessees are in
the ordinary course of business) and (iii) a disposition subject to ARTICLE II
(except to the extent the Company disposes of substantially all (but not all) of
its assets, in which event the assets not so disposed of shall be deemed as
having been sold by the Company).
"Average Life" means, as of the date of determination, with respect
to any Debt or Preferred Stock, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled sinking fund, serial maturity or other principal
payment of such Debt or redemption or similar payment with respect
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to such Preferred Stock multiplied by the amount of such payment by (ii) the sum
of all such payments.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means, with respect to any Person, such
Person's Board of Directors or any committee thereof duly authorized to act on
behalf of such Board of Directors.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company, depending upon the context
in which such term is used, to have been duly adopted by such Board of Directors
of the Company and to be in full force and effect on the date of such
certification and delivered to the Holders.
"Business Day" means each day which is not a Saturday or Sunday or a
day on which banking institutions are not required to be open in the State of
New York.
"Capital Lease Obligations" means, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, either would be required to be classified and
accounted for as a capital lease (a "Capital Lease") on a balance sheet of such
Person or otherwise be disclosed as such in a note to such balance sheet; the
amount of such obligation shall be the capitalized amount thereof, determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, contingent share issuances,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt
securities convertible into or exchangeable for such equity.
"CDPQ" has the meaning specified in the preamble to this Agreement.
"Change of Control" means (a) prior to an IPO, the failure of the
Windward Group to beneficially own, free and clear of all Liens, in the
aggregate at least 50% of the outstanding shares of Voting Stock of the Company
on a fully diluted basis (except for dilution resulting from issuance of
incentive Capital Stock to management) or (b) after an IPO, (i) the failure of
the Windward Group to beneficially own, free and clear of all Liens, in the
aggregate at least 30% of the outstanding Voting Stock of the Company on a fully
diluted basis or (ii) the acquisition, directly or indirectly, by any person or
group (as defined in Section 13(d)(3) under the Exchange Act) (other than any
member or members of the Windward Group) of a percentage of the outstanding
Voting Stock of the Company that exceeds in the aggregate the percentage of
Voting Stock then beneficially owned and controlled, directly or indirectly, by
the Windward Group or (iii) the board of directors of the Company shall not
consist of a majority of "CONTINUING DIRECTORS" (such term being defined as
directors of the Company on the Closing and each other director, if such other
director's nomination for election to the board of directors is recommended by a
majority of the then Continuing Directors or is recommended by a committee of
the board of
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directors, a majority of which is composed of the then Continuing Directors) or
if such other director receives the affirmative vote of the Windward Group.
"Change of Control Prepayment Date" has the meaning specified in
SECTION 3.7 hereof.
"Company" has the meaning specified in the first paragraph of this
Agreement.
"Consolidated EBITDA Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; provided that, and without duplication, (A) if the Company or
any of its Restricted Subsidiaries has issued any Debt since the beginning of
such period that remains outstanding (other than Debt issued under a revolving
credit or similar arrangement for working capital purposes or for capital
improvement purposes) on the last day of such period or if the transaction
giving rise to the need to calculate the Consolidated EBITDA Coverage Ratio is
an issuance of Debt, or both, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such Debt
as if such Debt had been issued on the first day of such period; (B) if since
the beginning of such period the Company or any of its Restricted Subsidiaries
shall have made any Asset Disposition, (x) the EBITDA for such period shall be
reduced by an amount equal to the EBITDA (if positive) directly attributable to
the assets which are the subject of such Asset Dispositions for such period, or
increased by an amount equal to the EBITDA (if negative) directly attributable
to the assets which are the subject of such Asset Dispositions for such period
and (y) Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Debt of the Company or any of its Restricted Subsidiaries repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Dispositions for such
period (or, if the Capital Stock of any of the Company's Restricted Subsidiaries
is sold, by an amount equal to the Consolidated Interest Expense for such period
directly attributable to the Debt of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer liable for
such Debt after such sale); (C) if since the beginning of such period the
Company or any of its Restricted Subsidiaries (by merger or otherwise) shall
have made an Investment in any of the Company's Subsidiaries (or any Person
which becomes a Subsidiary of the Company) or an acquisition of assets,
including any acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto (including the issuance of any Debt, but without regard to clause
(ii) of the proviso to the definition of "Consolidated Net Income") as if such
Investment or acquisition occurred on the first day of such period; (D) if since
the beginning of such period any Person (that subsequently became a Restricted
Subsidiary of the Company or was merged with or into the Company or any of its
Restricted Subsidiaries since the beginning of such period) shall have made any
Asset Disposition or any Investment that would have required an adjustment
pursuant to clause (B) or (C) above if made by the Company or any of its
Restricted Subsidiaries during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition or Investment occurred on the first day of
such
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period; and (E) there shall be excluded from Consolidated Interest Expense any
Consolidated Interest Expense related to any amount of Debt that was outstanding
during such four-fiscal-quarter period or thereafter but that is not outstanding
or is to be repaid on the date of determination, except for Consolidated
Interest Expense accrued during such four-fiscal-quarter period under a
revolving credit or similar arrangement. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the amount
of income or earnings relating thereto, and the amount of Consolidated Interest
Expense associated with any Debt issued in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting Officer of the Company, which determination shall, if the Holders of
a majority of the principal amount of the Notes so request, be confirmed by the
independent accountants of the Company. If any Debt bears a floating rate of
interest and is being given pro forma effect, the interest on such Debt shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period taking into account any Interest Rate
Agreement applicable to such Debt (if such Interest Rate Agreement has a
remaining term in excess of twelve months).
"Consolidated Income Tax Expense" means, for any period, the
consolidated provision for income taxes of the Company and its consolidated
Restricted Subsidiaries for such period determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP, including (i)
interest expense attributable to capital leases, (ii) capitalized interest to
the extent actually paid, (iii) non-cash interest expense (excluding any such
interest expense resulting from the accretion of original issue discount with
respect to the Notes), (iv) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing, (v)
interest actually paid by the Company or any such Restricted Subsidiary under
any guarantee of Debt or other obligation of any other Person, (vi) net costs
under Interest Rate Agreements (including amortization of fees), (vii) Preferred
Stock dividends in respect of all Preferred Stock and Redeemable Stock of the
Company held by Persons other than the Company or a Wholly Owned Subsidiary of
the Company and (viii) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company and its
consolidated Subsidiaries) in connection with loans incurred by such plan or
trust to purchase newly issued or treasury shares of the Company; provided that
non-cash interest expense accrued on unpaid dividends applicable to the
Company's Preferred Stock shall be excluded from the calculation of Consolidated
Interest Expense; provided further that the calculation of Consolidated Interest
Expense shall exclude (x) any amount of interest expense of any Restricted
Subsidiary of the Company if the net income (or loss) of such Restricted
Subsidiary is excluded in the calculation of Consolidated Net Income pursuant to
clauses (i) or (iii) of the definition thereof (but only in the same proportion
as the net income (or loss) of such Restricted Subsidiary is excluded from the
calculation of Consolidated Net Income pursuant to clauses (i) or (iii) of the
definition thereof) and (y) any premiums, fees and expenses (and any
amortization thereof) payable in connection with the Original Transaction and
the New Transaction, all as determined on a consolidated basis in conformity
with GAAP.
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"Consolidated Leverage Ratio" as of any date of determination means
the ratio of (i) Total Debt on such date to (ii) the aggregate amount of EBITDA
for the period of the most recent four consecutive fiscal quarters ending at
least 45 days prior to the date of such determination; provided that and without
duplication, (A) with respect to any calculation made in contemplation of any
Debt issuance, EBITDA and Total Debt shall be calculated after giving effect on
a pro forma basis to the Debt proposed to be issued as if such Debt had been
issued on the first day of such period, (B) if the Company or any of its
Restricted Subsidiaries has issued any Debt since the beginning of such period
that remains outstanding (other than Debt issued under a revolving credit or
similar arrangement for working capital purposes or for capital improvement
purposes) on the last day of such period, EBITDA and Total Debt for such period
shall be calculated after giving effect on a pro forma basis to such Debt as if
such Debt had been issued on the first day of such period; (C) if since the
beginning of such period the Company or any of its Restricted Subsidiaries shall
have made any Asset Disposition, the EBITDA for such period shall be reduced by
an amount equal to the EBITDA (if positive) directly attributable to the assets
which are the subject of such Asset Dispositions for such period, or increased
by an amount equal to the EBITDA (if negative) directly attributable to the
assets which are the subject of such Asset Dispositions for such period; (D) if
since the beginning of such period the Company or any of its Restricted
Subsidiaries (by merger or otherwise) shall have made an Investment in any of
the Company's Restricted Subsidiaries (or any Person which becomes a Restricted
Subsidiary of the Company) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA for such period shall be calculated
after giving pro forma effect thereto (including the issuance of any Debt, but
without regard to clause (ii) of the proviso to the definition of "Consolidated
Net Income") as if such Investment or acquisition occurred on the first day of
such period; and (E) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary of the Company or was merged with or
into the Company or any of its Restricted Subsidiaries since the beginning of
such period) shall have made any Asset Disposition or any Investment that would
have required an adjustment pursuant to clause (C) or (D) above if made by the
Company or any of its Restricted Subsidiaries during such period, EBITDA for
such period shall be calculated after giving pro forma effect thereto as if such
Asset Disposition or Investment occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets and the amount of income or earnings relating thereto the
pro forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Company, which determination shall, if
the Holders of a majority of the principal amount of the Notes so request, be
confirmed by the independent accountants of the Company. If any Debt bears a
floating rate of interest and is being given pro forma effect, the interest on
such Debt shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Debt if such Interest
Rate Agreement has a remaining term in excess of twelve months).
"Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its consolidated Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP (other than any net
income (or loss) of any Unrestricted Subsidiary); provided that there shall not
be included in such Consolidated Net Income (without duplication):
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(i) any net income (or loss) of any Person if such
Person is not a Restricted Subsidiary of the Company, except that
the Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary of the Company
as a dividend or other distribution (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary of the
Company, to the limitations contained in clause (iii) below);
provided that such limitation shall not apply to equity income in
respect of investments outstanding as of the Original Closing Date;
(ii) solely for the purposes of calculating the amount
of Restricted Payments that may be made pursuant to SECTION 4.3
hereof, any net income (or loss) of any Person acquired by the
Company or a Restricted Subsidiary of the Company in a pooling of
interests transaction for any period prior to the date of such
acquisition;
(iii) any net income of any Restricted Subsidiary of the
Company if such Restricted Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or indirectly,
to the Company (other than general statutory limitations on the
payment or making of such dividends or distributions), except that
(A) the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed
or available for distribution without restriction by such Restricted
Subsidiary during such period to the Company or another Restricted
Subsidiary of the Company as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another
Restricted Subsidiary of the Company, to the limitation contained in
this clause) and (B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(iv) any gain (or loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or
its consolidated Restricted Subsidiaries (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise
disposed of in the ordinary course of business and any gain (or
loss) realized upon the sale or other disposition of any Capital
Stock of any Person;
(v) the cumulative effect of a change in accounting
principles;
(vi) any extraordinary, non-recurring or unusual gains
and extraordinary, non-recurring or unusual losses;
(vii) any charges, expenses and amortizations which are
accelerated by reason of the payment prior to the maturity thereof
of any Debt;
(viii) any fees or expenses (and any amortization
thereof) incurred in connection with, or payable prior to or
substantially concurrently with the closing of the New Transaction
(including, without limitation, any fees or expenses related to the
financing thereof, any fees or expenses of attorneys, accountants,
financial advisors,
8
consultants and other similar persons incurred in connection
therewith and any other such fees and expenses relating thereto);
and
(ix) any non-cash charges reducing the net income of the
Company or any Restricted Subsidiary that relate to the issuance,
granting or modification of Capital Stock, stock options, stock
warrants, stock appreciation rights or any other similar rights to
the directors, officers or employees of the Company or any of its
Restricted Subsidiaries, and any cash payments reducing net income
of the Company or any of its Restricted Subsidiaries that relate to
stock options, stock appreciation rights or any other similar
rights, to the extent such cash payments do not come within any of
the Restricted Payment exceptions set forth in SECTION 4.3(b)
hereof.
In computing Consolidated Net Income of the Company, (1) the Company shall use
audited financial statements for the portions of the relevant period for which
audited financial statements are available on the date of determination and
unaudited financial statements and other current financial data based on the
books and records of the Company for the remaining portion of such period and
(2) the Company shall be permitted to rely in good faith on the financial
statements and other financial data derived from the books and records of the
Company that are available on the date of determination.
"Consolidated Net Worth" of any Person means the total of the
amounts shown on the balance sheet of such Person and its consolidated
Subsidiaries (or, if such Person is the Company, the balance sheet of the
Company and its consolidated Restricted Subsidiaries), determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of such Person ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of such Person, plus (ii)
paid-in capital or capital surplus relating to such Capital Stock, plus (iii)
any retained earnings or earned surplus, less (A) any accumulated deficit, less
(B) any amounts attributable to Redeemable Stock, and less (without duplication)
(C) any amounts attributable to Exchangeable Stock.
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of the Amendment and Restatement Date, among the Company, Mobile
Storage (U.K.) Limited, a company organized under the laws of England, The Bank
of Nova Scotia, as agent and lead arranger for the US Lenders (as therein
defined), Scotiabank, as agent and lead arranger for the UK Lenders (as therein
defined), Union Bank of California, N.A., as documentation agent, PNC Bank,
national association, as syndication agent, and the Lenders party thereto from
time to time, as it may be amended, restated, supplemented, modified,
restructured, extended, renewed, refinanced, replaced or otherwise modified from
time to time, in whole or in part.
"Currency Agreement" means in respect of any Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"Debt" of any Person means, without duplication
(i) the principal of, premium (if any) and interest and
related fees and expenses (if any) in respect of (A) indebtedness of
such Person for money borrowed and
9
(B) indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is
responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed
as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under
any title retention agreement;
(iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction;
(v) all obligations of the type referred to in clauses
(i) through (iv) of other Persons and all dividends of other Persons
for the payment of which, in either case, such Person is responsible
or liable, directly or indirectly, as obligor, guarantor or
otherwise, including any guarantees of such obligations and
dividends, but, in each case, only to the extent such Person is
responsible or liable for such obligations or dividends;
(vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons secured by any Lien on any property
or asset of such Person (even if such obligation is not assumed by
such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets and the amount of the
obligation so secured; and
(vii) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
Notwithstanding any of the foregoing provisions of this definition of "Debt",
(1) the amount outstanding at any time of any Debt issued with original issue
discount is the face amount of such Debt less the remaining unamortized portion
of the original issue discount of such Debt at such time as determined in
conformity with GAAP, and (2) Debt shall not include (A) any liability for
federal, state, local or other taxes, (B) trade accounts payable and other
accrued expenses arising in the ordinary course of business and obligations to
consignors to pay under normal trade terms for consigned goods, (C) with respect
to the deferred purchase price of property, obligations which are due within six
months after the date of placing such property in service or taking delivery and
title thereto, (D) any obligations in respect of any Redeemable Stock (including
any Preferred Stock that is Redeemable Stock) or (E) any obligation of the
Company pursuant to the Shareholders Agreement to purchase stock from any
Employee Shareholder upon the disability, death, or retirement of such Employee
Shareholder. The amount of Debt of any Person at any date shall be (x) the
outstanding balance at such date of all unconditional obligations as described
above, and (y) the maximum liability determined by such Person's Board of
Directors, in good faith, as reasonably likely to occur, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date. For purposes of determining any particular amount of Debt under
SECTION 4.2 hereof, (i) obligations of a Person with respect to letters of
credit, guarantees or security interests supporting or relating to any Debt
which is otherwise included in the determination of such particular amount shall
not be included, (ii) Debt permitted under SECTION 4.2 hereof need not be
permitted solely by reference to one provision permitting
10
such Debt but may be permitted in part by reference to one such provision and in
part by reference to one or more other provisions of the covenant permitting
such Debt, and (iii) in the event that an item of Debt or portion thereof meets
the criteria of more than one of the types of Debt permitted under SECTION 4.2
hereof, the Company, in its sole discretion, may classify such item of Debt or
portion thereof in one of such provisions and only be required to include the
amount and type of such Debt or portion thereof in one of such provisions.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Senior Debt" means all Senior Debt under the Credit
Agreement.
"EBITDA" for any period means the Consolidated Net Income for such
period (but without giving effect to adjustments, accruals, deductions or
entries resulting from gains or losses from any Asset Dispositions), plus the
following to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Income Tax Expense, (ii) Consolidated Interest Expense, (iii)
depreciation expense and (iv) amortization expense and other non-cash charges.
"Employee Shareholders" has the meaning specified in the
Shareholders Agreement.
"Event of Default" has the meaning specified in SECTION 5.1 hereof.
"Equity Offering" means an offering of Capital Stock of the Company
(or any entity of which the Company is a Subsidiary, to the extent the cash
proceeds of such primary offering are contributed to the Company or used to
acquire Capital Stock of the Company) pursuant to an effective registration
statement under the Securities Act or any similar private placement of
securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchangeable Stock" means any Capital Stock which is exchangeable
or convertible into another security (other than Capital Stock of the Company
which is neither Exchangeable Stock nor Redeemable Stock).
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" means any of the Purchasers or any other Person in whose
name a Note or Notes are registered on the Note Register.
"Indemnitees" has the meaning specified in SECTION 11.1 hereof.
"Initial Holders" means Northwestern Mutual, CDPQ, ▇▇▇▇ ▇▇▇▇▇▇▇,
Variable, Partner, Signature and New York Life.
"Interest Payment Date" has the meaning specified in Exhibit A or
Exhibit B, as applicable.
11
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is a party or a
beneficiary.
"Investment" in any Person means any loan or advance to, any
guarantee of, any capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any acquisition of any Capital Stock, equity interest,
obligation or other security of, such Person. Investments shall exclude advances
to customers and suppliers in the ordinary course of business. For purposes of
the definition of "Unrestricted Subsidiary" and SECTION 4.3 hereof, (i)
"Investment" shall include the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary of the Company is
designated an Unrestricted Subsidiary, and shall exclude the fair market value
of the net assets of any Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary of the Company and
(ii) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer, in each case as
determined by the Board of Directors of the Company in good faith.
"IPO" means an initial public offering of stock by the Company under
the Securities Act involving the registration of $25,000,000 or more of the
common stock of the Company.
"Lien" means any mortgage, pledge, security interest, encumbrance,
or charge of any kind (including any conditional sale or other title retention
agreement) to secure payment of a debt or performance of an obligation.
"Loan Stock" means the variable rate guaranteed unsecured loan stock
issued by Freepeak Limited, a Subsidiary of the Company, to certain shareholders
of Raven Hire Limited under that certain Loan Stock Instrument, to be dated on
or about November 13, 2001, as in effect on such date and in substantially the
form attached hereto as Exhibit C.
