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TELEX COMMUNICATIONS, INC.
$30,000,000
ADJUSTED INTEREST PIK SENIOR SECURED NOTES
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AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
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DATED AS OF NOVEMBER 21, 2001
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. THE SENIOR SECURED NOTES.................................................................... 2
1.1 Authorization of Senior Secured Notes.......................................................... 2
1.2 Interest on the Senior Secured Notes........................................................... 2
1.3 Priority....................................................................................... 4
1.4 Commitment Fees................................................................................ 4
ARTICLE 2. SALE AND PURCHASE OF TRANCHE B SENIOR SECURED NOTES......................................... 4
ARTICLE 3. CLOSING..................................................................................... 4
ARTICLE 4. CONDITIONS TO CLOSING....................................................................... 5
4.1 Representations and Warranties; Material Adverse Change........................................ 5
4.2 Performance; No Default........................................................................ 5
4.3 Senior Secured Notes........................................................................... 5
4.4 Documents Required............................................................................. 5
4.5 Opinions of Counsel............................................................................ 8
4.6 Purchase Permitted by Applicable Law, etc...................................................... 9
4.7 No Litigation or Other Proceedings............................................................. 9
4.8 No Material Adverse Change..................................................................... 9
4.9 Fees and Expenses.............................................................................. 9
4.10 Proceedings and Documents...................................................................... 9
4.11 Telex Exchange................................................................................. 10
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................... 10
5.1 Corporate Existence; Qualification; Power; Licenses and Permits................................ 10
5.2 Corporate and Governmental Authorization; Contravention........................................ 11
5.3 Binding Effect................................................................................. 11
5.4 Financial Information.......................................................................... 11
5.5 Litigation and Judgments....................................................................... 12
5.6 Compliance with ERISA.......................................................................... 12
5.7 Taxes.......................................................................................... 12
5.8 Capitalization; Subsidiaries................................................................... 13
5.9 Not an Investment Company...................................................................... 14
5.10 No Conflicting Requirements.................................................................... 14
5.11 Indebtedness................................................................................... 14
5.12 Title to Properties and Assets; Intellectual Property.......................................... 15
5.13 Compliance with Law............................................................................ 15
5.14 Compliance with Environmental Laws............................................................. 16
5.15 Security Interests and Liens................................................................... 16
5.16 Labor Relations................................................................................ 17
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5.17 Solvency; Material Adverse Effect.............................................................. 17
5.18 Margin Security................................................................................ 18
5.19 Affiliate Transactions......................................................................... 18
5.20 Accuracy and Completeness of Information....................................................... 18
5.21 Status of Accounts............................................................................. 18
5.22 Use of Proceeds................................................................................ 19
5.23 No Default..................................................................................... 19
5.24 Collateral..................................................................................... 19
5.25 Survival of Representations.................................................................... 20
ARTICLE 6. REPRESENTATIONS OF THE PURCHASER............................................................ 20
ARTICLE 7. AFFIRMATIVE COVENANTS....................................................................... 20
7.1 Financial Statements........................................................................... 20
7.2 Certificates; Other Information................................................................ 21
7.3 Payment of Obligations......................................................................... 22
7.4 Conduct of Business and Maintenance of Existence............................................... 22
7.5 Maintenance of Property; Insurance............................................................. 23
7.6 Inspection-of Property; Books and Records; Discussions......................................... 23
7.7 Notices........................................................................................ 23
7.8 Environmental Laws............................................................................. 25
7.9 After-Acquired Real Property and Fixtures...................................................... 26
7.10 Pledged Stock and Pledged Notes................................................................ 27
7.11 Conditions Subsequent to Closing............................................................... 27
ARTICLE 8. NEGATIVE COVENANTS.......................................................................... 28
8.1 Minimum Consolidated EBITDA.................................................................... 28
8.2 Limitation on Indebtedness..................................................................... 28
8.3 Limitation on Liens............................................................................ 30
8.4 Limitation on Guarantee Obligations............................................................ 32
8.5 Limitation on Fundamental Changes.............................................................. 33
8.6 Limitation on Sale of Assets................................................................... 33
8.7 Limitation on Restricted Payments.............................................................. 35
8.8 Limitation on Capital Expenditures............................................................. 35
8.9 Limitation on Investments, Loans and Advances.................................................. 35
8.10 Limitation on Transactions with Affiliates..................................................... 37
