Exhibit 4.13
________________________________________________________________________________
ACTERNA CORPORATION
ACTERNA LLC
CD&R VI (BARBADOS), LTD.
INVESTMENT AGREEMENT
Senior Secured Convertible Notes Due 2007, Series 2
Of Acterna LLC
Dated as of August 5, 2002
________________________________________________________________________________
EXECUTION COPY
TABLE OF CONTENTS
Page
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Article I
Grant of the Right; Authorization, Issuance, Purchase and Sale of
Notes and Warrants
1.1 Grant and Acceptance.................................................. 2
1.2 Authorization of the Notes............................................ 2
1.3 Authorization of Warrants............................................. 3
1.4 Sale and Purchase of Notes............................................ 3
Article II
The Closings
2.1 Date, Time and Location of Closings................................... 3
2.2 Delivery of Initial Notes and Purchase Price.......................... 4
Article III
Representations and Warranties of the Parent and the Company
3.1 Corporate Existence; Compliance with Law.............................. 4
3.2 Corporate Power; Authorization; Enforceable Obligations............... 5
3.3 Capitalization........................................................ 5
3.4 Financial Condition................................................... 6
3.5 Absence of Changes.................................................... 6
3.6 No Legal Bar.......................................................... 7
3.7 No Material Litigation................................................ 7
3.8 No Default............................................................ 7
3.9 Ownership of Property; Liens.......................................... 7
3.10 Intellectual Property................................................. 7
3.11 No Burdensome Restrictions............................................ 8
3.12 Taxes................................................................. 8
3.13 Federal Reserve Regulations........................................... 8
3.14 ERISA................................................................. 8
3.15 Investment Company Act; Other Regulations............................. 9
3.16 [Intentionally Omitted.].............................................. 9
3.17 Environmental Matters................................................. 9
3.18 Note Security Documents............................................... 11
3.19 Disclosure............................................................ 11
3.20 Solvency.............................................................. 11
3.21 Senior Indebtedness................................................... 11
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Article IV
Representations and Warranties of the Investor
4.1 Experience............................................................ 12
4.2 Investment Intent..................................................... 12
4.3 Notes, Warrants and Common Stock Not Registered....................... 12
Article V
Conditions to Each Closing
5.1 Conditions to Obligations of Each Party............................... 13
5.2 Conditions to Obligations of the Investor............................. 13
Article VI
The Convertible Notes; General Terms
6.1 Interest Accrual...................................................... 15
6.2 Payments.............................................................. 15
6.3 Conversion............................................................ 16
6.4 Optional Redemption................................................... 25
6.5 Mandatory Offer to Repurchase Upon Change of Control.................. 26
6.6 Mandatory Offer to Repurchase CD&R Barbados Notes Upon Disposition
of Assets............................................................. 29
6.7 Issuance of Warrants Upon Early Redemption or Repurchase.............. 33
6.8 Register of Holders................................................... 34
6.9 Exchange of Notes Upon Transfer....................................... 34
6.10 Mutilated, Destroyed, Lost and Stolen Notes........................... 35
Article VII
Affirmative Covenants of the Company
7.1 Financial Statements.................................................. 35
7.2 Certificates; Other Information....................................... 36
7.3 Payment of Obligations................................................ 37
7.4 Conduct of Business and Maintenance of Existence...................... 37
7.5 Maintenance of Property; Insurance.................................... 38
7.6 Inspection of Property; Books and Records; Discussions................ 38
7.7 Notices............................................................... 38
7.8 Environmental Laws.................................................... 40
7.9 Additional Collateral................................................. 41
7.10 Liens................................................................. 43
7.11 Note Guarantors....................................................... 43
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Article VIII
Negative Covenants of the Company
8.1 Limitation on Indebtedness............................................ 45
8.2 Limitation on Restricted Payments..................................... 49
8.3 Limitation on Restrictions on Distributions from Restricted
Subsidiaries.......................................................... 53
8.4 Limitation on Sales of Assets and Subsidiary Stock.................... 54
8.5 Limitation on Transactions with Affiliates............................ 58
8.6 Limitation on Liens................................................... 59
8.7 Limitation on Optional Payments and Modifications of Debt
Instruments and other Material Agreements............................. 60
8.8 Limitation on Negative Pledge Clauses................................. 61
Article IX
Successor Company
9.1 When the Company May Merge, etc....................................... 61
9.2 Successor Company Substituted......................................... 63
Article X
Events of Default
10.1 Events of Default..................................................... 63
10.2 Acceleration of Maturity; Rescission and Annulment.................... 66
10.3 Unconditional Right of Holders to Receive Principal, Premium
and Interest.......................................................... 67
10.4 Restoration of Rights and Remedies.................................... 67
10.5 Rights and Remedies Cumulative........................................ 67
10.6 Delay or Omission Not Waiver.......................................... 67
10.7 Waiver of Past Defaults............................................... 68
10.8 Waiver of Stay, Extension or Usury Laws............................... 68
Article XI
Termination
11.1 Termination........................................................... 68
11.2 Effect of Termination................................................. 68
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Article XII
Definitions
Article XIII
Miscellaneous
13.1 Notices............................................................. 105
13.2 Governing Law, etc.................................................. 107
13.3 Jurisdiction; Waiver of Jury Trial; Waiver of Punitive Damages...... 107
13.4 Binding Effect...................................................... 107
13.5 Assignment.......................................................... 108
13.6 No Third-Party Beneficiaries........................................ 108
13.7 Amendment; Waivers, etc............................................. 108
13.8 Survival of Representations and Warranties.......................... 110
13.9 Payment of Expenses and Taxes....................................... 110
13.10 Judgment Currency................................................... 112
13.11 Entire Agreement.................................................... 112
13.12 Severability........................................................ 112
13.13 Headings............................................................ 113
13.14 Rules of Construction............................................... 113
13.15 Schedules........................................................... 113
13.16 Counterparts........................................................ 114
13.17 Limitation on Certain Transactions.................................. 114
Schedule 3.2(a): Consents, Authorizations, Notices and Filings
Schedule 3.3: Capitalization
Annex A: Terms of Note Guarantees of Transferred Notes
Exhibit A: Form of Note
Exhibit B: Form of Warrant
Exhibit C: Form of Amendment No. 3 to the Registration Rights Agreement
Exhibit D: Form of Guarantee and Collateral Agreement
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EXECUTION COPY
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT, dated as of August 5, 2002, among Acterna
Corporation, a Delaware corporation (together with its successors and assigns,
the "Parent"), Acterna LLC, a Delaware limited liability company wholly owned
and controlled by the Parent (together with its successors and assigns, the
"Company"), and CD&R VI (Barbados), Ltd., a company organized under the laws of
Barbados (together with its successors and assigns, the "Investor"). Capitalized
terms used in this Agreement and not otherwise defined are defined in Article
XII.
Recitals
WHEREAS, on January 15, 2002 the Company issued and sold to ▇▇▇▇▇▇▇,
Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited
partnership ("Fund VI"), $75 million in aggregate principal amount of 12% Senior
Secured Convertible Notes due December 31, 2007 of the Company;
WHEREAS, the Investor currently holds $50.2 million aggregate principal
amount of Senior Subordinated Notes (the "Current CD&R Barbados Senior
Subordinated Notes");
WHEREAS, pursuant to the terms of the Offers to Purchase, dated June 24,
2002 (as the same may be amended or supplemented from time to time, the "Offers
to Purchase"), the Company and the Investor offered to purchase for cash, on a
combined basis, up to $155 million in aggregate principal amount of outstanding
Senior Subordinated Notes;
WHEREAS, pursuant to the terms of the Offers to Purchase, the Investor may
purchase for cash up to $46 million principal amount of additional outstanding
Senior Subordinated Notes (the "Additional CD&R Barbados Senior Subordinated
Notes" and, together with the Current CD&R Barbados Senior Subordinated Notes,
the "CD&R Barbados-Owned Senior Subordinated Notes");
WHEREAS, the Senior Subordinated Note Indenture requires the Company to pay
interest on the Senior Subordinated Notes semi-annually on May 15 and November
15 of each year (each, a "Senior Subordinated Note Interest Payment Date");
WHEREAS, in connection with the Offers to Purchase, the Company and the
other parties to the Credit Agreement have entered into the Third Credit
Agreement Amendment;
WHEREAS, as a condition to the effectiveness of such Third Credit Agreement
Amendment, the Administrative Agent required that the Investor obtain from the
Company the right to invest an amount equal to the amount of future cash
interest
received, on an after-tax basis, on all CD&R Barbados-Owned Senior Subordinated
Notes in the Senior Secured Convertible Notes, Series 2 due December 31, 2007 of
the Company (the "Initial Notes");
WHEREAS, the Investor desires to obtain from the Company the right to
invest in the Initial Notes an amount equal to future cash interest received, on
an after-tax basis, on all CD&R Barbados-Owned Senior Subordinated Notes;
WHEREAS, the Company desires to issue and sell to the Investor, and the
Investor desires to purchase from the Company, the Initial Notes from time to
time in accordance with the terms hereof, at the election of the Investor and in
an amount equal to future cash interest received, on an after-tax basis, on all
CD&R Barbados-Owned Senior Subordinated Notes;
WHEREAS, the Parent, the Company and the Investor have agreed that the
Notes will be secured, on and subject to the terms of (a) a Guarantee and
Collateral Agreement, in the form of Exhibit D hereto (the "Guarantee and
Collateral Agreement"), by the Parent, the Company and certain Subsidiaries of
the Company for the benefit of the Investor, and (b) an Intercreditor Agreement,
dated as of December 27, 2001 (the "Intercreditor Agreement"), among the Bank
Agent, Fund VI and the Investor, and consented to by the Parent, the Company and
certain Subsidiaries of the Company; and
WHEREAS, the Parent, the Company and the Investor desire to enter into this
Agreement to govern the terms of the CD&R Barbados Investment;
NOW, THEREFORE, in consideration of the mutual premises, covenants,
representations and warranties made in this Agreement and of the mutual benefits
to be derived from this Agreement, the parties hereto agree as follows:
Article I
Grant of the Right; Authorization, Issuance,
Purchase and Sale of Notes and Warrants
1.1 Grant and Acceptance. The Company hereby grants to the Investor the
right to invest in Initial Notes an amount equal to the Net Cash Interest Amount
in respect of any cash interest paid by the Company and received by the Investor
in respect of interest owing by the Company to the Investor on any Senior
Subordinated Note Interest Payment Date for so long as the Investor owns any
Senior Subordinated Notes (with respect to each such Senior Subordinated Note
Interest Payment Date, an "Investment Right"), and the Investor hereby accepts
such Investment Right.
1.2 Authorization of the Notes. The Company has authorized the issuance and
sale of the Notes on the terms set forth in this Agreement, to be designated as
Series 2-A through Series 2-K, with the Notes issued following the first
exercise by the Investor of
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its Investment Right to be designated as Series 2-A and the Notes issued
following each exercise by the Investor of its Investment Right thereafter to be
designated with the following letter of the alphabet through and including the
letter "K". Any additional Notes issued pursuant to Section 6.2(a)(ii) shall
have the same designation as the Notes with respect to which such additional
notes were issued. The Notes shall be in the form of Exhibit A hereto, with such
changes therefrom, if any, as may be approved by the Company and the Investor.
1.3 Authorization of Warrants. The Parent has authorized the issuance, upon
the redemption or repurchase of the Notes prior to the Maturity Date, of
warrants (each, a "Warrant") to purchase a number of newly-issued shares of
Common Stock equal to the number of shares of Common Stock into which the Notes
were convertible immediately prior to such redemption or repurchase, at the
exercise price per share equal to the Conversion Price, to be in the form of
Exhibit B hereto, with such changes therefrom, if any, as may be approved by the
Parent and the Holder of the Notes so redeemed or repurchased.
1.4 Sale and Purchase of Notes. An Investment Right with respect to any
Senior Subordinated Note Interest Payment Date may be exercised by the Investor
during the period commencing on the twentieth (20/th/) Business Day prior to,
and ending on the fifth (5/th/) Business Day following, each Senior Subordinated
Note Interest Payment Date occurring after the date hereof (each, an "Exercise
Period"), by written notice to the Company and the Appraiser, which notice shall
state (a) that the Investor has elected to exercise such Investment Right and
(b) the amount equal to the Net Cash Interest Amount being invested in Initial
Notes pursuant to such notice (an "Election Notice"). Following receipt of such
Election Notice, and subject to the terms and conditions of this Agreement, at
each Closing the Company will issue and sell to the Investor, and the Investor
will purchase from the Company, Initial Notes for a purchase price and in an
aggregate Principal Amount equal to the Net Cash Interest Amount with respect to
such Senior Subordinated Note Interest Payment Date (the "Purchase Price"). The
Investor agrees that the Investment Right will be exercised if, and only to the
extent required by, the terms of the Third Credit Agreement Amendment or any
agreement contemplated thereby.
Article II
The Closings
2.1 Date, Time and Location of Closings. Each purchase and sale of the
Initial Notes shall take place at the offices of Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., New York City time, at a
closing (each, a "Closing") to be held on (a) if the Investment Right is
exercised with respect to a Senior Subordinated Note Interest Payment Date
falling on November 15 of any year, the later to occur of (i) the fifth (5/th/)
Business Day after the final determination of the Conversion
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Rate and the Interest Rate in accordance with this Agreement, and (ii) the date
on which the interest in respect of which the Investment Right is being
exercised is actually received by the Investor, and (b) if the Investment Right
is exercised with respect to a Senior Subordinated Note Interest Payment Date
falling on May 15 of any year, the later to occur of (i) the fifth (5) Business
Day after receipt by the Company of the Election Notice, and (ii) the date on
which the interest in respect of which the Investment Right is being exercised
is actually received by the Investor, or, in each of case (a) and (b), on such
other Business Day thereafter as may be agreed upon by the Parent, the Company
and the Investor (such Business Day, with respect to a particular Closing, the
"Closing Date").
2.2 Delivery of Initial Notes and Purchase Price. At each Closing, (a) the
Company will deliver the Initial Notes to the Investor in the form of a single
promissory note (or such greater number of promissory notes in denominations of
at least $1,000 and integral multiples thereof as the Investor may request), in
the form of Exhibit A hereto, with such changes therefrom, if any, as may be
approved by the Company and the Investor, dated the Closing Date and registered
in the name of the Investor (or its nominee), and (b) the Investor shall deliver
the Purchase Price to the Company by wire transfer of immediately available
funds to an account previously designated in writing by the Company.
Article III
Representations and Warranties of the Parent and the Company
The Parent and the Company hereby represent and warrant as follows:
3.1 Corporate Existence; Compliance with Law. Each of the Parent, the
Company and the Subsidiaries of the Company (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate or other organizational power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
except to the extent that the failure to have such legal right would not be
reasonably expected to have a Material Adverse Effect, (c) is duly qualified as
a foreign entity and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not be reasonably expected to have
a Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
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3.2 Corporate Power; Authorization; Enforceable Obligations.
(a) Each of the Parent, the Company and the Subsidiaries of the
Company (i) has the corporate or other organizational power and authority, and
the legal right, to make, deliver and perform under this Agreement and the other
Transaction Agreements to which it is a party and (ii) has taken all necessary
corporate or other organizational action to authorize the execution, delivery
and performance of this Agreement and the other Transaction Agreements to which
it is a party. No consent or authorization of, filing with, notice to or other
similar act by or in respect of, any Governmental Authority or any other Person
is required to be obtained or made by or on behalf of the Parent, the Company or
any Subsidiary in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or the other Transaction Agreements, except for (w) consents, authorizations,
notices and filings described in Schedule 3.2(a), all of which have been
obtained or made, (x) filings to perfect the Liens created by the Note Security
Documents, (y) filings pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. (S) 3737 et seq.), in respect of accounts of the Parent, the
Company or any Subsidiary of the Company, the obligor in respect of which is the
United States of America or any department, agency or instrumentality thereof,
and (z) consents, authorizations, notices and filings which the failure to
obtain or make would not reasonably be expected to have a Material Adverse
Effect.
(b) This Agreement has been, and each of the other Transaction
Agreements and any other agreement to be entered into pursuant hereto will be,
duly executed and delivered on behalf of the Parent, the Company or any
Subsidiary of the Company, as appropriate. This Agreement constitutes, and each
of the other Transaction Agreements and any other agreement to be entered into
pursuant to this Agreement will, upon their execution and delivery, constitute,
a legal, valid and binding obligation of the Parent, the Company or any
Subsidiary of the Company, as appropriate, enforceable in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or similar laws relating to or affecting
creditors' rights generally and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3.3 Capitalization. Schedule 3.3 sets forth a complete and correct
description of the shares of capital stock of, or other securities or
instruments convertible into or exchangeable for any capital stock of or other
equity interest in, the Parent and the Company that are authorized, or issued
and outstanding as of the date set forth in such Schedule. Except as set forth
in Schedule 3.3, (a) there are no preemptive or similar rights on the part of
any holders of any class of securities of the Parent or the Company, (b) no
subscriptions, options, warrants, conversion or other rights, agreements,
commitments, arrangements or understandings of any kind obligating any Person,
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contingently or otherwise, to issue or sell, or cause to be issued or sold, any
shares of capital stock of any class of the Parent or the Company, or any
securities or other instruments convertible into or exchangeable for any such
shares, are outstanding and (c) no authorization for any of the foregoing has
been given. There are no outstanding contractual or other rights or obligations
to or of any Person to repurchase, redeem or otherwise acquire any outstanding
shares or other equity interests in the Parent or the Company.
3.4 Financial Condition. The audited consolidated balance sheets of the
Parent and its Subsidiaries as at March 31 of the two most recent fiscal years,
and the related consolidated statements of income and of cash flows for the
fiscal years ended on such dates, as filed by the Parent with the United States
Securities and Exchange Commission (and reported on by and accompanied by an
unqualified report from the Parent's independent public accountant), present
fairly, in all material respects, the consolidated financial condition of the
Parent and its Subsidiaries as at such respective dates, and the consolidated
results of its operations and its consolidated cash flows for the respective
fiscal years then ended. The unaudited consolidated balance sheet of the Parent
and its Subsidiaries for the most recent quarterly reporting period, and the
related unaudited consolidated statements of income and cash flows for the
interim quarterly fiscal period ended on such date, as filed by the Parent with
the United States Securities and Exchange Commission, on the basis disclosed in
the footnotes to such financial statements, present fairly, in all material
respects, the consolidated financial condition of the Parent and its
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the interim quarterly fiscal period then ended
(subject to the omission of certain footnotes and normal year-end audit and
other adjustments). All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the Chief
Financial Officer of the Parent, and disclosed in any such schedules and notes,
and except that such unaudited financial statements do not contain certain
footnotes). All material Guarantee Obligations, material contingent liabilities
and liabilities for taxes, or all material long-term leases or unusual forward
or long-term commitments, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other obligation in respect of
derivatives, which according to GAAP must be reflected in such financial
statements or the notes thereto, are so reflected.
3.5 Absence of Changes. Since the date of the most recent report filed by
Parent with the United States Securities and Exchange Commission on Form 10-Q or
Form 10-K, there has been no development or event relating to or affecting the
Parent, the Company or any Subsidiary of the Company which has had or would
reasonably be expected to have a Material Adverse Effect (after giving effect to
the Transactions).
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3.6 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Transaction Agreements by the Parent, the Company and
the Subsidiaries of the Company, as appropriate, and the use of the proceeds of
the CD&R Barbados Investment by the Company, (a) will not violate any
Requirement of Law or any Contractual Obligation applicable to or binding upon
the Parent, the Company and any Subsidiary of the Company or any of their
respective properties or assets in any respect that would reasonably be expected
to have a Material Adverse Effect and (b) will not result in the creation or
imposition of any Lien on any of the properties or assets of the Parent, the
Company or the Subsidiaries of the Company pursuant to any Requirement of Law or
Contractual Obligation, except for the Liens (i) arising under the Security
Documents (as defined in the Credit Agreement) or the Note Security Documents or
(ii) that are Permitted Liens and are permitted under the Credit Agreement
(after giving effect to the Third Credit Agreement Amendment).
3.7 No Material Litigation. No litigation by, investigation by, or
proceeding of or before any arbitrator or any Governmental Authority is pending
or, to the knowledge of the Parent, the Company or any Subsidiary of the
Company, threatened by or against the Parent, the Company or any Subsidiary of
the Company (or any of their respective properties or revenues, after giving
effect to the CD&R Barbados Investment) which would reasonably be expected to
have a Material Adverse Effect.
3.8 No Default. Neither the Parent, the Company nor any Subsidiary of the
Company is in default under or with respect to any Contractual Obligation which
would reasonably be expected to have a Material Adverse Effect. No Bank Default
Event or Senior Subordinated Default Event has occurred and is continuing.
3.9 Ownership of Property; Liens. Each of the Parent, the Company and the
Subsidiaries of the Company has good record and marketable title in fee simple
to, or a valid leasehold interest in, all of its material real property, and
good title to, or a valid leasehold interest in, all of its other material
property, and none of such property is subject to any Lien, except for Liens (a)
arising under the Security Documents (as defined in the Credit Agreement) or the
Note Security Documents or (b) that are Permitted Liens and are permitted under
the Credit Agreement (after giving effect to the Third Credit Agreement
Amendment).
3.10 Intellectual Property. Each of the Parent, the Company and the
Subsidiaries of the Company owns, or is licensed (or otherwise has the legal
right) to use, all United States trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business substantially
as currently conducted, except for those United States trademarks, tradenames,
copyrights, technology, know-how and processes, the failure to own or license
(or otherwise have the legal right to use) which would not reasonably be
expected to have a Material Adverse Effect (the "Intellectual Property"). No
claim has been asserted and is pending by any Person
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challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does the Parent, the Company
or any Subsidiary of the Company know of any valid basis for any such claim and
to the knowledge of each of the Parent, the Company and the Subsidiaries of the
Company, the use of the Intellectual Property by the Parent, the Company and the
Subsidiaries of the Company does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
3.11 No Burdensome Restrictions. No Requirement of Law applicable to or
Contractual Obligation of any of the Parent, the Company and the Subsidiaries of
the Company would reasonably be expected to have a Material Adverse Effect.
3.12 Taxes. Each of the Parent, the Company and its Subsidiaries has filed
or caused to be filed all United States federal income tax returns and all other
material tax returns which, to the knowledge of the Company, are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any (i) taxes, fees or other charges with respect to which
the failure to pay, in the aggregate, would not have a Material Adverse Effect
or (ii) taxes, fees or other charges the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Parent, the Company or its Subsidiaries, as the case may be); no
tax Lien has been filed, and, to the knowledge of the Company, no claim is being
asserted, with respect to any such tax, fee or other charge.
3.13 Federal Reserve Regulations. Neither the Parent, the Company nor any
Subsidiary of the Company will, directly or indirectly, use any of the proceeds
of the CD&R Barbados Investment for the purpose, whether immediate, incidental
or ultimate, of buying "margin stock" or of maintaining, reducing or retiring
any indebtedness originally incurred to purchase a stock that is currently
"margin stock", or otherwise take or permit to be taken any action which would
involve a violation of any regulation of the Board of Governors of the Federal
Reserve System. No indebtedness being reduced or retired out of the proceeds of
the CD&R Barbados Investment was incurred for the purpose of purchasing or
carrying any "margin stock" and neither the Parent, the Company nor any
Subsidiary owns or has any intention of acquiring any "margin stock".
3.14 ERISA. During the respective five year periods prior to the date
hereof and, solely for the purposes of Section 5.2(a)(ii), each Closing Date,
with respect to any Plan (or, with respect to (e) or (h) below, as of the date
such representation is made or, solely for the purposes of Section 5.2(a)(ii),
each Closing Date), none of the following events or conditions, either
individually or in the aggregate, has resulted or is reasonably
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likely to result in a liability to the Parent, the Company or any Subsidiary of
the Company which would be reasonably expected to have a Material Adverse
Effect: (a) a Reportable Event; (b) an "accumulated funding deficiency" (within
the meaning of Section 412 of the Code or Section 302 of ERISA); (c) any
material noncompliance with the applicable provisions of ERISA or the Code; (d)
a termination of a Single Employer Plan (other than a standard termination
pursuant to Section 4041(b) of ERISA); (e) a Lien in favor of the PBGC or a
Plan; (f) under-funding with respect to any Single Employer Plan; (g) a complete
or partial withdrawal from any Multiemployer Plan by the Parent, the Company,
any Subsidiary of the Company or any Commonly Controlled Entity; (h) any
liability of the Parent, the Company, any Subsidiary of the Company or any
Commonly Controlled Entity under ERISA if the Parent, the Company, any
Subsidiary of the Company or any Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the annual valuation date most
closely preceding the date on which this representation is made or, solely for
the purposes of Section 5.2(a)(ii), each Closing Date; (i) the Reorganization or
Insolvency of any Multiemployer Plan; and (j) an event or condition with respect
to which the Parent, the Company, any Subsidiary of the Company or any Commonly
Controlled Entity has incurred or could incur any liability in respect of a
Former Plan.
3.15 Investment Company Act; Other Regulations. Neither the Parent, the
Company nor any Subsidiary of the Company is an "investment company", or a
company "controlled" by an "investment company" required to register as such
under the Investment Company Act of 1940, as amended, within the meaning of such
act. Neither the Parent, the Company nor any Subsidiary is subject to regulation
under any Federal or State statute or regulation (other than Regulation X of the
Board of Governors of the Federal Reserve System) which limits its ability to
incur Indebtedness.
3.16 [Intentionally Omitted.]
3.17 Environmental Matters. Other than exceptions to any of the following
that would not, individually or in the aggregate, reasonably be expected to
result in the payment of a Material Environmental Amount:
(a) the facilities and properties owned, leased or operated by each
of the Parent, the Company and the Subsidiaries of the Company (the
"Properties") do not contain any Materials of Environmental Concern in amounts
or concentrations which (i) constitute a violation of, or (ii) would reasonably
be expected to give rise to liability on the part of any of the Parent, the
Company and the Subsidiaries of the Company under, any applicable Environmental
Law.
(b) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, in all material
respects, with all applicable Environmental Laws, and there is no contamination
at, under or about
9
the Properties or violation of any applicable Environmental Law with respect to
the Properties or the business operated by the Parent, the Company and the
Subsidiaries of the Company (the "Business") which would materially interfere
with the continued operation of the Properties.
(c) neither the Parent, the Company nor any of the Subsidiaries of the
Company has received any written notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with applicable Environmental Laws with regard to any of the
Properties or the Business, nor does any of the Parent, the Company or the
Subsidiaries of the Company have knowledge or reason to believe that any such
notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, in violation of, or in a manner or to a
location which would reasonably be expected to give rise to liability on the
part of any of the Parent, the Company and the Subsidiaries of the Company
under, any applicable Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any of
the Properties, in violation of, or in a manner that would reasonably be
expected to give rise to liability on the part of the Parent, the Company and
the Subsidiaries of the Company under, any applicable Environmental Law.
(e) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of any of the Parent, the Company and the
Subsidiaries of the Company, threatened, under any applicable Environmental Law
to which any of the Parent, the Company and the Subsidiaries of the Company is
or will be named as a party with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any applicable Environmental Law with respect to the
Properties or the Business.
(f) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of any of the Parent, the Company and the Subsidiaries of the
Company in connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that would reasonably be
expected to give rise to liability on the part of any of the Parent, the Company
and the Subsidiaries of the Company under applicable Environmental Laws.
(g) none of the Parent, the Company and the Subsidiaries of the
Company has assumed or retained, by contract or, to its knowledge, operation of
law, any known or suspected liabilities of any kind, fixed or contingent, as a
result of any violation
10
or breach of applicable Environmental Law or with respect to any contamination
by any Materials of Environmental Concern.
3.18 Note Security Documents. Upon execution and delivery thereof by the
parties thereto, the Note Security Documents will be effective to create (to the
extent described therein) in favor of and for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral
described therein, (a) except as may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing and (b) subject to the terms of
the Intercreditor Agreement. When the actions specified in Schedule 7 to the
Guarantee and Collateral Agreement have been duly taken, the security interests
granted pursuant thereto shall constitute (to the extent described therein) a
perfected third priority lien on, and security interest in, all right, title and
interest of each pledgor party thereto in the Collateral described therein with
respect to such pledgor. Neither the Bank Agent nor the Lenders (as defined in
the Credit Agreement) have any security interests in or Liens on any assets of
the Note Financing Parties securing Bank Indebtedness other than the security
interests and Liens created pursuant to the Credit Documents (as defined in the
Credit Agreement as in effect on the date hereof), and no Bank Indebtedness
benefits from any Guarantee of any Subsidiary of the Company that has not
provided a Guarantee under the Guarantee and Collateral Agreement.
3.19 Disclosure. The factual statements contained in the financial
statements referred to in Section 3.4, the Note Financing Documents (including
the schedules thereto, but excluding any statements by the Investor) and any
other certificates or documents furnished by or on behalf of the Company or any
of its Subsidiaries to the Investor in connection with this Agreement, taken as
a whole, do not, and will not as of the Closing Date, to the best knowledge of
the Company, contain any material misstatement of fact or omit to state a
material fact necessary in order to make the statements contained therein, in
light of the circumstances in which the same were made, not materially
misleading in their presentation of the Transactions or the other transactions
contemplated hereby or by the other Transaction Agreements or of the Company and
its Subsidiaries taken as a whole; all except as otherwise qualified herein or
therein, and such knowledge qualification being given only with respect to
factual statements made by Persons other than the Company or any of its
Subsidiaries.
3.20 Solvency. Each of the Parent, the Company and the Subsidiaries of the
Company is Solvent.
3.21 Senior Indebtedness. The monetary obligations of the Company under
this Agreement and the Notes constitute "Senior Indebtedness" under and as
defined in the Senior Subordinated Note Indenture. The Guarantee Obligation
being made by the
11
Parent pursuant to the Guarantee and Collateral Agreement constitutes "Parent
Senior Indebtedness" under and as defined in the Senior Subordinated Note
Indenture.