"Management Agreement" means the Management Agreement, dated as of
June 30, 2000, between Windward Capital Management LLC and the Company, as
amended by that certain First Amendment to Management Agreement, dated as of
November 13, 2001, between the aforesaid parties.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Capital Stock or Debt of the Company, the cash proceeds of such issuance or sale
of Capital Stock or Debt, net of any underwriters' or placement agents' fees,
discounts or commissions related to such issuance or sale.
"New Notes" has the meaning specified in the Recitals hereof.
"New Transaction" means, collectively, (a) the issuance and sale by
the Company of the New Notes, the Associated Common Stock and the Common Stock
and (b) the acquisition of all of the capital stock of Raven Hire Limited
pursuant to that certain Agreement for the Sale
12
and Purchase by Auction of Raven Hire Limited, to be dated on or about November
13, 2001, by and among Freepeak Limited, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and others.
"Non-Convertible Capital Stock" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible
Capital Stock of such corporation; provided, that Non-Convertible Capital Stock
shall not include any Redeemable Stock or Exchangeable Stock.
"Non-Monetary Default Blockage Period" has the meaning specified in
SECTION 6.3 hereof.
"Non-Recourse Debt" means, with respect to any Person, Debt of such
Person to the extent that, if such Person fails to pay such Debt when due and
the holder thereof obtains a judgment with respect thereto, the holder may not
collect by levy of execution against any general assets of such Person other
than assets securing such Debt; provided, however, that Debt shall not fail to
constitute Non-Recourse Debt by reason of (i) provisions giving recourse to, or
rights against, such Person or any assets thereof upon the happening of certain
specified events, including, without limitation, intentional misrepresentation,
regulatory noncompliance or violation of law, or (ii) any rights the holder
thereof may have under bankruptcy, insolvency, receivership or other proceedings
including by reason of Section 1111(b) of the Federal Bankruptcy Code.
"Northwestern Mutual" has the meaning specified in the preamble to
this Agreement.
"Note Register" means the register maintained pursuant to SECTION
7.2 hereof.
"Notes" means, collectively, (a) the $25,000,000 principal amount of
the Original Notes issued hereunder, (b) the $55,000,000 principal amount of the
New Notes issued hereunder and (c) all promissory notes issued in replacement or
substitution for any Original Notes or New Notes. "Note" means all or a part of
the Notes.
"Officer" means the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, the Treasurer or the Secretary of
the Company, depending upon the context in which such term is used.
"Original Closing Date" means June 30, 2000.
"Original Notes" has the meaning specified in the Recitals hereof.
"Original Subordinated Note Agreement" has the meaning specified in
the Recitals hereof.
"Original Transaction" means, collectively, (a) the merger of
Windward Acquisition/MS, LLC, a Delaware limited liability company, with and
into the Company pursuant to the Amended and Restated Agreement and Plan of
Merger dated April 3, 2000 by and among the Company, Windward Acquisition/MS,
LLC, Windward Capital Partners II, L.P., Windward Capital ▇▇ ▇▇, L.L.C., WCI and
the equity holders of the Company party thereto;
13
(b) the original execution of the original Credit Agreement and the initial
borrowings thereunder; (c) the execution of the Shareholders Agreement; and (d)
the transactions contemplated by the Original Subordinated Note Agreement.
"Pari Passu", as applied to the ranking of any Debt of a Person in
relation to other Debt of such Person, means that each such Debt either (i) is
not subordinated in right of payment to any Debt or (ii) is subordinated in
right of payment to the same Debt as is the other, and is so subordinated to the
same extent, and is not subordinated in right of payment to such other Debt or
to any Debt as to which the other is not so subordinated.
"Payment Default Blockage Period" has the meaning specified in
SECTION 6.3 hereof.
"Permitted Junior Securities" means (a) debt securities of the
Company as reorganized or readjusted, or debt securities of the Company (or any
other company, trust or organization provided for by a plan of reorganization or
readjustment succeeding to the assets and liabilities of the Company), that, in
each case, are subordinated, to at least the same extent as the Notes, to the
payment of all Senior Debt that will be outstanding after giving effect to such
reorganization or readjustment, so long as (i) the spread between the Treasury
Yield and the yield on such debt securities as of the issuance of such debt
securities shall not exceed the spread between the Treasury Yield and the yield
on the Notes on the date hereof and (ii) such debt securities shall not provide
for amortization (including sinking fund and mandatory prepayment provisions)
commencing prior to the date one year following the final scheduled maturity
date of the Senior Debt (as modified by such reorganization or readjustment) or
(b) shares of stock of the Company as reorganized or readjusted pursuant to a
reorganization or readjustment; provided, that, in each case with respect to
clauses (a) and (b) above, (x) if a new corporation results from any such
reorganization or readjustment, such corporation assumes all Senior Debt that
will be outstanding after giving effect thereto and (y) the rights of the
holders of the Senior Debt are not, without the consent of such holders or
approval by a court of competent jurisdiction, altered by any such
reorganization or readjustment, including, without limitation, such rights being
impaired within the meaning of Section 1124 of Title 11 of the United States
Code, or any impairment of the right to receive interest accruing during the
pendency of a bankruptcy or insolvency proceeding, including proceedings under
Title 11 of the United States Code.
"Permitted Liens" means (a) Liens existing on the Original Closing
Date and renewals, extensions and replacements thereof; provided, that such
renewals, extensions and replacements shall not apply to any property or assets
not previously subject to such Liens or increase the principal amount of
obligations secured thereby, (b) Liens on deposits made in the ordinary course
of business, (c) Liens in favor of collecting banks having a right of setoff,
revocation, refund or chargeback with respect to money or instruments of the
Company or any Subsidiary on deposit with or in possession of such banks, (d)
Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings; provided, that adequate reserves with respect thereto
are maintained on the books of the Company or its Subsidiaries, as the case may
be, in conformity with GAAP, (e) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and not overdue for a period of more than 90 days or which are being
contested in good faith by appropriate proceedings, (f) pledges or deposits in
connection with workers' compensation,
14
unemployment insurance and other social security legislation, (g) deposits to
secure the performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of like nature incurred in the ordinary course of business,
(h) easements, rights of way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
material in amount and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
course of business of the Company or its Subsidiaries, as the case may be, and
any exceptions to title set forth in any title insurance policies, (i) any
attachment or judgment Lien so long as the execution or other enforcement
thereof is effectively stayed, the claims secured thereby are being contested in
good faith by appropriate proceedings, adequate reserves have been established
with respect to such claims in accordance with GAAP and no Default or Event of
Default would result thereby or occur as a consequence thereof, (j) any Liens
relating or pursuant to Capital Lease Obligations and arising solely out of the
lease of the property related thereto and (k) any Liens in favor of consignors
with respect to consigned goods.
"Permitted Preferred Stock" means, collectively, (a) Preferred Stock
outstanding as of the Amendment and Restatement Date and described on SCHEDULE
3.1(a) attached hereto (including without limitation the Company's Series A
Convertible Preferred Stock, the Series B 10% Convertible Cumulative Preferred
Stock, the Series C 8.5% Cumulative Preferred Stock, the Series E 8.5%
Convertible Cumulative Preferred Stock and the Series F Preferred Stock), and
(b) Preferred Stock which is not mandatorily redeemable (or otherwise subject to
any mandatory repurchase by or on behalf of the Company) on or before the final
maturity of the Notes.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation. Without limiting the foregoing, the Preferred Stock of the Company
shall include the Company's Series A Convertible Preferred Stock, the Series B
10% Convertible Cumulative Preferred Stock, the Series C 8.5% Cumulative
Preferred Stock, the Series E 8.5% Convertible Cumulative Preferred Stock and
the Series F Preferred Stock.
"Prepayment Date" has the meaning specified in SECTION 3.9 hereof.
"Public or 144A Debt Offering" means either (a) an underwritten
offering of Debt securities of the Company registered under the Securities Act
or (b) an offering of Debt securities issued in accordance with the exemption
from registration provided by Rule 144A promulgated thereunder (together with
concurrent exchange registration rights relating to such Debt securities).
"Purchasers" has the meaning specified in the first paragraph of
this Agreement.
15
"Raven Acquisition" has the meaning specified in the Recitals
hereof.
"Redeemable Stock" means any Capital Stock that by its terms or
otherwise is required to be redeemed on or prior to the Stated Maturity of the
Notes or is redeemable at the option of the holder thereof at any time on or
prior to the Stated Maturity of the Notes.
"Refinancing Debt" has the meaning specified in SECTION 4.2(b)
hereof.
"Replenishment Amount" means an amount equal to the net cash
received by the Company and its Subsidiaries from issuances of Capital Stock to
the directors, officers and employees of the Company and its Subsidiaries
subsequent to the Amendment and Restatement Date.
"Restricted Payment" has the meaning specified in SECTION 4.3(a)
hereof.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Secured Debt" means any Debt of the Company or any Restricted
Subsidiary secured by a Lien on any assets of the Company or any Restricted
Subsidiary as any such Debt may be amended, restated, supplemented, modified,
restructured, extended, renewed, refinanced, replaced or otherwise modified from
time to time, in whole or in part.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Senior Debt" means any Debt of the Company and its Restricted
Subsidiaries (i) to any Person under the Credit Agreement and each note,
guaranty, security agreement or other loan document executed and delivered by
the Company or any Subsidiary of the Company pursuant to the terms of the Credit
Agreement, including, without limitation, any principal, interest (whether
accrued prior to or after the commencement of any proceeding under any
Bankruptcy Law or other bankruptcy or reorganization law and whether or not
allowed in such proceeding), obligations with respect to letters of credit and
letter of credit guarantees, all reimbursement and indemnification obligations
thereunder (whether or not matured, unmatured, liquidated or contingent) and all
obligations thereunder to pay fees, expenses and other amounts of the Company;
(ii) to any Person under any Interest Rate Agreements entered into for the
purpose of providing interest rate protection in respect of Debt under the
Credit Agreement, (iii) set forth on SCHEDULE 3.1(a) hereto, and (iv) to any
Person, if (A) so designated by the Company, (B) at the time of the incurrence
thereof, after giving effect thereto, the Consolidated Leverage Ratio is less
than or equal to 5:00 to 1, (C) at the time of such designation, no Default or
Event of Default exists, and (D) such designation is made in a written
instrument duly executed by the Company and delivered to the Holders, which
delivery shall be deemed to be a representation and warranty by the Company that
the conditions to such designation set forth in this sentence have been fully
satisfied. Notwithstanding the foregoing, (a) in no event shall any Debt which
is incurred in violation of SECTION 4.2 hereof constitute Senior Debt, and (b)
in no event shall any of the following constitute Senior Debt (unless it would
otherwise be included in clauses (i) or (ii) above): (1) Debt which is expressly
subordinated in right of payment to, or is
16
Pari Passu with, the Notes, (2) Debt which is owed to an Affiliate of the
Company or its Restricted Subsidiaries, or (3) any Non-Recourse Debt.
"Shareholders" has the meaning specified in the Shareholders
Agreement.
"Shareholders Agreement" means the Shareholders Agreement, dated as
of April 3, 2000, as amended by Amendment No. 1, dated as of November 13, 2001,
among Windward Capital Partners II, L.P., Windward Capital ▇▇ ▇▇, L.L.C., WCI,
WCI II, the Company and the equity holders of the Company party thereto, as
amended, restated, supplemented or otherwise modified from time to time.
"Shares" has the meaning specified in the Recitals hereof.
"Significant Subsidiary" means, at any date of determination, any
Subsidiary of the Company that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than ten percent (10%) of
the consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, was the owner of more than ten percent (10%)
of the consolidated assets of the Company and its Restricted Subsidiaries, all
as set forth on the most recently available consolidated financial statements of
the Company for such fiscal year.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which all of the outstanding
principal of such security is due and payable, including pursuant to any
mandatory redemption provision.
"Subordinated Obligation" means any Debt of the Company (whether
outstanding on the Original Closing Date or thereafter incurred) which is by its
terms or by related agreement expressly subordinate or junior in right of
payment to the Notes.
"Subsidiary" means, with respect to any Person, a corporation or
other entity (including a partnership or a limited liability company) of which a
majority of the Capital Stock or other voting interests having voting power
under ordinary circumstances to elect a majority of the board of directors or
otherwise control such corporation or other entity is owned by (i) such Person,
(ii) such Person and one or more of its Subsidiaries or (iii) one or more
Subsidiaries of such Person.
"Total Debt" as of any date of determination means the excess, if
any, of the aggregate principal amount of all Debt of the Company and its
Restricted Subsidiaries, on a consolidated basis, outstanding on such date less
the aggregate amount of cash held by the Company and its Restricted
Subsidiaries, on a consolidated basis, on such date.
"Treasury Yield" means the arithmetic mean of the rates published as
"Treasury Constant Maturities" as of 5:00 p.m., New York time, for the five
Business Days preceding the date of determination pursuant to this Agreement, as
shown on the USD screen of the Bloomberg service, or if such service is not
available, the Telerate service, or if neither the Bloomberg nor the Telerate
service is available, in the weekly statistical release designated "H.15(519)"
(or any successor publication) published by the Board of Governors of the
Federal Reserve System, for "On the Run" U.S. Treasury obligations corresponding
to the remaining life to maturity of the
17
Notes as of the date of determination; if no such maturity shall so exactly
correspond, yields for the two most closely corresponding published maturities
shall be calculated pursuant to the foregoing sentence and the Treasury Yield
shall be interpolated or extrapolated (as applicable) from such yields on a
straight-line basis (rounding, in the case of relevant periods, to the nearest
month).
"2000 Stock Option Plan" means the Company's 2000 Stock Option Plan
adopted on July 28, 2000.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted Subsidiary
by the Board of Directors of the Company in the manner provided below and (ii)
any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the
Company may designate any Subsidiary of the Company (including any newly
acquired or newly-formed Subsidiary of the Company) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided that
either (A) the Subsidiary to be so designated has total assets of $1,000,000 or
less or (B) if such Subsidiary has assets greater than $1,000,000, that such
designation would be permitted under SECTION 4.3 hereof. The Board of Directors
of the Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company; provided that immediately after giving effect to such
designation (x) the Company could issue $1.00 of additional Debt under SECTION
4.2(a) hereof and (y) no Default or Event of Default shall have occurred and be
continuing. Any Subsidiary of the Company may be designated as an Unrestricted
Subsidiary (or not so designated) for purposes of this Agreement without regard
to whether such Subsidiary is so designated (or not so designated) for purposes
of any other agreement relating to Debt of the Company or any of its
Subsidiaries. Notwithstanding anything in the foregoing to the contrary, no
Subsidiary of the Company may be designated an Unrestricted Subsidiary if the
Board of Directors of the Company has previously designated such Subsidiary an
Unrestricted Subsidiary and thereafter designated such Subsidiary a Restricted
Subsidiary under this Agreement more than one time.
"Voting Stock" of a corporation means all classes of Capital Stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
"WCI" has the meaning specified in the Recitals hereof.
"WCI II" has the meaning specified in the Recitals hereof.
"Wholly Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all the Capital Stock of which (other than directors'
qualifying shares and Preferred Stock) is owned by such Person or another Wholly
Owned Subsidiary of such Person.
"Windward Group" means (a) Windward Capital Partners II, L.P., a
Delaware limited partnership, (b) Windward Capital ▇▇ ▇▇, LLC, a Delaware
limited liability company, (c) Affiliates of the Persons referred to in clauses
(a) and (b), (d) Windward/MSG Co-Invest, LLC, a Delaware limited liability
company, and (e) Windward/MSG Co-Invest II, LLC, a Delaware limited liability
company.
18
ARTICLE II
SUCCESSOR COMPANY
Section 2.1. When the Company May Merge or Transfer Assets.
(a) The Company shall not consolidate with or merge with or into,
or convey or transfer or lease all or substantially all of its assets
(determined on a consolidated basis) to, another Person unless, subject to and
without limiting the terms of SECTION 3.7 hereof, (i) the resulting, surviving
or transferee Person (if not the Company) shall be a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and such entity shall assume in writing in form and
substance satisfactory to the Holders of the Notes all the obligations of the
Company under the Notes and this Agreement, (ii) immediately prior to and after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing and either (A) the Company is able to incur at least
$1.00 of additional Debt pursuant to SECTION 4.2(a) hereof or (B) the resulting,
surviving or transferee Person shall have Consolidated Net Worth in an amount
which is not less than the result of (x) the Consolidated Net Worth of the
Company immediately prior to such transaction, minus (y) the aggregate amount of
Restricted Payments which could have been made by the Company pursuant to
SECTION 4.3(a) hereof immediately prior to such transaction, but which are not
being made as part of such transaction, and (iii) the Company shall have
delivered to the Holders a certificate of an Officer of the Company stating that
such consolidation, merger or transfer complies with this Agreement and showing
in reasonable detail the calculations on which the Company based such
determination.
(b) Notwithstanding the provisions of SECTION 2.1(a), (i) any
Subsidiary of the Company with a positive net worth may consolidate with, merge
into or transfer all or part of its properties and assets to the Company;
provided that, in connection with any such transaction, no consideration (other
than common stock in the surviving Person or the Company) shall be issued or
distributed to the shareholders of the Company, and (ii) the provisions of
clause (ii) of SECTION 2.1(a) above shall not apply if, in the good faith
determination of the Board of Directors of the Company, whose determination
shall be evidenced by a Board Resolution, the principal purpose of such
transaction is to change the state of incorporation of the Company.
ARTICLE III
SALE OF THE NOTES
Section 3.1. Sale of the Notes. Representations and Warranties of the
Company. To induce the Purchasers to enter into and perform this Agreement, the
Company represents and warrants to the Purchasers and their nominees, if any, as
of the date hereof as follows in this SECTION 3.1(a).
(i) The Company is a corporation validly existing and in good
standing under the laws of the state of California, and has all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted.
19
(ii) The Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement and the Purchase Agreement, will
have been duly executed, issued and delivered and will be legal, valid
and binding obligations of the Company, entitled to the benefits
provided by this Agreement and the Purchase Agreement under which they
are to be issued; this Agreement and the Purchase Agreement constitute
the legal, valid and binding instruments of the Company, enforceable
against the Company in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by
general equitable principles (whether enforcement is sought by
proceedings in equity or at law). The issuance of the Shares has been
duly authorized, the Shares have been reserved for issuance under the
Merger Agreement, the Original Subordinated Note Agreement and the
Purchase Agreement, and when issued and delivered pursuant to the Merger
Agreement, the Original Subordinated Note Agreement and the Purchase
Agreement, will have been duly issued, fully paid and non-assessable.