8.11 Limitation on Sale and Leaseback Transactions.................................................. 38
8.12 Limitation on Optional Payments and Modifications of Debt Instruments and Other Documents...... 38
8.13 Limitations on Changes in Fiscal Year.......................................................... 41
8.14 Limitation on Negative Pledge Clauses.......................................................... 41
8.15 Limitation on Lines of Business; Creation of Subsidiaries...................................... 41
8.16 Limitations on Currency and Commodity Hedging Transactions..................................... 42
8.17 Holding Company Status of Telex Communications International, Ltd.............................. 42
8.18 Payment of Special Bonuses to Management....................................................... 42
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ARTICLE 9. EVENTS OF DEFAULT........................................................................... 42
9.1 Events of Default.............................................................................. 42
9.2 Acceleration................................................................................... 45
9.3 Remedies on Default............................................................................ 45
ARTICLE 10. REGISTRATION; EXCHANGE; SUBSTITUTION OF SENIOR SECURED NOTES................................ 46
10.1 Registration of Senior Secured Notes........................................................... 46
10.2 Transfer and Exchange of Senior Secured Notes.................................................. 46
10.3 Replacement of Senior Secured Notes............................................................ 47
ARTICLE 11. PREPAYMENT; PAYMENT OF SENIOR SECURED NOTES................................................. 48
11.1 Voluntary Prepayments.......................................................................... 48
11.2 Allocation of Partial Prepayments.............................................................. 48
11.3 Payment........................................................................................ 48
11.4 Maturity; Surrender, etc....................................................................... 48
11.5 Purchase of Senior Secured Notes............................................................... 48
ARTICLE 12. EXPENSES AND INDEMNIFICATION................................................................ 49
12.1 Transaction Expenses........................................................................... 49
12.2 Indemnification................................................................................ 49
12.3 Survival....................................................................................... 51
ARTICLE 13. ENTIRE AGREEMENT............................................................................ 51
ARTICLE 14. AMENDMENT AND WAIVER........................................................................ 51
14.1 Requirements................................................................................... 51
14.2 Solicitation of Holders of Senior Secured Notes................................................ 52
14.3 Binding Effect, etc............................................................................ 52
14.4 Senior Secured Notes Held by Company, Etc...................................................... 52
ARTICLE 15. NOTICES..................................................................................... 52
ARTICLE 16. REPRODUCTION OF DOCUMENTS................................................................... 53
ARTICLE 17. CONFIDENTIAL INFORMATION.................................................................... 53
ARTICLE 18. SUBSTITUTION OF PURCHASER................................................................... 54
ARTICLE 19. THE CO-AGENTS............................................................................... 55
19.1 Authorization and Action....................................................................... 55
19.2 Co-Agents' Reliance............................................................................ 55
19.3 GSCP Recovery or GoldenTree and Affiliates..................................................... 56
19.4 Purchaser Credit Decision...................................................................... 56
19.5 Indemnification................................................................................ 56
19.6 Successor Co-Agent............................................................................. 57
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ARTICLE 20. MISCELLANEOUS............................................................................... 57
20.1 Successors and Assigns......................................................................... 57
20.2 Payments Due on Non-Business Days.............................................................. 57
20.3 Satisfaction Requirement....................................................................... 57
20.4 Severability................................................................................... 58
20.5 Construction................................................................................... 58
20.6 Counterparts................................................................................... 58
20.7 Governing Law.................................................................................. 58
20.8 Consent to Jurisdiction........................................................................ 58
20.9 Intercreditor Agreement........................................................................ 58
20.10 Waiver of Jury Trial........................................................................... 59
20.11 Management Fees................................................................................ 59
20.12 Holdings....................................................................................... 59
20.13 Security Documents............................................................................. 59
20.14 Waivers........................................................................................ 59
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SCHEDULES
Schedule I - Purchasers
Schedule II - Defined Terms
Schedule 4.5 - Jurisdictions of Local Counsel Opinions
Schedule 5.5 - Litigation and Judgments
Schedule 5.6 - ERISA Matters
Schedule 5.7 - Tax Matters
Schedule 5.8 - Subsidiaries; Capitalization
Schedule 5.11 - Indebtedness
Schedule 5.12(a) - Property; Exceptions to Good Title
Schedule 5.12(b) - Intellectual Property
Schedule 5.14 - Environmental Matters
Schedule 5.15 - Liens
Schedule 5.17(b) - Material Adverse Effect
Schedule 5.19 - Existing Affiliate Transactions
Schedule 5.20(b) - Exchange Act Reports Matters
Schedule 5.24 - UCC Filing Jurisdictions and Office
Schedule 8.2(f) - Existing Indebtedness
Schedule 8.3(j) - Existing Liens
Schedule 8.4(a) - Existing Guarantee Obligations
Schedule 8.9(c) - Existing Investments
Schedule 8.10 - Permitted Affiliate Transactions
EXHIBITS
Exhibit A - Form of Senior Secured Note
Exhibit B - Form of Guarantee and Collateral Agreement
Exhibit C - Form of Patent and Trademark Security Agreement
Exhibit D-1 - Form of Opinion of Counsel to the Company
Exhibit D-2 - Form of Opinion of General Counsel to the Company
Exhibit E - Form of Intercreditor Agreement
Schedules 4.5 through 8.10 and Exhibits D-1 and D-2 have not been filed, but may
be obtained upon request.
