Exhibit 10.2
--------------------------------------------------------------------------------
NOTE PURCHASE AGREEMENT
Among
American Seafoods, L.P.,
American Seafoods Corporation,
The Subsidiary Guarantors from Time to Time Party Hereto
And
American Seafoods Holdings, L.P.
Dated as of [____________], 2004
--------------------------------------------------------------------------------
Table of Contents
Page
----
Article I Authorization ................................................ 1
1.1 The Notes .............................................. 1
1.2 Additional Notes ....................................... 1
Article II Purchase and Sale ............................................ 2
2.1 Purchase and Sale of the Notes ......................... 2
Article III Closing ...................................................... 2
3.1 Closing ................................................ 2
Article IV Closing Conditions ........................................... 3
4.1 Note Purchase Agreement; Subordinated Note Documents ... 3
4.2 Representations and Warranties ......................... 3
4.3 Performance; No Default ................................ 3
4.4 Purchase Permitted By Applicable Law, etc .............. 3
Article V Representations and Warranties ............................... 3
5.1 No Conflict ............................................ 3
5.2 Organization, Powers, Capitalization and Good Standing . 4
5.3 Solvency ............................................... 4
5.4 Use of Proceeds; Margin Regulations .................... 4
5.5 Investment Company Act; Public Utility Holding Company
Act .................................................... 4
Article VI [Reserved] ................................................... 4
Article VII Terms of Notes ............................................... 5
7.1 Interest ............................................... 5
7.2 Redemption; Repurchase ................................. 5
7.3 Payments ............................................... 6
7.4 Transfer and Exchange of Notes ......................... 6
7.5 Replacement of Notes ................................... 7
Article VIII Covenants .................................................... 8
8.1 Payment of Notes; Interest Deferral .................... 8
8.2 Reports and Other Information .......................... 9
8.3 Limitations on Incurrence of Indebtedness and Issuance
of Disqualified Stock and Preferred Stock .............. 9
8.4 Limitation on Restricted Payments ...................... 14
8.5 Dividend and Other Payment Restrictions Affecting
Subsidiaries ........................................... 18
8.6 Asset Sales ............................................ 20
8.7 Transactions with Affiliates ........................... 20
i
Table of Contents
(continued)
Page
----
8.8 Liens .................................................. 22
8.9 [Intentionally left blank] ............................. 22
8.10 Further Instruments and Acts ........................... 22
8.11 Future Guarantors ...................................... 23
8.12 Limitation on Layering ................................. 23
8.13 Subsequent Issuance .................................... 23
8.14 Merger, Consolidation or Sale of All or
Substantially All Assets ............................... 23
Article IX Events of Default ............................................ 25
9.1 Events of Default ...................................... 25
Article X Acceleration; Remedies on Default ............................ 28
10.1 Acceleration ........................................... 28
10.2 Other Remedies ......................................... 29
10.3 Waiver of Past Defaults ................................ 29
10.4 Rights of Purchasers to Receive Payment ................ 30
10.5 Undertaking for Costs .................................. 30
10.6 Waiver of Stay or Extension Law ........................ 30
Article XI Guarantee .................................................... 30
11.1 Note Guarantee ......................................... 30
11.2 Limitation on Liability ................................ 33
11.3 Reduction of Guaranteed Obligations .................... 33
11.4 Successors and Assigns ................................. 34
11.5 No Waiver .............................................. 34
11.6 Subordination of Note Guarantees ....................... 34
11.7 Modification ........................................... 34
11.8 Execution of Amendments for Future Guarantors .......... 34
11.9 Notation Not Required .................................. 35
Article XII Subordination of the Notes ................................... 35
12.1 Agreement To Subordinate ............................... 35
12.2 Liquidation, Dissolution or Bankruptcy ................. 35
12.3 Default on Guarantor Senior Indebtedness of the
Company ................................................ 35
12.4 When Distribution Must Be Paid Over .................... 36
12.5 Subrogation ............................................ 37
12.6 Relative Rights ........................................ 37
12.7 Subordination May Not Be Impaired by the Company ....... 37
12.8 Distribution or Notice to Representative ............... 37
12.9 Article XII Not To Prevent Events of Default or Limit
Right To Accelerate .................................... 37
12.10 Purchasers Entitled To Rely ............................ 37
ii
Table of Contents
(continued)
Page
----
12.11 Reliance by Holders of Guarantor Senior Indebtedness
on Subordination Provisions ........................... 38
Article XIII Definitions .................................................. 38
13.1 Definitions ........................................... 38
13.2 [Intentionally Omitted] ............................... 73
13.3 Rules of Construction ................................. 73
13.4 Headings .............................................. 73
Article XIV Miscellaneous ................................................ 74
14.1 Amendments; Actions by Purchasers; Solicitation of
Purchasers ............................................ 74
14.2 Addresses for Notices, etc ............................ 75
14.3 No Waiver; Cumulative Remedies ........................ 76
14.4 Successors and Assigns; No Third-Party Beneficiaries .. 76
14.5 Prior Agreements ...................................... 77
14.6 Severability .......................................... 77
14.7 GOVERNING LAW ......................................... 77
14.8 Consent to Jurisdiction ............................... 77
14.9 WAIVER OF JURY TRIAL .................................. 78
14.10 [Intentionally Omitted] ............................... 78
14.11 Service of Process .................................... 78
14.12 Further Assurances .................................... 79
14.13 Counterparts .......................................... 79
iii
SCHEDULES
Schedule 2.1 Purchased Notes
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Subsidiary Joinder
iv
American Seafoods Holdings, L.P.
Market Place Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dated as of [____________], 2004
To Each Purchaser Listed on
Schedule 2.1 Attached Hereto
Dear Purchasers:
American Seafoods Holdings, L.P., a Delaware limited partnership (the
"Company") hereby agrees with you as follows (capitalized terms used herein
without definition shall have the respective meanings given in Section 14.1):
Article I
Authorization
1.1 The Notes. The Company has authorized the issuance and sale to the
Purchasers of its [__]% Unsecured Subordinated Notes due 2014 in the aggregate
original principal amount of $[353,400,000] and any Additional Notes as provided
for in Section 1.2. The [__]% Unsecured Subordinated Notes shall be
substantially in the form set forth as Exhibit A attached hereto and are
referred to individually as a "Note" and collectively as the "Notes," which
terms shall also include any notes delivered in exchange or replacement
therefor. The Notes will contain the same payment and interest terms as the
Indenture Notes. The terms of the Notes shall constitute, and are hereby
expressly made, a part of this Agreement.
1.2 Additional Notes.
(a) Subject to the Conditions set for in Section 8.13, the Company may
issue additional Notes ("Additional Notes") from time to time (i) to the Issuer,
upon the issuance of Additional Indenture Notes, such that, after giving effect
to such issuance, the aggregate principal amount of the Indenture Notes then
outstanding equals the aggregate principal amount of the Notes held by the
Issuer; and (ii) to ASLP, in an aggregate principal amount of up to
[$20,500,000,] upon the exercise of management options to acquire units in ASLP.
(b) The obligations of the Purchasers to purchase and pay for the
Additional Notes to be sold to each Purchaser on each Additional Closing Date is
subject to the
fulfillment to such Purchaser's satisfaction, prior to or on such Additional
Closing Date, of the Conditions set forth in Article IV, as of such Additional
Closing Date.
Article II
Purchase and Sale
2.1 Purchase and Sale of the Notes. Subject to and in reliance upon the
terms and conditions of this Agreement, each Purchaser severally agrees to
purchase from the Company, and the Company agrees to sell to each Purchaser,
Notes in the principal amount set forth opposite such Purchaser's name on
Schedule 2.1 attached hereto.
Article III
Closing
3.1 Closing. The closing of the purchase and sale of the Notes to you and
the other Purchasers (the "Closing") shall take place at the offices of
Debevoise & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other
location as agreed by the Company and the Purchasers, upon satisfaction of the
conditions described in Article IV, at 10:00 a.m. local time (a) on the date on
which this Agreement is executed and delivered or on such other Business Day
thereafter as may be agreed upon by the Company and the Purchasers (the "Initial
Closing Date") and (b) at any Closing on a date to be agreed to by the Company
and the Purchasers with respect to any Additional Notes (the "Additional Closing
Date", and collectively with the Initial Closing Date, the "Closing Date"). At
each Closing the Company will deliver to each Purchaser a single Note (or such
greater number of Notes as the Purchasers may request), dated the Closing Date
and registered in such Purchaser's name in the principal amount set forth
opposite such Purchaser's name on Schedule 2.1 with respect to Notes issued on
the date hereof and the amounts provided for in Section 1.2, or such other
amounts as may be agreed to from time to time by the Company and the Purchasers,
with respect to any Additional Notes, in consideration for delivery (A) with
respect to Notes (i) by the Issuer to the Company of immediately available funds
by wire transfer to an account designated in writing by the Company in the
aggregate amount of the purchase price therefor set forth opposite the Issuer's
name on Schedule 2.1, (ii) by ASLP to the Company of the Interests, in each
case, on or prior to the Initial Closing Date and (B) with respect to Additional
Notes the consideration provided for in Section 1.2 or any other consideration
as may be agreed to from time to time by the Company and the Purchasers. If at
any Closing the Company shall fail to tender any Notes or Additional Notes, as
applicable, as provided in this Article III, or any of the conditions specified
in Article IV shall not have been fulfilled, each Purchaser shall, at the
election of such Purchaser, be relieved of all further obligations hereunder,
without thereby waiving any other rights it may have by reason of such failure
or such nonfulfillment.
2
Article IV
Closing Conditions
The obligation of each Purchaser to purchase the Notes at each Closing is
subject at the time of the making of such purchase to the satisfaction of the
following conditions, in each case to the satisfaction of such Purchaser:
4.1 Note Purchase Agreement; Subordinated Note Documents. This Agreement
and the other Subordinated Note Documents and the other documents required to be
executed in connection with the Transactions shall have been duly executed by
the parties hereto and thereto and delivered to the Note Parties and the
Purchasers; and the Purchasers shall have received such documents, instruments
and agreements as Purchasers shall reasonably request in connection with the
Transactions.
4.2 Representations and Warranties. The representations and warranties in
any Subordinated Note Document, or otherwise made in writing by or on behalf of
any Note Party in connection with the transactions contemplated by this
Agreement, shall be true and correct when made and at the time of each Closing.
4.3 Performance; No Default. Each Note Party shall have performed and
complied with all agreements and conditions contained in the Subordinated Note
Documents required to be performed or complied with by it prior to or at the
Closing, and at the time of the Closing no Default or Event of Default shall
have occurred and be continuing.
4.4 Purchase Permitted By Applicable Law, etc. On the date of the Closing
your purchase of Notes will not violate any applicable law or regulation
(including, without limitation, Regulation G, T or X of the Board of Governors
of the Federal Reserve System) and not subject the Purchasers to any tax,
penalty or liability under or pursuant to any applicable law or regulation. The
Purchasers may request an Officer's Certificate certifying as to such matters of
fact as they may reasonably specify to enable them to determine whether such
purchase is so permitted.
Article V
Representations and Warranties
In order to induce the Purchasers to purchase the Notes, each Note Party
makes the following representations, warranties, covenants and agreements, in
each case as of the Closing Date:
5.1 No Conflict. The consummation of the transactions contemplated hereby
does not and will not violate or conflict with any laws, rules, regulations or
orders of any Governmental Authority or violate, conflict with, result in a
breach of, or constitute a default (with due notice or lapse of time or both)
under the organizational documents of
3
the Company or any Guarantor or any material contract to which the Company or
such Guarantor is a party, except, in each case, if such violations, conflicts,
breaches or defaults would not reasonably be expected to have, in the aggregate,
a Material Adverse Effect.
5.2 Organization, Powers, Capitalization and Good Standing.
(a) Organization and Powers. Each Note Party is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and qualified to do business in all states where such qualification is required
except where failure to be so qualified would not reasonably be expected to
have, in the aggregate, a Material Adverse Effect. Each Note Party has all
requisite organizational power and authority to own and operate its properties,
to carry on its business as now conducted and proposed to be conducted (except
where the failure to have such power and authority would not reasonably be
expected to have a Material Adverse Effect), to enter into each Subordinated
Note Document to which it is a party and to incur its Note Party Obligations.
(b) Binding Obligation. This Agreement is, and each of the other
Subordinated Note Documents when executed and delivered will be, the legally
valid and binding obligation of each Note Party party thereto, each enforceable
against each of such parties, as applicable, in accordance with its respective
terms.
5.3 Solvency. Each of the Note Parties and its Subsidiaries, considered
as a whole, is Solvent.
5.4 Use of Proceeds; Margin Regulations. No part of the proceeds of the
sale of the Notes will be used for "buying" or "carrying" "margin stock" within
the respective meanings of such terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any other purpose that violates the provisions of the
regulations of the Board of Governors of the Federal Reserve System.
5.5 Investment Company Act; Public Utility Holding Company Act. None of
the Note Parties, (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
Article VI
[Reserved]
4
Article VII
Terms of Notes
7.1 Interest.
7.1.1 Interest Rate; Payment. The Notes shall bear interest (based on a
360-day year of twelve 30-day months) on the unpaid principal amount thereof
until due at (x) the rate of [__]% per annum, payable quarterly in arrears on
the 15th day of each March, June, September and December, provided that if such
day is not a Business Day such day shall be the next Business Day, or (y) such
lower rate as then may be the maximum rate permitted by applicable law.
7.1.2 Maximum Legal Rate of Interest. Nothing in this Agreement or in the
Notes shall require the Company to pay interest at a rate in excess of the
highest rate permitted by applicable law.
7.2 Redemption; Repurchase.
7.2.1 Redemption at Maturity.
(a) The Notes shall be payable in full on [________], 2014 (the "Maturity
Date"). On the Maturity Date or upon any earlier acceleration of the maturity of
the Notes, the Company shall redeem the Notes by paying the principal amount of
the Notes then outstanding together with all accrued and unpaid interest
thereon. No redemption of less than all of the Notes shall affect the obligation
of the Company to make the redemption required by this subsection.
(b) The Company may extend the maturity of the Notes for up to two
additional successive five-year terms, to [__________], 2019 and [___________],
2024, respectively, if the Total Leverage Ratio of the Company for the most
recent twelve-month period ended on the last day of any fiscal quarter at least
45 days prior to the end of the then-current term, is equal to or greater than
5.00 to 1.00, and provided that as of the scheduled maturity date:
(A) no Event of Default has occurred and is continuing with respect to
the Notes;
(B) no event of default has occurred and is continuing with respect to
any Indebtedness of the Company or a Significant Subsidiary; and
(C) there is no interest due but unpaid on the Notes or any Indebtedness
of the Company, other than Indebtedness that is not Indebtedness for
borrowed money up to an aggregate amount of $1,000,000.
5
(c) The Company shall extend the maturity of the Notes upon the
extension of the maturity of the Indenture Notes pursuant to
Section 2.15 of the Indenture.
(d) If the Company determines to extend the maturity of the Notes, the
Company shall mail a notice of such extension, which notice shall
include the new maturity date, to each Purchaser at such
Purchaser's registered address, at least 30 and not more than 60
days prior to the scheduled maturity date so extended.
(e) The Purchasers shall be deemed to have consented on the Issue Date
to each future extension of the maturity of the Notes by accepting
its beneficial ownership interest in the Notes.
7.2.2 Optional Redemption. The Company shall have the right at anytime
and from time to time, upon 30 days' prior written notice sent to each
Purchaser, to redeem the Notes, in whole or in part, in an amount specified in
such notice, by payment of the principal amount of the Notes (or portion
thereof) to be redeemed, without premium and any accrued but unpaid interest
thereon up to and including the Redemption Date.
7.3 Payments.
(a) Payments of principal and interest on the Notes shall be made
directly by wire transfer to an account designated in writing by each Purchaser.
Any payment to be made to the Purchasers hereunder shall be deemed to have been
made on the Business Day that such payment actually becomes available at such
Purchaser's bank prior to the close of business of such bank. Whenever any
payment to be made shall be due on a day which is not a Business Day, such
payment may be made on the next succeeding Business Day.
(b) The Company shall make all payments of principal and interest on
the Notes pro rata on all the Notes at the time outstanding.
(c) Notwithstanding anything to the contrary contained herein, the
Issuer agrees that any payment of principal of the Indenture Notes by the
Company or any Guarantor under its respective Indenture Guarantee shall, for the
purposes of this Agreement and the Notes, be deemed to be a payment made by the
Company to the Issuer with respect to the principal amount of the Notes then
held by the Issuer.
7.4 Transfer and Exchange of Notes. The Company shall keep a register
which shall provide for the registration of the Notes and the registration of
transfers of Notes (the "Note Register"). The principal amount of and stated
rate of interest on the Notes, the names and addresses of the Purchasers holding
the Notes, the transfer of the Notes, and the names and addresses of the
transferees of the Notes shall be registered in the Note Register. No Note may
be transferred unless such transfer is recorded in the Note Register. The
Purchaser holding any Note or Notes may, prior to maturity or
6
prepayment thereof, surrender such Note or Notes at the principal office of the
Company for transfer or exchange. Any Purchaser desiring to transfer or exchange
any Note shall first notify the Company in writing at least three Business Days
in advance of such transfer or exchange. Within a reasonable time after such
notice to the Company from a Purchaser of its intention to make such transfer or
exchange and without expense (other than transfer taxes, if any) to such
Purchaser, the Company shall:
(i) if requested by such Purchaser, acknowledge such transfer or
exchange by executing an Assignment and Acceptance in substantially the
form of Exhibit A hereto;
(ii) record such transfer or exchange in the Note Register,
effective as of the date of such Assignment and Acceptance if so
requested or otherwise as of the date of such transfer or exchange; and
(iii) issue in exchange therefor another Note or Notes for the
same aggregate principal amount, as of the date of such issuance, as the
unpaid principal amount of the Note or Notes so surrendered, and having
the same maturity and rate of interest, containing the same provisions
and subject to the same terms and conditions as the Note or Notes so
surrendered. Each new Note shall be made payable to such Person or
Persons, or assigns, as the Purchaser holding such surrendered Note or
Notes may designate, and such transfer or exchange shall be made in such
a manner that no gain or loss of principal or interest shall result
therefrom. The Company shall have no obligation hereunder or under any
Note to any Person other than the Purchaser that is the registered holder
of each such Note.