(iii) The issue and sale of the Notes and the Shares and the
compliance by the Company with all of the provisions of the Notes, this
Agreement and the Purchase Agreement and the consummation of the
transactions herein and therein contemplated will not (a) constitute a
violation (with or without the giving of notice or lapse of time or
both) of any provision of any domestic or foreign law applicable to the
Company, (b) require any consent, approval or authorization of, or
notice to, any person, corporation, partnership, domestic or foreign
governmental authority or other organization or entity, (c) result in a
default under, an acceleration or termination of, or the creation in any
party of the right to accelerate, terminate, modify or cancel, any
material agreement, lease, note or other restriction, encumbrance,
obligation or liability to which the Company is a party or by which the
Company is bound or to which any of its assets are subject, (d) result
in the imposition or creation of any Lien upon any assets owned or used
by the Company or (e) conflict with or result in a breach of or
constitute a default under any provision of the Company's Articles of
Incorporation or Bylaws.
(iv) As of the date hereof (and after giving effect to the
issuance of the Shares), SCHEDULE 3.1(a) hereto accurately states the
percentage and number of shares of stock in the Company owned by each
holder thereof with respect to the Common Stock and the aggregate
numbers outstanding of each class of the Company's Preferred Stock. All
such shares of stock have been duly issued and are fully paid and
non-assessable. Except as set forth on SCHEDULE 3.1(a), there are no
outstanding options to purchase, or any rights or warrants to subscribe
for, or any obligations convertible into, shares of stock of the
Company.
(v) Except for the consummation of the New Transaction, the
representations and warranties set forth in the Credit Agreement are
true and complete in all material respects as of the date hereof (except
for representations and warranties in the Credit Agreement that speak as
of a certain date); provided, however, that where the context requires,
references therein to the Credit Agreement shall be deemed to be
references to this Agreement and references to the lenders or agent(s)
thereunder shall be deemed to be a reference to the Holders. Except for
the consummation of the New Transaction, the Credit Agreement is in full
force and effect and all conditions set forth in SECTION 7.1 and
20
SECTION 7.3 thereof will have been satisfied or duly waived. As of the
date hereof, without limiting the foregoing, prepayment of the New Notes
under the second sentence of SECTION 3.3 hereof and repurchase of the
Common Stock and Associated Common Stock under SECTION 2.3(k) of the
Purchase Agreement is permitted by the Credit Agreement.
(b) Sale of the Notes and Issuance of the Shares. Each of the
parties hereto acknowledges and agrees that, upon the terms and subject to the
conditions set forth herein, the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company,
that principal amount of the New Notes set forth opposite such Purchaser's name
in Column 6 of SCHEDULE I. Each of the parties hereto acknowledges and agrees
that, upon the terms and subject to the conditions set forth herein, (x)
Northwestern Mutual shall purchase WCI Membership Interests in the amount set
forth opposite Northwestern Mutual's name in Column 7 of SCHEDULE I, and WCI
shall acquire 3,983.0402 shares of the Associated Common Stock from the Company,
and (y) CDPQ, ▇▇▇▇ ▇▇▇▇▇▇▇, Variable, Partner, Signature and New York Life shall
purchase WCI II Membership Interests in the amount set forth opposite such
Purchaser's name in Column 7 of SCHEDULE I, and WCI II shall acquire 10,620.4406
shares of the Associated Common Stock from the Company. Neither the Company, the
Purchasers, WCI nor WCI II, as the case may be, shall take any position on any
tax return based on the purchase prices for the Notes and the Shares that is
inconsistent with any of the provisions set forth in SCHEDULE I. Simultaneously
with the execution hereof, upon the terms and subject to the conditions set
forth herein, the Company shall deliver to (x) each of the Purchasers the New
Note or New Notes purchased by such Purchaser or such Purchaser's nominee, as
the case may be, registered in the name of such Purchaser and bearing the legend
set forth in SECTION 3.2(a) and substantially in the form attached hereto as
EXHIBIT B against payment by such Purchaser of the purchase price for such New
Note or New Notes by wire transfer of immediately available funds; and (y) WCI
and WCI II, as the case may be, a certificate or certificates representing the
Shares issued to WCI and WCI II, respectively, pursuant to the Purchase
Agreement, registered in the name of WCI or WCI II, as the case may be, and
bearing the legend set forth in SECTION 3.2(b).
(c) Delivery of Opinion. Simultaneously with the execution
hereof, the Company is delivering to the Purchasers an opinion of counsel to the
Company substantially with respect to the matters set forth in SECTIONS
3.1(a)(i), (ii) and (iii).
(d) Raven Acquisition. As a condition to the initiation of funds
for the purchase of the New Notes and the Associated Common Stock hereunder and
under the Purchase Agreement, the Purchasers shall have received evidence
reasonably satisfactory to them (which may consist of receipt of a copy of the
fully executed purchase agreement relating to the Raven Acquisition and
confirmation from the parties thereto, or their representatives, that all
conditions precedent thereunder have been satisfied or waived, except for the
payment of the purchase price) that the Raven Acquisition shall be
simultaneously consummated with such purchase.
(e) Representations and Warranties of the Purchasers. To induce
the Company to enter into and perform this Agreement, each of the Purchasers
represents and warrants to the Company as of the date hereof that (x) the Notes
are being acquired by such Purchaser hereunder for its own account and without a
view to distribution of such Notes in any transaction or series
21
of transactions in violation of applicable law and (y) such Purchaser is an
"accredited investor" as such term is defined in Rule 501(a) promulgated under
the Securities Act.
Section 3.2. Legends. The New Notes will bear a legend reading
substantially as follows:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). NO SALE, HYPOTHECATION, TRANSFER OR
OTHER DISPOSITION OF THIS NOTE (OTHER THAN TO THE ISSUER THEREOF) MAY BE
MADE UNLESS EITHER (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (B) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS NOTE IS SUBJECT TO
PROVISIONS IN THE AMENDED AND RESTATED SUBORDINATED NOTE AGREEMENT DATED
AS OF NOVEMBER 13, 2001 FOR THE SUBORDINATION OF THIS NOTE TO SENIOR
DEBT OF THE COMPANY, UPON ALL THE TERMS AND CONDITIONS THEREIN
SPECIFIED.
(b) Each certificate evidencing ownership of the Shares will bear
a legend reading substantially as follows:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). NO SALE, HYPOTHECATION, TRANSFER OR
OTHER DISPOSITION OF THESE SHARES (OTHER THAN TO THE ISSUER THEREOF) MAY
BE MADE UNLESS EITHER (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (B) PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
Section 3.3. Mandatory Repayment of the Notes. The aggregate principal
amount of the Notes (including all interest and other amounts owed thereon at
such time) shall be paid in full by the Company on June 29, 2010. The aggregate
principal amount of the New Notes (including all interest owed thereon at such
time but without premium or penalty) shall be paid in full by the Company within
two (2) Business Days after the Amendment and Restatement Date if the Raven
Acquisition pursuant to the Agreement for the Sale and Purchase by Auction of
Raven Hire Limited (in substantially the form previously provided to the
Purchasers) has not been consummated on or prior to such date. In addition to
and not by limitation of the foregoing, on December 30, 2008 the Company shall
make a principal payment on the Notes in an amount equal to $50.00 for each
$1,000.00 principal amount of the Notes outstanding on such date.
Section 3.4. Optional Prepayment of the Notes.
(a) Subject to the provisions of ARTICLE VI hereof, the Company
may, at any time on or after June 29, 2005, prepay the Notes at any time in
whole or from time to time in part (any
22
such partial prepayment to be made pro rata among the Holders, and in a minimum
aggregate amount of $1,000,000), at the redemption prices (expressed as
percentages of the principal amount of the Notes being prepaid) set forth below,
plus interest accrued thereon (if any) to the Prepayment Date:
if redeemed during the 12-month period commencing (and including) June
29 of the years set forth below:
Year Redemption Price
---- ----------------
2005 105.00%
2006 104.00%
2007 103.00%
2008 102.00%
2009 101.00%
2010 100.00%
Section 3.5. Optional Prepayment of the Notes Following Equity Offering.
Subject to the provisions of ARTICLE VI hereof, the Company may, at any time
following the date hereof and up until June 29, 2005, prepay the Notes, either
in whole or in part (any such partial prepayment to be made pro rata among the
Holders, and in a minimum aggregate amount of $1,000,000), with the Net Cash
Proceeds of any Equity Offering at a redemption price (expressed as a percentage
of the principal amount of the Notes being prepaid) equal to 105%, plus accrued
interest, if any, to the Prepayment Date.
Section 3.6. Optional Prepayment of the Notes Following Public or 144A
Debt Offering. Subject to the provisions of ARTICLE VI hereof, the Company may,
at any time following the date hereof and up until June 29, 2005, prepay the
Notes, either in whole or in part (any such partial prepayment to be made pro
rata among Holders, and in a minimum aggregate amount of $1,000,000) with the
Net Cash Proceeds of any Public or 144A Debt Offering at a redemption price
(expressed as a percentage of the principal amount of the Notes being prepaid)
equal to 105%, plus accrued interest, if any, to the Prepayment Date.
Section 3.7. Prepayment Right of Holders Upon Change of Control.
(a) Subject to SECTION 3.10(b), the Company covenants and agrees
that, promptly after the occurrence of a Change of Control but in any event
within ten (10) days thereafter, it shall give written notice thereof to each
Holder of a Note. Such notice shall (a) describe in reasonable detail the facts
and circumstances giving rise to such Change of Control, (b) offer to purchase,
on a date (the "CHANGE OF CONTROL PREPAYMENT DATE") which shall be not less than
thirty (30) days nor more than sixty (60) days after the date of such notice,
all of the Notes held by such Holders, (c) request each such Holder to notify
the Company in writing, not less than twenty (20) days prior to the Change of
Control Prepayment Date, of its acceptance or rejection of such offer and (d)
inform each such Holder that, upon its receipt of such notice by the Company,
failure to reject such offer in writing on or before the tenth day prior to the
Change of Control Prepayment Date shall be deemed acceptance of such offer. In
the event that the Holders of seventy-five percent (75%) of the outstanding
principal amount of the Notes accept or fail to
23
reject the prepayment offer, the Company may, but shall not be obligated to,
require the remaining Holders to sell all Notes held by them to the Company as
set forth in the prepayment offer and will notify the remaining Holders of such
compelled sale not less than five Business Days prior to the Change of Control
Prepayment Date. The Company covenants and agrees that it will on the Change of
Control Prepayment Date prepay all of the Notes held by each Holder who has
accepted the prepayment offer and each Holder who has been deemed or compelled
to accept the prepayment offer in accordance with this SECTION 3.7, by payment
of an amount equal to 100% of the principal amount of the Notes being prepaid,
together with interest accrued thereon (if any) to the Change of Control
Prepayment Date.
(b) On the Change of Control Prepayment Date, all Notes purchased
by the Company under this SECTION 3.7 shall be canceled, and, subject to the
provisions of SECTION 3.10(b), the Company shall pay 100% of the principal
amount of such Notes plus accrued and unpaid interest, if any, thereon to the
Holders entitled thereto. The Company shall comply with Rule 14e-1 under the
Exchange Act (or any successor provision thereof) and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in the event that a Change of Control occurs under this SECTION 3.7
and the Company is required to repurchase the Notes as described above; provided
that, notwithstanding anything to the contrary contained in this SECTION 3.7,
the Company may modify any of the foregoing provisions of this SECTION 3.7 to
the extent it is advised by independent counsel that such modification is
necessary or appropriate in order to ensure any such compliance; provided,
further that, in the event that an appropriate modification, based upon advice
of legal counsel, is available which would permit payments upon a Change of
Control as contemplated above, the Company shall use reasonable efforts to make
such modification so as to permit the foregoing payments.
Section 3.8. Allocation of Prepayments. In the event of any prepayment
of less than all of the outstanding Notes pursuant to SECTIONS 3.4, 3.5, or 3.6
hereof, the Company will allocate the principal amount so to be prepaid (but
only in units of $1,000) among the Holders of Notes in proportion, as nearly as
may be, to the respective unpaid principal amounts of the Notes held by them.
Section 3.9. Notice of Prepayment of the Notes. In the event that the
Company intends to effect any prepayment pursuant to SECTION 3.4, 3.5, OR 3.6
hereof, the Company shall notify the Holders of the Notes being prepaid of any
date set for prepayment (each, a "PREPAYMENT DATE") at least five (5) days but
not more than thirty (30) days prior to such Prepayment Date. Once notice of
prepayment of a Note is sent or mailed, such Note shall become due and payable
on the relevant Prepayment Date. On the relevant Prepayment Date, such Note
shall be paid in full plus accrued interest, if any, to the Prepayment Date and
any premium required by SECTION 3.4, 3.5, or 3.6, as applicable, and immediately
after such payment, each Holder shall surrender each of its prepaid Notes to the
Company and, if any portion of any such Note remains unpaid, the Company shall
issue to the Holder thereof a new Note representing such unpaid principal
amount.
Section 3.10. Restrictions on Optional Prepayments.
(a) Notwithstanding anything in this Agreement to the contrary,
the Company may not make any optional prepayment on the Notes, whether pursuant
to SECTION 3.4, 3.5 or 3.6
24
or otherwise, and whether in whole or in part, if such prepayment would result
in a Default or an Event of Default (as defined in the Credit Agreement).
(b) Notwithstanding anything in this Agreement to the contrary,
if as of any date at which the notice described in SECTION 3.7(a) is required to
be given, the terms of the Credit Agreement prohibit a repurchase under SECTION
3.7, then the Company shall, prior to making any such repurchase and prior to
the applicable Change of Control Payment Date, either: (1) obtain the written
consent of the Agent on behalf of the lenders under the Credit Agreement to the
applicable repurchase or (2) repay all obligations under the Credit Agreement
and terminate the Credit Agreement. Notwithstanding anything in this Agreement
to the contrary, if the Company is required to and fails to comply with the
preceding sentence, then an Event of Default shall be deemed to have occurred
under SECTION 5.1(a) hereunder as of the applicable Change of Control Payment
Date.
Section 3.11. Method of Payment on the Notes. The principal of, premium,
if any, and interest on the Notes shall be payable in lawful currency of the
United States by check in New York Clearing House Funds at the principal office
of each of the Holders or, at each Holder's option, by wire transfer in
immediately available funds to the account or accounts previously designated in
writing by each of the Holders at least three (3) Business Days prior to the due
date.
ARTICLE IV
COVENANTS
The Company covenants and agrees with each of the Holders as follows:
Section 4.1. Payment of the Notes.
(a) The Company shall promptly pay the principal of and interest
on the Notes on the date and in the manner provided herein and in the Notes. In
addition to and not by limitation of the foregoing, on December 30, 2008 the
Company shall make a principal payment on the Notes in an amount equal to $50.00
for each $1,000.00 principal amount of the Notes outstanding on such date.
(b) The Company shall pay interest on overdue principal of and on
overdue installments of interest on the Notes in the manner provided in the
Notes.
Section 4.2. Limitation on Debt.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, issue, directly or indirectly, any Debt unless,
after giving effect to the issuance of such Debt and the receipt and application
of the proceeds therefrom, (i) the Consolidated Leverage Ratio is less than or
equal to 5:00 to 1; and (ii) the Consolidated EBITDA Coverage Ratio exceeds the
amount set forth below with respect to the period in which such Debt is to be
incurred:
25
Period Consolidated EBITDA Coverage Ratio
------ ----------------------------------
June 30, 2000 -- June 29, 2003 1.75
June 30, 2003 -- June 29, 2004 2.00
June 30, 2004 and thereafter 2.25
If the Company or any of its Restricted Subsidiaries proposes to issue
Debt in excess of $5.0 million (other than as provided under SECTION 4.2(b))
pursuant to this SECTION 4.2(a), it shall furnish to the Holders of the Notes on
or prior to five days prior to the issuance of such Debt a calculation in
reasonable detail, certified by the chief financial officer, treasurer or
controller of the Company, demonstrating compliance with this SECTION 4.2(a). If
the Company or any of its Restricted Subsidiaries proposes to issue Debt of $5.0
million or less (other than as provided under SECTION 4.2(b)) pursuant to this
SECTION 4.2(a), it shall furnish to the Holders of the Notes as soon as
commercially practicable (but in no event more than ten days) thereafter a
calculation in reasonable detail, certified by the chief financial officer,
treasurer or controller of the Company, demonstrating compliance with this
SECTION 4.2(a).
(b) Notwithstanding SECTION 4.2(a), but subject to SECTION
4.2(c), the Company and the Restricted Subsidiaries of the Company may issue the
following Debt:
(i) Debt issued pursuant to the Credit Agreement in an
amount up to the Maximum Credit Agreement Amount and Debt (including
Secured Debt) outstanding as of the Original Closing Date. The "MAXIMUM
CREDIT AGREEMENT AMOUNT" at any date shall mean (1) One Hundred Seventy
Million Dollars ($170,000,000) less (2) 50% of the cumulative aggregate
payments of principal of the Term Loans (as defined in the Credit
Agreement), from and after the Original Closing Date to the applicable
date of determination, excluding any unscheduled pre-payments of
principal made in connection with a refinancing of Debt issued pursuant
to Term Loans under the Credit Agreement;
(ii) Debt issued in exchange for, or the net proceeds of
which are used to refund or refinance any Debt permitted by SECTION 4.2
hereof (and any refunding or refinancings thereof) (collectively,
"REFINANCING DEBT"); provided, that (A) the principal amount of such new
Debt (or, if such new Debt provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, the original issue price of such new Debt) so
issued, shall not exceed the sum of (x) the aggregate principal amount
(plus premiums, accrued interest, fees and expenses and all other
amounts payable in connection therewith) of the Debt so exchanged,
refunded or refinanced plus (y) any fees and expenses incurred in
connection with the issuance of such new Debt; (B) such new Debt (1)
shall not mature prior to the Stated Maturity of the Debt so exchanged,
refunded or refinanced, and (2) shall have an Average Life equal to or
greater than the remaining Average Life of the Debt so exchanged,
refunded or refinanced; (C) such new Debt shall not expressly prohibit
mandatory payments of the Notes or distributions from any Subsidiary of
the Company to the Company to permit the Company to make such payments,
absent an event of default under the agreement governing such new Debt,
except that, in the case of the Credit Agreement, such
26
restrictions which are no more onerous than those contained in the
Credit Agreement on the date hereof shall be permitted; and (D) any Debt
issued under this section in exchange for, or the net proceeds of which
are used to refund or refinance, any Non-Recourse Debt must also be
Non-Recourse Debt; provided, however, that the foregoing provisos shall
not apply to Debt issued to refund, refinance or replace all Notes then
outstanding. For purposes of this clause (ii), Debt may be incurred in
exchange for, or to refund or refinance, operating leases in existence
on the Original Closing Date, notwithstanding the fact that such
operating leases do not constitute "Debt", so long as the incurrence of
such Debt would have been permitted under this clause (ii) had the
operating lease in question been a Capital Lease.