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
This AMENDED AND RESTATED NOTE PURCHASE AGREEMENT, dated as of November
21, 2001 (this "AGREEMENT"), is made by and among Telex Communications, Inc., a
Delaware corporation (the "COMPANY" or "TELEX"), GSCP Recovery (US), LLC ("GSCP
RECOVERY") (formerly known as TCI Investments LLC) and GoldenTree Asset
Management, LLC ("GOLDENTREE") (as successor co-agent to GoldenTree High Yield
Opportunities I, L.P.), each as Co-Agent, the purchasers parties hereto and
listed on Schedule I hereto as the Original Purchasers (the "ORIGINAL
PURCHASERS"), and the purchasers parties hereto and listed on Schedule I hereto
as the New Purchasers (the "NEW PURCHASERS," and collectively, together with the
Original Purchasers and any transferees or assigns thereof pursuant to Section
10.2 hereof, the "PURCHASERS"). Certain capitalized terms used in this Agreement
are defined in Schedule II hereto; references to a "Schedule" or an "Exhibit"
are, unless otherwise specified herein, to a Schedule or an Exhibit attached to
this Agreement.
BACKGROUND
WHEREAS, the Company and the Original Purchasers are parties to that
certain Note Purchase Agreement, dated as of April 11, 2001 (the "NOTE PURCHASE
AGREEMENT"), pursuant to which the Company issued and sold to the Original
Purchasers, and the Original Purchasers purchased from the Company, $20,000,000
aggregate principal amount of the Company's 18% Adjusted Interest PIK Senior
Secured Notes due April 11, 2004;
WHEREAS, Events of Default have occurred and are continuing under (i)
Section 9(b) of the Note Purchase Agreement as a result of the Company's failure
to meet the financial conditions and covenants contained in Section 8.1 of the
Note Purchase Agreement and (ii) Sections 9(d) and 9(f) of the Note Purchase
Agreement as a result of the Company's failure to pay interest on the 11%
Subordinated Notes on September 17, 2001, the Company's failure to pay interest
on the 10.5% Subordinated Notes in November 2001 and the Company's failure to
meet the financial conditions and covenants contained in Section 8.1 of the
Senior Credit Agreement;
WHEREAS, the Company has made an exchange offer to the holders of the
10.5% Subordinated Notes and the holders of the 11% Subordinated Notes pursuant
to which the holders of such Notes will exchange the Notes for new senior
subordinated notes to be issued by, and Preferred Stock (convertible into common
stock at the option of the Company) and warrants to purchase Preferred Stock of,
the Company (the "TELEX EXCHANGE");
WHEREAS, in connection with such Events of Default and the Telex Exchange,
the Company has requested that the Purchasers agree to (i) waive such Events of
Default, (ii) purchase an additional $10,000,000 aggregate principal amount of
the Company's Senior Secured Notes and (iii) amend, modify and restate the Note
Purchase Agreement in certain respects; and
WHEREAS, the Co-Agents and the Purchasers are willing to agree to the
requested waivers, purchase, amendment, modification and restatement but only on
the terms and subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree to
amend and restate the Note Purchase Agreement as follows:
ARTICLE 1. THE SENIOR SECURED NOTES.