Article IV
Representations and Warranties of the Investor
The Investor hereby represents and warrants as follows:
4.1 Experience. The Investor (a) acknowledges that the CD&R Barbados
Investment is by its nature one of high risk, (b) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the CD&R Barbados Investment, (c) has been furnished with
and has had access to such information as the Investor considers necessary to
make a determination as to the advisability of the CD&R Barbados Investment,
together with such additional information as is necessary to verify the accuracy
of the information supplied and (d) financially can afford to bear the economic
risk of holding the Notes and, if issued, the Warrants, for an indefinite period
and can afford to suffer the complete loss of each Purchase Price.
4.2 Investment Intent. The Investor will be acquiring the Notes and, if
issued, the Warrants, as well as the Common Stock issuable upon conversion of
the Notes and the exercise of the Warrants, for investment, for its own account,
and not with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act.
4.3 Notes, Warrants and Common Stock Not Registered.
(a) The Investor acknowledges and understands that the offering of
the Notes and the Warrants issuable upon the early redemption or repurchase of
the Notes pursuant to this Agreement and the Transaction Agreements has not been
and will not be registered under the Securities Act or qualified under any state
securities laws.
(b) The Investor acknowledges and understands that (i) the Notes must
be held until the earlier of their maturity, conversion, redemption or
repurchase, unless, prior to any such maturity, conversion, redemption or
repurchase, the Notes are registered under the Securities Act and qualified
under any applicable state securities laws or an exemption from such
registration and such qualification is available, (ii) the Warrants, if issued,
must be held until the earlier of their exercise or expiration, unless such
Warrants are, prior to such exercise or expiration, registered under the
Securities Act and qualified under any applicable state securities laws or an
exemption from such registration and such qualification is available and (iii)
the shares of Common Stock issuable upon the conversion or exercise, as
appropriate, of the Notes and Warrants must be held indefinitely unless such
shares of Common Stock are registered under the Securities Act
12
and qualified under any applicable state securities laws or an exemption from
such registration and such qualification is available.
(c) The Investor has been advised or is aware of the provisions of (i)
Rule 144 promulgated under the Securities Act, which permits limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions and (ii) Regulation S, promulgated under the Securities Act,
which permits limited resale of securities outside of the United States, and
that such Rule 144 and Regulation S may not become available for resale of the
Notes and Warrants.
Article V
Conditions to Each Closing
5.1 Conditions to Obligations of Each Party. The obligations of the
Parent, the Company and the Investor to consummate the transactions contemplated
by this Agreement and the other Transaction Agreements at each Closing shall be
subject to the satisfaction, or waiver by each such party, on or prior to the
Closing Date of the following conditions:
(a) No Injunction etc. Consummation of the transactions contemplated
by such Closing shall not have been restrained, enjoined or otherwise prohibited
or made illegal by any Requirement of Law, and no such Requirement of Law that
would have such an effect shall have been promulgated, entered, issued or
determined by any court or other Governmental Authority to be applicable to such
transactions. No action or proceeding shall be pending on the Closing Date
before any court or other Governmental Authority to restrain, enjoin or
otherwise prevent the consummation of such transactions, or to recover any
material damages or obtain other material relief as a result of such
transactions, or that otherwise relates to the application of any such
Requirement of Law.
(b) Government Approvals and Consents. All Consents of all
Governmental Authorities required to be made or obtained by any of the Parent,
the Company, the Investor and their respective Affiliates, including all
Consents to be obtained by the Company pursuant to the Credit Agreement, in
connection with the consummation of the transactions contemplated at such
Closing, shall have been made or obtained.
5.2 Conditions to Obligations of the Investor. The obligations of the
Investor to consummate the transactions contemplated by this Agreement and the
other Transaction Agreements at each Closing shall be subject to the
satisfaction, or waiver by the Investor, on or prior to the Closing Date of the
following conditions:
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(a) Representations and Warranties. The representations and
warranties of each Note Financing Party contained in Article III or any other
provision of this Agreement, or in any other Transaction Agreement, (i) shall be
true and correct in all material respects at and as of the date hereof (in the
case of this Agreement and the Guarantee and Collateral Agreement, giving effect
to the delivery of disclosure schedules in accordance with Sections 5.2(j) and
13.15) as if such schedules, had formed a part of each such respective
Transaction Agreement on the date hereof) and (ii) shall be true and correct in
all material respects at and as of each Closing as though made at and as of such
date (except to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall be
true and correct in all material respects, on and as of such earlier date).
(b) Performance of Agreements. Each Note Financing Party shall have in
all material respects duly performed and complied with all agreements, covenants
and conditions required by this Agreement or any other Transaction Agreement to
be performed or complied with by it prior to or on the Closing Date.
(c) Third Credit Agreement Amendment. The Third Credit Agreement
Amendment shall be effective and in full force and effect.
(d) Amendment No. 3 to Registration Rights Agreement. The Parent and
the Investor shall have entered into Amendment No. 3 to the Registration Rights
Agreement, which amendment shall be in the form of Exhibit C hereto, with such
changes therefrom, if any, as are satisfactory to the Investor.
(e) Guarantee and Collateral Agreement. Each Note Financing Party and
the Investor shall have entered into the Guarantee and Collateral Agreement,
which agreement shall be in the form of Exhibit D hereto, with such changes
therefrom, if any, as are satisfactory to the Investor.
(f) Actions to Perfect Liens. The Investor shall have received
evidence in form and substance reasonably satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on Form UCC-1, necessary or, in the
reasonable opinion of the Investor, reasonably desirable to perfect the Liens
created by the Note Security Documents shall have been completed.
(g) Lien Searches. The Investor shall have received the results of a
recent search by a Person satisfactory to the Investor, of the Uniform
Commercial Code, judgment and tax lien filings which may have been filed with
respect to personal property of the Parent, the Company and any Domestic
Subsidiary (including any Foreign Subsidiary Holdco) that is a Credit Party, and
the results of such search shall be reasonably satisfactory to the Investor.
14
(h) No Default. No Bank Default Event, no Senior Subordinated Default
Event, no Fund VI Default Event and no Default or Event of Default hereunder
shall have occurred and be continuing as of the Closing Date.
(i) Officer's Certificate. Each of the Parent and the Company shall
have delivered to the Investor a certificate, dated the Closing Date and signed
by an officer of the Parent or the Company, as appropriate, in form and
substance reasonably satisfactory to the Investor, to the effect set forth above
in Sections 5.2(a), 5.2(b), and 5.2(h).
(j) Disclosure Schedules. The Parent and the Company shall have
delivered to the Investor each of the Schedules to this Agreement and the
Guarantee and Collateral Agreement as required hereby and thereby, in form and
substance reasonably satisfactory to the Investor.
(k) Corporate and Other Proceedings. All corporate and other
proceedings of the Parent, the Company and the Subsidiaries of the Company in
connection with the transactions contemplated by this Agreement and the other
Transaction Agreements, and all documents and instruments incident thereto,
shall be satisfactory in form and substance to the Investor and its counsel, and
the Investor and its counsel shall have received all such documents and
instruments, or copies thereof, certified if requested, as may be reasonably
requested.
Article VI
The Convertible Notes; General Terms
6.1 Interest Accrual. Interest on each Note shall be computed on the basis
of a three hundred sixty (360) day year of twelve (12) thirty (30) day months,
and shall accrue on the unpaid principal amount of such Note from time to time
outstanding from and including the date thereof at the Specified Interest Rate
(the "Interest Rate"), in arrears, semi-annually on each March 31st and
September 30th (each, an "Interest Payment Date") of each year (commencing on
the later of March 31, 2003 and the Interest Payment Date next succeeding the
date of issuance of such Note) until the Principal Amount of such Note shall
have become due and payable. Any overdue installment of interest or payment of
any Principal Amount (the due date of such installment or payment to be
determined without giving effect to any grace period) shall be payable upon
demand and shall bear interest at a rate per annum equal to the lesser of (a)
the highest rate allowed by applicable law and (b) the Interest Rate plus two
percent (2%).
6.2 Payments.
(a) Interest Payments. The Company shall pay the accrued and unpaid
interest on the Notes on each Interest Payment Date, without any presentment of
the
15
Notes by the Holders thereof and without any notation of such payment being made
thereon. With respect to each Note, payments of accrued and unpaid interest
(each, an "Interest Payment") shall be made by the Company to the Holder of such
Note either (i) in cash or (ii), at the option of the Company, by the issuance
of an additional Note (A) in the form Exhibit A hereto, with such changes
therefrom, if any, as may be approved by the Company and the Holder, (B)
registered in the name of such Holder, (C) bearing interest from the relevant
Interest Payment Date at the Interest Rate equal to the Interest Rate applicable
to such Note, (D) having a face value equal to the amount of the Interest
Payment applicable to such Note, and (E) having the Conversion Rate equal to the
Conversion Rate applicable to such Note. In the event that an Interest Payment
is made by the Company through the issuance of an additional Note as provided in
the previous sentence, such Interest Payment shall be deemed paid in full and
shall not constitute an overdue installment of interest.
(b) Payment of Principal Upon Maturity. With respect to each Note, on
the Maturity Date, the Principal Amount of such Note shall become due and
payable and shall be paid by the Company, together with any accrued and unpaid
interest on such Note, to the Holder thereof in cash.
(c) Mechanism for Payments in Cash. Any cash payment required to be
made by the Company under this Article VI shall be made by wire transfer of
immediately available funds to an account designated in writing by the Holder to
whom such payment is due.
(d) Payment on Business Day Only. If any payment due on, or with
respect to, any Note shall fall due on a day other than a Business Day, then
such payment shall be made on the next succeeding Business Day following the day
on which such payment shall have so fallen due, without including the additional
days elapsed in the computation of the interest payable on such succeeding
Business Day.
6.3 Conversion.
(a) Subject to and upon compliance with the provisions of this Section
6.3, at the option of the Holder thereof, any Note may be converted into fully
paid and nonassessable shares (calculated as to each conversion to the nearest
1/100th of a share) of Common Stock at the Conversion Rate, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall commence on the initial issuance date of each Note and expire at the close
of business on the Maturity Date. In case a Note or portion thereof is called
for redemption at the election of the Company or the Holder thereof exercises
his right to require the Company to repurchase the Note following a Change of
Control, such conversion right in respect of the Note, or portion thereof so
called, shall expire at the close of business on the Business Day prior to the
Redemption Date or the Change of Control Payment Date, as the case may be,
unless the
16
Company defaults in making the payment due upon redemption or repurchase, as the
case may be. The rate at which shares of Common Stock shall be delivered upon
conversion of any particular Note (the "Conversion Rate") shall be the Specified
Conversion Rate for such Note. The Conversion Rate shall be adjusted in certain
instances as provided in this Section 6.3. (For the purposes of this Agreement,
an "increase" or "decrease" in the Conversion Rate means that the number of
shares of Common stock issuable upon conversion of each $1,000 of Principal
Amount of the Notes shall be increased or decreased, as appropriate.)
(b) Mechanics of Conversion.
(i) No fractional shares of Common Stock shall be issued upon
conversion of any Note. In lieu of any fractional shares of Common Stock
(or other property) to which a Holder would otherwise be entitled upon
conversion of any Note (or specified portion thereof), the Company shall
pay such Holder cash equal to such fraction multiplied by the Current
Market Price per share of Common Stock on the day of conversion.
(ii) Before any Holder of a Note shall be entitled to convert such
Note into Common Stock, such Holder shall surrender such Note, duly
endorsed in blank, to the Company at the principal executive office of the
Company (or any transfer agent designated by the Company), accompanied by
written notice to the Company (a copy of which shall also be delivered to
the Parent) stating therein (A) that such Holder elects to convert all or
a specified percentage (based on the Principal Amount and any accrued but
unpaid interest thereon) of such Note into shares of Common Stock in
accordance with this Agreement and (B) the name or names of the Person or
Persons which such Holder wishes the certificate or certificates evidencing
the Common Stock to be issued. The Company's or Parent's delivery to the
Holder (or its designee in the notice of conversion) of the number of
shares of Common Stock (and cash in lieu of fractions thereof) into which a
Note is convertible will be deemed to satisfy the Company's obligation to
pay the Principal Amount of (and accrued but unpaid interest on) the Note.
The Parent and the Company shall, as soon as practicable thereafter, (x)
issue and deliver to such Holder (or to his nominee or nominees) a
certificate or certificates representing the number of shares of Common
Stock to which such Holder shall be entitled as aforesaid, (y) deliver to
such Holder (or to his nominee or nominees) cash in lieu of any fractional
share and (z), if less than the full Principal Amount (and accrued but
unpaid interest) evidenced by such surrendered Note is being converted, a
new Note, duly executed and delivered by the Company, with a Principal
Amount equal to the Principal Amount of the Note surrendered for
conversion, plus any accrued but unpaid interest thereon, minus the portion
of such Principal Amount (and accrued but unpaid interest) converted to
shares Common Stock. A Note may be converted in part, but only if the
17
principal amount of such Note to be converted is any integral multiple of
$1,000 and the principal amount of such Note to remain outstanding after
such conversion is equal to $1,000 or any integral multiple of $1,000 in
excess thereof.
(iii) Any conversion made under this Agreement shall be deemed to have
been made immediately prior to the close of business on the date of
surrender of the Note to be converted, and at such time the rights of the
Holders of such Notes shall cease, and the Person or Persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for
all purposes by the Parent as the record holder or holders of such Common
Stock as of such date.
(c) Anti-Dilution Adjustments. The Conversion Rate shall be subject
to adjustments from time to time as follows:
(i) In case the Parent shall pay or make a dividend or other
distribution on shares of any class of capital stock payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on
the day following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be increased
by dividing such Conversion Rate by a fraction of which (x) the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and (y) the denominator
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following
the date fixed for such determination. If, after any such date fixed for
determination, any dividend or distribution is not in fact paid, the
Conversion Rate shall be immediately readjusted, effective as of the date
the Board of Directors determines not to pay such dividend or distribution,
to the Conversion Rate that would have been in effect if such determination
date had not been fixed. For the purposes of this Section 6.3(c)(i), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Parent but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of shares of
Common Stock.
(ii) In case the Parent shall issue rights, options or warrants to
all or substantially all holders of its Common Stock or to any other Person
(whether or not other holders of its Common Stock receive any such rights,
options or warrants) entitling them to subscribe for or purchase shares of
Common Stock, or securities convertible into shares of Common Stock, at a
price per share (such price per share, the "New Price Per Share") less than
the Current Market Price per share of the Common Stock on the date fixed
for the determination of stockholders entitled to receive such rights,
options or warrants or, in the case of any other issuance (an "Issuance"),
on the date of such Issuance (other than any
18
rights, options or warrants that by their terms will also be issued to any
Holder upon conversion of a Note into shares of Common Stock without any
action required by the Parent or any other Person), the Conversion Rate in
effect at the opening of business on the day following the date fixed for
such determination or the date of such Issuance, as the case may be, shall
be increased by dividing such Conversion Rate by a fraction of which (x)
the numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination or
immediately prior to such Issuance, as the case may be, plus the number of
shares of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and (y) the
denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination or
immediately prior to such Issuance, as the case may be, plus the number of
shares of Common Stock so offered for subscription or purchase, such
increase to become effective immediately after the opening of business on
the day following the date fixed for such determination or of such
Issuance, as the case may be. If, after any such date fixed for
determination or any Issuance, any such rights, options or warrants are not
in fact issued, or are not exercised, prior to the expiration thereof, the
Conversion Rate shall be immediately readjusted, effective as of the date
such rights, options or warrants expire, or the date the Board of Directors
of the Parent determines not to issue such rights, options or warrants, to
the Conversion Rate that would have been in effect if the unexercised
rights, options or warrants had never been granted or such determination
date had not been fixed, as the case may be. For the purposes of this
Section 6.3(c)(ii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock.
(iii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon which
such subdivision or combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(iv) In case the Parent shall, by dividend or otherwise, distribute
to all or substantially all holders of its Common Stock evidences of its
indebtedness,
19
shares of any class of capital stock or other property (including cash or
assets or securities, but excluding (A) any rights, options or warrants
referred to in Section 6.3(c)(ii) and any other rights, options or warrants
that by their terms will also be issued to any Holder upon conversion of a
Note into shares of Common Stock without any action required by the Parent
or any other Person, (B) any dividend or distribution referred to in
Section 6.3(c)(i) and (C) mergers or consolidations to which Section 6.3(i)
applies), the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which (x) the numerator shall be the Current Market Price per
share of the Common Stock on the date fixed for such determination less the
then fair market value (as determined by the Board of Directors of the
Parent) of the portion of the assets, shares or evidences of indebtedness
so distributed applicable to one share of Common Stock and (y) the
denominator shall be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening
of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. If after any such date
fixed for determination, any such distribution is not in fact made, the
Conversion Rate shall be immediately readjusted, effective as of the date
the Board of Directors of the Parent determines not to make such
distribution, to the Conversion Rate that would have been in effect if such
determination date had not been fixed.
(v) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or
merger to which Section 6.3(i) applies) shall be deemed to involve (A) a
distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and "the date fixed for such determination"
within the meaning of Section 6.3(c)(iv)), and (B) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective," as the case may be, and "the day upon which
such subdivision or combination becomes effective" within the meaning of
Section 6.3(c)(iii).
(vi) In the case the Parent shall issue or sell any shares of New
Common Stock (other than pursuant to securities referred to in Section
6.3(c)(ii)) for consideration per share (such price per share, the "New
Issue Price") less than
20
the Current Market Price per share of Common Stock, then and in such event,
the Conversion Rate shall be increased by dividing such Conversion Rate by
a fraction of which (x) the numerator shall be the number of shares of
Common Stock outstanding immediately prior to such issuance or sale plus
the number of shares of Common Stock which the aggregate of the purchase
price of the total number of shares of Common Stock so issued or sold would
purchase at such Current Market Price and (y) the denominator shall be the
number of shares of Common Stock outstanding immediately prior to such
issuance or sale plus the number of shares of Common Stock so issued or
sold, such increase to become effective immediately after the consummation
of such issuance or sale.
(vii) For purposes of this Agreement, the term "`ex' date," when used
with respect to any issuance or distribution, means the first date on which
the Common Stock trades the regular way in the applicable securities market
or on the applicable securities exchange without the right to receive such
issuance or distribution.
(viii) The Parent may make such increases in the Conversion Rate, for
the remaining term of the Notes or any shorter term, in addition to those
required by paragraphs (i), (ii), (iii), (iv), (v), and (vi) of this
Section 6.3(c), as it considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of Common Stock resulting
from any dividend or distribution of stock or issuance of rights or
warrants to purchase or subscribe for stock or from any event treated as
such for income tax purposes. The Parent shall have the power to resolve
any ambiguity or correct any error in this paragraph (viii) and its actions
in so doing shall, absent manifest error, be final and conclusive.
(ix) Notwithstanding the provisions of Section 6.3(c)(iv), in the
event that the then fair market value (as so determined) of the portion of
the shares of capital stock, evidences of indebtedness, cash or other
assets, including securities so distributed applicable to one share of
Common Stock is equal to or greater than the Current Market Price per share
of the Common Stock, then, in lieu of the adjustments provided for by
Section 6.3(c)(iv), as the case may be, adequate provision shall be made so
that each Holder shall have the right to receive upon conversion of a Note
(or any portion thereof) the amount of shares of capital stock, evidences
of indebtedness, cash or other assets, including securities, such Holder
would have received had such Holder converted such Note (or portion
thereof) immediately prior to the date fixed for such determination.
Notwithstanding the foregoing, the issuance of Notes or Warrants pursuant
to this Agreement shall not cause any anti-dilution adjustments to be made to
any other Notes or Warrants previously issued pursuant to this Agreement.
21
(d) Notice of Adjustments of Conversion Rate. Whenever the
Conversion Rate is adjusted as herein provided the Parent shall compute the
adjusted Conversion Rate in accordance with Section 6.3(c) and shall prepare a
certificate signed by a Responsible Officer setting forth the adjusted
Conversion Rate and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall promptly be provided to the
Holder.
(e) Notice of Certain Corporate Action. In case:
(i) the Parent shall declare a dividend (or any other distribution)
on its Common Stock; or
(ii) the Parent shall authorize the granting to all or substantially
all of the holders of its Common Stock of, or otherwise authorize the
issuance to any other Person, rights, options or warrants to subscribe for
or purchase any shares of capital stock of any class or of any other
rights; or
(iii) the Parent shall subdivide the outstanding shares of Common
Stock into a greater number of shares; or
(iv) the Parent shall distribute, by dividend or otherwise, to all or
substantially all of the holders of Common Stock evidences of its
indebtedness, shares of any class of capital stock or other property
(including, without limitation, cash, assets or securities), subject to the
exceptions set forth on Section 6.3(c)(iv); or
(v) of any reclassification of the Common Stock, or of any
consolidation, merger or share exchange to which the Parent is a party and
for which approval of any stockholders of the Parent is required, or of the
conveyance, sale, transfer or lease of all or substantially all of the
assets of the Parent; or
(vi) of the voluntary or involuntary dissolution, liquidation or
winding up of the Parent;
then the Parent shall provide to all Holders, at least twenty (20) days (or ten
(10) days in any case specified in clause (i) or (ii) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights, options or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled
22
to exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up. Neither the
failure to give such notice or the notice referred to in the next sentence nor
any defect therein shall affect the legality or validity of the proceedings
described in clauses (i) through (vi) of this Section 6.3(e). The Parent shall
provide to all Holders notice of any tender offer by the Company or any of its
Subsidiaries for all or any portion of the Common Stock at or about the time
that such notice of tender offer is provided to the public generally.
(f) Company to Reserve Common Stock. The Parent shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock (including treasury stock), for the purpose of
effecting the conversion of Notes, the full number of shares of Common Stock
then issuable upon the conversion of all then outstanding Notes.
(g) Taxes on Conversions. Except as provided in the next sentence,
the Parent will pay any and all taxes and duties that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Notes
pursuant hereto. The Parent shall not, however, be required to pay any tax or
duty which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Note or Notes to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the Parent the
amount of any such tax or duty, or has established to the satisfaction of the
Parent that such tax or duty has been paid.
(h) Covenants as to Common Stock and Distribution in Respect
Thereof.
(i) The Parent agrees that all shares of Common Stock that may be
delivered upon conversion of Notes, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable and,
except as provided in Section 6.3(g), the Parent will pay all taxes, liens
and charges with respect to the issue thereof.
(ii) The Parent will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Parent.
(iii) The Parent will not issue any rights, options or warrants in
respect of shares of Common Stock held in the treasury of the Parent.
(i) Provision in Case of Consolidation, Merger or Sale of Assets. In
case of any consolidation or merger of the Parent with or into any other Person
or any merger of another Person with or into the Parent (in either case, other
than a merger
23
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Parent) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Parent, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to each Holder an agreement providing that the Holder of each Note then
outstanding shall have the right thereafter, during the period such Note shall
be convertible as specified in this Section 6.3, to convert such Note only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by a holder of the
number of shares of Common Stock of the Parent into which such Note might have
been converted immediately prior to such consolidation, merger, conveyance,
sale, transfer or lease, assuming such holder of Common Stock (x) is not (A) a
Person with which the Parent consolidated or merged with or into or which merged
into or with the Parent or to which such conveyance, sale, transfer or lease was
made, as the case may be (a "Constituent Person"), or (B) an Affiliate of a
Constituent Person and (y) failed to exercise his or her rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance, sale, transfer or lease (provided
that if the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance, sale, transfer, or lease is not the
same for each share of Common Stock held immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 6.3(i) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale, transfer
or lease by the holders of each Non-electing Share shall be deemed to be the
kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such agreement shall provide for adjustments which, for events
subsequent to the effective date of such agreement, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
6.3. The above provisions of this Section 6.3(i) shall similarly apply to
successive consolidations, mergers, conveyances, sales, transfers or leases.
(j) Rights Issued in Respect of Common Stock. Rights, options or
warrants distributed by the Parent to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Parent's capital
stock (either initially or under certain circumstances), which rights or
warrants, until the occurrence of a specified event or events (each, a "Trigger
Event"):
(i) are deemed to be transferred with such shares of Common Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of Common Stock
24
shall not be deemed distributed for purposes of this Section 6.3 until the
occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with respect thereto,
that shall have resulted in an adjustment to the Conversion Rate under this
Section 6.3, (A) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(B) in the case of any such rights or warrants all of which shall have expired
without exercise by any holder thereof, the Conversion Rate shall be readjusted
as if such issuance had not occurred.
(k) Conversion Rights Subject to Stockholder Vote. If, pursuant to
any Requirement of Law or rule or regulation of any securities exchange or
national securities quotation service, the stockholders of the Parent are
required to approve the issuance of shares of Common Stock issuable upon
conversion of the Notes under this Agreement, no Note may be converted until
such issuance upon conversion has been so approved at the next annual meeting of
the Parent's stockholders following the Closing Date or otherwise. At any time
prior to such approval, upon the written request of Holders of Notes holding, at
any time, eighty percent (80%) of the aggregate Principal Amount of the Notes
outstanding at such time, the Parent, at its own expense and as soon as
practicable following such request, shall seek the written consent or approval
of its stockholders to such issuance upon conversion of the Notes, prepare and
file with the SEC an information statement relating to such stockholder approval
and take all other actions as are necessary or advisable under any Requirement
of Law or otherwise in respect of the issuance of Common Stock upon conversion
of the Notes.
6.4 Optional Redemption.
(a) The Company may, at its option, redeem (each, an "Optional
Redemption") the Notes at any time, in whole or in part, without penalty or
premium, in a minimum aggregate Principal Amount of $1,000,000 (or, if the
aggregate outstanding principal amount of the Notes is less than $1,000,000 at
such time, then such Principal Amount) and in integral multiples of $1,000,000,
in each case for a redemption price equal to the aggregate Principal Amount of
the Notes so redeemed, together with accrued but unpaid interest on such
Principal Amount to the date of redemption (the "Redemption Date"), without
penalty or premium.
(b) If the Company undertakes an Optional Redemption in accordance
with this Section 6.4, notice (a "Redemption Notice") shall be given by the
Company, at its own expense, to each Holder of Notes to be redeemed. The
Redemption Notice shall
25
be sent by first class mail, postage prepaid, to such Holder's address appearing
in the Note Register, by the Company not less than thirty (30) nor more than
sixty (60) days prior to the expected Redemption Date. The Redemption Notice
shall state:
(i) the expected Redemption Date;
(ii) that such redemption is an Optional Redemption made pursuant to
this Section 6.4;
(iii) the Principal Amount of each Note to be redeemed plus the amount
of the interest to be paid on each such Note, accrued to the Redemption
Date (the Principal Amount plus accrued but unpaid interest thereon, the
"Redemption Price");
(iv) the place where or manner in which the Notes to be redeemed are
to be surrendered to the Company for payment; and
(c) In the case of any partial Optional Redemption, selection of the
Notes for redemption will be made not more than sixty (60) days prior to the
Redemption Date by the Company on a pro rata basis, by lot or by such other
method as the Company in its sole discretion shall deem to be fair and
appropriate, although no Note of $1,000 in Principal Amount or less will be
redeemed in part.
(d) If a Redemption Notice has been given in accordance with this
Section 6.4, such Notes (or the portions thereof to be redeemed) shall, on the
Redemption Date, become due and payable at the Redemption Price and from and
after such date (unless the Company defaults in the payment of the Redemption
Price) such Notes (or the portions thereof to be redeemed) shall cease to bear
interest. Upon surrender of such Notes for redemption in accordance with such
Redemption Notice, such Notes (or the portions thereof to be redeemed) shall be
paid by the Company at the Redemption Price. If any Note (or portion thereof)
called for redemption shall not be so paid upon surrender thereof for
redemption, such Note shall, until paid, bear interest from the Redemption Date
at the Interest Rate.
(e) If any Note is duly surrendered by its Holder for redemption
only in part, following the consummation of such redemption, the Company shall
execute and deliver to such Holder, without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
Principal Amount of the Note so surrendered.
6.5 Mandatory Offer to Repurchase Upon Change of Control.
(a) In the event of the obtaining of actual knowledge of a Change of
Control Notice Event, the Company will, within three (3) Business Days after the
26
occurrence of such event, give notice of such Change of Control Notice Event to
each Holder of Notes. Each such notice shall (i) be dated the date of the
sending of such notice; (ii) refer to this Section 6.5; and (iii) specify, in
reasonable detail, the nature and date of the Change of Control Notice Event.
(b) In the event of a Change of Control, the Company will, within
three (3) Business Days after the occurrence of such event (or, in the case of
any Change of Control the consummation or finalization of which would involve
any action of the Company, at least thirty (30) days prior to such Change of
Control), give notice of such Change of Control to each Holder of Notes. Such
notice shall contain an irrevocable separate offer by the Company to each Holder
of Notes to repurchase all, but not less than all, of the Notes held by such
Holder, in each case for a purchase price equal to the aggregate Principal
Amount of Notes so repurchased, together with accrued but unpaid interest on
such Principal Amount to the date of repurchase, without penalty or premium.
Such payment shall occur on a date (the "Change of Control Payment Date")
specified in such notice that is not less than thirty (30) days and not more
than forty-five (45) days after the date of such notice. Each such notice shall:
(i) be dated the date of the sending of such notice;
(ii) specify, in reasonable detail, the nature and date of the Change
of Control;
(iii) specify the Change of Control Payment Date;
(iv) specify the Principal Amount of each Note outstanding;
(v) specify the interest that will be due on each Note offered to be
repurchased, accrued to the Change of Control Payment Date;
(vi) certify that the conditions of this Section 6.5 have been
fulfilled; and
(vii) state that a failure to respond to the notice shall be deemed to
be an acceptance of such offer.