(iii) Debt owed to and held by a Wholly Owned Subsidiary
of the Company, or Debt owed to and held by the Company; provided, that
any subsequent issuance or transfer of any Capital Stock that results in
any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary
of the Company or any subsequent transfer of such Debt (other than to
the Company or a Wholly Owned Subsidiary of the Company) shall be
deemed, in each case, to constitute the issuance of such Debt;
(iv) Debt (A) incurred in respect of performance, surety
or appeal bonds provided in the ordinary course of business, (B)
incurred under Hedging Obligations, provided that (1) such Hedging
Obligations arise under an Interest Rate Agreement or Currency Agreement
entered into and maintained in the ordinary course of business (and not
for speculative purposes) and (2) such agreements do not increase the
Debt of the obligor outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates or by
reason of fees, indemnities and compensation payable thereunder, and (C)
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, or from guarantees or letters of
credit, surety bonds or performance bonds securing any obligations of
the Company or any Restricted Subsidiary of the Company pursuant to such
agreements, in any case, issued in connection with the disposition of
any business, assets or Restricted Subsidiary of the Company (other than
guarantees of Debt issued by any Person acquiring all or any portion of
such business, assets or Restricted Subsidiary of the Company for the
purpose of financing such acquisition);
(v) Debt in respect of letters of credit and bankers'
acceptances incurred in the ordinary course of business;
(vi) Acquired Debt;
(vii) Debt evidenced by the Original Notes and the New
Notes;
(viii) Junior subordinated notes issued pursuant to the
terms of SECTION 7.4 of the Shareholders Agreement as in effect on the
Amendment and Restatement Date;
(ix) Debt issued in connection with the acquisition of any
business, assets or Subsidiary, provided, that (i) such Debt is issued
to the seller thereof,(ii) such
27
Debt is unsecured, and (iii) such Debt is subordinated in right of
payment to the Notes pursuant to a subordination agreement in form and
substance acceptable to the Purchasers in their reasonable
determination;
(x) Debt in an aggregate principal amount not in excess of
Six Million Two Hundred Fifty Thousand Dollars ($6,250,000);
(xi) In addition to the Debt permitted by clauses (i)
through (x) of this SECTION 4.2(b) and by SECTION 4.2(a) above, Debt
which is Pari Passu with the Notes in an aggregate outstanding principal
amount which is not at any time in excess of Nine Million Three Hundred
Seventy-Five Thousand Dollars ($9,375,000); provided, however, that to
the extent that the Company desires to issue Debt which is Pari Passu
with the Notes pursuant to this clause (xi) it will first offer each
Purchaser the opportunity to purchase such Debt on a pro rata basis on
equivalent terms as those proposed to be offered to a third party; and
(xii) Debt consisting of L2,300,000 aggregate principal
amount of the Loan Stock.
(c) Notwithstanding the provisions of SECTION 4.2(b) above, the
Restricted Subsidiaries of the Company shall not issue any Debt pursuant to
SECTION 4.2(b)(ii) above if the proceeds thereof are used, directly or
indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any
Subordinated Obligations, unless the provisions of such Debt contain
subordination provisions which, in the aggregate, subordinate such Debt to the
Notes in substantially the same manner as such Subordinated Obligations were
subordinated to the Notes (or in a manner which is more subordinated than such
Subordinated Obligations).
(d) The Company shall not issue any new Debt which expressly
prohibits mandatory payments of the Notes or distributions from any Subsidiary
of the Company to the Company to permit the Company to make such payments,
absent an event of default under the agreement governing such new Debt, except
that, in the case of refinancings of the Credit Agreement, restrictions which
are no more onerous than those contained in the Credit Agreement on the date
hereof shall be permitted.
Section 4.3. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to directly or indirectly (i) declare or pay any
dividend or make any distribution on or in respect of its Capital Stock (other
than stated dividends on or in respect of the Preferred Stock of the Company
outstanding on the Amendment and Restatement Date) (including any such payment
in connection with any merger or consolidation involving the Company), except
dividends or distributions payable solely in its Non-Convertible Capital Stock
or in options, warrants or other rights to purchase its Non-Convertible Capital
Stock and except dividends or distributions payable to the Company or any of its
Restricted Subsidiaries, (ii) purchase, redeem or otherwise acquire or retire
for value any Capital Stock of the Company from any shareholder of the Company
(other than any Restricted Subsidiary of the Company), (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled
28
repayment or scheduled sinking fund payment any Subordinated Obligations, or
(iv) make any Investment in any Affiliate of the Company, other than any of its
Restricted Subsidiaries (after giving effect to such Investment) and other than
with respect to any directors, officers or employees of the Company in the
ordinary course of business or in any of its Restricted Subsidiaries (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment set forth in clauses (i) through (iv)
above being herein referred to as a "RESTRICTED PAYMENT"; provided that no
payment made in respect of the Loan Stock shall constitute a "Restricted
Payment") if at the time of and after giving effect to such Restricted Payment:
(x) a Default or Event of Default shall have occurred and be
continuing (or would result therefrom), or
(y) the aggregate amount expended for all Restricted Payments,
other than those Restricted Payments permitted pursuant to clauses
(b)(i), (ii), (iii), (vi), (vii) (to the extent, with respect to clause
(vii), that either (A) such payments are made in cash and such purchase,
together with all other purchases of stock for cash from directors,
officers and employees which occurred during the twelve months prior to
such purchase, does not exceed $1,000,000 plus the Replenishment Amount
or (B) such payments are made in junior subordinated notes), (viii),
(ix), (x), (xi) and (xii) of SECTION 4.3(b) hereof (the amount so
expended, if other than in cash, to be determined in good faith by the
Board of Directors of the Company, whose determination shall be
conclusive and evidenced by a Board Resolution), after the date of this
Agreement shall exceed the sum, without duplication, of:
(1) fifty percent (50%) of the aggregate amount of the
Consolidated Net Income (or, if the Consolidated Net Income is a
loss, minus 100% of the aggregate amount of the Consolidated Net
Income) of the Company (determined by excluding income resulting
from the transfers of assets received by the Company or a
Restricted Subsidiary from an Unrestricted Subsidiary) accrued
on a cumulative basis during the period (taken as one accounting
period) beginning on the first day of the quarter immediately
following the Original Closing Date and ending on the last day
of the last fiscal quarter preceding the date of determination,
plus
(2) the aggregate net proceeds (including the fair
market value of noncash proceeds as determined in good faith by
the Board of Directors of the Company) received by the Company
from the issuance and sale permitted by this Agreement of the
Capital Stock of the Company (other than Redeemable Stock),
except to the extent such proceeds are applied pursuant to and
in the manner provided in the provisions of SECTION 4.3(b)(i)
hereof, to a Person who is not a Restricted Subsidiary of the
Company or an Unrestricted Subsidiary of the Company, including
an issuance or sale permitted by this Agreement for cash or
other property upon the conversion of any Debt of the Company
subsequent to the Original Closing Date, or from the issuance of
any options, warrants or other rights to acquire Capital Stock
of the Company (in each case,
29
exclusive of any Redeemable Stock or any options, warrants or
other rights that are redeemable at the option of the holder, or
are required to be redeemed, prior to the Stated Maturity of the
Notes), plus
(3) the amount by which Debt of the Company or any of
its Restricted Subsidiaries is reduced on the Company's balance
sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the issuance of Debt of
the Company or any of its Restricted Subsidiaries convertible or
exchangeable for Capital Stock (other than Redeemable Stock)
(less the amount of any cash or the value of any other property
of the Company or any Restricted Subsidiary distributed by the
Company or any Restricted Subsidiary upon such conversion or
exchange), plus
(4) an amount equal to the net reduction in Investments
in Unrestricted Subsidiaries (other than such Investments made
pursuant to clause (iii) of SECTION 4.3(b)) resulting from
payments of interest on Debt, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the
Company or any Restricted Subsidiary from Unrestricted
Subsidiaries, or from redesignation of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as provided in
the definition of "INVESTMENTS"), plus
(5) $2,000,000.
(b) The provisions of SECTION 4.3(a) shall not prohibit:
(i) provided no Event of Default has occurred and is
continuing, any purchase, redemption or other acquisition of Capital
Stock or Debt of the Company or any of its Restricted Subsidiaries made
in exchange for, or out of the cash proceeds of a sale of, Capital Stock
of the Company;
(ii) provided no Event of Default has occurred and is
continuing, any purchase, redemption or other acquisition of Debt of the
Company or any of its Restricted Subsidiaries made in exchange for, or
out of the proceeds of a substantially concurrent sale of, Debt of the
Company which is permitted to be issued pursuant to SECTION 4.2 and
which contains subordination provisions which, in the aggregate,
subordinate such Debt to the Notes in substantially the same manner as
the Debt which was purchased, redeemed or acquired was subordinated to
the Notes (or in a manner which is more subordinated than such
purchased, redeemed or acquired Debt);
(iii) provided that no Event of Default has occurred and
is continuing, the making of Investments in Unrestricted Subsidiaries of
the Company in an aggregate amount not to exceed $1,000,000 in each
fiscal year;
(iv) dividends paid within sixty (60) days after the date
of declaration thereof if at such date of declaration such dividend
would have complied with this Section;
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(v) provided that no Event of Default has occurred and is
continuing, the payment of dividends on the Capital Stock of the
Company, following any public offering of Capital Stock of the Company,
of up to six percent (6%) per annum of the net proceeds thereof received
by the Company (provided that the Company has prepaid or acquired,
either pursuant to the provisions of SECTION 3.5 hereof or otherwise, at
least thirty five percent (35%) of the aggregate principal amount of the
Notes outstanding as of the date hereof (after giving effect to the
issuance of the New Notes);
(vi) payments to the Company in respect of Debt of any
Restricted Subsidiary of the Company owed to the Company, or, provided
that no Event of Default has occurred and is continuing, payments to any
Restricted Subsidiary of the Company in respect of Debt of the Company
or another Restricted Subsidiary owed to such Restricted Subsidiary;
(vii) any purchases of Capital Stock made by the Company
from employees, directors or officers or their respective legal
representatives in connection with the deaths, disabilities or
retirements of, or terminations of employment of, employees, or the
deaths, disabilities, retirements or terminations of directors and any
other purchases of Capital Stock of the Company by the Company
contemplated by the Shareholders Agreement;
(viii) any purchases of Capital Stock of the Company from
the estate of any Person who was a member of management or an employee
of the Company with the proceeds of life insurance purchased by the
Company on the life of such Person;
(ix) payments or distributions pursuant to or in
connection with a consolidation, merger or other transaction that
complies with the provisions of ARTICLE II hereof;
(x) payments or distributions to the Company to fund, and
in an amount not to exceed, the actual cash taxes and cash expenses then
payable by the Company;
(xi) in connection with the exercise or vesting of options
under the Company's 2000 Stock Option Plan, the Company permitting
employees, managers and directors to satisfy their obligations to
reimburse the Company for federal, state or local income taxes, and
other amounts which the Company is required to withhold, by delivering
shares of Capital Stock previously owned by such employees, managers and
directors or agreeing to a reduction in the number of shares of Capital
Stock which would otherwise be distributable pursuant to the exercise of
such options, all in accordance with the provisions of such plan, as the
same may be amended, modified, supplemented, restated or replaced from
time to time;
(xii) payments to employees, managers and directors under
junior subordinated notes issued in connection with the Company's
repurchase of shares of Capital Stock from such employees, managers
and/or directors, provided that the amount of such payments shall not
exceed (A) the amount of federal, state and local tax payable
31
by such employees, managers and directors in connection with such
repurchase minus (B) the amount, if any, of federal, state and local
income tax which was withheld by the Company and reimbursed by such
employees, managers and/or directors by the delivery of shares of
Capital Stock (or the reduction in the number of issued shares of
Capital Stock) in accordance with clause (xi) above;
(xiii) provided no Event of Default has occurred and is
continuing, any purchase, redemption or other acquisition of Preferred
Stock of the Company or any of its Restricted Subsidiaries, provided
that such repurchases, redemptions or such other acquisitions may not
result in payments in excess of $5 million per fiscal year; and
(xiv) provided no Event of Default has occurred and is
continuing, dividends or distributions on or in respect of Capital Stock
which consist of shares of Series G Convertible Preferred Stock of the
Company having the terms described on Schedule 3.1.
Section 4.4. Limitation on Liens. The Company shall not, and shall not
permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to
exist any Liens, except for:
(a)Liens securing Debt incurred pursuant to the Credit Agreement
and Liens permitted by the Credit Agreement;
(b)Liens securing Debt incurred pursuant to clauses (i), (iv), or
(x) of SECTION 4.2(b);
(c)Liens in respect of Refinancing Debt permitted to be incurred
in accordance with this Agreement, provided, that the terms of such Liens in
respect of such Refinancing Debt are not less favorable to the Holders than
terms of the Liens securing the Debt outstanding as of the date hereof being
refinanced and do not extend to or cover any property or assets of the Company
or of any of its Restricted Subsidiaries not securing such currently outstanding
Debt;
(d)Liens in respect of Acquired Debt permitted to be incurred in
accordance with this Agreement; provided, that such Liens in respect of such
Acquired Debt do not extend to or cover any property or assets of the Company or
of any of its Restricted Subsidiaries other than the property or assets that
secured the Acquired Debt prior to the time such Debt became Acquired Debt of
the Company or such Restricted Subsidiaries; and
(e)Permitted Liens.
Section 4.5. Restrictions on Distributions from Subsidiaries of the
Company. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any such Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock or pay any Debt or other obligation owed to
the Company or any other Restricted Subsidiary of the Company, (b) make any
loans or advances to the Company or any other Restricted Subsidiary of the
Company or (c) transfer any of its property or assets to the Company, except:
32
(1) any encumbrance or restriction pursuant to an
agreement entered into prior to the Original Closing Date and
which is in effect on the Original Closing Date (including
without limitation the Credit Agreement) and any refinancing or
refunding thereof permitted pursuant to SECTION 4.2 hereof;
(2) any encumbrance or restriction with respect to a
Subsidiary of the Company pursuant to an agreement relating to
any Acquired Debt of such Subsidiary;
(3) any encumbrance or restriction pursuant to an
agreement effecting a refinancing of Debt issued pursuant to an
agreement referred to in clause (1) or (2) of this Section or
contained in any amendment to an agreement referred to in clause
(1) or (2) of this Section; provided that the encumbrances and
restrictions contained in any such refinancing agreement or
amendment are, in the reasonable determination of the Board of
Directors of the relevant entity whose determination shall be
conclusive and evidenced by a Board Resolution, not materially
less favorable to the Holders of the Notes than the encumbrances
and restrictions contained in such agreements;
(4) in the case of SECTION 4.5(c) above, any
encumbrances or restrictions (A) that restrict in a customary
manner the subletting, assignment or transfer of any property or
asset that is a lease, license, conveyance or contract or
similar property or asset, (B) existing by virtue of any
transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any of
its Restricted Subsidiaries not otherwise prohibited by this
Agreement, (C) arising or agreed to in the ordinary course of
business and that do not, individually or in the aggregate,
detract from the value of property or assets of the Company or
any of its Restricted Subsidiaries in any manner material to the
Company and its Restricted Subsidiaries taken as a whole or (D)
on any property or assets of any Restricted Subsidiary
substantially all of whose assets are secured by Liens not
otherwise prohibited by this Agreement;
(5) in the case of SECTION 4.5(c) above, any
restrictions contained in security agreements or mortgages
securing Debt of a Restricted Subsidiary to the extent such
restrictions restrict the transfer of the property subject to
such security agreements or mortgages; and
(6) any restriction with respect to a Restricted
Subsidiary of the Company imposed pursuant to an agreement that
has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and
assets of, such Restricted Subsidiary.
Section 4.6. Limitation on Transactions with Affiliates.
33
(a)The Company shall not, and shall not permit any of its
Subsidiaries to, conduct any business or enter into any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) or series of related transactions with any Affiliate of the Company or
any owner of five percent (5%) or more of any class of Capital Stock of the
Company or with an Affiliate of any such owner (other than a Subsidiary of the
Company or any employee stock ownership plan for the benefit of the Company's or
any of its Subsidiaries', directors, officers or employees) unless the terms of
such business, transaction or series of transactions are (i) set forth in
writing, (ii) on terms and conditions that are not materially less favorable to
the Company or such Subsidiary than those terms and conditions that would be
obtainable at the time for a comparable transaction or series of similar
transactions in arm's-length dealings with an unrelated third Person and (iii)
if the amount involved in any transaction or series of similar transactions is
in excess of $500,000 in any one instance or are in excess of $1,000,000 in
aggregate over any one-year period, the disinterested members of the Board of
Directors have, by a Board Resolution, determined in good faith that the
criteria set forth in clause (ii) are satisfied.
(b) The provisions of SECTION 4.6(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to SECTION 4.3, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options, stock appreciation rights, stock ownership and similar benefit plans
approved by the Board of Directors, (iii) compensation and benefit arrangements,
and loans and advances to officers and employees, in the ordinary course of
business based on past practice, (iv) the payment of reasonable fees and
expenses to directors of the Company or its Subsidiaries who are not employees
of the Company or its Subsidiaries, (v) any transaction between the Company and
a Wholly Owned Subsidiary of the Company or between Wholly Owned Subsidiaries of
the Company, (vi) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company files
a consolidated tax return or with which the Company is part of a consolidated
group for tax purposes, (vii) any transaction determined by a nationally
recognized investment banking firm or a nationally recognized accounting firm to
be reasonable or fair to the Company or any of its Subsidiaries which is a party
thereto, (viii) any fees, expenses or indemnities payable by the Company to
Windward Capital Management LLC pursuant to the terms of that certain letter
agreement, dated as of June 30, 2000, between the Company and Windward Capital
Management LLC, as in effect on the date hereof, (ix) any fees, expenses or
indemnities payable by the Company to Windward Capital Management LLC pursuant
to the terms of the Management Agreement, (x) any provision by the Company or
any of its Restricted Subsidiaries of directors' and officers' insurance for the
benefit of, or any indemnification by the Company or any of its Restricted
Subsidiaries of, their respective directors and officers, (xi) any transactions,
including without limitation indemnification in the event of a Registration (as
defined therein), contemplated by the Shareholders Agreement, (xii) any
amendment, modification, extension or renewal of any of the foregoing
arrangements; provided that the provisions of any such amendment, modification,
extension or renewal are (1) approved by the disinterested members of the Board
of Directors or (2) determined by a nationally recognized investment banking
firm or a nationally recognized accounting firm to be reasonable or fair to the
Company or any of its Subsidiaries which is a party thereto, (xiii) any
employment agreement, proprietary or confidentiality agreement or
non-competition agreement entered into with any employee or officer, in the
ordinary course of business consistent with past practice or as otherwise
approved
34
by the Board of Directors, (xiv) to the extent not included in the foregoing,
any transactions contemplated by the 2000 Stock Option Plan, (xv) the New
Transaction, and (xvi) the payment of a fund-raising fee to the Windward Group
in connection with the Raven Acquisition in the amount not in excess of $900,000
and reimbursement of expenses of the Windward Group in connection therewith.
