AMENDED AND RESTATED
NOTE AND WARRANT PURCHASE AGREEMENT,
dated as of February 22, 1996
among
▇▇▇▇▇▇ CO., INC.,
as the Company,
and
THE PURCHASERS LISTED ON SCHEDULE I HERETO
with respect to
U.S. $9,330,866 principal amount
of
Senior Subordinated Notes
Due December 22, 2000
and
Warrants to Purchase 46,654,330 Shares of Common Stock
AMENDED AND RESTATED
NOTE AND WARRANT PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
SECTION 1.1. Defined Terms . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Additional Terms . . . . . . . . . . . . . . . . . 15
SECTION 1.3. Use of Defined Terms . . . . . . . . . . . . . . . 16
SECTION 1.4. Cross-References . . . . . . . . . . . . . . . . . 16
SECTION 1.5. Accounting and Financial Determinations . . . . . 16
SECTION 1.6. Construction . . . . . . . . . . . . . . . . . . . 16
ARTICLE II
PURCHASE AND SALE OF SECURITIES
SECTION 2.1. Issue of Securities . . . . . . . . . . . . . . . 17
SECTION 2.2. Purchase and Sale of Securities . . . . . . . . . 18
SECTION 2.2.1. Purchase and Sale . . . . . . . . . . . . . . . . 18
SECTION 2.2.2. Closing . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.2.3. Fees and Expenses . . . . . . . . . . . . . . . . 18
SECTION 2.3. Registration of Securities . . . . . . . . . . . . 19
SECTION 2.4. Delivery Expenses . . . . . . . . . . . . . . . . 19
SECTION 2.5. Issue Taxes . . . . . . . . . . . . . . . . . . . 20
SECTION 2.6. General Provisions Regarding Payments . . . . . . 20
SECTION 2.7. Lost Securities, etc. . . . . . . . . . . . . . . 20
SECTION 2.8. Indemnification . . . . . . . . . . . . . . . . . 21
SECTION 2.9. Use of Proceeds . . . . . . . . . . . . . . . . . 23
SECTION 2.10. Margin Regulations . . . . . . . . . . . . . . . . 23
SECTION 2.11. Taxes . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE III
CLOSING CONDITIONS
SECTION 3.1. Organic Documents, Resolutions, etc . . . . . . . 24
SECTION 3.2. Execution of this Agreement and each other
Transaction Document . . . . . . . . . . . . . . 25
SECTION 3.3. Capitalization . . . . . . . . . . . . . . . . . . 26
SECTION 3.4. Necessary Consents . . . . . . . . . . . . . . . . 26
SECTION 3.5. Financials; Pro Forma Balance Sheets . . . . . . . 26
SECTION 3.6. Closing Expenses, etc. . . . . . . . . . . . . . . 26
SECTION 3.7. Approvals . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.8. Investment by Other Purchasers . . . . . . . . . . 26
SECTION 3.9. Representations and Warranties . . . . . . . . . . 26
SECTION 3.10. Opinions of Counsel to Company . . . . . . . . . . 26
SECTION 3.11. Satisfactory Legal Form . . . . . . . . . . . . . 27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1. Corporate Existence . . . . . . . . . . . . . . . 27
SECTION 4.2. Power and Authority . . . . . . . . . . . . . . . 27
SECTION 4.3. Binding Obligation . . . . . . . . . . . . . . . . 28
SECTION 4.4. Capitalization . . . . . . . . . . . . . . . . . . 28
SECTION 4.5. Consents, Approvals and Non-Contravention . . . . 29
SECTION 4.6. Pro Forma Balance Sheet . . . . . . . . . . . . . 29
SECTION 4.7. Financial Statements . . . . . . . . . . . . . . . 29
SECTION 4.8. No Material Adverse Effect . . . . . . . . . . . . 30
SECTION 4.9. Events Subsequent to the Date of the Last Financial
Statement . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.10. Absence of Undisclosed Liabilities . . . . . . . . 30
SECTION 4.11. Taxes . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.12. Litigation . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.13. Insurance . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.14. Licenses; Compliance with Laws, Other Agreements,
etc. . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.15. Investment Company Act . . . . . . . . . . . . . . 32
SECTION 4.16. Brokers, etc. . . . . . . . . . . . . . . . . . . 32
SECTION 4.17. Private Sale . . . . . . . . . . . . . . . . . . . 32
SECTION 4.18. Disclosure . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.19. Subsidiaries . . . . . . . . . . . . . . . . . . . 33
SECTION 4.20. Ownership of Properties . . . . . . . . . . . . . 33
SECTION 4.21. Pension and Welfare Plans . . . . . . . . . . . . 33
SECTION 4.22. Environmental Warranties . . . . . . . . . . . . . 34
SECTION 4.23. Securities Activities . . . . . . . . . . . . . . 35
SECTION 4.24. Solvency . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
SECTION 5.1. Purchase for Own Account . . . . . . . . . . . . . 35
SECTION 5.2. Accredited Investor . . . . . . . . . . . . . . . 35
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.1. Financial Statements and Other Reports . . . . . . 36
SECTION 6.2. Corporate Existence, etc. . . . . . . . . . . . . 40
SECTION 6.3. Compliance with Laws, etc. . . . . . . . . . . . . 40
SECTION 6.4. Maintenance of Properties . . . . . . . . . . . . 41
SECTION 6.5. Insurance . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.6. Books and Records . . . . . . . . . . . . . . . . 41
SECTION 6.7. Environmental Covenant . . . . . . . . . . . . . . 41
SECTION 6.8. The Company's Remedial Action Regarding Hazardous
Materials . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.9. Maintenance of Office or Agency . . . . . . . . . 42
SECTION 6.10. Private Offering . . . . . . . . . . . . . . . . . 43
SECTION 6.11. Information to Prospective Purchasers . . . . . . 43
SECTION 6.12. Further Assurances . . . . . . . . . . . . . . . . 43
SECTION 6.13. Board of Directors . . . . . . . . . . . . . . . . 43
ARTICLE VII
NEGATIVE COVENANTS
SECTION 7.1. [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . 43
SECTION 7.2. [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . 44
SECTION 7.3. [INTENTIONALLY OMITTED] . . . . . . . . . . . . . 44
SECTION 7.4. Modification of Certain Agreements . . . . . . . . 44
SECTION 7.5. Transactions with Affiliates . . . . . . . . . . . 44
SECTION 7.6. Inconsistent Agreements . . . . . . . . . . . . . 44
SECTION 7.7. Fiscal Year . . . . . . . . . . . . . . . . . . . 44
SECTION 7.8. Limitation of Ranking of Future Indebtedness . . . 44
SECTION 7.9. Stay, Extension and Usury Laws . . . . . . . . . . 44
ARTICLE VIII
REDEMPTION
SECTION 8.1. Mandatory Redemption . . . . . . . . . . . . . . . 45
SECTION 8.2. The Company's Right to Redeem . . . . . . . . . . 45
SECTION 8.3. Selection of Notes and Portions of Notes to Be
Redeemed . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.4. Notice of Redemption . . . . . . . . . . . . . . . 45
SECTION 8.5. Effect of Notice of Redemption . . . . . . . . . . 46
SECTION 8.6. Payment of Redemption Price . . . . . . . . . . . 46
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default . . . . . . . . . . . 47
SECTION 9.1.1. Non-Payment of Obligations . . . . . . . . . . . . 47
SECTION 9.1.2. Breach of Warranty . . . . . . . . . . . . . . . . 47
SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations
47
SECTION 9.1.4. Non-Performance of Other Covenants and Obligations 47
SECTION 9.1.5. Default on Other Indebtedness . . . . . . . . . . 47
SECTION 9.1.6. Judgments . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.1.7. Pension Plans . . . . . . . . . . . . . . . . . . 48
SECTION 9.1.8. Bankruptcy, Insolvency, etc. . . . . . . . . . . . 48
SECTION 9.1.9. Dissolution . . . . . . . . . . . . . . . . . . . 49
SECTION 9.1.10. Impairment of Transaction Documents, etc. . . . . 49
SECTION 9.2. Action if Bankruptcy . . . . . . . . . . . . . . . 49
SECTION 9.3. Action if Other Event of Default . . . . . . . . . 49
ARTICLE X
SUBORDINATION
SECTION 10.1. Agreement to Subordinate . . . . . . . . . . . . . 50
SECTION 10.2. General Subordination to Senior Debt . . . . . . . 50
SECTION 10.3. Subordination on Dissolution, Liquidation or
Reorganization of the Company . . . . . . . . . . 50
SECTION 10.4. Limitation on Remedies . . . . . . . . . . . . . . 51
SECTION 10.4.1. . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.5. Amendments and Exchanges of Subordinated Debt . . 52
SECTION 10.6. Payments Received in Contravention of Subordination
Provisions . . . . . . . . . . . . . . . . . . . 53
SECTION 10.7. Subrogation . . . . . . . . . . . . . . . . . . . 53
SECTION 10.8. Relative Rights . . . . . . . . . . . . . . . . . 53
SECTION 10.9. Reliance on Judicial Order or Decree or Senior Agent
Certificate . . . . . . . . . . . . . . . . . . . 54
SECTION 10.10. Proof of Claim . . . . . . . . . . . . . . . . . . 54
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Amendments and Waivers . . . . . . . . . . . . . . 54
SECTION 11.2. Transfers . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.3. Notices . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.4. Independence of Covenants . . . . . . . . . . . . 58
SECTION 11.5. Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . 58
SECTION 11.6. Failure or Indulgence Not Waiver; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . 59
SECTION 11.7. Severability . . . . . . . . . . . . . . . . . . . 59
SECTION 11.8. Obligations Several; Independent Nature of Senior
Debtholders' Rights . . . . . . . . . . . . . . . 59
SECTION 11.9. Headings . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.10. APPLICABLE LAW . . . . . . . . . . . . . . . . . . 59
SECTION 11.11. Successors and Assigns . . . . . . . . . . . . . . 59
SECTION 11.12. Consent to Jurisdiction and Service of Process . . 60
SECTION 11.13. Waiver of Jury Trial . . . . . . . . . . . . . . . 60
SECTION 11.14. Counterparts; Effectiveness . . . . . . . . . . . 61
SECTION 11.15. Understanding Among the Purchasers . . . . . . . . 61
SECTION 11.17. Entire Agreement . . . . . . . . . . . . . . . . . 67
SCHEDULE I - Disclosure Schedule
EXHIBIT A - Form of Note
EXHIBIT B - Form of Warrant Agreement
THIS AMENDED AND RESTATED NOTE AND WARRANT PURCHASE
AGREEMENT, dated as of February 22, 1996 (this "Agreement"), by and among
▇▇▇▇▇▇ CO., INC., a Wisconsin corporation (the "Company"), the Purchasers
listed on Schedule I hereto (together with their respective successors and
assigns, the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company and certain of the Purchasers are
parties to the Note and Warrant Purchase Agreement, dated as of December
22, 1995 (the "Existing Purchase Agreement");
WHEREAS, the parties to the Existing Agreement desire that
such agreement be amended and restated as set forth in this Agreement;
WHEREAS, the Company desires that the Purchasers purchase
U.S.$9,330,866 principal amount of Senior Subordinated Notes (such
capitalized term and other capitalized terms used in these recitals
without definition shall have the meanings provided for in Article I) of
the Company, the proceeds of which will be used to refinance certain
outstanding trade indebtedness of the Company and for general corporate
purposes (including capital expenditures); and
WHEREAS, the Company desires that the Purchasers purchase the
Warrants exercisable for 46,654,330 shares of the Common Stock of the
Company, representing on a fully-diluted basis as of the date hereof
approximately 61% of the outstanding Common Stock of the Company;
NOW, THEREFORE, based upon the foregoing and the mutual
covenants and agreements herein contained, and for other good and
sufficient consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby
agree (i) that the Existing Purchase Agreement is hereby amended and
restated, and (ii) further as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1. Defined Terms. The following terms (whether or
not underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings:
"Affiliate" means, with respect to any Person, any
other Person which, directly or indirectly, controls, is
under common control with, or is owned or controlled by, such
Person. For purposes of this definition, (i) "control"
means, with respect to any Person, either (x) the beneficial
ownership of five percent (5%) or more of any class of
equity, securities or other beneficial Interests of such
Person or (y) the power to direct the management and policies
of such Person through the ownership of voting securities, by
contract or otherwise, (ii) "controlling", "control with" and
"controlled by", and similar terms shall have meanings
correlative to the foregoing and (iii) the officers,
directors and shareholders of such Person shall be deemed to
be Affiliates of such Person.
"Agreement" means this Note and Warrant Purchase
Agreement, as it may be amended, restated, supplemented or
otherwise modified from time to time pursuant to Section
11.1.
"Authorized Officer" means, relative to the Company,
those of its officers whose signatures and incumbency shall
have been certified to the Purchasers pursuant to Section
3.1.
"Bankruptcy Code" shall mean Title 11 of the United
States Code, as amended from time to time, and all rules and
regulations promulgated thereunder.
"Business Day" means any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the
State of New York or is a day on which banking institutions
located in such state are authorized or required by law or
other governmental action to close.
"Capitalized Lease Liabilities" means, with respect to
any Person, all monetary obligations of such Person or any of
its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as
capitalized leases, and, for purposes of this Agreement, the
amount of such obligations 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" means, with respect to any Person, any
and all shares, interests, participations or other
equivalents (however designated) of such Person's capital
stock or equity, whether now outstanding or issued after the
date hereof, including all common stock, preferred stock,
partnership interests and member interests.
"Cash Equivalents" means, as at any time,
(a) marketable securities (i) issued or directly and
unconditionally guaranteed as to interest and principal
by the United States Government or (ii) issued by any
agency of the United States the obligations of which
are backed by the full faith and credit of the United
States, in each case maturing within one year after
such date;
(b) marketable direct obligations issued by any
state of the United States of America or any political
subdivision of any such state or any public
instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the
acquisition thereof, one of the two highest ratings
obtainable from either Standard & Poor's Ratings Group,
a division of ▇▇▇▇▇▇-▇▇▇▇, Inc. ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's");
(c) commercial paper maturing no more than one year
from the date of creation thereof and having, at the
time of the acquisition thereof, a rating of at least
A-1 (or the equivalent) from S&P or at least P-1 (or
the equivalent) from Moody's;
(d) certificates of deposit or bankers' acceptances
maturing within one year after such date and issued or
accepted by any commercial bank organized under the
laws of the United States of America or any state
thereof or the District of Columbia that (i) is at
least "adequately capitalized" (as defined in the
regulations of its primary federal banking regulator)
and (ii) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; and
(e) shares of any money market mutual fund that
(i) has at least 95% of its assets invested
continuously in the types of investments referred to in
clauses (a) and (b) above, (ii) has net assets of not
less than $500,000,000, and (iii) has one of the two
highest ratings obtainable from either S&P or Moody's.
"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental
Response Compensation Liability Information System List.
"Change in Control" means any event, transaction or
occurrence as a result of which, without the consent of the
Requisite Holders (which consent shall not be unreasonably
withheld), either (i) (x) Internationale Nederlanden (U.S.)
Capital Corporation and its Affiliates shall cease to own or
control at least 15% or (y) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Ltd. and its
Affiliates shall cease to own or control at least 10%, of the
outstanding shares of Capital Stock, on a fully diluted
basis, or (ii) any other Person and its Affiliates shall own
or control, directly or indirectly, in the aggregate 51% or
more of the shares of Capital Stock on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as
amended, reformed or otherwise modified from time to time.
"Collateral" shall mean all property of the Company
that at the time is security for the Senior Debt.
"Common Stock" means the Common Stock, no par value per
share, of the Company.
"Controlled Group" means all members of a controlled
group of corporations and all members of a controlled group
of trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated
as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Credit Agreement" means, collectively, (i) the Credit
Agreement, dated as of June 30, 1995, among the Company, the
lenders named therein and General Electric Capital
Corporation, as agent, as amended on September 15, 1995,
December 22, 1995 and as such agreement may be further
amended, restated, extended, renewed, supplemented or
otherwise modified from time to time, or replaced through
refinancing and (ii) all other agreements, documents and
instruments evidencing, governing, securing or pertaining to
all or any portion of the Senior Debt.