If the Company shall not have received a written response to such notice from
any Holder of Notes within ten (10) days after the date of posting of such
notice to such Holder of Notes, then the Company shall immediately send a second
notice to each such Holder of Notes.
(c) In the event that the Company makes a repurchase offer to the
Holders of the Notes in accordance with subsection (b) of this Section 6.5, but
at the time such offer is made the terms of any Bank Indebtedness restrict or
prohibit such
27
repurchase of Notes, then prior to the mailing of a notice to Holders in
accordance with subsection (b) of this Section 6.5, but in any event not later
than thirty (30) days following the date of any Change of Control (unless the
Company has exercised its right to redeem all the Notes under Section 6.4 or has
repurchased all the Notes under Section 6.6), the Company shall (i) repay in
full all such Bank Indebtedness (if otherwise permitted hereby) or (ii) if no
other action is required by the terms of such Bank Indebtedness, offer to repay
in full all such Bank Indebtedness and repay the Bank Indebtedness of each
holder thereof who has accepted such offer or (iii) obtain the requisite consent
under the agreements governing such Bank Indebtedness to permit the repurchase
of Notes as provided for in this Section 6.5.
(d) To accept such repurchase offer, a Holder of Notes shall either
(i) cause a notice of such acceptance to be delivered to the Company not later
than thirty (30) days after the date of receipt by such Holder of the written
offer of such repurchase or (ii) unless such Holder subsequently delivers a
written notice of rejection to the Company, fail to respond to such written
offer of repurchase within such period of thirty (30) days. To reject such offer
such Holder of Notes shall deliver a written notice of rejection of such offer.
If accepted, such offered repurchase shall be due and payable on the Change of
Control Payment Date.
(e) The obligation of the Company to purchase Notes pursuant to the
offers required by Section 6.5(b) and accepted in accordance with Section 6.5(d)
is subject to the occurrence of the Change of Control in respect of which such
offers and acceptances shall have been made. In the event that such Change of
Control does not occur prior to the Change of Control Payment Date in respect
thereof, such purchase shall be deferred until and shall be made on the date on
which such Change of Control occurs or, if the Company determines that efforts
to effect such Change of Control have ceased or have been abandoned, then such
offer, acceptances and obligation to purchase shall be deemed to have been
rescinded. The Company shall keep each Holder of Notes reasonably and timely
informed of (i) any such deferral of the date of purchase; (ii) the date on
which such Change of Control and the purchase are expected to occur; and (iii)
any determination by the Company that efforts to effect such Change of Control
have ceased or been abandoned.
(f) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 6.5. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 6.5, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 6.5 by virtue
thereof.
28
6.6 Mandatory Offer to Repurchase CD&R Barbados Notes Upon Disposition of
Assets.
(a) For purposes of this Section 6.6(a), the term "Mandatory 6.6(a)
Repurchase Event" shall mean:
(i) any sale, transfer or other disposition by the Company or any of
its Subsidiaries of any real or personal, tangible or intangible, property
of the Company or such Subsidiary (including, without limitation, any
Capital Stock of a Subsidiary of the Company) to any Person (other than to
the Company or any of its Restricted Subsidiaries) that is either (x) not
permitted under the Credit Agreement as in effect on the Closing Date
(giving effect to the Third Credit Agreement Amendment) but has been
consented to by the requisite lenders under the Credit Agreement, or (y) is
permitted under, but is subject to any mandatory prepayment requirement of,
the Credit Agreement, or
(ii) the recovery by the Company or any of its Subsidiaries of amounts
owing to it under property insurance policies if the Company and its
Subsidiaries have not commenced replacement of the property on account of
which such amounts were paid within one year of the later of the date of
the casualty to, or condemnation of, such property or the receipt of such
Net Proceeds.
If, on any date during the Adjustment Period, the Company or any of its
Subsidiaries shall receive Net Proceeds from any Mandatory 6.6(a) Repurchase
Event, the Company shall give notice thereof to the Investor and any other
member of the CD&R Group that is a Holder. Such notice shall contain an
irrevocable separate offer by the Company to repurchase each such Holder's CD&R
Barbados Notes on the applicable Mandatory Repurchase Date (subject to prorating
as described in Section 6.6(d)), for a purchase price equal to the Principal
Amount of Notes so repurchased (plus accrued and unpaid interest on the
Principal Amount thereof so repurchased to the date of repurchase). The
aggregate purchase price to be so applied to repurchase CD&R Barbados Notes
(excluding accrued and unpaid interest) shall be equal to (x) the aggregate
amount of such Net Proceeds not previously applied to permanently prepay Bank
Indebtedness under the Credit Agreement minus (y) the aggregate amount of such
Net Proceeds required to be applied to repurchase Fund VI Notes pursuant to
Section 6.6(a) of the Fund VI Investment Agreement minus (z) the Reinvested
Amount related thereto; provided, however, that in no event shall the aggregate
amount of all Reinvested Amounts subtracted from such Net Proceeds received in
connection with asset dispositions described in clause (i) of the definition of
"Mandatory 6.6(a) Repurchase Event" exceed $10,000,000 in any fiscal year of the
Company.
(b) For purposes of this Section 6.6(b), the term "Mandatory 6.6(b)
Repurchase Event" shall mean:
29
(i) the sale, transfer or other disposition by the Company or any of
its Subsidiaries of any real or personal, tangible or intangible, property
of the Company or such Subsidiary (including, without limitation, any
Capital Stock of a Subsidiary of the Company) to any Person (other than to
the Company or any of its Restricted Subsidiaries) that is either (x) not
permitted under the Credit Agreement (as in effect prior to giving effect
to the Second Credit Agreement Amendment) but has been consented to by the
requisite lenders under the Credit Agreement, or (y) is permitted under,
but is subject to any mandatory prepayment requirement of, the Credit
Agreement, or
(ii) the recovery by the Company or any of its Subsidiaries of amounts
owing to it under property insurance policies if the Company and its
Subsidiaries have not commenced replacement of the property on account of
which such amounts were paid within one year of the later of the date of
the casualty to, or condemnation of, such property or the receipt of such
Net Proceeds.
If, on any date other than during the Adjustment Period, the Company or any of
its Subsidiaries shall receive Net Proceeds from any Mandatory 6.6(b) Repurchase
Event, the Company shall give notice thereof to the Investor and any other
member of the CD&R Group that is a Holder. Such notice shall contain an
irrevocable separate offer by the Company to repurchase each such Holder's CD&R
Barbados Notes on the applicable Mandatory Repurchase Date (subject to prorating
as described in Section 6.6(d)), for a purchase price equal to the Principal
Amount of Notes so repurchased (plus accrued and unpaid interest on the
Principal Amount thereof so repurchased to the date of repurchase). The
aggregate purchase price to be so applied to repurchase CD&R Barbados Notes
(excluding accrued and unpaid interest) shall be equal to (x) the aggregate
amount of such Net Proceeds not previously applied to permanently prepay Bank
Indebtedness under the Credit Agreement minus (y) the aggregate amount of such
Net Proceeds required to be applied to repurchase Fund VI Notes pursuant to
Section 6.6(a) of the Fund VI Investment Agreement minus (z) the Reinvested
Amount related thereto; provided that, notwithstanding the foregoing, any such
repurchase of CD&R Barbados Notes shall only be required upon any such sale,
transfer, other disposition or recovery (A) described in subsections 14.5(h),
(j) or (k) of the Credit Agreement (as in effect prior to giving effect to the
Second Credit Agreement Amendment), to the extent the Net Proceeds received
therefrom, when aggregated with the Net Proceeds received from all such sales,
transfers, other dispositions or recoveries in the immediately preceding
twelve-month period and minus all applicable Reinvested Amounts relating to all
such Net Proceeds, exceed $5,000,000 or (B) described in subsection 14.5(f) of
the Credit Agreement (as in effect prior to giving effect to the Second Credit
Agreement Amendment), to the extent the Net Proceeds received from any one such
sale and minus the applicable Reinvested Amounts relating to such Net Proceeds
exceeds $5,000,000 or to the extent that Net Proceeds received therefrom, when
aggregated with the Net Proceeds received from all
30
such sales and minus all applicable Reinvested Amounts relating to all such Net
Proceeds, exceed $10,000,000.
(c) Any notice of the Company's offer to repurchase CD&R Barbados
Notes given pursuant to this Section 6.6 shall be given as promptly as
practicable (and in any event, within three (3) Business Days) following the
date of receipt of any such Net Proceeds (except that if any such Net Proceeds
are eligible to be reinvested in accordance with the definition of "Reinvested
Amount" in Section 6.6(e) and the Company has not elected to reinvest such
proceeds, such notice shall be given on the earlier of (i) the date on which the
certificate of a Responsible Officer of the Company to such effect is delivered
to the Investor in accordance with such definition and (ii) the last day of the
period within which a certificate setting forth such election is required to be
delivered in accordance with such definition). If the Company shall not have
received a written response to such notice from any Holder of CD&R Barbados
Notes within ten (10) days after the date of posting of such notice to such
Holder, then the Company shall immediately send a second notice to such Holder.
(d) To accept a repurchase offer under this Section 6.6, a Holder of
CD&R Barbados Notes shall cause a notice of such acceptance to be delivered to
the Company not later than thirty (30) days after the date of receipt by such
Holder of the written offer of such repurchase. If accepted, such offered
repurchase shall be due and payable on the applicable Mandatory Repurchase Date
or, if later, five (5) Business Days after the date of delivery of such notice
of acceptance to the Company. If, upon the expiration of the period for which a
repurchase offer under this Section 6.6 remains open, the aggregate Principal
Amount of the CD&R Barbados Notes surrendered by Holders exceeds the amount of
Net Proceeds available for payment, the Company will select the CD&R Barbados
Notes to be purchased on a pro rata basis.
(e) As used in this Section 6.6, the following terms shall have the
following meanings:
"Adjustment Period" means the period from the date of this Agreement to the
first date on or after June 30, 2003 on which no Bank Default Event has occurred
and is continuing.
"Mandatory Repurchase Date" means a date specified in a notice given
pursuant to this Section 6.6 of an offer to repurchase CD&R Barbados Notes that
is not later than ten (10) Business Days after the date of such notice (or if no
date is so specified, the date that is ten (10) Business Days after the date
such notice is issued).
"Net Proceeds" means, with respect to any of the events referred to in this
Section 6.6 and the defined terms used herein, (a) the gross cash consideration,
and all cash proceeds (as and when received) of non-cash consideration
(including, without limitation,
31
any such cash proceeds in the nature of principal and interest payments on
account of promissory notes or similar obligations), received by the Company and
its Subsidiaries in connection with such event, minus (b) the sum, without
duplication, of (i) any taxes reasonably estimated to be payable to any federal,
state, local or foreign taxing authority by the Parent and its Subsidiaries as a
result thereof, (ii) the amount of fees and commissions (including reasonable
investment banking fees, legal, accounting, consulting, survey, title and
recording tax expenses and other costs and expenses) actually incurred in
connection with such event which are paid or payable by the Company and its
Subsidiaries, (iii) the amount of such net cash proceeds which are attributable
to (and payable to) minority interests, (iv) the amount of any reserve
reasonably maintained by the Company and its Subsidiaries with respect to
indemnification obligations owing pursuant to the definitive documentation
pursuant to which such event is consummated (with any unused portion of such
reserve to constitute Net Proceeds on the date upon which the indemnification
obligations terminate or such reserve is reduced other than in connection with a
payment), (v) the amount of Indebtedness (other than intercompany Indebtedness)
of any Person, or secured by a Lien permitted hereunder on or that otherwise
relates to any asset, that is the subject of such event, if any, which is
required to be repaid at the time or as a result of such event out of the
proceeds thereof and (vi) with respect to the determination of Net Proceeds from
a sale or other disposition of property or assets referred to in this Section
6.6, appropriate amounts to be provided by the Company or any of its
Subsidiaries to be applied to satisfy any reasonable expenses and liabilities
associated with any such property or assets and retained by the Company or any
such Subsidiary after such sale or other disposition and other appropriate
amounts which shall be used by the Company or any of its Subsidiaries to
discharge or pay on a current basis any other reasonable expenses and
liabilities associated with such property or assets.
"Reinvested Amount" means, with respect to any sale, transfer or other
disposition of property or assets of the Company or any of its Subsidiaries or
any recovery of amounts under any property insurance policies, that portion of
the Net Proceeds thereof as shall, according to a certificate of a Responsible
Officer of the Company delivered to the Investor within thirty (30) days of such
sale or other disposition, be reinvested in the business of the Company and its
Subsidiaries in a manner consistent with the terms of this Agreement within
three hundred sixty (360) days of the receipt of such Net Proceeds or, if such
reinvestment is in a project authorized by the board of directors or comparable
body of the Company that will take longer than such three hundred sixty (360)
days to complete, the period of time necessary to complete such project (so long
as the Company or the relevant Subsidiary has committed to expend such portion
of the Net Proceeds within, and is diligently pursuing such project during, the
period of three hundred sixty (360) days from the receipt of such Net Proceeds);
provided that if any such certificate of a Responsible Officer is not delivered
to the Investor on the date of such sale or other disposition, any Net Proceeds
of such sale or other disposition shall be promptly (x) deposited in a cash
collateral account established in accordance
32
with the terms of the Credit Agreement, to the extent then required thereby (it
being understood in such case that the Administrative Agent is acting as bailee
for the Secured Parties pursuant to the terms of the Intercreditor Agreement),
or applied to prepay revolving credit borrowings under the Credit Agreement
pending delivery of such certificate, (y) deposited in a cash collateral account
established in accordance with the terms of the Fund VI Investment Agreement at
the Collateral Account Bank (as defined in the Fund VI Guaranty and Collateral
Agreement), to the extent then required thereby, or applied in accordance with
Section 6.6 of the Fund VI Investment Agreement pending delivery of such
certificate, or (z) deposited in a cash collateral account established at the
Collateral Account Bank (as defined in the Guaranty and Collateral Agreement) to
be held as collateral in favor of the Secured Parties on terms reasonably
satisfactory to the Secured Parties and shall remain on deposit in such cash
collateral account until such certificate of a Responsible Officer is (or is
required to be) delivered to the Investor or such Net Proceeds are required to
be applied in accordance with this Section 6.6.
(f) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 6.6. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 6.6, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 6.6 by virtue
thereof.
(g) The provisions of this Section 6.6 are in addition to and not in
limitation of the provisions of Section 8.4.
6.7 Issuance of Warrants Upon Early Redemption or Repurchase.
(a) Upon the consummation of any redemption or repurchase of Notes
prior to the Maturity Date (whether pursuant to any provision of this Article
VI, Section 8.4 or otherwise), the Parent shall, at its own expense, execute,
issue and deliver Warrants to the Holders of the Notes so redeemed or
repurchased as provided by this Section 6.7. With respect to each Holder
receiving Warrants under this Section 6.7, the Warrants shall (a) be
substantially in the form of Exhibit B hereto, with such changes as may be
reasonably requested by such Holder and approved by the Parent, (b) expire on
the Maturity Date, (c) have an initial exercise price, subject to adjustment in
accordance with the terms of the warrant, equal to the Conversion Price in
effect immediately prior to such repurchase or redemption, and (d) entitle its
Holder to purchase a number of shares of Common Stock (or other property) equal
to the number of shares of Common Stock (or other property) into which such
Holder's Notes were convertible immediately prior to their redemption or
repurchase. Each Holder entitled to receive Warrants under this Section 6.7
shall receive them in the form of a single warrant certificate (or such greater
number of warrant certificates in denominations of at least 1,000 shares as such
Holder
33
may request), delivered by the Parent to the registered address of such Holder
in the Register of Holders maintained by the Company in accordance with Section
6.8.
(b) If, pursuant to any Requirement of Law or rule or regulation of
any securities exchange or national securities quotation service, the
stockholders of the Parent are required to approve the issuance of shares of
Common Stock issuable upon exercise of the Warrants, no Warrant may be exercised
until such issuance upon exercise has been so approved in connection with the
stockholder approval of the issuance of Common Stock upon conversion of the
Notes as contemplated by Section 6.3(k). At any time prior to such approval,
upon the written request of holders of the Warrants, the Parent, at its own
expense and as soon as practicable following such request, shall obtain the
written consent of its stockholders to such issuance upon exercise of the
Warrants, prepare and file with the SEC an information statement relating to
such stockholder approval and take all other actions as are necessary or
advisable under any Requirement of Law or otherwise in respect of the issuance
of Common Stock upon exercise of the Warrants.
6.8 Register of Holders. The Company shall keep, or shall cause to be kept,
by a Transfer Agent for the Notes or otherwise, a register (the "Register of
Holders") for the registration and transfer of Notes, in which register the
Company shall record (a) the name, address and facsimile number of each Holder
(subject to change by such Holder in accordance with Section 13.1) and (b) the
details of each transfer of one or more Notes made in accordance with Section
6.9, including the name and address of each transferee of one or more Notes. The
Person in whose name any Note shall be properly registered shall be deemed and
treated as the owner and holder thereof for all purposes hereof, and the Company
shall not be affected by any notice or knowledge to the contrary, other than in
accordance with Section 6.9.
6.9 Exchange of Notes Upon Transfer. Upon surrender of any Note to the
Company (or the Transfer Agent for the Notes, if any), duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder or
such Holder's attorney duly authorized in writing, the Company shall execute and
deliver a new Note or Notes in exchange therefor, in an aggregate principal
amount equal to the unpaid Principal Amount of the surrendered Note. Each new
Note shall (i) be registered in the name of such Person as the Holder may
request, (ii) be (A) dated and bear interest from the date to which interest had
been paid on the surrendered Note or (B) dated the date of the surrendered Note
if no interest shall have been paid thereon and (iii) carry the same rights to
unpaid interest and interest to accrue that were carried by the surrendered
Note. Notes shall not be transferred in denominations of less than $1,000,000,
provided that a Holder may transfer its entire holding of Notes regardless of
the principal amount of such Notes. Each Holder may transfer any Note (or any
portion thereof) to any Person without the Company's consent, provided that any
such transfer of Notes by the Investor or any Holder that is a member of the
CD&R Group to any Person not a member of the CD&R Group shall cause the Liens
and Guarantees established with respect to such Transferred
34
Notes in accordance with the Guarantee and Collateral Agreement or any other
Note Security Documents to be irrevocably released, discharged and of no further
force or effect with respect to such Transferred Notes. The Company shall pay
the cost of executing, issuing and delivering the new Note or Notes to the home,
office or custodian bank of (or other location designated by) the Holder
thereof, insured to the reasonable satisfaction of such Holder. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any transfer of Notes.
6.10 Mutilated, Destroyed, Lost and Stolen Notes.
(a) If (i) any mutilated Note is surrendered to the Company, or the
Company receives evidence reasonably satisfactory to it of the destruction, loss
or theft of any Note and (ii), in the case of any destroyed, lost or stolen
Note, there is delivered to the Company such security or indemnity as may be
required to hold the Company harmless, then, in the absence of notice to the
Company that such Note has been acquired by a bona fide purchaser, the Company
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a new Note of like tenor and principal amount,
bearing a number not contemporaneously outstanding. The Company may require
payment of a sum sufficient to cover its reasonable expenses and any stamp tax
or governmental charge imposed in respect of such issuance of a new Note.
(b) Every new Note issued pursuant to this Section 6.10 in lieu of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Agreement and, as appropriate, the
other Transaction Agreements equally and ratably with any and all other duly
issued Notes.
(c) The provisions of this Section 6.10 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Article VII
Affirmative Covenants of the Company
The Company hereby agrees that, from and after the date hereof and until
the payment in full of the Principal Amount of the Notes, as well as any other
amount then due and owing under or with respect to the Notes, the Company shall
and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
7.1 Financial Statements. Furnish the following financial statements of
the Parent to each Holder, it being understood all such financial statements
shall be complete
35
and correct in all material respects and shall be prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by a Responsible
Officer of the Parent and disclosed therein, and except, in the case of
financial statements delivered pursuant to subsections (b) and (c), for the
absence of certain notes):
(a) as soon as available, but in any event within ninety (90) days
after the end of each fiscal year of the Parent, a copy of the consolidated
balance sheet of the Parent and its consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income, stockholders equity
and cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by PricewaterhouseCoopers or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than forty-five
(45) days after the end of each of the first three quarterly periods of each
fiscal year of the Parent, the unaudited consolidated balance sheet of the
Parent and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income, stockholders equity and
cash flows of the Parent and its consolidated Subsidiaries for such quarter and
the portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer of the Parent as being fairly stated in all material
respects (subject to normal year-end audit and other adjustments); and
(c) as soon as available, but in any event not later than forty-five
(45) days after the end of each calendar month, commencing with the month of
August, 2002, financial data for such month summarizing the results of
operations of the Parent and its consolidated Subsidiaries as at the end of such
month, certified by a Responsible Officer as being fairly stated in all material
respects.
7.2 Certificates; Other Information. Furnish to each Holder:
(a) concurrently with the delivery of the financial statements
referred to in subsection (a) of Section 7.1, a certificate of the independent
certified public accountants reporting on such financial statements stating
that, in making the audit necessary therefor, no knowledge was obtained of any
Default or Event of Default, insofar as the same relates to any financial
accounting matters covered by their audit, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections (a) and (b) of Section 7.1, a certificate of a
Responsible Officer stating that, to the best of such Responsible Officer's
knowledge, during such period (i) no
36
Subsidiary has been formed or acquired (or, if any such Subsidiary has been
formed or acquired, the Company has complied with the requirements of subsection
7.9 with respect thereto), (ii) neither the Company nor any other Note Financing
Party has changed its name, its principal place of business, its chief executive
office or the location of any material item of tangible Collateral without
complying with the requirements of this Agreement and the Note Security
Documents with respect thereto and (iii) to the best of such Responsible
Officer's knowledge, each of the Company and the other Note Financing Parties
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Note
Financing Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except, in each case as specified in such certificate;
(c) not later than sixty (60) days after the beginning of each fiscal
year of the Company, a copy of the projections by the Company of the operating
budget and cash flow budget of the Company and its Subsidiaries for such fiscal
year, such projections to be accompanied by a certificate of a Responsible
Officer to the effect that such Responsible Officer believes such projections
have been prepared on the basis of reasonable assumptions;
(d) within five (5) Business Days after the same are sent, copies of
all financial statements and reports which the Parent sends to its public
stockholders, and within five (5) Business Days after the same are filed, copies
of all financial statements and reports which the Parent or the Company may make
to, or file with, the SEC or any successor or analogous Governmental Authority;
(e) promptly, such additional financial and other information as any
Holder may from time to time reasonably request; and
(f) promptly, (x) any certificate of a Responsible Officer required
pursuant to the definition of "Consolidated Net Income" and (y) any additional
financial and other information provided to the Administrative Agent or any
lender or other party under the Credit Agreement, whether pursuant to the terms
of the Credit Agreement or upon the reasonable request of such party thereto.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the consolidated books of the Parent.
7.4 Conduct of Business and Maintenance of Existence. Continue to engage
in business of the same general type as the Company and its Subsidiaries now
conduct
37
and preserve, renew and keep in full force and effect the corporate existence of
the Company and its Subsidiaries and take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of the business of the Company and its Subsidiaries taken as a whole except as
otherwise permitted pursuant to Article IX; provided that the Company and its
Subsidiaries shall not be required to maintain any such rights, privileges or
franchises, or the corporate existence of such Subsidiary, if the failure to do
so would not reasonably be expected to have a Material Adverse Effect; and
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith would not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in the business of the Company and its Subsidiaries taken as a whole
in good working order and condition; maintain with financially sound and
reputable insurance companies insurance on all its property material to the
business of the Company and its Subsidiaries taken as a whole in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar business; and
furnish to each Holder, upon written request, full information as to the
insurance carried.
7.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, complete and correct entries in
conformity with all material Requirements of Law shall be made of all dealings
and transactions in relation to the business and activities of the Company and
its Subsidiaries; and permit representatives of any Holder, at any reasonable
time, upon reasonable notice, and as often as may reasonably be desired, to
visit and inspect any of the properties of the Company and its Subsidiaries and
examine and, to the extent reasonable, make abstracts from any of its books and
records and to discuss the business, operations, properties and financial and
other condition of the Company and its Subsidiaries with officers and employees
of the Company and its Subsidiaries and with the independent certified public
accountants of the Parent, in each case at the expense of the Company.
7.7 Notices. Promptly give notice (it being understood that each notice
provided pursuant to this Section 7.7 shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto) to
each Holder of:
(a) as soon as possible after any Responsible Officer knows, or
reasonably should know, of the occurrence of any Default or Event of Default;
(b) as soon as possible after any Responsible Officer knows or
reasonably should know thereof, (i) any (A) default or event of default under
any Contractual Obligation of the Company or any Subsidiary of the Company,
other than as
38
previously disclosed to the Holders, or (B) litigation, investigation or
proceeding which may exist at any time between the Parent, the Company or any
Subsidiary of the Company and any Governmental Authority, which in either case,
if not cured or if adversely determined, as the case may be, would reasonably be
expected to have a Material Adverse Effect, or (ii) any Bank Default Event or
Senior Subordinated Default Event;
(c) as soon as possible after any Responsible Officer knows or
reasonably should know thereof, any litigation or proceeding which has a
reasonable possibility of an adverse determination which would result in a
judgment against the Parent, the Company or any Subsidiary of the Company of
$5,000,000 or more and which is not covered by insurance, or in which injunctive
or similar relief is sought that would reasonably be expected to have a Material
Adverse Effect;
(d) the following events, as soon as possible and in any event
within thirty (30) days after any Responsible Officer knows or reasonably should
know thereof:
(i) the occurrence or expected occurrence of any Reportable Event
with respect to any Single Employer Plan (other than a Reportable Event
described in Section 4043(c)(9) of ERISA), a failure to make any required
contribution to a Single Employer Plan or Multiemployer Plan, the creation
of any Lien on the property of the Parent, the Company or any Subsidiary of
the Company in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan, if,
as a result thereof, the Parent, the Company or any Subsidiary of the
Company could reasonably be expected to incur any material liability;
(ii) the existence of an Underfunding under a Single Employer Plan
that exceeds ten percent (10%) of the value of the assets of such Single
Employer Plan, determined as of the most recent annual valuation date of
such Single Employer Plan on the basis of the actuarial assumptions used to
determine the funding requirements of such Single Employer Plan as of such
date;
(iii) the institution of proceedings or the taking of any other formal
action by the PBGC or the Parent, the Company, any Subsidiary of the
Company or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Single Employer Plan or Multiemployer Plan if, as a
result thereof, the Parent, the Company or any Subsidiary of the Company
could reasonably be expected to incur any material liability; or
(iv) the occurrence or expected occurrence of any event or condition
under which the Parent, the Company, any Subsidiary of the Company or any
39
Commonly Controlled Entity has incurred or could incur any liability in
respect of a Former Plan;
(e) as soon as possible after any Responsible Officer knows, and
except as would not, individually or in the aggregate, reasonably be expected to
result in the payment of a Material Environmental Amount, that:
(i) any Governmental Authority has identified the Parent, the
Company or any Subsidiary of the Company as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability
Act or any similar Environmental Law for the cleanup of Materials of
Environmental Concern at any location, whether or not owned, leased or
operated by the Parent, the Company or any Subsidiary of the Company;
(ii) any Governmental Authority may revoke any permit pursuant to
Environmental Law held by the Parent, the Company or any Subsidiary of the
Company, or deny or refuse to renew any such permit sought by the Parent,
the Company or any Subsidiary of the Company; or
(iii) any property owned, leased, or operated by the Parent, the
Company or any Subsidiary of the Company is being listed on, or proposed
for listing on, the National Priorities List or the Comprehensive
Environmental Response, Compensation and Liability Information System
maintained by the United States Environmental Protection Agency or any
similar list maintained by any Governmental Authority;
(f) as soon as possible after any Responsible Officer knows or
reasonably should know thereof, any development or event which has had or would
reasonably be expected to have a Material Adverse Effect; and
(g) as soon as possible after any Responsible Officer knows or
reasonably should know thereof, any "Termination" as defined in Section 11 of
the Intercreditor Agreement.
7.8 Environmental Laws.
(a) Comply substantially with all Environmental Laws applicable to
the Company and its Subsidiaries, and obtain, comply substantially with and
maintain any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws (collectively, "Environmental
Permits"); and
(b) take all reasonable efforts to ensure that all of its tenants,
subtenants, contractors, subcontractors and invitees comply substantially with
all Environmental Laws, and obtain, comply substantially with and maintain any
and all
40
Environmental Permits applicable to any of them insofar as any failure to so
comply, obtain or maintain reasonably would be expected to adversely affect the
Company or any of its Subsidiaries. For purposes of this Section 7.8,
noncompliance shall be deemed not to constitute a breach of this covenant,
provided that, upon learning of any actual or suspected noncompliance, the
Company or its Subsidiaries, as appropriate, shall in a timely manner undertake
all reasonable efforts to achieve substantial compliance, and provided, further,
that, in any case, such noncompliance, and any other such noncompliance with any
Environmental Law or Environmental Permit, individually or in the aggregate,
would not reasonably be expected to give rise to the payment of a Material
Environmental Amount.