1.1 Authorization of Senior Secured Notes.
(a) The Company has authorized the issuance and sale of $20,000,000
aggregate principal amount (as such amount has been, or may from time to time
be, adjusted pursuant to Sections 1.2 and 11.1 hereof, the "TRANCHE A PRINCIPAL
AMOUNT") of its 18% Adjusted Interest PIK Senior Secured Notes due April 11,
2004 (such Senior Secured Notes and any promissory note issued in substitution
therefor pursuant to Article 10 hereof or as PIK Interest pursuant to Section
1.2 below, collectively, the "TRANCHE A SENIOR SECURED NOTES"). On April 11,
2001, the Company issued and sold to each Original Purchaser, and each Original
Purchaser purchased from the Company, the Tranche A Senior Secured Notes in the
principal amount specified opposite such Purchaser's name on Schedule I hereto
at the purchase price of 100% of such principal amount. The Tranche A Principal
Amount shall be payable on July 31, 2004 (the "MATURITY DATE") in U.S. dollars
in immediately available funds. The Tranche A Senior Secured Notes are and shall
be substantially in the form attached hereto as Exhibit A, with such changes
therefrom, if any, as may be approved by the Required Purchasers and the
Company.
(b) The Company will authorize the issuance and sale of $10,000,000
aggregate principal amount (as such amount may from time to time be adjusted
pursuant to Sections 1.2 and 11.1 hereof, the "TRANCHE B PRINCIPAL AMOUNT"; and
together with the Tranche A Principal Amount, the "PRINCIPAL AMOUNT") of its
19.5% Adjusted Interest PIK Senior Secured Notes due July 31, 2004 (such Senior
Secured Notes and any promissory note issued in substitution therefor pursuant
to Article 10 hereof or as PIK Interest pursuant to Section 1.2 below,
collectively, the "TRANCHE B SENIOR SECURED NOTES"; and together with the
Tranche A Senior Secured Notes, the "SENIOR SECURED NOTES"). The Tranche B
Principal Amount shall be payable on the Maturity Date in U.S. dollars in
immediately available funds. The Tranche B Senior Secured Notes shall be
substantially in the form attached hereto as Exhibit A, with such changes
therefrom, if any, as may be approved by the Required Purchasers and the
Company.
1.2 Interest on the Senior Secured Notes.
(a) The Tranche A Senior Secured Notes have accrued interest,
compounded quarterly, at the rate of (x) 18% per annum from April 11, 2001
through June 30, 2001, (y) 18.75% per annum from July 1, 2001 through September
30, 2001 and (z) 19.5% per annum from October 1, 2001 through November 21, 2001.
On each of June 30, 2001 and September 30, 2001, the Company paid the applicable
accrued interest by issuing Tranche A Senior Secured Notes in the principal
amount of such accrued interest.
(b) The Company shall pay interest as set forth in this Section 1.2
on the unpaid principal amount of the Senior Secured Notes until such Senior
Secured Notes are paid in full. The Senior Secured Notes shall accrue interest
at the rate of 19.5% per annum from the
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Closing Date through December 31, 2001 (the "INITIAL INTEREST RATE"). Beginning
on January 1, 2002 and on the first day of each calendar quarter thereafter
(i.e., April 1, July 1, October 1 and January 1), the then applicable interest
rate shall increase by an additional 0.75% per annum (each such adjusted
interest rate, the "ADJUSTED INTEREST RATE") and the Senior Secured Notes shall
thereafter accrue interest at the applicable Adjusted Interest Rate for so long
as the Senior Secured Notes remain outstanding; provided that the Adjusted
Interest Rate applicable (excluding any default interest or other amounts
payable under this Section 1 or otherwise hereunder) to the Senior Secured Notes
shall not exceed 25% per annum; provided further that nothing in this Section
1.2(b) shall preclude the accrual and payment of interest at the Default Rate,
in addition to the then applicable Adjusted Interest Rate pursuant to Section
1.2(d) below.