"Default" means any Event of Default or any condition,
occurrence or event which, after notice or lapse of time or
both, would constitute an Event of Default.
"Disclosure Schedule" means the Disclosure Schedule
attached hereto as Schedule II, as it may be amended,
supplemented or otherwise modified from time to time by the
Company with the written consent of the Requisite Holders.
"Dollars" and the sign "$" mean the lawful money of the
United States of America.
"Environmental Claim" means any accusation, allegation,
notice of violation, claim, demand, abatement order or other
order or direction (conditional or otherwise) by any
governmental authority or any Person for any damage,
including personal injury (including sickness, disease or
death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties
or restrictions, in each case relating to, resulting from or
in connection with Hazardous Materials and relating to the
Company, any of their respective Affiliates or any Facility.
"Environmental Laws" means all statutes, ordinances,
orders, rules, regulations, guidance documents or decrees
relating to (i) environmental matters, including those
relating to fines, injunctions, penalties, damages,
contribution, cost recovery compensation, losses or injuries
resulting from the Release or threatened Release of Hazardous
Materials, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, or the protection of
human, plant or animal health or welfare from injury as a
result of exposure to Hazardous Materials or loss of
ecological resources, in any manner applicable to the
Company, any of their respective Affiliates or predecessors
or any of their respective properties, including the
Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section
1801 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Occupational Safety and Health Act
(29 U.S.C. Section 651 et seq.) and the Emergency Planning
and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, and any analogous
future or present local, state and federal statutes and
regulations promulgated pursuant thereto, each as in effect
as of the date of determination.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any successor
statute, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA
also refer to any successor sections.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor
statute.
"Facilities" means any and all real property (including
all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated
or used by the Company or any of its predecessors or
Affiliates.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive
calendar months ending on December 31; references to a Fiscal
Year with a number corresponding to any calendar year (e.g.,
the "1995 Fiscal Year") refer to the Fiscal Year ending on
the December 31 occurring during such calendar year.
"fully diluted basis" means, as applied to the
calculation of the number of shares of Common Stock
outstanding at any time, after giving effect to (a) all
shares of Common Stock outstanding at the time of
determination, (b) all shares of Common Stock issuable upon
the conversion, exercise or exchange of any convertible
security, warrant, option, subscriptions, calls or other
rights to acquire Common Stock outstanding at the time of
determination, irrespective of whether such conversion,
exercise or exchange is permitted, restricted or vested at
the time of determination, and irrespective of the price or
consideration required by such conversion, exercise or
exchange, and (c) all other commitments, promises or
understandings to issue any shares of Common Stock or any
convertible security, warrant, option, subscription, call or
other rights outstanding at the time of determination. Such
calculation will reflect the Warrants, and will not be made
in accordance with the "treasury method in accordance with
GAAP".
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent
decree of or from any federal, state or local governmental
authority, agency or court.
"guaranty" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or
otherwise becomes or is contingently liable upon (by direct
or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to or otherwise to invest
in a debtor or otherwise to assure a creditor against loss)
the debt, obligation or other liability of any other Person
(other than by endorsements of instruments in the course of
collection) or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The
amount of the obligor's obligation under any guaranty shall
(subject to any limitation set forth therein) be deemed to be
the outstanding principal amount (or maximum outstanding
principal amount, if larger) of the debt, obligation or other
liability guaranteed thereby.
"Hazardous Materials" means (i) any chemical, material
or substance at any time defined as or included in the
definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic
substances" or any other formulations intended to define,
list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar import under
any applicable Environmental Laws or publications promulgated
pursuant thereto; (ii) any oil, petroleum, petroleum fraction
or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the
exploration, development or production of crude oil, natural
gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos in
any form; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million;
(ix) pesticides; and (x) any other chemical, material or
substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could
pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of the Facilities.
"Hedging Obligations" means, with respect to any
Person, all liabilities of such Person under interest rate
swap agreements, interest rate cap agreements, interest rate
collar agreements, foreign exchange contracts, currency swap
agreements, futures contracts, option contracts, and
synthetic cap agreements and all other agreements or
arrangements designed to protect such Person against
fluctuations in interest rates or currency exchange rates.
"Holder" means each Purchaser (or any of its permitted
designees, successors or assigns, other than the Company or
any of its Subsidiaries) who continues to hold any of the
Securities and any other holder of any of the Securities;
provided, that for the purposes of Article X and Section
11.16, "Holder" includes the Company or any of its
Subsidiaries to the extent that such entity holds any of the
Securities or otherwise would be deemed a Purchaser
hereunder.
"Indebtedness" of any Person means, without
duplication:
(a) all obligations of such Person for borrowed
money and all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments
(including Redeemable Capital Stock);
(b) all obligations, contingent or otherwise,
relative to the face amount of all letters of credit,
whether or not drawn, and banker's acceptances issued
for the account of such Person;
(c) all obligations of such Person as lessee under
leases which have been or should be, in accordance with
GAAP, recorded as Capitalized Lease Liabilities;
(d) all other items which, in accordance with GAAP,
would be included as liabilities on the liability side
of the balance sheet of such Person as of the date at
which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to
pay the deferred purchase price of property or
services, and indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being
purchased by such Person (including indebtedness
arising under conditional sales or other title
retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in
recourse; and
(g) all guaranties of such Person in respect of any
of the foregoing.
For all purposes of this Agreement, the Indebtedness of any
Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a
joint venturer.
"Joint Venture" means a joint venture, partnership or
other similar arrangement, whether in corporate, partnership
or other legal form; provided that in no event shall any
corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or otherwise), charge against or interest in
property to secure payment of a debt or performance of an
obligation or other priority or preferential arrangement of
any kind or nature whatsoever (including any conditional sale
or other title retention agreement, any financing lease
involving substantially the same economic effect as any of
the foregoing or the filing of any financing statement under
the Uniform Commercial Code or comparable law of any
jurisdiction).
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse
effect upon the business, assets, liabilities, condition
(financial or otherwise), operations, performance, properties
or prospects of the Company, or (ii) the impairment of the
ability of the Company to perform, or the Holders to enforce,
any obligation of the Company under any Transaction Document
to which it is party (including the Obligations).
"Net Income" means, with respect to any Person for any
applicable period, the net income (or loss) of such Person
and its Subsidiaries on a consolidated basis for such period
determined in conformity with GAAP, exclusive of any
extraordinary gains or non-cash extraordinary losses.
"Net Worth" means, with respect to any Person as at any
date of determination, the sum of the capital stock and
additional paid-in capital plus retained earnings (or minus
accumulated deficits) of such Person and its Subsidiaries on
a consolidated basis determined in conformity with GAAP.
"Note" means each promissory note of the Company, dated
the Closing Date, substantially in the form of Exhibit A
hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time), all other promissory
notes accepted from time to time in substitution, replacement
or renewal therefor, and any payment-in-kind note issued to
pay interest thereunder.
"Obligations" means all obligations (monetary or
otherwise) of every nature of the Company from time to time
owed to the Purchasers, Holders or any of them under the
Transaction Documents, whether for principal, interest, fees,
expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any
corporation, a certificate executed on behalf of such
corporation by its chairman of the board (if an officer) or
its president or one of its vice presidents and by its chief
financial officer or its treasurer; provided that any
Officers' Certificate with respect to the compliance with a
condition precedent to the issuance and sale of the
Securities hereunder shall include (i) a statement that the
officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or
other provisions contained in this Agreement relating
thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them
to express an informed opinion as to whether or not such
condition has been complied with and (iii) a statement as to
whether, in the opinion of the signers, such condition has
been complied with.
"Organic Document" means, relative to any Person, such
Person's certificate of incorporation, by-laws and all
shareholder agreements, voting trusts and similar
arrangements applicable to any of such Person's authorized
shares of Capital Stock.
"Other Subordinated Securities" means equity and debt
securities subordinated at least to the same extent as the
Notes to the payment of all outstanding Senior Debt and which
do not contain terms in respect of affirmative and negative
covenants, events of default or amortization that are more
onerous, as a whole, to the Company than the initial terms of
the Notes.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions
under ERISA.
"Pension Plan" means a "pension plan", as such term is
defined in section 3(2) of ERISA, which is subject to
Title IV of ERISA (other than a multiemployer plan as defined
in section 4001(a)(3) of ERISA), and to which the Company or
any corporation, trade or business that is, along with the
Company, a member of a Controlled Group, may have liability,
including any liability by reason of having been a
substantial employer within the meaning of section 4063 of
ERISA at any time during the preceding five years, or by
reason of being deemed to be a contributing sponsor under
section 4069 of ERISA.
"Person" means any individual, corporation, general or
limited partnership, joint venture, association, limited
liability company, joint stock company, trust, business
trust, land trust, bank, trust company, estate (including any
beneficiaries thereof), unincorporated organization,
cooperative, association or government branch, agency or
political subdivision thereof.
"Redeemable Capital Stock" means, as applied to any
Person, any Capital Stock of such Person which, either by its
terms, by the terms of any security into which it is
convertible or exchangeable or otherwise, (i) is or upon the
happening of an event or passage of time would be required to
be redeemed (for consideration other than shares of the
common equity capital of such Person) on or prior to December
20, 2000, (ii) is redeemable at the option of the holder
thereof (for consideration other than shares of the common
equity capital of such Person) at any time prior to such date
or (iii) is convertible into or exchangeable for debt
securities at any time prior to such date.
"Redemption Date" means (i) in the case of a redemption
of Notes pursuant to Section 8.1 in connection with a Change
in Control, the date 30 days following the occurrence of such
Change in Control, unless such date is a day which is not a
Business Day, in which case the Redemption Date shall be the
next succeeding Business Day, and (ii) in the case of a
redemption of Notes pursuant to Section 8.2, the date
selected by the Company for such redemption.
"Redemption Price" means, when used with respect to any
Note to be redeemed, the redemption price fixed for such
redemption pursuant to Section 8.1 or 8.2.
"Registration Rights Agreement" means the Amended and
Restated Registration Rights Agreement, dated as of the
Closing Date, substantially in the form of Exhibit C to the
Warrant Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of
Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any
Hazardous Materials), or into or out of any Facility,
including the movement of any Hazardous Material through the
air, soil, surface water, groundwater or property.
"Requisite Holders" means the Holders of at least a
majority in aggregate principal amount of the then
outstanding Notes.
"Requisite Senior Debtholders" means, with respect to
any action which may be taken by the Senior Debtholders in
connection with any term of this Agreement, the Senior
Debtholder or Senior Debtholders necessary to approve or
consent to such action pursuant to the terms of the Credit
Agreement.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, and any successor statute.
"Senior Agent" means General Electric Capital
Corporation, in its capacity as agent for the lenders under
the Credit Agreement, and its successors in such capacity,
or, if there is then no acting agent under the Credit
Agreement, financial institutions holding a majority in
principal amount of the Senior Debt outstanding thereunder,
or if no debt is outstanding, a majority in amount of the
loan commitments outstanding thereunder.
"Senior Debt" means all loans, advances, debts,
liabilities and obligations, for the performance of
covenants, tasks or duties or for the payment of monetary
amounts (whether or not such performance is then required or
contingent, or amounts are liquidated or determinable) owing
by the Company to the Senior Agent or any lender under the
Credit Agreement, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or
not evidenced by any note, agreement or other instrument,
arising under the Credit Agreement. Senior Debt includes all
principal, interests, fees, expenses, attorneys' fees and any
other sum chargeable to the Company under the Credit
Agreement or any of the other Loan Documents, together with,
subject to the last sentence hereof, (a) all complete or
partial refinancings of the Senior Debt, (b) any amendments,
modifications, renewals or extensions of any of the foregoing
and (c) any interest accruing on the foregoing after the
commencement of any bankruptcy, insolvency or similar
proceeding, without regard to whether or not such interest
accrues in any such proceeding or is an allowed claim in any
such proceeding. Senior Debt shall be considered to be
outstanding whenever any loan commitment under the Credit
Agreement is outstanding. Notwithstanding the foregoing,
however, "Senior Debt" shall not include any loans, advances,
debts, liabilities, obligations or other amounts arising out
of any partial or complete refinancing of Senior Debt if both
(i) such refinancing is with a party or parties other than
the existing Senior Agent and the Senior Debtholders for whom
the Senior Agent is at the time serving as agent under the
Credit Agreement and (ii) the final stated maturity date of
such refinancing is later than December 22, 2003.
"Senior Debtholder" means a holder of Senior Debt.
"Solvent" means, with respect to any Person, that as of
the date of determination both (a) (i) the then fair saleable
value of the property of such Person is (A) greater than the
total amount of liabilities (including contingent
liabilities) of such Person and (B) not less than the amount
that will be required to pay the probable liabilities on such
Person's then existing debts as they become absolute and
matured considering all financing alternatives and potential
asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and
(iii) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and
(b) such Person is "solvent" within the meaning given that
term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an
actual or matured liability.
"Stated Maturity Date" means December 20, 2000.
"Subordinated Debt" means all of the obligations of the
Company to the Holders evidenced by the Subordinated Debt
Documents, all other amounts now or hereafter owed by the
Company to the Holders under the Subordinated Debt Documents,
and all other obligations of the Company to the Holders now
or hereafter arising, including without limitation, all
principal (and premium, if any) and interest outstanding
under the Subordinated Debt Documents and all claims relating
to the Subordinated Debt Documents arising from rescission,
misrepresentation, breach of warranty, indemnification, taxes
or securities law violations.
"Subordinated Debt Documents" means this Agreement and
the Notes and all agreements, documents and instruments
securing the Subordinated Debt pursuant to Section 11.16
hereof.
"Subsidiary" means, with respect to any specified
Person, any corporation, partnership, association, joint
venture or other business entity of which more than 50% of
the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is
at the time owned or controlled, directly or indirectly, by
such specified Person or one or more of the other
Subsidiaries of such specified Person or a combination
thereof.
"Tax" or "Taxes" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any
nature and whatever called, by whomsoever, on whomsoever and
wherever imposed, levied, collected, withheld or assessed;
provided that "Tax on the overall net income" of a Person
shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office is
located (and/or, in the case of a Holder, the jurisdiction in
which the office through which its investment in the
Securities is being maintained is located) or in which that
Person is deemed to be doing business on all or part of the
net income, profits or gains of that Person (whether
worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"Transaction Costs" means the fees, costs and expenses
payable by the Company in connection with the transactions
contemplated hereby.
"Transaction Documents" means the Subordinated Debt
Documents and the Warrant Documents and each other agreement,
document, certificate or instrument delivered in connection
with and such agreements and documents, whether or not
specifically mentioned herein or therein.
"Undertaking" means the undertaking of the Company as
set forth in Section 6.13, relating to, among other things,
the commitment of the Company to (i) by January 10, 1996,
complete and distribute to the accredited investor
stockholders of the Company, a Private Placement Memorandum
for the offer of notes and warrants of the Company on terms
substantially similar to those contained in the Transaction
Documents, and (ii) by February 29, 1996, complete the
transactions described in the Private Placement Memorandum.
"United States" or "U.S." means the United States of
America, its fifty States and the District of Columbia.
"Warrant Documents" means the Warrant Agreement, the
Warrant Certificates and the Registration Rights Agreement.
"Warrants" is defined in the Warrant Agreement.
"Welfare Plan" means a "welfare plan", as such term is
defined in Section 3(1) of ERISA.
SECTION 1.2. Additional Terms. The following terms shall
have the meanings indicated or referred to in the following Sections of
this Agreement:
Term Section
Audited Financial Statements 3.7
Blue Sky Laws 4.2
Closing 2.2.2
Closing Date 2.2.2
Company Preamble
Event of Default 9.1
Existing Purchase Agreement First Recital
Financial Statements 3.7
GAAP 1.5
Indemnified Parties 2.8
Indemnifying Party 2.8
Interim Financial Statements 3.7
Intellectual Property 4.17
Licenses 4.16
Losses 2.8
Note Register 2.3
Notice of Redemption 8.4
Offering 6.13
Purchasers Preamble
Securities 2.1
Senior Payment Default 10.2
Warrant Agreement 2.1
Warrant Certificate 2.1(c)
Warrant Register 2.3
Warrant Shares 2.1(c)
SECTION 1.3. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule,
in each Note, in each other Transaction Document, and in each other notice
and other communication delivered from time to time in connection with
this Agreement or any other Transaction Document.