7.9 Additional Collateral.
(a) With respect to any owned real property or fixtures located on
owned real property, in each case with a purchase price or a fair market value
of at least $1,000,000, in which the Company or any of its Subsidiaries acquires
ownership rights at any time after the date hereof, promptly grant to the
Secured Parties, a Lien of record on all such owned real property and fixtures,
upon terms reasonably satisfactory in form and substance to such Secured Parties
(it being understood that such Lien shall be subject to the Intercreditor
Agreement), and in accordance with any applicable requirements of any
Governmental Authority (including, without limitation, any appraisals of such
property under the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 which any Secured Party reasonably deems to be required by law),
provided that (i) nothing in this Section 7.9(a) shall defer or impair the
attachment or perfection of any security interest in any Collateral covered by
any of the Note Security Documents which would attach or be perfected pursuant
to the terms thereof without action by the Company, any of its Subsidiaries or
any other Person and (ii) no such Lien shall be required to be granted as
contemplated by this Section 7.9(a) on any owned real property or fixtures the
acquisition of which is financed as permitted by Section 8.1(b)(iv), until such
Indebtedness is repaid in full (and not refinanced as permitted by Section
8.1(b)(iv)) or, as the case may be, the Company or its Subsidiary determines not
to proceed with such financing or refinancing. In connection with any such grant
to the Secured Parties of a Lien of record on any such real property in
accordance with this Section 7.9(a), the Company or such Subsidiary shall
deliver or cause to be delivered to the Secured Parties any surveys, title
insurance policies, environmental reports and other documents in connection with
such grant of such Lien obtained by it in connection with the acquisition of
such ownership rights in such real property or as any Secured Party shall
reasonably request (in light of the value of such real property and the cost and
availability of such surveys, title insurance policies, environmental reports
and other documents and whether the delivery of such surveys, title insurance
policies, environmental reports and other documents would be customary in
connection with such grant of such Lien in similar circumstances).
41
(b) With respect to any Person that, subsequent to the date hereof,
becomes a Domestic Subsidiary or Foreign Subsidiary Holdco (other than to the
extent that compliance with this Section 7.9(b) would have an adverse tax
consequence to the Company), promptly upon the request of any Secured Party:
(i) (A) execute and deliver, or cause to be executed and delivered,
to the Investor, for the benefit of the Secured Parties, a new pledge
agreement or such amendments to the Guarantee and Collateral Agreement as
any Secured Party shall reasonably deem necessary or reasonably advisable
to grant to the Secured Parties a Lien on the Capital Stock of such
Subsidiary which is owned by the Company or any of its Domestic
Subsidiaries (provided that in no event shall more than sixty-five percent
(65%) of the Capital Stock of any Foreign Subsidiary Holdco be required to
be so pledged; and it being understood that such Lien shall be subject to
the Intercreditor Agreement) and (B) (subject to the terms of the Guarantee
and Collateral Agreement) deliver to the Secured Parties the certificates
(if any) representing such Capital Stock, together with undated stock
powers executed and delivered in blank by a duly authorized officer of the
Company or such Subsidiary, as the case may be; and
(ii) cause any such new Domestic Subsidiary (A) to become a party to
the Guarantee and Collateral Agreement, in each case pursuant to
documentation which is in form and substance reasonably satisfactory to the
Secured Parties, and (B) to take all actions reasonably deemed by any
Secured Party to be necessary or reasonably advisable to cause the Lien
created by the Guarantee and Collateral Agreement to be duly perfected in
accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may
be reasonably requested by any Secured Party.
(c) With respect to any Person that, subsequent to the date hereof,
becomes a Foreign Subsidiary (other than a Foreign Subsidiary Holdco) and which
has Capital Stock that is owned directly by the Company or a Domestic Subsidiary
(other than Acterna WG) and with respect to any Foreign Subsidiary of Acterna WG
that, subsequent to the date hereof, becomes a direct Subsidiary of the Company
or of a Domestic Subsidiary (other than Acterna WG), promptly, upon the request
of any Secured Party, (i) execute and deliver to the Secured Parties a new
Foreign Pledge Agreement or such amendments to the relevant Foreign Pledge
Agreement or the Guarantee and Collateral Agreement as any Secured Party shall
reasonably deem necessary or reasonably advisable to grant to the Secured
Parties a Lien on the Capital Stock of such Foreign Subsidiary that is owned
directly by the Company or any of its Domestic Subsidiaries (other than Acterna
WG) (provided that in no event shall more than sixty-five percent (65%) of the
Capital Stock of any such Subsidiary be required to be so pledged; and it being
understood that such Lien shall be subject to the Intercreditor Agreement) and
(ii) to the extent deemed advisable by any Secured Party (subject to the
42
terms of the Guarantee and Collateral Agreement) deliver to the Secured Parties
the certificates (if any) representing such Capital Stock, together with undated
stock powers executed and delivered in blank by a duly authorized officer of the
Company or such Subsidiary, as the case may be.
(d) Notwithstanding anything to the contrary contained herein, the
Company and its Subsidiaries shall not be required to (x) make the
representations and warranties set forth in Section 4 of the Guarantee and
Collateral Agreement or Sections 3.2, 3.6 or 3.18 of this Agreement or (y)
comply with the covenants set forth in Sections 5.2.1, 5.2.2, 5.2.4, 5.2.6,
5.2.7, 5.2.8, 5.2.9(b), 5.2.10, 5.2.11, 5.3.1, 5.3.2(iii), 5.3.3 or 6.7 of the
Guarantee and Collateral Agreement with respect to any Inactive Subsidiary or
any property or assets thereof so long as such Subsidiary is an Inactive
Subsidiary, and the exclusions of Inactive Subsidiaries from representations and
warranties and covenants described in this clause (ii) shall be given effect by
appropriate modifications (which shall be reasonably acceptable to each Secured
Party and the Company) to the assumption agreement entered into by the Inactive
Subsidiaries pursuant to Section 8.15 of the Guarantee and Collateral Agreement.
(e) Comply with subsection 14.15 of the Credit Agreement (entitled
Limitation on Inactive Subsidiaries) as in effect on the Closing Date.
7.10 Liens. If after the date hereof, the Company or any of its
Subsidiaries creates or suffers to exist a Lien on any of their respective
properties or assets securing any Bank Indebtedness, then the Company shall, and
shall cause each such Subsidiary to, create a Lien on such property or assets
securing the CD&R Barbados Notes pursuant to the Guarantee and Collateral
Agreement (or, if requested by any Secured Party, one or more other Note
Security Documents in form and substance reasonably satisfactory to the Secured
Parties and substantially equivalent to one or more security documents in
respect of such Bank Indebtedness), which Lien securing the CD&R Barbados Notes
shall be on terms no less favorable to the Holders thereof than the terms of
such Lien securing such Bank Indebtedness, shall be to the holders of such Bank
Indebtedness (it being understood that such Lien securing the CD&R Barbados
Notes shall be subject to the Intercreditor Agreement).
7.11 Note Guarantors.
(a) From and after the date hereof, the Company will cause each
Subsidiary that Guarantees payment of any Bank Indebtedness to execute and
deliver to each Holder of CD&R Barbados Notes an instrument pursuant to which
such Subsidiary will Guarantee payment of the CD&R Barbados Notes pursuant to
the Guarantee and Collateral Agreement (or, if requested by any Secured Party,
one or more other Note Security Documents in form and substance reasonably
satisfactory to the Secured
43
Parties), whereupon such Subsidiary will become a Note Guarantor for all
purposes under this Agreement.
(b) From and after the date hereof, the Parent shall Guarantee
payment of the Transferred Notes in accordance with the terms of Annex A hereto.
From and after the date hereof, the Company will cause each Domestic Subsidiary
that is a Significant Subsidiary and that Guarantees Indebtedness of the Company
(other than Bank Indebtedness), to execute and deliver to each Holder of
Transferred Notes an instrument pursuant to which such Subsidiary will Guarantee
payment of the Transferred Notes in accordance with the terms of Annex A hereto,
whereupon such Subsidiary will become a Note Guarantor in respect of the
Transferred Notes for all purposes under this Agreement, provided, however, each
such Guarantee in respect of a Transferred Note (a "Springing Guarantee") by a
Domestic Significant Subsidiary (a "Significant Subsidiary Guarantor") will be
subject to termination and discharge under the following circumstances: Each
Significant Subsidiary Guarantor will automatically and unconditionally be
released from all obligations under its Springing Guarantee, and such Springing
Guarantee shall thereupon terminate and be discharged and of no further force or
effect, (i) concurrently with any sale or disposition (by merger or otherwise)
in accordance with the terms of this Agreement of any Significant Subsidiary
Guarantor or any interest therein by the Company or a Restricted Subsidiary,
following which such Significant Subsidiary Guarantor is no longer a Restricted
Subsidiary of the Company for the purposes of this Agreement and with respect to
the Notes, (ii) pursuant to the terms of its Springing Guarantee, (iii) at any
time that such Significant Subsidiary Guarantor is released from all of its
obligations under all of its Springing Guarantees of payment of Indebtedness
(other than Bank Indebtedness) of the Company, (iv) upon the merger or
consolidation of any Significant Subsidiary Guarantor with and into the Company
or another Significant Subsidiary Guarantor that is the surviving Person in such
merger or consolidation and (v) upon payment in full of the aggregate principal
amount of all Transferred Notes then outstanding and all other Guaranteed
Obligations in respect of Transferred Notes then due and owing. Upon any such
occurrence specified in the preceding sentence, each Holder of Transferred Notes
shall execute any documents reasonably required in order to evidence such
release, discharge and termination of such Significant Subsidiary Guarantee (at
the expense of the Company).
Article VIII
Negative Covenants of the Company
The Company hereby agrees that, from and after the date hereof and until
payment in full of the Principal Amount of the Notes, as well as any other
amount then due and owing under or with respect to the Notes:
44
8.1 Limitation on Indebtedness.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, Incur any Indebtedness, provided, however, that the Company or
any Note Guarantor Subsidiary may Incur Indebtedness if on the date of the
Incurrence of such Indebtedness, after giving effect to the Incurrence thereof,
the Consolidated Coverage Ratio would be greater than 2.00:1.00.
(b) Notwithstanding subsection (a) of this Section 8.1, the Company
and its Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred pursuant to the Credit Facility (including
but not limited to in respect of letters of credit or bankers' acceptances
issued or created thereunder) and Indebtedness of any Foreign Subsidiary
that is a Restricted Subsidiary Incurred other than under the Credit
Facility, and (without limiting the foregoing), in each case, any
Refinancing Indebtedness in respect thereof, in a maximum principal amount
at any time outstanding not exceeding in the aggregate the amount equal to
(A) $410,000,000, plus (B) the amount, if any, by which the Borrowing Base
exceeds $110,000,000, plus (C) in the case of any refinancing of the Credit
Facility or any portion thereof, the aggregate amount of fees, underwriting
discounts, premiums and other costs and expenses incurred in connection
with such refinancing;
(ii) Indebtedness (A) of any Restricted Subsidiary to the Company or
(B) of the Company or any Restricted Subsidiary to any Restricted
Subsidiary, provided, that any subsequent issuance or transfer of any
Capital Stock of such Restricted Subsidiary to which such Indebtedness is
owed, or other event, that results in such Restricted Subsidiary ceasing to
be a Restricted Subsidiary or any other subsequent transfer of such
Indebtedness (except to the Company or a Restricted Subsidiary) will be
deemed, in each case, an Incurrence of such Indebtedness by the issuer
thereof;
(iii) Indebtedness represented by the Notes, any Indebtedness
represented by the Fund VI Notes, any Indebtedness represented by the
Senior Subordinated Notes, any Indebtedness outstanding on the date hereof
that was initially Incurred in accordance with Section 406(a) of the Senior
Subordinated Note Indenture, and any Refinancing Indebtedness Incurred in
respect of any Indebtedness described in this clause (iii) or subsection
(a) of this Section 8.1;
(iv) Purchase Money Obligations and Capitalized Lease Obligations,
and any Refinancing Indebtedness with respect thereto, in an aggregate
principal amount at any time outstanding not exceeding an amount equal to
ten percent (10%) of Consolidated Total Assets at any time outstanding;
45
(v) Indebtedness of any Foreign Subsidiary that is a Restricted
Subsidiary Incurred for working capital purposes;
(vi) (A) Guarantees by the Company or any Restricted Subsidiary of
Indebtedness or any other obligation or liability of the Company or any
Restricted Subsidiary (other than any Indebtedness incurred by the Company
or such Restricted Subsidiary, as the case may be, in violation of this
Section 8.1) or (B) Indebtedness of the Company or any Restricted
Subsidiary arising by reason of any Lien granted by or applicable to such
Person securing Indebtedness of the Company or any Restricted Subsidiary
(other than any Indebtedness incurred by the Company or such Restricted
Subsidiary, as the case may be, in violation of this Section 8.1);
(vii) Indebtedness of the Company or any Restricted Subsidiary (A)
arising from the honoring of a check, draft or similar instrument of such
Person drawn against insufficient funds, provided that such Indebtedness is
extinguished within five (5) Business Days of its incurrence, or (B)
consisting of guarantees, indemnities, obligations in respect of earnouts
or other purchase price adjustments, or similar obligations, Incurred in
connection with the acquisition or disposition of any business, assets or
Person;
(viii) Indebtedness of the Company or any Restricted Subsidiary in
respect of (A) letters of credit, bankers' acceptances or other similar
instruments or obligations issued, or relating to liabilities or
obligations incurred, in the ordinary course of business (including those
issued to any governmental entity in connection with self-insurance under
applicable workers' compensation statutes), or (B) completion guarantees,
surety, judgment, appeal or performance bonds, or other similar bonds,
instruments or obligations, provided, or relating to liabilities or
obligations incurred, in the ordinary course of business, or (C) Hedging
Obligations entered into for bona fide hedging purposes in the ordinary
course of business, or (D) Management Guarantees, or (E) the financing of
insurance premiums in the ordinary course of business;
(ix) Indebtedness of a Receivables Subsidiary secured by a Lien on
all or part of the assets disposed of in, or otherwise incurred in
connection with, a Financing Disposition;
(x) Indebtedness of any Person that is assumed by the Company or
any Restricted Subsidiary in connection with its acquisition of assets from
such Person or any Affiliate thereof or is issued and outstanding on or
prior to the date on which such Person was acquired by the Company or any
Restricted Subsidiary or merged or consolidated with or into any Restricted
Subsidiary (other than Indebtedness Incurred to finance, or otherwise in
connection with, such
46
acquisition), provided that on the date of such acquisition, merger or
consolidation, after giving effect thereto, (A) with respect to any such
Indebtedness of the Company or any Note Guarantor Subsidiary, (1) the
Company could Incur at least $1.00 of additional Indebtedness pursuant to
paragraph (a) of this Section 8.1 or (2) the Consolidated Coverage Ratio is
greater than it was on such date immediately prior to giving effect to such
acquisition and (B) with respect to any such Indebtedness of any Restricted
Subsidiary that is a not a Note Guarantor Subsidiary, the Company could
Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a)
of this Section 8.1; and any Refinancing Indebtedness with respect to any
such Indebtedness;
(xi) Indebtedness of the Company or any Restricted Subsidiary in an
amount at any time outstanding not exceeding twice the amount of Excluded
Contributions made after May 21, 1998, provided that the proceeds of such
Indebtedness and the related amount of such Excluded Contributions are used
to finance the acquisition of assets of any Person in a Related Business or
the merger or consolidation of such a Person into or with the Company or
any Restricted Subsidiary (including but not limited to payment of any
related fees and expenses) or to refinance any such acquisition, merger or
consolidation with such Indebtedness being Incurred for such refinancing
within nine (9) months of the closing of such acquisition, merger or
consolidation; and any Refinancing Indebtedness with respect to any such
Indebtedness; and
(xii) Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount at any time outstanding not exceeding an amount
equal to (a) twenty percent (20%) of Consolidated Total Assets minus (b)
the lesser of (x) $75.0 million and (y) the aggregate Principal Amount (as
defined in the Fund VI Investment Agreement) of Fund VI Notes outstanding
at any time minus (c) the lesser of (x) the aggregate Principal Amount of
the Notes purchased from time to time by the Investor through the exercise
of the Investment Right and (y) the aggregate Principal Amount of the Notes
outstanding at any time.
(c) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this Section 8.1, (i) any other obligation of the obligor on
such Indebtedness (or of any other Person who could have Incurred such
Indebtedness under this Section 8.1) arising under any Guarantee, Lien or letter
of credit, bankers' acceptance or other similar instrument or obligation
supporting such Indebtedness shall be disregarded to the extent that such
Guarantee, Lien or letter of credit, bankers' acceptance or other similar
instrument or obligation secures the principal amount of such Indebtedness; (ii)
in the event that Indebtedness meets the criteria of more than one of the types
of Indebtedness described in paragraph (b) of this Section 8.1, the Company, in
its sole discretion, shall classify such item of Indebtedness and only be
required to include the amount and type of
47
such Indebtedness in one of such clauses and (iii) the amount of Indebtedness
issued at a price that is less than the principal amount thereof shall be equal
to the amount of the liability in respect thereof determined in accordance with
GAAP.
(d) For purposes of determining compliance with any United States
dollar-denominated restriction on the Incurrence of Indebtedness denominated in
a foreign currency, the United States dollar-equivalent principal amount of such
Indebtedness Incurred pursuant thereto shall be calculated based on the relevant
currency exchange rate in effect on the date that such Indebtedness was
Incurred, in the case of term Indebtedness, or first committed, in the case of
revolving credit Indebtedness, provided that (i) the United States
dollar-equivalent principal amount of any such Indebtedness outstanding on May
21, 1998 shall be calculated based on the relevant currency exchange rate in
effect on May 21, 1998, (ii) if such Indebtedness is Incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would cause
the applicable United States dollar-denominated restriction to be exceeded if
calculated at the relevant currency exchange rate in effect on the date of such
refinancing, such United States dollar-denominated restriction shall be deemed
not to have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced and (iii) the United States dollar-equivalent principal amount of
Indebtedness denominated in a foreign currency and Incurred pursuant to the
Credit Agreement shall be calculated based on the relevant currency exchange
rate in effect on, at the Company's option, (x) May 21, 1998, (y) any date on
which any of the respective commitments under the Credit Agreement shall be
reallocated between or among facilities or subfacilities thereunder, or on which
such rate is otherwise calculated for any purpose thereunder, or (z) the date of
such Incurrence. The principal amount of any Indebtedness Incurred to refinance
other Indebtedness, if Incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such respective Indebtedness is
denominated that is in effect on the date of such refinancing.
(e) The Company shall not Incur any Indebtedness that is subordinated
in right of payment to any other Indebtedness of the Company, unless such
Indebtedness so Incurred is subordinated in right of payment to the Notes on
terms no less favorable to the Holders than the terms on which it is
subordinated to such other Indebtedness. No Note Guarantor shall Incur any
Indebtedness that is subordinated in right of payment to any other Indebtedness
of such Note Guarantor, unless such Indebtedness so Incurred is subordinated in
right of payment to any Note Guarantee of such Note Guarantor on terms no less
favorable to the Holders than the terms on which it is subordinated to such
other Indebtedness.
48
8.2 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to (i) declare or pay any dividend or make
any distribution on or in respect of its Capital Stock (including any such
payment in connection with any merger or consolidation to which the Company is a
party) except (A) dividends or distributions payable solely in its Capital Stock
(other than Disqualified Stock) and (B) dividends or distributions payable to
the Company or any Restricted Subsidiary (and, in the case of any such
Restricted Subsidiary making such dividend or distribution, to other holders of
its Capital Stock on no more than a pro rata basis, measured by value); (ii)
purchase, redeem, retire or otherwise acquire for value any Capital Stock of the
Company held by Persons other than the Company or a Restricted Subsidiary; (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment, any Subordinated Obligations (other than a purchase, redemption,
defeasance or other acquisition or retirement for value in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of such acquisition or retirement);
or (iv) make any Investment (other than a Permitted Investment) in any Person
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition or retirement or Investment being herein referred to as a
"Restricted Payment"), if at the time the Company or such Restricted Subsidiary
makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company could not incur at least an additional $1.00 of
Indebtedness pursuant to paragraph (a) of Section 8.1; or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
as determined in good faith by the Board of Directors, whose determination
shall be conclusive) declared or made subsequent to May 21, 1998 and then
outstanding would exceed the sum of:
(A) fifty percent (50%) of the Consolidated Net Income accrued
during the period (treated as one accounting period) from March 31,
1998 to the end of the most recent fiscal quarter ending prior to the
date of such Restricted Payment for which consolidated financial
statements of the Company are available (or, in case such Consolidated
Net Income shall be a negative number, one-hundred percent (100%) of
such negative number);
49
(B) the aggregate Net Cash Proceeds, and fair value (as
determined in good faith by the Board of Directors) of property or
assets, received (x) by the Company as capital contributions to the
Company after May 21, 1998 or from the issuance or sale (other than to
a Restricted Subsidiary) of its Capital Stock (other than Disqualified
Stock) after the Closing Date (other than Excluded Contributions) or
(y) by the Company or any Restricted Subsidiary from the issuance and
sale by the Company or any Restricted Subsidiary after May 21, 1998 of
Indebtedness that shall have been converted into or exchanged for
Capital Stock of the Company (other than Disqualified Stock), plus the
amount of cash, property or assets (determined as provided above)
received by the Company or any Restricted Subsidiary upon such
conversion or exchange;
(C) the aggregate amount equal to the net reduction since May 21,
1998 in Investments in Unrestricted Subsidiaries resulting from (x)
dividends, distributions, interest payments, return of capital,
repayments of Investments or other transfers of assets to the Company
or any Restricted Subsidiary from any Unrestricted Subsidiary, or (y)
the redesignation of any Unrestricted Subsidiary as a Restricted
Subsidiary (valued in each case as provided in the definition of
"Investment"), not to exceed in the case of any such Unrestricted
Subsidiary the aggregate amount of Investments (other than Permitted
Investments) made by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary after May 21, 1998; and
(D) in the case of any disposition or repayment since May 21,
1998 of any Investment constituting a Restricted Payment (without
duplication of any amount deducted in calculating the amount of
Investments at any time outstanding included in the amount of
Restricted Payments), an amount in the aggregate equal to the lesser
of the return of capital, repayment or other proceeds with respect to
all such Investments and the initial amount of all such Investments.
(b) The provisions of subsection (a) of this Section 8.2 will not
prohibit any of the following (each, a "Permitted Payment"):
(i) any purchase, redemption, repurchase, defeasance or other
acquisition or retirement of Capital Stock of the Company or Subordinated
Obligations made by exchange (including any such exchange pursuant to the
exercise of a conversion right or privilege in connection with which cash
is paid in lieu of the issuance of fractional shares) for, or out of the
proceeds of the substantially concurrent issuance or sale of, Capital Stock
of the Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a
50
Subsidiary) or a substantially concurrent capital contribution to the
Company, provided, that the Net Cash Proceeds from any such issuance, sale
or capital contribution since May 21, 1998 shall be excluded in subsequent
calculations under subsection (a) of this Section 8.2;
(ii) any purchase, redemption, repurchase, defeasance or other
acquisition or retirement of Subordinated Obligations (A) made by exchange
for, or out of the proceeds of the substantially concurrent issuance or
sale of, Indebtedness of the Company or Refinancing Indebtedness Incurred
in compliance with Section 8.1, (B) from Net Available Cash to the extent
permitted by Section 8.4 or (C) to the extent required by the agreement
governing such Subordinated Obligations, following the occurrence of a
Change of Control (or other similar event described therein as a "change of
control"), but only if the Company shall have repurchased all Notes
surrendered for repurchase pursuant to Sections 6.5, 6.6 and 8.4 prior to
purchasing or repaying such Subordinated Obligations;
(iii) dividends paid within sixty (60) days after the date of
declaration thereof if at such date of declaration such dividend would have
complied with the subsection (a) of this Section 8.2;
(iv) Investments or other Restricted Payments in an aggregate amount
outstanding at any time not to exceed the amount of Excluded Contributions,
provided that such Excluded Contributions shall not include any Excluded
Contribution the proceeds of which were used to finance the acquisition of
assets from any Person in a Related Business or the merger or consolidation
of such a Person into or with the Company or any Restricted Subsidiary
pursuant to clause (xi) of subsection (b) of Section 8.1 (or, prior to the
date hereof, pursuant to clause (xi) of paragraph (b) of Section 406 of the
Senior Subordinated Note Indenture);
(v) loans, advances, dividends or distributions by the Company to
the Parent to permit the Parent to repurchase or otherwise acquire its
Capital Stock (including any options, warrants or other rights in respect
thereof), or payments by the Company to repurchase or otherwise acquire
Capital Stock (including any options, warrants or other rights in respect
thereof), in each case from Management Investors, such payments, loans,
advances, dividends or distributions not to exceed an amount (net of
repayments of any such loans or advances) equal to (A) $25,000,000, plus
(B) $5,000,000 multiplied by the number of calendar years that have
commenced since May 21, 1998, plus the Net Cash Proceeds received by the
Company since May 21, 1998 from, or as a capital contribution from, the
issuance or sale to Management Investors of Capital Stock (including any
options, warrants or other rights in respect thereof), to the extent
51
such Net Cash Proceeds since May 21, 1998 are not included in any
calculation under clause (3)(B)(x) of subsection (a) of this Section 8.2;
(vi) the payment by the Company of, or loans, advances, dividends or
distributions by the Company to the Parent to pay, dividends on the common
stock or equity of the Company or the Parent following a public offering of
such common stock or equity, in an amount not to exceed in any fiscal year
six percent (6%) of the aggregate gross proceeds received by the Company in
or from such public offering;
(vii) Restricted Payments (including loans or advances) in an
aggregate amount outstanding at any time not to exceed $10,000,000 (net of
repayments of any such loans or advances); provided that any "Restricted
Payments" (as defined in the Senior Subordinated Note Indenture)
outstanding on the date hereof under clause (vii) of paragraph (b) of
Section 408 of the Senior Subordinated Note Indenture shall be deemed
outstanding on such date under this clause (vii);
(viii) loans, advances, dividends or distributions to the Parent or
other payments by the Company or any Restricted Subsidiary (A) to satisfy
or permit the Parent to satisfy obligations under the Management
Agreements, (B) pursuant to the Tax Sharing Agreement or (C) to pay or
permit the Parent to pay any Parent Expenses or any Related Taxes;
(ix) payments by the Company, or loans, advances, dividends or
distributions by the Company to the Parent to make payments, to holders of
Capital Stock of the Company or the Parent in lieu of issuance of
fractional shares of such Capital Stock, not to exceed $100,000 in the
aggregate outstanding at any time; and
(x) dividends or other distributions of Capital Stock, Indebtedness
or other securities of Unrestricted Subsidiaries.
provided that (A) in the case of clauses (iii), (vi), (vii) and (ix), the net
amount of any such Permitted Payment since May 21, 1998 shall be included in
subsequent calculations of the amount of Restricted Payments, (B) in the case of
clause (v), at the time of any calculation of the amount of Restricted Payments,
the net amount of Permitted Payments that have then actually been made under
clause (v) (or, prior to the date hereof, clause (v) of paragraph (b) of Section
408 of the Senior Subordinated Note Indenture) since May 21, 1998 that is in
excess of fifty percent (50%) of the total amount of Permitted Payments then
permitted under clause (v) shall be included in such calculation of the amount
of Restricted Payments, (C) in all cases other than pursuant to clauses (A) and
(B) immediately above, the net amount of any such Permitted Payment since May
21, 1998 shall be excluded in subsequent calculations of the amount of
Restricted Payments
52
and (D) solely with respect to clause (vii), no Default or Event of Default
(and, prior to the date hereof, no Senior Subordinated Default Event) shall have
occurred or be continuing at the time of any such Permitted Payment after giving
effect thereto.
8.3 Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (x) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company, (y) make
any loans or advances to the Company or (z) transfer any of its property or
assets to the Company, except any encumbrance or restriction:
(a) pursuant to an agreement or instrument in effect at or entered
into on the date hereof (including, without limitation, the Credit Agreement,
the Senior Subordinated Note Indenture, the Fund VI Investment Agreement and
this Agreement);
(b) pursuant to any agreement or instrument of a Person, or relating
to Indebtedness or Capital Stock of a Person, which Person is acquired by or
merged or consolidated with or into the Company or any Restricted Subsidiary, or
which agreement or instrument is assumed by the Company or any Restricted
Subsidiary in connection with an acquisition of assets from such Person, as in
effect at the time of such acquisition, merger or consolidation (except to the
extent that such Indebtedness was incurred to finance, or otherwise in
connection with, such acquisition, merger or consolidation), provided that for
purposes of this clause (b), if another Person is the Successor Company, any
Subsidiary thereof or agreement or instrument of such Person or any such
Subsidiary shall be deemed acquired or assumed, as the case may be, by the
Company or a Restricted Subsidiary, as the case may be, when such Person becomes
the Successor Company;
(c) pursuant to an agreement or instrument (a "Refinancing
Agreement") effecting a refinancing of Indebtedness Incurred pursuant to, or
that otherwise extends, renews, refunds, refinances or replaces, an agreement or
instrument referred to in clause (a) or (b) of this Section 8.3 or this clause
(c) (an "Initial Agreement") or contained in any amendment, supplement or other
modification to an Initial Agreement (an "Amendment"), provided, however, that
the encumbrances and restrictions contained in any such Refinancing Agreement or
Amendment are not materially less favorable to the Holders taken as a whole than
encumbrances and restrictions contained in the Initial Agreement or Initial
Agreements to which such Refinancing Agreement or Amendment relates (as
determined in good faith by the Company);
(d) (i) that restricts in a customary manner the subletting,
assignment or transfer of any property or asset that is subject to a lease,
license or similar contract, or
53
the assignment or transfer of any lease, license or other contract, (ii) by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by this Agreement, (iii) contained in
mortgages, pledges or other security agreements securing Indebtedness of a
Restricted Subsidiary to the extent restricting the transfer of the property or
assets subject thereto, (iv) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal easement
agreements of the Company or any Restricted Subsidiary, (v) pursuant to Purchase
Money Obligations that impose encumbrances or restrictions on the property or
assets so acquired, (vi) on cash or other deposits or net worth imposed by
customers under agreements entered into in the ordinary course of business,
(vii) pursuant to customary provisions contained in agreements and instruments
entered into in the ordinary course of business (including but not limited to
leases and joint venture and other similar agreements entered into in the
ordinary course of business) or (viii) that arises or is agreed to in the
ordinary course of business and does not detract from the value of property or
assets of the Company or any Restricted Subsidiary in any manner material to the
Company or such Restricted Subsidiary;
(e) with respect to a Restricted Subsidiary (or any of its property
or assets) imposed pursuant to an agreement entered into for the direct or
indirect sale or disposition of all or substantially all the Capital Stock or
assets of such Restricted Subsidiary (or the property or assets that are subject
to such restriction) pending the closing of such sale or disposition;
(f) required by any applicable law, rule, regulation or order or by
any regulatory authority having jurisdiction over the Company or any Restricted
Subsidiary or any of their businesses; or
(g) pursuant to an agreement or instrument (i) relating to any
Indebtedness permitted to be Incurred subsequent to the date hereof pursuant to
the provisions of Section 8.1 if the Company determines that such encumbrance or
restriction will not cause the Company not to have the funds necessary to pay
the principal of or interest on the Notes, (ii) relating to any sale of
receivables by a Foreign Subsidiary that is a Restricted Subsidiary or (iii)
relating to Indebtedness of or a Financing Disposition to or by any Receivables
Entity.