7.5 Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, if requested in the case of any such loss, theft or destruction, upon
delivery of an indemnity bond or other agreement or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of such Note, the Company will issue a new Note, of
like tenor and amount and dated the date to which interest has been paid, in
lieu of such lost, stolen, destroyed or mutilated Note; provided, however, that
if any Note held by a Purchaser that is an institutional investor is lost,
stolen or destroyed, the affidavit of an authorized partner or officer of the
Purchaser setting forth the circumstances with respect to such loss, theft or
destruction shall be accepted as satisfactory evidence thereof, and no
indemnification bond or other security shall be required as a condition to the
execution and delivery by the Company of a new Note in replacement of such lost,
stolen or destroyed Note, other than such Purchaser's written agreement to
indemnify the Company.
7
Article VIII
Covenants
8.1 Payment of Notes; Interest Deferral. The Company shall promptly pay
the principal of and interest on the Notes on the dates and in the manner
provided in the Notes and in this Agreement. Prior to [ ], 2009, the Company
shall be permitted to defer interest payments on the Notes if and for so long as
the Interest Coverage Ratio of the Company for the twelve-month period ended on
the last day of any fiscal quarter for which internal financial statements are
available, is less than the applicable Interest Deferral Threshold, unless a
default in payment of interest or principal on the Notes has occurred and is
continuing, or any other Event of Default with respect to the Notes has occurred
and is continuing and the Notes have been accelerated as a result of the
occurrence of such Event of Default (any such period of interest deferral, a
"Mandatory Interest Deferral Period"). The interest payments shall be deferred
under this provision from the time the Company provides the Purchasers with a
calculation demonstrating that such deferral is permitted (provided, however,
that such calculation shall be provided to the Purchasers not later than 45 days
after the end of the applicable quarter) until such time as the Company provides
the Purchasers with a calculation demonstrating that such deferral is no longer
permitted (provided, however, that such calculation shall be provided to the
Purchasers not later than 45 days after the end of the applicable quarter) or,
if earlier, until such time as a default in payment of interest or principal on
the Notes has occurred or any other Event of Default with respect to the Notes
has occurred and is continuing and the maturity of the Notes has been
accelerated as a result of the occurrence of such Event of Default. Interest
payments on the Notes shall not be deferred under this provision for more than 8
quarters in the aggregate or beyond [ ], 2009.
In addition, between [ ], 2009 and [ ], 2014, but not after [ , 2014,
the Company may at its election defer interest on the Notes on not more than two
occasions for not more than 3 quarters per occasion (the "Optional Interest
Deferral Period") by notifying the Purchasers to the effect that, based upon a
good-faith determination of the Company's Board of Directors, such deferral is
reasonably necessary for bona fide cash management purposes, or to reduce the
likelihood of or avoid a default on the Designated Senior Indebtedness; provided
no such deferral may be commenced, and any ongoing deferral shall cease, if a
default in payment of interest or principal on the Notes has occurred and is
continuing, or any other Event of Default with respect to the Notes has occurred
and is continuing and the Notes have been accelerated as a result of the
occurrence of such Event of Default.
Deferred interest on the Notes shall bear interest at a rate per annum of
[ ]% until paid in full. Following the end of any interest deferral period, the
Company shall resume quarterly payments of interest on the Notes, including
interest on deferred interest. All interest on the Notes deferred at any time
prior to [__________], 2009, together with
8
interest accrued on such deferred interest during such period, shall be due and
payable on [ ], 2009. The Company may prepay all or part of the deferred
interest, at any time other than during an interest deferral period. All
interest deferred between , 2009 and , 2014, shall be due and payable on ,
2014, provided that the Company may not defer interest on the second occasion
unless all deferred interest has been repaid in full.
8.2 Reports and Other Information. The Company shall provide to the
Purchasers without cost, promptly upon request, (i) copies of annual reports on
Form 10-K (or any successor or comparable form) of the Issuer or the Company
(ii) copies of reports on Form 10-Q (or any successor or comparable form) of the
Issuer or the Company, (iii) copies of other reports on Form 8-K (or any
successor or comparable form) of the Issuer or the Company, and (iv) any other
information, documents and other reports which the Company would be required to
file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act,
in each case, within 15 days after the time period the Company would be required
to file such information with the SEC if it were subject to Section 13 or 15(d)
of the Exchange Act.
8.3 Limitations on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any
Indebtedness (including Acquired Indebtedness) or issue any shares of
Disqualified Stock or Preferred Stock; provided, however, that the Company and
any Restricted Subsidiary may Incur Indebtedness (including Acquired
Indebtedness), which may, but shall not be required to, be Incurred under the
Senior Credit Documents, or issue shares of Disqualified Stock or Preferred
Stock if either (x) the Fixed Charge Coverage Ratio of the Company for the
twelve-month period ended on any June 30, September 30 or December 31, or (y)
the Adjusted Fixed Charge Coverage Ratio of the Company for the twelve-month
period ended on any March 31, as applicable, in either case for the most
recently ended period for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is Incurred
or such Disqualified Stock or Preferred Stock is issued, would have been at
least 2.00 to 1.00 determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been Incurred, or the Disqualified Stock or Preferred Stock had been issued,
as the case may be, and the application of proceeds therefrom had occurred at
the beginning of such period.
The foregoing limitations shall not apply to:
(a) the Incurrence by the Company and any Restricted Subsidiary of
Indebtedness under the Senior Credit Documents and the issuance and creation of
letters of credit and bankers' acceptances thereunder (with letters of credit
and bankers' acceptances being deemed to have a principal amount equal to the
face amount thereof),
9
and, without limiting the foregoing, any refinancing or refunding indebtedness
in respect thereof, up to an aggregate principal amount of $[330,000,000]
outstanding at any one time (excluding Hedging Obligations);
(b) the Incurrence by the Company and the Restricted Subsidiaries on the
Issue Date of Indebtedness represented by the Notes, the Guarantees and the
Indenture Notes and Indenture Guarantees, as applicable;
(c) Indebtedness existing on the date of this Agreement (other than
Indebtedness described in clauses (a) and (b));
(d) Indebtedness (including capitalized Lease Obligations) Incurred by
the Company or any of its Restricted Subsidiaries, which may, but shall not be
required to, be Incurred under the Senior Credit Documents, to finance the
purchase, lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets) in an aggregate principal amount which, when
aggregated with the principal amount of all other Indebtedness then outstanding
and Incurred pursuant to this clause (d) and all Refinancing Indebtedness (as
defined below) Incurred to refund, refinance or replace any Indebtedness
Incurred pursuant to this clause (d), does not exceed the greater of 5% of Total
Assets at the time of Incurrence or $20,000,000;
(e) Indebtedness Incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including without limitation
letters of credit in respect of workers' compensation and personal injury
claims, health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance, or with respect to agreements to provide
services, or other Indebtedness with respect to reimbursement type obligations
regarding workers' compensation claims; provided, however, that upon the drawing
of such letters of credit, such obligations are reimbursed within 30 days
following such drawing;
(f) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, Incurred in connection with the disposition
of any business, assets or a Subsidiary of the Company in accordance with the
terms of this Agreement, other than guarantees of Indebtedness Incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition;
(g) Indebtedness of the Company to a Restricted Subsidiary of the
Company; provided that any such Indebtedness (other than Indebtedness held by a
Guarantor) is subordinated in right of payment to the Notes and the Indenture
Notes; provided, further that any subsequent issuance or transfer of any Capital
Stock or any other event which
10
results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary
of the Company or any other subsequent transfer of any such Indebtedness (except
to the Company or another Restricted Subsidiary) shall be deemed, in each case
to be an Incurrence of such Indebtedness;
(h) shares of Preferred Stock or Disqualified Stock of a Restricted
Subsidiary issued to the Company or another Restricted Subsidiary of the Company
or shares of Preferred Stock or Disqualified Stock of the Company issued to the
Issuer or a Restricted Subsidiary of the Company; provided that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
other subsequent transfer of any such shares of Preferred Stock or Disqualified
Stock (except to the Company or another Restricted Subsidiary of the Company)
shall be deemed, in each case, to be an issuance of shares of Preferred Stock or
Disqualified Stock;
(i) Indebtedness of the Company to the Issuer or of a Restricted Subsidiary
to the Company, the Issuer or another Restricted Subsidiary of the Company;
provided that any such Indebtedness of a Restricted Subsidiary to the Company or
the Issuer or of the Company to the Issuer is made pursuant to a written
instrument; provided further that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any Restricted Subsidiary
lending such Indebtedness ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Company or another
Restricted Subsidiary of the Company) shall be deemed, in each case, to be an
Incurrence of such Indebtedness;
(j) Hedging Obligations that are incurred in the ordinary course of
business (1) for the purpose of fixing or hedging interest rate risk with
respect to any Indebtedness that is permitted by the terms of this Agreement to
be outstanding, (2) for the purpose of fixing or hedging currency exchange rate
risk with respect to any currency exchanges or (3) for the purpose of fixing or
hedging commodity price risk with respect to any commodity purchases;
(k) obligations in respect of performance, bid and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary in
the ordinary course of business;
(l) Indebtedness or Disqualified Stock of the Company and any Restricted
Subsidiary not otherwise permitted hereunder (which may, but shall not be
required to, be Incurred under the Senior Credit Documents) in an aggregate
principal amount, which when aggregated with the principal amount or liquidation
preference of all other Indebtedness and Disqualified Stock then outstanding and
Incurred pursuant to this clause (1), does not exceed the greater of 5% of Total
Assets or $20,000,000 at any one time outstanding; provided, however, that
Indebtedness of Foreign Subsidiaries, when
11
aggregated with the principal amount of all other Indebtedness of Foreign
Subsidiaries then outstanding and Incurred pursuant to this clause (l), shall
not exceed $10,000,000 (or the equivalent thereof in any other currency) at any
one time outstanding (it being understood that any Indebtedness Incurred under
this clause (l) shall cease to be deemed Incurred or outstanding for purposes of
this clause (l) but shall be deemed to be Incurred for purposes of the first
paragraph of this covenant from and after the first date on which the Company
could have Incurred such Indebtedness under the first paragraph of this covenant
without reliance upon this clause (l));
(m) any guarantee by the Company or a Restricted Subsidiary of Indebtedness
or other obligations of the Issuer, Company or any of its Restricted
Subsidiaries so long as such Indebtedness Incurred by the Company or such
Restricted Subsidiary is otherwise permitted under the terms of this Agreement
or if such Indebtedness of the Issuer is permitted to be incurred under the
Indenture;
(n) the Incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness which serves to refund or refinance any Indebtedness Incurred as
permitted under the first paragraph of this covenant and clauses (b), (c), (d),
(l), (n) and (o) of this paragraph, or any Indebtedness issued to so refund or
refinance such Indebtedness (subject to the following proviso, "Refinancing
Indebtedness") prior to its respective maturity; provided, however, that such
Refinancing Indebtedness:
(i) has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is Incurred which is not less than the remaining
Weighted Average Life to Maturity of the Indebtedness being refunded or
refinanced;
(ii) has a Stated Maturity which is no earlier than the Stated
Maturity of the Indebtedness being refunded or refinanced;
(iii) to the extent such Refinancing Indebtedness refinances Pari Passu
Indebtedness, the Indenture Guarantees or the obligations of the Company or
the Restricted Subsidiaries under the Notes or the Note Guarantees, as
applicable, ranks pari passu with the Notes and the Guarantees;
(iv) 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 aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced plus premium and fees Incurred in connection
with such refinancing; and
(v) shall not include Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
12
and provided further that subclauses (i) and (ii) of this clause (n) shall
not apply to any refunding or refinancing of any Guarantor Senior Indebtedness;
(o) Indebtedness or Disqualified Stock of Persons that are acquired by the
Company or any of its Restricted Subsidiaries or merged into a Restricted
Subsidiary in accordance with the terms of this Agreement; provided, however,
that such Indebtedness or Disqualified Stock is not Incurred in contemplation of
such acquisition or merger or to provide all or a portion of the funds or credit
support required to consummate such acquisition or merger; provided, further,
that any such Indebtedness and Disqualified Stock shall be included in the
calculation of the Fixed Charge Coverage Ratio, or the Adjusted Fixed Charge
Coverage Ratio, as applicable, of the Company; and provided, finally, that after
giving effect to such acquisition and the Incurrence of such Indebtedness either
(i) the Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio set forth in the first
sentence of this covenant or (ii) the Fixed Charge Coverage Ratio, or the
Adjusted Fixed Charge Coverage Ratio, as applicable, of the Company would be
greater than immediately prior to such acquisition;
(p) Contribution Indebtedness;
(q) the Incurrence of the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an Incurrence of Indebtedness by a Restricted Subsidiary;
(r) Indebtedness arising by reason of a Lien created or permitted to exist
in compliance with Section 8.8, other than Liens permitted pursuant to clauses
(v) or (x) of the definition of "Permitted Liens";
(s) Indebtedness arising from honoring a check, draft or similar instrument
drawn against insufficient funds, provided that such Indebtedness is
extinguished within five Business Days of its incurrence;
(t) the Incurrence by the Company or its Restricted Subsidiaries of
obligations in respect of performance, appeal and surety bonds, completion
guarantees, insurance bonds and other similar bonds provided by the Company or
such Restricted Subsidiary in the ordinary course of business;
(u) Indebtedness incurred in connection with the issuance of Additional
Indenture Notes, including Additional Notes and Guarantees, if any, not to
exceed the amount set forth in Section 1.2(a)(i) provided that no Event of
Default has occurred and is continuing at the time of such issuance;
13
(v) Indebtedness in the form of Additional Notes and related Note
Guarantees issued to ASLP upon exercise of management options to acquire units
in ASLP in an aggregate principal amount not to exceed $[20,500,000] in an
aggregate principal amount not to exceed $33,000,000;
(w) Indebtedness of the Company or any Restricted Subsidiary Incurred to
finance the acquisition (including without limitation by way of a merger) of
Capital Stock of any Person engaged in, or assets used or useful in, a Similar
Business, provided that after giving effect to such acquisition and the
Incurrence of such Indebtedness (i) no Default or Event of Default has occurred
and is continuing, (ii) the Interest Coverage Ratio of the Company calculated
for the most recently ended twelve-month period for which internal financial
statements are available is higher than immediately prior to giving effect to
such acquisition and the Incurrence of such Indebtedness, and (iii) the Total
Leverage Ratio of the Company calculated as of the last day of the most recently
ended fiscal quarter for which internal financial statements are available is
lower than immediately prior to giving effect to such acquisition and the
Incurrence of such Indebtedness; and
(q) Seller Subordinated Debt. For purposes of determining compliance with
this covenant, in the event that an item of Indebtedness meets the criteria of
more than one of the categories of permitted Indebtedness described in clauses
(a) through (q) above or is entitled to be Incurred pursuant to the first
paragraph of this covenant, the Company shall, in its sole discretion, classify
or reclassify such item of Indebtedness in any manner that complies with this
covenant and such item of Indebtedness shall be treated as having been Incurred
pursuant to only one of such clauses or pursuant to the first paragraph hereof.
Any other obligation of the obligor on such Indebtedness (or any other person
who could have incurred such Indebtedness under this covenant) arising under any
Guarantee, Lien or letter of credit supporting such Indebtedness shall be
disregarded to the extent that such Guarantee, Lien or letter of credit secures
the principal amount of such Indebtedness. The amount of Indebtedness issued at
a price less than the principal amount thereof shall be equal to the amount of
liability in respect thereof determined in accordance with GAAP. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness shall not be deemed to be an Incurrence of
Indebtedness for purposes of this covenant.
8.4 Limitation on Restricted Payments. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) voluntarily purchase, redeem, defease or otherwise voluntarily
acquire or retire for value, prior to scheduled maturity, scheduled
repayment of scheduled sinking fund payment, any Subordinated Obligations
(other than a purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value (x) of any Existing Notes or (y) in
anticipation of satisfying a sinking
14
fund obligation, principal installment or final maturity, in each case due
within one year of the date of such acquisition or retirement); or
(ii) make any Restricted Investment (all such payments and other
actions set forth in this clause (ii) and clause (i) above being
collectively referred to as "Restricted Payments"),
unless, at the time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) immediately after giving effect to such transaction on a pro forma
basis, the Company could Incur $1.00 of additional Indebtedness under the
provisions of the first paragraph of Section 8.3; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (including Restricted Payments permitted
by clause (2) of the next succeeding paragraph, but excluding all other
Restricted Payments permitted by the next succeeding paragraph), is less
than the sum of, without duplication:
(i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the fiscal quarter that
first begins after the Issue Date to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, in the case
such Consolidated Net Income for such period is a deficit, minus 100%
of such deficit), plus
(ii) 100% of the aggregate net proceeds, including cash and the
Fair Market Value (as determined in accordance with the next succeeding
sentence) of property other than cash, received by the Company since
the Issue Date from the issue or sale of Equity Interests of the
Company (excluding Refunding Capital Stock (as defined below),
Designated Preferred Stock, Excluded Contributions and Disqualified
Stock), excluding conversion of Indebtedness or upon exercise of
warrants or options (other than an issuance or sale to a Subsidiary of
the Company or an employee stock ownership plan of trust established by
the Company or any of its Subsidiaries), plus
(iii) 100% of the aggregate amount of contributions to the capital
of the Company received in cash and the Fair Market Value (as
determined in accordance with the next succeeding sentence) of property
other than cash since the Issue Date (other than Excluded
Contributions, Refunding Capital Stock, Designated Preferred Stock and
Disqualified Stock), plus
15
(iv) 100% of the aggregate amount received in cash and the Fair
Market Value (as determined in accordance with the next succeeding
sentence) of property other than cash received from (A) the sale or
other - disposition (other than to the Company or a Restricted
Subsidiary) of Restricted Investments made by the Company and its
Restricted Subsidiaries and from repurchases and redemptions of such
Restricted Investments from the Company and its Restricted Subsidiaries
by any Person (other than the Company or any of its Subsidiaries) and
from repayments of loans or advances which constituted Restricted
Investments, (B) the sale (other than to the Company or a Subsidiary)
of the Capital Stock of an - Unrestricted Subsidiary or (C) a
distribution or dividend from an Unrestricted Subsidiary, plus -
(v) in the event any Unrestricted Subsidiary has been redesignated
as a Restricted Subsidiary or has been merged, consolidated or
amalgamated with or into, or transfers or conveys its assets to, or is
liquidated into, the Company or a Restricted Subsidiary, the Fair
Market Value (as determined in good faith by the Board of Directors) of
the Investment of the Company in such Unrestricted Subsidiary at the
time of such redesignation, combination or transfer (or of the assets
transferred or conveyed, as applicable), after deducting any
Indebtedness associated with the Unrestricted Subsidiary so designated
or combined or any Indebtedness associated with the assets so
transferred or conveyed, not to exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made by the Company or
any Restricted Subsidiary in such Unrestricted Subsidiary, which amount
was included in the calculation of the amount of Restricted Payments,
plus
(vi) the amount of all Specified Cash Contributions.