SECTION 1.4. Cross-References. Unless otherwise specified,
references in this Agreement and in each other Transaction Document to any
Article or Section are references to such Article or Section of this
Agreement or such other Transaction Document, as the case may be, and,
unless otherwise specified, references in any Article, Section or
definition to any clause are references to such clause of such Article,
Section or definition.
SECTION 1.5. Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used herein or in any other
Transaction Document shall be interpreted, all accounting determinations
and computations hereunder or thereunder shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be
prepared in accordance with, those generally accepted accounting
principles ("GAAP") set forth in opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, in each case as applied in the preparation of the
financial statements referred to in Section 4.7.
SECTION 1.6. Construction. When used herein, the masculine form of
words includes the feminine and the neuter and vice versa, and, unless the
context otherwise requires, the singular form of words includes the plural
and vice versa.
ARTICLE II
PURCHASE AND SALE OF SECURITIES
SECTION 2.1. Issue of Securities. (a) On or before the Closing
Date,
(i) the Company will have authorized the issue and sale of
U.S.$[_______] aggregate principal amount of the Notes; and
(ii) the Company will have authorized the issue and sale of the
Warrants pursuant to an Amended and Restated Warrant Agreement
substantially in the form attached hereto as Exhibit B (as amended or
otherwise modified from time to time in accordance with the terms
thereof, the "Warrant Agreement").
The Notes and the Warrants shall individually be referred to herein as a
"Security" and collectively referred to herein as the "Securities".
(b) The Notes shall be substantially in the form attached hereto as
Exhibit A and shall include such notations, legends or endorsements set
forth therefor or required by law. Each Note shall be dated the date of
its issuance. The aggregate principal amount of the Notes shall be due
and payable on the Stated Maturity Date. The terms and provisions
contained in the Notes shall constitute, and are hereby expressly made, a
part of this Agreement and, to the extent applicable, the Company and the
Purchasers, by their execution and delivery of this Agreement, expressly
agree to such terms and provisions and to be bound thereby.
(c) Each Warrant shall be evidenced by a certificate substantially
in the form attached as Exhibit A to the Warrant Agreement (each such
certificate being referred to herein as a "Warrant Certificate"). Each
Warrant Certificate shall be dated the date of its issuance. The Warrants
will be exercisable, in the manner provided in the Warrant Agreement and
the applicable Warrant Certificate, for a number of shares of Common Stock
as provided therein (the "Warrant Shares"). The Holders of Warrant Shares
will have certain rights with respect to the Warrant Shares as provided in
the Registration Rights Agreement. The terms and provisions contained in
the Warrant Agreement and the Warrant Certificates shall constitute, and
are hereby expressly made, a part of this Agreement and, to the extent
applicable, the Company and the Purchasers, by their execution and
delivery of this Agreement, expressly agree to such terms and provisions
and to be bound thereby.
SECTION 2.2. Purchase and Sale of Securities.
SECTION 2.2.1. Purchase and Sale. (a) The Company agrees to sell
and, subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of the Company contained or
incorporated herein, each of the Purchasers agrees, severally but not
jointly, to purchase the Securities set forth below such Purchaser's name
on Schedule I hereto, at a purchase price of $990 per $1000 principal
amount of Notes and $10 per Warrant unit, for an aggregate purchase price
of $1000 per each unit of Notes and Warrants.
(b) The Company and each Purchaser hereby acknowledge and agree that
the Notes and Warrants are part of an investment unit within the meaning
of Section 1273(c)(2) of the Code. Any other provision of this Agreement
to the contrary notwithstanding, the Company and each Purchaser hereby
further acknowledge and agree that the total issue price of the investment
unit consisting of the Notes and Warrants for all federal, state and local
income tax purposes is $1,000 per investment unit comprised of $990 per
$1,000 principal amount of Notes and $10 per Warrant unit. All federal,
state and local income tax returns shall be filed by the Company and each
Purchaser in a manner consistent in all material respects with the
provisions of this Section 2.2.1.
SECTION 2.2.2. Closing. The purchase and sale of the Notes and
Warrants shall take place at a closing (the "Closing") at the offices of
the Company located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ on
February 22, 1996 or such other Business Day, as may be agreed upon by the
Purchasers and the Company (the "Closing Date"). At the Closing, the
Company will deliver to each Purchaser the Securities to be delivered to
such Purchaser (in such permitted denomination or denominations and
registered in such Purchaser's name or the name of such nominee or
nominees as such Purchaser may reasonably request), dated the Closing
Date, against payment of the purchase price therefor by intra-bank or
federal funds bank wire transfer of same day funds to such bank account as
the Company shall designate at least one Business Day prior to the
Closing.
SECTION 2.2.3. Fees and Expenses. After the Notes and Warrants are
sold, the Company agrees to pay or reimburse all reasonable expenses
relating to this Agreement, including:
(a) the reasonable fees and other charges of one counsel for
the Purchasers appointed by the Requisite Holders in connection
herewith;
(b) any reasonable out-of-pocket fees and expenses (including
the reasonable fees and expenses of one counsel for the Purchasers
appointed by the Requisite Holders) in connection with any
registration or qualification of the Securities required in
connection with the offer and sale of the Securities pursuant to this
Agreement under the securities or Blue Sky Laws of any jurisdiction
requiring such registration or qualification or in connection with
obtaining any exemptions from such requirements; and
(c) the reasonable fees and expenses of one counsel for the
Purchasers appointed by the Requisite Holders relating to any
amendment, supplement or modification of, or any waiver, consent,
enforcement or preservation of rights under, this Agreement, the
Securities, the Warrant Agreement or any other Transaction Document,
or any other documents contemplated hereby or thereby, including any
refinancing or restructuring of the Obligations in the nature of a
"work-out" or pursuant to bankruptcy or insolvency proceedings.
The Company shall deliver to such Purchaser or to such other Persons
as such Purchaser shall direct, at Closing, by intra-bank or federal funds
bank wire transfer of same day funds payment for the reasonable fees and
expenses of one counsel for the Purchasers appointed by the Requisite
Holders, or at Purchasers' election shall deduct such amount from the
Purchase Price for the Securities.
SECTION 2.3. Registration of Securities. The Company shall cause to
be kept at its principal office (i) a register for the registration and
transfer of the Notes (the "Note Register") and (ii) a register for the
registration and transfer of the Warrants (the "Warrant Register"). The
names and addresses of the Holders of Notes, the transfer of Notes, and
the names and addresses of the transferees of the Notes shall be
registered in the Note Register. The names and addresses of the Holders
of Warrants, the transfer of Warrants and the names and addresses of the
transferees of Warrants shall be registered in the Warrant Register.
The Person in whose name any registered Security shall be registered
shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement and the Company shall not be affected by any
notice to the contrary, until due presentment of such Security for
registration of transfer so provided in this Section 2.3. Payment of or
on account of the principal, premium, if any, and interest on, or any
other amount in respect of, any registered Securities shall be made to or
upon the written order of such registered holder.
SECTION 2.4. Delivery Expenses. If a Holder surrenders any Note or
Warrant to the Company for any reason, the Company agrees to pay the cost
of delivering to such Holder's home office or to the office of such
Holder's designee from the Company each Security issued in substitution or
replacement for the surrendered Security.
SECTION 2.5. Issue Taxes. The Company agrees to pay all taxes
(other than taxes in the nature of income, franchise or gift taxes) in
connection with the issuance, sale, delivery or transfer by the Company to
each Purchaser of the Notes and the Warrants and the execution and
delivery of the agreements and instruments contemplated hereby and any
modification of any of such Securities, agreements and instruments and
will save such Purchaser harmless without limitation as to time against
any and all liabilities with respect to all such taxes. The obligations
of the Company under this Section 2.5 shall survive the payment or
prepayment of the Notes, the exercise of the Warrants and the termination
of this Agreement.
SECTION 2.6. General Provisions Regarding Payments.
(a) Manner and Time of Payment. All payments by the Company of
principal, premium, if any, and other amounts hereunder shall be made in
Dollars in same day funds, without defense, setoff or counterclaim, free
of any restriction or condition, and delivered to each Holder's account
not later than 12:00 Noon (New York time) on the date due unless such date
is a day which is not a Business Day, in which case the Company shall make
such payments on the next succeeding Business Day, and interest shall
accrue on the aggregate amount of such payments until such amount is paid
and payment of such accrued interest shall be made concurrently with the
payment of such amount. Funds received by a Holder after 12:00 Noon
(New York time) on the date due shall be deemed to have been paid by the
Company on the next succeeding Business Day and interest shall accrue on
such amount paid until such next succeeding Business Day.
(b) Application of Payments to Principal and Interest. All payments
in respect of the principal amount of any Note shall include payment of
accrued interest on the principal amount being repaid or prepaid, and all
such payments shall be applied to the payment of interest before
application to principal.
SECTION 2.7. Lost Securities, etc. If a mutilated Security is
surrendered to the Company or if the Holder of a Security claims and
submits an affidavit or other evidence, satisfactory to the Company to the
effect that the Security has been lost, destroyed or wrongfully taken, the
Company shall issue a replacement Security subject to the terms of the
immediately succeeding sentence. If required by the Company, such Holder
must provide an indemnity bond, or other form of indemnity, sufficient in
the judgment of the Company to protect the Company from any loss which it
may suffer if a Security is replaced; provided that, if any Purchaser or
any other institutional Holder (or nominee thereof) is the owner of any
such lost, stolen or destroyed Security, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Security at the time of such loss,
theft or destruction shall be accepted as satisfactory evidence thereof
and no further indemnity shall be required as a condition to the execution
and delivery of a new Security other than the unsecured written agreement
of such owner reasonably satisfactory to indemnify the Company or at the
option of such Purchaser or such institutional Holder an indemnity bond in
the amount of the Security remaining outstanding.
Every replacement Security is an obligation of the Company.
SECTION 2.8. Indemnification. The Company (the "Indemnifying
Party") hereby agrees, without limitation as to time, to indemnify each
Holder and each director, officer, partner, member, employee, counsel,
agent and Affiliate of such Holder (collectively, the "Indemnified
Parties") against, and hold it and them harmless from, all losses, claims,
damages, liabilities, costs (including reasonable attorneys' fees and
disbursements) (collectively, "Losses") incurred by it or them and arising
out of or in connection with this Agreement, the Securities, the Credit
Agreement, the Warrant Agreement or any other Transaction Document, or the
transactions contemplated hereby or thereby (or any other document or
instrument executed herewith or pursuant hereto or thereto), whether or
not the transactions contemplated by this Agreement are consummated and
whether or not any Indemnified Party is a formal party to any proceeding,
other than to the extent that any Losses result from action on the part of
any Indemnified Party which is finally judicially determined to constitute
either gross negligence or willful misconduct. For the purpose of the
preceding sentence, "Losses" shall not include any losses by any Holder
resulting solely from the reduction in value of the Securities or
Transaction Documents. The Indemnifying Party agrees to reimburse any
Indemnified Party promptly for all such Losses as they are incurred by
such Indemnified Party. The obligations of the Indemnifying Party to each
Indemnified Party hereunder shall be separate obligations and each
Indemnifying Party's liability to any such Indemnified Party hereunder
shall not be extinguished solely because any other Indemnified Party is
not entitled to indemnity hereunder. The obligations of the Indemnifying
Party under this Section 2.8 shall survive the payment or prepayment of
the Notes, at maturity, upon acceleration, redemption or otherwise, the
exercise of the Warrants purchased by any Purchaser, the redemption or
repurchase by the Company of the Warrants purchased by any Purchaser, the
redemption or repurchase of any Warrant Shares, any transfer of the
Securities by any Holder and the termination of this Agreement, the
Securities, the Warrant Agreement or any other Transaction Document. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have, including under this Agreement and any other
indemnification agreements contained in the Warrant Agreement or any other
Transaction Document.
In case any action shall be brought against any Indemnified Party
with respect to which indemnity may be sought against the Indemnifying
Party hereunder, such Indemnified Party shall promptly notify the
Indemnifying Party in writing and the Indemnifying Party shall, if it so
desires, assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Indemnified Party and payment of such
counsel's reasonable fees and expenses. The failure to so notify the
Indemnifying Party shall not affect any obligation it may have to any
Indemnified Party under this Agreement or otherwise unless it is
materially adversely affected by such failure. Each Indemnified Party
shall have the right to employ separate counsel in such action and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless: (a) the
Indemnifying Party has agreed in writing to pay such expenses, (b) the
Indemnifying Party has failed to assume such defense and employ counsel or
(c) the named parties to any such action (including any impleaded parties)
include any Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by outside counsel that there
may be one or more significant legal defenses available to it which are
materially inconsistent with or additional to those available to the
Indemnifying Party; provided that, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel in
the circumstances described in the preceding clause (b) or (c), the
Indemnifying Party shall not have the right to assume the defense of such
action or proceeding; provided, however, that the Indemnifying Party shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances,
be responsible hereunder for the fees and expenses of more than one such
firm of separate counsel (in addition to any necessary local counsel),
which counsel shall be designated by such Indemnified Party. The
Indemnifying Party shall not be liable for any settlement of any such
action effected without its written consent. Without limiting the effect
of the immediately preceding sentence, the Indemnifying Party agrees that
it will not, without the prior written consent of the Indemnified Parties,
settle or compromise any pending or threatened claim, action or suit in
respect of which indemnification or contribution may be sought hereunder
unless the foregoing contains an unconditional release of the Indemnified
Parties from all liability and obligation arising therefrom.
If the indemnification provided for in this Section 2.8 is
unavailable to any Indemnified Party in respect of any Losses referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Persons,
shall have an obligation to contribute to the amount paid or payable by
such Persons as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party, its
Subsidiaries and/or any other Person or Persons (other than each Purchaser
and the other Indemnified Parties) and each Purchaser and the other
Indemnified Parties in connection with the actions which resulted in such
Losses as well as any other relevant equitable considerations. The amount
paid or payable by any such Person as a result of the Losses referred to
above shall be deemed to include, subject to the limitations set forth in
this Section 2.8, any legal or other fees or expenses reasonably incurred
by such Person in connection with any investigation, lawsuit or legal or
administrative action or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.8 were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph.
SECTION 2.9. Use of Proceeds. The net cash proceeds of the
Securities, together with other funds available to the Company, shall be
applied by the Company in accordance with the first recital.
SECTION 2.10. Margin Regulations. No portion of the proceeds of any
Securities under this Agreement shall be used by any Transaction Party in
any manner that might cause the issuance and sale of the Securities or the
application of such proceeds to violate Regulations G, U, T or X of the
Board of Governors of the Federal Reserve System or any other regulation
of such Board or to violate the Exchange Act, in each case as in effect on
the date or dates of such issuance and sale and such use of proceeds.
SECTION 2.11. Taxes. (a) All sums payable by the Company under
this Agreement and the other Transaction Documents shall be paid free and
clear of and (except to the extent required by law) without any deduction
or withholding on account of any Tax (other than a Tax on the overall net
income of any Holder) imposed, levied, collected, withheld or assessed by
or within the United States or any political subdivision in or of the
United States or any other jurisdiction from or to which a payment is made
by or on behalf of the Company or by any federation or organization of
which the United States or any such jurisdiction is a member at the time
of payment.
(b) If the Company or any other Person is required by law to make
any deduction or withholding on account of any such Tax from any sum paid
or payable by the Company to any Holder under any of the Transaction
Documents:
(i) the Company shall notify each Holder of any such
requirement or any change in any such requirement as soon as the
Company becomes aware of it;
(ii) the Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on the Company) for its own account or
(if that liability is imposed on such Holder) on behalf of and in the
name of such Holder; provided, that the Company shall be entitled to
seek reimbursement for any such amounts so paid, including by seeking
setoff against interest due and payable on the Notes;
(iii) the sum payable by the Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, such Holder receives on the
due date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; provided,
that the Company shall be entitled to seek reimbursement for any such
amounts so paid, including by seeking setoff against interest due and
payable on the Notes; and
(iv) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b)(ii) above to pay, the Company shall deliver to such Holder
evidence satisfactory to it of such deduction, withholding or payment
and of the remittance thereof to the relevant taxing or other
authority.