(c) Interest shall be due quarterly in arrears on December 31, March
31, June 30 and September 30 of each year on the first such date occurring after
the date of this Agreement, on the Maturity Date and, if the Maturity Date shall
not be the Termination Date, on the Termination Date (each such date, an
"INTEREST DUE DATE"), shall be compounded quarterly and shall be payable as set
forth in this Section 1.2(c). On each Interest Due Date other than the Maturity
Date and, if applicable, the Termination Date, payment of the interest due on
such Interest Due Date shall be paid in the following manner: (i) with the
approval of the applicable Purchaser, which approval shall be in such
Purchaser's sole discretion, such accrued interest shall be capitalized on the
applicable Senior Secured Note or (ii) such accrued interest shall be paid in
the form of a Tranche A Senior Secured Note or Tranche B Senior Secured Note, as
applicable (interest paid in such manner, the "PIK INTEREST"), in the principal
amount of such accrued interest and issued on the applicable Interest Due Date.
Notwithstanding the foregoing, if the Consolidated EBITDA for the four fiscal
quarters ending prior to the Interest Due Date other than the Maturity Date and,
if applicable, the Termination Date, is greater than or equal to two times the
Consolidated Interest Expense for the same four fiscal quarters (after including
an amount equal to $5,600,000 in the definition of Consolidated Interest
Expense), then such accrued interest shall be paid in U.S. dollars in
immediately available funds (up to, on each quarterly interest payment date,
$1,400,000, and in aggregate, $5,600,000 in any fiscal year) if and to the
extent permitted by Section 8.12(e) of the Senior Credit Agreement and the
Intercreditor Agreement. Interest due on the Maturity Date and, if applicable,
the Termination Date shall be payable in U.S. dollars in immediately available
funds. Interest on the Senior Secured Notes shall be computed on the basis of a
360-day year for the actual number of days (including the first day and the last
day) occurring in the period for which such interest is payable.
(d) Notwithstanding the foregoing, so long as any Event of Default
shall have occurred and be continuing, interest shall accrue on the unpaid
principal amount of the Senior Secured Notes at the Initial Interest Rate or the
Adjusted Interest Rate, as applicable, plus 3.00% per annum (the "DEFAULT
RATE"), shall be due in arrears on a quarterly basis on each Interest Due Date
during the continuation of such Event of Default, and shall be payable in
accordance with Section 1.2(c) above.
1.3 Priority.
(a) Senior to the Subordinated Notes. The Obligations of the Company
under the Senior Secured Notes and the other Note Documents constitute, and
shall be deemed to constitute for all purposes thereunder, "Senior Indebtedness"
and "Designated Senior
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Indebtedness" under the 10.5% Subordinated Note Documents, the 11% Subordinated
Note Documents and the New Telex Subordinated Note Documents. The Obligations of
the Company under the Note Documents are, and shall be deemed to be, senior to
any and all Obligations of the Company under the 10.5% Subordinated Note
Documents, the 11% Subordinated Note Documents and the New Telex Subordinated
Note Documents and any and all Obligations of the Company ranking pari passu
with, or junior to, such Obligations.
(b) Subordinated to the Senior Debt Obligations. The Obligations of
the Company under the Senior Secured Notes and the other Note Documents are
subordinated to the Company's Senior Debt Obligations on the terms and
conditions set forth in the Intercreditor Agreement.
1.4 Commitment Fees. The Company shall pay to each Purchaser on the
Closing Date, such Purchaser's pro rata share of 5.00% of the Tranche B
Principal Amount of the Tranche B Senior Secured Notes (the "COMMITMENT FEE").
The Commitment Fee shall be payable and fully earned as of the Closing Date.
ARTICLE 2. SALE AND PURCHASE OF TRANCHE B SENIOR SECURED NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser, and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3 hereof, Tranche B Senior
Secured Notes in the principal amount specified opposite such Purchaser's name
on Schedule I hereto at the purchase price of 100% of such principal amount
(such issuance, sale and purchase, the "NOTE PURCHASE"; and, together with the
other transactions contemplated hereunder and under the other Note Documents,
including, without limitation, the modification of the Senior Credit Documents
(including Amendment No. 5 to the Senior Credit Agreement), the execution,
delivery and performance of the New Telex Subordinated Note Documents and the
granting of the security interests in the Collateral, in each case as
contemplated hereunder and thereunder, the "NOTE PURCHASE TRANSACTIONS"). Each
Purchaser's obligation hereunder are several and not joint obligations and no
Purchaser shall have any obligations under this Agreement or any other Note
Document, or any liability to any Person, for the performance or nonperformance
by any other Purchaser hereunder or thereunder.