The Fair Market Value of property other than Cash and Cash Equivalents
covered by clauses (ii), (iii) and (iv) above shall be determined in good faith
by the Company and (A) in the event of property with a Fair Market Value in
excess of $2,500,000, shall be set forth in an Officers' Certificate or (B) in
the event of property with a Fair Market Value in excess of $5,000,000, shall be
set forth in a resolution approved by at least a majority of the Board of
Directors.
The foregoing provisions shall not prohibit:
(1) (a) the repurchase, retirement or other
acquisition of any Subordinated Indebtedness of the
Issuer or the Company, or dividends or distribution to
effect such transaction in exchange for, or out of the
proceeds of the substantially concurrent sale of, Equity
Interests of the Issuer or the Company or contributions
to the equity capital of the Issuer or the Company (other
than any
16
Disqualified Stock or any Equity Interests sold to a
Subsidiary of the Issuer or the Company or to an employee
stock ownership plan or any trust established by the
Issuer, the Company or any of its Subsidiaries)
(collectively, including any such contributions,
"Refunding Capital Stock");
(2) Investments in Unrestricted Subsidiaries having
an aggregate Fair Market Value, taken together with all
other Investments made pursuant to this clause (6) that
are at that time outstanding, not to exceed $[2,500,000]
(with the Fair Market Value of each Investment being
measured at the time made and without giving effect to
subsequent changes in value);
(3) Investments that are made with Excluded
Contributions;
(4) Permitted Payments;
(5) the Transactions;
(6) the redemption or repurchase by the Company of
the Notes held by ASLP with the proceeds of issuance of
Additional Indenture Notes and Common Stock completed
substantially contemporaneously with such repurchase or
redemption and in the same proportion as the ratio of
such Additional Indenture Notes and Additional Common
Stock, provided that such transactions may only be
consummated in accordance with the ASLP Exchange and
Registration Rights Agreement.
provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (1), (2) and (4)above, no Default or
Event of Default shall have occurred and be continuing or would occur as a
consequence thereof; provided further, however, that for purposes of determining
the aggregate amount expended for Restricted Payments in accordance with clause
(c) of the immediately preceding paragraph, only the amounts expended under
clause (2) above shall be included.
Notwithstanding the foregoing, Restricted Payments described in clause (i)
of the first paragraph of this covenant and the Restricted Payments described in
clause (1) above shall be prohibited, during any interest deferral period or,
after the end of any interest deferral period, so long as any deferred interest
and any accrued interest thereon has not been paid in full.
17
The Company shall not permit any Restricted Subsidiary to become an
Unrestricted Subsidiary except pursuant to the definition of "Unrestricted
Subsidiary." For purposes of designating any Restricted Subsidiary as an
Unrestricted Subsidiary, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so
designated shall be deemed to be Restricted Payments in an amount determined as
set forth in the last sentence of the definition of "Investments." Such
designation shall only be permitted if a Restricted Payment in such amount would
be permitted at such time (whether pursuant to the first paragraph of this
covenant or under clause (2)) and if such Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
8.5 Dividend and Other Payment Restrictions Affecting Subsidiaries. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to the Issuer, the
Company or any of its Restricted Subsidiaries (x) on its Capital Stock or (y)
with respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Issuer, the Company or any of
its Restricted Subsidiaries;
(b) make loans or advances to the Issuer, the Company or any of its
Restricted Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to the Issuer,
the Company or any of its Restricted Subsidiaries, except in each case for such
encumbrances or restrictions existing under or by reason of:
(1) contractual encumbrances or restrictions in
effect on the Issue Date, including pursuant to the
Senior Credit Documents;
(2) this Agreement, the Notes, the Indenture Notes
and the Guarantees;
(3) applicable law or any applicable rule,
regulation or order;
(4) any agreement or other instrument (x) relating
to Indebtedness of a Person acquired by the Issuer, the
Company or any Restricted Subsidiary which was in
existence at the time of such acquisition (but not
created in contemplation thereof or to provide all or any
portion of the funds or credit support utilized to
consummate such acquisition), which encumbrance or
restriction is
18
not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or
assets of the Person, so acquired or (y) with respect to
any asset acquired, in existence at the time of the -
acquisition and not incurred in connection with or in
contemplation of such acquisition;
(5) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of all or substantially all
the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition;
(6) Indebtedness otherwise permitted to be Incurred
pursuant to Sections 8.3 and 8.8;
(7) restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into
in the ordinary course of business;
(8) customary provisions in agreements and
instruments, including, without limitation, joint venture
agreements and other similar agreements entered into in
the ordinary course of business;
(9) customary provisions contained in leases,
agreements to provide services and other similar
agreements entered into in the ordinary course of
business that impose restrictions of the type described
in clause (c) above;
(10) (x) purchase money obligations for property
acquired in the ordinary course of business that impose
restrictions on the property so acquired of the nature
described in clause (c) above; or (y) restrictions on the
transfer of property or assets required by any regulatory
authority having jurisdiction over the Issuer, the
Company or any Restricted Subsidiary or any of their
businesses; or
(11) any encumbrances or restrictions of the type
referred to in clauses (a), (b) and (c) above imposed by
any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations
referred to in clauses (1) through (10) above; provided
that such amendments,
19
modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings
are, in the good faith judgment of the Board of
Directors, not materially more restrictive with respect
to such dividend and other payment restrictions than
those contained in the dividend or other payment
restrictions prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
8.6 Asset Sales. The Company will not, and will not permit any of its
Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) the Company,
or its Restricted Subsidiaries, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value (as
determined in good faith by the Company) of the assets sold or otherwise
disposed of and (y) except in the case of a Permitted Asset Swap, at least 75%
of the consideration therefor received by the Company, or such Restricted
Subsidiary, as the case may be, is in the form of Cash Equivalents; provided
that the amount of: (i) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet or in the notes thereto) of
the Company or any Restricted Subsidiary that are assumed by the transferee of
any such assets; (ii) any notes or other obligations or other securities
received by the Company or such Restricted Subsidiary from such transferee that
are converted by the Company or such Restricted Subsidiary into cash within 180
days of the receipt thereof (to the extent of the cash received); and (iii) any
Designated Noncash Consideration received by the Company or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Noncash Consideration received
pursuant to this clause (iii) that is at that time outstanding, not to exceed
the greater of 7.5% of Total Assets (with the Fair Market Value of each item of
Designated Noncash Consideration being measured at the time received and without
giving effect to subsequent changes in value) shall be deemed to be Cash
Equivalents for the purposes of this provision.
8.7 Transactions with Affiliates. The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, make any payment
to, or sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make or
amend any transaction or series of transactions, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate of the Company (each of the foregoing, an "Affiliate Transaction")
involving aggregate consideration in excess of $50,000, unless:
(a) such Affiliate Transaction is on terms that are not materially less
favorable to the Company or the relevant Restricted Subsidiary than those that
could have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person.
20
The foregoing provisions shall not apply to the following:
(i) transactions between or among the Issuer, the Company and/or any of
its Restricted Subsidiaries;
(ii) Permitted Investments and Restricted Payments permitted by Section
8.4 and the making of distributions permitted by the Company's partnership
agreement;
(iii) the payment of reasonable and customary fees and other compensation
paid to, and indemnity provided on behalf of, officers, directors, employees or
consultants of the Company or any Restricted Subsidiary;
(iv) payments or loans to employees or consultants in the ordinary course
of business which are approved by a majority of the disinterested members of the
Board of Directors of the Company or a Restricted Subsidiary, as applicable in
good faith;
(v) any agreement as in effect as of the Issue Date or any amendment
thereto (so long as any such amendment is not disadvantageous to the Purchasers
in any material respect) or any transaction contemplated thereby;
(vi) the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of its obligations under the terms of, any stockholders
agreement to which it is a party as of the Issue Date and any similar agreements
which it may enter into thereafter; provided, however, that the existence of, or
the performance by the Company or any of its Restricted Subsidiaries of its
obligations under any future amendment to any such existing agreement or under
any similar agreement entered into after the Issue Date shall only be permitted
by this clause (vii) to the extent that the terms of any such amendment or new
agreement are not otherwise disadvantageous to the Purchasers in any material
respect;
(vii) transactions with customers, clients, suppliers or purchasers or
sellers of goods or services, in each case in the ordinary course of business
and otherwise in compliance with the terms of this Agreement, which are fair to
the Company and its Restricted Subsidiaries in the reasonable determination of
the Board of Directors or the senior management of the Company, or are on terms
at least as favorable as might reasonably have been obtained at such time from
an unaffiliated party;
(viii) the Transactions; and
21
(ix) the issuance of Capital Stock (other than Disqualified Stock) of
the Company or Additional Indenture Notes, Additional Notes and related
Guarantees or other Pari Passu Indebtedness evidenced by a different series
of notes or shares of the Company's Capital Stock to any Permitted Holder.
8.8 Liens.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries that are not Guarantors to, directly or indirectly, create, Incur
or suffer to exist any Lien on any asset or property of the Company or such
Restricted Subsidiary, or any income or profits therefrom, or assign or convey
any right to receive income therefrom, that secures any Indebtedness of the
Company or any of its Subsidiaries (such lien, the "Initial Lien") unless the
Notes are equally and ratably secured with (or on a senior basis to, in the case
of Indebtedness subordinated in right of payment to the Notes) the Indebtedness
so secured or until such time as such Indebtedness is no longer secured by a
Lien. Any such Lien thereby created in favor of the Notes shall 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. The preceding sentence will not require the Company or any
Restricted Subsidiary to secure the Notes if the Lien consists of a Permitted
Lien.
(b) No Guarantor shall, and the Company shall not permit any Guarantor to,
directly or indirectly create, Incur or suffer to exist any Lien on any asset or
property of such Guarantor or any income or profits therefrom, or assign or
convey any right to receive income therefrom, that secures any Indebtedness of
such Guarantor (other than Guarantor Senior Indebtedness of such Guarantor)
(such lien, the "Initial Lien") unless the Note Guarantee of such Guarantor is
equally and ratably secured with (or on a senior basis to, in the case of
Indebtedness subordinated in right of payment to such Note Guarantee) the
Indebtedness so secured or until such time as such Indebtedness is no longer
secured by a Lien. Any such Lien thereby created in favor of the Note Guarantees
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 Guarantor in, or all or substantially all the assets
of, any Guarantor creating such Initial Lien. The preceding sentence will not
require any Guarantor to secure its Note Guarantee if the Lien consists of a
Permitted Lien.
8.9 [Intentionally left blank.]
8.10 Further Instruments and Acts. Upon request of the Purchasers, the
Company shall execute and deliver such further instruments and do such further
acts as
22
may be reasonably necessary or proper to carry out more effectively the purpose
of this Agreement.
8.11 Future Guarantors. The Company shall cause each Restricted Subsidiary
organized under the laws of the United States or any state or territory thereof
that guarantees the Indenture Notes to execute a Subsidiary Joinder
substantially in form of Exhibit C pursuant to which such Subsidiary shall
guarantee the Guaranteed Obligations and become a Guarantor hereunder.
8.12 Limitation on Layering. Neither the Company nor any Guarantor shall
Incur any Indebtedness that is expressly subordinated in right of payment to any
Guarantor Senior Indebtedness of the Company or such Guarantor, as applicable,
unless such Indebtedness so Incurred ranks pari passu in right of payment with,
or is subordinated in right of payment to Notes with respect to the Company or
such Guarantor's Note Guarantee with respect to such Guarantor. Unsecured
Indebtedness is not deemed to be subordinate or junior to secured Indebtedness
merely because it is unsecured, and Indebtedness that is not guaranteed by a
particular Person is not deemed to be subordinate or junior to Indebtedness that
is so guaranteed merely because it is not so guaranteed.
8.13 Subsequent Issuance.
The Company may issue Additional Notes provided that (i) no Event of
Default has occurred and is continuing at the time of such issuance, (ii) the
Incurrence of Indebtedness evidenced by such Additional Notes is permitted
pursuant to Sections 8.3 and 1.2.
8.14 Merger, Consolidation or Sale of All or Substantially All Assets.
(a) The Company may not consolidate or merge with or into or wind up into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to any Person unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") is a Person organized and existing under the laws of the United
States of America, any State thereof, the District of Columbia, or any
territory thereof;
(ii) the Successor Company (if other than the Company) expressly
assumes all the obligations of the Company under this Agreement and the
Notes by executing and delivering to the Purchasers an amendment to this
Agreement or other documents or instruments in form reasonably satisfactory
to the Purchasers;
23
(iii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company or
any of its Restricted Subsidiaries 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 shall have
occurred and be continuing;
(iv) immediately after giving effect to such transaction, as if such
transaction had occurred at the beginning of the applicable period, either
(A) the Successor Company would be permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the fixed charge coverage ratio test
set forth in the first sentence of Section 8.3 or (B) the Fixed Charge
Coverage Ratio, or the Adjusted Fixed Charge Coverage Ratio, as applicable,
for the Successor Company and its Restricted Subsidiaries would be greater
than or equal to such ratio for the Company and its Restricted Subsidiaries
immediately prior to such transaction; and
(v) each Guarantor, unless they are the other party to the
transactions described above, shall have delivered an amendment to this
Agreement or other document or instrument in form reasonably satisfactory
to the Purchasers, confirming its Note Guarantee;
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement and the
Notes, and thereafter the predecessor Company shall be relieved of all
obligations and covenants under this Agreement, except that the predecessor
Company in the case of a lease of all or substantially all its assets will not
be released from the obligation to pay the principal of and interest on the
Notes. Clauses (iii) and (iv) of this Section 8.14(a) shall not apply to any
transaction in which, (i) any Restricted Subsidiary consolidates with, merges
into or transfers all or part of its properties and assets to the Company or to
another Restricted Subsidiary or (ii) the Company merges with or transfers all
or part of its properties and assets to an Affiliate incorporated or organized
for the purpose of reincorporating or reorganizing the Company in another State
of the United States of America or changing its legal structure so long as the
amount of Indebtedness of the Company and its Restricted Subsidiaries is not
increased thereby.
(b) Subject to Section 11.2(b) hereof governing the release of a Note
Guarantee upon the sale or disposition of a Guarantor that is a Subsidiary of
the Company, ASG will not, and the Company will not permit ASG to, consolidate
or merge with or into or wind up into (whether or not ASG is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets in one or more related
transactions to, any Person unless:
24
(i) the resulting, surviving or transferee Person (the "Successor
Guarantor") is a Person organized and existing under the laws of the United
States of America, any State thereof, the District of Columbia, or any
territory thereof;
(ii) the Successor Guarantor (if other than such Guarantor) expressly
assumes all the obligations of ASG under this Agreement and ASG's Note
Guarantee by executing and delivering to the Purchasers an amendment to
this Agreement or other documents or instruments in form reasonably
satisfactory to the Purchasers;
(iii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Guarantor or
any of its Subsidiaries as a result of such transaction as having been
Incurred by the Successor Guarantor or such Subsidiary at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing; and
The Successor Guarantor will succeed to, and be substituted for, and may
exercise every right and power of, ASG under this Agreement and such Guarantor's
Note Guarantee, and thereafter the predecessor Guarantor shall be relieved of
all obligations and covenants under this Indenture.
Clauses (iii) and (v) of this Section 8.14(b) shall not apply to any
transaction in which ASG merges with or transfers all or part of its properties
and assets to an Affiliate incorporated for the purpose of reincorporating or
reorganizing ASG in another state of the United States or changing its legal
structure so long as the amount of Indebtedness of ASG is not increased thereby.
Article IX
Events of Default
9.1 Events of Default. An "Event of Default" occurs if:
(a) The Company defaults in any payment of interest on any Note or interest
on any deferred interest when the same becomes due and payable, and such default
continues for a period of 30 days, provided that deferral of interest payments
in accordance with Section 8.1 hereof shall not constitute a default;
(b) the Company defaults in the payment of the principal on any Note when
the same becomes due and payable at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise;
(c) the Company defaults in the payment of any deferred interest when the
same becomes due and payable;
25
(d) the Company fails to comply with Section 8.14 hereof;
(e) the Company fails to comply with Section 8.3, 8.4, 8.5, 8.6, 8.7, 8.8,
8.12 or 8.13 and such failure continues for 30 days after the notice specified
below;
(f) the Company fails to comply with any of its agreements in the Notes or
this Agreement (other than those referred to in (a), (b), (c) or (d) above) and
such failure continues for 60 days after the notice specified below;
(g) Indebtedness of the Company or any Significant Subsidiary (other than
Indebtedness owing to the Issuer, the Company or a Restricted Subsidiary) is not
paid within any applicable grace period after final maturity or the acceleration
by the holders thereof because of a default and the total amount of such
Indebtedness so unpaid or accelerated exceeds $12,500,000 or its foreign
currency equivalent, and a period of 20 Business Days shall have elapsed
following the acceleration of such indebtedness and such acceleration shall not
have been waived or rescinded or the underlying debt shall not have been paid,
acquired or retired within such 20 Business Day period (the "cross acceleration
provision");
(h) the Company or any Significant Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors;
(v) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(vi) is for relief against the Company or any Significant Subsidiary
in an involuntary case;
(vii) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of the property of the Company or
any Significant Subsidiary; or
(viii) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
26
(ix) and the order or decree remains unstayed and in effect for 60
days;
(i) the rendering of any judgment or decree for the payment of money (other
than judgments which are covered by enforceable insurance policies issued by
solvent carriers) in excess of $12,500,000 or its foreign currency equivalent
against the Company or a Significant Subsidiary, if such judgment or decree
remains outstanding for a period of 60 days following such judgment or decree
and is not discharged, waived or stayed (the "judgment default provision");
(j) any Note Guarantee of a Significant Subsidiary ceases to be in full
force and effect (except as contemplated by the terms thereof or this Agreement)
or any Guarantor that is a Significant Subsidiary denies or disaffirms in
writing such Guarantor's obligations under this Agreement or its Note Guarantee
(other than by reason of termination of this Agreement or such Note Guarantee or
the release of such Note Guarantee in accordance with the terms of such Note
Guarantee and this Agreement), and such Default continues for 10 days; or
(k) an Event of Default under the Indenture has occurred and is continuing.