ARTICLE III
CLOSING CONDITIONS
The obligation of each Purchaser to purchase and pay for the Notes
and the Warrants to be delivered on the Closing Date shall be subject to
the prior or concurrent satisfaction of each of the conditions precedent
set forth in this Article III.
SECTION 3.1. Organic Documents, Resolutions, etc. On or before the
Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser (with sufficient originally executed copies, where appropriate,
for such Purchaser and its counsel) the following, each, unless otherwise
specified, dated the Closing Date:
(a) certified copies of its certificate of incorporation,
together with an Officer's Certificate certifying that the Company
(i) is in good standing and is duly qualified and licensed in each
state wherein the character of its real property or the nature of its
business makes such qualification or qualification necessary, and
(ii) has paid any applicable franchise or similar taxes which are due
and owing as of the Closing Date;
(b) copies of its by-laws, certified as of the Closing Date by
its corporate secretary or an assistant secretary;
(c) resolutions of the independent member of its Board of
Directors approving and authorizing the execution, delivery and
performance of this Agreement and the other Transaction Documents to
which it is a party, in form and substance reasonably satisfactory to
each Purchaser and its counsel, certified as of the Closing Date by
its corporate secretary or an assistant secretary as being in full
force and effect without modification or amendment; and
(d) signature and incumbency certificates of its officers
executing this Agreement and the other Transaction Documents to which
it is a party.
SECTION 3.2. Execution of this Agreement and each other Transaction
Document. On or before the Closing Date, each Purchaser shall received
original copies of the following:
(a) this Agreement duly executed by the Company and each
Purchaser;
(b) the Notes duly executed by the Company;
(c) the Warrant Agreement duly executed by the Company and the
Purchaser;
(d) the Warrant Certificates evidencing the Warrants duly
executed by the Company;
(e) the Registration Rights Agreement duly executed by the
Company;
(f) each other Transaction Document duly executed by the party
or parties to it.
SECTION 3.3. Capitalization. Each Purchaser shall be reasonably
satisfied with the capital, organization, ownership and management
structure of the Company.
SECTION 3.4. Necessary Consents. The Company shall have obtained
all consents necessary in connection with the transactions contemplated
by the Transaction Documents (including pursuant to the Credit Agreement),
and each of the foregoing shall be in full force and effect and in form
and substance reasonably satisfactory to each Purchaser.
SECTION 3.5. Financials; Pro Forma Balance Sheets. On or before the
Closing Date, the Purchaser shall have received from the Company
(i) audited financial statements for the Company for the fiscal year
ending December 31, 1994 and December 31, 1993 (the "Audited Financial
Statements"), (ii) the unaudited financial statements of the Company as of
November 30, 1995 (the "Interim Financial Statements", and, together with
the Audited Financial Statements, the "Financial Statements"), and
(iii) an estimated pro forma balance sheet of the Company as at the
Closing Date, prepared in accordance with GAAP after giving effect to all
the transactions contemplated hereby and by the other Transaction
Documents, which shall be in form and substance reasonably satisfactory to
the Purchaser.
SECTION 3.6. Closing Expenses, etc. Each Purchaser shall have
received all costs and expenses due and payable pursuant to Section 2.2.3
(including counsel fees), if then invoiced.
SECTION 3.7. Approvals. Each Purchaser shall have received the
approvals of its investment advisory committee and/or other committees
needed to approve its investment under this Agreement.
SECTION 3.8. Investment by Other Purchasers. On the Closing Date,
each Purchaser shall have purchased and paid for the Securities required
to be purchased by it hereunder.
SECTION 3.9. Representations and Warranties. The Purchasers shall
have received an Officer's Certificate to the effect that (i)
representations and warranties contained in Article IV shall be true,
correct and complete on and as of the Closing Date to the same extent as
though such representations and warranties had been made on and as of such
date (except to the extent that any such representations and warranties
specifically apply to a prior date) and (ii) after giving effect to the
transactions set forth in the transaction documents, no default or event
of default shall exist under the Credit Agreement.
SECTION 3.10. Opinions of Counsel to Company. Each Purchaser and
its counsel shall have received originally executed copies of one or more
opinions of counsel for the Company, each in form and substance reasonably
satisfactory to each Purchaser and its counsel, addressed to each
Purchaser, dated the Closing Date.
SECTION 3.11. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Company shall be
satisfactory in form and substance to the Requisite Purchasers and one
counsel for the Purchasers appointed by the Requisite Holders; each
Purchaser and one counsel for the Purchasers appointed by the Requisite
Holders shall have received all information, approvals, opinions or
instruments as such Purchaser or counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Purchasers to enter into this Agreement and to
purchase the Notes and the Warrants, the Company represents and warrants
to each Purchaser, as of the Closing Date (except to the extent any of the
following representations or warranties specifically apply or relate to a
prior date, in which event the Company represents and warrants such
representations and warranties to be true and correct as of such prior
date), as follows:
SECTION 4.1. Corporate Existence. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Wisconsin and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or use of its assets or properties, or the conduct or nature of
its business, makes such qualification necessary.
SECTION 4.2. Power and Authority. The Company has all requisite
corporate power and authority, and has taken all required corporate and
other action necessary, to execute, deliver and perform this Agreement and
all other Transaction Documents and to issue and sell the Securities as
herein provided. None of the foregoing actions will (i) violate any
provision of the Organic Documents of the Company, (ii) result in the
breach of or constitute a default under any contract, agreement or
instrument to which the Company is a party or by which the Company or any
of its properties is bound, (iii) result in the creation or imposition of
any material Lien, claim or encumbrance on any properties of the Company,
(iv) give any Person rights to terminate any contracts or agreements with
the Company or otherwise to exercise rights against the Company or
(v) violate any order, writ, judgment, injunction, decree, statute, rule
or regulation of any court, tribunal or governmental entity applicable to
or bearing upon the Company or any of its respective assets or businesses.
The Securities to be delivered to each Purchaser will be duly authorized
and validly issued and will be delivered to such Purchaser free and clear
of any Liens, encumbrances, pre-emptive rights, escrows, options, rights
of first refusal or other agreements, arrangements, commitments,
understandings or obligations, whether written or oral, or any other
restrictions affecting rights and other incidents of record and beneficial
ownership, other than (i) as set forth herein or in the other Transaction
Documents and (ii) restrictions on transferability imposed generally under
the Securities Act and under the securities laws of the several states and
the rules and regulations issued in respect thereto (such state laws,
rules and regulations, being, collectively, "Blue Sky Laws"). The
issuance and delivery of the Securities is exempt from the registration
requirements of the Securities Act and the Blue Sky Laws or has been
qualified as may be necessary.
SECTION 4.3. Binding Obligation. Each of the Transaction Documents
has been duly executed and delivered by the Company and is the legally
valid and binding obligation of the Company, enforceable against such
Transaction Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
SECTION 4.4. Capitalization. As of the date hereof, the authorized
Capital Stock of the Company consists of 100,000,000 shares of Common
Stock, of which 30,177,100 shares are outstanding. All outstanding shares
of Common Stock are fully paid and nonassessable and are free of all Liens
and there are no other outstanding shares of Capital Stock of the Company.
The stockholders of record and holders of subscriptions, warrants,
options, convertible securities and other rights (contingent or other) to
purchase or otherwise acquire capital stock of the Company, and the number
of shares of capital stock and the number of such subscriptions, warrants,
options, convertible securities, and other such rights held by each, are
as set forth in Item 4.4 of the Disclosure Schedule. The designations,
powers, preferences, rights, qualifications, limitations and restrictions
in respect of each class and series of authorized capital stock of the
Company are as set forth in the Company's charter, copies of which will be
delivered to the purchasers on the closing date, and all such
designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable and in accordance with all
applicable laws. Except as set forth in Item 4.4 of the Disclosure
Schedule, (i) no Person owns of record or is known to the Company to own
beneficially any shares of capital stock, (ii) no subscription, warrant,
option, convertible security or other right (contingent or other) to
purchase or otherwise acquire capital stock of the Company is authorized
or outstanding and (iii) there is no commitment by the Company to issue
shares, subscriptions, warrants, options, convertible securities or other
such rights or to distribute to holders of any of its capital stock any
evidence of indebtedness or asset. Except as provided for in the Charter
or as set forth in Item 4.4 of the Disclosure Statement, the Company has
no obligation (contingent or other) to purchase, redeem or otherwise
acquire any of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof. Except for
the Warrant Documents and as set forth in Item 4.4 of the Disclosure
Statement, there are no voting trusts or agreements, stockholders'
agreements, pledge agreements, buy-sell agreements, rights of first
refusal, preemptive rights or proxies relating to any securities of the
Company or any of its Subsidiaries (whether or not the Company or any of
its Subsidiaries is a party thereto). All of the outstanding securities of
the Company were issued in compliance with all applicable Federal and
state securities laws.
SECTION 4.5. Consents, Approvals and Non-Contravention. Neither the
execution, delivery and performance of this Agreement or any other
Transaction Document by the Company, nor the consummation of any
transaction related hereto or thereto, nor the issuance, sale or delivery
of the Securities will
(a) require any consent or approval of, filing or taking of any
other action with, or notice to, any Person;
(b) violate any contract, agreement, instrument or other
arrangement to which the Company is a party or by which it or any of
its properties is bound; or
(c) violate any order, writ, judgment, injunction, decree,
statute, law, rule or regulation of any court, tribunal or
governmental entity or authority applicable to or bearing upon the
Company or any of its properties or businesses.
SECTION 4.6. Pro Forma Balance Sheet. The pro forma balance sheet
referred to in Section 3.5 fairly presents the financial condition of the
Company upon consummation of the transactions contemplated hereby and by
the other Transaction Documents.
SECTION 4.7. Financial Statements. The Financial Statements have
been prepared in accordance with GAAP, consistently applied, and fairly
present the financial position of the Company and the results of its
consolidated operations and cash flows for the periods covered thereby.
SECTION 4.8. No Material Adverse Effect. Except as disclosed on
Item 4.8 of the Disclosure Schedule, since December 31, 1994, no event or
change has occurred that has caused or could cause, or evidences, either
in any case or in the aggregate, a Material Adverse Effect.
SECTION 4.9. Events Subsequent to the Date of the Last Financial
Statement. Except as disclosed on Item 4.9 of the Disclosure Schedule,
since the date of the last Audited Financial Statements, except as
contemplated by this Agreement or as set forth in the Interim Financial
Statements, the Company has not (i) issued any stock, bond or other
corporate security, (ii) borrowed any amount or incurred or become subject
to any liability (absolute, accrued or contingent), except current
liabilities incurred and liabilities under contracts entered into in the
ordinary course of business, (iii) discharged or satisfied any Lien or
encumbrance or incurred or paid any obligation or liability (absolute,
accrued or contingent) other than current liabilities shown on the Interim
Financial Statements and current liabilities incurred since the date of
the last applicable Interim Financial Statement in the ordinary course of
business, (iv) declared or made any payment or distribution to
stockholders or purchased or redeemed any of its capital stock,
(v) mortgaged, pledged or subjected to any Lien or encumbrance any of its
assets, tangible or intangible, other than Liens of current real property
taxes not yet due and payable, (vi) sold, assigned or transferred any of
its tangible assets except in the ordinary course of business, or
cancelled any debt or claim owed to it except in the ordinary course of
business, (vii) sold, assigned, transferred or granted any exclusive
license with respect to any patent, trademark, trade name, service ▇▇▇▇,
copyright, trade secret or other intangible asset, (viii) suffered any
substantial loss of property or waived any right of substantial value
other than in the ordinary course of business, (ix) made any change in
officer compensation except in the ordinary course of business and
consistent with past practice, (x) made any material change in the manner
of its business or operations, (xi) entered into any transaction except in
the ordinary course of business or as otherwise contemplated hereby or
(xii) entered into any commitment, obligation, understanding or other
arrangement, contingent or otherwise, to effect, directly or indirectly,
any of the foregoing.
SECTION 4.10. Absence of Undisclosed Liabilities. Since the date of
the last Audited Financial Statements, the Company has no material
liabilities (matured or unmatured, fixed or contingent), which are not
fully reflected or provided for on the Interim Financial Statements, or
any material loss contingency (as defined in Statement of Financial
Accounting Standards No. 5) whether or not required by GAAP to be shown on
the Interim Financial Statements, except (i) obligations to perform under
commitments incurred in the ordinary course of business, and (ii) tax and
related liabilities which have been disclosed pursuant to Section 4.11.
SECTION 4.11. Taxes. The Company has filed all tax returns,
Federal, state, county, local and foreign, required to be filed by it, as
well as all informational returns required of it. All taxes shown as due
on all such returns have been paid. Each such return and filing is true
and correct and the Company neither has nor will have any additional
liability for taxes with respect to any return or other filing heretofore
filed or which was required by law to be filed, other than as reflected as
liabilities on the Financial Statements or which may result from pending
or subsequent audits. All taxes which the Company is required by law to
withhold or collect, including without limitation, sales and use taxes,
and amounts required to be withheld for taxes of employees, have been duly
withheld or collected and, to the extent required, have been paid over to
the proper governmental authorities or are held in separate bank accounts
for such purpose. All such taxes with respect to which the Company has
become obligated pursuant to elections made by the Company in accordance
with generally accepted practice have been paid and adequate reserves have
been established for all taxes accrued but not yet payable. No deficiency
assessment with respect to or proposed adjustment of the Company's
Federal, state, county or local taxes is pending or, to the Company's best
knowledge, threatened, and the Company is not aware of any fact which
would constitute grounds for the assessment of any additional taxes by any
taxing authority with respect to the taxable years of the Company
beginning on or before the Closing Date. The Company has not granted or
been requested to grant waivers of any statutes of limitations applicable
to any claim for taxes. There is no tax lien, whether imposed by any
Federal, state, county or local taxing authority, outstanding against the
assets, properties or business of the Company. Neither the Company nor
any of its stockholders has ever filed (a) an election pursuant to Section
1362 of the Code, that the Company be taxed as an S corporation or
(b) consent pursuant to Section 341(f) of the Code, relating to
collapsible corporations.
SECTION 4.12. Litigation. Other than as set forth on Item 4.12 of
the Disclosure Schedule, there are no actions, suits, proceedings, orders,
investigations or claims pending or threatened against or affecting the
Company, or any of its respective properties, businesses, assets or
revenues or any of its respective directors or employees, at law or in
equity, before any court, arbitration panel, tribunal or governmental
department, commission, board, bureau, agency or instrumentality which
could have a Material Adverse Effect or which could materially adversely
affect the legality, validity or enforceability of this Agreement or any
other Transaction Document or materially adversely affect the transactions
contemplated by the Agreement and the other Transaction Documents.
SECTION 4.13. Insurance. The Company holds valid policies in full
force and effect covering all of the insurance required to be maintained
by it pursuant to Section 6.5.
SECTION 4.14. Licenses; Compliance with Laws, Other Agreements, etc.
All governmental approvals, authorizations, consents, licenses and
permits, which are necessary or required for the conduct of the businesses
currently conducted by the Company are referred to collectively herein as
"Licenses". The Company knows of no basis upon which the renewal of any
License would be denied in the future. Each such License has been validly
issued to the Company, and is in full force and effect, and the Company,
is not in violation of any such License.
SECTION 4.15. Investment Company Act. The Company is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended; or a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.16. Brokers, etc. The Company has not dealt with, nor is
the Company obligated to pay any fee or commission in connection with, any
broker, finder or other similar Person in connection with the offer or
sale of the Securities or any of the transactions contemplated by this
Agreement, and the Company hereby indemnifies each Purchaser against, and
agrees that it will hold each Purchaser harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
SECTION 4.17. Private Sale. The Company has not, either directly or
through any agent, offered any Securities or any other securities to, or
solicited any offers to acquire any Securities or any other securities
from, or otherwise approached, negotiated or communicated in respect of
any Securities or any other securities with, any Person in such a manner
as to require that the offer or sale of the Securities or any such other
securities be registered pursuant to the Securities Act or any Blue Sky
Laws. The Purchasers are the sole purchasers of the Securities and no
securities have been issued and sold by the Company within the four-month
period immediately prior to the date hereof.