8.4 Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, make any Asset Disposition unless:
(i) the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming
responsibility
54
for, any liabilities, contingent or otherwise) at the time of such Asset
Disposition at least equal to the fair market value of the shares and
assets subject to such Asset Disposition, as such fair market value may be
determined (and shall be determined, to the extent such Asset Disposition
or any series of related Asset Dispositions involves aggregate
consideration in excess of $10,000,000) in good faith by the Board of
Directors, whose determination shall be conclusive (including as to the
value of all non-cash consideration);
(ii) in the case of any Asset Disposition (or series of related Asset
Dispositions) having a fair market value of $10,000,000 or more, at least
seventy-five percent (75%) of the consideration therefor (excluding, in the
case of an Asset Disposition (or series of related Asset Dispositions) of
assets, any consideration by way of relief from, or by any other Person
assuming responsibility for, any liabilities, contingent or otherwise, that
are not Indebtedness) received by the Company or such Restricted Subsidiary
is in the form of cash, and provided that this clause (ii) shall not apply
to any Asset Disposition (or series of related Asset Dispositions),
involving assets that accounted for less than two percent (2%) of
Consolidated EBITDA during the period of the most recent four (4)
consecutive fiscal quarters ending prior to the date of such Asset
Disposition for which consolidated financial statements of the Company are
available; and
(iii) an amount equal to one-hundred percent (100%) of the Net
Available Cash from such Asset Disposition is applied by the Company (or
any Restricted Subsidiary, as the case may be) as follows:
(A) first, either (1) to the extent the Company elects (or is
required by the provisions of this Agreement or the terms of the
Credit Agreement or of Indebtedness of a Restricted Subsidiary that is
not a Note Guarantor of any of the Notes), to prepay, repay or
purchase the Notes, the Fund VI Notes, the Bank Indebtedness under the
Credit Agreement or such Indebtedness of a Restricted Subsidiary (in
each case other than Indebtedness owed to the Company or a Restricted
Subsidiary) within 365 days after the date of such Asset Disposition
or (2) to the extent the Company or such Restricted Subsidiary elects,
to reinvest in Additional Assets (including by means of an investment
in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Company or another Restricted Subsidiary) within
365 days from the date of such Asset Disposition, or, if such
reinvestment in Additional Assets is a project that is authorized by
the Board of Directors that will take longer than such 365 days to
complete, the period of time necessary to complete such project;
55
(B) second, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A) above, to make an
offer to purchase the Notes pursuant and subject to the conditions of
this Section 8.4; and
(C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B) above,
to fund (to the extent consistent with any other applicable provision
of this Agreement) any general corporate purpose (including but not
limited to the repurchase, repayment or other acquisition or
retirement of any Subordinated Obligations to the extent otherwise
permitted hereby);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A)(1) or (B) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased.
(b) Notwithstanding the foregoing provisions of this Section 8.4, the
Company and the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section 8.4 except to the extent that the
aggregate Net Available Cash from all Asset Dispositions that is not applied in
accordance with this Section 8.4 exceeds $15,000,000, it being understood that
lesser amounts of Net Available Cash shall be carried forward for future
application in accordance with this Section 8.4.
(c) For the purposes of clause (ii) of the first paragraph of this
Section 8.4, the following are deemed to be cash: (i) Temporary Cash Investments
and Cash Equivalents, (ii) the assumption of Indebtedness of the Company (other
than Disqualified Stock of the Company) or any Restricted Subsidiary and the
release of the Company or such Restricted Subsidiary from all liability on
payment of the principal amount of such Indebtedness in connection with such
Asset Disposition, (iii) Indebtedness of any Restricted Subsidiary that is no
longer a Restricted Subsidiary as a result of such Asset Disposition, to the
extent that the Company and each other Restricted Subsidiary are released from
any Guarantee of payment of the principal amount of such Indebtedness in
connection with such Asset Disposition, (iv) securities received by the Company
or any Restricted Subsidiary from the transferee that are converted by the
Company or such Restricted Subsidiary into cash and (v) consideration consisting
of Indebtedness of the Company or any Restricted Subsidiary.
(d) In the event of an Asset Disposition that requires the purchase
of Notes pursuant to clause (iii)(B) of the first paragraph of this Section 8.4,
the Company will be required to purchase Notes tendered pursuant to an offer by
the Company for the
56
Notes (the "Offer") at a purchase price of 100% of their Principal Amounts plus
accrued and unpaid interest to the date of such purchase in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
paragraph (e) of this Section 8.4. If the aggregate purchase price of the Notes
tendered pursuant to the Offer is less than the Net Available Cash allotted to
the purchase of Notes, the remaining Net Available Cash will be available to the
Company for use in accordance with clause (iii)(C) of the subsection (a) of this
Section 8.4. The Company shall not be required to make an Offer for Notes
pursuant to this Section 8.4 if the Net Available Cash available therefor (after
application of the proceeds as provided in clause (iii)(A) of the first
paragraph of this Section 8.4) is less than $15,000,000 for any particular Asset
Disposition (which lesser amounts shall be carried forward for purposes of
determining whether an Offer is required with respect to the Net Available Cash
from any subsequent Asset Disposition).
(e) The Company will, not later than five (5) days after the Company
becomes obligated to make an Offer pursuant to this Section 8.4, mail a notice
to each Holder stating: (i) that an Asset Disposition that requires the purchase
of a portion of the Notes has occurred and that such Holder has the right
(subject to the prorating described below) to require the Company, to purchase a
portion of such Holder's Notes at a purchase price in cash equal to one hundred
percent (100%) of the Principal Amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase; (ii) the circumstances and relevant
facts and financial information regarding such Asset Disposition; (iii) the
repurchase date (which shall be no earlier than forty-five (45) days nor later
than sixty (60) days from the date such notice is mailed); (iv) the instructions
determined by the Company, consistent with this Section 8.4, that a Holder must
follow in order to have its Notes purchased; and (v) the amount of the Offer.
If, upon the expiration of the period for which the Offer remains open, the
aggregate Principal Amount of Notes surrendered by Holders exceeds the amount of
the Offer, the Company will select the Notes to be purchased on a pro rata
basis.
(f) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 8.4. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 8.4, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 8.4 by virtue
thereof.
(g) The provisions of this Section 8.4 are in addition to and not in
limitation of the provisions of Section 6.6.
57
8.5 Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into or conduct any transaction or
series of related transactions (including the purchase, sale, lease or exchange
of any property or the rendering of any service) with any Affiliate of the
Company (an "Affiliate Transaction") unless (i) the terms of such Affiliate
Transaction are not materially less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be obtained at the time in
a transaction with a Person who is not such an Affiliate and (ii), if such
Affiliate Transaction involves aggregate consideration in excess of $10,000,000,
the terms of such Affiliate Transaction have been approved by a majority of the
Disinterested Directors. For purposes of this paragraph, any Affiliate
Transaction shall be deemed to have satisfied the requirements set forth in this
paragraph if (x) such Affiliate Transaction is approved by a majority of the
Disinterested Directors or (y) in the event there are no Disinterested
Directors, a fairness opinion is provided by a nationally recognized appraisal
or investment banking firm with respect to such Affiliate Transaction.
(b) The provisions of the preceding subsection (a) of this Section
8.5 shall not apply to:
(i) any Restricted Payment Transaction;
(ii) (A) the entering into, maintaining or performance of any
employment contract, collective bargaining agreement, benefit plan, program
or arrangement, related trust agreement or any other similar arrangement
for or with any employee, officer or director heretofore or hereafter
entered into in the ordinary course of business, including vacation,
health, insurance, deferred compensation, severance, retirement, savings or
other similar plans, programs or arrangements, (B) the payment of
compensation, performance of indemnification or contribution obligations,
or any issuance, grant or award of stock, options, other equity-related
interests or other securities, to employees, officers or directors in the
ordinary course of business, (C) the payment of fees to directors of the
Company or any of its Subsidiaries, (D) any transaction with an officer or
director in the ordinary course of business not involving more than
$100,000 in any one case or (E) Management Advances and payments in respect
thereof;
(iii) any transaction with the Company, any Restricted Subsidiary, or
any Receivables Entity;
(iv) any transaction arising out of agreements or instruments in
existence on the date hereof, and any payments made pursuant thereto;
58
(v) the execution, delivery and performance of the Tax Sharing
Agreement and Management Agreements, including payment to CD&R or any
Affiliate of CD&R of fees of up to $1,000,000 in any fiscal year, plus all
out-of-pocket expenses incurred by CD&R or any such Affiliate in connection
with its performance of management consulting, monitoring, financial
advisory or other services with respect to the Company and its Restricted
Subsidiaries;
(vi) any transaction in the ordinary course of business on terms not
materially less favorable to the Company or the relevant Restricted
Subsidiary than those that could be obtained at the time in a transaction
with a Person who is not an Affiliate of the Company; and
(vii) any transaction in the ordinary course of business, or approved
by a majority of the Board of Directors, between the Company or any
Restricted Subsidiary and any Affiliate of the Company controlled by the
Company that is a joint venture or similar entity.
8.6 Limitation on Liens.
(a) Without the prior written consent of the Majority CD&R Barbados
Note Holders, so long as any CD&R Barbados Notes are outstanding, the Company
shall not, and shall not permit any Subsidiary to, directly or indirectly,
create or permit to exist any Lien upon any of its property or assets, whether
owned on the date of this Agreement or thereafter acquired, except for Permitted
Liens. Without in any way limiting the foregoing, in the event that the Company
or any of its Subsidiaries shall create or permit to exist any such Lien that is
not a Permitted Lien securing any liability or obligation, the Company shall,
and shall cause each such Subsidiary to, make effective provision to secure the
Indebtedness due under the CD&R Barbados Notes or, in respect of Liens on any
Subsidiary's property or assets, any Note Guarantee of such Subsidiary in
respect of the CD&R Barbados Notes, (i) equally and ratably with any such
liability or obligation that ranks pari passu in right of payment with the CD&R
Barbados Notes or (ii) prior to any such liability or obligation that is
subordinated in right of payment to the CD&R Barbados Notes.
(b) Without the prior written consent of the Majority Transferred
Note Holders, so long as any Transferred Notes are outstanding, the Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, create or permit to exist any Lien (other than Permitted Liens) on
any of its property or assets (including Capital Stock of any other Person),
whether owned on the date of this Agreement or thereafter acquired, securing any
Indebtedness of the Company or any Note Guarantor of the Transferred Notes (the
"Initial Lien"), unless contemporaneously therewith effective provision is made
to secure the Indebtedness due under the Transferred Notes or, in respect of
Liens on any Restricted Subsidiary's property or assets, any Note Guarantee of
59
such Restricted Subsidiary in respect of the Transferred Notes, (i) equally and
ratably with any such obligation that ranks pari passu in right of payment with
the Transferred Notes or (ii) prior to any such obligation that by its terms is
expressly subordinated in right of payment to the Transferred Notes, in each
case for so long as such obligation is so secured by such Initial Lien. Any such
Lien thereby created in favor of the Transferred Notes or any such Note
Guarantee will be automatically and unconditionally released and discharged upon
(i) the release and discharge of the Initial Lien to which it relates, or (ii)
any sale, exchange or transfer to any Person not an Affiliate of the Company of
the property or assets secured by such Initial Lien, or of all of the Capital
Stock held by the Company or any Restricted Subsidiary in, or all or
substantially all the assets of, any Restricted Subsidiary creating such Lien.
8.7 Limitation on Optional Payments and Modifications of Debt Instruments
and other Material Agreements. The Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
(a) make any optional payment, prepayment, repurchase or redemption of
the Senior Subordinated Notes or make any optional payments on account of
or for a sinking or other analogous fund for the repurchase, redemption,
defeasance or other acquisition thereof (other than (i) mandatory payments
of principal and interest and payments of, in each case, fees and expenses
required by the Senior Subordinated Notes or the Senior Subordinated Note
Indenture, only to the extent permitted under the subordination provisions,
if any, applicable thereto or (ii) pursuant to the Offers to Purchase);
(b) make any amendment, supplement, modification or waiver of any of
the terms of the Senior Subordinated Notes or the Senior Subordinated Note
Indenture which (i) amends or modifies the subordination provisions
contained in the Senior Subordinated Notes and the Senior Subordinated Note
Indenture, (ii) shortens the fixed maturity or increases the principal
amount of, or increases the rate or shortens the time of payment of
interest on, or increases the amount or shortens the time of payment of any
principal or premium payable whether at maturity, at a date fixed for
prepayment or by acceleration or otherwise of the Indebtedness evidenced by
the Senior Subordinated Notes or increases the amount of, or accelerates
the time of payment of, any fees or other amounts payable in connection
therewith to any holder of the Senior Subordinated Notes, (iii) relates to
any material affirmative or negative covenants or any events of default or
remedies under the Senior Subordinated Notes and the Senior Subordinated
Note Indenture, and the effect of which is to subject the Company, or any
of its Subsidiaries, to any more onerous or more restrictive provisions or
(iv) which otherwise adversely affects the interests of the Holders as
senior creditors with respect to the Senior Subordinated Notes or the
interests of the Holders hereunder in any material respect;
60
(c) in the event of the occurrence of a Change of Control, repurchase
the Senior Subordinated Notes, unless the Company shall have (i) made, or
caused to have been made, payment in full of the Notes and any other
amounts then due and owing to any Holder under the Notes or this Agreement
(including, without limitation, accrued but unpaid interest on the Notes)
or (ii) made, or caused to have been made, an offer to pay the Notes and
any amounts then due and owing to each Holder under the Notes or this
Agreement (including, without limitation, accrued but unpaid interest on
the Notes), or caused to have been made, payment in full thereof to each
such Holder which has accepted such offer; or
(d) make any amendment, supplement, modification or waiver of any of
the terms of (i) Section 14.12(d) and (f) of the Credit Agreement as
amended by the Second Credit Agreement Amendment or (ii) Section 14.12(e)
of the Credit Agreement as amended by the Second Credit Agreement Amendment
and the Third Credit Agreement Amendment, in each case that adversely
affects any Holder without the consent of the Majority CD&R Barbados Note
Holders.
8.8 Limitation on Negative Pledge Clauses. The Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, enter into
any agreement which prohibits or limits the ability of the Company or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its property or revenues, whether now owned or hereafter acquired, to secure the
obligations under the CD&R Barbados Notes or any Note Financing Document to the
extent relating to the CD&R Barbados Notes or, in the case of any Note
Guarantor, its obligations under its Note Guarantee of the CD&R Barbados Notes
or any Note Financing Document to the extent relating to such Note Guarantee,
other than (a) the Credit Facility, the Fund VI Note Financing Documents, this
Agreement and the other Note Financing Documents and any related documents and
(b) any industrial revenue or development bonds, agreements governing any
purchase money Liens, acquisition agreements or Financing Leases or operating
leases of real property entered into in the ordinary course of business
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed, acquired or leased thereby).
Article IX
Successor Company
9.1 When the Company May Merge, etc.
(a) The Company will not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any Person,
unless:
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(i) the resulting, surviving or transferee Person (the "Successor
Company") will be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) will expressly assume all the
obligations of the Company under this Agreement, the Notes and the other
Note Financing Documents by executing and delivering to the Holders an
agreement or one or more other documents or instruments in form reasonably
satisfactory to the Holders;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Restricted Subsidiary
at the time of such transaction), no Default or Event of Default will have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, either (A)
the Successor Company could Incur at least $1.00 of additional Indebtedness
pursuant to paragraph 8.1(a) or (B) the Consolidated Coverage Ratio of the
Successor Company would equal or exceed the Consolidated Coverage Ratio of
the Company immediately prior to giving effect to such transaction;
(iv) each Note Guarantor (other than any party to any such
consolidation or merger) shall have delivered a document or instrument in
form and substance reasonably satisfactory to the Holders confirming its
Note Guarantee; and
(v) the Company shall have delivered to the Holders a certificate of
a Responsible Officer and an opinion of counsel (which counsel shall be
reasonably acceptable to the Holders), each to the effect that such
consolidation, merger or transfer complies with the provisions described in
this paragraph of this Section 9.1, and each in form and substance
reasonably satisfactory to the Holders, provided that (A) in giving such
opinion such counsel may rely on a certificate of a Responsible Officer as
to compliance with the foregoing clauses (ii) and (iii) and as to any
matters of fact, and (B) no opinion of counsel will be required for a
consolidation, merger or transfer described in subsection (c) of this
Section 9.1.
(b) Any Indebtedness that becomes an obligation of the Company or
any Restricted Subsidiary (or that is deemed to be Incurred by any Restricted
Subsidiary that becomes a Restricted Subsidiary) as a result of any such
transaction undertaken in compliance with this Section 9.1, and any Refinancing
Indebtedness with respect thereto, shall be deemed to have been Incurred in
compliance with Section 8.1.
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(c) Clauses (ii) and (iii) of subsection (a) of this Section 9.1
will not apply to any transaction in which (A) any Restricted Subsidiary
consolidates with, merges into or transfers all or part of its properties and
assets to the Company or (B) the Company consolidates or merges with or into or
transfers all or substantially all its assets to (1) an Affiliate incorporated
or organized for the purpose of reincorporating or reorganizing the Company in
another jurisdiction or changing its legal structure to a corporation or other
entity or (2) a Restricted Subsidiary of the Company so long as all assets of
the Company and the Restricted Subsidiaries immediately prior to such
transaction (other than Capital Stock of such Restricted Subsidiary) are owned
by such Restricted Subsidiary and its Restricted Subsidiaries immediately after
the consummation thereof.
9.2 Successor Company Substituted. Upon any transaction involving the
Company in accordance with Section 9.1, in which the Company is not the
Successor Company, the Successor Company will succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Agreement, and thereafter (other than in the case of a lease) the predecessor
Company shall be relieved of all obligations and covenants under this Agreement.
Article X
Events of Default
10.1 Events of Default. An "Event of Default" occurs if, voluntarily or
involuntarily, by operation of law or pursuant to any judgment, decree or order
of any Governmental Authority or otherwise:
(a) the Company defaults in any payment of interest on any Note when
due or any other amount payable under any Note Financing Document when due
(other than a payment governed by the following clause (b)), and such default
continues for a period of thirty (30) days;
(b) the Company defaults in the payment of the principal of any Note
when the same becomes due and payable, whether at the Maturity Date, upon
optional redemption, upon purchase, upon declaration of acceleration or
otherwise;
(c) the Company fails to comply with any covenant or obligation (x)
contained in Section 6.5 (other than a failure to purchase Notes, which shall be
governed by the preceding clause (b)) or Article IX and such failure continues
for a period of thirty (30) days after notice thereof is given to the Company by
any Holder or (y) to issue shares of Common Stock or Warrants pursuant to
Section 6.3, 6.7 or 13.9(b) or any other provision of any Note Financing
Document and such failure continues for a period of ten (10) days;
63
(d) the Company or any other Note Financing Party fails to comply
with any covenant or obligation (x) contained in Section 6.6 (other than a
failure to purchase Notes, which shall be governed by clause (b) of this Section
10.1), Article VII (other than any covenant or obligation referred to in clause
(o) of this Section 10.1) or Section 13.9 or (y) under any Note Financing
Document other than this Agreement and the Notes (other than any covenant or
obligation referred to in clauses (a), (b), (c), (o) and (p) of this Section
10.1), and in any such case, such failure continues for a period of thirty (30)
days after either a Responsible Officer shall have discovered or should have
discovered such default or notice thereof is given to the Company by any Holder;
(e) the Company or any other Note Financing Party fails to comply
with any of its covenants and obligations under this Agreement or any Note
(other than those referred to in clauses (a), (b), (c), (d), (o) and (p) of this
Section 10.1) and such failure continues for a period of sixty (60) days after
notice thereof is given to the Company by any Holder;
(f) (i) Any Senior Subordinated Default Event shall occur or exist,
(ii) any Fund VI Default Event shall occur or exist or (iii) any Bank Default
Event shall occur or exist and either the Commitments (as defined in the Credit
Agreement) shall be terminated or the Loans (as defined in the Credit Agreement)
shall be declared due and payable;
(g) The Company, any Note Guarantor or any other Subsidiary of the
Company shall (i) default in any payment of principal of or interest of any
Indebtedness (other than the Notes), beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (ii) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice or lapse of time if required,
such Indebtedness to become due prior to its stated maturity, and (in the case
of any such Indebtedness not constituting Subordinated Obligations) such
Indebtedness shall have so become due; provided, however, that no Default or
Event of Default shall exist under this paragraph unless the amount of any such
Indebtedness in respect of which any default or other event or condition
referred to in this paragraph shall have occurred shall be equal to at least
$15,000,000;
(h) the Parent, the Company or any Material Subsidiary shall
commence any case, proceeding or other action (i) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or
64
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (ii) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Parent, the Company or any
Material Subsidiary shall make a general assignment for the benefit of its
creditors;
(i) there shall be commenced against any of the Parent, the Company
or any Material Subsidiary any case, proceeding or other action of a nature
referred to in clause (g) above which (i) results in the entry of an order for
relief or any such adjudication or appointment or (ii) remains undismissed,
undischarged or unbonded for a period of sixty (60) days;
(j) there shall be commenced against the Parent, the Company or any
Material Subsidiary any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within sixty (60) days from the entry thereof;
(k) the Parent, the Company or any Material Subsidiary shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (g), (h), or (i) of this
Section 10.1;
(l) the Parent, the Company or any Material Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due;
(m) one or more judgments or decrees shall be entered against the
Company or any of its Active Subsidiaries involving in the aggregate a liability
(net of any insurance or indemnity payments actually received in respect thereof
prior to or within sixty (60) days from the entry thereof, or to be received in
respect thereof, in the event any appeal thereof shall be unsuccessful) of
$15,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within sixty (60) days from
the entry thereof;
(n) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Company or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single
65
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is reasonably likely to result in the termination of
such Plan for purposes of Title IV of ERISA (other than a standard termination
pursuant to Section 4041(b) of ERISA), (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly
Controlled Entity shall, or is reasonably likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, (vi) the occurrence or expected occurrence of any event or
condition which results or is reasonably likely to result in the Company's or
any Commonly Controlled Entity's becoming responsible for any liability in
respect of a Former Plan, or (vii) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vii)
above, such event or condition, together with all other such events or
conditions, if any, would be reasonably expected to result in liability which
would have a Material Adverse Effect;
(o) (i) Any of the Note Security Documents (or any guarantee
thereunder by any Note Financing Party of the monetary obligations of the
Company hereunder) shall cease, for any reason, to be in full force and effect
other than pursuant to the terms hereof and thereof, or the Company or any other
Note Financing Party which is a party to any of the Note Security Documents
shall so assert in writing, (ii) the Company shall fail to perform any covenant
or obligation contained in Section 7.10, 7.11(a), 8.6(a) or 8.8 or (iii) the
Lien created by any of the Note Security Documents shall cease to be enforceable
and of the same effect as to perfection and priority purported to be created
thereby with respect to any significant portion of the Collateral (other than in
connection with any termination of such Lien in respect of any Collateral as
permitted hereby or by any Note Security Document), and such failure of such
Lien to be perfected and enforceable with such priority shall have continued
unremedied for a period of twenty (20) days; or
(p) (i) The Senior Subordinated Notes, for any reason, shall not be
or shall cease to be validly subordinated as provided therein and in the Senior
Subordinated Note Indenture to the obligations of the Company under this
Agreement, any Notes and the other Note Financing Documents or (ii) the Company
shall fail to perform any covenant or obligation contained in Section 8.7.
10.2 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default (other than an Event of Default specified
in clauses 10.1(h) through (l) with respect to the Company) occurs and is
continuing, the Holders of at least a twenty five percent (25%) of the aggregate
Principal Amount of the outstanding Notes, by notice to the Company specifying
the respective Event of Default and that such notice is a "Notice of
Acceleration," may declare the principal of and accrued but unpaid interest on
all the Notes to be due and payable. Upon such declaration, such principal and
interest will be due and payable immediately.
66
(b) Notwithstanding subsection (a) of this Section 10.2, if an Event
of Default specified in clauses 10.1(h) through (l) with respect to the Company
occurs and is continuing, then the principal of and any accrued interest on the
outstanding Notes will ipso facto become and be immediately due and payable
without any declaration or other act on the part of any Holder.
(c) The Holders of a majority in aggregate Principal Amount of the
outstanding Notes may, by notice to the Company, rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
10.3 Unconditional Right of Holders to Receive Principal, Premium and
Interest. Notwithstanding any other provision of this Agreement or any other
Note Financing Document, each Holder's right to receive payment of the principal
of and all interest on the Note or Notes held by it on the Interest Payment
Dates and Stated Maturity expressed in such Note or Notes, and to institute suit
for the enforcement of any such payment on or after such Interest Payment Dates
and Stated Maturity, shall not be impaired without the consent of such Holder.
10.4 Restoration of Rights and Remedies. If any Holder has instituted any
proceeding to enforce any right or remedy under this Agreement and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to such Holder, then and in every such case the Company,
any other obligor upon the Notes and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Holders shall continue as though no such proceeding had been instituted.
10.5 Rights and Remedies Cumulative. No right or remedy herein conferred
upon the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
10.6 Delay or Omission Not Waiver. No delay or omission of any Holder to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article X or by law
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Holders.
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10.7 Waiver of Past Defaults. The Holders of not less than a majority in
aggregate Principal Amount of the outstanding Notes may, on behalf of the
Holders of all of the Notes, waive any past Default hereunder and its
consequences, except a Default in the payment of the principal of or interest on
any Note (which may only be waived with the consent of each Holder of Notes
directly affected), and except as may otherwise be provided in Section 13.7.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose,
but no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon. In case of any such waiver, the
Company, each Note Guarantor, any other obligor upon the Notes and the Holders
shall be restored to their former positions and rights hereunder and under the
Notes, respectively.
10.8 Waiver of Stay, Extension or Usury Laws. The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury or other similar law wherever enacted,
now or at any time hereafter in force, that would prohibit or forgive the
Company from paying all or any portion of the principal of (or premium, if any)
or interest on the Notes contemplated herein or in the Notes or that may affect
the covenants or the performance of this Agreement.
Article XI
Termination
11.1 Termination. This Agreement may be terminated prior to any Closing (a)
at any time by the written agreement of the Parent, the Company and the
Investor, (b) at any time upon written notice given by the Parent and the
Company to the other parties that the consummation of the transactions
contemplated hereby would violate, in whole or in part, a Requirement of Law and
(c) at any time upon written notice given by the Investor to the other parties.
11.2 Effect of Termination. In the event of the termination of this
Agreement prior to the first Closing pursuant to the provisions of Section 11.1,
this Agreement shall become void and have no effect, without any liability to
any Person; provided that the provisions of Sections, 13.1, 13.2, 13.3, 13.6,
13.7, 13.8, 13.9, 13.10, 13.11, 13.12, 13.13 and 13.14 shall survive any
termination of this Agreement.
Article XII
Definitions
"Acterna WG" means Acterna WG International Holdings LLC, a Delaware
limited liability company, and any successors thereto.
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"Active Subsidiaries" means each Subsidiary of the Company other than any
Inactive Subsidiary.
"Additional CD&R Barbados Senior Subordinated Notes" has the meaning given
to it in the Recitals.
"Affiliate" means, with respect to any Person, a Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the first Person. "Control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a Person (whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise) and shall be deemed to exist
upon the ownership of securities entitling the holder thereof to exercise more
than 20% of the voting power in the election of directors of such Person (or
other Persons or body performing similar functions).
"Affiliate Transaction" has the meaning given to it in Section 8.5.
"Agreement Currency" has the meaning given to it in Section 13.10.
"Amendment" has the meaning given to it in Section 8.3(c).
"Appraiser" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial Advisers, Inc.
or, if ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial Advisers, Inc. is unwilling or
unable to perform such services, an independent appraisal firm selected by the
Special Committee (but at the Company's expense), following consultation with
the Investor, from among any nationally recognized appraising or investment
banking firms engaged in valuation of securities of publicly traded companies.