The foregoing shall constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ Code, or any similar
Federal or state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (e) or (f) above is not an Event of Default until
Purchasers of more than 50% in principal amount of the outstanding Notes notify
the Company of the Default and the Company does not cure such Default within the
time specified in clause (e) or (f), as the case may be, after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default". When a Default or Event of
Default is cured, it ceases.
The Company shall deliver to the Purchasers, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (h) or (i) and any event which with the giving
of notice or the lapse of time would become an Event of Default under clause
(e), (f) or (j), its status and what action the Company is taking or proposes to
take with respect thereto.
27
Article X
Acceleration; Remedies on Default
10.1 Acceleration.
(a) If an Event of Default (other than an Event of Default specified in
Section 9.1(h) or (i)) occurs and is continuing, the Purchasers holding more
than 50% in principal amount of the outstanding Notes by notice to the Company,
may declare the principal and accrued but unpaid interest on all the Notes to be
due and payable, subject to clause (b) of this Section 10.1. Subject to
compliance with the provisions of Section 10.1(b), upon the effectiveness of
such a declaration, such principal and interest shall be due and payable. If (i)
an Event of Default specified in Section 9.1(h) or (i) occurs or (ii) if any
other Event of Default shall have occurred and be continuing and the Indenture
Notes are effectively accelerated, the principal and interest on all the Notes
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Purchasers. The Purchasers holding
more than 50% of the outstanding Notes by written notice to the Company may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of such acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. For the avoidance of
doubt, original issue discount portion of the principal of the Notes, if any,
that is deemed to be unearned interest thereof, shall only be due and payable
upon acceleration to the extent permitted by law.
(b) Until the earlier of (a) the date on which no Designated Senior
Indebtedness (including any guarantee of other Designated Senior Indebtedness)
of the Company or any Guarantor shall be outstanding and (b) [ ], 2009,
if an Event of Default (other than an Event of Default described in Section
9.1(h) or (i)) has occurred and is continuing, without in any way limiting the
right of any Purchaser to exercise any other remedy such Purchaser may have
(including the right to bring suit against the Company or any Guarantor for
payment of any and all amounts of principal and interest due and payable), the
principal of all the Notes may not be declared to be due and payable unless and
until the earliest to occur of: (i) the Acceleration Forbearance Period has
expired, (ii) the Designated Senior Indebtedness of the Company or any Guarantor
shall be due and payable in full, or shall have been declared to be due in full,
or there shall have been a demand for payment in full thereof, or any
enforcement or collection action shall have been commenced with respect thereto,
(iii) holders of any Indebtedness of the Company or one or more of the
Guarantors, in each case to the extent not constituting Guarantor Senior
Indebtedness or Seller Subordinated Debt, exceeding $10,000,000 in the aggregate
principal amount, shall have commenced any enforcement or collection action with
respect to such Indebtedness, (iv) an Event of Default described in Section
9.1(h) or (i) shall have occurred and (v) the acceleration of the Indenture
Notes
28
shall have become effective. For the avoidance of doubt, the provisions set
forth in this sub-section shall not prevent the Purchasers from receiving
payments on the Notes when due or exercising any other remedies under this
Agreement while an Acceleration Forbearance Period is in effect.
10.2 Other Remedies.
If an Event of Default occurs and is continuing, the Purchasers may pursue
any available remedy to collect the payment of principal of or interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
A delay or omission by the Purchasers in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
In addition to the foregoing, if an Event of Default shall have occurred
and be continuing the Purchasers holding a majority in principal amount of the
Outstanding Notes may exercise any one or more of the following remedies:
(a) institute proceedings for the collection of all amounts then payable on
the Notes or under this Agreement with respect thereto, whether by declaration
or otherwise, enforce any judgment obtained, collect from the Company and any
other obligor upon such Notes moneys adjudged due; and
(b) exercise any other rights and remedies that may be available at law or
in equity.
10.3 Waiver of Past Defaults.
(a) The holders of a majority in principal amount of the outstanding Notes
may waive any existing Default or Event of Default and its consequences except
(i) a continuing Default or an Event of Default in the payment of the principal
of or interest on a Note or (ii) any Default or Event of Default in respect of a
provision that under Section 14.1 cannot be amended without the consent of each
Purchaser affected. 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 of this Agreement; 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, any other obligor upon the
Notes and the Purchasers shall be restored to their former positions and rights
hereunder and under the Notes, respectively.
(b) In the event of any Event of Default specified in Section 9.1(g), such
Event of Default and all consequences thereof (including without limitation any
29
acceleration or resulting payment default) shall be annulled, waived and
rescinded, automatically and without any action by the Purchasers, if within 20
days after such Event of Default arose (x) the Indebtedness or guarantee that is
the basis for such Event of Default has been discharged, or (y) the holders
thereof have rescinded or waived the acceleration, notice or action (as the case
may be) giving rise to such Event of Default, or (z) if the default that is the
basis for such Event of Default has been cured.
10.4 Rights of Purchasers to Receive Payment. Subject to Section 8.1
hereof, the right of any Purchaser to receive payment of principal of and
interest on the Notes held by such Holder, on or after the respective due dates
expressed in the Notes, or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Purchaser.
10.5 Undertaking for Costs. In any suit for the enforcement of any right or
remedy under this Agreement, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 10.5 does not apply to a Purchaser pursuant to Section
10.4 or a suit by Purchasers of more than 10% in principal amount of the Notes,
or to any suit instituted by any Purchaser for the enforcement of the payment of
the principal of or interest on any Note on or after the respective Stated
Maturity or interest payment dates expressed in such Note.
10.6 Waiver of Stay or Extension Law. Neither the Company nor any Guarantor
(to the extent it may lawfully do so) shall at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Agreement; and the Company
and each Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
Article XI
Guarantee
11.1 Note Guarantee. Each Guarantor hereby jointly and severally,
irrevocably, fully and unconditionally guarantees, on an unsecured and
subordinated basis, as a primary obligor and not merely as a surety, to each
Purchaser and its successors and assigns the full and punctual payment when due,
whether at Stated Maturity, by acceleration, by redemption or otherwise, of all
monetary obligations of the Company under this Agreement and the Notes, whether
for payment of principal of, or
30
interest on, the Notes (including deferred interest), expenses, indemnification
or otherwise (all the foregoing being hereinafter collectively called the
"Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from each such Guarantor, and that each such Guarantor shall
remain bound under this Article XI notwithstanding any extension or renewal of
any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from and protest
to the Company of any of the Guaranteed Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder
shall not be affected by (a) the failure of any Purchaser to assert any claim or
demand or to enforce any right or remedy against the Company or any other Person
under this Agreement, the Notes or any other agreement or otherwise; (b) any
extension or renewal of the Notes or the Guaranteed Obligations; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Notes or any other agreement; (d) the release of any
security held by any Purchaser for the Guaranteed Obligations; (e) the failure
of any Purchaser to exercise any right or remedy against any other Guarantor of
the Guaranteed Obligations; or (f) any change in the ownership of such
Guarantor, except as provided in Section 11.2(b).
Each Guarantor hereby waives any right to which it may be entitled to have
its obligations hereunder divided among the Guarantors, such that such
Guarantor's obligations would be less than the full amount claimed. Each
Guarantor hereby waives any right to which it may be entitled to have the assets
of the Company first be used and depleted as payment of the Company's or such
Guarantor's obligations hereunder prior to any amounts being claimed from or
paid by such Guarantor hereunder. Each Guarantor hereby waives any right to
which it may be entitled to require that the Company be sued prior to an action
being initiated against such Guarantor.
Each Guarantor further agrees that its Note Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Purchaser to any security held for payment of the Guaranteed Obligations.
Except as expressly set forth in Sections 11.2, 11.3 and 11.7, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor herein shall not be discharged or impaired or
otherwise affected by any default, failure or delay, willful or otherwise, in
the
31
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of any Guarantor or would otherwise operate as a discharge
of any Guarantor as a matter of law or equity.
Each Guarantor agrees that its Note Guarantee shall remain in full force
and effect until payment in full of all the Guaranteed Obligations. Each
Guarantor further agrees that its Note Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Purchaser upon the bankruptcy or
reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Purchaser has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Company to pay the principal of or interest on
any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Guaranteed Obligation, each Guarantor hereby promises to and
shall, upon receipt of written demand by the Purchasers, forthwith pay, or cause
to be paid, in cash, to the Purchasers an amount equal to the sum of (i) the
unpaid principal amount of such Guaranteed Obligations then due and owing, (ii)
accrued and unpaid interest on such Guaranteed Obligations (but only to the
extent not prohibited by law) and (iii) all other monetary obligations of the
Company to the Purchasers, including deferred interest then due and owing.
Each Guarantor agrees (to the fullest extent permitted by law) that it
shall not be entitled to any right of subrogation in relation to the Purchasers
in respect of any Guaranteed Obligations guaranteed hereby until payment in full
of all Guaranteed Obligations and all obligations to which the Guaranteed
Obligations are subordinated as provided in Article XII. Each Guarantor further
agrees (to the fullest extent permitted by law) that, as between it, on the one
hand, and the Purchasers, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article X for
the purposes of any Guarantee herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article X, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by such Guarantor for the purposes of this Section 11.1.
Each Guarantor that makes a payment or distribution under its Note
Guarantee shall have the right to seek contribution from the Company or any
non-paying Guarantor that has also Guaranteed the relevant Guaranteed
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 under the
Note Guarantees.
32
Each Note Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Agreement and that
its Note Guarantee is knowingly made in contemplation of such benefits.
Each Guarantor also agrees to pay any and all reasonable costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Purchasers
in enforcing any rights under this Section 11.1.
Upon request of the Purchasers, each Guarantor shall execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Agreement.
11.2 Limitation on Liability.
(a) Any term or provision of this Agreement to the contrary
notwithstanding, the maximum aggregate amount of the Guaranteed Obligations
guaranteed hereunder by any Guarantor shall not exceed the maximum amount that,
after giving effect to all other contingent and fixed liabilities of such
Guarantor (including, without limitation, any guarantees under the Senior Credit
Facilities) and after giving effect to any collections from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Agreement, can be hereby guaranteed without rendering such Guarantor
insolvent or this Agreement or the Note Guarantee, as it relates to such
Guarantor, voidable or unenforceable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) A Note Guarantee as to any Guarantor that is a Subsidiary of the
Company shall terminate and be of no further force or effect and such Guarantor
shall be deemed to be released from all obligations under this Article XI upon
(i) any sale or disposition (by merger or otherwise) of such Guarantor or a
Person which is the parent company of such Guarantor to a Person that is not
(either before or after giving effect to such transaction) a Subsidiary of the
Company in compliance with this Agreement; or (ii) the proper designation by the
Company of any Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary; or (iii) the merger or consolidation of a Guarantor with and into
the Company, the Issuer or another Guarantor that is the surviving Person of
such merger or consolidation; or (iv) upon payment in full of the aggregate
principal amount of all Notes then outstanding and all other Guaranteed
Obligations then due and owing.
11.3 Reduction of Guaranteed Obligations. Any term or provision of this
Agreement to the contrary notwithstanding, the aggregate principal amount of the
Notes included in the Guaranteed Obligations held by the Issuer shall be
permanently reduced by the amount of payments in respect of principal of the
Indenture Notes collected under
33
the Indenture Notes or the Indenture Guarantee (by the Trustee, the holders of
the Indenture Notes or otherwise).
11.4 Successors and Assigns. This Article XI shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of the
successors and assigns of Purchasers and, in the event of any transfer or
assignment of rights by any Purchaser, the rights and privileges conferred upon
that party in this Agreement and in the Notes shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions of this Agreement.
11.5 No Waiver. Neither a failure nor a delay on the part of the Purchasers
in exercising any right, power or privilege under this Article XI shall operate
as a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Purchaser herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which it may have under this
Article XI at law, in equity, by statute or otherwise.
11.6 Subordination of Note Guarantees. The Obligations of each Guarantor
under its Note Guarantee pursuant to this Article XI shall be junior and
subordinated to the prior payment in full of all Guarantor Senior Indebtedness
of such Guarantor on the same basis as the Notes are junior and subordinated to
the prior payment in full of all Guarantor Senior Indebtedness of the Company as
described in Article XII hereof. For the purposes of the foregoing sentence, the
Purchasers shall have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Agreement, including Article XII hereof.
11.7 Modification. Subject to Section 14.1, no modification, amendment or
waiver of any provision of this Article XI, nor the consent to any departure by
any Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the holders of the majority in principal amount of
the Notes outstanding, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice to or
demand on any Guarantor in any case shall entitle such Guarantor to any other or
further notice or demand in the same, similar or other circumstances.]
11.8 Execution of Amendments for Future Guarantors. Each Subsidiary which
is required to become a Guarantor pursuant to Section 8.11 hereof shall execute
a Subsidiary Joinder substantially in the form of Exhibit C pursuant to which
such Subsidiary shall guarantee payment of the Notes and become a Guarantor
under this Article XI and shall guarantee the Guaranteed Obligations.
34
11.9 Notation Not Required. Neither the Company nor any Guarantor shall be
required to make a notation on the Notes to reflect any Note Guarantee or any
such release, termination or discharge thereof.
Article II
Subordination of the Notes
12.1 Agreement To Subordinate. The Company agrees, and each Purchaser by
accepting a Note agrees, that the Indebtedness evidenced by the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article XII, to the prior payment in full of all existing and future
Guarantor Senior Indebtedness of the Company and that the subordination is for
the benefit of and enforceable by the holders of such Guarantor Senior
Indebtedness. The Notes shall in all respects rank pari passu in right of
payment with all existing and future Pari Passu Indebtedness of the Company, and
shall in all respects rank senior in right of payment to all existing and future
Subordinated Obligations; and only Guarantor Senior Indebtedness of the Company
shall rank senior to the Notes in accordance with the provisions set forth
herein.
12.2 Liquidation, Dissolution or Bankruptcy. Upon any payment or
distribution of the assets of the Company to creditors, upon a total or partial
liquidation or dissolution of the Company or reorganization of or similar
proceeding relating to the Company or its property, the holders of Guarantor
Senior Indebtedness of the Company shall be entitled to receive payment in full
of such Guarantor Senior Indebtedness of the Company before the Purchasers are
entitled to receive any payment and until the Guarantor Senior Indebtedness is
paid in full, any payment or distribution to which a Purchaser would be entitled
but for this Article XII shall be made to holders of such Guarantor Senior
Indebtedness of the Company as their interests may appear. If a distribution is
made to Purchasers that due to this Article XII should not have been made to
them, such Purchasers are required to hold it in trust for the holders of
Guarantor Senior Indebtedness of the Company and pay it over to them as their
interests may appear (except that the Purchasers may receive and retain
Permitted Junior Securities.
12.3 Default on Guarantor Senior Indebtedness of the Company. The Company
may not pay principal of, premium (if any) or interest on, the Notes and may not
otherwise purchase, redeem or otherwise retire any Notes (collectively, "pay the
Notes") if (i) a default in the payment of the principal of, premium (if any) or
interest on any Guarantor Senior Indebtedness of the Company occurs and is
continuing beyond any applicable grace period, or (ii) any other default on
Guarantor Senior Indebtedness of the Company occurs and the maturity of such
Guarantor Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Guarantor Senior Indebtedness has
been paid in full. However, the Company may pay its Notes without regard to the
foregoing if the Company receives written notice approving such payment
35
from the Representative of Designated Senior Indebtedness with respect to which
either of the events in clause (i) or (ii) of the immediately preceding sentence
has occurred and is continuing. During the continuance of any default (other
than a default described in clause (i) or (ii) of the second preceding sentence)
with respect to any Designated Senior Indebtedness of the Company pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the Notes
for a period (a "Payment Blockage Period") commencing upon the receipt by to the
Company of written notice (a "Blockage Notice") of such default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending on the earliest to occur of the
following events: (a) 179 days shall have elapsed since such receipt of such
Blockage Notice; provided, however, that in the event that there has been any
Acceleration Forbearance Period in respect of the Notes in the immediately
preceding 360-day period, such 179-day period will be automatically reduced by
the cumulative duration of all Acceleration Forbearance Periods that occurred
during such immediately preceding 360-day period, (b) such Payment Blockage
Period is terminated by written notice to the Company from the Person or Persons
who gave such Blockage Notice, (c) the repayment in full of such Designated
Senior Indebtedness, or (d) the default giving rise to such Blockage Notice is
no longer continuing. Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in the
first sentence of this Section 12.3 and in Section 12.2), unless the holders of
such Designated Senior Indebtedness or the Representative of such holders shall
have accelerated the maturity of such Designated Senior Indebtedness, the
Company may resume payments on the Notes after such Payment Blockage Period,
including any missed payments. In no event shall the total number of days during
which any Payment Blockage Period is in effect extend beyond the 179 days from
the date of receipt by the Purchasers of the relevant Blockage Notice, and in no
event shall the total number of days during which any Payment Blockage Period or
any Acceleration Forbearance Period is in effect exceed 179 days during any 360
consecutive day period. For purposes of this provision, no default or event of
default that existed or was continuing on the date of commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, unless such default or event of default
shall have been cured or waived for a period of not less than 90 consecutive
days.