SECTION 4.18. Disclosure. Neither this Agreement, nor any other
Transaction Document nor any of the exhibits, schedules, attachments,
written or oral statements, documents, certificates or other items
prepared or supplied to any of the Purchasers by or on behalf of the
Company, with respect to the transactions contemplated hereby or thereby
contain any untrue statement of a material fact or omit a material fact
necessary to make each statement contained herein or therein not
misleading; provided, however, that with respect to the financial
projections furnished to any of the Purchasers by or on behalf of the
Company, the Company represents and warrants only that such projections
were based upon assumptions reasonably believed by the Company to be
reasonable and fair as of the date the projections were prepared in the
context of the Company's history and current and reasonably foreseeable
business conditions. There is no fact which the Company have not
disclosed to any of the Purchasers in writing and of which any of its
officers and directors is aware (other than general economic conditions)
and which has had or could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.19. Subsidiaries. The Company has no Subsidiaries.
SECTION 4.20. Ownership of Properties. The Company owns good and
marketable title to all of its respective properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and
clear of all Liens (including infringement claims with respect to patents,
trademarks, copyrights and the like).
SECTION 4.21. Pension and Welfare Plans. Except as disclosed in
Item 4.24 of the Disclosure Schedule, during the twelve-consecutive-month
period prior to the date of the execution and delivery of this Agreement,
no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by the Company, or any
member of its Controlled Group of any material liability, fine or penalty.
Except as disclosed in Item 4.24 of the Disclosure Schedule, neither the
Company nor any member of its Controlled Group has any contingent
liability with respect to any post-retirement benefit under a Welfare
Plan, other than liability for continuation coverage described in Part 6
of Title I of ERISA.
SECTION 4.22. Environmental Warranties. Except as set forth in Item
4.22 of the Disclosure Schedule
(a) the Company's real properties are free of contamination
from any Hazardous Materials. In addition, Item 4.22 discloses
material environmental liabilities of the Company of which it has
knowledge (i) related to noncompliance with any Environmental Laws,
or (ii) associated with its real properties. The Company has not
caused or suffered to occur any Release with respect to any Hazardous
Materials at, under, above or upon any real property which it owns or
leases. The Company is not involved in operations that are likely to
result in the imposition of any Lien on its assets or any material
liability on the Company, under any Environmental Laws, and the
Company has not permitted any tenant or occupant of such premises to
engage in any such activity. The Company has provided to the
Purchasers copies of all existing environmental reports, reviews and
audits and all written information pertaining to actual or potential
Environmental Claims, in each case relating to the Company.
(b) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the
Company that, singly or in the aggregate, have, or may reasonably be
expected to have, a Material Adverse Effect;
(c) the Company has been issued and are in material compliance
with all permits, certificates, approvals, licenses and other
authorizations relating to environmental matters and necessary or
desirable for their businesses;
(d) no property now or previously owned or leased by the
Company is listed or proposed for listing (with respect to owned
property only) on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list of sites requiring
investigation or clean-up;
(e) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by the Company that,
singly or in the aggregate, have, or may reasonably be expected to
have, a Material Adverse Effect;
(f) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Company that, singly or in the aggregate, have, or may reasonably be
expected to have, a Material Adverse Effect; and
(g) no conditions exist at, on or under any property now or
previously owned or leased by the Company which, with the passage of
time, or the giving of notice or both, could give rise to liability
under any Environmental Law.
SECTION 4.23. Securities Activities. (a) The Company is not
engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying any
Margin Stock.
(b) No portion of the proceeds of the issuance of the Securities
under this Agreement shall be used by the Company in any manner that might
cause such issuance and sale or the application of such proceeds to
violate Regulations G, U, T or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such
issuance and sale and such use of proceeds.
SECTION 4.24. Solvency. The Company is and, upon consummation of
the transactions contemplated hereby, will be, Solvent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers severally, not jointly, represent and warrant
to the Company, at and as of the Closing Date that:
SECTION 5.1. Purchase for Own Account. Such Purchaser is purchasing
the Notes and Warrants solely for its own account and not as nominee or
agent for any other Person and not with a view to, or for offer or sale in
connection with, any distribution thereof (within the meaning of the
Securities Act) that would be in violation of the securities laws of the
United States of America or any state thereof, without prejudice, however,
to its right at all times to sell or otherwise dispose of all or any part
of said Notes and Warrants pursuant to a registration statement under the
Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act, and subject, nevertheless, to the
disposition of its property being at all times within its control.
SECTION 5.2. Accredited Investor. Such Purchaser is knowledgeable,
sophisticated and experienced in business and financial matters; it
previously invested in securities similar to the Notes and Warrants and it
acknowledges that the Notes and Warrants have not been registered under
the Securities Act and understands that the Notes and Warrants must be
held indefinitely unless they are subsequently registered under the
Securities Act or such sale is permitted pursuant to an available
exemption from such registration requirement; it is able to bear the
economic risk of its investment in the Notes and Warrants and is presently
able to afford the complete loss of such investment; it is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act;
and it has been afforded access to information about the Company and its
respective financial condition, results of operations, business, property,
management and prospects sufficient to enable it to evaluate its
investment in the Notes and Warrants. Such Purchaser acknowledges that it
has conducted its own analysis of the foregoing factors.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, until payment in full of all
the Obligations, the Company shall perform, or cause the performance of,
all covenants set forth in this Article VI.
SECTION 6.1. Financial Statements and Other Reports. The Company
will maintain, and will cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in
conformity with GAAP. The Company will furnish, or will cause to be
furnished, to each Holder of at least 10% of the aggregate principal
amount of the outstanding Notes (each a "Qualified Holder"), unless such
Qualified Holder has notified the Company that he or it elects not to
receive such information, copies of the following financial statements,
reports, notices and information:
(a) promptly when available and in any event when furnished
pursuant to the Credit Agreement, copies of all financial statements,
certificates, audit and other reports, filings, projections,
management letters and other information furnished pursuant thereto;
(b) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year of as of the end of such Fiscal Quarter statements of earnings,
stockholders' equity and cash flow of the Company for such Fiscal
Quarter and for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal quarter, certified
by the chief financial Authorized Officer of the Company;
(c) as soon as available and in any event within 120 days after
the end of each Fiscal Year of the Company, a copy of the annual
audit report for such Fiscal Year for the Company, including therein
consolidated balance sheets the Company and its Subsidiaries as of
the end of such Fiscal Year and statements of earnings, stockholders'
equity and cash flow of the Company for such Fiscal Year, in each
case certified in a manner acceptable to the Requisite Holders by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent public accountants
acceptable to the Requisite Holders, and to the effect that, in
making the examination necessary for the signing of such annual
report by such accountants, they have not become aware of any Default
or Event of Default that has occurred and is continuing, or, if they
have become aware of such Default or Event of Default, describing
such Default or Event of Default and the steps, if any, being taken
to cure it;
(d) if, as a result of any material change in accounting
principles and policies from those used in the preparation of the
Financial Statements referred to in Section 4.7, the consolidated
financial statements of the Company and its Subsidiaries delivered
pursuant to clause (b), (c) or (k) of this Section 6.1 will differ in
any material respect from the consolidated financial statements that
would have been delivered pursuant to such clauses had no such change
in accounting principles and policies been made, then, at the
reasonable request of the Requisite Holders, financial statements of
the Company for (i) the then current Fiscal Year to the effective
date of such change and (ii) the one full Fiscal Year immediately
preceding the Fiscal Year in which such change is made, in each case
prepared on a pro forma basis as if such change had been in effect
during such periods, and a written statement of the chief accounting
Authorized Officer or chief financial Authorized Officer of the
Company setting forth the differences which would have resulted if
such financial statements had been prepared without giving effect to
such change;
(e) promptly upon receipt thereof (unless restricted by
applicable professional standards), copies of all material reports
submitted to the Company or its Subsidiaries by independent certified
public accountants in connection with each annual, interim or special
audit of the financial statements of the Company made by such
accountants, including any comment letter submitted by such
accountants to management in connection with their annual audit;
(f) promptly after the sending or filing thereof, copies of
(i) all financial statements, reports, notices and proxy statements
sent or made available generally by the Company to its
securityholders, (ii) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form)
and prospectuses, if any, filed by the Company with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (iii) all press
releases and other statements made available generally by the Company
to the public concerning material developments in the business of the
Company;
(g) promptly upon any officer of the Company obtaining
knowledge (i) of any condition or event that constitutes a Default or
Event of Default, or becoming aware that the any Holder has given any
notice or taken any other action with respect to a claimed Default or
Event of Default, (ii) that any Person has given any notice to the
Company or taken any other action with respect to a claimed default
or event or condition of the type referred to in Section 9.1.2,
(iii) of any condition or event that would be required to be
disclosed in a current report filed by the Company or its
Subsidiaries with the Securities and Exchange Commission on Form 8-K
(Items 1, 2, 4, 5 and 6 of such Form as in effect on the date hereof)
if the Company were required to file such reports under the Exchange
Act, or (iv) of the occurrence of any event or change that has caused
or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Default, event or condition, and what
action the Company has taken, is taking and proposes to take with
respect thereto;
(h) promptly upon any officer of the Company obtaining
knowledge of (i) the institution of, or non-frivolous threat of, any
action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration against or
affecting the Company or its Subsidiaries or any of its properties
(collectively, "Proceedings") not previously disclosed in writing by
the Company to the Holders or (ii) any material development in any
Proceeding that:
(A) if adversely determined, could give rise to a Material
Adverse Effect, or
(B) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby,
written notice thereof together with such other information as may be
reasonably available to the Company to enable the Holders and their
counsel to evaluate such matters; and within twenty days after the
end of each Fiscal Quarter of the Company, a schedule of all
Proceedings involving an alleged liability of, or claims against or
affecting, the Company equal to or greater than $50,000, and promptly
after request by the Requisite Holders such other information as may
be reasonably requested by the Requisite Holders to enable the
Holders and their respective counsel to evaluate any of such
Proceedings;
(i) immediately upon becoming aware of the institution of any
steps by the Company to terminate any Pension Plan, or the failure to
make a required contribution to any Pension Plan if such failure is
sufficient to give rise to a Lien under section 302(f) of ERISA, or
the taking of any action with respect to a Pension Plan which could
result in the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of any
event with respect to any Pension Plan which could result in the
incurrence by the Company of any material liability, fine or penalty,
or any material increase in the contingent liability of the Company
with respect to any post-retirement Welfare Plan benefit, notice
thereof and copies of all documentation relating thereto;
(j) as soon as available and in any event no later than 60 days
after the beginning of each Fiscal Year, a plan and financial
forecast for such Fiscal Year, including (i) forecasted balance
sheets and forecasted statements of income, stockholders' equity and
cash flow of the Company for each such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based,
(ii) forecasted statements of income, stockholders' equity and cash
flows of the Company for each month of each such Fiscal Year,
together with an explanation of the assumptions on which such
forecasts are based, and (iii) such other information and projections
as the Requisite Holders may reasonably request;
(k) as soon as practicable and in any event by the last day of
each Fiscal Year, a report in form and substance reasonably
satisfactory to the Requisite Holders outlining all material
insurance coverage maintained as of the date of such report by the
Company and all material insurance coverage planned to be maintained
by the Company in the immediately succeeding Fiscal Year;
(l) as soon as practicable following receipt thereof, copies of
all environmental audits and reports, whether prepared by personnel
of the Company or by independent consultants, with respect to
significant environmental matters at any Facility or which relate to
an Environmental Claim which could result in a Material Adverse
Effect;
(m) with reasonable promptness, written notice of any change in
the Board of Directors of the Company;
(n) promptly upon any Person becoming a Subsidiary of the
Company, (i) a written notice setting forth with respect to such
Person the date on which such Person became a Subsidiary of the
Company and (ii) an Officer's Certificate demonstrating in reasonable
detail compliance with the restrictions contained in Article VII; and
(o) with reasonable promptness, such other information and data
with respect to the financial condition, business, property, assets,
revenues and operations of the Company as the Requisite Holders may
from time to time reasonably request; provided, that the Company
shall not be required to deliver any of the information specified in
this Section 6.1 to any Holder which the Company reasonably
determines to be in, or be affiliated with a Person in, a line of
business which is competitive with the Company's line of business.
SECTION 6.2. Corporate Existence, etc. The Company will, and will
cause its Subsidiaries to, at all times preserve and keep in full force
and effect its corporate existence and all rights and franchises material
to its business.
SECTION 6.3. Compliance with Laws, etc. The Company will, and will
cause its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to
include:
(a) the maintenance and preservation of its corporate existence
and qualification as a foreign corporation; and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all
claims (including claims for labor, services, materials and supplies)
for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time
when any penalty or fine shall be incurred with respect thereto;
provided that no such charge or claim need be paid if the same is
being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
SECTION 6.4. Maintenance of Properties. The Company will, and will
cause its Subsidiaries to, maintain, preserve, protect and keep its
properties (including all its Intellectual Property) in good repair,
working order and condition, and make necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless the Company
determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION 6.5. Insurance. The Company will, and will cause its
Subsidiaries to, maintain or cause to be maintained with responsible
insurance companies insurance with respect to its properties and business
(including business interruption insurance) against such casualties and
contingencies and of such types and in such amounts as is customary in the
case of similar businesses and will, upon request of the Requisite
Holders, furnish to each Qualified Holder at reasonable intervals a
certificate of an Authorized Officer of the Company setting forth the
nature and extent of all insurance maintained by the Company and its
Subsidiaries in accordance with this Section.
SECTION 6.6. Books and Records. The Company will, and will cause
its Subsidiaries to, keep books and records which accurately reflect all
of its business affairs and transactions and permit each Holder of greater
than 25% of the then outstanding principal amount of the Notes or any of
their respective representatives, at reasonable times and intervals, to
visit all of its offices, to discuss its financial matters with its
officers and independent public accountant (and the Company hereby
authorizes such independent public accountant to discuss their financial
matters with each such Holder or its representatives whether or not any
representative of the Company is present) and to examine (and, at the
expense of the Company, photocopy extracts from) any of its books or other
corporate records. The Company shall pay reasonable fees of such
independent public accountant incurred in connection with any such
Holder's exercise of its rights pursuant to this Section.
SECTION 6.7. Environmental Covenant. The Company will, and will
cause its Subsidiaries to,
(a) use and operate all of its Facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) promptly notify each of the Qualified Holders of (i) any
proposed acquisition of stock, assets or property by the Company or
any of its Subsidiaries that could reasonably be expected to expose
the Company or any of its Subsidiaries to, or result in,
Environmental Claims that could have a Material Adverse Effect or
that could reasonably be expected to have a material adverse effect
on any Governmental Authorization then held by the Company or any of
its Subsidiaries and (ii) any proposed action to be taken by the
Company or any of its Subsidiaries to commence manufacturing,
industrial or other operations that could reasonably be expected to
subject any such Person to additional Environmental Laws, including
Environmental Laws requiring additional environmental permits or
licenses; and
(c) provide such information, certifications and copies of
documents (at the expense of the Company) which the Requisite Holders
may reasonably request from time to time to evidence compliance with
this Section 6.7.
SECTION 6.8. The Company's Remedial Action Regarding Hazardous
Materials. The Company will promptly take, and will cause each of its
Subsidiaries to promptly take, any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or
Release of any Hazardous Materials on, under or about any Facility in
order to comply with all applicable Environmental Laws and Governmental
Authorizations applicable to the Company or its Subsidiaries in respect of
such Facility. In the event the Company or any of its Subsidiaries
undertakes any remedial action with respect to any Hazardous Materials on,
under or about any Facility, the Company or such Subsidiary will conduct
and complete such remedial action in compliance with all applicable
Environmental Laws, and in accordance with the applicable policies, orders
and directives of all federal, state and local governmental authorities
except when, and only to the extent that, the liability of the Company or
such Subsidiary for such presence, storage, use, disposal, transportation
or discharge of any Hazardous Materials is being contested in good faith
by such Person.