"Asset Disposition" means any sale, lease, transfer or other disposition of
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares, or, in the case of a Foreign Subsidiary, to the extent
required by any Requirement of Law), property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Company or any of
its Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction), other than (a) a disposition to the
Company or a Restricted Subsidiary, (b) a disposition in the ordinary course of
business, (c) the sale or discount (with or without recourse, and on customary
or commercially reasonable terms) of accounts receivable or notes receivable
arising in the ordinary course of business, or the conversion or exchange of
accounts receivable for notes receivable, (d) any Restricted Payment
Transactions, (e) a disposition that is governed by the provisions described
under Article IX hereof, (f) any Financing Disposition, (g) any "fee in lieu" or
other disposition of assets to any governmental authority or agency that
continue in use by the Company or any Restricted Subsidiary, so
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long as the Company or any Restricted Subsidiary may obtain title to such assets
upon reasonable notice by paying a nominal fee, (h) any exchange of like
property pursuant to Section 1031 (or any successor section) of the Code, (i)
any financing transaction with respect to property built or acquired by the
Company or any Restricted Subsidiary after the Closing Date, including without
limitation any sale/leaseback transaction or asset securitization, (j) any
disposition arising from foreclosure, condemnation or similar action with
respect to any property or other assets, (k) any disposition of Capital Stock,
Indebtedness or other securities of an Unrestricted Subsidiary, (l) a
disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement
or other obligation with or to a Person (other than the Company or a Restricted
Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such
Restricted Subsidiary acquired its business and assets (having been newly formed
in connection with such acquisition), entered into in connection with such
acquisition, (m) a disposition of not more than five-percent (5%) of the
outstanding Capital Stock of a Foreign Subsidiary that is a Restricted
Subsidiary that has been approved by the Board of Directors, or (n) any
disposition or series of related dispositions for aggregate consideration not to
exceed $2.5 million.
"Assumption Agreement" means the Assumption Agreement, dated as of August
7, 2002, pursuant to which the Investor became a party to the Intercreditor
Agreement.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (a) the sum
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (b) the sum of all such payments.
"Bank Agent" means JPMorgan Chase Bank (as successor by merger to the
▇▇▇▇▇▇ Guaranty Trust Company of New York), and any successors thereto, in its
capacity as administrative agent under the Credit Agreement.
"Bank Default Event" means a "Default" or "Event of Default" as those terms
are defined in the Credit Agreement, or any other default or event of default
under the Credit Agreement.
"Bank Indebtedness" means any and all amounts, whether outstanding on the
date hereof or thereafter incurred, payable under or in respect of the Credit
Facility, including without limitation principal, premium (if any), interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Restricted
Subsidiary whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees,
other monetary obligations of any nature and all other amounts payable
thereunder or in respect thereof.
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"Board of Directors" means, unless the context otherwise requires, the
Board of Directors of the Company.
"Borrowing Base" means the sum (determined as of the end of the most
recently ended fiscal quarter for which consolidated financial statements of the
Company are available) of (a) sixty percent (60%) of Inventory of the Company
and its Restricted Subsidiaries and (b) eighty percent (80%) of Receivables of
the Company and its Restricted Subsidiaries.
"Business" has the meaning given to it in Section 3.17.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banking institutions in the City of New York, New York are authorized or
obligated by any Requirement of Law to be closed.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Capitalized Lease Obligation" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP. The stated maturity of any Capitalized Lease
Obligation shall be the date of the last payment of rent or any other amount due
under the related lease.
"CD&R" means ▇▇▇▇▇▇▇, Dubilier & Rice, Inc., a Delaware corporation, and
any successors thereto.
"CD&R Barbados Investment" means the investment by the Investor in the
Notes from time to time pursuant to this Agreement.
"CD&R Barbados Notes" means one or more Notes held by the Investor or any
other member of the CD&R Group.
"CD&R Barbados-Owned Senior Subordinated Notes" has the meaning given to it
in the Recitals.
"CD&R Group" means CD&R, Fund V, Fund VI or any other investment fund or
vehicle managed, sponsored or advised by CD&R, or any Affiliate of or successor
to CD&R, Fund V, Fund VI or any such other investment fund or vehicle.
"Change of Control" means the occurrence of the following: (a) any Person
or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act),
other than any of the Permitted Investors, shall have acquired a percentage of
shares of Voting
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Stock that is greater than as held in the aggregate by the Permitted Investors
or (b) the Permitted Investors shall cease to hold in the aggregate at least (i)
at any time prior to a New Equity Financing, thirty-five percent (35%) of the
outstanding Voting Stock of the Parent or (ii) upon or at any time after a New
Equity Financing, twenty-five percent (25%) of the outstanding Voting Stock of
the Parent or (c) a "Change of Control" as defined in the Senior Subordinated
Note Indenture. "Voting Stock" means shares of Capital Stock entitled to vote
generally in the election of directors and "Permitted Investors" means any of
(x) the Investor, CD&R, Fund V, Fund VI, any other investment fund or vehicle
managed, sponsored or advised by CD&R, or any Affiliate of or successor to the
Investor, CD&R, Fund V or any such other investment fund or vehicle, (y) any
Management Investor and (z) for a period not exceeding three (3) Business Days,
any Person acting in the capacity of an underwriter in connection with a public
or private offering of Capital Stock of the Parent. "New Equity Financing" means
the receipt by the Parent of at least $150,000,000 in gross cash proceeds from
the issuance and sale of newly-issued shares of Common Stock after the Closing
Date to Persons other than the Permitted Investors and "Management Investor"
means, collectively, the officers, directors, employees and other members of the
management of the Parent, the Company or any Subsidiary of the Company, or
immediate family members or relatives thereof, or trusts or partnerships for the
benefit of any of the foregoing, or any of their heirs, executors or legal
representatives, who at any particular date shall beneficially own or have the
right to acquire, directly or indirectly, common stock of the Parent or the
Company.
"Change of Control Notice Event" means (a) the execution of any written
agreement (including, without limitation, any "letter of intent" or other
similar agreement which contemplates more complete documentation or agreement)
which, when fully performed by the parties thereto, would result in a Change of
Control or (b) the making of any written offer by any person (as such term is
used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on
the Closing Date) or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act as in effect on the Closing Date), which
offer, if accepted by the requisite number of such Holders, would result in a
Change of Control.
"Change of Control Payment Date" has the meaning given to it in Section
6.5.
"Closing" has the meaning given to it in Section 2.1.
"Closing Date" has the meaning given to it in Section 2.1.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
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"Collateral" means all assets of the Note Financing Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any Note
Security Document.
"Common Stock" means the common stock, par value $0.01 per share, of the
Parent.
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Parent, the Company or any Subsidiary of
the Company within the meaning of Section 4001 of ERISA or is part of a group
which includes the Parent, the Company or any Subsidiary of the Company and
which is treated as a single employer under Section 414(b) or 414(c) of the
Code.
"Company" has the meaning given to it in the Heading.
"Consent" means any consent, approval, authorization, waiver, permit,
concession, decree, agreement, license, exemption or order of, registration,
declaration or filing with, or report or notice to, any Person.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (x) the aggregate amount of Consolidated EBITDA of the Company and the
Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination for which
consolidated financial statements of the Company are available to (y)
Consolidated Interest Expense for such four fiscal quarters, provided that:
(a) if since the beginning of such period the Company or any
Restricted Subsidiary has Incurred any Indebtedness that remains outstanding on
such date of determination or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
Consolidated EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Indebtedness as if
such Indebtedness had been Incurred on the first day of such period (except that
in making such computation, the amount of Indebtedness under any revolving
credit facility outstanding on the date of such calculation shall be computed
based on (i) the average daily balance of such Indebtedness during such four
fiscal quarters or such shorter period for which such facility was outstanding
or (ii) if such facility was created after the end of such four fiscal quarters,
the average daily balance of such Indebtedness during the period from the date
of creation of such facility to the date of such calculation);
(b) if since the beginning of such period the Company or any
Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise
acquired, retired or discharged any Indebtedness (each, a "Discharge") or if the
transaction giving
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rise to the need to calculate the Consolidated Coverage Ratio involves a
Discharge of Indebtedness (in each case other than Indebtedness Incurred under
any revolving credit facility unless such Indebtedness has been permanently
repaid), Consolidated EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such Discharge
of such Indebtedness, including with the proceeds of such new Indebtedness, as
if such Discharge had occurred on the first day of such period;
(c) if since the beginning of such period the Company or any
Restricted Subsidiary shall have disposed of any company, any business or any
group of assets constituting an operating unit of a business (any such
disposition, a "Sale"), the Consolidated EBITDA for such period shall be reduced
by an amount equal to the Consolidated EBITDA (if positive) attributable to the
assets that are the subject of such Sale for such period or increased by an
amount equal to the Consolidated EBITDA (if negative) attributable thereto for
such period and Consolidated Interest Expense for such period shall be reduced
by an amount equal to (i) the Consolidated Interest Expense attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
redeemed, defeased or otherwise acquired, retired or discharged with respect to
the Company and its continuing Restricted Subsidiaries in connection with such
Sale for such period (including but not limited to through the assumption of
such Indebtedness by another Person) plus (ii) if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Interest Expense for such period
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such Sale;
(d) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger, consolidation or otherwise) shall have made an
Investment in any Person that thereby becomes a Restricted Subsidiary, or
otherwise acquired any company, any business or any group of assets constituting
an operating unit of a business, including any such Investment or acquisition
occurring in connection with a transaction causing a calculation to be made
hereunder (any such Investment or acquisition, a "Purchase"), Consolidated
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any related
Indebtedness) as if such Purchase occurred on the first day of such period; and
(e) if since the beginning of such period any Person became a
Restricted Subsidiary or was merged or consolidated with or into the Company or
any Restricted Subsidiary, and since the beginning of such period such Person
shall have Discharged any Indebtedness or made any Sale or Purchase that would
have required an adjustment pursuant to clause (b), (c) or (d) above if made by
the Company or a Restricted Subsidiary during such period, Consolidated EBITDA
and Consolidated
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Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Discharge, Sale or Purchase occurred on the first day
of such period.
For purposes of this definition, whenever pro forma effect is to be given to any
Sale, Purchase or other transaction, or the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or
otherwise acquired, retired or discharged in connection therewith, the pro forma
calculations in respect thereof (including without limitation in respect of
anticipated cost savings or synergies relating to any such Sale, Purchase or
other transaction) shall be as determined in good faith by a responsible
financial or accounting officer of the Company. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness). If
any Indebtedness bears, at the option of the Company or a Restricted Subsidiary,
a rate of interest based on a prime or similar rate, a eurocurrency interbank
offered rate or other fixed or floating rate, and such Indebtedness is being
given pro forma effect, the interest expense on such Indebtedness shall be
calculated by applying such optional rate as the Company or such Restricted
Subsidiary may designate. If any Indebtedness that is being given pro forma
effect was Incurred under a revolving credit facility, the interest expense on
such Indebtedness shall be computed based upon the average daily balance of such
Indebtedness during the applicable period. Interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate determined in good
faith by a responsible financial or accounting officer of the Company to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP.
"Consolidated EBITDA" means, for any period, the Consolidated Net Income
for such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (a) provision for all taxes (whether or not paid,
estimated or accrued) based on income, profits or capital, (b) Consolidated
Interest Expense and any Receivables Fees, (c) depreciation, amortization
(including but not limited to amortization of goodwill and intangibles and
amortization and write-off of financing costs) and all other non-cash charges or
non-cash losses, (d) any expenses or charges related to any sale of Capital
Stock (other than Disqualified Stock) of the Company and (e) the amount of any
minority interest expense.
"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its Restricted Subsidiaries, determined on a consolidated basis
in accordance with GAAP and before any reduction in respect of Preferred Stock
dividends, if any; provided, that there shall not be included in such
Consolidated Net Income:
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(a) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that (i) subject to the limitations contained in
clause (d) below, the Company's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income up to the
aggregate amount actually distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other distribution (subject,
in the case of a dividend or other distribution to a Restricted Subsidiary, to
the limitations contained in clause (c) below) and (ii) the Company's equity in
the net loss of such Person shall be included to the extent of the aggregate
Investment of the Company or any of its Restricted Subsidiaries in such Person;
(b) any net income (loss) of any Person acquired by the Company or a
Restricted Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(c) any net income (loss) of any Restricted Subsidiary that is not a
Note Guarantor Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of similar distributions by such Restricted Subsidiary, directly or indirectly,
to the Company by operation of the terms of such Restricted Subsidiary's charter
or any agreement, instrument, judgment, decree, order, statute or governmental
rule or regulation applicable to such Restricted Subsidiary or its stockholders
(other than (x) restrictions that have been waived or otherwise released, (y)
restrictions pursuant to the Notes or this Agreement and (z) restrictions in
effect on May 21, 1998 with respect to a Restricted Subsidiary and other
restrictions with respect to such Restricted Subsidiary that taken as a whole
are not materially less favorable to the Holders than such restrictions in
effect on May 21, 1998), except that (i) subject to the limitations contained in
clause (d) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of any dividend or distribution that was or that could
have been made by such Restricted Subsidiary during such period to the Company
or another Restricted Subsidiary (subject, in the case of a dividend that could
have been made to another Restricted Subsidiary, to the limitation contained in
this clause) and (ii) the net loss of such Restricted Subsidiary shall be
included to the extent of the aggregate Investment of the Company or any of its
other Restricted Subsidiaries in such Restricted Subsidiary;
(d) any gain or loss realized upon the sale or other disposition of
any asset of the Company or any Restricted Subsidiary (including pursuant to any
sale/leaseback transaction) that is not sold or otherwise disposed of in the
ordinary course of business (as determined in good faith by the Board of
Directors);
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(e) any item classified as an extraordinary, unusual or nonrecurring
gain, loss or charge, including, without limitation, fees, expenses and charges
associated with any acquisition, merger or consolidation after the Closing Date;
(f) the cumulative effect of a change in accounting principles;
(g) all deferred financing costs written off and premiums paid in
connection with any early extinguishment of Indebtedness;
(h) any unrealized gains or losses in respect of Currency Agreements;
(i) any unrealized foreign currency transaction gains or losses in
respect of Indebtedness of any Person denominated in a currency other than the
functional currency of such Person; and
(j) any non-cash compensation charge arising from any grant of stock,
stock options or other equity-based awards.
In the case of any unusual or nonrecurring gain, loss or charge not included in
Consolidated Net Income pursuant to clause (f) above in any determination
thereof, the Company will deliver a certificate of a Responsible Officer to each
Holder promptly after the date on which Consolidated Net Income is so
determined, setting forth the nature and amount of such unusual or nonrecurring
gain, loss or charge.
"Consolidated Total Assets" means, as of any date of determination, the
total assets shown on the consolidated balance sheet of the Company and its
Restricted Subsidiaries as of the most recent date for which such a balance
sheet is available, determined on a consolidated basis in accordance with GAAP
(and, in the case of any determination relating to any Incurrence of
Indebtedness or any Investment, on a pro forma basis including any property or
assets being acquired in connection therewith), provided that for purposes of
paragraph (b) of Section 8.1 and the definition of "Permitted Investment,"
Consolidated Total Assets shall not be less than $285,300,000 million.
"Constituent Person" has the meaning given to it in Section 6.3(i).
"Contractual Obligation" means, with respect to any Person, any provision
of any material security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.
"Conversion Price" means, at any time, a price per share of Common Stock
equal to $1,000 divided by the number of shares of Common Stock delivered upon
conversion for each $1,000 Principal Amount of Notes as determined by the
Conversion Rate in effect at such time.
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"Conversion Rate" has the meaning given to it in Section 6.3(a).
"Credit Agreement" means the credit agreement dated as of May 23, 2000,
among the Company, the banks and other financial institutions party thereto from
time to time, Credit Suisse First Boston, as syndication agent, The Chase
Manhattan Bank, as documentation agent, and the Bank Agent, as administrative
agent, as such agreement may be assumed by any successor in interest, and as
such agreement may be amended, supplemented, waived or otherwise modified from
time to time, or refunded, refinanced, restructured, replaced, renewed, repaid,
increased or extended from time to time (whether in whole or in part, whether
with the original agent and lenders or other agents and lenders or otherwise,
and whether provided under the original Credit Agreement or otherwise).
"Credit Facility" means the collective reference to the Credit Agreement,
any Credit Documents (as defined therein), any notes and letters of credit
issued pursuant thereto and any guarantee and collateral agreement, patent and
trademark security agreement, mortgages, letter of credit applications and other
guarantees, pledge agreements, security agreements and collateral documents, and
other instruments and documents, executed and delivered pursuant to or in
connection with any of the foregoing, in each case as the same may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Credit Agreement or one or more other credit agreements, indentures or
financing agreements or otherwise). Without limiting the generality of the
foregoing, the term "Credit Facility" shall include any agreement (i) changing
the maturity of any Indebtedness incurred thereunder or contemplated thereby,
(ii) adding Subsidiaries of the Company as additional borrowers or guarantors
thereunder, (iii) increasing the amount of Indebtedness incurred thereunder or
available to be borrowed thereunder or (iv) otherwise altering the terms and
conditions thereof.
"Currency Agreement" means, in respect of a Person, any foreign exchange
contract, currency swap agreement or other similar agreement or arrangements
(including derivative agreements or arrangements), as to which such Person is a
party or a beneficiary.
"Current CD&R Barbados Senior Subordinated Notes" has the meaning given to
it in the Recitals.
"Current Market Price" means, on any date specified herein, (a) in the case
of securities that have an existing public trading market, the amount per
security equal to (i) the average of the last sale price of such security,
regular way, for the five (5) consecutive trading days selected by the Company
commencing not more than ten (10)
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trading days before, and ending not later than the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation (the five (5) trading days so selected
by the Company, the "Trading Period"), or, if no such sale takes place during
such period, the average of the closing bid and asked prices thereof during the
Trading Period, in each case as officially reported on the principal national
securities exchange on which the same are then listed or admitted to trading, or
(ii) if no such security is then listed or admitted to trading on any national
securities exchange but such security is designated as a national market system
security by the NASD, the average of the last sale price of such security,
regular way, during the Trading Period, or if such security is not so
designated, the average of the reported closing bid and asked prices thereof
during the Trading Period as shown by the NASD automated quotation system or, if
no shares thereof are then quoted in such system, as published by the National
Quotation Bureau, Incorporated or any successor organization, and in either case
as reported by any member firm of the New York Stock Exchange selected by the
Company, and (b) in the case of securities that do not have an existing public
trading market and in the case of other property, the higher of (i) the book
value thereof as determined by agreement between the Company and the Holder, or
if the Company and the Holder fail to agree, by any firm of independent public
accountants of recognized standing selected by the Board of Directors of the
Company, as of the last day of any month ending within sixty (60) days preceding
the date as of which the determination is to be made and (ii) the fair value
thereof (w) determined by an agreement between the Company and the Holder or (x)
if the Company and the Holder fail to agree, determined jointly by an
independent investment banking firm retained by the Company and by an
independent investment banking firm retained by the Holder, either of which
firms may be an independent investment banking firm regularly retained by the
Company or the Holder or (y) if the Company or the Holder shall fail so to
retain an independent investment banking firm within five Business Days of the
retention of such firm by the Holders or the Company, as the case may be,
determined solely by the firm so retained or (z) if the firms so retained by the
Company and by such holders shall be unable to reach a joint determination
within fifteen (15) Business Days of the retention of the last firm so retained,
determined by another independent investment banking firm chosen by the first
two such firms and which is not a regular investment banking firm of the Company
or any such holder.
"Default" means any of the events specified in Section 10.1, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Disinterested Director" means, with respect to any Affiliate Transaction,
a member of the Board of Directors of the Parent having no material direct or
indirect financial interest in or with respect to such Affiliate Transaction. A
member of the Board of Directors shall not be deemed to have such a financial
interest by reason of such
79
member's holding Capital Stock of the Parent or any options, warrants or other
rights in respect of such Capital Stock.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
(other than Management Stock) that by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable or exercisable) or
upon the happening of any event (other than following the occurrence of a Change
of Control or other similar event described under such terms as a "change of
control" or an Asset Disposition) (a) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (b) is convertible or
exchangeable for Indebtedness or Disqualified Stock or (c) is redeemable at the
option of the holder thereof (other than following the occurrence of a Change of
Control or other similar event described under such terms as a "change of
control," or an Asset Disposition), in whole or in part, in each case on or
prior to the Maturity Date.
"Domestic Subsidiary" means any Subsidiary of the Company organized under
the laws of any jurisdiction within the United States (other than any Foreign
Subsidiary Holdco).
"Election Notice" has the meaning given to it in Section 1.4.
"Environmental Laws" means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority properly promulgated and
having the force and effect of law, or other Requirements of Law (including,
without limitation, common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or human health as
related to the environment, as now or may at any relevant time hereafter be in
effect.
"Environmental Permits" has the meaning given to it in Section 7.8.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" means any of the events specified in Section 10.1,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor
statute, and the rules and regulations of the SEC thereunder, as amended.
"Excluded Contribution" means Net Cash Proceeds, or the fair value, as
determined in good faith by the Board of Directors, of property or assets,
received by the Company as capital contributions to the Company after the
Closing Date or from the issuance or sale (other than to a Restricted
Subsidiary) of Capital Stock (other than
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Disqualified Stock) of the Company, in each case not previously included in the
calculation set forth in subparagraph (a)(3)(B)(x) of Section 8.2 for purposes
of determining whether a Restricted Payment may be made.
"Exercise Period" has the meaning given to it in Section 1.4.
"Fair Market Value" as applied to the Notes, means the price at which the
Notes would change hands between a willing buyer and a willing seller, neither
being under any compulsion to buy or to sell, and both having reasonable
knowledge of all relevant facts, which buyer and seller are unrelated parties
having no business dealings with each other, other than such dealings as would
be conducted by unrelated parties acting at arm's length. The Appraiser shall
determine the Fair Market Value of the Notes in a manner consistent with
customary valuation methodologies used in the valuation of securities of
publicly traded companies, taking into account in particular interest rates and
conversion rates for convertible securities of companies comparable, both as to
industry and financial condition, to the Company.
"Financing Disposition" means any sale, transfer, conveyance or other
disposition of property or assets by the Company or any Subsidiary of the
Company to any Receivables Entity, or by any Receivables Subsidiary, in each
case in connection with the Incurrence by a Receivables Entity of Indebtedness,
or obligations to make payments to the obligor on Indebtedness, which may be
secured by a Lien in respect of such property or assets.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Pledge Agreement" each pledge agreement (or analogous document),
which pledge agreement (or analogous document) shall be in form and substance
reasonably satisfactory to the Secured Parties, pursuant to which the Company or
any of its Domestic Subsidiaries purports to ▇▇▇▇▇ ▇ ▇▇▇▇ on any portion of the
Capital Stock of any Foreign Subsidiary, as the same may be amended,
supplemented or otherwise modified from time to time.
"Foreign Subsidiary" means any Subsidiary of the Company that is organized
under the laws of any jurisdiction outside the United States of America, or that
is a Foreign Subsidiary Holdco.
"Foreign Subsidiary Holdco" means any Subsidiary of the Company that has no
material assets other than Capital Stock or other securities of one or more
Foreign Subsidiaries or other Foreign Subsidiary Holdcos, and other assets
relating to an ownership interest in such Capital Stock, securities or Foreign
Subsidiaries.
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"Former Plan" means any employee benefit plan in respect of which the
Parent, the Company or any Subsidiary of the Company or a Commonly Controlled
Entity has engaged in a transaction described in Section 4069 or Section 4212(c)
of ERISA.
"Fund V" means ▇▇▇▇▇▇▇, Dubilier & Rice Fund V Limited Partnership, a
Cayman Islands exempted limited partnership managed by CD&R, and its successors
and assigns who are members of the CD&R Group at the time of any such
assignment.
"Fund VI" has the meaning given to it in the Recitals.
"Fund VI Default Event" means a "Default" or "Event of Default" as those
terms are defined in the Fund VI Investment Agreement, or any other default or
event of default under the Fund VI Investment Agreement.
"Fund VI Guaranty and Collateral Agreement" means "Guaranty and Collateral
Agreement" as this term is defined in the Fund VI Investment Agreement.
"Fund VI Investment Agreement" means the Investment Agreement, dated as of
December 27, 2001, among the Parent, the Company and Fund VI, as such agreement
may be amended, supplemented, waived or otherwise modified from time to time, or
refunded, refinanced, restructured, replaced, renewed, repaid, increased or
extended from time to time (whether in whole or in part, whether with the
original agent and lenders or other agents and lenders or otherwise, and whether
provided under the original Investment Agreement or otherwise).
"Fund VI Note Financing Documents" means the "Note Financing Documents" as
defined in the Fund VI Investment Agreement.
"Fund VI Notes" means the "Notes" as defined in the Fund VI Investment
Agreement.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect on May 21, 1998 (for purposes of the definitions of the
terms "Consolidated Coverage Ratio," "Consolidated EBITDA," "Consolidated
Interest Expense," "Consolidated Net Income" and "Consolidated Total Assets,"
all defined terms in this Agreement to the extent used in or relating to any of
the foregoing definitions, and all ratios and computations in this Agreement
based on any of the foregoing definitions) and as in effect from time to time
(for purposes of Section 8.1(c)(iii) and for all other purposes of this
Agreement), including those set forth in the 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 or in such other statements by such other entity as approved by
a significant segment of the accounting profession. All ratios and computations
based on GAAP contained in this Agreement shall be computed in conformity with
GAAP.
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"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any entity, authority or body exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee and Collateral Agreement" has the meaning given to it in the
Recitals.
"Guarantee" and "Guarantee Obligations" means, with respect to any Person
(the "guaranteeing person"), any obligation of (a) the guaranteeing person or
(b) another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any such obligation of the guaranteeing person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (x) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (y) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Company in good faith. (The term "Guarantee" used as a verb has a corresponding
meaning.)
"Holder" means the Person in whose name a Note is registered in the
Register of Holders.
"Inactive Subsidiaries" means each Subsidiary of the Company listed on
Schedule 3.16 so long as such Subsidiary is in compliance with Section 7.9(e).
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"Incur" means issue, assume, enter into any Guarantee of, incur or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an Incurrence of
Indebtedness. Any Indebtedness issued at a discount (including Indebtedness on
which interest is payable through the issuance of additional Indebtedness) shall
be deemed Incurred at the time of original issuance of the Indebtedness at the
initial accreted amount thereof. For purposes of this Agreement, all
Indebtedness of the Company and its Restricted Subsidiaries that is outstanding
on the date hereof and was initially Incurred in accordance with Section 406(b)
of the Senior Subordinated Note Indenture, shall be deemed Incurred on the date
hereof and outstanding under the respective clauses of Section 8.1(b)
corresponding to the respective clauses of Section 406(b) of the Senior
Subordinated Indenture under which such Indebtedness was initially Incurred and
is outstanding on the date hereof (with the United States dollar equivalent
principal amount of any Indebtedness denominated in a foreign currency being
calculated in accordance with Section 8.1(d) without giving effect to such
deemed new Incurrence thereof on the date hereof).
"Initial Agreement" has the meaning given to it in Section 8.3(c).
"Initial Lien" has the meaning given to it in Section 8.6(b).
"Initial Notes" has the meaning given to it in the Recitals.
"Indebtedness" means with respect to any Person on any date of
determination (without duplication):
(a) the principal of indebtedness of such Person for borrowed money;
(b) the principal of obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(c) all reimbursement obligations of such Person in respect of letters
of credit or other similar instruments (the amount of such obligations being
equal at any time to the aggregate then undrawn and unexpired amount of such
letters of credit or other instruments plus the aggregate amount of drawings
thereunder that have not then been reimbursed);
(d) all obligations of such Person to pay the deferred and unpaid
purchase price of property (except Trade Payables), which purchase price is due
more than one year after the date of placing such property in final service or
taking final delivery and title thereto;
84
(e) all Capitalized Lease Obligations of such Person;
(f) the redemption, repayment or other repurchase amount of such
Person with respect to any Disqualified Stock of such Person or (if such Person
is a Subsidiary of the Company other than a Note Guarantor Subsidiary) any
Preferred Stock of such Subsidiary, but excluding, in each case, any accrued
dividends (the amount of such obligation to be equal at any time to the maximum
fixed involuntary redemption, repayment or repurchase price for such Capital
Stock, or if less (or if such Capital Stock has no such fixed price), to the
involuntary redemption, repayment or repurchase price therefor calculated in
accordance with the terms thereof as if then redeemed, repaid or repurchased,
and if such price is based upon or measured by the fair market value of such
Capital Stock, such fair market value shall be as determined in good faith by
the board of directors or other governing body of the issuer of such Capital
Stock);
(g) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, that the amount of Indebtedness of such Person shall be the lesser of
(i) the fair market value of such asset at such date of determination (as
determined in good faith by the Company) and (ii) the amount of such
Indebtedness of such other Persons;
(h) all Indebtedness of other Persons to the extent Guaranteed by such
Person; and
(i) to the extent not otherwise included in this definition, net
hedging obligations in respect of any Currency Agreements and Interest Rate
Agreements of such Person (the amount of any such obligation to be equal at any
time to the termination value of such agreement or arrangement giving rise to
such hedging obligation that would be payable by such Person at such time).
The amount of Indebtedness of any Person at any date shall be determined as set
forth above or otherwise provided in this Agreement, or otherwise shall equal
the amount thereof that would appear on a balance sheet of such Person
(excluding any notes thereto) prepared in accordance with GAAP.
"Insolvency" means, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Intellectual Property" has the meaning given to it in Section 3.10.
"Intercreditor Agreement" has the meaning given to it in the Recitals.
"Interest Payment" has the meaning given to it in Section 6.2.
"Interest Payment Date" has the meaning given to it in Section 6.1.
85
"Interest Rate" has the meaning given to it in Section 6.1.
"Interest Rate Agreement" means, with respect to any Person, any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement (including derivative agreements or arrangements), as to which
such Person is party or a beneficiary.
"Investment" in any Person by any other Person means any direct or indirect
advance, loan or other extension of credit (other than to customers, suppliers,
directors, officers or employees of any Person in the ordinary course of
business) or capital contribution (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others) to, or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by, such Person. For purposes of the
definition of "Unrestricted Subsidiary" and Section 8.2(a), (a) "Investment"
shall include the portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of any Subsidiary of
the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary, provided that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive)
equal to (x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation, (b) any property transferred to or
from an Unrestricted Subsidiary shall be valued at its fair market value at the
time of such transfer and (c) in each case under clause (a) or (b) above, fair
market value shall be as determined in good faith by the Board of Directors.