12.4 When Distribution Must Be Paid Over. If a payment or distribution is
made to Purchasers that because of this Article XII should not have been made to
them, the Purchasers who receive the payment or distribution shall hold such
payment or distribution in trust for holders of the Guarantor Senior
Indebtedness and pay it over to them as their respective interests may appear.
36
12.5 Subrogation. After all Guarantor Senior Indebtedness of the Company is
paid in full and until the Notes are paid in full in cash, the Purchasers shall
be subrogated to the rights of holders of Guarantor Senior Indebtedness to
receive distributions applicable to Guarantor Senior Indebtedness. A
distribution made under this Article XII to holders of Guarantor Senior
Indebtedness which otherwise would have been made to Purchasers is not, as
between the Company and the Purchasers, a payment by the Company on the Notes.
12.6 Relative Rights. This Article XII defines the relative rights of the
Purchasers and holders of Guarantor Senior Indebtedness. Nothing in this
Indenture shall:
(a) impair, as between the Company and the Purchasers, the obligation of
the Company which is absolute and unconditional, to make payments with respect
to the Guaranteed Obligations; or
(b) prevent the any Purchaser from exercising its available remedies upon
a Default, subject to the rights of holders of Guarantor Senior Indebtedness to
receive distributions otherwise payable to the Purchasers.
12.7 Subordination May Not Be Impaired by the Company. No right of any
holder of Guarantor Senior Indebtedness to enforce the subordination of the
obligations of the Company hereunder shall be impaired by any act or failure to
act by the Company or by its failure to comply with this Agreement.
12.8 Distribution or Notice to Representative. Whenever a distribution is
to be made or a notice given to holders of Guarantor Senior Indebtedness, the
distribution may be made and the notice given to their Representative (if any).
12.9 Article XII Not To Prevent Events of Default or Limit Right To
Accelerate. The failure to make a payment pursuant to the Notes by reason of any
provision in this Article XII shall not be construed as preventing the
occurrence of a Default. Nothing in this Article XII shall have any effect on
the right of the Purchasers to accelerate the maturity of the Notes (other than
with respect to an Acceleration Forbearance Period).
12.10 Purchasers Entitled To Rely. Upon any payment or distribution
pursuant to this Article XII, the Purchasers shall be entitled to rely (i) upon
any order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 12.2 are pending, (ii) upon a
certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Purchasers or (iii) upon the Representatives for
the holders of Guarantor Senior Indebtedness for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the
37
holders of the Guarantor Senior Indebtedness and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XII. In the event that the Purchasers determine, in good faith, that evidence is
required with respect to the right of any Person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XII, the Purchasers may request such Person to furnish evidence to the
reasonable satisfaction of the Purchasers as to the amount of Guarantor Senior
Indebtedness the Company held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article XII, and, if such
evidence is not furnished, the Purchaser may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
12.11 Reliance by Holders of Guarantor Senior Indebtedness on Subordination
Provisions. Each Purchaser, by accepting a Note, acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Guarantor Senior
Indebtedness, whether such Guarantor Senior Indebtedness was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Guarantor Senior Indebtedness and such holder of
Guarantor Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Guarantor Senior Indebtedness.
Article III
Definitions
13.1 Definitions. The following terms shall have the following meanings:
"Acceleration Forbearance Period" means the period commencing on the date
when the Purchasers of more than 50% in principal amount of the Notes then
outstanding provide the Company with a notice of acceleration and expiring on
the earliest of the date on which (a) 90 days shall have elapsed following the
commencement of such period, (b) the Designated Senior Indebtedness of the
Company or any Guarantor shall be due and payable in full, or shall have been
declared to be due in full, or there shall have been a demand for payment in
full thereof, or any enforcement or collection action shall have been commenced
with respect thereto, (c) holders of any Indebtedness of the Company or one or
more of the Guarantors, in each case to the extent not constituting Guarantor
Senior Indebtedness or Seller Subordinated Debt, exceeding $[10,000,000] in the
aggregate principal amount, shall have commenced any enforcement or collection
action with respect to such Indebtedness, (d) an Event of Default described in
Section 9.1(h) or (i) shall have occurred and (e) the acceleration of the
Indenture Notes shall have become effective; provided, however, that in the
event that there has been any prior Acceleration Forbearance Period in the
immediately preceding twelve-month period, the duration of
38
the Acceleration Forbearance Period shall be automatically reduced by the
cumulative duration of all prior Acceleration Forbearance Periods that occurred
during the preceding twelve-month period (it being understood that the
Acceleration Forbearance Period may terminate immediately after commencing
pursuant to this proviso).
"Accounts" means all "accounts," as such term is defined in the UCC, now
owned or hereafter acquired by any Note Party.
"Acquired Indebtedness" means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary of such
specified Person; and
(ii) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person,
in each case, other than Indebtedness Incurred as consideration in, in
contemplation of, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was otherwise acquired by such Person, or such asset was acquired
by such Person, as applicable.
"Additional Closing Date" has the meaning assigned to that term in Section
3.1.
"Additional Indenture Notes" means notes issued pursuant to [Section 4.14]
of the Indenture.
"Additional Notes" has the meaning assigned to that term in Section 1.2.
"Adjusted EBITDA" means for any period, the Consolidated Adjusted Net
Income of Holdings and its Consolidated Subsidiaries for such period, plus:
(i) an amount which, in the determination of Consolidated Adjusted
Net Income for such period, has been deducted for (A) Consolidated Interest
Expense, (B) provisions for Federal, state, local and foreign income, value
added and similar taxes (and, without duplication, tax distributions made
in such period), (C) depreciation and amortization expense, (D) unrealized
foreign exchange losses recognized in accordance with Statement of
Financial Accounting Standards No. 133, (E) non-cash deductions in respect
of minority interests, and other non-cash charges, losses or expenses, (F)
losses from asset sales (other than sales of inventory in the ordinary
course of business), and (G) any financial advisory fees, accounting fees,
legal fees, and other similar advisory and consulting fees and related
out-of-pocket costs and expenses of Holdings and its
39
Consolidated Subsidiaries (1) incurred and deducted from net income as a
result of the Transactions (to the extent that the foregoing amounts
referred to in this clause (G)(1) do not exceed $______ in the aggregate)
or (2) any permitted acquisition, whether or not consummated, in an
aggregate amount not to exceed $2,000,000 per fiscal year with respect to
this clause (G)(2), plus
(ii) all cash payments received during such period on account of
non-cash income or non-cash gains in a prior period, plus
(iii) cash dividends and similar distributions received from any
Subsidiary of Holdings that is not a Guarantor or from any Person that is
not a Subsidiary of Holdings or is accounted for by the equity method of
accounting during such period, minus
(iv) all cash payments made during such period on account of non-cash
charges expensed in a prior period, minus
(v) without duplication, an amount which, in the determination of
Consolidated Adjusted Net Income for such period, has been added for (A)
unrealized foreign exchange gains recognized in accordance with Statement
of Financial Accounting Standards No. 133, (B) any non-cash income or
non-cash gains, and (C) gains from asset sales (other than sales of
inventory in the ordinary course of business) all as determined in
accordance with GAAP,
all as determined on consolidated basis.
"Adjusted Fixed Charge Coverage Ratio" means, with respect to any Person
for any twelve-month period ended on March 31, the ratio of (1) Consolidated
EBITDA of such Person for the fifteen-month period ended on March 31, multiplied
by 4/5 to (2) the Fixed Charges of such Person for the twelve-month period ended
on March 31. In the event that the Company or any of its Restricted Subsidiaries
Incurs or redeems any Indebtedness (including, without limitation, Indebtedness
under the Notes and Senior Credit Documents and the redemption of Indebtedness
on the Issue Date) or issues or redeems Preferred Stock subsequent to the
commencement of the fifteen- or twelve-month period, as applicable, for which
the Consolidated EBITDA or Consolidated Interested Expense are being calculated
for the purpose of determining the Adjusted Fixed Charge Coverage Ratio but
prior to the event or to the end of such applicable period for which the
Consolidated EBITDA or Consolidated Interest Expense are being calculated for
the purpose of determining the Adjusted Fixed Charge Coverage Ratio (the
"Calculation Date"), then the Consolidated EBITDA and the Consolidated Interest
Expense shall be calculated giving pro forma effect to such Incurrence or
redemption of Indebtedness, or such issuance or redemption of Preferred Stock,
as if the same had occurred at the beginning of the applicable period.
40
For purposes of making the computation of Consolidated EBITDA and
Consolidated Interest Expense of a Person to determine the Adjusted Fixed Charge
Coverage Ratio of such Person, Investments, acquisitions, dispositions, mergers,
consolidations and discontinued operations (as determined in accordance with
GAAP), in each case with respect to an operating unit of a business, that have
been made by the Company or any of its Restricted Subsidiaries during the
fifteen- or twelve-month reference period, as applicable, or subsequent to such
reference period and on or prior to or simultaneously with the Calculation Date
shall be calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, discontinued operations, mergers and consolidations
(and the reduction of any associated fixed charge obligations and the change in
Consolidated EBITDA resulting therefrom ) had occurred on the first day of the
applicable period. If since the beginning of the fifteen- or twelve-month
reference period, as applicable, any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Investment,
acquisition, disposition, discontinued operation, merger or consolidation, in
each case with respect to an operating unit of a business, that would have
required adjustment pursuant to this definition, then for the purposes of
computing the Adjusted Fixed Charge Coverage Ratio, the Consolidated EBITDA and
the Consolidated Interest Expense shall be calculated giving pro forma effect
thereto such fifteen- or twelve-month reference period, as applicable, as if
such Investment, acquisition, disposition, discontinued operation, merger or
consolidation had occurred at the beginning of the applicable period.
For purposes of this definition, whenever pro forma effect is to be given
to any transaction, the pro forma calculations shall be made 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 on such Indebtedness shall be calculated as if the rate in effect on
the Calculation Date had been the applicable rate for the entire period (taking
into account any Hedging Obligation applicable to such Indebtedness if such
Hedging Obligation has a remaining term in excess of 12 months). Interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined 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.
For purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. Interest on Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rate, shall be deemed to have been
based upon the rate actually chosen, or, if none, then based upon such optional
rate chosen as the Company may designate. Any such pro forma calculation may
include adjustments appropriate, in the
41
reasonable determination of the Company as set forth in an Officers'
Certificate, to reflect operating expense reductions reasonably expected to
result from any acquisition or merger.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise. For purposes of
Sections 8.6 and 8.7 only, "Affiliate" shall also mean any beneficial owner of
shares representing 10% or more of the total voting power of the Voting Stock
(on a fully diluted basis) of the Issuer or of any security representing rights
to purchase such Voting Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Affiliate Transaction" has the meaning assigned to that term in Section
8.7.
"Agreement" means this Note Purchase Agreement, as modified, supplemented,
amended, restated (including any amendment and restatement hereof), extended or
renewed, from time to time.
"Applicable Percentage" has the meaning assigned to that term in Section
7.2.2.
"ASG" means American Seafoods Group LLC, a Delaware limited liability
company and a wholly-owned subsidiary of the Company.
"ASLP" has the meaning assigned to that term in the first paragraph of this
Agreement.
"Asset Sale" means:
(i) the sale, conveyance, transfer or other disposition (whether in a
single transaction or a series of related transactions) of property or
assets (including by way of a Sale/Leaseback Transaction) of the Company or
any Restricted Subsidiary (each referred to in this definition as a
"disposition"); or
(ii) the issuance or sale of Equity Interests of any Restricted
Subsidiary (other than to the Issuer, the Company or another Restricted
Subsidiary)(whether in a single transaction or a series of related
transactions), in each case, other than directors' qualifying shares, or in
the case of a foreign Restricted Subsidiary, to the extent required by
applicable law,
42
in each case other than:
(a) a disposition of Cash Equivalents or Investment Grade Securities or
obsolete or worn out equipment in the ordinary course of business;
(b) the disposition of all or substantially all of the assets of the
Company in a manner permitted pursuant to Section 8.14 or any disposition that
constitutes a Change of Control;
(c) any Restricted Payment or Permitted Investment that is permitted to be
made, and is made, under Section 8.4;
(d) any disposition of assets with an aggregate Fair Market Value of less
than $1,000,000;
(e) any disposition of property or assets by a Restricted Subsidiary to the
Issuer or the Company or by the Company or a Restricted Subsidiary to the Issuer
or a Restricted Subsidiary;
(f) any exchange of like property pursuant to Section 1031 of the Internal
Revenue Code for use in a Similar Business;
(g) sales of assets received by the Company upon the foreclosure on a Lien
or other settlement of obligations owing to the Company;
(h) any sale of Equity Interests in, or Indebtedness or other securities
of, an Unrestricted Subsidiary;
(i) sales of inventory, equipment, accounts receivable or other assets in
the ordinary course of business consistent with past practices and sales of
equipment upon termination of a contract with a client entered into in the
ordinary course of business pursuant to the terms of such contract; and
(j) the exchange of assets held by the Company or any Restricted Subsidiary
of the Company (including without limitation by way of merger, consolidation or
sale and leaseback transaction) for assets held by any Person or entity
(including Equity Interests of such Person or entity), provided that (i) the
assets received by the Company or such Restricted Subsidiary in any such
exchange will immediately constitute a Permitted Investment in a Similar
Business or will immediately constitute, be part of, or be used in a Similar
Business which is conducted in a Restricted Subsidiary; (ii) any such assets are
of a comparable fair market value to the assets exchanged as determined in good
faith by the Board of Directors of the Company; and (iii) in the case of an
exchange involving a vessel, the assets received by such Restricted Subsidiary
43
must represent a vessel which shall be substantially similar in all
material respects to the vessel exchanged, including with respect to
fishing and processing capability and the ability under applicable
regulatory requirements to fish.
"Average Revolver Outstandings" means the respective amount specified below
for each twelve-month period ended on each of the dates specified below:
----------------------------------------------------------------
Test Period Ending Amount
----------------------------------------------------------------
June 30, 2004
----------------------------------------------------------------
September 30, 2004
----------------------------------------------------------------
December 31, 2004
----------------------------------------------------------------
March 31, 2005
----------------------------------------------------------------
"Blockage Notice" has the meaning assigned to that term in Section 12.3.
"Board of Directors" means the Board of Directors of the Issuer or the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or other day on
which banking institutions in New York State are authorized or required by law
to close.
"Capital Stock" means:
(i) in the case of a corporation, corporate stock, including,
without limitation, corporate stock represented by IDSs and corporate stock
outstanding upon the separation of IDSs into the securities represented
thereby;
(ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(iv) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
44
"Capitalized Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized and reflected as a liability on
a balance sheet in accordance with GAAP.
"Cash Equivalents" means:
(i) U.S. dollars and foreign currency exchanged into U.S. dollars
within 180 days;
(ii) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality thereof;
(iii) certificates of deposit, time deposits and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight
bank deposits, in each case with any commercial bank having capital and
surplus in excess of $500,000,000 and whose long-term debt is rated at
least "A" or the equivalent thereof by ▇▇▇▇▇'▇ or S&P;
(iv) repurchase obligations for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above;
(v) commercial paper issued by a corporation (other than an
Affiliate of the Company) rated at least "A-2" or the equivalent thereof by
▇▇▇▇▇'▇ or S&P and in each case maturing within one year after the date of
acquisition;
(vi) investment funds investing at least 95% of their assets in
securities of the types described in clauses (i) through (v) above;
(vii) readily marketable direct obligations issued by any state of
the United States or any political subdivision thereof having one of the
two highest rating categories obtainable from either ▇▇▇▇▇'▇ or S&P; and
(viii) Indebtedness or preferred stock issued by Persons with a rating
of "A" or higher from S&P or "A-2" or higher from ▇▇▇▇▇'▇.
"Change of Control" means:
(i) the sale, lease, transfer or other disposition (other than by
way of merger or consolidation), in one or a series of related
transactions, of all or substantially all assets of the Issuer and its
Restricted Subsidiaries, taken as a
45
whole, to any person or group (as such term is used in Section 13(d)(3) of
the Exchange Act);
(ii) the adoption of a plan relating to the liquidation or
dissolution of the Company or the Issuer (provided that this clause (ii)
shall not apply with respect to the Company at any time that the Issuer
owns 100% of the Equity Interests of the Company);
(iii) the direct or indirect acquisition by any person or group (as
such term is used in Section 13(d)(3) of the Exchange Act) other than the
Permitted Holders of more than [45]% of the beneficial ownership (as such
term is defined in Rules 13d-3 and 13d-5 under the Exchange Act) of the
voting power of the voting stock of the Issuer, by way of purchase, merger
or consolidation or otherwise;
(iv) the merger or consolidation of the Issuer with or into another
Person or the merger of another Person into the Issuer with the effect that
immediately after such transaction the stockholders of the Issuer
immediately prior to such transaction hold, directly or indirectly, less
than [35]% of the beneficial ownership (as such term is defined in Rules
13d-3 and 13d-5 under the Exchange Act) of the total voting power of all
securities generally entitled to vote in the election of directors,
managers, or trustees of the Person surviving such merger or consolidation;
or
(v) the first day on which a majority of the members of the Board of
Directors of the Issuer are not Continuing Directors.
"Closing" has the meaning assigned to that term in Section 3.1.
"Closing Date" has the meaning assigned to that term in Section 3.1.
"Company" has the meaning assigned to that term in the first paragraph of
this Agreement.
"Consolidated Adjusted Net Income" means, for any period, the net income
(or net loss) after taxes of Holdings and its Consolidated Subsidiaries from
continuing operations for such period, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded from the calculation
of Consolidated Net Income, (i) the income (or loss) of any Person that is not a
Subsidiary of Holdings, or that is a not a Guarantor, or that is accounted for
by the equity method of accounting, [except in each case to the extent that any
such income is actually received by Holdings or a Wholly-Owned Subsidiary of
Holdings in the form of cash Dividends during such period], and (ii) the income
of any Subsidiary of Holdings that would otherwise be included, to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of
46
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary.