ARTICLE 3. CLOSING.
The Note Purchase shall occur at the offices of Dechert, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., New York time, at a closing (the
"CLOSING") on November 21, 2001 or on such other Business Day as may be agreed
upon by the Company and the Purchasers (the "CLOSING DATE"). At the Closing, the
Company will deliver to each Purchaser a Tranche B Senior Secured Note in the
principal amount purchased by such Purchaser (or such greater number of Senior
Secured Notes each in a denomination of at least $100,000 as such Purchaser may
request) dated the Closing Date and registered in such Purchaser's name (or in
the name of such Purchaser's nominee), against delivery to the Company or its
order of immediately available funds in U.S. dollars in the amount of the
purchase price thereof by wire transfer for the account of the Company to such
account or accounts in the United States as the Company shall designate to the
Purchasers at least two Business Days prior to the Closing. If, at the Closing,
the Company shall fail to tender such Tranche B Senior Secured Notes to any
Purchaser
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as provided in this Section 3, or any of the conditions specified in Section 4
below shall not have been fulfilled to the satisfaction of the Required
Purchasers, each Purchaser shall, at such Purchaser's election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
such Purchaser may have by reason of such failure or such nonfulfillment.
ARTICLE 4. CONDITIONS TO CLOSING.
Each Purchaser's obligations to purchase Tranche B Senior Secured Notes
hereunder is subject to the performance and full satisfaction, prior to or on
the Closing Date, of the conditions precedent set forth in this Article 4.
4.1 Representations and Warranties; Material Adverse Change. The
representations and warranties of the Company contained in this Agreement and in
each other Note Document shall be true and correct when made and on the Closing
Date, before and immediately after giving pro forma effect to the Note Purchase
Transactions as if such representations had been made on and as of the Closing
Date.
4.2 Performance; No Default. The Company shall have performed and complied
with all agreements and conditions in this Agreement and each other Note
Document required to be performed or complied with thereby prior to or at the
Closing and, before and immediately after giving pro forma effect to the Note
Purchase Transactions, and each of them, no Default or Event of Default shall
have occurred and be continuing.
4.3 Senior Secured Notes. The Company shall have delivered the Tranche B
Senior Secured Notes, in each case, duly executed by the Company, to the
Purchasers.
4.4 Documents Required. Each Purchaser shall have received the following
documents, each dated as of the Closing Date and, unless otherwise specified
herein, in the form of the respective Exhibit hereto, if any, or otherwise in
form and substance satisfactory to the Required Purchasers.
(a) Amendment to the Senior Credit Facility. Amendment No. 5 to the
Senior Credit Agreement shall be in full force and effect and the Purchasers
shall have received true and correct copies of such Amendment No. 5 to the
Senior Credit Agreement, certified by a Responsible Officer of the Company.
(b) New Telex Senior Subordinated Indenture. The New Telex Senior
Subordinated Indenture shall be in full force and effect. The Company shall have
delivered a true and correct copy of such Indenture, certified by a Responsible
Officer of the Company.
(c) Governmental Approvals. All governmental and third party
approvals necessary or reasonably advisable in connection with the financing
contemplated hereby and the continuing operations of the Company and its
subsidiaries shall have been obtained and be in full force and effect, and all
applicable waiting periods under applicable Law shall have expired without any
action being taken or threatened by an competent authority which would restrain,
prevent or otherwise impose material adverse conditions on the Note Purchase
Transactions.
(d) [Intentionally Omitted.]
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(e) [Intentionally Omitted.]