Guarantees shall not be deemed to be Investments. The amount of any Investment
outstanding at any time shall be the original cost of such Investment, reduced
(at the Company's option) by any dividend, distribution, interest payment,
return of capital, repayment or other amount or value received in respect of
such Investment; provided, that to the extent that the amount of Restricted
Payments outstanding at any time since May 21, 1998 (including, prior to the
date hereof, pursuant to the Senior Subordinated Note Indenture) is so reduced
by any portion of any such amount or value that would otherwise be included in
the calculation of Consolidated Net Income, such portion of such amount or value
shall not be so included for purposes of calculating the amount of Restricted
Payments that may be made pursuant to paragraph (a) of Section 8.2.
"Investment Right" has the meaning given to it in Section 1.1.
"Investor" has the meaning given to it in the Heading.
"Judgment Currency" has the meaning given to it in Section 13.10.
86
"Lien" means any mortgage, pledge, hypothecation, assignment, security
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).
"Majority CD&R Barbados Note Holders" means, at any time, Holders holding
more than fifty percent (50%) of the aggregate principal amount of CD&R Barbados
Notes outstanding at such time.
"Majority Holders" means, at any time, Holders holding more than fifty
percent (50%) of the aggregate principal amount of Notes outstanding at such
time.
"Majority Transferred Note Holders" means, at any time, Holders holding
more than fifty percent (50%) of the aggregate principal amount of Transferred
Notes outstanding at such time.
"Management Advances" means (a) loans or advances made to directors,
officers or employees of the Parent, the Company or any Restricted Subsidiary
(i) in respect of travel, entertainment or moving-related expenses incurred in
the ordinary course of business, (ii) in respect of moving-related expenses
incurred in connection with any closing or consolidation of any facility or
(iii) in the ordinary course of business and (in the case of this clause (iii))
not exceeding $2,500,000 in the aggregate outstanding at any time, (b)
promissory notes of Management Investors acquired in connection with the
issuance of Management Stock to such Management Investors, (c) Management
Guarantees, or (d) other Guarantees of borrowings by Management Investors in
connection with the purchase of Management Stock, which Guarantees are permitted
under Section 8.1.
"Management Agreements" means, collectively, the Consulting Agreement and
the Indemnification Agreement, each dated as of May 21, 1998, each between the
Company and CD&R (and its permitted successors and assigns thereunder), as each
may be amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof and of this Agreement.
"Management Guarantees" means guarantees (a) of up to an aggregate
principal amount of $20,000,000 of borrowings by Management Investors in
connection with their purchase of Management Stock or (b) made on behalf of, or
in respect of loans or advances made to, directors, officers or employees of the
Parent, the Company or any Restricted Subsidiary (i) in respect of travel,
entertainment and moving-related expenses incurred in the ordinary course of
business, or (ii) in the ordinary course of business and
87
(in the case of this clause (ii)) not exceeding $2,500,000 million in the
aggregate outstanding at any time.
"Management Investors" means the officers, directors, employees and other
members of the management of the Parent, the Company and any Subsidiary of the
Company, or family members or relatives thereof, or trusts or partnerships for
the benefit of any of the foregoing, or any of their heirs, executors,
successors and legal representatives, who at any date beneficially own or have
the right to acquire, directly or indirectly, Capital Stock of the Parent or the
Company.
"Management Stock" means Capital Stock of the Parent or the Company
(including any options, warrants or other rights in respect thereof) held by any
of the Management Investors.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Parent, the Company and the Subsidiaries of the Company, taken as a whole, or
(b) the validity or enforceability of the Note Financing Documents as to any
Note Financing Parties party thereto or the rights and remedies of the Investor
or any other Holder hereunder and thereunder, taken as a whole.
"Material Environmental Amount" means an amount payable by the Parent, the
Company or any Subsidiary of the Company in respect of or under any
Environmental Law for remedial costs, compliance costs, compensatory damages,
punitive damages, fines, penalties or any combination thereof in an amount that
would reasonably be expected to have a Material Adverse Effect.
"Material Subsidiary" means, at any date, any Subsidiary of the Company
which at such date has assets with a market value in excess of $5,000,000 or
annual revenues in excess of $5,000,000.
"Materials of Environmental Concern" means any hazardous or toxic
substances, materials, pollutants or wastes, defined or regulated as such in or
under any applicable Environmental Law, including, without limitation, gasoline
or petroleum (including, without limitation, crude oil or any fraction thereof)
or petroleum products, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Maturity Date" means December 31, 2007.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
88
"Net Available Cash" from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other non-cash form) therefrom, in each case net of (a) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP, as a consequence of such Asset
Disposition (including as a consequence of any transfer of funds in connection
with the application thereof in accordance with the covenant described in
Section 8.4), (b) all payments made, and all installment payments required to be
made, on any Indebtedness that is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon such assets, or that
must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (c) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition, or to any other Person (other than the Company or a
Restricted Subsidiary) owning a beneficial interest in the assets disposed of in
such Asset Disposition and (d) any liabilities or obligations associated with
the assets disposed of in such Asset Disposition and retained by the Company or
any Restricted Subsidiary after such Asset Disposition, including without
limitation pension and other post-employment benefit liabilities, liabilities
related to environmental matters, and liabilities relating to any
indemnification obligations associated with such Asset Disposition.
"Net Cash Interest Amount," with respect to interest paid on any date in
respect of interest payable to the Investor by the Company on any Senior
Subordinated Note Interest Payment Date on or after the date hereof by the
Company to the Investor in respect of any CD&R Barbados-Owned Senior
Subordinated Notes pursuant to the terms of the Senior Subordinated Note
Indenture and such notes, means an amount (rounded down to the nearest $1,000)
equal to (a) the cash interest received by the Investor on such date minus (b)
the aggregate amount of all withholding and income taxes with respect to the
receipt or accrual of such interest paid or payable by or in respect of the
Investor or any Person (including the direct and indirect owners of the capital
stock of the Investor) whose tax liability is determined by reference to the
income of the Investor, the amount of such taxes to be determined in good faith
by the Investor.
"Net Cash Proceeds," with respect to any issuance or sale of any securities
of the Company or any Subsidiary of the Company by the Company or any Subsidiary
of the Company, or any capital contribution, means the cash proceeds of such
issuance, sale or contribution net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees actually incurred
89
in connection with such issuance, sale or contribution and net of taxes paid or
payable as a result thereof.
"New Common Stock" means any newly-issued shares of Common Stock (or
securities convertible into or exercisable or exchangeable for newly-issued
shares of Common Stock) issued or proposed to be issued after the Closing Date,
other than (a) shares of Common Stock issued upon the exercise of any Warrant
issued by the Parent pursuant to this Agreement or upon the conversion of any of
the Notes pursuant to Section 6.3 and, (b) any issuance of shares of Common
Stock issuable as a result of an adjustment of the Conversion Rate under clauses
(i), (ii), (iii), (iv), (v) or (vi) of Section 6.3(c).
"New Issue Price" has the meaning given to it in Section 6.3(c).
"New Price Per Share" has the meaning given to it in Section 6.3(c)(vi).
"New York Court" has the meaning given to it in Section 13.3.
"Non-electing Share" has the meaning given to it in Section 6.3(i).
"Note Financing Documents" means this Agreement, the Notes, the
Intercreditor Agreement and the Note Security Documents.
"Note Financing Party" means the Parent, the Company and each Subsidiary of
the Company that is a party to a Note Financing Document.
"Note Guarantee" means any Guarantee with respect to any of the Notes by
Parent or any Subsidiary of the Company.
"Note Guarantor" means Parent or any Restricted Subsidiary of the Company
that is party to a Note Guarantee.
"Note Guarantor Subsidiary" means any Restricted Subsidiary of the Company
that is a Note Guarantor of both the CD&R Barbados Notes and the Transferred
Notes (if any).
"Note Security Documents" means the Guarantee and Collateral Agreement and
all other security documents hereafter delivered to any of the Secured Parties
granting a Lien on any asset or assets of any Person to secure the obligations
and liabilities of the Company hereunder and under any of the other Note
Financing Documents or to secure any guarantee of any such obligations and
liabilities.
"Notes" means (a) the Initial Notes, (b) any additional promissory notes
issued by the Company (i) in lieu of payment of an Interest Payment in cash, in
accordance with
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Section 6.2, (ii) in connection with any Optional Redemption, in accordance with
Section 6.4, (iii) in connection with any repurchase offer, in accordance with
Section 6.6, (iv) in connection with any transfer of Notes, in accordance with
Section 6.9, (v) in replacement of any mutilated, destroyed, lost or stolen
Notes, in accordance with Section 6.10 and (vi) in connection with any
repurchase offer, in accordance with Section 8.4.
"Offer" has the meaning given to it in Section 8.4(d).
"Offers to Purchase" has the meaning given to it in the Recitals.
"Optional Redemption" has the meaning given to it in Section 6.4.
"Parent" has the meaning given to it in the first paragraph of this
Agreement.
"Parent Expenses" means (a) costs (including all professional fees and
expenses) incurred by the Parent to comply with its reporting obligations under
federal or state laws or under this Indenture, including any reports filed with
respect to the Securities Act, Exchange Act or the respective rules and
regulations promulgated thereunder, (b) indemnification obligations of the
Parent owing to directors, officers, employees or other Persons under its
charter or by-laws or pursuant to written agreements with any such Person, (c)
other operational expenses of the Parent incurred in the ordinary course of
business and (d) expenses incurred by the Parent in connection with any public
offering of Capital Stock or Indebtedness (i) where the net proceeds of such
offering are intended to be received by or contributed or loaned to the Company
or a Restricted Subsidiary, or (ii) in a prorated amount of such expenses in
proportion to the amount of such net proceeds intended to be so received,
contributed or loaned or (iii) otherwise on an interim basis prior to completion
of such offering so long as the Parent shall cause the amount of such expenses
to be repaid to the Company or the relevant Restricted Subsidiary out of the
proceeds of such offering promptly if completed.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in, or consisting of, any of the following:
(a) a Restricted Subsidiary, the Company, or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary;
(b) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, or is liquidated into, the Company or a
Restricted Subsidiary;
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(c) Temporary Cash Investments or Cash Equivalents;
(d) receivables owing to the Company or any Restricted Subsidiary, if
created or acquired in the ordinary course of business;
(e) any securities or other Investments received as consideration in,
or retained in connection with, sales or other dispositions of property or
assets, including Asset Dispositions made in compliance with Section 8.4;
(f) securities or other Investments received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement
of any Lien, or in satisfaction of judgments, including in connection with any
bankruptcy proceeding or other reorganization of another Person;
(g) Investments in existence or made pursuant to legally binding
written commitments in existence on the Closing Date;
(h) Currency Agreements, Interest Rate Agreements and related hedging
obligations, which obligations are Incurred in compliance with Section 8.1;
(i) pledges or deposits (x) with respect to leases or utilities
provided to third parties in the ordinary course of business or (y) otherwise
described in the definition of "Permitted Liens";
(j) any Investment in a joint venture or similar entity that is not a
Restricted Subsidiary, or in any Related Business, in an aggregate amount
outstanding at any time not to exceed seven percent (7%) of Consolidated Total
Assets;
(k) (i) Investments in any Receivables Subsidiary, or in connection
with a Financing Disposition by or to any Receivables Entity, including
Investments of funds held in accounts permitted or required by the arrangements
governing such Financing Disposition or any related Indebtedness, or (ii) any
promissory note issued by the Company or the Parent, provided that if the Parent
receives cash from the relevant Receivables Entity in exchange for such note, an
equal cash amount is contributed by the Parent to the Company;
(l) bonds secured by assets leased to and operated by the Company or
any Restricted Subsidiary that were issued in connection with the financing of
such assets so long as the Company or any Restricted Subsidiary may obtain title
to such assets at any time by paying a nominal fee, canceling such bonds and
terminating the transaction;
(m) the Fund VI Notes or the Notes;
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(n) any Investment to the extent made using Capital Stock of the
Company (other than Disqualified Stock), or Capital Stock of the Parent, as
consideration;
(o) Management Advances; and
(p) other Investments in an aggregate amount outstanding at any time
not to exceed ten percent (10%) of Consolidated Total Assets.
"Permitted Liens" means:
(a) Liens for taxes, assessments or other governmental charges not
yet delinquent or the nonpayment of which in the aggregate would not reasonably
be expected to have a material adverse effect on the Company and its Restricted
Subsidiaries, or that are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or a Subsidiary thereof, as the case may be, in accordance
with GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business in
respect of obligations that are not overdue for a period of more than sixty (60)
days, or that are bonded or that are being contested in good faith and by
appropriate proceedings;
(c) pledges, deposits or Liens in connection with workers'
compensation, unemployment insurance and other social security and other similar
legislation or other insurance-related obligations (including, without
limitation, pledges or deposits securing liability to insurance carriers under
insurance or self-insurance arrangements);
(d) pledges, deposits or Liens to secure the performance of bids,
tenders, trade, government or other contracts (other than for borrowed money),
obligations for utilities, leases, licenses, statutory obligations, completion
guarantees, surety, judgment, appeal or performance bonds, other similar bonds,
instruments or obligations, and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements (including reciprocal easement agreements),
rights-of-way, building, zoning and similar restrictions, utility agreements,
covenants, reservations, restrictions, encroachments, changes, and other similar
encumbrances or title defects incurred, or leases or subleases granted to
others, in the ordinary course of business, which do not in the aggregate
materially interfere with the ordinary conduct of the business of the Company
and its Subsidiaries, taken as a whole;
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(f) Liens existing on, or provided for under written arrangements
existing on, the date hereof, or (in the case of any such Liens securing
Indebtedness of the Company or any of its Subsidiaries existing or arising under
written arrangements existing on the date hereof) securing any Refinancing
Indebtedness in respect of such Indebtedness so long as the Lien securing such
Refinancing Indebtedness is limited to all or part of the same property or
assets (plus improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or under such written arrangements could secure)
the original Indebtedness;
(g) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by any
developer, landlord or other third party on property over which the Company or
any Restricted Subsidiary of the Company has easement rights or on any leased
property and subordination or similar agreements relating thereto and (ii) any
condemnation or eminent domain proceedings affecting any real property;
(h) Liens securing (i) Hedging Obligations Incurred in compliance
with clause (b)(viii)(C) of Section 8.1 or (ii) Purchase Money Obligations or
Capitalized Lease Obligations Incurred in compliance with Section 8.1; provided
that, in the case of this clause (ii), (A) such Liens shall be created prior to
or substantially simultaneously with or within six months of the acquisition
thereby financed or the date of the incurrence or assumption of such
Indebtedness and (B) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness;
(i) Liens arising out of judgments, decrees, orders or awards in
respect of which the Company shall in good faith be prosecuting an appeal or
proceedings for review, which appeal or proceedings shall not have been finally
terminated, or if the period within which such appeal or proceedings may be
initiated shall not have expired;
(j) leases, subleases, licenses or sublicenses to third parties;
(k) Liens (1) on Collateral securing Bank Indebtedness Incurred under
the Credit Agreement in compliance with Section 8.1, (2) on property or assets
of a Foreign Subsidiary that is a Restricted Subsidiary securing Indebtedness of
a Foreign Subsidiary that is a Restricted Subsidiary Incurred in compliance with
clause (b)(v) of Section 8.1, (3) securing the Fund VI Notes, (4) securing the
Notes or (5) securing Indebtedness or other obligations of any Receivables
Entity;
(l) Liens existing on property or assets of a Person at the time such
Person becomes a Subsidiary of the Company (or at the time the Company or a
Restricted Subsidiary acquires such property or assets); provided, however, that
such Liens are not created in connection with, or in contemplation of, such
other Person becoming such a Subsidiary (or such acquisition of such property or
assets), and that such Liens are
94
limited to all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) that
secured (or, under the written arrangements under which such Liens arose, could
secure) the obligations to which such Liens relate;
(m) Liens on Capital Stock or other securities of an Unrestricted
Subsidiary that secure Indebtedness or other obligations of such Unrestricted
Subsidiary;
(n) any encumbrance or restriction (including, but not limited to,
put and call agreements) with respect to Capital Stock of any joint venture or
similar arrangement pursuant to any joint venture or similar agreement; and
(o) Liens securing Refinancing Indebtedness Incurred in respect of
any Indebtedness secured by, or securing any refinancing, refunding, extension,
renewal or replacement (in whole or in part) of any other obligation secured by,
any other Permitted Liens, provided that any such new Lien is limited to all or
part of the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure) the
obligations to which such Liens relate; and
(p) Liens securing the Transferred Notes incurred pursuant to Section
8.6(b).
For purposes of Section 8.6(b), "Permitted Liens" shall also mean and include
Liens securing (1) other Hedging Obligations, Purchase Money Obligations and
Capitalized Lease Obligations Incurred in compliance with Section 8.1, (2)
Indebtedness Incurred in compliance with clause (b)(i), (b)(iv), (b)(v),
(b)(vii), (b)(viii) or (b)(x) of Section 8.1, (3) Bank Indebtedness, (4)
commercial bank Indebtedness, (5) Indebtedness of any Restricted Subsidiary that
is not a Note Guarantor of the Transferred Notes, (6) the Fund VI Notes, (7) the
Notes or (8) Indebtedness or other obligations of any Receivables Entity
"Permitted Payment" has the meaning given to it in Section 8.2(b).
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan" means any employee benefit plan that is covered by ERISA and in
respect of which the Parent, the Company, any Subsidiary of the Company or a
Commonly Controlled Entity is an "employer" as defined in Section 3(5) of ERISA.
"Preferred Stock" as applied to the Capital Stock of any corporation means
Capital Stock of any class or classes (however designated) that by its terms is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or
95
involuntary liquidation or dissolution of such corporation, over shares of
Capital Stock of any other class of such corporation.
"Principal Amount" means, with respect to any Note, the principal amount
that will become due and payable to the Holder thereof on the Maturity Date, as
adjusted from time to time to account for the partial redemption or repurchase
of such Note by the Company prior to the Maturity Date.
"Properties" has the meaning given to it in Section 3.17.
"Purchase Money Obligations" means any Indebtedness Incurred to finance or
refinance the acquisition, leasing, construction or improvement of property
(real or personal) or assets, and whether acquired through the direct
acquisition of such property or assets or the acquisition of the Capital Stock
of any Person owning such property or assets, or otherwise.
"Purchase Price" has the meaning given to it in Section 1.4.
"Receivable" means a right to receive payment arising from a sale or lease
of goods or services by a Person pursuant to an arrangement with another Person
pursuant to which such other Person is obligated to pay for goods or services
under terms that permit the purchase of such goods and services on credit, as
determined in accordance with GAAP.
"Receivables Entity" means (a) any Receivables Subsidiary or (b) any other
Person that is engaged in the business of acquiring, selling, collecting,
financing or refinancing Receivables, accounts (as defined in the Uniform
Commercial Code as in effect in any jurisdiction from time to time), other
accounts and/or other receivables, and/or related assets.
"Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interest issued or sold in
connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Financing.
"Receivables Financing" means any financing of Receivables of the Company
or any Restricted Subsidiary that have been transferred to a Receivables Entity
in a Financing Disposition.
"Receivables Subsidiary" means a Subsidiary of the Company that (a) is
engaged solely in the business of acquiring, selling, collecting, financing or
refinancing Receivables, accounts (as defined in the Uniform Commercial Code as
in effect in any jurisdiction from time to time) and other accounts and
receivables (including any thereof constituting or evidenced by chattel paper,
instruments or general intangibles), all
96
proceeds thereof and all rights (contractual and other), collateral and other
assets relating thereto, and any business or activities incidental or related to
such business, and (b) is designated as a "Receivables Subsidiary" by the Board
of Directors.
"Redemption Date" has the meaning given to it in Section 6.4.
"Redemption Notice" has the meaning given to it in Section 6.4.
"Redemption Price" has the meaning given to it in Section 6.4.
"Refinancing Agreement" has the meaning given to it in Section 8.3(c).
"refinance" means, for purposes of Articles VIII and IX, to refinance,
refund, replace, renew, repay, modify, restate, defer, substitute, supplement,
reissue, resell or extend (including pursuant to any defeasance or discharge
mechanism); and the terms "refinances," "refinanced" and "refinancing" as used
for any purpose of Articles VIII and IX shall have a correlative meaning.
"Refinancing Indebtedness" means Indebtedness that is Incurred to refinance
any Indebtedness existing on the date of this Agreement or Incurred in
compliance with this Agreement (including Indebtedness of the Company that
refinances Indebtedness of any Restricted Subsidiary (to the extent permitted in
this Agreement) and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness; provided, that (a) the Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being refinanced, (b) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than the sum of (x) the aggregate principal
amount (or if issued with original issue discount, the aggregate accreted value)
then outstanding of the Indebtedness being refinanced, plus (y) fees,
underwriting discounts, premiums and other costs and expenses incurred in
connection with such Refinancing Indebtedness, (c) in the event that the
Indebtedness to be refinanced is subordinated in right of payment to the Notes
or any Note Guarantee, such new Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such new Indebtedness is issued or
remains outstanding, is made subordinate in right of payment to the Notes or
such Note Guarantee at least to the same extent that the Indebtedness to be
refinanced is subordinated to the Notes or such Note Guarantee, and (d)
Refinancing Indebtedness shall not include (x) Indebtedness of a Restricted
Subsidiary that is not a Note Guarantor Subsidiary that refinances Indebtedness
of the Company or a Note Guarantor that was incurred pursuant to paragraph (a)
of Section 8.1 or (prior to the date hereof) Section 406(a) of the Senior
Subordinated Note Indenture or (y) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.
97
"Register of Holders" has the meaning given to it in Section 6.8.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of May 21, 1998, and subsequently amended on May 23, 2000
and January 15, 2002, among the Parent, Fund VI, Fund V and certain other
parties, the third amendment of which shall be in the form of Exhibit C hereto,
as such agreement may be amended, supplemented, waived or otherwise modified
from time to time in accordance with the terms thereof and of this Agreement.
"Related Business" means those businesses in which the Company or any of
its Subsidiaries is engaged on the date of this Agreement, or that are related,
complementary, incidental or ancillary thereto or extensions, developments or
expansions thereof.
"Related Taxes" means (a) any taxes, charges or assessments, including but
not limited to sales, use, transfer, rental, ad valorem, value-added, stamp,
property, consumption, franchise, license, capital, net worth, gross receipts,
excise, occupancy, intangibles or similar taxes, charges or assessments (other
than federal, state or local taxes measured by income and federal, state or
local withholding imposed on payments made by the Parent), required to be paid
by the Parent by virtue of its being incorporated or having Capital Stock
outstanding (but not by virtue of owning stock or other equity interests of any
corporation or other entity other than the Company or any of its Subsidiaries),
or being a holding company parent of the Company or receiving dividends from or
other distributions in respect of the Capital Stock of the Company, or having
guaranteed any obligations of the Company or any Subsidiary thereof, or having
made any payment in respect of any of the items for which the Company is
permitted to make payments to the Parent pursuant to Section 8.2, or (b) any
other federal, state, foreign, provincial or local taxes measured by income for
which the Parent is liable up to an amount not to exceed with respect to such
federal taxes the amount of any such taxes that the Company would have been
required to pay on a separate company basis or on a consolidated basis if the
Company had filed a consolidated return on behalf of an affiliated group (as
defined in Section 1504 of the Code, or an analogous provision of state, local
or foreign law) of which it were the common parent, or with respect to state and
local taxes, on a combined basis if the Company had filed a combined return on
behalf of an affiliated group consisting only of the Company and its
Subsidiaries.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. (S) 2615.
98
"Requirement of Law" means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject; provided that the foregoing shall not apply to
any non-binding recommendation of any Governmental Authority.
"Responsible Officer" means the chief executive officer and the President
of the Company or, with respect to financial matters, the chief financial
officer of the Company.
"Restricted Payment" has the meaning given to it in Section 8.2(a). For
purposes of this Agreement, all Investments and Restricted Payments of the
Company and its Restricted Subsidiaries outstanding on the date hereof that have
been made since May 21, 1998 in accordance with Section 408(b) of the Senior
Subordinated Note Indenture, or (in the case of any Investment) the definition
of "Permitted Investments" contained in such indenture, shall be deemed made on
the date hereof and outstanding under the respective clauses of Section 8.2(b)
and the definition of "Permitted Investments" contained herein corresponding to
the respective clauses of Section 408(b) of the Senior Subordinated Note
Indenture and the definition of "Permitted Investments" contained in such
indenture under which such Investments and Restricted Payments were made and are
outstanding on the date hereof.
"Restricted Payment Transaction" means any Restricted Payment permitted
pursuant to Section 8.2, any Permitted Payment, any Permitted Investment, or any
transaction specifically excluded from the definition of the term "Restricted
Payment."
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Service, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"SEC" means the United States Securities and Exchange Commission.
"Second Credit Agreement Amendment" means the Second Amendment, dated as of
December 27, 2001, to the Credit Agreement.
"Secured Parties" means the Investor and each other member of the CD&R
Group that is a Holder.
"Securities Act" means the Securities Act of 1933, or any successor
statute, and the rules and regulations of the SEC thereunder, as amended.
99
"Senior Subordinated Default Event" means a "Default" or "Event of
Default", as those terms are defined in the Senior Subordinated Note Indenture,
or any other default or event of default under the Senior Subordinated Note
Indenture.
"Senior Subordinated Note Indenture" means the Indenture, dated as of May
21, 1998, among the Parent, the Company and State Street Bank and Trust Company,
as Trustee, relating to the 9 3/4% Senior Subordinated Notes Due 2008 of the
Company, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof and of this Agreement.
"Senior Subordinated Note Interest Payment Date" has the meaning given to
it in the Recitals.
"Senior Subordinated Notes" means the Company's 9 3/4% Senior Subordinated
Notes due 2008, in an aggregate principal amount not exceeding $275,000,000
outstanding at any time, issued and outstanding pursuant to the Senior
Subordinated Note Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC, as in effect on May 21, 1998.
"Significant Subsidiary Guarantor" has the meaning given to it in Section
7.11.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent", when used with respect to any Person, means that, as of any date
of determination, (a) the amount of the assets of such Person, at a fair
valuation, will, as of such date, exceed the amount of all liabilities of such
Person, contingent or otherwise, as of such date, (b) the present fair saleable
value of the assets of such Person will, as of such date, be greater than the
amount that will be required to pay the probable liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Special Committee" means a special committee of the Board of Directors of
the Company consisting of directors that are not Affiliated with the Investor
and formed for the purpose of determining from time to time the Specified
Conversion Rate and the Specified Interest Rate as set forth herein.
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"Specified Change" has the meaning given to it in Section 13.7.
"Specified Conversion Rate" means, in respect of any Notes issued
hereunder, the number of shares of Common Stock issuable upon conversion of each
$1,000 Principal Amount of Notes as mutually agreed between the Company's Board
of Directors (on the recommendation of the Special Committee after receiving the
advice of the Appraiser) and the Investor prior to the time of the issuance of
such Notes, such that the Fair Market Value of such Notes, taking into
consideration all other terms of the Notes, including but not limited to the
Specified Interest Rate, will be equal to the Purchase Price for such Notes;
provided however that in the case of any Note issued pursuant to the exercise of
the Investment Right with respect to the Senior Subordinated Note Interest
Payment Date falling on each May 15, the Specified Conversion Rate for such Note
shall be the Conversion Rate set forth in the Notes issued following the
immediately preceding Senior Subordinated Note Interest Payment Date. In
relation to each Senior Subordinated Note Interest Payment Date falling on
November 15, if the Company and the Investor shall not have agreed on the
Specified Conversion Rate within five (5) Business Days following the later to
occur of (i) such Senior Subordinated Note Interest Payment Date, and (ii) the
date of receipt by the Company of the Election Notice relating to such Senior
Subordinated Note Interest Payment Date, the Specified Conversion Rate shall be
a rate determined by the Appraiser, taking into account, together with other
relevant factors, the price per share of the Common Stock at the time of
issuance of such Notes, to be within the range of such rates that would apply to
notes issued on or about the time of issuance of such Notes by companies
comparable, both as to industry and financial condition, to the Company, and
having all other terms similar to those applicable to the Notes (including but
not limited to the Specified Interest Rate), such that the Fair Market Value of
the Notes as determined by the Appraiser, taking into consideration all other
terms of the Notes (including but not limited to the Specified Interest Rate) to
be issued, will be equal to the Purchase Price for such Notes. The Appraiser
shall complete its determination of the Conversion Rate not later than the tenth
(10) Business Day following the referral of the dispute to the Appraiser. Such
determination shall be final and binding on the Company, Parent and the
Investor, and the Appraiser shall deliver a notice thereof to the Company,
Parent and the Investor, together with the financial analyses supporting its
determination.
"Specified Interest Rate" means, in respect of any Notes issued hereunder,
the interest rate per annum to be payable on such Notes as mutually agreed
between the Company's Board of Directors (on the recommendation of the Special
Committee after receiving the advice of the Appraiser) and the Investor prior to
the time of the issuance of such Notes, such that the Fair Market Value of such
Notes, taking into consideration all other terms of the Notes, including but not
limited to the Specified Conversion Rate, will be equal to the Purchase Price
for such Notes; provided however that in the case of any Note issued pursuant to
the exercise of the Investment Right with respect to the Senior Subordinated
Note Interest Payment Date falling on each May 15, the Specified Interest
101
Rate for such Note shall be the Interest Rate set forth in the Notes issued
following the immediately preceding Senior Subordinated Note Interest Payment
Date. In relation to each Senior Subordinated Note Interest Payment Date falling
on November 15, if the Company and the Investor shall not have agreed on the
Specified Interest Rate within five (5) Business Days following the later to
occur of (i) such Senior Subordinated Note Interest Payment Date, and (ii) the
date of receipt by the Company of the Election Notice relating to such Senior
Subordinated Note Interest Payment Date, the Specified Interest Rate shall be a
rate determined by the Appraiser to be within the range of such rates that would
apply to notes issued on or about the time of issuance of such Notes by
companies comparable, both as to industry and financial condition, to the
Company, and having all other terms similar to those applicable to the Notes
(including but not limited to the Specified Conversion Rate), such that the Fair
Market Value of the Notes as determined by the Appraiser, taking into
consideration all other terms of the Notes (including but not limited to the
Specified Conversion Rate) to be issued, will be equal to the Purchase Price for
such Notes. The Appraiser shall complete its determination of the Interest Rate
not later than the tenth (10) Business Day following the referral of the dispute
to the Appraiser. Such determination shall be final and binding on the Company,
Parent and the Investor, and the Appraiser shall deliver a notice thereof to the
Company, Parent and the Investor, together with the financial analyses
supporting its determination.