Section 4.7. Notice of Default. The Company will furnish to each of the
Holders of the Notes, within thirty (30) days following the date in which the
Company becomes aware of the existence of any condition or event which
constitutes a Default or an Event of Default, written notice specifying the
nature and period of existence thereof and the action which the Company is
taking or proposes to take with respect thereto. In addition, in the event the
Company receives any notice commencing a Non-Monetary Default Blockage Period
under SECTION 6.3 or the Company fails to pay any Senior Debt when due, the
Company will promptly (and in any event within five (5) business days thereof)
give written notice thereof to the Holders of the Notes specifying in reasonable
detail the relevant facts with respect thereto.
Section 4.8. Authorizations and Approvals. The Company will promptly
make or obtain, from time to time at its own expense, all such governmental
notices, filings, licenses, authorizations, consents, permits and approvals as
may be required to enable it to comply with obligations hereunder and under the
Notes.
Section 4.9. Provision of Periodic Financial Information. The Company
shall keep adequate records and books of account with respect to its business
activities in which proper entries are made in accordance with GAAP reflecting
its financial transactions; and cause to be prepared and furnished to the
Holders of the Notes the following (all to be prepared in accordance with GAAP
applied on a consistent basis, unless the Company's certified public accountants
concur in any change therein and such change is consistent with GAAP):
(a) not later than 120 days after the close of each fiscal year of
the Company, audited financial statements of the Company and its Subsidiaries as
of the end of such year, on a consolidated and consolidating basis, certified,
in the case of the consolidated statements, by Ernst & Young LLP or another firm
of independent certified public accountants of recognized standing selected by
the Company;
(b) not later than forty-five (45) days after the end of each
quarterly accounting period of the Company, unaudited interim financial
statements of the Company and its Subsidiaries as of the end of such period and
of the portion of the Company's financial year then elapsed, on a consolidated
basis, certified by the chief financial officer or treasurer of the Company (or
by any Officer of the Company if at such time there is no chief financial
officer or treasurer of the Company) as prepared in accordance with GAAP and
fairly presenting in all material respects the consolidated financial position
and results of operations of the Company and its Subsidiaries for such period
subject only to changes from audit and year-end adjustments and except that such
statements need not contain notes;
(c) as soon as available and in any event within 45 days after the
end of each calendar month, a monthly operating statement of the Company and its
Subsidiaries for such month, in substantially the form attached hereto as
Exhibit D, together with a calculation of Total
35
Debt as of the last day of such calendar month, in each case certified by the
chief financial officer or treasurer of the Company (or by any Officer of the
Company if at such time there is no chief financial officer or treasurer of the
Company);
(d) promptly after the sending or filing thereof, as the case may
be, copies of any proxy statements, financial statements or reports which the
Company has made available to its shareholders generally and copies of any
regular, periodic and special reports or registration statements which the
Company files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or any national securities
exchange;
(e) concurrently with the delivery of the financial statements
described in clauses (a) and (b) of this SECTION 4.9, a certificate of the
Company's chief financial officer, treasurer or controller certifying as to the
Company's compliance with each of the provisions of this ARTICLE IV and
illustrating such compliance, with such calculations and other details as may be
reasonably requested by any Holder;
(f) not later than sixty (60) days after the end of each fiscal year
of the Company, the annual budget of the Company for the next fiscal year,
prepared on a quarterly basis; and
(g) such other information as any Holder, from time to time, may
reasonably request, relating to the Company or its Subsidiaries.
Section 4.10. Visits and Inspections. The Company shall permit
representatives of the Holders (so long as no Default or Event of Default is in
existence, at the expense of the Holders), from time to time, as often as may be
reasonably requested (upon reasonable advance notice at all times that no Event
of Default has occurred and is continuing), but only during normal business
hours, to visit and inspect the properties of the Company and each of its
Restricted Subsidiaries, audit and make extracts from its books and records, and
discuss with its officers, its employees and its independent accountants (it
being agreed that the Company shall be entitled to be present at any such
meeting with its accountants) the Company's and its Restricted Subsidiaries'
business, assets, liabilities, financial condition, business prospects and
results of operations.
Section 4.11. Limitation on Issuance Certain Preferred Stock. The
Company shall not issue any Preferred Stock that is not Permitted Preferred
Stock.
Section 4.12. Future Subsidiary Guaranty.
(a) Subject to SECTION 4.12(b) hereof, if a domestic subsidiary of
the Company issues, pursuant to the terms of the Credit Agreement, a US
Subsidiary Guaranty (as defined in the Credit Agreement) to the Agent and
Lenders under, and as defined in, the Credit Agreement, then the Company shall
cause such subsidiary to issue a similar guaranty to the Purchasers, provided
that such guaranty shall be in all respects subordinated to the obligations of
such subsidiary guarantor under the US Subsidiary Guaranty issued pursuant to
the Credit Agreement on terms at least as favorable to the Lender Parties (as
defined in the Credit Agreement) as the subordination provisions contained in
this Agreement; provided, however, that the foregoing requirements will not
apply to MSG Investments, Inc. so long as the guaranty provided by MSG
Investments, Inc. under the Credit Agreement is limited to a guaranty of
obligations of foreign obligors under the Credit Agreement.
36
(b) Notwithstanding the provisions of SECTION 4.12(a) above, no
guaranty shall be required pursuant to SECTION 4.12(a) if either: (i) such
subsidiary has assets having a fair market value of less than $5.0 million in
the aggregate or (ii) the Company is taking reasonable actions to dissolve,
liquidate, merge or otherwise convey such subsidiary to the Company. The parties
acknowledge the provisions of this SECTION 4.12 do not apply to any subsidiary
organized under laws other than those of the United States.
Section 4.13. Board Observation. The Company agrees that each Initial
Holder shall have the right to receive all notices of, and to attend (either in
person or by telephonic conference) at the expense of such Initial Holder, all
meetings of the Company's Board of Directors and any committees thereof. Each
such Initial Holder shall be entitled to receive copies of all minutes of such
meetings, together with copies of any items distributed to the members of the
Board of Directors at such meetings, whether or not such Initial Holder attends
any such meeting. The foregoing rights shall survive the prepayment in full of
the Notes with respect to any Initial Holder which continues to own a WCI
Membership Interest or WCI II Membership Interest or shares of the Associated
Common Stock or Common Stock. The rights of each Initial Holder under this
Section 4.13 may be exercised by such Initial Holder or an Affiliate of such
Initial Holder that becomes a Holder of Notes or WCI Membership Interests or WCI
II Membership Interests only so long as such Initial Holder or its Affiliates
owns Notes, Associated Common Stock or Common Stock; provided that the rights of
each Initial Holder under this Section 4.13 may not be exercised by more than
two Persons who would attend such meetings on behalf of such Initial Holder at a
time. Notwithstanding the foregoing, the rights under this Section 4.13 shall
terminate upon an IPO.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.1. Events of Default. An "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment of any interest on any of
the Notes when the same becomes due and payable, whether or not such payment
shall be prohibited by ARTICLE VI, and such default continues for five (5) days;
or
(b) the Company defaults in the payment of the principal of any of
the Notes when the same becomes due and payable at the Stated Maturity thereof,
upon redemption, upon acceleration or otherwise, whether or not such payment
shall be prohibited by ARTICLE VI; or
(c) any representation or warranty made by the Company herein shall
be false in any material respect on the date as of which made, or the Company
fails to comply with any of the provisions applicable to it under ARTICLE II, or
SECTIONS 3.7, 3.8, 3.10(b), 4.2 (with respect to an amount in excess of $5.0
million), SECTION 4.3 (with respect to an amount in excess of $500,000), SECTION
4.6 (with respect to an amount in excess of $500,000) or SECTION 4.7 of this
Agreement; or
37
(d) the Company fails to comply with any of the other provisions
applicable to it under the Notes or as otherwise set forth in this Agreement
(other than as specifically provided in the other clauses of this SECTION 5.1)
and in each case the failure continues for thirty (30) days; or
(e) an event of default occurs under any instrument under which
there may be issued, or by which there may be secured or evidenced, any Debt of
the Company or any of its Restricted Subsidiaries which is a Significant
Subsidiary resulting in the acceleration of such Debt, or any default occurs in
payment of any such Debt on the final maturity date thereof, including pursuant
to any mandatory redemption or prepayment provision, beyond any applicable grace
period, if the total of all such Debt which has been so accelerated and any
additional Debt which has not been paid on the final maturity date thereof shall
exceed $2,000,000, and there shall have been a failure to obtain rescission or
annulment of all such accelerations or to pay in full the amount in default
(together with any applicable interest); or
(f) (i) the Company or any of its Significant Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law or any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Company or any of its Significant Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Company or any of its Significant Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
sixty (60) days; or (iii) there shall be commenced against the Company or any of
its Significant Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
any order for any such relief which shall not have been vacated, discharged or
stayed or bonded pending appeal within sixty (60) days from the entry thereof;
or (iv) the Company or any of its Significant Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Company or any of its Significant Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; provided, however, that notwithstanding anything to the contrary
contained in this SECTION 5.1(f), neither the voluntary liquidation, dissolution
or winding up of a Subsidiary into a Wholly-Owned Subsidiary of the Company or
into the Company, nor any action in furtherance of, or consent, approval or
acquiescence with respect to, any such liquidation, dissolution or winding up,
shall constitute an Event of Default; or
(g) any judgment or decree for the payment of money in excess of
$2,000,000 or its foreign currency equivalent at the time is entered against the
Company or any of its Significant Subsidiaries and is not discharged and either
(i) an enforcement proceeding has been commenced by a creditor upon such
judgment or decree or (ii) there is a period of sixty (60) days following the
entry of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed.
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The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
A default under clauses (c) or (d) above shall not constitute an Event
of Default until the Holders of a majority in principal amount of the Notes
notify the Company of the default and the Company does not cure the default
within thirty (30) days after receipt of such notice. The notice must specify
the Default and demand that it be remedied.
Section 5.2. Acceleration. If an Event of Default (other than an Event
of Default specified in SECTION 5.1(f)(i) OR (ii) with respect to the Company)
occurs and is continuing, the Holders of a majority of the principal amount of
the Notes at the time outstanding, by notice to the Company, may declare the
principal of and accrued interest on all the Notes to be due and payable.
Subject to the provisions of Article VI, upon such a declaration such principal
and interest shall be due and payable immediately. If an Event of Default
specified in SECTION 5.1(f)(i) OR (ii) with respect to the Company occurs and is
continuing, then the principal of all of the Notes shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of any Holder of the Notes. The Holders of a majority in principal amount of the
Notes by notice to the Company may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of acceleration. In the
event of a declaration of acceleration because an Event of Default set forth in
clause (e) or (g) above has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (e) or (g) shall be
remedied, cured by the Company or waived by the holders of the relevant Debt
within sixty (60) days after the declaration of acceleration with respect
thereto.
Section 5.3. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Holders of the Notes is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent or subsequent assertion or
employment of any other appropriate right or remedy.
Section 5.4. Delay or Omission Not Waiver. No delay or omission of the
Holders of the Notes to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this ARTICLE V or by law to the Holders of the Notes may be exercised from time
to time, and as often as may be deemed expedient, by the Holders of the Notes.
Section 5.5. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted,
39
now or at any time hereafter in force, which may affect the covenants or the
performance of any Note; and the Company (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Holder but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 5.6. Waiver of Past Defaults. The Holders of a majority of the
principal amount of the Notes then outstanding by notice to the Company may
waive any existing Default or Event of Default and its consequences except a
Default or Event of Default arising out of SECTION 5.1(a), (b) OR (f). A Default
or Event of Default and its consequences arising out of SECTION 5.1(a) OR (b)
may be waived only by the Holders of one hundred percent (100%) of the principal
amount of the Notes then outstanding by notice to the Company. When a Default or
Event of Default is waived, it is deemed cured, but no such waiver shall extend
to any subsequent or other Default or Event of Default.
Section 5.7. Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Agreement or the Notes other than ARTICLE VI hereof, the
right of any Holder to receive payment of principal of, premium, if any, and
interest on the Notes held by such Holder, on or after the respective due dates
expressed in the Notes, or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be affected without the consent of
such Holder.
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement To Subordinate. The Company agrees, and each
Holder of the Notes by accepting a Note agrees, that the indebtedness and other
payment obligations incurred under this Agreement or evidenced by the Notes,
including without limitation all indemnification obligations of the Company
under ARTICLE XI, are subordinated in right of payment, to the extent and in the
manner provided in this ARTICLE VI, to the prior indefeasible payment in full in
cash of all Senior Debt, and that the subordination is for the benefit of the
holders of Senior Debt, and only indebtedness of the Company and of any of its
Restricted Subsidiaries which is Senior Debt shall rank senior to the Notes (and
in such case only to the extent and on the terms and conditions set forth
herein).
Section 6.2. Liquidation, Dissolution, Bankruptcy. Upon any distribution
to creditors of the Company in a liquidation or a total or partial dissolution
of the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property:
(1) holders of Senior Debt shall be entitled to receive
payment in full in cash of the Senior Debt or provisions
satisfactory to the holders of Senior Debt shall be made for
such payment before the Holders of the Notes shall be entitled
to receive any payment of principal of or interest on the Notes
or in respect of any other obligation arising under this
Agreement; and
40
(2) until the Senior Debt is paid in full, in cash, any
distribution to which the Holders of the Notes would be entitled
but for this ARTICLE VI shall be made to holders of Senior Debt
as their interests may appear, except that the Holders of the
Notes may receive Permitted Junior Securities.
Section 6.3. Default on Senior Debt. If any Senior Debt is not paid when
due (without giving effect to any grace period) and such default is not cured or
waived in writing and the holder of such Senior Debt has not waived in writing
the benefits of this sentence, the Company may not pay principal of or interest
on the Notes or make any payment in respect of any other obligation arising
under this Agreement or acquire or redeem any Notes for cash, property or
securities (other than Permitted Junior Securities) unless and until such
default shall have been cured or waived in writing or shall have ceased to exist
or such Senior Debt shall have been discharged in accordance with its terms or
the holders of such Senior Debt shall have waived in writing the benefit of this
sentence, after which the Company shall resume making any and all required
payments in respect of the Notes including any missed payments. (Such period
during which such payments, acquisitions and redemptions are prohibited being
hereinafter referred to as a "PAYMENT DEFAULT BLOCKAGE PERIOD"). In addition,
during the continuance of any other event of default, or any event which upon
the giving of notice or lapse of time or both would constitute an event of
default, with respect to any Designated Senior Debt pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any further applicable grace periods, upon the receipt by the Company of written
notice thereof from or on behalf of the holders of at least a majority of the
principal amount of such Designated Senior Debt (taken together as one class) or
the Agent on behalf of the holders of such Designated Senior Debt, the Company
may not pay principal of or interest on the Notes or make any payment in respect
of any other obligation arising under this Agreement or acquire or redeem any
Notes for cash, property or securities (other than the Permitted Junior
Securities) for a period (the "NON-MONETARY DEFAULT BLOCKAGE PERIOD") commencing
on the date of receipt of such notice until the earliest of (x) 180 days
thereafter (or, if the holders of the Designated Senior Debt are then stayed
from exercising remedies under the applicable instruments evidencing such
Designated Senior Debt until the earlier of 240 days thereafter or the
expiration of such stay (for the avoidance of doubt, if such stay expires prior
to 180 days after the receipt of such notice, this parenthetical shall not be
applicable)), (y) the date, if any, on which the Designated Senior Debt to which
such event of default, or any event which upon the giving of notice or lapse of
time or both would constitute an event of default, relates is discharged in
accordance with its terms or such event of default is waived in writing by the
holders of such Designated Senior Debt in accordance with the terms of such
Designated Senior Debt or otherwise cured and (z) the date, if any, on which
such Non-Monetary Default Blockage Period shall have been terminated by written
notice to the Company from or on behalf of such holders of such Designated
Senior Debt, after which, in the case of clause (x), (y) or (z), the Company
shall, subject to the first sentence of this SECTION 6.3, resume making any and
all required payments in respect of the Notes, including any missed payments;
provided that nothing in this Section shall have any effect on the rights of the
Holders of the Notes to accelerate the maturity of the Notes pursuant to SECTION
5.2 (except to the extent otherwise provided in SECTION 6.4 below); provided,
further, that, subject to the first sentence of this SECTION 6.3, nothing in
this sentence shall prevent payment by the Company on the Notes after 180 days
(or up to 240 days, in the circumstances described above) have passed following
41
notice in writing to the holders of Designated Senior Debt of such acceleration
pursuant to SECTION 6.4. No more than one notice of a Non-Monetary Default
Blockage Period may be given by or on behalf of the holders of any Designated
Senior Debt in any 365 day period and no more than four (4) such notices in the
aggregate may be given by or on behalf of such holders after the date hereof.
Notwithstanding anything in this Agreement to the contrary, there must be 120
consecutive days in any 365-day period in which no Non-Monetary Default Blockage
Period is in effect. No event of default that existed or was continuing (it
being acknowledged that any subsequent action that would give rise to an event
of default pursuant to any provision under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose) on the date of commencement of any Non-Monetary Default Blockage Period
with respect to the Designated Senior Debt initiating such Non-Monetary Default
Blockage Period shall be, or shall be made, the basis for the commencement of a
second Non-Monetary Default Blockage Period by the representative for, or the
holders of, such Senior Debt whether or not within a period of 365 consecutive
days, unless such event of default shall have been cured or waived for a period
of not less than 90 consecutive days.
Section 6.4. Acceleration of Payment of Notes and Exercise of Remedies.
Until the Senior Debt shall have been paid in full in cash, in the event that,
and during the continuance of any Event of Default described in ARTICLE V
hereof, all or any portion of the unpaid principal amount of the Notes shall
have been declared due and payable pursuant to the provisions of ARTICLE V
hereof, such declarations shall not be effective until the earliest of (i) the
date on which an Event of Default under SECTION 5.1(f)(i) OR (ii) with respect
to the Company has occurred, or (ii) the date on which the maturity of any
Senior Debt under the Credit Agreement is accelerated, or (iii) one hundred and
twenty (120) days after the date of such declaration.
Section 6.5. When Distribution Must Be Paid Over. Without limiting the
other provisions of this Article VI, in the event that any Note is declared due
and payable before its Stated Maturity, then no payment or distribution of any
kind or character shall be made in respect of such Note and the holders of the
Senior Debt outstanding at the time of such declaration shall be entitled to
receive payment in full in cash of all amounts due (including by reason of
acceleration), or appropriate provision satisfactory to the holders of such
Senior Debt shall be made for such payment, before the Holder of any Note is
entitled to receive any payment or distribution of any kind or character
(including any payment which may be payable by reason of the payment of any
other Debt of the Company being subordinate to the payment of the Notes by the
Company). Notwithstanding the foregoing, if a distribution is made to any Holder
of the Notes that pursuant to this ARTICLE VI should not have been made pursuant
to this ARTICLE VI to such Holder, the Holder of the Notes who receives the
distribution shall upon request of the Agent pay it over to the Agent for
distribution among the holders of Senior Debt in accordance with their interests
therein (or if no Agent then exists, to the holders of Senior Debt as their
interests may appear) and, if such Holder knew at the time of receipt of such
distribution that pursuant to this ARTICLE VI such distribution should not have
been made, such Holder shall hold such distribution in trust and pay it to the
Agent or such holders.