"Consolidated Depreciation and Amortization Expense" means, with respect to
any Person for any period, the total amount of depreciation and amortization
expense of such Person and its Restricted Subsidiaries (including without
limitation amortization of intangibles) for such period on a consolidated basis
and otherwise determined in accordance with GAAP.
"Consolidated EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income for such period plus, to the extent deducted in
calculating such Consolidated Net Income, Consolidated Interest Expense,
provision for all taxes (whether or not paid, estimated or accrued) based on
income, profits or capital, Consolidated Depreciation and Amortization Expense,
minority interest in income or loss of consolidated entities, and all other
non-cash charges or non-cash losses.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the total interest expense of such Person its Consolidated Subsidiaries,
whether paid or accrued and whether or not capitalized, non-cash interest
expense, the interest component of any deferred payment obligations, the
interest component of all Capitalized Lease Obligations, and the implied
interest component of Synthetic Lease Obligations to the extent included in
calculating Consolidated Adjusted Net Income or Consolidated Net Income, as
applicable (regardless of whether accounted for as an interest expense under
GAAP), all commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptances and net costs in respect of
Hedging Obligations, to the extent actually paid during such period, but
excluding (X) amortization of debt issuance costs and original issue discount,
and (Y) to the extent they would otherwise be included in interest expense under
GAAP, gains and losses arising from derivative financial instruments issued by
Holdings or ASLP for the benefit of ASLP, employees of ASLP, or employees of
Holdings and its consolidated subsidiaries, including rights under exchange
warrants and other registration rights, options to acquire ownership interests
or debt in ASLP or options to acquire IDSs, or commitments by Holdings to issue
equity and debt to ASLP in the event that ASLP employees exercise their Series A
or E options, all as determined on a consolidated basis; provided that for the
purposes of calculating the Fixed Charge Coverage Ratio or the Adjusted Fixed
Charge Coverage Ratio, Consolidated Interest Expense shall be calculated in
respect of Holdings and its Restricted Subsidiaries, and provided further, that
in respect of any period (or portion of a period) occurring prior to the Issue
Date, Consolidated Interest Expense shall be calculated (i) excluding all
interest in respect of the Existing Credit Agreement and the Existing Notes, and
(ii) including the pro forma effect of interest arising under the Intercompany
Notes and the Indebtedness under the Senior Credit Facilities, as though each
had been incurred on the first day of such period, as follows:
47
(A) interest in respect of the Intercompany Notes and Senior Secured
Notes shall be deemed to have accrued throughout such period at the rate
specified in such notes as of the Issue Date, based on the full principal
amount thereof outstanding on the Issue Date; and
(B) interest in respect of term loans and revolving loans under the
Credit Agreement shall be deemed to have accrued throughout such period at
the per annum rate equal to the sum of (x) the three month eurodollar rate
existing on the Issue Date, plus (y) 2.5%; based upon, (1) in the case of
term loans, the aggregate principal amount of term loans outstanding on the
Issue Date, and (2) in the case of revolving loans, the Average Revolver
Outstandings for the applicable period.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis; provided, however, that:
(i) any effect of extraordinary gains or losses shall be excluded;
(ii) any increase in amortization or depreciation resulting from
purchase accounting in relation to any acquisition that is consummated
after the Issue Date, net of taxes, shall be excluded;
(iii) the Net Income for such period shall not include the cumulative
effect of a change in accounting principles during such period;
(iv) any effect of income or loss from discontinued operations and
any effect of gains or losses on disposal of discontinued operations shall
be excluded;
(v) any effect of gains or losses (less all fees and expenses
relating thereto) attributable to asset dispositions other than in the
ordinary course of business (as determined in good faith by the Board of
Directors) shall be excluded;
(vi) the Net Income for such period of any Person that is not a
Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is
accounted for by the equity method of accounting, shall be included only to
the extent of the amount of dividends or distributions or other payments
paid in cash (or to the extent converted into cash) to the referent Person
or a Restricted Subsidiary thereof in respect of such period;
(vii) the Net Income for such period of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of its Net
Income is not at the date of
48
determination permitted without any prior governmental approval (which has
not been obtained) or, directly or indirectly, by the operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, unless such restrictions with respect to
the payment of dividends or in similar distributions have been legally
waived; provided that (A) such Person's equity in the net income of any
such Restricted Subsidiary shall be included in the Consolidated Net Income
up to the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period as a dividend, and (B) the net
loss of such Restricted Subsidiary shall be included to the extent of the
aggregate Investment of such Person in such Restricted Subsidiary;
(viii) any non-cash charge, together with any related provision for
taxes on such charge, related to the write off of goodwill or intangibles
as a result of impairment, including, without limitation, in each case, as
required in accordance with GAAP;
(ix) any unrealized foreign exchange gains or losses;
(x) any compensation charge arising solely from any grant of stock,
stock options or other equity-based awards;
(xi) all deferred financing costs written off and premiums paid in
connection with any early extinguishment of Indebtedness; and
(xii) any item classified as an extraordinary, unusual or nonrecurring
gain, loss or charge, including without limitation (a) any charge or
expense incurred for employee bonuses in connection with the Transactions,
and (b) fees, expenses and charges associated with the Transactions or any
acquisition, merger or consolidation after the Issue Date.
Notwithstanding the foregoing, for the purpose of Section 8.4 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Company or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to Section 8.4(c)(iv) and Section 8.4(c)(v).
"Consolidated Subsidiary" means, with respect to any Person at any date, a
Subsidiary of such Person the accounts of which would be consolidated with those
of such Person in its consolidated financial statements if such statements were
prepared as of such date in accordance with GAAP.
49
"Continuing Directors" means, as of any date of determination, any member
of the Issuer's Board of Directors who:
(i) was a member of the Issuer's Board of Directors on the date of
this Agreement or on the date which is two years prior to the date of
determination; or
(ii) was nominated for election or elected to the Board of Directors
with the affirmative vote of at least a majority of the Continuing
Directors who were members of the Issuer's Board of Directors at the time
of the nomination or election.
"Contribution Indebtedness" means Indebtedness of the Company in an
aggregate principal amount not greater than the amount of all Specified Cash
Contributions, provided that such Contribution Indebtedness (i) has a Stated
Maturity later than the Stated Maturity of the Notes, (ii) is Incurred
substantially concurrently with such Specified Cash Contributions, and (iii) is
so designated as Contribution Indebtedness pursuant to an Officers' Certificate
on the Incurrence date thereof.
"Control" has the meaning specified in the definition of "Affiliate."
"Credit Agreement" means the credit agreement dated as of [ ], 2004
as amended, restated, supplemented, waived, replaced, restructured, repaid,
increased, refunded, refinanced or otherwise modified from time to time,
including any agreement extending the maturity thereof or otherwise
restructuring all or any portion of the Indebtedness under such agreement among
Holdings, ASG, the Subsidiaries of ASG named therein, the financial institutions
named therein and ▇▇▇▇▇ Fargo Bank, as Administrative Agent, or any Successor.
"Default" means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default
"Designated Noncash Consideration" means the Fair Market Value of noncash
consideration received by the Company or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers' Certificate, setting forth the basis of
such valuation, less the amount of Cash Equivalents received in connection with
a subsequent sale of such Designated Noncash Consideration.
"Designated Preferred Stock" means Preferred Stock of the Company (other
than Disqualified Stock) that is issued for cash (other than to a Subsidiary of
the Company or an employee stock ownership plan or trust established by the
Company or any of its Subsidiaries) and is so designated as Designated Preferred
Stock, pursuant to an Officers' Certificate, on the issuance date thereof, the
cash proceeds of which are excluded from the calculation set forth in Section
8.4(c).
50
"Designated Senior Indebtedness", with respect to the Company or any
Guarantor, means:
(i) any Indebtedness of the Company or such Guarantor under the Senior
Credit Documents; and
(ii) after payment in full of all obligations under either the Credit
Agreement or the Note Purchase Agreement, any other Guarantor Senior
Indebtedness permitted by this Agreement, the principal amount of which is
$25,000,000 or more and that has been designated by the Company or such
Guarantor as "Designated Senior Indebtedness."
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of such Person which, by its terms (or by the terms of any security into which
it is convertible or for which it is redeemable or exchangeable), or upon the
happening of any event:
(i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise;
(ii) is convertible or exchangeable for Indebtedness or Disqualified
Stock; or
(iii) is redeemable at the option of the holder thereof, in whole or
in part, in each case prior to the 91st day after the maturity date of the
Notes;
provided, however, that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable at
the option of the holder thereof prior to such first anniversary shall be deemed
to be Disqualified Stock; provided further, however, that if such Capital Stock
is issued to any employee or to any plan for the benefit of employees of the
Company or its Subsidiaries or by any such plan to such employees, such Capital
Stock shall not constitute Disqualified Stock solely because it may be required
to be repurchased by the Company in order to satisfy applicable statutory or
regulatory obligations or as a result of such employee's termination, death or
disability.
"Dividend Suspension Threshold" means the following applicable Interest
Coverage Ratio of the Company for the twelve-month period ended on the last day
of any fiscal quarter:
---------------------------------------------------------------------
Period Ended On Dividend Suspension
Threshold
---------------------------------------------------------------------
Issue Date through June 29, 2005 1.75 to 1.00
---------------------------------------------------------------------
June 30, 2005 and thereafter 1.85 to 1.00
---------------------------------------------------------------------
51
"Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Default" has the meaning assigned to that term in Section 9.1
"Excess Proceeds" has the meaning assigned to that term in Section 8.6.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Contributions" means the net cash proceeds received by the
Company after the Issue Date from (i) contributions to its common equity capital
and (ii) the sale (other than to a Subsidiary of the Company or to any Company
or Subsidiary management equity plan or stock option plan or any other
management or employee benefit plan or agreement) of Capital Stock (other than
Disqualified Stock and Designated Preferred Stock) of the Company, in each case
designated as Excluded Contributions pursuant to an Officers' Certificate
executed by an Officer of the Company, the cash proceeds of which are excluded
from the calculation set forth in Section 8.4(c), which designation can be
subsequently altered so long as such proceeds have not been expended by the
Company or its Restricted Subsidiaries.
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of April 18, 2002, among Holdings, ASG, American Seafoods
Consolidated LLC, the lenders named therein, and Bank of America, N.A., as
administrative agent and collateral agent, as amended, restated, or supplemented
from time to time.
"Existing Notes" means the 10 1/8% Senior Subordinated Notes due 2010
issued by ASG and the corporate co-issuer.
"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
twelve-month period ended on June 30, September 30 or December 31, the ratio of
Consolidated EBITDA of such Person for such period to the Fixed Charges of such
Person for such period. In the event that the Company or any of its Restricted
Subsidiaries Incurs or redeems any Indebtedness (including, without limitation,
Indebtedness under this Indenture and the Senior Credit Documents and the
redemption
52
of Indebtedness on the Issue Date) or issues or redeems Preferred Stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the event or to the end of the period for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such Incurrence or redemption of Indebtedness, or
such issuance or redemption of Preferred Stock, as if the same had occurred at
the beginning of the applicable twelve-month period.
For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers, consolidations and discontinued operations
(as determined in accordance with GAAP), in each case with respect to an
operating unit of a business, that have been made by the Company or any of its
Restricted Subsidiaries during the four-quarter reference period or subsequent
to such reference period and on or prior to or simultaneously with the
Calculation Date shall be calculated on a pro forma basis assuming that all such
Investments, acquisitions, dispositions, discontinued operations, mergers and
consolidations (and the reduction of any associated fixed charge obligations and
the change in Consolidated EBITDA resulting therefrom) had occurred on the first
day of the four-quarter reference period. If since the beginning of such period
any Person (that subsequently became a Restricted Subsidiary or was merged with
or into the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Investment, acquisition, disposition, discontinued
operation, merger or consolidation, in each case with respect to an operating
unit of a business, that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect thereto for such period as if such Investment, acquisition,
disposition, discontinued operation, merger or consolidation had occurred at the
beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given
to any transaction, the pro forma calculations shall be made 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 on such Indebtedness shall be calculated as if the rate in effect on
the Calculation Date had been the applicable rate for the entire period (taking
into account any Hedging Obligation applicable to such Indebtedness if such
Hedging Obligation has a remaining term in excess of 12 months). Interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined 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.
For purposes of making the computation referred to above, interest on
any Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. Interest on Indebtedness that may optionally be
determined at an
53
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate chosen
as the Company may designate. Any such pro forma calculation may include
adjustments appropriate, in the reasonable determination of the Company as set
forth in an Officers' Certificate, to reflect operating expense reductions
reasonably expected to result from any acquisition or merger.
"Fixed Charges" means, with respect to any Person for any period, the sum
of (i) Consolidated Interest Expense of such Person for such period and (ii) all
cash dividend payments (excluding items eliminated in consolidation) on any
series of Preferred Stock or Disqualified Stock of such Person and its
Subsidiaries.
"Foreign Ownership Rules" means all provisions of United States law
regulating as to citizenship, the ownership, documentation, and operation of (i)
any vessel documented under 46 U.S.C. Ch. 121 with a coastwise endorsement or
(ii) any vessel documented under 46 U.S.C. Ch. 121 with a fishery endorsement
that is one hundred (100) feet or greater in registered length, including, but
not limited to, the American Fisheries Act, the Shipping Act of 1916, as amended
(46 U.S.C. ss. 801 et seq.), 46 U.S.C. Ch. 121, and 46 U.S.C. Ch. 313, as from
time to time amended, and the regulations issued by the United States Coast
Guard, MARAD, and the United States Secretary of Transportation pursuant
thereto, as each may be amended from time to time.
"Foreign Subsidiary" means a Restricted Subsidiary not organized or
existing under the laws of the United States of America or any state or
territory thereof.
"GAAP" means accounting principles generally accepted in the United States,
as set forth in the opinions and pronouncements of accounting standard setting
bodies approved by a significant segment of the accounting profession, or such
other regulatory body, as applicable, which are in effect from time to time. For
the purposes of this Agreement, the term "consolidated" with respect to any
Person shall mean such Person consolidated with its Restricted Subsidiaries, and
shall not include any Unrestricted Subsidiary, but the interest of such Person
in an Unrestricted Subsidiary will be accounted for as an Investment.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any
54
manner (including, without limitation, letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Indebtedness or other
obligations.
"Guarantee" means any Note Guarantee and any Indenture Guarantee.
"Guaranteed Obligations" has the meaning assigned to that term in Section
11.1.
"Guarantor" means each Wholly Owned Domestic Subsidiary of the Company, and
any other Person that Incurs a Note Guarantee; provided that upon the release or
discharge of such Person from its Note Guarantee in accordance with the terms of
this Agreement, such Person ceases to be a Guarantor.
"Guarantor Senior Indebtedness" means the Indebtedness of the Company and
any Guarantor under the Senior Credit Documents and all Hedging Obligations
originally entered with the Lenders or their affiliates under the Credit
Agreement and all other Indebtedness, including interest thereon (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or any Subsidiary of the Company whether
or not a claim for post-filing interest is allowed in such proceeding) and other
amounts (including fees, expenses, reimbursement obligations under letters of
credit and indemnities) owing in respect thereof, whether outstanding on the
Issue Date or thereafter Incurred, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is provided
that such obligations are not superior in right of payment to the Notes or the
Note Guarantees, as applicable; provided, however, that Guarantor Senior
Indebtedness shall not include, as applicable, (i) any obligation of any
Guarantor to the Company or any other Subsidiary of the Company or any
obligation of the Company to any Guarantor, (ii) any liability for Federal,
state, local or other taxes owed or owing by the Company or any Guarantor, (iii)
any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including guarantees thereof or instruments
evidencing such liabilities), (iv) any Indebtedness or obligation of the Company
or any Guarantor which is expressly subordinated in right of payment to any
other Indebtedness of the Company or any Guarantor, (v) any obligations with
respect to any Capital Stock, and (vi) any Indebtedness Incurred in violation of
this Agreement.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) currency exchange, interest rate or commodity swap
agreements, currency exchange, interest rate or commodity cap agreements and
currency exchange, interest rate or commodity collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange, interest rates or commodity prices.
"IDSs" means the Issuer's Income Deposit Securities, whether issued on the
Issue Date or as may be issued from time to time.
55
"Initial Closing Date" has the meaning assigned to that term in Section
3.1.
"Initial Lien" has the meaning assigned to that term in Section 8.8.
"Incur" means issue, assume, enter into a 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 person at the time it becomes a Subsidiary. Any Indebtedness issued at a
discount (including Indebtedness on which interest is payable through the
issuance of additional Indebtedness) shall be deemed to be incurred at the time
of original issuance of the Indebtedness at the issue price thereof.
"Indebtedness" means, with respect to any Person (without duplication):
(i) the principal of any indebtedness of such Person, whether or not
contingent:
(a) in respect of borrowed money;
(b) evidenced by bonds, notes, debentures or similar instruments
or letters of credit or bankers' acceptances (or, without duplication,
reimbursement agreements in respect thereof);
(c) representing the deferred and unpaid purchase price of any
property, except any such balance that constitutes a trade payable or
similar obligation to a trade creditor due within six months from the
date on which it is Incurred, in each case Incurred in the ordinary
course of business, which purchase price is due more than one year
after the date of placing the property in service or taking delivery
and title thereto;
(d) in respect of Capitalized Lease Obligations; or
(e) representing any Hedging Obligations (the amount of any such
Hedging 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), if and to the
extent that any of the foregoing Indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability on a
balance sheet (excluding the footnotes thereto) of such Person
prepared in accordance with GAAP;
(ii) to the extent not otherwise included, any obligation of such
Person to be liable for, or to pay, as obligor, guarantor or otherwise, on
the Indebtedness of
56
another Person (other than by endorsement of negotiable instruments for
collection in the ordinary course of business); and
(iii) to the extent not otherwise included, Indebtedness of another
Person secured by a Lien on any asset owned by such Person (whether or not
such Indebtedness is assumed by such Person); provided, however, that the
amount of such Indebtedness will be the lesser of (a) the Fair Market Value
of such asset at such date of determination and (b) the amount of such
Indebtedness of such other Person;
provided further, that any obligation of the Company or any Restricted
Subsidiary in respect of (i) minimum guaranteed commissions, or other similar
payments, to clients, minimum returns to clients or stop loss limits in favor of
clients or (ii) indemnification obligations to clients, in each case pursuant to
contracts to provide services to clients entered into in the ordinary course of
business shall be deemed not to constitute Indebtedness.