"Springing Guarantee" has the meaning given to it in Section 7.11.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligations" means (a) any Indebtedness represented by any
Senior Subordinated Note or any Guarantee thereof or (b) any Indebtedness of the
Company or any Note Guarantor (whether outstanding on the date of this Agreement
or thereafter Incurred) that is subordinated in right of payment to the Notes,
any Note Guarantee or any other Indebtedness of the Company or any Note
Guarantor.
"Subsidiary" of any Person means any corporation, association, partnership
or other entity of which more than 50% of the total voting power of shares of
Capital Stock or other equity or ownership interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person or (ii) one or
more Subsidiaries of such Person.
"Successor Company" has the meaning given to it in Section 9.1.
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"Tax Sharing Agreement" means the Tax Sharing Agreement, dated as of May
21, 1998, between the Parent and the Company, as the same may be amended,
supplemented, waived or otherwise modified from time to time in accordance with
the terms thereof and of this Agreement.
"Temporary Cash Investments" means any of the following: (a) any investment
in (i) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations Guaranteed by the United States of
America or any agency or instrumentality thereof or (ii) direct obligations of
any foreign country recognized by the United States of America rated at least
"A" by S&P or "A-1" by ▇▇▇▇▇'▇ (or, in either case, the equivalent of such
rating by such organization or, if no rating of S&P or ▇▇▇▇▇'▇ then exists, the
equivalent of such rating by any nationally recognized rating organization), (b)
overnight bank deposits, and investments in time deposit accounts, certificates
of deposit, bankers' acceptances and money market deposits (or, with respect to
foreign banks, similar instruments) maturing not more than one year after the
date of acquisition thereof issued by (i) any lender under the Credit Agreement
or (ii) a bank or trust company that is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by the
United States of America having capital and surplus aggregating in excess of
$250,000,000 (or the foreign currency equivalent thereof) and whose long term
debt is rated at least "A" by S&P or "A-1" by ▇▇▇▇▇'▇ (or, in either case, the
equivalent of such rating by such organization or, if no rating of S&P or
▇▇▇▇▇'▇ then exists, the equivalent of such rating by any nationally recognized
rating organization) at the time such Investment is made, (c) repurchase
obligations with a term of not more than thirty (30) days for underlying
securities of the types described in clause (a) or (b) above entered into with a
bank meeting the qualifications described in clause (c) above, (d) Investments
in commercial paper, maturing not more than two-hundred and seventy (270) days
after the date of acquisition, issued by a Person (other than the Company or any
of its Subsidiaries), with a rating at the time as of which any Investment
therein is made of "P-2" (or higher) according to ▇▇▇▇▇'▇ or "A-2" (or higher)
according to S&P (or, in either case, the equivalent of such rating by such
organization or, if no rating of S&P or ▇▇▇▇▇'▇ then exists, the equivalent of
such rating by any nationally recognized rating organization), (e) Investments
in securities maturing not more than one year after the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by S&P or "A" by ▇▇▇▇▇'▇ (or, in either case, the
equivalent of such rating by such organization or, if no rating of S&P or
▇▇▇▇▇'▇ then exists, the equivalent of such rating by any nationally recognized
rating organization), (f) Preferred Stock (other than of the Company or any of
its Subsidiaries) having a rating of "A" or higher by S&P or "A2" or higher by
▇▇▇▇▇'▇ (or, in either case, the equivalent of such rating by such organization
or, if no rating of S&P or ▇▇▇▇▇'▇ then exists, the equivalent of such rating by
any nationally recognized rating organization), (g) investment funds investing
ninety-five percent (95%) of their assets in securities of the type described in
clauses (a)-(f) above (which funds may also hold
103
reasonable amounts of cash pending investment and/or distribution), (h) any
money market deposit accounts issued or offered by a domestic commercial bank or
a commercial bank organized and located in a country recognized by the United
States of America, in each case, having capital and surplus in excess of
$250,000,000 (or the foreign currency equivalent thereof), or investments in
money market funds complying with the risk limiting conditions of Rule 2a-7 (or
any successor rule) of the SEC under the Investment Company Act of 1940, as
amended, and (i) similar short-term investments approved by the Board of
Directors in the ordinary course of business.
"Third Credit Agreement Amendment" means the Third Amendment, dated as of
August 7, 2002, to the Credit Agreement.
"Trade Payables" means, with respect to any Person, any accounts payable or
any indebtedness or monetary obligation to trade creditors created, assumed or
guaranteed by such Person arising in the ordinary course of business in
connection with the acquisition of goods or services.
"Transactions" means the CD&R Barbados Investment, the effectiveness of the
Third Credit Agreement Amendment and all other transactions relating thereto.
"Transaction Agreements" means (a) this Agreement, (b) Amendment No. 3 to
the Registration Rights Agreement, (c) the Guarantee and Collateral Agreement,
(d) the Intercreditor Agreement, (e) the Notes, (f) the Third Credit Agreement
Amendment, (g) the Note Security Documents, (h) the Warrants and (i) the
Assumption Agreement.
"Transferred Notes" means one or more Notes held by any Person other than
the Investor or a member of the CD&R Group.
"Trigger Event" has the meaning given to it in Section 6.3(j).
"Underfunding" means an excess of all accrued benefits under a Plan (based
on those assumptions used to fund such Plan), determined as of the most recent
annual valuation date, over the value of the assets of such Plan allocable to
such accrued benefits.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Company that at
the time of determination is an Unrestricted Subsidiary, as designated by the
Board of Directors in the manner provided below, and (b) any Subsidiary of an
Unrestricted Subsidiary; provided that any Subsidiary of the Company that on the
date hereof is an "Unrestricted Subsidiary" (as defined in the Senior
Subordinated Note Indenture) for purposes of the Senior Subordinated Note
Indenture (if any) shall, as of the date hereof, be deemed to have been
designated an Unrestricted Subsidiary hereunder as of the date on which such
Subsidiary became an "Unrestricted Subsidiary" (as defined in the Senior
Subordinated Note Indenture). The Board of Directors may designate any
Subsidiary of
104
the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Restricted Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so designated, provided
that either (A) the Subsidiary to be so designated has total consolidated assets
of $1,000 or less or (B) if such Subsidiary has consolidated assets greater than
$1,000, then such designation would be permitted under Section 8.2. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, provided that immediately after giving effect to such designation
either (x) the Company could incur at least $1.00 of additional Indebtedness
under paragraph (a) of Section 8.1 or (y) the Consolidated Coverage Ratio would
be greater than it was immediately prior to giving effect to such designation.
"Warrant" has the meaning given to it in Section 1.3.
Article XIII
Miscellaneous
13.1 Notices. Except as otherwise specifically provided for in this
Agreement, notices and other communications given pursuant to this Agreement
shall be in writing and shall be deemed to have been duly given (a) on receipt,
if delivered personally, (b) three Business Days after being mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, (c) one Business Day after being sent by internationally recognized
courier (appropriately marked for two-day delivery) or (d) upon transmission, if
it is sent by telecopy (so long as the transmitting machine records electronic
confirmation of due transmission) to the address or telecopy number set forth
below, or such other address or telecopy number as may be specified to the other
parties hereto from time to time:
(i) if to the Parent, at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Acterna Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
105
(ii) if to the Company, at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Acterna Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
(iii) if to the Investor, at
c/o Corporate Services Limited
The Financial Services Centre
▇▇▇▇▇▇'▇ Court ▇▇▇▇
St. ▇▇▇▇▇▇▇, Barbados
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
(iv) if to any Holder other than the Investor, at the address or
facsimile number of such Holder recorded in the Register of Holders (or
such other address or facsimile number provided to the Company in writing
for use under this Section 13.1 by such Holder).
(v) Copies of any notice or other communication given under this
Agreement shall be given to:
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▇▇▇▇▇▇▇, Dubilier & Rice, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
13.2 Governing Law, etc. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
13.3 Jurisdiction; Waiver of Jury Trial; Waiver of Punitive Damages.
(a) Each of the parties hereto irrevocably and unconditionally (i)
agrees that any legal suit, action or proceeding brought by any party hereto
arising out of or based upon this Agreement or the transactions contemplated
hereby may be brought in the United States District Court for the Southern
District of New York or any New York State court sitting in the Borough of
Manhattan, in the City of New York (each, a "New York Court"), (ii) waives, to
the fullest extent it may effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such proceeding brought in the New
York Court, and any claim that any such action or proceeding brought in the New
York Court has been brought in an inconvenient forum and (iii) submits to the
non-exclusive jurisdiction of the New York Court in any suit, action or
proceeding. Each of the parties agrees that a judgment in any suit, action or
proceeding brought in the New York Court shall be conclusive and binding upon it
and may be enforced in any other courts to whose jurisdiction it is or may be
subject, by suit upon such judgment.
(b) EACH OF THE PARTIES AGREES AND ACKNOWLEDGES THAT ANY CONTROVERSY
THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY TRANSACTION AGREEMENT, OR THE BREACH, TERMINATION OR
VALIDITY OF THIS AGREEMENT OR ANY TRANSACTION AGREEMENT.
(c) Each of the parties waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover any punitive damages in any
legal action or proceeding referred to in this Section 13.3.
13.4 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns.
107
13.5 Assignment. This Agreement and the other Note Financing Documents may
not be assigned or otherwise transferred (by merger, consolidation, operation of
law or otherwise) by the Parent or the Company without the prior written consent
of the Majority CD&R Barbados Note Holders, and any attempt to so assign or
otherwise transfer this Agreement or any other Note Financing Document without
such consent shall be void and of no effect. The Investor and each other Holder
may assign or otherwise transfer this Agreement or any other Note Financing
Document to any Person without the consent of the Parent or the Company.
Notwithstanding the foregoing, without the prior consent of the Parent or the
Company, which shall not be unreasonably withheld, the Investor may not assign
or otherwise transfer the Investment Right to any Person other than a member of
the CD&R Group and any member of the CD&R Group that has been assigned or
otherwise transferred the Investment Right may not assign or otherwise transfer
the Investment Right to any Person other than a member of the CD&R Group.
13.6 No Third-Party Beneficiaries. Nothing in this Agreement shall be
construed as conferring any rights upon any person or entity other than the
parties hereto, each Holder and their respective heirs, successors and permitted
assigns.
13.7 Amendment; Waivers, etc.
(a) Neither this Agreement nor any other Note Financing Document, nor
any terms hereof or thereof, may be amended, supplemented, modified or waived
except in accordance with the provisions of this Section 13.7.
(b) Except as set forth in the succeeding paragraphs of this Section
13.7, the Majority Holders may (i) enter into with the relevant Note Financing
Parties written amendments, supplements or modifications to this Agreement and
the other Note Financing Documents for the purpose of adding any provisions to
this Agreement or the other Note Financing Documents or changing in any manner
the rights of the Holders or of the Note Financing Parties hereunder or
thereunder or (ii) waive at any Note Financing Party's request on such terms and
conditions as the Majority Holders may specify in such instrument, any of the
requirements of this Agreement or the other Note Financing Documents or any
Default or Event of Default and its consequences (any such amendment,
supplement, modification or waiver, a "Specified Change"); provided, that
without the written consent of all Holders, no Specified Change shall reduce the
percentage specified in the definition of "Majority Holders".
(c) Without the written consent of the Majority CD&R Barbados Note
Holders, no Specified Change shall amend, supplement, modify or waive any of the
provisions of Sections 6.6, 6.9, 7.9, 7.10, 7.11(a), 8.6(a), 8.8 or 13.5, or any
provision of any Note Security Document, or the definition of "Majority CD&R
Barbados Note Holders".
108
(d) Without the written consent of the Majority Transferred Note
Holders, no Specified Change shall amend, supplement, modify or waive any of the
provisions of Sections 7.11(b) and 8.6(b), Annex A or the definition of
"Majority Transferred Note Holders".
(e) Without the written consent of the Majority CD&R Barbados Note
Holders, no Specified Change shall take any action which has the effect of
releasing any of the Collateral securing any CD&R Barbados Notes or any of the
Note Guarantors from their Guarantee in respect of any CD&R Barbados Note
(except as permitted hereby or by any Note Financing Document).
(f) Subject to Section 10.7, without the written consent of each
Holder directly affected thereby, no Specified Change shall reduce the Principal
Amount of any Note, extend the Maturity Date or any Interest Payment Date,
reduce the Interest Rate or any fee payable hereunder or extend the scheduled
date of any payment thereof or amend, modify or waive any provision of this
Section 13.7(f).
(g) Without the written consent of the Majority CD&R Barbados Note
Holders, no Specified Change shall consent to the assignment or transfer by the
Company of any of its rights and obligations under this Agreement and the other
Note Financing Documents.
(h) Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Holders and shall be binding
upon the Note Financing Parties and the Holders (including all future Holders).
In the case of any waiver, each of the Note Financing Parties and the Holders
shall be restored to their former positions and rights hereunder and under the
other Note Financing Documents, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
(i) No delay or omission of any Holder to exercise any right, remedy,
power or privilege hereunder or under the other Transaction Agreements shall
impair such right, remedy, power or privilege or operate as a waiver thereof or
acquiescence therein; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided hereunder or
now or hereafter existing at law or in equity or otherwise.
(j) Any consent by the Company to any amendment, supplement,
modification or waiver of, or other action that would require the Company's
consent
109
under, this Agreement or any other Note Financing Document shall be granted or
taken only upon the prior recommendation of the Special Committee.
13.8 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Transaction Agreements and in any
certificate delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the purchase and sale of the
Notes and the issuance of the Warrants hereunder.
13.9 Payment of Expenses and Taxes.
(a) The Company agrees (i) to pay or reimburse each Holder for all
its reasonable out-of-pocket costs and expenses incurred in connection with the
preparation and execution of, and any amendment, supplement or modification to,
or proposed amendment, supplement or modification to, this Agreement and the
other Transaction Agreements and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Holders; (ii) to pay or
reimburse each Holder for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Transaction Agreements and any such other documents,
including, without limitation, the reasonable fees and disbursements of counsel
to the Holders; (iii) to pay, indemnify, and hold each Holder harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other
Transaction Agreements and any such other documents and (iv) to pay, indemnify,
and hold harmless each Holder from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Transaction Agreements and any such other documents, or the
use of the proceeds of the Notes, including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of the Company, any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (iv),
collectively, the "indemnified liabilities"), provided that the Company shall
have no obligation under this Section 13.9(a)(iv) to any Holder with respect to
indemnified liabilities arising from (A) the gross negligence or willful
misconduct of such Holder (or any of its respective directors, trustees,
officers, employees, agents, successors and assigns) or (B) claims made or legal
proceedings commenced against such Holder by any securityholder or creditor
thereof arising out of
110
and based upon rights afforded any such securityholder or creditor solely in its
capacity as such.
(b) Notwithstanding the foregoing provisions of Section 13.9(a),
except as provided in clauses (ii) and (iii) of Section 13.9(a) and subject to
the provisions of this Section 13.9(b), the Company shall have no obligation
under Section 13.9(a) to any Holder with respect to any withholding or deduction
required by any Governmental Authority to be made by the Company from any
payment by the Company to such Holder of principal of or interest on any Note,
for or on account of any tax, levy, impost or duty, or any charge or fee in the
nature of a tax, levy, impost or duty, that is imposed, levied, collected or
assessed by such Governmental Authority (a "withholding tax"). If any payment of
withholding tax shall be required by any Governmental Authority to be made by
the Company from any payment of principal of or interest on any Note, the
Company shall give notice thereof to the Holder of such Note no later than 15
Business Days prior to such payment. If any payment of withholding tax shall be
required by any Governmental Authority to be made by the Company from any
payment of principal of or interest on any Note in cash, a portion of such
payment of principal or interest equal to the amount of such withholding tax
paid to such Governmental Authority shall be deemed to have been paid to the
Holder of such Note for all purposes of this Agreement. If any payment of
withholding tax shall be required by any Governmental Authority to be made by
the Company from any payment of interest on any Note through the issuance of an
additional Note as provided in Section 6.2(a), the Company shall withhold and
reduce the face value of such additional Note by an amount equal to the amount
of such withholding tax paid to such Governmental Authority, and a portion of
such payment of interest equal to the amount of face value so withheld and
reduced shall be deemed to have been paid to the Holder of such Note for all
purposes of this Agreement, provided that the Parent shall, upon such
withholding and reduction of face amount, issue and deliver Warrants to the
Holder of such Note that entitle such Holder to purchase a number of shares of
Common Stock (or other property) that shall fairly compensate such Holder for
the loss of the conversion rights pursuant to Section 6.3 with respect to the
face amount of such additional Note so withheld and reduced, and with respect to
the face amount of any additional Notes that would have been issued in respect
of interest on any such additional Note if the face amount thereof had not been
so withheld and reduced, the provisions of such Warrants and the issuance and
delivery thereof to be effected as provided in Section 6.7, with such changes as
may be necessary or appropriate under the circumstances. The Company and the
relevant Holder shall use their respective good faith efforts to agree on the
number of such shares of Common Stock (or other property) and the provisions of
such Warrants. The Company and the relevant Holder shall use their respective
good faith efforts to avoid or minimize the payment of withholding tax from any
payment of principal of or interest on the Notes, provided that such Holder
shall not be required to (x) change its place of organization or any office or
other place of business thereof or (y) take other any action or refrain from
taking any action, which action or inaction, in its reasonable judgment, would
be significantly disadvantageous to
111
its business or operations or would require it to incur additional costs. Such
efforts shall include but not be limited to such Holder's provision of all
applicable withholding certificates, compliance certificates and representations
relating to status, subject to the proviso to the preceding sentence. Nothing in
this Section 13.9(b) shall be construed to require any Holder to disclose any of
such Holder's books, records or tax filings to the Company or any other party.
(c) The agreements in this Section 13.9 shall survive repayment of
the Notes and all other amounts payable hereunder and the issuance of the
Warrants.
13.10 Judgment Currency.
(a) If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in one currency into another currency,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures each Holder could purchase the first currency with such other
currency in the City of New York, New York for the first currency on the
Business Day preceding the day on which final judgment is given.
(b) The obligation of the Company in respect of any sum due from it
to any Holder hereunder shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the "Agreement
Currency"), be discharged only to the extent that on the Business Day following
receipt by such Holder of any sum adjudged to be so due in the Judgment Currency
such Holder may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency; if the amount of Agreement
Currency so purchased is less than the sum originally due to such Holder in the
Agreement Currency, the Company agrees notwithstanding any such judgment to
indemnify such Holder against such loss, and if the amount of the Agreement
Currency so purchased exceeds the sum originally due to any Holder, such Holder
agrees to remit to the Company such excess.
13.11 Entire Agreement. This Agreement and the other Transaction
Agreements (when executed and delivered) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and thereof.
13.12 Severability. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties hereto to the
maximum extent possible. In any event, the invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that
112
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
13.13 Headings. The headings contained in this Agreement are for purposes
of convenience only and shall not affect the meaning or interpretation of this
Agreement.
13.14 Rules of Construction. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement;
(b) "or" is not exclusive;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision;
(e) all references to "$" or "dollars" shall refer to the lawful currency
of the United States of America;
(f) the words "include," "included" and "including" as used herein shall be
deemed in each case to be followed by the phrase "without limitation," if not
expressly followed by such phrase or the phrase "but not limited to";
(g) words in the singular include the plural, and words in the plural
include the singular; and
(h) any reference to a Section or Article refers to such Section or Article
of this Agreement.
13.15 Schedules. No later than five (5) Business Days prior to the initial
Closing Date, the Parent and the Company shall deliver all Schedules to this
Agreement and the Guarantee and Collateral Agreement to the Investor, which
Schedules shall be subject in all respects to review and approval by the
Investor. Unless the context otherwise requires, if a Closing shall occur, all
references to any "Schedule" herein shall be deemed to be a reference to a
Schedule hereto delivered pursuant this Section 13.15, as if such Schedule had
been delivered on the date hereof. Notwithstanding anything to the contrary
herein, from and after the initial Closing Date, this Agreement shall be
construed as if all such Schedules hereto delivered pursuant to this Section
13.15 had been delivered on the date hereof.
113
13.16 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
13.17 Limitation on Certain Transactions. The Investor hereby agrees that,
from and after the date hereof, the Investor shall not engage in any Rule 13e-3
transaction, as such term is defined in Rule 13e-3 of the Exchange Act, without
the prior written consent of the Special Committee. The agreements in this
Section 13.17 shall survive repayment of the Notes and all other amounts payable
hereunder and the issuance of the Warrants.
114
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
ACTERNA CORPORATION
By: _________________________________
Name:
Title:
ACTERNA LLC
By: _________________________________
Name:
Title:
CD&R VI (BARBADOS), LTD.
By: Corporate Services Limited,
Secretary
By:______________________________
Name:
Title:
115
Annex A
Terms of Note Guarantees of Transferred Notes
1. Guarantees Generally.
(a) Parent Guarantee. Parent, as a primary obligor and not merely as
surety, hereby irrevocably and fully and unconditionally Guarantees, on a senior
basis, the punctual payment when due, whether at the Maturity Date, by
acceleration or otherwise, of all monetary obligations of the Company under the
Agreement and the Transferred Notes, whether for principal of or interest on the
Transferred Notes, expenses, indemnification or otherwise (all such obligations
guaranteed by Parent being herein called the "Parent Guaranteed Obligations").
(b) Note Guarantees. Any Significant Subsidiary Guarantor from time to time
party hereto, as primary obligor and not merely as surety, hereby jointly and
severally, irrevocably and fully and unconditionally Guarantees, on a senior
basis, the punctual payment when due, whether at the Maturity Date, by
acceleration or otherwise, of all monetary obligations of the Company under the
Agreement and the Transferred Notes, whether for principal of or interest on the
Transferred Notes, expenses, indemnification or otherwise (all such obligations
guaranteed by such Significant Subsidiary Guarantors being herein called the
"Springing Guaranteed Obligations").
Any term or provision of the Agreement notwithstanding, each Springing
Guarantee shall not exceed the maximum amount that can be guaranteed by the
applicable Significant Subsidiary Guarantor without rendering the Springing
Guarantee, as it relates to such Significant Subsidiary Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
(c) Further Agreements of Parent Guarantor and any Significant Subsidiary
Guarantor. (i) Parent, in its capacity as guarantor of the Parent Guaranteed
Obligations hereunder (in such capacity, the "Parent Guarantor") and any
Significant Subsidiary Guarantor from time to time party hereto (each of the
Parent Guarantor and any Significant Subsidiary Guarantor, a "Guarantor") each
hereby agrees that (to the fullest extent permitted by law) its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Agreement, the Transferred Notes or the obligations of the
Company or any other Guarantor to the Holders of the Transferred Notes hereunder
or thereunder, the absence of any action to enforce the same, any waiver or
consent by any Holder of Transferred Notes with respect to any provisions hereof
or thereof, any release of any other Guarantor, the recovery of any judgment
against the Company, any action to enforce the same, whether or not a notation
concerning its respective Parent Guarantee or Springing Guarantee is made on any
particular Transferred Note, or any other circumstance that might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
(ii) Each Guarantor hereby waives (to the fullest extent permitted by law)
the benefit of diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Parent Guarantee or (except as otherwise
provided in Section 7.11(b) of the Agreement) Springing Guarantee, as the case
may be, will not be discharged except by complete performance of the obligations
contained in the Transferred Notes, the Agreement, and its Parent Guarantee or
Springing Guarantee, as the case may be. Such Parent Guarantee or Springing
Guarantee, as the case may be, is a guarantee of payment and not of collection.
Each Guarantor further agrees (to the fullest extent permitted by law) that, as
between it, on the one hand, and the Holders of the Transferred Notes, on the
other hand, subject to the provisions of this Annex A, (1) the maturity of the
obligations guaranteed by its Parent Guarantee or Springing Guarantee, as the
case may be, may be accelerated as and to the extent provided in Article X of
the Agreement for the purposes of such Parent Guarantee or Springing Guarantee,
as the case may be, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed by such
Parent Guarantee or Springing Guarantee, as the case may be, and (2) in the
event of any acceleration of such obligations as provided in Article X of the
Agreement, such obligations (whether or not due and payable) shall forthwith
become due and payable by such Guarantor in accordance with the terms of the
provisions of this Annex A for the purpose of such Parent Guarantee or Springing
Guarantee, as the case may be. No Holder of Transferred Notes shall have any
obligation to enforce or exhaust any rights or remedies or to take any other
steps under any security for the Parent Guaranteed Obligations or the Springing
Guaranteed Obligations (collectively, the "Guaranteed Note Obligations") or
against the Company or any other Person or any property of the Company or any
other Person before the Holder of Transferred Notes is entitled to demand
payment and performance by any or all Guarantors of their obligations under
their respective Parent Guarantee or Significant Guarantees or under the
Agreement.
(iii) The Parent Guarantee and, unless and until terminated in accordance
with Section 7.11(b) of the Agreement, any Springing Guarantee, shall remain in
full force and effect and continue to be effective should any petition be filed
by or against the Company for liquidation or reorganization, should the Company
become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Company's assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Transferred Notes are, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee
on such Transferred Notes, whether as a "voidable preference," "fraudulent
transfer" or otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the
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Transferred Notes shall, to the fullest extent permitted by law, be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
(d) Each Guarantor that makes a payment or distribution under the Parent
Guarantee or any Springing Guarantee, as the case may be, shall have the right
to seek contribution from the Company or any non-paying Guarantor that has also
Guaranteed the Guaranteed Note Obligations in respect of which such payment or
distribution is made, so long as the exercise of such right does not impair the
rights of the Holders of the Transferred Notes under the Parent Guarantee or
such Springing Guarantee.
(e) Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Agreement and that
its Parent Guarantee or its Springing Guarantee, as the case may be, and the
waiver set forth in Section 3 of this Annex A is knowingly made in contemplation
of such benefits.
(f) Each Guarantor also hereby agrees to pay any and all reasonable
out-of-pocket expenses (including reasonable counsel fees and expenses) incurred
by the Holders of Transferred Notes in enforcing any rights under its Parent
Guarantee or its Springing Guarantee, as the case may be.
2. Continuing Guarantees. (a) The Parent Guarantee shall be a continuing
Guarantee and shall (i) remain in full force and effect until payment in full of
the Principal Amount of all outstanding Transferred Notes (whether by payment at
maturity, purchase, redemption, defeasance, retirement or other acquisition) and
all other Parent Guaranteed Obligations then due and owing, (ii) be binding upon
Parent and (iii) inure to the benefit of and be enforceable by the Holders of
Transferred Notes and their permitted successors, transferees and assigns.
(b) Each Springing Guarantee shall be a continuing Guarantee and shall (i)
remain in full force and effect until payment in full of the principal amount of
all outstanding Transferred Notes (whether by payment at maturity, purchase,
redemption, defeasance, retirement or other acquisition) and all other
Guaranteed Obligations then due and owing, unless earlier terminated as provided
in Section 7.11(b) of the Agreement, (ii) be binding upon such Guarantor and
(iii) inure to the benefit of and be enforceable by the Holders of the
Transferred Notes and their permitted successors, transferees and assigns.
3. Waiver of Subrogation. Each of the Parent Guarantor and each
Significant Subsidiary Guarantor hereby irrevocably waives any claim or other
rights that it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of the Company's obligations
under the Transferred Notes and the Agreement or such Guarantor's obligations
under its Parent Guarantee or Springing Guarantee, as the case may be, and the
Agreement, including, without
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limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Transferred Notes against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
until the Agreement is discharged and all of the Transferred Notes are
discharged and paid in full. If any amount shall be paid to a Guarantor in
violation of the preceding sentence and the Transferred Notes shall not have
been paid in full, such amount shall have been deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the Holders
of the Transferred Notes, and shall forthwith be paid to the Holders of
Transferred Notes to be credited and applied upon the Transferred Notes, whether
matured or unmatured, in accordance with the terms of the Agreement and this
Annex A.
4. Notation Not Required. Neither the Company nor any Guarantor shall be
required to make a notation on the Transferred Notes to reflect the Parent
Guarantee or any Springing Guarantee or any such release, termination or
discharge thereof.
5. Successors and Assigns of the Parent Guarantor and the Other
Guarantors. All covenants and agreements in the Agreement or the terms of this
Annex A by each Guarantor shall bind its respective successors and assigns,
whether so expressed or not.
6. Execution and Delivery of Note Guarantees. Concurrently with the
execution and delivery of the instrument required to be delivered under Section
7.11(b) of the Agreement, the Company shall deliver to the Holders of
Transferred Notes an opinion of counsel (which counsel shall be reasonably
satisfactory to the Majority Transferred Note Holders) in form and substance
reasonably satisfactory to the Majority Transferred Note Holders to the effect
that such instrument has been duly authorized, executed and delivered by the
relevant Significant Subsidiary Guarantor and that, subject to the applicable
bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance,
reorganization, moratorium and other laws now or hereafter in effect affecting
creditors' rights or remedies generally and the general principles of equity
(including standards of materiality, good faith, fair dealing and
reasonableness), whether considered in a proceeding at law or at equity such
instrument is a valid and binding agreement of such Significant Subsidiary
Guarantor, enforceable against such Significant Subsidiary Guarantor in
accordance with its terms.
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