(f) Security Documents. An amended and restated guaranty and
collateral agreement, in substantially the form of Exhibit B hereto (together
with each other guarantee and collateral agreement, or other security agreement,
pledge agreement, assignment agreement (or other similar document) delivered
pursuant to this Agreement, in each case as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof, the
"GUARANTEE AND COLLATERAL AGREEMENT"; and, together with the Mortgages and the
Patent and Trademark Security Agreement and the other documents, instruments and
filings to be delivered or made thereunder or under this Section 4.4(f), the
"SECURITY DOCUMENTS"), duly executed by each of the Company and its Domestic
Subsidiaries, together with (unless otherwise delivered to the Co-Agents, in
form and substance reasonably satisfactory to the Required Purchasers, prior to
the Closing Date):
(i) an amended and restated patent and trademark security
agreement substantially in the form of Exhibit C hereto (together with
each other patent and trademark security agreement (or similar document)
delivered pursuant to this Agreement, in each case as the same may be
amended, supplemented or otherwise modified from time to time, the "PATENT
AND TRADEMARK SECURITY AGREEMENT") duly executed and delivered by the
Company and each of its Subsidiaries parties to the Guarantee and
Collateral Agreement;
(ii) each of the Mortgages, duly executed and delivered by a
duly authorized officer of the Company and any of its Subsidiaries parties
to the Guarantee and Collateral Agreement;
(iii) proper financing statements (Form UCC-1 or a comparable
form) or amendments to existing financing statements (Form UCC-3 or a
comparable form) or the equivalent thereof under the Uniform Commercial
Code (or any similar Requirements of Law) of all jurisdictions that may be
necessary or that the Required Purchasers may reasonably deem desirable in
order to perfect and protect the liens and security interests created or
purported to be created under the Security Documents, covering the
Collateral described therein, in each case completed in a manner
satisfactory to the Purchasers and duly executed by the applicable grantor
party thereto;
(iv) evidence of the insurance required by the terms of the
Guarantee and Collateral Agreement, Mortgages and the Patent and Trademark
Security Agreement;
(v) copies of the assigned agreements, if any, assigned
pursuant to the Guarantee and Collateral Agreement;
(vi) evidence that all of the other actions (including,
without limitation, the completion of all of the other recordings and
filings of or with respect to the Security Documents) that may be
necessary or that the Required Purchasers may reasonably deem desirable in
order to perfect and protect the liens and security interests created
under the Security Documents have been taken or will be taken in
accordance with the terms of the Note Documents.
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(g) Corporate Approvals. Certified copies of (i) the resolutions of
the Board of Directors of the Company approving each Note Document to which it
is or is to be a party, the Note Purchase Transactions and the other
transactions contemplated hereby and thereby and (ii) all documents evidencing
other necessary corporate action with respect to each such Note Document and
each such other document and the Note Purchase Transactions and the other
transactions contemplated hereby and thereby.
(h) Officers' Certificates. A certificate from the Company and each
other Grantor (as defined in the Guarantee and Collateral Agreement) signed on
behalf of such Person by its president or a vice president and the chief
financial officer (the statements made in which certificate shall be true on and
as of the Closing Date), certifying the following: (i) true and complete copies
of the charter and by-laws of such Person as in effect on the date the
resolutions specified in clause (g) were adopted and the absence of any
amendments to such charter or by-laws since such dates; (ii) the due
incorporation and good standing of such Person in its state of incorporation and
the absence of any proceeding for the dissolution or liquidation of such Person;
(iii) the accuracy of the representations and warranties made by the Company in
this Agreement and each other Note Document before and immediately after giving
pro forma effect to the Note Purchase Transactions; (iv) the absence of any
event occurring and continuing, or resulting from the Note Purchase
Transactions, that constitutes a Default or an Event of Default; (v) the absence
of any event occurring and continuing, or resulting from the Note Purchase
Transactions that constitutes a default or event of default, or with the passage
of time or the giving of notice or both would constitute a default or event of
default, under the Senior Credit Documents or under any other Indebtedness of
such Person; (vi) in the case of the Company, the absence of any event occurring
and continuing, or resulting from the Note Purchase Transactions that
constitutes a default or event of default, or with the giving of notice or
passage of time would constitute a default or event of default, under the New
Telex Subordinated Notes; and (vii) the satisfaction of all conditions precedent
to be performed or otherwise satisfied by the Company prior to the Note Purchase
on and as of the Closing Date including, without limitation, a certification
that the conditions precedent set forth in Section 4.2 hereof has been
satisfied.
(i) Incumbency Certificates. A certificate of the secretary or an
assistant secretary of the Company and each other Grantor (as defined in the
Guarantee and Collateral Agreement) certifying the names and true signatures of
the officers of the Company or such Grantor, as the case may be, authorized to
sign each Note Document on behalf of such Person to which such Person is or is
to be a party, and the other documents to be delivered hereunder and thereunder.