"Indenture" means the Indenture, dated as of [__________], 2004 among the
Issuer, as Issuer, the Guarantors from time to time party thereto, as Guarantors
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee, providing for
the issuance of the Indenture Notes.
"Indenture Guarantee" means the guarantee by the Company, each other
guarantor under the Indenture of the Issuer's obligations under the Indenture
and the Indenture Notes.
"Indenture Notes" means the [___]% Senior Secured Notes Due 2014, issued by
the Issuer under the Indenture.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm or consultant to Persons engaged in a similar business
of nationally recognized standing that is, in the good faith determination of
the Company, qualified to perform the task for which it has been engaged.
"Interest Coverage Ratio" means the ratio of Adjusted EBITDA to
Consolidated Interest Expense for the twelve-month period ended on the last day
of any fiscal quarter, provided that for the purposes of determining the
Interest Coverage Ratio for any twelve-month period ended on March 31, Adjusted
EBITDA shall be calculated for the most recent 15-month period ended on such
date and multiplied by 4/5.
"Interest Deferral Threshold" means the following applicable Interest
Coverage Ratio of the Company for the twelve-month period ended on the last day
of any fiscal quarter:
57
Interest Deferral
Period Ended On Threshold
--------------- -----------------
Issue Date through June 29, 2005 1.65 to 1.00
June 30, 2005 through [______], 2009 1.75 to 1.00
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Interests" means [number] limited liability company interests of the
Company, representing [___]% of the company and evidenced by certificate(s) No.
[___], owned and delivered by ASLP to the Company at the Closing, as
consideration for the Notes issued on the Closing Date in the name of ASLP in
the aggregate principal amount set forth opposite ASLP's name on Schedule 2.1.
"Investment Grade Securities" means:
(i) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof
(other than Cash Equivalents);
(ii) debt securities or debt instruments with a rating of BBB-- or
higher by S&P or Baa3 or higher by Moody's or the equivalent of such rating
by such rating organization, or if no rating of S&P or Moody's then exists,
the equivalent of such rating by any other nationally recognized securities
rating agency, but excluding any debt securities or instruments
constituting loans or advances among the Company and its Subsidiaries; and
(iii) investments in any fund that invests exclusively in investments
of the type described in clauses (i) and (ii) which fund may also hold
immaterial amounts of cash pending investment and/or distribution.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding accounts receivable,
trade credit and advances to customers and commission, travel and similar
advances to officers, employees and consultants made in the ordinary course of
business), purchases or other acquisitions for consideration (including
agreements providing for the adjustment of purchase price) of Indebtedness,
Equity Interests or other securities issued by any other Person and investments
that are required by GAAP to be classified on the balance sheet of the Company
in the same manner as the other investments included in this definition to the
extent such transactions involve the transfer of cash or other property.
58
For purposes of the definition of "Unrestricted Subsidiary" and Section
8.4:
(i) "Investments" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of
the net assets of a Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
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 equal to 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; and
(ii) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its Fair Market Value at the time of such transfer, in
each case as determined in good faith by the Board of Directors.
["IRS" means the Internal Revenue Service.]
"Issue Date" means the first date on which the Notes or Additional Notes
are issued under this Agreement.
"Issuer" means American Seafoods Corporation, or any successor issuer of
the Indenture Notes.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction);
provided that in no event shall an operating lease be deemed to constitute a
Lien.
"Management Investors" means any current or future individuals who are or
become members of management of the Issuer and Restricted Subsidiaries,
including, without limitation, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, in their capacities as individual investors.
"Mandatory Interest Deferral Period" has the meaning assigned to such term
in Section 8.1.
59
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, industry or financial condition of the Company and
the other Note Parties considered as a whole, (b) the Purchasers' rights and
remedies under this Agreement and the other Subordinated Note Documents or (c)
the legality, validity, binding effect, or enforceability against any Note Party
of any Subordinated Note Document.
"Maturity Date" has the meaning assigned to that term in Section 7.2.1.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor rating
agency.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received in respect of or upon the sale or other
disposition of any Designated Noncash Consideration received in any Asset Sale
and 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 the assumption by the acquiring person of Indebtedness relating to
the disposed assets or other considerations received in any other noncash form),
net of the direct costs relating to such Asset Sale and the sale or disposition
of such Designated Noncash Consideration (including, without limitation, legal,
accounting and investment banking fees, and brokerage and sales commissions),
and any relocation expenses Incurred as a result thereof, taxes paid or payable
as a result thereof or distributions required to permit payment of taxes as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements related thereto), amounts required
to be applied to the repayment of principal and interest on Indebtedness
required to be paid as a result of such transaction, all distributions or other
payments made to minority interest holders or any other Person (other than the
Company or a Restricted Subsidiary) owning a beneficial interest in the assets
disposed of in such transaction, and any deduction of appropriate amounts to be
provided by the Company as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and
retained by the Company after such sale or other disposition thereof, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the Issuer
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
60
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise,
or (c) constitutes the lender; (ii) no default with respect to which (including
any rights that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any other Indebtedness (other than the Notes) of the Issuer or any of
its Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and (iii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Issuer or any of
its Restricted Subsidiaries.
"Note Guarantee" means the guarantee by each Guarantor of the Company's
obligations under this Agreement and on the Notes, executed pursuant to the
provisions of this Agreement.
"Note Parties" means the Company and each of its Note Guarantors, whether
in existence on the Closing Date or thereafter organized.
"Note Party Obligations" means all loans, advances, debts, liabilities
and obligations for the performance of covenants, tasks or duties or for payment
of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Note
Party to any Purchaser, and all covenants and duties regarding such amounts, of
any kind or nature, present or future, whether or not evidenced by any note,
agreement or other instrument, in each case, arising under any Subordinated Note
Documents. This term includes, without limitation all principal, premium,
interest (including all deferred interest and interest that accrues after the
commencement of any case or proceeding by or against any Note Party in
bankruptcy, whether or not allowed in such case or proceeding), fees, charges,
expenses, attorneys' fees and any other sum chargeable to any Note Party under
any Subordinated Note Documents.
"Note Purchase Agreement" means the Note Purchase Agreement, dated [ ],
2004, relating to the senior secured notes of ASG, as amended, restated,
supplemented, waived, replaced, restructured, repaid, increased, refunded,
refinanced or otherwise modified from time to time, including any agreement
extending the maturity thereof or otherwise restructuring all or any portion of
the Indebtedness under such agreement.
"Note Register" has the meaning assigned to that term in Section 7.4.
"Notes" has the meaning assigned to that term in Section 1.1.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements (including, without limitation, reimbursement
obligations with respect to letters of credit and bankers' acceptances), damages
and other liabilities payable under
61
the documentation governing any Indebtedness; provided that Obligations with
respect to the Notes and Indenture Notes shall not include fees or
indemnifications in favor of any third parties other than the Purchasers, the
Trustee and the holders of the Indenture Notes.
"Optional Interest Deferral Period" has the meaning assigned to that term
in Section 8.1.
"Pari Passu Indebtedness" means with respect to the Company or any
Guarantor, all Indebtedness of such Person other than Guarantor Senior
Indebtedness and other than Indebtedness that is by its terms expressly
subordinated in right of payment to any Guarantee of such Guarantor of the
Notes, as applicable.
"Payment Blockage Period" has the meaning assigned to that term in
Section 12.3.
"Permitted Asset Swap" means any one or more transactions in which the
Company or any Restricted Subsidiary exchanges assets for consideration
consisting of (i) assets used or useful in a Similar Business and (ii) any cash
or Cash Equivalents, provided that such cash or Cash Equivalents shall be
considered Net Proceeds from an Asset Sale.
"Permitted Holder" means Centre Partners Management LLC and any funds
managed by Centre Partners Management LLC or its affiliates, the Management
Investors, Coastal Villages ▇▇▇▇▇▇▇ LLC and Central Bering Sea Fishermans
Association, and Related Parties of each of them.
"Permitted Investments" means:
(i) any Investment in the Company or any Restricted Subsidiary;
(ii) any Investment in Cash Equivalents or Investment Grade Securities;
(iii) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person if as a result of such Investment (a) such Person becomes a
Restricted Subsidiary or (b) such Person, in one transaction or a series of
related transactions, is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary;
(iv) any Investment in securities or other assets not constituting Cash
Equivalents and received in connection with an Asset Sale made pursuant to the
provisions of Section 8.6 or any other disposition of assets not constituting an
Asset Sale;
62
(v) any Investment existing on the Issue Date or made pursuant to legally
binding written commitment existing on the Issue Date;
(vi) loans and advances to directors, officers and employees not in
excess of $1,000,000 outstanding at any one time in the aggregate;
(vii) any Investment acquired by the Company or any of its Restricted
Subsidiaries (a) in exchange for any other Investment or accounts receivable
held by the Company or any such Restricted Subsidiary in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization of the
Company of such other Investment or accounts receivable or (b) as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect to
any secured Investment or other transfer of title with respect to any secured
Investment in default;
(viii) Hedging Obligations permitted under Section 8.3(j);
(ix) additional Investments having an aggregate Fair Market Value, taken
together with all other Investments made pursuant to this clause (ix) that are
at that time outstanding, not to exceed the greater of 5% of Total Assets or
$25,000,000 at the time of such Investment (with the Fair Market Value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value);
(x) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses, in
each case Incurred in the ordinary course of business;
(xi) Investments the payment for which consists of Equity Interests of
the Issuer (other than Disqualified Stock);
provided, however, that such Equity Interests shall not increase the
amount available for Restricted Payments under Section 8.4(c);
(xii) any transaction to the extent it constitutes an Investment that is
permitted by and made in accordance with the provisions of Section 8.7 (except
transactions described in clauses (ii), (iii), (v) and (vi) of such paragraph);
(xiii) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
(xiv) Guarantees issued in accordance with Section 8.3;
(xv) any Investment by Restricted Subsidiaries in other Restricted
Subsidiaries and Investments by Subsidiaries that are not Restricted
Subsidiaries in other Subsidiary that are not Restricted Subsidiaries;
63
(xvi) Investments consisting of prepaid expenses or performance or
similar deposits to third parties purchases and acquisitions of inventory,
supplies, materials and equipment or purchases of contract rights or licenses or
leases of intellectual property, in each case in the ordinary course of
business;
(xvii) deposit accounts with respect to foreign currency received in the
ordinary course of business or held by the Company or any Restricted Subsidiary
in the ordinary course of business in connection with entering into or
fulfilling Hedging Obligations, and deposits and cash collateral provided with
respect to Hedging Obligations;
(xviii) investments in the Notes or the Existing Notes; and
(xix) pledges or deposits made in connection with Liens permitted under
Section 8.8.
"Permitted Junior Securities" mean debt or equity securities of the
Company or any successor corporation issued pursuant to a plan of reorganization
or readjustment of the Company that are subordinated to the payment of all
then-outstanding Guarantor Senior Indebtedness of the Company at least to the
same extent that the Notes are subordinated to the payment of all Guarantor
Senior Indebtedness of the Company on the Issue Date, so long as to the extent
that any Guarantor Senior Indebtedness of the Company outstanding on the date of
consummation of any such plan of reorganization or readjustment is not paid in
full in cash on such date, either (a) the holders of any such Guarantor Senior
Indebtedness not so paid in full in cash have consented to the terms of such
plan of reorganization or readjustment or (b) such holders receive securities
which constitute Guarantor Senior Indebtedness and which have been determined by
the relevant court to constitute satisfaction in full in cash of any Senior
Indebtedness not paid in full in cash.
"Permitted Liens" means, with respect to any Person:
(a) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar legislation, or
good faith deposits in connection with bids, tenders, contracts (other
than for the payment of Indebtedness) or leases to which such Person is a
party, or deposits to secure public or statutory obligations of such
Person or deposits of cash or United States government bonds to secure
surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent,
in each case Incurred in the ordinary course of business;
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings or other Liens arising out of
judgments or awards
64
against such Person with respect to which such Person shall then be
proceeding with an appeal or other proceedings for review;
(c) Liens for taxes, assessments or other governmental charges not
yet due or payable or subject to penalties for nonpayment or which are
being contested in good faith by appropriate proceedings;
(d) Liens in favor of issuers of performance and surety bonds or
bid bonds or completion guarantees or with respect to other regulatory
requirements or letters of credit issued pursuant to the request of and
for the account of such Person in the ordinary course of its business;
(e) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real
properties or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not Incurred in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their
use in the operation of the business of such Person;
(f) Liens securing Indebtedness permitted to be incurred pursuant
to Section 8.3(d);
(g) Liens to secure Indebtedness permitted pursuant to Section
8.3(a);
(h) Liens existing on, or provided for under written arrangements
existing on, the Issue Date;
(i) Liens on property or shares of stock of a Person at the time
such Person becomes a Subsidiary; provided, however, such Liens are not
created or Incurred in connection with, or in contemplation of, such
other Person becoming such a Subsidiary; provided further, however, that
such Liens may not extend to any other property owned by the Company or
any Restricted Subsidiary;
(j) Liens on property at the time the Company or a Restricted
Subsidiary acquired the property, including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that such Liens are not created or
Incurred in connection with, or in contemplation of, such acquisition;
provided further, however, that the Liens may not extend to any other
property owned by the Company or any Restricted Subsidiary;
65
(k) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Issuer, the Company or another
Restricted Subsidiary permitted to be incurred in accordance with Section
8.3;
(l) Liens securing Hedging Obligations;
(m) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances, issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(n) leases and subleases of real property which do not materially
interfere with the ordinary conduct of the business of the Company or any
of its Restricted Subsidiaries;
(o) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business;
(p) Liens in favor of the Company or any Restricted Subsidiary;
(q) Liens on equipment of the Company granted in the ordinary
course of business to the Company's client at which such equipment is
located;
(r) Liens encumbering deposits made in the ordinary course of
business to secure obligations arising from statutory, regulatory,
contractual or warranty requirements, including rights of offset and
set-off;
(s) Liens on the Equity Interests of Unrestricted Subsidiaries
securing obligations of Unrestricted Subsidiaries not otherwise
prohibited by this Indenture;
(t) Liens to secure Indebtedness permitted by Section 8.3(l);
(u) 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;
(v) Liens securing commercial bank indebtedness;
(w) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by any
developer, landlord or
66
other third party on property over which the Company or any Restricted
Subsidiary 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;
(x) Liens on properties or assets (1) of the Company or any
Guarantor securing Guarantor Senior Indebtedness, (2) of any Wholly Owned
Subsidiary that is not a Guarantor securing Indebtedness of any Wholly
Owned Subsidiary that is not a Guarantor or (3) of any Restricted
Subsidiary that is not a Guarantor securing its Indebtedness;
(y) 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;
(z) Liens securing the Notes and the Indenture Notes; and
(aa) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses
(f), (g), (h), (i), (j), (k), (l) and (t); provided, however, that (x)
such new Lien shall be limited to all or part of the same property that
secured the original Lien (plus improvements on such property) and (y)
the Indebtedness secured by such Lien at such time is not increased to
any amount greater than the sum of (A) the outstanding principal amount
or, if greater, committed amount of the Indebtedness described under
clauses (f), (g), (h), (i), (j), (k), (l) or (t) at the time the original
Lien became a Permitted Lien under this Indenture and (B) an amount
necessary to pay any fees and expenses, including premiums, related to
such refinancing, refunding, extension, renewal or replacement.
"Permitted Payment" means any payment to the Issuer and ASLP pursuant the
Expense Reimbursement Agreement, dated , 2004, between the Issuer, ASLP and
Holdings.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding up.
67
"Redemption Date" when used with respect to any Note to be redeemed or
purchased means the date fixed for such redemption or purchase by or pursuant to
this Agreement and the Notes.
"Related Party" means:
(1) with respect to any Permitted Holder other than an individual, any
controlling stockholder, partner, member, or 80% (or more) owned Subsidiary;
(2) with respect to any Permitted Holder other than an individual, any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Permitted Holders
and/or such other Persons referred to in the immediately preceding clause (1);
or
(3) with respect to any Permitted Holder that is an individual, (x) any
immediate family member, heir, executor or legal representative of such
individual or (y) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more individuals
who are Management Investors or members of their immediate families.
"Purchasers" means the holder or holders from time to time of the Notes.
"Refunding Capital Stock" has the meaning assigned to that term in
Section 8.4.
"Refinanced Indebtedness" has the meaning assigned to that term in
Section 8.3.
"Representative" means the trustee, agent or representative (if any) for
an issue of Guarantor Senior Indebtedness or Designated Senior Indebtedness, as
the case may be.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning assigned to that term in Section
8.4.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Retired Capital Stock" has the meaning assigned to that term in Section
8.4.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company
68
or such Restricted Subsidiary leases it from such Person, other than leases
between the Company and a Wholly Owned Subsidiary or between Wholly Owned
Subsidiaries.
"S&P" means Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc., or any successor rating agency.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller Subordinated Debt" means unsecured Indebtedness of ASG or any of
its Wholly-Owned Subsidiaries that (i) constitutes Subordinated Obligations,
(ii) is evidenced by writings having no material covenants or events of default,
other than failure to pay and bankruptcy events, (iii) has a maturity date no
earlier than , 2009 and provides for no principal amortization prior to
maturity, (iv) is incurred in favor of the seller as partial consideration for
an acquisition undertaken by ASG or its Wholly-Owned Subsidiary, and (v) the
aggregate principal amount of all such Indebtedness incurred after the Issue
Date together does not exceed $22,500,000.
"Senior Credit Documents" means the Credit Agreement, the Note Purchase
Agreement, the notes issued pursuant thereto and the guarantees thereof, any
agreements or instruments relating to the Hedging Obligations entered into with
the Lenders under the Credit Agreement or their affiliates, and the collateral
and other documents relating thereto.