SECTION 6.9. Maintenance of Office or Agency. The Company will
maintain (a) an office or agency where the applicable Securities may be
presented for payment, (b) an office or agency where the applicable
Securities may be presented for registration and transfer and for exchange
as provided in this Agreement, and (c) an office or agency where notices
and demands to or upon the Company in respect of the applicable Securities
may be served. The location of such office or agency initially shall be
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Company shall
give to each applicable Holder written notice of any change of location
thereof.
SECTION 6.10. Private Offering. The Company agrees that neither it,
nor anyone acting on its behalf, will offer or sell the Securities, or any
portion of them, other than as contemplated by the Undertaking, if such
offer or sale might bring the issuance and sale of the Securities to any
Purchaser hereunder within the provisions of Section 5 of the Securities
Act nor offer any similar securities for issuance or sale to, or solicit
any offer to acquire any of the same from, or otherwise approach or
negotiate with respect thereto with, anyone if the sale of the Securities
and any such securities could be integrated as a single offering for the
purposes of the Securities Act, including Regulation D thereunder.
SECTION 6.11. Information to Prospective Purchasers. The Company
shall, upon the request of any Holder, deliver to such Holder and any
prospective purchaser designated by such Holder promptly following the
request of such Holder or such prospective purchaser, such information
which such Holder or such prospective purchaser may reasonably request in
order to comply with the information requirements of Rule 144 or Rule 144A
under the Securities Act.
SECTION 6.12. Further Assurances. At any time and from time to time
upon the request of the Requisite Holders, the Company will, and will
cause each of its Subsidiaries to, at their own expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and
things as the Requisite Holders may reasonably request in order to effect
fully the purposes of the Transaction Documents and to provide for payment
of the Obligations in accordance with the terms of this Agreement, the
Notes and the other Transaction Documents.
SECTION 6.13. Board of Directors. The Company and the Purchasers
shall, on or prior to March 15, 1996, use their respective best efforts to
amend the Company's Organic Documents and to take any and all other
actions reasonably necessary to permit the Company's Board of Directors to
consist of four directors.
ARTICLE VII
NEGATIVE COVENANTS
The Company covenants and agrees that, until payment in full of all
of the Obligations, the Company shall perform the obligations set forth in
this Article VII.
SECTION 7.1. [INTENTIONALLY OMITTED].
SECTION 7.2. [INTENTIONALLY OMITTED].
SECTION 7.3. [INTENTIONALLY OMITTED].
SECTION 7.4. Modification of Certain Agreements. The Company will
not consent to any amendment, supplement or other modification of any of
the terms or provisions contained in, or applicable to, the Transaction
Documents, Warrant, other than any amendment, supplement or other
modification which does not affect the rights of the Holders under the
Transaction Documents.
SECTION 7.5. Transactions with Affiliates. The Company will not,
and will not permit any of its Subsidiaries to, enter into, or cause,
suffer or permit to exist any arrangement or contract with any of its
other Affiliates unless such arrangement or contract is fair and equitable
to the Company or such Subsidiary and is an arrangement or contract of the
kind which would be entered into by a prudent Person in the position of
the Company or such Subsidiary with a Person which is not one of its
Affiliates.
SECTION 7.6. Inconsistent Agreements. The Company will not, and
will not permit any of its Subsidiaries to, enter into any agreement or
arrangement which is inconsistent with the obligations of the Company or
any of its respective Subsidiaries under this Agreement or any other
Transaction Document.
SECTION 7.7. Fiscal Year. The Company will not change its Fiscal
Year.
SECTION 7.8. Limitation of Ranking of Future Indebtedness. The
Company will not, directly or indirectly, incur, create, or suffer to
exist any Indebtedness which is subordinate or junior in right of payment
(to any extent) to any Senior Debt and which is senior or superior in
right of payment (to any extent) to the Notes.
SECTION 7.9. Stay, Extension and Usury Laws. The Company covenants
and agrees (to the extent that it may lawfully do so) that it will not,
and will not permit any of its Subsidiaries to, at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit of or
advantage of, and will use its best efforts to resist any attempts to
claim or take the benefit of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of its obligations under this Agreement, the
Notes or any other Transaction Document, and the Company (to the extent it
may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Holders, but will suffer and permit the execution of every such power as
though no such law has been enacted.
ARTICLE VIII
REDEMPTION
SECTION 8.1. Mandatory Redemption. Upon the occurrence of a Change
of Control, and subject to Article X, the Company shall offer to redeem
all of the then outstanding Notes at a redemption price equal to the
aggregate principal amount thereof then outstanding plus accrued and
unpaid interest, within 30 days of the occurrence of such Change in
Control, and shall provide a Notice of Redemption pursuant to Section 8.4.
SECTION 8.2. The Company's Right to Redeem. Subject to Article X,
the Company, at its option, may redeem, at any time, all of the then
outstanding Notes at a redemption price equal to the aggregate principal
amount thereof then outstanding plus accrued and unpaid interest.
SECTION 8.3. Selection of Notes and Portions of Notes to Be
Redeemed. If less than all of the then outstanding Notes are being
redeemed, the Company shall redeem the Notes pro rata, in such manner as
complies with applicable legal requirements, if any. Notes in
denominations of $1,000 may be redeemed only in whole. The Company may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than
$1,000. Provisions of this Agreement that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
SECTION 8.4. Notice of Redemption. A notice of redemption ("Notice
of Redemption") shall be mailed by the Company to each Holder whose Notes
are to be redeemed at such Holder's registered address by first class mail
(i) in the event such Notes are being redeemed pursuant to Section 8.1 in
connection with a Change in Control, not more than 10 days after the
occurrence of such Change in Control, or (ii) in the event such Notes are
being redeemed pursuant to Section 8.2, at least 20 days but not more than
60 days before the applicable Redemption Date. Each Notice of Redemption
shall identify the Notes to be redeemed and shall state:
(a) the applicable Redemption Date;
(b) the applicable Redemption Price;
(c) the name and address of the Company;
(d) that the Notes called for redemption must be surrendered to
the Company to collect the applicable Redemption Price;
(e) that, unless the Company defaults in payment of the
Redemption Price, interest on the Notes called for redemption ceases
to accrue on and after the applicable Redemption Date, and the only
remaining right of the Holders of such Notes is to receive payment of
the Redemption Price upon surrender to the Company of the Notes
redeemed;
(f) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes
in aggregate principal amount equal to the unredeemed portion thereof
will be issued setting forth the remaining principal amount due on
the Stated Maturity Date;
(g) if less than all the Notes then outstanding are to be
redeemed, the identification of the particular Notes (or portion(s)
thereof) to be redeemed, as well as the aggregate principal amount of
Notes to be redeemed and the aggregate principal amount of Note(s) to
be outstanding after such partial redemption; and
(h) the Section of this Agreement pursuant to which the Notes
are to be redeemed.
SECTION 8.5. Effect of Notice of Redemption. Once a Notice of
Redemption is delivered in accordance with Section 8.4 in connection with
a redemption pursuant to Section 8.2, the Notes called for redemption
thereunder shall become due and payable on the applicable Redemption Date
at the applicable Redemption Price.
SECTION 8.6. Payment of Redemption Price. On presentation and
surrender of any Notes in connection with a mandatory redemption in
respect of a Change of Control or an optional redemption with respect to
which a Notice of Redemption has been given, at the place of payment
specified in Section 6.9, such Notes or specified portions thereof shall
be paid and redeemed by the Company on the applicable Redemption Date at
the applicable Redemption Price.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 9.1 shall constitute an
"Event of Default".
SECTION 9.1.1. Non-Payment of Obligations. The Company shall
default in the payment when due, whether at stated maturity, by
acceleration, by notice of optional redemption or prepayment, by mandatory
redemption or prepayment or otherwise, of (a) any principal or premium of
any Note, (b) any interest on any Note, or (c) any other Obligation (and
the failure to pay such Obligation shall remain unremedied for a period of
ten days).
SECTION 9.1.2. Breach of Warranty. Any representation or warranty
of the Company made or deemed to be made hereunder or in any other
Transaction Document executed by it or any other writing or certificate
furnished by or on behalf of the Company to any Purchaser or any Holder
for the purposes of or in connection with this Agreement or any such other
Transaction Document (including any certificates delivered pursuant to
Article III) is or shall be incorrect when made in any material respect.
SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations.
The Company shall default in the due performance and observance of any of
its obligations under Article VII or Section 6.1, 6.2, 6.13 or 6.14.
SECTION 9.1.4. Non-Performance of Other Covenants and Obligations.
The Company shall default in the due performance and observance of any
other agreement contained herein or in any other Transaction Document
executed by it, and such default shall continue unremedied for a period of
fifteen days after the earlier of (i) an officer of the Company becoming
aware of such default or (ii) notice thereof shall have been given to the
Company by any Holder.
SECTION 9.1.5. Default on Other Indebtedness. A default shall occur
in the payment when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 9.1.1) of the Company having a principal amount,
individually or in the aggregate, in excess of $2,000,000, or a default
shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness if the effect of such default
is to accelerate the maturity of any such Indebtedness or such default
shall continue unremedied for any applicable period of time sufficient to
permit the holder or holders of such Indebtedness, or any trustee or agent
for such holders, to cause such Indebtedness to become due and payable
prior to its expressed maturity.
SECTION 9.1.6. Judgments. Any judgment or order for the payment of
money in excess of $500,000 shall be rendered against the Company, and
either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
SECTION 9.1.7. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan
(a) the institution of any steps by the Company, any member of
its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination, the Company or any such member
could be required to make a contribution to such Pension Plan, or
could reasonably expect to incur a liability or obligation to such
Pension Plan, in excess of $100,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 9.1.8. Bankruptcy, Insolvency, etc. The Company shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the appointment of
a trustee, receiver, sequestrator or other custodian for the Company
or any property of it, or make a general assignment for the benefit
of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for the Company or for a
substantial part of the property of any thereof, and such trustee,
receiver, sequestrator or other custodian shall not be discharged
within 60 days, provided that the Company expressly authorizes each
Holder to appear in any court conducting any relevant proceeding
during such 60-day period to preserve, protect and defend their
rights hereunder and under the other Transaction Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of the
Company and, if any such case or proceeding is not commenced by the
Company, such case or proceeding shall be consented to or acquiesced
in by the Company or shall result in the entry of an order for relief
or shall remain for 60 days undismissed, provided that the Company
expressly authorizes each Holder to appear in any court conducting
any such case or proceeding during such 60-day period to preserve,
protect and defend their rights hereunder and under the other
Transaction Documents; or
(e) take any corporate action authorizing, or in furtherance
of, any of the foregoing.
SECTION 9.1.9. Dissolution. Any order, judgment or decree shall be
entered against the Company decreeing the dissolution or split up of the
Company, such order shall remain undischarged or unstayed for a period in
excess of 30 days.
SECTION 9.1.10. Impairment of Transaction Documents, etc. Any
Transaction Document shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of the Company, or the Company
shall, directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability. Without limiting the
foregoing, if the Undertaking is conducted other than in accordance with
(i) Regulation D promulgated under the Securities Act and (ii) Blue Sky
Laws or is declared to be null and void, or the Company denies in writing
that it has any further liability thereunder or under any other
Transaction Document to which it is a party.
SECTION 9.2. Action if Bankruptcy. If any Event of Default
described in clauses (a) through (d) of Section 9.1.8 shall occur, the
outstanding principal amount of all outstanding Notes and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand.
SECTION 9.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (a) through
(d) of Section 9.1.8) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Requisite Holders (or, in the case
such Event of Default is an Event of Default described in Section 9.1.1,
Holders holding at least 25% of the aggregate principal amount of the then
outstanding Notes) may, upon notice or demand and subject to Article X,
declare all or any portion of the outstanding principal amount of the
Notes and other Obligations, to be due and payable, whereupon the full
unpaid amount of such Notes and any and all other Obligations which shall
be so declared due and payable shall be and become immediately due and
payable, without further notice, demand or presentment.
ARTICLE X
SUBORDINATION
SECTION 10.1. Agreement to Subordinate. The Company and each
Holder, by its acceptance of a Note, covenant and agree that the
Subordinated Debt shall, to the extent and in the manner set forth herein
and in Section 11.16, be subordinated in right of payment to the prior
payment in full in cash or Cash Equivalents by the Company of the Senior
Debt, whether now outstanding or hereafter created, incurred, assumed or
guaranteed. The provisions of this Article X shall be given independent
effect so that if a particular payment is prohibited by any one of such
provisions, it shall be prohibited although it otherwise would not be
prohibited by another provision. All provisions of this Article X are for
the benefit of the Senior Agent and the Senior Debtholders and the Senior
Agent and the Senior Debtholders are entitled to enforce such provisions
in all respects and each Holder waives acceptance of such provisions by
the Senior Agent and the Senior Debtholders.
SECTION 10.2. General Subordination to Senior Debt. (a) Until the
Senior Debt is repaid in full in cash or Cash Equivalents and all
commitments to extend Senior Debt have been terminated, no payment or
distribution of assets of the Company of any kind or character shall be
made by the Company for or on account of the Subordinated Debt or any
principal, interest, fees or judgment related thereto, or on account of
the purchase or redemption or other acquisition of Subordinated Debt,
other than payment-in-kind of interest on the Notes pursuant to paragraph
1 thereof. Notwithstanding the foregoing, the consent of the Senior
Debtholders shall not be required for the surrender by holders of
Subordinated Debt of Notes to the Company as consideration for all or any
portion of the exercise price for the Warrants.
SECTION 10.3. Subordination on Dissolution, Liquidation or
Reorganization of the Company. Upon any payment or distribution of cash,
securities or other property of the Company of any kind or character to
creditors upon any dissolution, winding up, total or partial liquidation,
reorganization or marshaling of assets of the Company, whether voluntary
or involuntary, or in bankruptcy, insolvency, receivership proceedings or
upon assignment for the benefit of creditors:
(i) all Senior Debt shall first be paid in full in cash or Cash
Equivalents before any Holder may receive or retain any payment or
distribution of assets of any kind, and
(ii) any payment or distribution of cash, securities or other
property of any kind to which any Holder would be entitled, except
for the provisions of this Article X, shall be paid directly to the
Senior Agent for the benefit of the Senior Debtholders to the extent
necessary to pay all Senior Debt in full in cash or Cash Equivalents,
after giving effect to any concurrent payment or distribution to the
Senior Debtholders, before any such payment or distribution is made
to any Holder.
SECTION 10.4. Limitation on Remedies. (a) So long as any Senior
Debt remains outstanding, no Holder may
(i) declare, or join in the declaration of, any Subordinated
Debt to be due and payable prior to the maturity thereof or otherwise
accelerate the maturity of the principal of the Notes, accrued
interest thereon or other amounts due thereunder, prior to the
acceleration of any Senior Debt, or
(ii) commence any administrative, legal or equitable action or
proceeding against the Company or any Collateral, including, without
limitation, filing or joining in the filing of any insolvency
petition against the Company.
(b) To the extent the Holders of Subordinated Debt have been granted
a Lien in any assets of the Company to secure the Subordinated Debt, the
Liens and Security Interests of Senior Agent and the Senior Debtholder
under the Credit Agreement in the assets of the Company shall be senior
and have priority over the Liens of the Holders. In addition, so long as
any Senior Debt or commitments to advance any Senior Debt remain
outstanding, the Holders shall not exercise rights or remedies in respect
of any of its Liens, nor shall any of the Holders contest in any manner
the validity or enforceability of the Senior Debt or the validity,
enforceability, priority or perfection of any of the Liens or security
interests securing the Senior Debt.