Section 6.6. Subrogation. After all Senior Debt is paid in full in cash
and until the Notes are paid in full, the Holders of the Notes shall be
subrogated (pro rata with the holders of all Debt of the Company and its
Subsidiaries which, by its express terms, ranks Pari Passu with the Notes and is
entitled to like rights of subrogation) to the rights of holders of Senior Debt
to
42
receive the payments or distributions applicable to the Senior Debt, to the
extent payments with respect to the Notes have been applied to the payment of
the Senior Debt. Any payment or distribution made under this ARTICLE VI to
holders of Senior Debt which otherwise would have been made to the Holders of
the Notes except for the provisions of this ARTICLE VI shall not, as between the
Company, its creditors (other than the holders of the Senior Debt) and the
Holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Debt, and no payments or distributions to the holders of the Notes
of cash, property or securities by virtue of the subrogation herein provided
shall, as between the Company, its creditors (other than the holders of the
Senior Debt) and the Holders of the Notes, be deemed to be a payment to or on
account of the Notes, it being understood that the provisions of this ARTICLE VI
are and are intended solely for the purpose of defining the relative rights of
the holders of the Notes on the one hand and the holders of Senior Debt on the
other.
Section 6.7. Relative Rights. This ARTICLE VI defines the relative
rights of the Holders of the Notes and holders of Senior Debt. Nothing in this
Agreement shall:
(1) impair, as between the Company and the Holders of
the Notes, the obligations of the Company, which are absolute
and unconditional, to pay principal of and interest on the Notes
in accordance with their terms (provided, however, that this
provision is not intended to limit the restrictions on payments
on the Notes set forth in SECTION 6.3 hereof); or
(2) prevent any Holder of the Notes from exercising its
available remedies upon a Default or an Event of Default,
subject to the rights of holders of Senior Debt to receive
distributions otherwise payable to the Holders of the Notes
(provided, however, that this provision is not intended to limit
the provisions of SECTION 6.4).
If the Company fails because of this ARTICLE VI to pay principal of or
interest on a Note on the due date, the failure is still an Event of Default
(subject, in the case of failures to pay interest, to the expiration of the five
(5) day grace period, in accordance with SECTION 5.1(a)).
Section 6.8. Subordination May Not Be Impaired by Company. No right of a
holder of Senior Debt to enforce the subordination of the indebtedness evidenced
by the Notes shall be impaired by any act or failure to act by the Company or by
its failure to comply with this Agreement.
Section 6.9. Reinstatement. If, at any time, all or part of any payment
with respect to Senior Debt previously made by the Company or any other Person
is rescinded for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Company or such other Person),
the subordination provisions set forth herein shall continue to be effective or
be reinstated (including with respect to payments on the Notes prior to such
reinstatement), as the case may be, all as though such payment had not been
made.
Section 6.10. Proofs of Claim. If, while any Senior Debt is outstanding,
any Event of Default under SECTION 5.1(f)(i) OR (ii) of this Agreement, with
respect to the Company only, occurs each Holder of a Note shall, to the extent
permitted by applicable law, duly and promptly
43
take such action as the Agent (or if no Agent then exists, any representative of
the Senior Debt) may reasonably request to collect any payment hereunder to
which the holders of Senior Debt may be entitled hereunder or under the Notes,
and to file appropriate claims or proofs of claim in respect of this Agreement
and the Notes. Upon the failure of any Holder of a Note to take any such action,
the Agent (or if no Agent then exists, any representative of the Senior Debt) is
hereby irrevocably authorized and empowered (in its own name or otherwise and to
the extent permitted by applicable law), but shall have no obligation, to
demand, use, collect and receive every payment or distribution referred to
hereunder and under any such Note and to file claims and proofs of claim with
respect to this Agreement and the Notes and the Holders of the Notes hereby
appoint the Agent (or, if no Agent then exists, any representative of the Senior
Debt) as attorney-in-fact for such Holders of the Notes to take any and all
actions permitted by this paragraph to be taken by such Holders of the Notes;
provided, however, that the Agent (or representatives of the Senior Debt) shall
only be permitted to file such proofs of claim upon notice to each Holder and to
the extent that the Holders have failed to make such filings by the date which
is ten (10) days prior to the last date on which such Holders are permitted to
make such filings as a matter of applicable Bankruptcy Law.
Section 6.11. Non-Impairment. The Holders of the Notes agree and consent
that, without notice to or assent by them, and without affecting the liabilities
and obligations of the Company and the rights and benefits of the holders of the
Senior Debt set forth in this ARTICLE VI:
(1) the obligations and liabilities of the Company and
any other party or parties for or upon the Senior Debt may, from
time to time, be increased, renewed, refinanced, extended,
modified, amended, restated, compromised, supplemented,
terminated, waived or released;
(2) the holders of Senior Debt, and any representative
or representatives acting on behalf thereof, may exercise or
refrain from exercising any right, remedy or power granted by or
in connection with any agreements relating to the Senior Debt;
and
(3) any balance or balances of funds with any holder of
Senior Debt at any time outstanding to the credit of the Company
may, from time to time, in whole or in part, be surrendered or
released, all as the holders of any Senior Debt, or any
representative or representatives acting on behalf thereof, may
deem advisable, and all without impairing, abridging,
diminishing, releasing or affecting the subordination of the
Notes to the Senior Debt.
Section 6.12. No Modification. The provisions of SECTION 4.2(b)(i) and
of this ARTICLE VI and the defined terms used in this ARTICLE VI are for the
benefit of the holders from time to time of Senior Debt and, so long as any
Senior Debt or any commitments with respect thereto remain outstanding, such
provisions and defined terms may not be modified, rescinded or canceled in whole
or in part; provided, that the provisions of SECTION 4.2(b)(i) and this ARTICLE
VI and the defined terms used in SECTION 4.2(b)(i) and this ARTICLE VI may be
modified, amended or supplemented by the parties to this Agreement upon
obtaining the prior written consent of the
44
Agent; provided, however, that any such prior written consent by the Agent shall
be deemed to be authorized and binding upon the lenders pursuant to the Credit
Agreement.
Section 6.13. Waivers; Reliance by Holders of Senior Debt. To the extent
permitted by applicable law, the Holders of the Notes and the Company hereby
waive (A) notice of acceptance hereof by the holders of the Senior Debt and (B)
all diligence in the collection or protection of or realization upon the Senior
Debt. Each Holder, by accepting any Note, acknowledges and agrees that the
subordination provisions in this ARTICLE VI are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt, whether such
Senior Debt was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior Debt and
such holder of Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
Section 6.14. Enforcement of Rights. The Company and the Holders of the
Notes hereby expressly agree that the holders of Senior Debt may enforce any and
all rights derived herein by suit, either in equity or at law, for specific
performance of any agreement contained in this ARTICLE VI or for judgment at law
and any other relief whatsoever appropriate to such action or procedure.
Section 6.15. Note Reference to Subordination. The Company and the
Holders of the Notes hereby expressly agree that the Notes shall contain, among
other provisions, a provision providing substantially as follows: "THIS NOTE IS
SUBJECT TO PROVISIONS IN THE AMENDED AND RESTATED SUBORDINATED NOTE AGREEMENT
DATED AS OF NOVEMBER 13, 2001 FOR THE SUBORDINATION OF THIS NOTE TO SENIOR DEBT
OF THE COMPANY, UPON ALL THE TERMS AND CONDITIONS THEREIN SPECIFIED."
ARTICLE VII
TRANSFER OF THE NOTES
Section 7.1. Registration of Transfer. Subject to compliance with
applicable law, upon surrender of any Note for registration of transfer, the
Company will execute and deliver in exchange therefor a new Note registered as
such Holder may request. The Company may require payment by such Holder of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer. Notwithstanding anything to the contrary contained in this
Agreement, prior to the occurrence of a Default or Event of Default, no Holder
shall be permitted to transfer any Note or assign any of its rights or
obligations under this Agreement or the Notes, unless in each case (i) such
transfer or assignment together with all other such transfers or assignments
made after the Amendment and Restatement Date would result in or create a
significant risk (as defined below) that the Company would become subject to the
informational requirements of the Exchange Act), (ii) each such transferee or
assignee (other than the Company) is either (A) an Affiliate of an Initial
Holder or an investment fund managed by an Affiliate of an Initial Holder or (B)
a "qualified institutional buyer" (as defined in Rule 144A promulgated under the
Securities Act of 1933, as amended) or an "accredited investor" (as defined
under and pursuant to Rule 501(a)(1)(2)(3) or (7) promulgated under the
Securities Act of 1933, as amended) and has agreed in writing to be bound by the
terms and conditions of this
45
Agreement and the Note in question to the same extent and in the same manner as
the transferor or assignor thereof, (iii) each such transferee or assignee, to
the knowledge of the applicable Holder, after reasonable inquiry (which may
consist of a certification by any such transferee or assignee), is not a Person
or a Subsidiary of a Person engaged substantially in the supply of portable
storage, cartage or office units or trailers and (iv) the transfer to any such
transferee or assignee is in compliance with all applicable federal, state and
foreign securities laws. For the purposes of this SECTION 7.1, a "significant
risk" shall be deemed to arise when the number of "holders of record" (as
determined in accordance with the Exchange Act) is greater than 80% of the
number of "holders of record" that would cause the application or continued
application of the informational requirements of the Exchange Act under the then
existing circumstances; provided that no transfer or assignment to or from any
Affiliate of a Holder shall be deemed to have created any such significant risk
or shall require consent of the Company.
Section 7.2. Register. The Company shall maintain a register of the
Holders of all the Notes issued pursuant to this Agreement. The Company will
allow any Holder of a Note to inspect and copy such list at the Company's
principal place of business during normal business hours. The Company may refuse
to effect any transfer of any Note on such register, and may refuse to recognize
any transferee of such Note for all purposes hereunder and under such Note, if
the transferor and/or transferee of such Note have not complied with the
provisions of SECTION 7.1 above.
ARTICLE VIII
TERMINATION
Section 8.1. Termination. This Agreement may be terminated by the mutual
written agreement of each of the parties hereto.
Section 8.2. Liability. If this Agreement is terminated pursuant to this
Article, such termination shall be without liability of any party to any other
party, except for any breach by such party of this Agreement or the Notes prior
to the date of such termination.
ARTICLE IX
AMENDMENTS
Section 9.1. Amendments. Subject to SECTION 6.12, the Company may amend
this Agreement or the Notes with the written consent of the Holders of at least
a majority of the principal amount of the Notes, except that, without the
consent of Holders of one hundred percent (100%) of the principal amount of
outstanding Notes, an amendment may not:
(1) reduce the amount of Notes whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Note;
46
(3) reduce the principal of, or premium, or extend the
Stated Maturity of any Note; or
(4) make any Note payable in a currency other than that
stated in the Note.
After an amendment under this Section becomes effective, the Company
shall mail to each of the Holders of Notes a notice briefly describing such
amendment. The failure to give such notice to all Holders of Notes, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
Section 9.2. Revocation and Effect of Consents and Waivers. Any
amendment to this Agreement or the Notes shall become effective in accordance
with its terms when executed and delivered by the Company provided that the
Company has received the requisite consents prior thereto. The Company shall not
be obligated to execute any such amendment regardless of whether such consents
have been received. Any waiver shall become effective when the requisite
consents have been received or such later time as the Company may elect. A
consent to an amendment or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same Debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Company receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Holder of a Note.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Notes entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Agreement. If a record date is fixed, then, notwithstanding the
immediately preceding paragraph, those persons who were Holders of Notes at such
record date (or their duly designated proxies), and only those persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
Section 9.3. Notation on or Exchange of Notes. If an amendment changes
the terms of a Note, the Company may require the Holder of the Note to deliver
it to the Company. The Company may place an appropriate notation on the Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Company so determines, the Company in exchange for the Note shall issue a new
Note that reflects the changed terms. Failure to make the appropriate notation
or to issue a new Note shall not affect the validity of such amendment.
Section 9.4. Payment for Consent. Neither the Company, any Affiliate of
the Company nor any of its Subsidiaries shall, directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Agreement or the Notes
unless such consideration is offered to be paid or agreed to be paid to all
Holders which so
47
consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices and other communications pertaining
to this Agreement or any Note shall be in writing and shall be deemed to have
been duly given upon the receipt thereof by the other party. Such notices shall
be in writing and delivered by hand, confirmed facsimile transmission, or
mailed, certified or registered mail with postage prepaid, or sent by prepaid
overnight courier:
If to the Company, to it at:
Mobile Storage Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Windward Capital Partners II, L.P.
1177 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Northwestern Mutual:
The Northwestern Mutual Life Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Department
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
48
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Capital d'Amerique CDPQ Inc.:
Capital d'Amerique CDPQ Inc.
Place Mercantile, 2001,
avenue ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: The President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇ ▇▇▇▇▇▇▇, Variable, Partner, or Signature:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Accounting Division, B-3
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to New York Life Insurance Company:
c/o New York Life Investment Management LLC
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Securities Investment Group, Private
Finance, 2nd Floor
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
49
With a copy to:
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other Person or address as shall be furnished to the other party in
writing.
Section 10.2. Parties. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, each subsequent Holder of a Note and each of
their respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any Person, firm or
corporation, other than the parties hereto and their respective successors and,
with respect to ARTICLE VI, the holders of Senior Debt, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties hereto, any
subsequent Holder of a Note and their respective successors and assigns, and,
with respect to ARTICLE VI, the holders of Senior Debt, and for the benefit of
no other Person, firm or corporation.
Section 10.3. Governing Law; Forum Selection; Consent to Jurisdiction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THE
PARTIES SUBJECT HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CHOICE OF LAW PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW. ANY ACTION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS AGREEMENT OR ANY NOTE ISSUED PURSUANT HERETO, SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK, NEW
YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH
PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
THE PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
50
Section 10.4. Waiver of Jury Trial. THE COMPANY AND EACH OF THE
PURCHASERS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE PURCHASERS TO
PURCHASE THE NOTES.
Section 10.5. Replacement Note. If any Note becomes mutilated and is
surrendered by the Holder thereof to the Company, or if the Holder thereof
claims that any Note has been lost, destroyed or wrongfully taken, the Company
will execute a replacement note and the Company will deliver to such Holder such
replacement note, upon the affidavit of the Holder thereof attesting to such
loss, destruction or wrongful taking with respect to such Note. Such affidavit
shall be accepted as satisfactory evidence of the loss, wrongful taking or
destruction thereof and no indemnity shall be required as a condition of the
execution and delivery of a replacement Note.
Section 10.6. Successors and Assigns. All covenants and agreements of
the Company in this Agreement or any Note shall bind their respective successors
and assigns.
Section 10.7. Severability Clause. In case any provision in this
Agreement or any Note shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.
Section 10.8. Further Assurances. Each party hereto or person or entity
subject hereto shall do and perform or cause to be done and performed all such
further acts and things and shall execute and deliver all such other agreements,
certificates, instruments and documents as any other party hereto or person or
entity subject hereto may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
Section 10.9. Entire Agreement. This Agreement, together with all
exhibits and schedules hereto, and the Notes are intended by the parties to be a
final expression of their agreement in respect of the subject matter contained
herein and therein, and supersede all prior agreements and understandings
between the parties with respect to such subject matter.
Section 10.10. Headings. The headings of the Articles and the sections
in this Agreement are for convenience of reference only and shall not be deemed
to alter or affect the meaning or interpretation of any provisions hereof.
Section 10.11. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same instrument.
51
Section 10.12. Original Notes. The execution of the this Agreement shall
not constitute a repayment of any Original Notes. All references in the Original
Notes to the "Subordinated Note Agreement" and the "Agreement" shall mean this
Amended and Restated Subordinated Note Agreement, as amended and restated hereby
and as amended, restated, supplemented or otherwise modified from time to time
after the date hereof.
ARTICLE XI
INDEMNIFICATION
Section 11.1. Indemnity of Holders of the Notes by the Company. Subject
to ARTICLE VI, the Company agrees to (i) reimburse each Purchaser for any costs
and expenses (including, without limitation, reasonable attorneys' and
paralegals' fees and expenses, with respect to either one outside firm or
allocated in-house counsel for each such Purchaser) incurred by each Purchaser
in connection with (a) this Agreement and closing the New Transaction, and (b)
defending any suit brought against the Purchasers by the Company or any other
Person in connection with the transactions contemplated by this Agreement, and
(ii) indemnify and hold the Purchasers and their respective officers, directors,
trustees, employees, partners, Affiliates, attorneys and agents (collectively,
the "INDEMNITEES") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, incurred by the
Indemnitees, whether direct, indirect or consequential, as a result of or
arising from or relating to any proceeding by any Person, whether threatened or
initiated, asserting any claim for legal or equitable remedy against any Person
under any statute or regulation (including, without limitation, any federal or
state securities or commercial laws or under any common law or equitable cause
or otherwise) or common law principles arising from or in connection with the
past, present or future operations of the Company, its Subsidiaries or their
respective predecessors in interest, in any way arising from or in connection
with the negotiation, preparation, execution, delivery, enforcement, performance
and administration of this Agreement or any other document executed in
connection herewith; provided, however, that the Company shall have no
obligation hereunder with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of any Indemnitee seeking such
indemnification. To the extent that the indemnity set forth in this Section may
be unenforceable because it is violative of any law or public policy, the
Company shall pay the maximum portion which it is permitted to pay under
applicable law. Any Indemnitee will promptly notify the Company of the
commencement of any legal proceeding which may give rise to any indemnified
liability under the foregoing indemnity and shall permit the Company to
participate in the defense of such Indemnitee in any such proceeding; provided,
however, that if any Indemnitee fails to provide prompt notice to the Company of
any legal proceeding, such Indemnitee shall nevertheless be entitled to be
indemnified under this ARTICLE XI to the extent (but only to the extent) that
the Indemnitee can establish that the Company has not been materially prejudiced
by the time elapsed. The foregoing indemnity shall survive the repayment of the
Notes and the termination of this Agreement.
[the remainder of this page intentionally left blank]
52
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
MOBILE STORAGE GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Its Authorized Representative
CAPITAL D'AMERIQUE CDPQ INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice-President
By: /s/ CYRILLE VIHECOQ
------------------------------
Name: Cyrille Vihecoq
Title: Manager
▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇ ▇▇▇▇▇▇▇ VARIABLE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
INVESTORS PARTNER LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
SIGNATURE 5 L.P.