"Senior Credit Facility" means the debt facilities provided pursuant to
the Senior Credit Documents, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
"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 under the Securities Act promulgated by the SEC.
"Similar Business" means a business, the majority of whose revenues are
derived from the harvesting and/or processing of seafood, or the activities of
the Company and its Subsidiaries as of the Issue Date or any business or
activity that is reasonably similar thereto or a reasonable extension,
development or expansion thereof or ancillary thereto.
"Specified Cash Contributions" means the aggregate amount of cash
contributions (other than Excluded Contributions) made to the capital of the
Company which are designated as "Specified Cash Contributions" pursuant to an
Officers' Certificate, which designation can be subsequently altered so long as
such proceeds have not been applied by the Company or its Restricted
Subsidiaries to permit a Restricted Payment.
69
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final 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).
"Stockholder" means, with respect to any Person, any holder of Capital
Stock of such Person.
"Subordinated Note Documents" means this Agreement, the Notes and all
other documents, agreements and certificates executed or delivered in connection
therewith from time to time. Any reference in this Agreement or any other
Subordinated Note Document to a Subordinated Note Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or
such Subordinated Note Document as the same may be in effect at any and all
times such reference becomes operative.
"Subordinated Obligations" means any Indebtedness of any Guarantor in
respect of Existing Notes, and any Indebtedness of the Company or any Guarantor
(whether outstanding on the date of the applicable Indenture or thereafter
Incurred) that is expressly subordinated in right of payment to the Notes or to
the Note Guarantee of such Guarantor, as applicable, pursuant to a written
agreement.
"Subsidiary" means, with respect to any Person:
(i) any corporation, association or other business entity (other
than a partnership, joint venture or limited liability company) of which
more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person
or one or more of the other Subsidiaries of that Person or a combination
thereof; and
(ii) any partnership, joint venture or limited liability company
of which (x) more than 50% of the capital accounts, distribution rights,
total equity and voting interests or general and limited partnership
interests, as applicable, are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of
that Person or a combination thereof, whether in the form of membership,
general, special or limited partnership interests or otherwise and (y)
such Person or any Wholly Owned Restricted Subsidiary of such Person is a
controlling general partner or otherwise controls such entity.
70
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Total Assets" means the total consolidated assets of the Company and its
Restricted Subsidiaries, as shown on the most recent balance sheet of the
Company.
"Total Leverage Ratio" means, with respect to the Company on any date, the
ratio of (1) Indebtedness of the Company as of such date (which shall include
(a) any outstanding deferred interest on the Intercompany Notes and (b) the
average daily balance of Indebtedness under any revolving credit facility during
the twelve-month period ended on the last day of the most recently ended fiscal
quarter) to (2) either (x) the Adjusted EBITDA of the Company for the most
recently ended twelve-month period ended on any June 30, September 30 or
December 31, or (y) the Adjusted EBITDA of the Company for the most-recently
ended fifteen-month period ended on any March 31, multiplied by 4/5, as
applicable.
"Transactions" means the transactions occurring in connection with the
consummation of the offering described in the prospectus, dated [ ], 2004, of
the Issuer, including without limitation repayment of existing indebtedness,
distribution of proceeds and corporate restructuring contemplated thereby.
"Trustee" means the trustee under the Indenture.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be enacted and in effect in the State of New York; provided, that to the extent
that the UCC is used to define any term herein or in any Subordinated Note
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern.
"United States" and "U.S." shall each mean the United States of America.
"Unrestricted Subsidiary" means:
(i) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below; and
(ii) any Subsidiary of an Unrestricted Subsidiary.
71
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary of the Company) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any
property of, the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that the
Subsidiary to be so designated and its Subsidiaries do not at the time of
designation have and do not thereafter Incur any Indebtedness pursuant to which
the lender has recourse to any of the assets of the Company or any of its
Restricted Subsidiaries; provided further, however, 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 8.4.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation (x) (1) the Company could Incur $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.3 or (2) the Fixed Charge Coverage Ratio, or the Adjusted Fixed Charge
Coverage Ratio, as applicable, for the Company and its Restricted Subsidiaries
would be greater than such ratio for the Company and its Restricted Subsidiaries
immediately prior to such designation, in each case on a pro forma basis taking
into account such designation, and (y) no Default shall have occurred and be
continuing.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States
(including any agency or instrumentality thereof) for the payment of which the
full faith and credit of the United States is pledged and which are not callable
or redeemable at the Company's option.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Voluntary Redemption" has the meaning assigned to that term in Section
7.2.2.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or Disqualified Stock, as the case may be, at any date, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the date of each successive scheduled principal payment of such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock multiplied by the amount of such payment, by (ii) the sum of all such
payments.
"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary that is
a Restricted Subsidiary.
72
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
100% of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned
13.2 [Intentionally Omitted].
13.3 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;
(H) any reference to a Section or Article refers to such Section or
Article of this Agreement; and
(I) any reference to any agreement, contract, certificate or other
instrument shall include, without limitation, all exhibits, schedules
and annexes thereto, whether or not specifically referenced herein.
13.4 Headings. Article, Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
73
Article XIV
Miscellaneous
14.1 Amendments; Actions by Purchasers; Solicitation of Purchasers.
(a) Subject to Section 14.1(b), and (e), and subject to the provisions in
the Indenture limiting the Issuer's ability to grant consents or waivers
hereunder, no amendment, alteration, modification or waiver (including waivers
of Default or Events of Default) of any term or provision of this Agreement, the
Notes or the other Subordinated Note Documents, nor consent to any departure by
any Note Party therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Purchasers holding the majority of principal
amount of the outstanding Notes, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; any waiver or consent may be given subject to satisfaction of conditions
stated therein. Written notice of any waiver or consent effected under this
subsection shall be promptly delivered by the Company to any Purchasers that did
not execute the same.
(b) Subject to Sections 8.1 and 7.2.1, without the consent of each
Purchaser affected, an amendment or waiver may not: (i) reduce the amount of
Notes whose Purchasers must consent to an amendment; (ii) reduce the rate of or
extend the time for payment of interest on any Note; (iii) reduce the principal
of or extend the Stated Maturity of any Note; (iv) change the time at which any
Note may be redeemed in accordance with Section 7.2; (v) make any Note payable
in money other than that stated in the Note; (vi) make any change to the
subordination or ranking provisions of this Agreement or the related definitions
that adversely affects the rights of any Purchaser; (vii) impair the right of
any Purchaser to receive payment of principal, and interest on such Purchaser's
Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Purchaser's Notes; or
(viii) make any change in the amendment provisions which require each
Purchaser's consent or in the waiver provisions.
(c) The Company will provide each Purchaser (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such Purchaser to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The Company
will deliver executed or true, correct and complete copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 14.1 to
each Purchaser promptly following the date on which it is executed and delivered
by, or receives the consent or approval of, the Requisite Holders.
74
(d) Except as otherwise stated in paragraph (a) and (b) above and Article
IX, wherever in this Agreement action is required or permitted to be taken by,
or consent is required of, or a matter requires the satisfaction of, the
Purchasers, such action may be taken by, and/or such consent may be obtained
from, and/or such satisfaction may be expressed by, the holders of a majority of
the principal amount of the Notes then outstanding.
(e) An amendment under this Article XIV may not make any change that
adversely affects the rights under Article XII of any holder of Guarantor Senior
Indebtedness then outstanding (which Guarantor Senior Indebtedness has been
previously designated in writing by the Company to the Purchasers and the
Trustee for this purpose) unless the holders of such Guarantor Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
14.2 Addresses for Notices, etc. All notices, requests, demands and other
communications provided for hereunder shall be in writing and mailed (by first
class registered or certified mail, postage prepaid), sent by express overnight
courier service or facsimile transmission, or delivered to the applicable party
at the addresses indicated below:
If to Note Parties, to:
American Seafoods Holdings, L.P.
Market Place Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchasers:
American Seafoods, L.P.
Market Place Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: [_________]
75
American Seafoods Corporation
Market Place Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: [_________]
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to any other Purchaser:
At such Purchaser's address for notice as set forth in the
transfer records of the Company
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other party complying as to delivery with
the terms of this Section (such designation, if made by a Purchaser holding
Notes, to be recorded by the Company in the Note Register). All such notices,
requests, demands and other communications shall be deemed to have been validly
served, given or delivered the case of communications to the Purchasers in
respect of any matter contemplated by (i) upon the earlier of actual receipt and
three days after deposit in the United States mail, registered or certified
mail, return receipt requested, with proper postage paid, (ii) upon
transmission, when sent by telecopy or other similar facsimile transmission and
confirmed by telephone, (iii) one Business Day after deposit with a reputable
overnight courier with all charges prepaid or (iv) when delivered, if hand
delivered by messenger.
14.3 No Waiver; Cumulative Remedies. No failure or delay on the part of
any Purchaser, in exercising any right, power or remedy hereunder shall operate
as a suspension or waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
14.4 Successors and Assigns; No Third-Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
Company and each of the Purchasers and their respective successors and assigns
and, in particular, shall inure to the benefit of and be enforceable by any
Purchaser or Purchasers holding the
76
Notes from time to time, except that no Note Party shall have the right to
assign its rights hereunder or any interest therein without the prior written
consent of the Purchasers. Any such purported assignment without the prior
written consent of the Purchasers shall be null and void ab initio. Except as
expressly set forth herein, nothing in this Agreement shall confer any claim,
right, interest or remedy on any third party or inure to the benefit of any
third party.
14.5 Prior Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements,
written or oral, concerning the subject matter hereof.
14.6 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, to achieve the intent of the parties hereto to the maximum
extent possible. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
14.7 GOVERNING LAW. THIS AGREEMENT AND (UNLESS OTHERWISE EXPRESSLY
PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL CONSENTS AND WAIVERS
PURSUANT TO, THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CONFLICT OF LAWS RULES THEREOF TO THE EXTENT THEY ARE NOT
MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF
THE LAW OF ANOTHER JURISDICTION.
14.8 Consent to Jurisdiction.
(a) Each Note Party irrevocably submits to the non-exclusive
jurisdiction of any state or federal court sitting in the County of New York
over any suit, action or proceeding arising out of or relating to this
Agreement, the Notes or any of the other Subordinated Note Documents. To the
fullest extent it may effectively do so under applicable law, each Note Party
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
77
(b) Each Note Party agrees, to the fullest extent it may effectively do
so under applicable law, that a judgment in any suit, action or proceeding of
the nature referred to in paragraph (a) above brought in any court referred to
therein shall, subject to such rights of appeal on issues other than
jurisdiction as may be available to such Note Party, be conclusive and binding
upon such Note Party and may be enforced in the courts of the United States of
America or the State of New York (or any other courts to the jurisdiction of
which such Note Party is or may be subject) by a suit upon such judgment.
14.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH 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 OTHER SUBORDINATED NOTE DOCUMENT, OR THE
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR ANY OTHER SUBORDINATED
NOTE DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 12.9.
14.10 [Intentionally Omitted].
14.11 Service of Process. Each Note Party consents to service of process in
any suit, action or proceeding of the nature referred to in Section 12.8 by
actual receipt of a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to the address of such Note Party specified
in or designated pursuant to Section 13.2. Each Note Party agrees that such
service (i) shall be deemed in every respect effective service of process upon
such Note Party in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such Note Party. Nothing in this Agreement shall
affect the right of any Purchaser to serve process in any manner permitted by
law, or limit any right that any Purchaser may have against any of the Note
Parties to bring proceedings against the Note Parties in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
78
14.12 Further Assurances. From and after the date of this Agreement, upon
the request of the Purchasers, each Note Party shall execute and deliver such
instruments, documents and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of the Subordinated Note Documents.
14.13 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and each of the parties hereto may execute this Agreement by signing
any such counterpart.
[The remainder of this page has been left blank intentionally]
79
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase Agreement as of the date first above written.
COMPANY: AMERICAN SEAFOODS HOLDINGS, L.P.
By: ___________________________
Name:
Title:
PURCHASERS: AMERICAN SEAFOODS, L.P.
By: ___________________________
Name:
Title:
AMERICAN SEAFOODS CORPORATION
By: ___________________________
Name:
Title:
GUARANTORS: AMERICAN SEAFOODS GROUP LLC
By: ___________________________
Name:
Title:
80
AMERICAN SEAFOODS
INTERNATIONAL LLC
By: ____________________________________
Name:
Title:
NEW BEDFORD SEAFOODS LLC
By: ____________________________________
Name:
Title:
THE ▇▇▇▇▇▇ GROUP LLC
By: ____________________________________
Name:
Title:
AMERICAN SEAFOODS PROCESSING
LLC
By: ____________________________________
Name:
Title:
AMERICAN SEAFOODS COMPANY
LLC
By: ____________________________________
Name:
Title:
81
AMERICAN CHALLENGER LLC
By: ____________________________________
Name:
Title:
AMERICAN DYNASTY LLC
By: ____________________________________
Name:
Title:
AMERICAN TRIUMPH LLC
By: ____________________________________
Name:
Title:
OCEAN ROVER LLC
By: ____________________________________
Name:
Title:
NORTHERN EAGLE LLC
By: ____________________________________
Name:
Title:
▇▇
▇▇▇▇▇ ▇▇▇▇ LLC
By: ____________________________________
Name:
Title:
NORTHERN ▇▇▇▇▇▇ LLC
By: ____________________________________
Name:
Title:
KATIE ▇▇▇ LLC
By: ____________________________________
Name:
Title:
SOUTHERN PRIDE CATFISH LLC
By: ____________________________________
Name:
Title:
SOUTHERN PRIDE CATFISH TRUCKING, INC.
By: ____________________________________
Name:
Title:
83
PACIFIC LONGLINE COMPANY LLC
By: ____________________________________
Name:
Title:
▇▇▇▇▇ ▇▇▇, LLC
By: ____________________________________
Name:
Title:
NORTH CAPE FISHERIES, LLC
By: ____________________________________
Name:
Title:
DEEP PACIFIC, LLC
By: ____________________________________
Name:
Title:
84
SCHEDULE 2.1
Purchasers
Purchaser Principal Amount
American Seafoods, L.P. [105,900,000]
American Seafoods Corporation [247,400,000]
EXHIBIT A
Form of Note
[TO COME]
A-1
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
_____________, 200_
Reference is made to the Note Purchase Agreement, dated as of
[_________], 2004, by and among American Seafoods, L.P., a Delaware limited
partnership, American Seafoods Corporation, a Delaware corporation, American
Seafoods Holdings, L.P., a Delaware limited partnership and the Guarantors from
time to time party thereto (such agreement, as the same may be from time to time
amended, modified or supplemented, the "Note Purchase Agreement"); capitalized
terms used herein not otherwise defined herein shall have the meanings ascribed
to them in the Note Purchase Agreement.)
1. [Assignor] (the "Assignor") hereby sells and assigns, without recourse, to
[Assignee] (the "Assignee"), and the Assignee hereby purchases and assumes,
without recourse, from the Assignor, effective as of ______________, 200_
(the "Assignment Date"), $[________] principal amount of Notes issued
pursuant to the Note Purchase Agreement (the "Assigned Notes") and all of
the Assignor's rights and obligations under the Note Purchase Agreement
relating to the Assigned Notes.
2. This Assignment and Acceptance shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the state of New
York, without giving effect to the conflict of laws rules thereof (other
than section 5-1401 of the general obligations law of the state of New
York).
B-1
IN WITNESS WHEREOF, the undersigned has caused this Assignment and
Acceptance to be duly executed and delivered by its officer thereunto duly
authorized as of ____________, 20__.
[ASSIGNOR] [ASSIGNEE]
as Assignor as Assignee
By:__________________________ By: ____________________
Name: Name:
Title: Title:
Acknowledged and accepted by:
AMERICAN SEAFOODS HOLDINGS, L.P.
By:__________________________
Name:
Title:
B-2
EXHIBIT C
FORM OF SUBSIDIARY JOINDER
[__________], 20__
This Subsidiary Joinder (the "Joinder"), effective as of the date
hereof, is delivered by [each of] the undersigned (each, a "Joining Subsidiary")
pursuant to Sections 8.12 and 11.7 of the Note Purchase Agreement, dated as of
[__________] ___, 2004, by and among American Seafoods, L.P., a Delaware limited
partnership, American Seafoods Corporation, a Delaware corporation, American
Seafoods Holdings, L.P., a Delaware limited partnership and the Guarantors from
time to time party thereto (such agreement, as the same may be from time to time
amended, modified or supplemented, the "Note Purchase Agreement"; capitalized
terms used herein not otherwise defined herein shall have the meanings ascribed
to them in the Note Purchase Agreement.)
3. Each Joining Subsidiary acknowledges receipt of, and having read, a
copy of the Note Purchase Agreement and the Indenture.
4. Each Joining Subsidiary hereby agrees that this Joinder may be attached
to the Note Purchase Agreement.
5. Each Joining Subsidiary hereby represents that it is a [direct]
[indirect] wholly owned Subsidiary of the Company.
6. For all purposes of the Note Purchase Agreement, each Joining
Subsidiary, by executing and delivering this Joinder, hereby agrees to become a
Guarantor under the Note Purchase Agreement in accordance with Sections 8.12 and
11.7 thereof and agrees to be bound by all of the terms of the Note Purchase
Agreement applicable to a Guarantor.
The address and facsimile number to which notices may be sent to the
Joining Subsidiary is as follows:
Address:
Facsimile Number:
Attention:
C-1
7. The Joining Subsidiary hereby waives acceptance by the Purchasers of
the guaranty by the Joining Subsidiary under Article XI of the Note Purchase
Agreement upon the execution of this Joinder by the Joining Subsidiary.
8. [This Joinder may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.]/1/
9. THIS JOINDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS RULES THEREOF (OTHER THAN SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
IN WITNESS WHEREOF, the Joining Subsidiary has caused this Joinder to
be duly executed by its authorized officers, for the ratable benefit of the
Purchasers, has caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[SUBSIDIARY]
By:
Name: _________________________
Title: ________________________
________
/1/ Include if there are multiple Joining Subsidiaries.
C-2