SECTION 10.4.1. Modifications to Senior Debt. The Senior
Debtholders may at any time and from time to time without the consent of
or notice to Holders, without incurring liability to the Holders and
without impairing or releasing the obligations of the Holders under this
Article X or Section 11.16, change the manner or place of payment or
extend the time of payment of or renew, alter or change the amount of any
Senior Debt, release any collateral therefor or amend in any manner any
agreement, note, guaranty or other instrument evidencing or securing or
otherwise relating the Senior Debt. Subject to the final sentence of the
definition of Senior Debt, the terms of this Article X, the subordination
effected hereby, and the rights and the obligations of the Holders, the
Senior Agent or Senior Debtholders arising hereunder, shall not be
affected, modified or impaired in any manner or to any extent by: (a) any
amendment or modification of or supplement to the Credit Agreement or any
of the Subordinated Debt Documents; (b) the validity or enforceability of
any of such documents; or (c) any exercise or non-exercise of any right,
power or remedy under or in respect of the Senior Debt or the Subordinated
Debt or any of the instruments or documents referred to in clause (a)
above. The Holders hereby acknowledge that the provisions of this Article
X are intended to be enforceable at all times, whether before the
commencement of, after the commencement of, in connection with or premised
on the occurrence of a bankruptcy, insolvency or similar proceeding by or
against the Company.
SECTION 10.5. Amendments and Exchanges of Subordinated Debt.
Without the prior written consent of the Requisite Senior Debtholders, but
without limiting the obligations of the Company to the Senior Debtholders
with regard thereto under the Credit Agreement, the Company and the
Holders shall not amend, supplement or otherwise modify the terms of the
Subordinated Debt if the effect of such amendment, supplement or other
modification is to change (to earlier dates) any dates upon which payments
of principal or interest are due on such Subordinated Debt, take any Liens
in any property of the Company other than as expressly set forth herein
and in Section 11.16, change any affirmative or negative covenant in any
significant respect, change the redemption or prepayment provisions
thereof or change any of the subordination provisions thereof (including,
without limitation, subordinating the Subordinated Debt to any other
debt), and if the effect of such amendment, supplement or other
modification is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the Holders (or a trustee
or other representative on their behalf) which would be adverse to any
Senior Debtholder. Notwithstanding any other term or provision of the
Agreement (including Section 11.1(a)), no amendment, modification,
termination or waiver of any term or provision of Article X or Section
11.16 hereof, or of any definitions used therein, or of the form of any
Note issued hereunder, shall be effective without the express written
consent of the Requisite Senior Debtholders.
SECTION 10.6. Payments Received in Contravention of Subordination
Provisions. If any Holder receives any payment or distribution of assets
in violation of this Article X and Section 11.16, such Holder shall
receive such payment or distribution of assets in trust for the Senior
Debtholders' benefit and shall forthwith remit such payment or
distribution of assets, as the case may be, to the Senior Agent for the
benefit of the Senior Debtholders in the form in which it was received,
together with such endorsements or documents as may be necessary to
effectively negotiate or transfer the same (but without recourse and
without representation or warranty).
SECTION 10.7. Subrogation. After all Senior Debt of the Company has
been paid in full in cash or Cash Equivalents and until the Notes are paid
in full in cash or Cash Equivalents, the Holders shall be subrogated to
any rights of the Senior Debtholders to receive payments or distributions
of assets applicable to such Senior Debt to the extent that payments or
distributions otherwise payable to the Holders have been applied to the
payment of such Senior Debt. A distribution made under this Article X to
the Senior Debtholders that otherwise would have been made to the Holders
is not, as between the Company and the Holders, a payment by the Company
on its Senior Debt.
SECTION 10.8. Relative Rights. This Article X and Section 11.16
defines the relative rights of Holders and Senior Debtholders and this
Article X and Section 11.16 shall constitute a continuing offer to all
persons who become holders of, or continue to hold, Senior Debt. Nothing
in this Article X and Section 11.16 or elsewhere in this Agreement or any
Note is intended to or shall:
(a) impair, as between the Company and the Holders, the
Company's obligations, which are absolute and unconditional, to pay
principal of, and premium, if any, and interest on, the Notes in
accordance with their terms;
(b) affect the relative rights of the Holders and the Company's
creditors other than the rights of the Holders in relation to the
Senior Debtholders; or
(c) prevent the Holders from accelerating the Subordinated Debt
in accordance with Sections 9.3 and 10.4 (a)(i) and exercising their
available remedies upon a Default or Event of Default, after the
Senior Debt has been paid in full and the Credit Agreement has been
terminated.
The failure to make a payment on account of principal of, or interest
on, the Notes by reason of any provision of this Article X shall not be
construed as preventing the occurrence of an Event of Default under
Section 9.1.1.
SECTION 10.9. Reliance on Judicial Order or Decree or Senior Agent
Certificate. The Holders shall be entitled to rely upon any order or
decree of any court of competent jurisdiction or any certificate of the
Senior Agent in ascertaining any amount to be paid or distributed to the
Senior Debtholders and all other facts pertinent to such payment or
distribution or to this Article X, provided that, in the case of any such
order or decree, such court has been fully apprised of the provisions of,
or the order or decree makes reference to, the provisions of this Article
X.
SECTION 10.10. Proof of Claim. In the event that, while any Senior
Debt is outstanding, any bankruptcy or insolvency proceeding is commenced
by or against the Company or its property and the Holders have not filed
appropriate proofs of claim as of the tenth business day preceding the bar
date therefor, the Senior Agent on behalf of the Senior Debtholders will
be irrevocably authorized and empowered (in its own name or otherwise),
but shall have no obligation, to file appropriate proofs of claim for the
exercise or enforcement of any of the rights or interests of the Holders
with respect to the Subordinated Debt in such proceeding. Notwithstanding
the foregoing, neither the Senior Agent nor any Senior Debtholder shall
have any right whatsoever to vote any claim that any Holder may have in
such proceeding to accept or reject any plan of partial or complete
liquidation, reorganization, arrangement, composition or extension.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Amendments and Waivers.
(a) Consent of Holders. No amendment, modification, termination or
waiver of any provision of this Agreement, the Notes, or consent to any
departure by the Company therefrom, shall in any event be effective
without the written concurrence of the Requisite Holders; provided,
however, that no amendment, modification, termination or waiver of any
term or provision of Article X or Section 11.16 hereof, or of any
definitions used therein, or of the form of any Note issued hereunder,
shall be effective without the express written consent of the Requisite
Senior Debtholders. Without the consent of each Holder affected, no
amendment, modification, termination or waiver may (with respect to any
Notes held by a non-consenting Holder of Notes):
(i) reduce the principal amount of, or change the Stated
Maturity Date of, any Note of such Holder;
(ii) amend the provisions with respect to the redemption of any
Note of such Holder pursuant to Sections 8.1, 8.2 and 8.3 (including
reducing any applicable Redemption Price);
(iii) reduce the rate of, or change the time for payment of,
interest on any Note of such Holder;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes;
(v) make the principal of, premium, if any, or the interest on,
any Note of such Holder payable in any manner other than that stated
in this Agreement and the Notes;
(vi) waive a redemption payment with respect to any Note of
such Holder;
(vii) make any change to the subordination provisions of this
Agreement that adversely affects any Holder;
(viii) make any change to the definition of "Requisite
Holders";
(ix) reduce the percentage of the aggregate outstanding
principal amount of Notes necessary to accelerate the Notes under
Section 9.3 or modify the right of a Holder to accelerate its Note
under Section 9.3;
(x) make any change to the transfer provisions of Section 11.2
that adversely affects the ability of a Holder to make any transfer
described therein; or
(xi) make any change in the foregoing amendment and waiver
provisions.
After an amendment, modification, termination or waiver under this
Section 11.1 becomes effective, the Company shall mail to the Holders
affected thereby a notice briefly describing such amendment, modification,
termination or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such amendment, modification, termination or waiver.
(b) Solicitation of Noteholders. The Company will not solicit,
request or negotiate for or with respect to any proposed amendment,
modification, termination or waiver of any of the provisions of this
Agreement or the Notes unless each Holder of the Notes (irrespective of
the amount of Notes then owned by it) shall be informed thereof by the
Company (but only to the extent the Company has been provided with
addresses for the Holders) and shall be afforded the opportunity of
considering the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with respect
thereto. Executed or true and correct copies of any amendment,
modification, termination or waiver effected pursuant to the provisions of
this Section 11.1 shall be delivered by the Company to each Holder of
outstanding Notes forthwith following the date on which the same shall
have been executed and delivered by the Holder or Holders of the requisite
percentage of outstanding Notes (but only to the extent the Company has
been provided with the addresses for the Holders).
(c) Revocation and Effect of Consents. Until an amendment,
modification, termination or waiver becomes effective, a consent to it by
a Holder is a continuing consent by the Holder and every subsequent Holder
of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on
any Note. However, any such Holder of subsequent Holder may revoke the
consent as to its Note or portion of its Note by notice to the Company
received before the date on which the Requisite Holders have consented
(and not theretofore revoked such consent) to such amendment,
modification, termination or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any
amendment, modification, termination or waiver, which record date shall be
at least 30 days prior to the first solicitation of such consent. If a
record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not
such Persons continue to be Holders after such record date.
After an amendment, modification, termination or waiver becomes
effective, it shall bind every Holder of a Note, unless it makes a change
described in any of clauses (i) through (viii) of Section 11.1(a), in
which case, the amendment, modification, termination or waiver shall bind
only each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note; provided that any such waiver shall not impair
or affect the right of any Holder to receive payment of principal of,
premium (if any) and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any
such payment on or after such respective dates without the consent of such
Holder.
SECTION 11.2. Transfers. Each Holder shall be permitted to transfer
any Note or any portion thereof (and the rights relating thereto under
this Agreement and the other Transaction Documents) to any Person;
provided that
(i) such transfer is made pursuant to a registration statement
under the Securities Act (it being acknowledged that the Company
shall not be obligated to assist in any manner in any such
registration) or pursuant to an exemption from the registration
requirements of the Securities Act;
(ii) if such transfer is being made pursuant to an exemption
from such registration requirements and if requested by the Company,
counsel for such Holder (which counsel may be internal counsel)
furnishes to the Company an opinion to the effect that such transfer
is being made pursuant such an exemption;
(iii) the applicable transferee is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act;
(iv) such transferee represents to the Company in writing that
it is acquiring such Note solely for its own account and not as
nominee or agent for any other Person (other than for such managed
accounts, if applicable) and not with a view to, or for offer or sale
in connection with, any distribution thereof (within the meaning of
the Securities Act) that would be in violation of the securities laws
of the United States of America or any state thereof, without
prejudice, however, to its right at all times to sell or otherwise
dispose of all or any part of said Note pursuant to a registration
statement under the Securities Act or pursuant to an exemption from
the registration requirements of the Securities Act, and subject,
nevertheless, to the disposition of its property being at all times
within its control;
(v) unless the Holder making such transfer is making such
transfer to any of its Affiliates or any of its partners or with the
Company's prior written consent, such transfer is of (A) all the
Notes then held by such Holder or (B) a Note or Notes (or a portion
thereof) evidencing an aggregate principal amount outstanding of not
less than $1,000,000.
Within three Business Days after its receipt of notice that a
transfer is being made pursuant to this Section 11.2, but not prior to the
effective date of such transfer, the Company shall deliver to the
applicable transferee a new Note evidencing the aggregate principal amount
transferred and, if the Holder making such transfer is retaining an
interest in the Notes, a replacement Note in the aggregate principal
amount being retained by such Holder (such Note to be in exchange for, but
not in payment of, the Note then held by such Holder). Each such Note
shall be dated the date of the predecessor Note. The Holder making such
transfer shall ▇▇▇▇ the predecessor Note "exchanged" and deliver it to the
Company.
SECTION 11.3. Notices. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to
be given shall be in writing and shall be made by personal service,
facsimile, United States air mail or reputable courier service:
(a) if to the Purchasers or any subsequent Holder, at the
address or telecopier number set forth on the signature pages hereof,
or such other address as shall be designated in a written notice
delivered to the Company, with a copy to ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile No. (212) 262-
1910, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; and
(b) if to the Company, at the address or telecopy number set
forth on the signature pages hereof, or such other address as shall
be designated in a written notice delivered to the other parties
hereto.
Unless otherwise specifically provided herein, any notice or other
communication shall be deemed to have been given when delivered in person
or by courier service, upon receipt of facsimile (electronically
confirmed), or five Business Days after depositing it in the United States
air mail with postage prepaid and properly addressed.
SECTION 11.4. Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a
Default or an Event of Default if such action is taken or condition
exists.
SECTION 11.5. Survival of Representations, Warranties and
Agreements. (a) All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the
issuance and sale of the Securities hereunder.
(b) Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of the Company set forth in Sections 2.2,
2.5, 2.8, and 2.11 shall survive the payment of the Notes, the exercise of
the Warrants, and the termination of this Agreement.
SECTION 11.6. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any Holder in the exercise of any
power, right or privilege hereunder or under any other Transaction
Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other
Transaction Documents are cumulative to, and not exclusive of, any rights
or remedies otherwise available.
SECTION 11.7. Severability. Any provision of this Agreement, the
Notes or any other Transaction Document which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating or impairing the remaining
provisions of this Agreement, the Notes or such other Transaction Document
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.8. Obligations Several; Independent Nature of Senior
Debtholders' Rights. The obligations of the Holders hereunder are several
and no Holder shall be responsible for the obligations of any other Holder
hereunder. Nothing contained herein or in any other Transaction Document,
and no action taken by the Holders pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity. The amounts payable at any time
hereunder to each Holder shall be a separate and independent debt, and
each Holder shall be entitled to protect and enforce, subject to the
express provisions of this Agreement, its rights arising out of this
Agreement and it shall not be necessary for any other Holder to be joined
as an additional party in any proceeding for such purpose.
SECTION 11.9. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given
any substantive effect.
SECTION 11.10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF ILLINOIS.
SECTION 11.11. Successors and Assigns. This Agreement shall be
binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of the parties hereto and the
successors and assigns of each Purchaser (including each Holder).
SECTION 11.12. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY TRANSACTION PARTY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT AND THE COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER TRANSACTION DOCUMENT
OR SUCH OBLIGATION. The Company hereby agrees that service of all process
in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to such Person at its address
provided on the signature pages hereto, such service being hereby
acknowledged by such Person to be sufficient for personal jurisdiction in
any action against such Person in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or
shall limit the right of any Holder to bring proceedings against the
Company in the courts of any other jurisdiction.
SECTION 11.13. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT
OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in
entering into this Agreement, and that each will continue to rely on this
waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal
counsel and that it knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS
OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE SECURITIES ISSUED
HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 11.14. Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents or supplements hereto or in connection
herewith may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed
and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages
may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to
the same document.
SECTION 11.15. Understanding Among the Purchasers. The
determination of each Purchaser to purchase the Securities pursuant to
this Agreement has been made by such Purchaser independent of any other
Purchaser and independent of any statements (including any projections) or
opinions as to the advisability of such purchase or as to the properties,
business, prospects or condition (financial or otherwise) of the Company
which may have been made or given by any other Purchaser or by any agent
or employee of any other Purchaser. In addition, it is acknowledged by
each Purchaser that no other Purchaser has acted as an agent of or in
concert with such Purchaser in connection with making its investment
hereunder and that no other Purchaser will be acting as an agent of such
Purchaser in connection with monitoring its investment hereunder.
SECTION 11.16. Grant of Security. (a) The Company hereby assigns
and pledges to the Purchasers for their respective benefit and the ratable
benefit of each of the Holders, and hereby grants to the Purchasers, for
their respective benefit and the ratable benefit of each of the Holders, a
security interest in all Collateral. The Company and each Holder, by its
acceptance of a Note, covenant and agree that the Liens granted hereunder
or under any other document or instrument to the Holders shall, to the
extent and in the manner herein set forth, (i) not extend to any property
of the Company other than the Collateral, and (ii) be subordinated and
junior to the Liens of the Senior Agent on the terms set forth in this
Section 11.16. The provisions of this Section 11.16 shall be given
independent effect so that if a particular action is prohibited by any one
of such provisions, it shall be prohibited although it otherwise would not
be prohibited by another provision. All provisions of Section 11.16 are
for the benefit of the Senior Agent and the Senior Debtholders and the
Senior Agent and the Senior Debtholders are entitled to enforce such
provisions in all respects, and each Holder waives acceptance of such
provisions by the Senior Agent and Senior Debtholders.