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, as
Portfolio Advisor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
NEW YORK LIFE INSURANCE COMPANY
By: /s/ S. ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Name: S. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Investment Vice President
SCHEDULE I
COLUMN 2 COLUMN 5
WIRE TRANSFER COLUMN 3 COLUMN 4 PURCHASE PRICE COLUMN 6 COLUMN 7 COLUMN 8
COLUMN 1 INFORMATION FOR TAX ID FACE VALUE OF OF ORIGINAL FACE VALUE OF CAPITAL PURCHASE PRICE
PURCHASER PAYMENTS NO. ORIGINAL NOTES NOTES NEW NOTES CONTRIBUTION OF NEW NOTES
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
The Northwestern Bank: Bankers Trust Company 39- $14,285,714.29 $12,857,605.13 $15,000,000.00 $2,987,280.00 $12,012,720.00
Mutual Life ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 0509570
Insurance Insurance Unit --
Company ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
For the account:
The Northwestern Mutual
Life Insurance Company
Account No.: ▇▇-▇▇▇-▇▇▇
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
Bank: Bank of New York for
Capital the account of Caisse $10,714,285.71 $9,643,203.85 $7,500,000.00 $1,493,640.00 $6,006,360.00
D'Amerique Centrale Desjardins du
CDPQ Inc. Quebec, Montreal.
Account No.: ▇▇▇-▇▇▇▇-▇▇▇
CHIPS UID: 238324
Fed. ABA No.: ▇▇▇▇▇▇▇▇▇
SWIFT: IRVT US 3N
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
▇▇▇▇ ▇▇▇▇▇▇▇ Bank: Fleet Boston 04- n/a n/a $15,250,000.00 $3,037,068.00 $12,212,932.00
Life Insurance Boston, Mass. 02110 1414660
Company
Schedule I-1
COLUMN 2 COLUMN 5
WIRE TRANSFER COLUMN 3 COLUMN 4 PURCHASE PRICE COLUMN 6 COLUMN 7 COLUMN 8
COLUMN 1 INFORMATION FOR TAX ID FACE VALUE OF OF ORIGINAL FACE VALUE OF CAPITAL PURCHASE PRICE
PURCHASER PAYMENTS NO. ORIGINAL NOTES NOTES NEW NOTES CONTRIBUTION OF NEW NOTES
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
ABA No. ▇▇▇▇▇▇▇▇▇
Account No.: 541-55417
Account of: ▇▇▇▇ ▇▇▇▇▇▇▇
Life Insurance Co. Private
Placement Collection Acct.
Deadline: 12:00 Noon,
Boston time
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
▇▇▇▇ ▇▇▇▇▇▇▇ Bank: Fleet Boston 04- n/a n/a $1,000,000.00 $199,152.00 $800,848.00
Variable Life ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 2664016
Insurance
Company ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 541-55417
Account of: ▇▇▇▇ ▇▇▇▇▇▇▇
Life Insurance Co. Private
Placement Collection Acct.
Deadline: 12:00 Noon,
Boston time
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
Investors Bank: Fleet Boston 13- n/a n/a $250,000.00 $49,788.00 $200,212.00
Partner Life ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 3072894
Insurance
Company ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 541-55417
Account of: ▇▇▇▇ ▇▇▇▇▇▇▇
Life Insurance Co. Private
Placement Collection Acct.
Deadline: 12:00 Noon,
Boston time
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
Schedule I-2
COLUMN 2 COLUMN 5
WIRE TRANSFER COLUMN 3 COLUMN 4 PURCHASE PRICE COLUMN 6 COLUMN 7 COLUMN 8
COLUMN 1 INFORMATION FOR TAX ID FACE VALUE OF OF ORIGINAL FACE VALUE OF CAPITAL PURCHASE PRICE
PURCHASER PAYMENTS NO. ORIGINAL NOTES NOTES NEW NOTES CONTRIBUTION OF NEW NOTES
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
Signature 5 L.P. Bank: HARE & CO. N/A n/a n/a $3,500,000.00 $697,032.00 $2,802,968.00
▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ No.: ▇▇▇▇▇▇▇▇▇
BNF: IOC566
FFC Account No.: 77634
Account of:
Deadline: 12:00 Noon,
Boston time
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
New York Life Bank: Chase Manhattan Bank 13- n/a n/a $12,500,000.00 $2,489,400.00 $10,010,600.00
Insurance New York, New York 5582869
Company 10019
ABA No. ▇▇▇-▇▇▇-▇▇▇
For the account: New York
Life Insurance Company
Account No.: ▇▇▇-▇-▇▇▇▇▇
For the benefit of: New
York Life Insurance Company
---------------- --------------------------- -------- -------------- -------------- -------------- ------------- --------------
Schedule I-3
SCHEDULE 3.1(a)
Capitalization of the Company
--------------------------------------------------------------------------------------------------
COMMON STOCK
--------------------------------------------------------------------------------------------------
NAME OF SHAREHOLDER NUMBER OF SHARES PERCENTAGE OWNERSHIP
--------------------------------------------------------------------------------------------------
Windward Capital Partners, L.P. 95,497.4800 39.56%
--------------------------------------------------------------------------------------------------
Windward Capital ▇▇ ▇▇, L.L.C. 3,622.6300 1.50%
--------------------------------------------------------------------------------------------------
Windward/MSG Co-Invest, LLC 45,408.4536 18.81%
--------------------------------------------------------------------------------------------------
Windward/MSG Co-Invest II, LLC 27,523.8339 11.40%
--------------------------------------------------------------------------------------------------
Management and Directors 48,343.9800 20.03%
--------------------------------------------------------------------------------------------------
Management and Director Options 21,000.0000 8.70%
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Total 241,396.3775 100.00%
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
PREFERRED STOCK
--------------------------------------------------------------------------------------------
DESIGNATION NUMBER OF SHARES OUTSTANDING(1)
--------------------------------------------------------------------------------------------
Series A Convertible Preferred Stock None
--------------------------------------------------------------------------------------------
Series B 10% Convertible Cumulative Preferred Stock 2,608,597
--------------------------------------------------------------------------------------------
Series C 8.5% Cumulative Preferred Stock None
--------------------------------------------------------------------------------------------
Series E 8.5% Convertible Cumulative Preferred Stock 276,928
--------------------------------------------------------------------------------------------
Series F Preferred Stock 20,000
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
----------
(1) The Company expects to issue shares of Series G Convertible Preferred
Stock shortly after the Amendment and Restatement Date in an amount equal
to one share of Series G Convertible Preferred Stock for each outstanding
share of Series B 10% Convertible Cumulative Preferred Stock. Series G
Convertible Preferred Stock is non-voting, is not entitled to any
dividends and has an initial liquidation preference which is equal to Ten
Cents ($0.10) per share (aggregating upon issuance approximately
$65,214.93 and cumulating at a rate of $0.10 annually) and is junior to
all other existing series of preferred stock of the Company. Series G
Convertible Preferred Stock is not mandatorily redeemable and is
convertible into common stock of the Company upon an initial underwritten
offering of the Company's common stock.
Schedule 3.1(a)
EXHIBIT A
Form of Original Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). NO SALE, HYPOTHECATION, TRANSFER OR OTHER DISPOSITION OF
THIS NOTE (OTHER THAN TO THE ISSUER THEREOF) MAY BE MADE UNLESS EITHER (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS NOTE IS SUBJECT TO PROVISIONS IN THE SUBORDINATED NOTE AGREEMENT DATED
AS OF JUNE 30, 2000 FOR THE SUBORDINATION OF THIS NOTE TO SENIOR DEBT OF THE
COMPANY, UPON ALL THE TERMS AND CONDITIONS THEREIN SPECIFIED.
FOR PURPOSES OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL AMOUNT AT
MATURITY OF THIS NOTE IS $99.97 THE ISSUE DATE IS JUNE 30, 2000 AND THE YIELD TO
MATURITY IS 13.88% (COMPOUNDED SEMI-ANNUALLY).
$_____________ June 30, 2000
SUBORDINATED NOTE
FOR VALUE RECEIVED, the undersigned, Mobile Storage Group, Inc., a
California corporation (the "COMPANY"), promises to pay
___________________________, or its registered assigns (the "PURCHASER"), the
principal sum of _______________________ Dollars ($______________) on June 29,
2010, or such earlier date as the principal may become due pursuant to the terms
hereof and to pay interest at a rate per annum equal to 12%. The Company will
pay interest semiannually on June 30th and December 30th of each year (each, an
"INTEREST PAYMENT DATE"), commencing December 30, 2000 (or on the next Business
Day following such date, in the event such date is not a Business Day). The
Company shall pay interest on overdue principal and on overdue installments of
interest at a rate per annum equal to the sum of two percent (2%) plus the
interest rate otherwise applicable hereunder. Terms used herein and not
otherwise defined have the meanings assigned to them in the Subordinated Note
Agreement among the Company and the parties named therein dated as of the date
hereof (the "AGREEMENT").
Interest shall be payable in arrears on this Note semiannually as
provided above and on such date as this Note may be prepaid or the maturity
accelerated. Interest shall be computed on the basis of a 360-day year and the
actual number of days elapsed. All payments of the principal of and interest on
this Note shall be made in money of the United States of America that at the
time of payment is legal tender for the payment of public and private debts, by
check in New York Clearing House Funds at the principal office of the Purchaser
located in New York, New York or by wire transfer of immediately available
Federal Reserve funds into a bank account designated by the Purchaser in writing
to the Company at least three Business Days before the Company makes such
payment.
Exhibit A-1
The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the Purchaser of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
This note is one of the Notes referred to in the Agreement, which
Agreement, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for the subordination of
this Note to Senior Debt of the Company, for optional prepayment of the
principal hereof prior to maturity and for the amendment or waiver of certain
provisions of the Agreement, all upon the terms and conditions therein
specified. Additionally, this Note is subject to certain restrictions on
transfer set forth in the Agreement.
This Note shall be construed in accordance with and governed by the laws
of the State of New York, without giving effect to the conflict of law
principles thereof other than Section 5-1401 of the New York General Obligations
Law.
IN WITNESS WHEREOF, Mobile Storage Group, Inc. has caused this Note to be
signed in its corporate name by a duly authorized officer and its corporate seal
to be affixed hereto, and the same to be attested by its Secretary or Assistant
Secretary, and to be dated as of the day and year first above written.
MOBILE STORAGE GROUP, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Attest:
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Secretary
Exhibit A-2
EXHIBIT B
Form of New Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). NO SALE, HYPOTHECATION, TRANSFER OR OTHER DISPOSITION OF
THIS NOTE (OTHER THAN TO THE ISSUER THEREOF) MAY BE MADE UNLESS EITHER (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS NOTE IS SUBJECT TO PROVISIONS IN THE AMENDED AND RESTATED SUBORDINATED
NOTE AGREEMENT DATED AS OF NOVEMBER 13, 2001 FOR THE SUBORDINATION OF THIS NOTE
TO SENIOR DEBT OF THE COMPANY, UPON ALL THE TERMS AND CONDITIONS THEREIN
SPECIFIED.
FOR PURPOSES OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, EACH NOTE WITH
$1,000 PRINCIPAL AMOUNT SHALL HAVE AN ISSUE PRICE OF $800.8480 AND ORIGINAL
ISSUE DISCOUNT OF $199.1520, THE ISSUE DATE IS NOVEMBER 13, 2001 AND THE YIELD
TO MATURITY IS ___% (COMPOUNDED SEMI-ANNUALLY).
$_____________ November 13, 2001
SUBORDINATED NOTE
FOR VALUE RECEIVED, the undersigned, Mobile Storage Group, Inc., a
California corporation (the "COMPANY"), promises to pay
________________________, or its registered assigns (the "PURCHASER"), the
principal sum of ____________________ Dollars ($___________) on June 29, 2010,
or such earlier date as the principal may become due pursuant to the terms
hereof and to pay interest at a rate per annum equal to 12%. The Company will
pay interest semiannually on June 30th and December 30th of each year (each, an
"INTEREST PAYMENT DATE"), commencing December 30, 2001 (or on the next Business
Day following such date, in the event such date is not a Business Day). The
Company shall pay interest on overdue principal and on overdue installments of
interest at a rate per annum equal to the sum of two percent (2%) plus the
interest rate otherwise applicable hereunder. The Company shall make principal
payments on the indebtedness evidenced by this Note as provided in the Agreement
(defined below). Terms used herein and not otherwise defined have the meanings
assigned to them in the Amended and Restated Subordinated Note Agreement among
the Company and the parties named therein dated as of the date hereof (as
amended, restated, supplemented or otherwise modified from time to time, the
"AGREEMENT").
Interest shall be payable in arrears on this Note semiannually as
provided above and on such date as this Note may be prepaid or the maturity
accelerated. Interest shall be computed on the basis of a 360-day year and the
actual number of days elapsed. All payments of the principal of and interest on
this Note shall be made in money of the United States of America that at the
time of payment is legal tender for the payment of public and private debts, by
check in New York Clearing House Funds at the principal office of the Purchaser
located in New York, New York or by wire transfer of immediately available
Federal Reserve funds into a bank account
Exhibit B-1
designated by the Purchaser in writing to the Company at least three Business
Days before the Company makes such payment.
The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the Purchaser of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
This note is one of the Notes referred to in the Agreement, which
Agreement, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for the subordination of
this Note to Senior Debt of the Company, for optional prepayment of the
principal hereof prior to maturity and for the amendment or waiver of certain
provisions of the Agreement, all upon the terms and conditions therein
specified. Additionally, this Note is subject to certain restrictions on
transfer set forth in the Agreement.
This Note shall be construed in accordance with and governed by the laws
of the State of New York, without giving effect to the conflict of law
principles thereof other than Section 5-1401 of the New York General Obligations
Law.
Exhibit B-2
IN WITNESS WHEREOF, Mobile Storage Group, Inc. has caused this Note to be
signed in its corporate name by its duly authorized officers as of the date
first written above.
MOBILE STORAGE GROUP, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary
Exhibit B-3
EXHIBIT C
Form of Loan Stock Instrument
DATED 2001 DRAFT (4): 29.10.01
SAE/504413.07005/JLL
FREEPEAK LIMITED
-----------------------------------------------------------
LOAN STOCK INSTRUMENT
CONSTITUTING POUND L2,300,000 VARIABLE RATE GUARANTEED LOAN
STOCK 2011
-----------------------------------------------------------
Exhibit C-1
THIS INSTRUMENT is made the 2001 by FREEPEAK LIMITED (registered in
England No 4283040 having its registered office at ▇▇▇▇▇▇▇ House, ▇▇/▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇ (the "COMPANY") WHEREAS the Company, by Resolution
of its Board of Directors passed on the 2001, has created TWO MILLION THREE
HUNDRED THOUSAND POUNDS (L2,300,000) principal amount of Variable Rate
Guaranteed Loan Stock 2011 to be constituted as hereinafter provided.
NOW THIS INSTRUMENT WITNESSETH and the Company hereby declares as follows:-
1. The Stock shall be known as "Variable Rate Guaranteed Loan Stock 2011".
All Stock as and when issued shall rank pari passu equally and rateably
without discrimination or preference as an unsecured obligation of the
Company.
2. In this Instrument and the Schedules attached unless there is something
in the subject or context inconsistent therewith the following
expressions have the following meanings:-
"BUSINESS DAY" a day (other than a Saturday) on which
clearing banks in the City of London are
normally open for usual Sterling banking
business
"CERTIFICATE" a certificate in the form set out in Part
1 of Schedule 1 issued pursuant to Clause
3 hereof
"CLAUSE" a Clause of this Instrument
"THIS INSTRUMENT" these presents and any document
supplemental hereto or executed by the
Company in pursuance hereof
"INTEREST PERIOD" a period for the determination of
interest, the first such period
commencing on the date hereof and
following periods commencing on the
expiry of the immediately preceding
period and all such periods being of six
months' duration
"ISSUE DATE" the date hereof or such other date on
which a Certificate (other than a
replacement Certificate) is issued in
respect of any Stock
"MATURITY DATE" the date ten years after the Issue Date
or, if such date is not a Business Day,
the next succeeding day which is a
Business Day
"PARAGRAPH" a numbered paragraph of the Schedules
"PAYMENT DATE" any date on which the Stockholder may
require the Company to repay all or part
of the Stock
"PRINCIPAL SUM" the sum stated on the Certificate as the
Principal Sum of the Stock represented by
that
Exhibit C-2
Certificate or the amount of it from time
to time outstanding
"THE REGISTER" the register of Stockholders to be
maintained by the Company pursuant to the
provisions of the Schedule 2 attached.
"THE SPECIFIED RATE" a rate equal to the rate payable from
time to time on 6 Month National
Westminster Bank Plc Corporate Bonds on
the date of commencement of each Interest
Period until the Maturity Date
"THE STOCK" the loan stock created by this Instrument
for the time being outstanding
"THE STOCKHOLDERS" the persons whose names are for the time
being entered into the Register as the
holders of the Stock
"TAX" shall be construed so as to include all
present and future taxes, charges,
imposts, duties, levies, deductions,
withholdings or amounts or charges of a
similar nature, or any amount payable on
account of, or as security for, any of
the foregoing, including any penalties,
fines, surcharges or interest payable in
connection with such amounts, and "Taxes"
and "Taxation" shall be construed
accordingly
Words denoting the singular only shall include the plural number also and
vice versa. Words denoting the masculine gender only shall also include
the feminine and neuter genders. Words denoting persons shall include
corporations. Unless the context otherwise requires words or expressions
appearing in this Instrument and defined in the Companies ▇▇▇ ▇▇▇▇ shall
have the same meanings as in that Act.
3. The Principal Sum of the Stock is limited to L2,300,000. The Stock shall
be issued in denominations and multiples of L1 in nominal value at par
[in consideration for the transfer to the Company of shares in Raven Hire
Limited] subject to and with the benefit of the provisions of this
Instrument. All the obligations and covenants contained in this
Instrument shall be binding on the Company and the Stockholders.
4. Subject to any other agreement in writing between the Company and the
initial Stockholders, the Stock shall be issued on the Issue Date.
5. The Stock constitutes general and unconditional obligations of the
Company which shall rank pari passu amongst themselves and at all times
rank at least pari passu with all future unsecured obligations of the
Company.
6. Each Stockholder or joint holders of any Stock shall be entitled to one
Certificate for the total amount of the Stock registered in his name or,
in the case of joint holders, their names. Every such Certificate shall
refer to this Instrument and be in the form or to the
Exhibit C-3
effect set out in Schedule 1. The Company shall comply with the
Conditions set out in Schedule 2 which shall be deemed to be incorporated
in this Instrument and shall be binding on the Company and the
Stockholders and all persons claiming through or under them respectively.
Any Certificate in the names of joint holders of any Stock shall be
delivered to that one of the joint holders who is first named on the
Register or to such person as all such joint holders may in writing
direct. The Company shall not be bound to register more than four persons
as the joint holders of any Stock.
7.
7.1 Subject to the other terms of this Instrument, the Stock shall be repaid
at par together with any accrued interest on the Maturity Date.
7.2 The Company shall, on the Maturity Date, redeem the Stock at par and pay
to the relevant Stockholder(s) all accrued interest outstanding at such
date.