(b) Notwithstanding the date, manner or order of grant, attachment
or perfection of the Liens in the Collateral granted to or for the benefit
of the Holders, and notwithstanding any provision of the Uniform
Commercial Code, or any other applicable law or decisions, the Senior
Agent under the Credit Agreement shall have a first and prior lien and
security interest in the Collateral and all proceeds thereof to secure the
Senior Debt, and any Lien in the Collateral held by or for the benefit of
the Holders shall be junior and subordinate to all Liens in the Collateral
held by or for the benefit of the Senior Agent under the Credit Agreement.
(c) Each Holder acknowledges that the priorities provided in this
Section 11.16 shall not be affected or impaired in any manner whatsoever
including, without limitation, on account of (i) the invalidity,
irregularity or unenforceability of all or any part of the Credit
Agreement, (ii) any amendment, change or modification of the Credit
Agreement or (iii) any impairment, modification, change, exchange, release
or subordination of or limitation on, any liability of, or stay of actions
or lien enforcement proceedings against, any of the Company, its property,
or its estate in bankruptcy resulting from any bankruptcy, arrangement,
readjustment, composition, liquidation, rehabilitation, similar proceeding
or otherwise involving or affecting the Company. This Section 11.16 shall
continue and be effective until all Senior Debt shall have been
indefeasibly paid in full and any commitment to advance Senior Debt has
been terminated, or all the Liens of the Senior Agent and the Senior
Debtholders shall have been consensually released by the Senior Agent and
the Senior Debtholders.
(d) Except as otherwise expressly permitted in this Section 11.16,
(i) the Holders shall not exercise or enforce any rights or remedies with
respect to the Collateral or in any manner interfere with the Liens and
security interests of the Senior Agent and the Senior Debtholders or the
enforcement thereof and (ii) the sole right of the Holders with respect to
the Collateral is to hold a Lien in the Collateral to the extent granted
herein. The Senior Agent and Senior Debtholders shall have the right to
specific performance by the Company and the Holders of the provisions of
Article X and Section 11.16 hereof, in addition to any other remedies they
may have at law or in equity. The Holders and the Company hereby
irrevocably waive, to the extent that they may do so under applicable law,
any defense based on the adequacy of a remedy at law which may be asserted
as a bar to the remedy of specific performance in any action brought
against the Company or the Holders for specific performance of the
provisions of Article X and Section 11.16 hereof by the Senior Agent or
the Senior Debtholders.
(e) Notwithstanding anything to the contrary contained in the Credit
Agreement or otherwise provided in law or equity, so long as any Senior
Debt, or any commitment to advance any such Senior Debt, is outstanding,
the Senior Agent and Senior Debtholders shall have the exclusive right
(whether exercised pursuant to a bankruptcy or similar proceeding or
otherwise) solely on behalf of the Senior Debtholders, without the consent
of any Holder: (i) to take action with respect to, to release or consent
to the release of the Liens of the Senior Agent and the Senior Debtholders
and of the Holders of the Subordinated Debt in respect of, or to
substitute, sell or otherwise dispose of, the Collateral, in accordance
with the Credit Agreement free and clear of the Liens of the Senior
Debtholders and Holders of the Subordinated Debt or as permitted by
applicable law; (ii) to enforce and realize upon the Liens on the
Collateral held by the Senior Agent on behalf of the Senior Debtholders,
in accordance with the Credit Agreement or as permitted by applicable law,
including to conduct any public or private sale of all or any portion of
the Collateral or turnover of all or any portion of the Collateral under
Article 9 of the Uniform Commercial Code, (iii) to determine whether or
not to accept a deed in lieu of foreclosure or similar transfer of all or
any portion of the Collateral, (iv) to enforce all rights and privileges
related to the Collateral accruing to the Senior Agent or the Senior
Debtholders by reason of, and in accordance with, the Credit Agreement,
including, without limitation, to grant or refuse to grant any and all
consents, approvals and waivers, to exercise all of its rights and
privileges as attorney-in-fact for purposes of carrying out the terms of
the Credit Agreement, (v) to take any and all appropriate action and to
execute any and all documents and instruments related to the Collateral
which may be necessary or desirable to accomplish the purposes of this
Section 11.16 or the Credit Agreement and (vi) to make all decisions on
behalf of itself, and the Senior Debtholders under the Credit Agreement,
in any such circumstances. In exercising its rights as aforesaid, the
Senior Agent shall have sole control over the timing, circumstances and
manner of exercising its rights.
(f) Any proceeds of Collateral received by the Holders in
contravention of this Agreement shall be segregated and held in trust for
the benefit of the Senior Agent and paid over to the Senior Agent in the
same form as received, with any necessary endorsements, or as a court of
competent jurisdiction may otherwise direct.
(g) This Section 11.16 shall be applicable both before and after the
commencement, whether voluntary or involuntary, of any case of the Company
under the Bankruptcy Code, and all references herein to the Company, shall
be deemed to apply to such entity as debtor in possession and to any
trustee in bankruptcy for the estate of such entity.
(h) So long as any Senior Debt, or commitment to advance any Senior
Debt, is outstanding, in any bankruptcy or similar proceeding of the
Company, the Senior Agent and the Senior Debtholders shall have the sole
right to seek, and the Holders shall not seek, in respect of any part of
the Collateral or proceeds thereof or any Lien which may exist thereon any
adequate protection rights pursuant to Section 361 of the Bankruptcy Code
or otherwise, any relief from or modification of the automatic stay as
provided in section 362 of the Bankruptcy Code or otherwise, the entry of
any cash collateral order pursuant to Section 363 of the Bankruptcy Code
or otherwise, any sale of all or any portion of the Collateral pursuant to
Section 363 of the Bankruptcy Code or otherwise, or the entry of any
financing order under Section 364 of the Bankruptcy Code or otherwise,
unless in each instance the Senior Agent shall consent thereto. The
Holders shall not oppose any such relief or modification sought by the
Senior Agent or the Senior Debtholders under the Credit Agreement with
respect to all or any portion of the Collateral.
(i) In the event the Senior Agent or any of the Senior Debtholders
under the Credit Agreement is required under any bankruptcy or other law
to return to the Company, the estate in bankruptcy thereof, any third
party or any trustee, receiver or other representative of the Company, any
payment or distribution of assets, whether in cash, property or
securities, including, without limitation, any Collateral or any proceeds
of the Collateral previously received by the Senior Agent or such Senior
Debtholder under the Credit Agreement (a "Recovered Distribution"), then
to the extent permitted by law, this Agreement and the subordination of
the Liens of the Holders in such Collateral or proceeds as set forth
herein shall be reinstated on the terms set forth herein with respect to
any such Recovered Distribution to the extent that the claim of the Senior
Agent and the Senior Debtholders under the Credit Agreement resulting from
the return of such Recovered Distribution is entitled to a priority under
such bankruptcy or other law at least equal to the general unsecured
obligation of the Company existing prior to the commencement of any such
bankruptcy case or other proceeding.
(j) Nothing contained herein shall prevent the Holders from filing
claims or pleadings or otherwise participating in any bankruptcy or
similar proceeding of the Company provided the same is not inconsistent
with and does not violate the terms and conditions of this Agreement.
(k) So long as any Senior Debt or commitment to extend any such
Senior Debt, is outstanding, the Holders, to the fullest extent permitted
by applicable law, waive, with respect to the Collateral, any requirement
regarding, and agree not to demand, request, plead or otherwise claim the
benefit of, any marshalling, appraisement, valuation or other similar
right that may otherwise be available under applicable law.
(l) Until all Senior Debt owed to the Senior Agent and the Senior
Debtholders has been finally and indefeasibly paid in full and any
commitment to advance Senior Debt has been terminated, the Holders shall
have no right to subrogation with respect to the Collateral.
(m) The Holders agree that neither the Senior Agent nor the Senior
Debtholders under the Credit Agreement shall have any liability to the
Holders for, and each of the Holders hereby waives, any claim which such
Holder may have at any time against the Senior Agent or the Senior
Debtholders under the Credit Agreement arising out of any and all actions
which the Senior Agent or the Senior Debtholders under the Credit
Agreement take or omit to take, in a commercially reasonable manner and
not otherwise in violation of the express provisions of this Agreement,
with respect to the possession, administration, foreclosure upon or sale,
liquidation or other disposition, or valuation, use, protection or
release, of the Collateral.
(n) If any of the Senior Agent, the Senior Debtholders under the
Credit Agreement, or the Holders shall enforce its rights or remedies in
violation of the terms of this section 11.16, the Company agrees that it
shall not raise such violation as a defense to the enforcement by any such
or other party of the Credit Agreement, nor assert such violation as a
counterclaim or basis for setoff or recoupment against any such party.
(o) This Section 11.16 is solely for the purpose of defining the
rights and priorities of the Senior Agent and the Senior Debtholders, on
the one hand, and the Holders, on the other, and their respective
successors and assigns with respect to the Collateral, and no other
person, firm, entity or corporation shall have any right, benefit,
priority or interest under, or because of the existence of, this Section
11.16, nor shall this Section 11.16 affect the obligations of the Company
to the Senior Debtholders under the Credit Agreement, the Senior Agent or
the Holders, which obligations shall remain absolute and unconditional in
all circumstances. This Section 11.16 shall not inure to the benefit of
the Company or its respective successors and assigns.
(p) Unless and until the Senior Debt has been paid in full and the
Credit Agreement shall have been terminated, the Senior Agent shall have
the sole and exclusive right, subject to the rights of the Company under
the Agreement, to adjust settlement for any insurance policy covering the
Collateral in the event of any loss thereunder and to approve any award
granted in any condemnation or similar proceeding affecting the
Collateral. Unless and until the Senior Debt shall have been paid in full
and the Agreement shall have been terminated, all proceeds of any such
policy and any such award shall be paid to the Senior Agent, provided that
any such proceeds or awards remaining after payment of the Credit shall be
promptly delivered to the Holders for application to the Subordinated
Debt.
(q) The Senior Agent hereby agrees to hold, for the benefit of the
Holders, as possessory agent, any Collateral in respect of which a
security interest is perfected by possession and has actually been
delivered to the Senior Agent (the "Possessory Collateral"), including
without limitation, all negotiable collateral so delivered and the Senior
Agent hereby acknowledges that it will hold all of such Possessory
Collateral as agent on behalf of the Holders in order to perfect the Lien
of the Holders in such Possessory Collateral. The Senior Agent's sole
role as agent on behalf of the Holders in accordance with this Section
11.16 shall be to hold any such Possessory Collateral on behalf of the
Holders and deliver the same to the Holders (or any agent of the Holders
designated in writing to the Senior Agent) upon payment in full of the
Senior Debt and the termination of the Credit Agreement but subject to its
right to release such Collateral pursuant to the Credit Agreement and this
Section 11.16. Notwithstanding anything herein to the contrary, the
Senior Agent's obligation to hold Possessory Collateral on behalf of the
Holders shall extend only to that Possessory Collateral which the Senior
Agent holds on its own behalf, and the Senior Agent shall have no
liability to the Holders for its failure to hold any Possessory
Collateral.
(r) Any collateral document executed in connection with this
Agreement to secure the Subordinated Debt shall expressly state that any
lien or security interest evidenced by or referenced in such collateral
document is subordinated to the Liens of the Senior Agent in accordance
with this Section 11.16.
(s) Other than as set forth in the Credit Agreement, no UCC
statement, mortgage or similar document of record shall be filed in any
recording office or similar location with respect to the Liens of the
Holders unless and until a UCC statement, mortgage or similar document of
record has been filed in such office or location with respect to the Liens
and security interests of the Senior Agent and the Senior Debtholders.
Each UCC or other recording document filed with respect to the Liens of
the Holders shall contain a description of collateral that is no broader
than any description filed on behalf of the Senior Agent and the Senior
Debtholders.
(t) Other than as set forth in the Credit Agreement, prior to the
filing of any UCC statement, mortgage or similar document of record in any
recording office or similar location, an appropriate UCC termination
statement or release for such filing in recordable form shall be delivered
to the Senior Agent to be held in trust and filed in connection with the
Senior Debtholders' rights under this Section 11.16. Upon payment in full
of the Senior Debt and termination of any commitment to extend Senior
Debt, the Senior Agent shall return such UCC termination statements or
releases (if not filed) to the Holders.
(u) If the Holders obtain any interest in Collateral contrary to any
provision of this Section 11.16, such interest shall be deemed null and
void.
SECTION 11.17. Entire Agreement. This Agreement, together with the
Securities, the Warrant Agreement and the schedules and exhibits hereto
and thereto is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the
agreement and understanding, written or verbal, of the parties hereto in
respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement together with the
Securities and the Warrant Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as
of the day and year first above written.
LADISH CO., INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
Notice Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(signature page to Purchase Agreement)
ING EQUITY PARTNERS, L.P. I
By: Lexington Partners, L.P.,
its General Partner
By: Lexington Partners, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
STATE STREET RESEARCH
HIGH INCOME FUND
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
STATE STREET RESEARCH MANAGED ASSETS
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ PRINCIPLE MATURITY TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SALOMON BROTHERS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
WYNNEFIELD PARTNERS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
C.C. PARTNERS, LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EBI INDEMNITY COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
SECURITY REINSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
GUARANTY NATIONAL INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CANYON PARTNERS INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
NEW GENERATION LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
NEW GENERATION INSTITUTIONAL LIMITED
PARTNERSHIP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ FAMILY PARTNERS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PRUDENTIAL SECURITIES
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SCHEDULE I
Purchasers Securities Purchase Amount
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Ltd. Note in principal amount of $3,435,088
$9,330,866
Warrant to purchase 17,175,440
shares of Common Stock
ING Equity Note in principal amount of $3,435,088
Partners L.P. I $9,330,866
Warrant to purchase 17,174,440
shares of Common Stock
State Street Research Note in principal amount of $181,135
High Income Fund $9,330,866
Warrant to purchase 905,675
shares of Common Stock
State Street Research Note in principal amount of $18,114
Managed Assets $9,330,866
Warrant to purchase 90,750
shares of Common Stock
Franklin Principle Note in principal amount of $895,315
Maturity Trust $9,330,866
Warrant to purchase 4,476,575
shares of Common Stock
Salomon Brothers Inc Note in principal amount of $433,330
$9,330,866
Warrant to purchase 2,166,650
shares of Common Stock
Wynnefield Partners Note in principal amount of $72,280
$9,330,866
Warrant to purchase 361,400
shares of Common Stock
C.C. Partners, Ltd. Note in principal amount of $54,340
$9,330,866
Warrant to purchase 271,700
shares of Common Stock
EBI Indemnity Company Note in principal amount of $27,170
$9,330,866
Warrant to purchase 135,850
shares of Common Stock
Security Reinsurance Note in principal amount of $63,397
Company $9,330,866
Warrant to purchase 316,985
shares of Common Stock
Guaranty National Note in principal amount of $90,567
Insurance Company $9,330,866
Warrant to purchase 452,835
shares of Common Stock
Canyon Partners Note in principal amount of $110,000
Incorporated $9,330,866
Warrant to purchase 550,000
shares of Common Stock
New Generation Note in principal amount of $38,491
Limited Partnership $9,330,866
Warrant to purchase 192,455
shares of Common Stock
New Generation Note in principal amount of $6,793
Institutional Limited $9,330,866
Partnership
Warrant to purchase 33,965
shares of Common Stock
▇▇▇▇▇▇▇ Family Note in principal amount of $67,576
Partners $9,330,866
Warrant to purchase 337,880
shares of Common Stock
Prudential Securities Note in principal amount of $315,244
$9,330,866
Warrant to purchase 1,576,220
shares of Common Stock
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Note in principal amount of $41,800
$9,330,866
Warrant to purchase 209,000
shares of Common Stock
▇▇▇▇▇▇ ▇▇▇▇ Note in principal amount of $4,529
$9,330,866
Warrant to purchase 22,645
shares of Common Stock
▇▇▇ ▇▇▇▇▇▇ Note in principal amount of $6,966
$9,330,866
Warrant to purchase 34,830
shares of Common Stock
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Note in principal amount of $13,933
$9,330,866
Warrant to purchase 69,665
shares of Common Stock
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Note in principal amount of $17,416
$9,330,866
Warrant to purchase 87,080
shares of Common Stock