7.3 Subject to the terms of this Instrument, a Stockholder may, by giving not
less than 20 Business Days notice in writing at any time to the Company,
elect that that part of the Stock as is notified by the Stockholder, be
redeemed or repaid together with accrued interest thereon, provided that
such amount shall not be less than Pound L10,000. Such notice shall not
be capable of taking effect before the date being six months after the
Issue Date.
7.4 As and when the Principal Sum or any part thereof ought to be redeemed or
repaid in accordance with the provisions of this Instrument the Company
shall upon surrender by the Stockholder of the relevant Certificate pay
to the Stockholders in accordance with Paragraph 9 of Schedule 2 the
Principal Sum represented by the Stock held by them respectively or as
the case may be the Principal Sum of such part of the Stock held by them
respectively as ought to be redeemed, in each case together with accrued
interest thereon.
7.5 All payments to be made by the Company under or in respect of the Stock
shall be made free and clear of and without deduction or withholding of
Tax save as required by any law in force at the date of this Instrument.
7.6 The Company shall pay interest on the Principal Sum outstanding in
respect of each Interest Period at the Specified Rate until the Stock is
redeemed in accordance with the provisions of this Instrument. Interest
will accrue daily on the basis of a 365 day year and will be payable on 1
November and 1 May in each year (or, if any such date does not fall on a
Business Day, on the immediately preceding Business Day) and if not so
paid will be compounded with the Principal Sum on the due date for
payment and will attract interest in accordance with this Clause until
paid.
8. The Principal Sum of the Stock (together with accrued interest thereon)
shall be forthwith repayable on the happening of any of the following
events:-
8.1 an effective resolution being passed or an order being made for
the winding-up of the Company (except for the purpose of an
amalgamation or re-construction on a solvent basis);
Exhibit C-4
8.2 the appointment of an administrator or of an administrative
receiver over any part of the undertaking assets or property of
the Company or the levying of any distress or executions upon any
of the assets or property of the Company which is not paid out
within seven days of its being levied;
8.3 the Company ceasing or threatening to cease to carry on its
business.
9. Any Stockholder shall be entitled to ▇▇▇ for the performance and
observance of the provisions hereof so far as his holding of Stock is
concerned. None of the terms of this Instrument is enforceable by any
person other than the Company and the Stockholders and their respective
successors in title and assigns.
10. Every Stockholder shall be entitled to receive from the Company a copy of
the Annual Report and Accounts of the Company at the address of the
Stockholder appearing in the Register together with all documents
required by law to be attached thereto concurrently with the issue
thereof to the members of the Company.
11.
11.1 Each Stockholder may, by notice in writing to the Company given on or
before a date (the "ELECTION DATE") being 40 Business Days prior to any
Payment Date elect that the whole of the Stock or any part thereof which
the Stockholder is entitled to require repayment on the relevant Payment
Date (the "ELECTION AMOUNT") shall be redeemed in US dollars.
11.2. If the Stockholder makes an election pursuant to Clause 11.1 the Company
shall, subject to Clauses 11.3 and 11.4 below, pay to the Stockholder, on
the Payment Date and in full discharge of its obligation to repay the
Election Amount, an amount in US Dollars (the "ELECTION DOLLAR AMOUNT")
obtained by converting the principal amount of the Election Amount into
US Dollars at the Spot Rate on the Election Date.
11.3 If the amount in sterling obtained by converting the Election Dollar
Amount into sterling at the Spot Rate on the Payment Date exceeds the
aggregate of (i) the Election Amount and (ii) 0.02 per cent of the
Election Amount for each complete calendar month between the Issue Date
and the Payment Date, the Election Dollar Amount shall be substituted by
the lesser of:-
11.3.1 the amount in US Dollars obtained by converting the said aggregate
amount at the Spot Rate on the Payment Date; and
11.3.2 the maximum amount of US Dollars which can be paid without causing
the Election Amount to become a deep gain pursuant to the
provisions of paragraph 3(3) of Schedule 13 to the Finance ▇▇▇
▇▇▇▇ (as amended from time to time).
11.4 If the Election Dollar Amount shall be less than the amount in US Dollars
obtained by converting the Election Amount into US Dollars at the Spot
Rate on the Payment Date (the "GREATER DOLLAR AMOUNT") by more than 0.02
per cent for each complete calendar month between the Issue Date and the
Payment Date, the Election Dollar Amount shall be substituted by the
Greater Dollar Amount less than 0.02 per cent of the Greater
Exhibit C-5
Dollar Amount for each complete calendar month between the Issue Date and
the Payment Date.
11.5 In this Clause 11, the "Spot Rate" means the spot rate of the Bank of
Scotland PLC at 11.00 am on the relevant date or if that date is not a
business day, the next business day.
12. All Schedules hereto shall form an integral part of and be incorporated
into this Instrument.
13. The Stock is issued with the benefit of the guarantee of National
Westminster Bank Plc a copy of which is attached.
IN WITNESS whereof this Instrument has been executed and delivered as a deed by
the Company this 2001.
EXECUTED (but not delivered until the date )
hereof) AS A DEED by )
FREEPEAK LIMITED )
acting by:- )
)
Director
Director/Secretary
Exhibit C-6
SCHEDULE 1
FREEPEAK LIMITED
(Incorporated under the Companies ▇▇▇ ▇▇▇▇ No 4283040)
Issue of up to L2,300,000 Variable Rate
Guaranteed Loan Stock 2011
Issued pursuant to the Memorandum and Articles of
Association of the Company and to a Resolution of the
Board of Directors passed on the day of 2011
THIS IS TO CERTIFY that of is the registered
holder of POUNDS (L ) Principal Sum of Variable
Rate Guaranteed Loan Stock 2011 of Freepeak Limited which Stock is
constituted by an Instrument entered into by the Company and dated the day of
2011 and is issued with the benefit of and subject to the provisions therein
contained (and as such terms are defined in the Instrument). Interest on the
Stock is payable by equal half yearly instalments on [1 November and 1 May] at
the Specified Rate.
The Stock is transferable only in accordance with the Instrument. No transfer of
any part of the Stock represented by this Certificate will be registered unless
accompanied by this Certificate. The Stock is redeemable in accordance with the
terms and conditions contained in the Instrument a copy of which is attached to
this Certificate.
EXECUTED (but not delivered until the date )
hereof) AS A DEED by )
FREEPEAK LIMITED )
acting by:- )
)
Director
Director/Secretary
Exhibit C-7
SCHEDULE 2
3. The Company shall at all times keep an accurate register (the Register)
showing (a) the names and addresses of the Stockholders and (b) the
amount of the Stock held by every registered holder. Any Stockholder and
any person (not being a person to whom the Company may reasonably object)
authorised in writing by a Stockholder may at all reasonable times during
the Company's normal office hours inspect the Register and take copies of
and extracts from the same.
4. The Stockholder shall be recognised by the Company as entitled to the
Stock and the Principal Sum represented thereby free from any equity
set-off or cross claim on the part of the Company against the original or
any intermediate holder of the Stock.
5. The Company shall recognise the registered holder of any Stock as the
absolute owner thereof and shall not be effected by any notice of any
trust whether express implied or constructive or to any claim of any
person other than the registered holder and the receipt of the
Stockholders or in the case of joint registered holders the receipt of
any one of them for the Principal Sum or part thereof shall be a good
discharge to the Company notwithstanding any notice it may have whether
actual or constructive of the right title interest or claim of any other
person to or in such Stock or monies.
6. The Stock shall, subject to the provisions of this Paragraph 4, be freely
transferable by a Stockholder. A transfer of the Stock shall be by an
instrument in writing signed by the transferor in the usual common form
or such other form as the Company may approve. The transfer shall be
lodged with the Company together with such evidence of the title of the
transferor (including the Certificate) as the Company may reasonably
require and thereupon and subject to such transfer being stamped (if
appropriate) the transferee shall be registered as the holder of the
Stock. The Company shall be entitled to retain the transfer. The Stock
may not be transferred in part, save in units of not less than Pound
L1,000 of the Principal Sum (or if less the whole of the Principal Sum).
7. The Company will keep a register of Stockholders and enter in it the
issue and all transfers and changes of ownership of this Stock. The said
register may be closed at such times and for such periods as the Company
may from time to time determine provided that it shall not be closed for
more than 30 days in any year.
8. The Company may charge a fee not exceeding Pound L10 for the registration
of any transfer or change in ownership of this Stock.
9. On the death of the Stockholder (not being one of several joint holders)
his personal representatives, executors and administrators and on the
death of one or more of several joint holders the survivor or survivors
of them shall be the only persons recognised by the Company as having any
title to this Stock.
10. Any person entitled to this Stock by reason of the death or bankruptcy or
insolvency of any Stockholder or otherwise by operation of law may upon
producing such evidence of his title as the Company may reasonably
require elect to be registered as the holder of
Exhibit C-8
this Stock. The Company may in its discretion withhold any payments due
on such Stock until the person entitled to be registered as the holder of
the Stock has been duly registered as such in accordance with the
provisions of this Instrument.
11. The Principal Sum of the Stock or any part thereof may be paid by cheque
sent through the post at the Stockholders wish to the Stockholder or to
the first named of joint holders to the address appearing on the Register
or to such other person or address as the Stockholder may in writing
request. Payment of the cheque shall be payment and satisfaction of the
Principal Sum represented thereby.
12. If several persons are entered in the Register as joint holders of any
Stock then without prejudice to the last preceding Condition the receipt
of any one of such persons for the Principal Sum or part thereof payable
in respect of such Stock shall be as effective a discharge to the Company
as if the person signing such receipt was the sole registered
Stockholder.
13. If any Certificate is defaced, worn out, lost or destroyed it may be
renewed on payment of a fee not exceeding Pound L10 and on such terms (if
any) as the Directors of the Company may require as to indemnity and
evidence of defacement or wearing out, loss or destruction. In the case
of defacement or wearing out the defaced or worn out Certificate shall be
surrendered and cancelled before the new certificate is issued. In the
case of loss or destruction, the relevant Stockholder shall also pay to
the Company (if demanded) all expenses incidental to the investigation of
evidence of loss or destruction and the preparation of any form of
indemnity. There shall be entered in the Register particulars of the
issue of any Certificate and any indemnity. Any stamp duty payable on
such renewal shall be borne by the Stockholder.
14. Stock shall only be redeemed against the surrender of the relevant
Certificate for cancellation.
15. All Stock redeemed by the Company under the provisions of this Instrument
shall be cancelled and shall not be re-issued.
16. The Principal Amount of the Stock or part of the Stock and any accrued
interest thereon will be paid at the registered office of the Company or
at such other place as the Company and the Stockholder shall agree.
17. Notices given in connection with the Stock shall be in writing and may be
given by the Stockholder or by the Company by posting the notice in a
pre-paid envelope addressed to the Company at its registered office or as
the case may be to the Stockholder or the first named of joint holders at
his address as shown in the register of Stockholders and every such
notice shall be deemed to have been served twenty-four hours after the
time of posting and in proving such service it shall be sufficient to
prove that the envelope containing the notice was correctly addressed and
stamped and was posted.
Exhibit C-9
SCHEDULE 3
18. The Company may (and shall at the request in writing of a person or
persons holding not less than ten per cent of the Principal Sum of the
Stock) convene a meeting of the Stockholders. Such meeting shall be held
at the registered office of the Company or such other convenient place as
the Directors of the Company may decide.
19. At least 21 days' notice, or when the meeting is being convened for the
purpose of passing an Extraordinary Resolution at least 14 days' notice,
of every meeting shall be given to the Stockholders. The notice shall
specify the place day and hour of meeting and the general nature of the
business to be transacted but except in the case of an Extraordinary
Resolution it shall not be necessary to specify in the notice the terms
of any resolution to be proposed. The accidental omission to give notice
to or the non-receipt of notice by any of the Stockholders shall not
invalidate the proceedings at any meeting.
20. At any meeting the Stockholders present in persons or by proxy (or in the
case of a Stockholder being a corporation by its authorised
representative) holding or representing fifty per cent of the aggregate
principal amount of the Stock (for the time being outstanding) shall form
a quorum for the transaction of business except for the purpose of
passing an Extraordinary Resolution. The quorum for passing an
Extraordinary Resolution shall be the Stockholders present in persons or
by proxy holding or representing seventy-five per cent of the Principal
Sum of the Stock (for the time being outstanding). No business (other
than the election of a Chairman) shall be transacted at any meeting
unless the requisite quorum is present at the commencement of business.
If within half an hour from the time appointed for the meeting a quorum
is not present the meeting if convened upon the requisition of
Stockholders shall be dissolved. In any other case it shall stand
adjourned to such day and time not being less than seven days thereafter
and to such place as may be decided by the Chairman and at such adjourned
meeting the Stockholders present and entitled to vote whatever their
number and whatever the Principal Sum of the Stock held by them shall be
a quorum for the transaction of business including the passing of
Extraordinary Resolutions. At least three days' notice of any adjourned
meeting of Stockholders at which an Extraordinary Resolution is to be
submitted shall be given in the same manner mutatis mutandis as for the
original meeting and such notice shall state that the Stockholders
present at the adjourned meeting whatever their number and whatever the
aggregate principal amount of the Stock held by them will form a quorum.
21. The Chairman of the Company shall preside at every meeting or if he is
not present within five minutes after the time appointed for holding the
meeting or unwilling to act the Stockholders shall choose one of their
number to be Chairman. Any Director, the Secretary, the Auditors of the
Company and the Solicitors of the Company and any other person authorised
in that behalf by the Company may attend any meeting.
22. The Chairman may with the consent of any meeting at which a quorum is
present and shall if so directed by the meeting adjourn the meeting from
time to time and from place to place but no business shall be transacted
at any adjourned meeting except business which might lawfully have been
transacted at the meeting from which the adjournment took place.
Exhibit C-10
23. At any meeting a resolution put to the vote of the meeting shall be
decided on a show of hands unless a poll is (before or on the declaration
of the result of the show of hands) demanded by the Chairman or by one or
more Stockholders present in person or by proxy and holding or
representing not less than ten per cent of the Principal Sum of the Stock
(for the time being outstanding). Unless a poll is so demanded a
declaration by the Chairman that a resolution has been carried or carried
unanimously or by a particularly majority or lost shall be conclusive
evidence of the fact without proof of the number or proportion of the
votes recorded in favour of or against such resolution. If a poll is duly
demanded it shall be taken in such manner as the Chairman may direct and
the result of such a poll shall be deemed to be the resolution of the
meeting at which the poll was demanded.
24. In the case of an equality of votes whether on a show of hands or on a
poll the Chairman of the Meeting at which the show of hands takes place
or at which the poll is demanded shall be entitled to a casting vote in
addition to the vote or votes (if any) to which he may be entitled as a
Stockholder.
25. A poll so demanded shall be taken forthwith.
26. The demand for a poll shall not prevent the continuance of a meeting for
the transaction of any business other than the question on which the poll
has been demanded.
27. On a show of hands every Stockholder who is present in person or being a
corporation by its authorised representative shall have one vote and on a
poll every Stockholder who is present in person or being a corporation by
its authorised representative or by proxy shall have one vote for every
L1 or part thereof of Principal Sum of Stock of which he is the holder.
28. In the case of joint registered holders of Stock the vote of the senior
who tenders a vote whether in person or by proxy shall be accepted to the
exclusion of the votes of the other joint holders and for this purpose
seniority shall be determined by the order in which the names stand in
the Register in respect of the joint holding.
29. On a poll votes may be given either personally or by proxy and a
Stockholder entitled to more than one vote need not use all his vote or
cast all the votes he uses in the same manner.
30. The instrument appointing a proxy shall be in writing under the hand of
the appointor or his attorney or in the case of a corporation under the
hand of an officer or attorney duly authorised.
31. A person appointed to act as a proxy need not be a Stockholder.
32. The instrument appointing a proxy and the power of attorney or other
authority (if any) under which it is signed shall be delivered to the
Chairman before the time appointed for the meeting and in default the
instrument of proxy shall not be treated as valid. No instrument
appointing a proxy shall be valid after the expiration of three months
from the date named in it as the date of execution or signature.
33. An instrument appointing a proxy may be in the usual or common form or in
such other form as the Directors may from time to time prescribe or
accept. The proxy shall be
Exhibit C-11
deemed to confer the right to demand or join in demanding a poll. A proxy
whether in the usual or common form or not shall unless the contrary is
stated thereon be valid as well for any adjournment of the meeting as for
the meeting to which it relates and need not be witnessed.
34. Any company or corporation which is a registered holder of any of the
Stock may by resolution of its directors or other governing body
authorise any person to act as its representative at any meeting of the
Stockholders and such representative shall be entitled to exercise the
same powers on behalf of the company or corporation which he represents
as he would be entitled to exercise if he was himself the registered
holder of such Stock.
35. A meeting of the Stockholders shall in addition to all other powers
(which such other powers shall be exercisable by Ordinary Resolution)
have the following powers exercisable by Extraordinary Resolution:-
35.1 Power to sanction any modification or compromise or any arrangement in
respect of the rights of the Stockholders against the Company whether
such rights arise under this Instrument or otherwise.
35.2 Power to assent to any modifications of the Conditions to which the Stock
is subject and/or of the provisions contained in this Instrument proposed
or agreed to by the Company.
35.3 Power to appoint any persons (whether Stockholders or not) as a committee
to represent the interests of the Stockholders and to confer upon such
committee any powers or discretions which the Stockholders could
themselves exercise.
35.4 Power to sanction the exchange of the Stock for or the conversion of the
Stock into shares stock debentures or other obligations or securities of
the company or any other company formed or to be formed.
36. A resolution passed at a meeting of the Stockholders duly convened and
held in accordance with these presents shall be binding upon all the
Stockholders whether or not present at the meeting and each of the
Stockholders shall be bound to give effect thereto accordingly.
37. The expression "Ordinary Resolution" means a resolution passed at a
meeting of the Stockholders duly convened and held in accordance with the
provisions herein contained and carried by a simple majority of the
persons voting thereat upon a show of hands or on a poll.
38. The expression "Extraordinary Resolution" means a resolution passed at a
meeting of the Stockholders duly convened and held in accordance with the
provisions herein contained and carried by a majority consisting of not
less than three-fourths of the persons voting thereat upon a show of
hands or if a poll is duly demanded by a majority consisting of not less
than seventy-five per cent of all the votes cast on such poll.
39. A resolution in writing signed by all the Stockholders who for the time
being are entitled to receive notice of meetings in accordance with the
provisions herein contained shall for all purposes be as valid and
effectual as an Ordinary Resolution or Extraordinary
Exhibit C-12
Resolution as the case may be passed at a meeting duly convened and held
in accordance with the provisions herein contained. Such resolution in
writing may be contained in one document or in several documents in like
form each signed by one or more Stockholders and the effective date of
such resolution shall be the date of the last signature thereto.
Exhibit C-13
EXHIBIT D
Form of Monthly Operating Statement
[attached]
Exhibit D-1