(j) Solvency Certificate. A certificate from the chief financial
officer of the Company attesting to the Solvency of the Company immediately
after giving pro forma effect to the Note Purchase Transactions.
(k) Lien Searches. The Purchasers shall have received the results of
a recent search by a Person reasonably satisfactory to the Purchasers, of the
Uniform Commercial Code, judgment and tax lien filings which may have been filed
with respect to personal property of the Company and its Subsidiaries in any of
the jurisdictions set forth in Part I of Schedule 5.15 hereto and the results of
such search shall not reveal any liens other than liens permitted by Section 8.3
hereof.
7
(l) Title Insurance Policy. Each Co-Agent shall have received in
respect of each of the Mortgaged Properties a date-down endorsement for the
existing mortgagee's title policy (or policies) or marked up unconditional
binder for such insurance dated the Closing Date. Each such policy shall (i) be
in an amount reasonably satisfactory to the Required Purchasers; (ii) insure
that the Mortgage insured thereby creates a valid Lien second in priority only
to Liens created under the Senior Credit Documents on the Mortgaged Property
encumbered thereby free and clear of all defects and encumbrances, except those
permitted by Section 8.3 hereof and such as the Required Purchasers may approve
from time to time; (iii) name the Co-Agents, as agents for the Purchasers as the
insureds thereunder; (iv) be in the form of an ALTA Loan Policy; (v) contain
such endorsements and affirmative coverage as the Required Purchasers may
reasonably request, except that (A) in the case of zoning endorsements, if any,
no additional premiums will be required in excess of $2,000 per property and (B)
those exceptions taken on account of the delayed delivery of surveys to the
Title Insurance Company, which surveys shall be delivered pursuant to Section
7.11(b) hereof and which exceptions shall be removed from the applicable
policies pursuant to Section 7.11(c) hereof, (vi) be issued by title companies
reasonably satisfactory to the Required Purchasers (including any such title
companies acting as reinsurers, at the option of the Required Purchasers) and
(vii) be issued at ordinary rates (other than with respect to affirmative
insurance). The Co-Agents shall have received evidence reasonably satisfactory
to it that all premiums in respect of each such policy, and all charges for
mortgage recording tax, if any, have been paid. The Co-Agents shall have also
received a copy of all recorded documents referred to, or listed as exceptions
to title in, the title policy or policies referred to in this subsection and a
copy, certified by such parties as the Required Purchasers may deem reasonably
appropriate, of all other documents affecting the property covered by each
Mortgage as shall have been reasonably requested by the Required Purchasers.
(m) Other Documentation. Such other documents, agreements or
information as the Required Purchasers may reasonably request.
4.5 Opinions of Counsel. The Purchasers shall have received: (a) a
favorable opinion from Dechert, counsel to the Company, dated the Closing Date,
substantially in the form of Exhibit D-1 hereto opining that, among other
things, (i) the Senior Secured Notes are permitted under the New Telex Senior
Subordinated Indenture and constitute "Senior Indebtedness" and "Designated
Senior Indebtedness" thereunder, and (ii) the Note Purchase Transactions and the
Senior Secured Notes are permitted under the Senior Credit Documents; (b) a
favorable opinion from ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel of the Company
("GENERAL COUNSEL"), substantially in the form of Exhibit D-2 hereto; (c) a
letter from each of Dechert, counsel for the Company, and General Counsel
addressed to the Co-Agents and each other Purchasers and otherwise in form and
substance reasonably satisfactory to the Required Purchasers, stating that the
Purchasers may rely upon the favorable opinion of such counsel being delivered
in connection with (i) Amendment No. 5 to the Senior Credit Agreement and (ii)
the New Telex Senior Subordinated Indenture, in each case together with a copy
of such opinion; and (d) favorable legal opinions of special local counsel in
the jurisdictions set forth in Schedule 4.5 hereto with respect to collateral
security matters, each in form and substance reasonably satisfactory to the
Required Purchasers.
4.6 Purchase Permitted by Applicable Law, etc. On the Closing Date, each
Purchaser's purchase of and payment for the Tranche B Senior Secured Notes to be
purchased thereby at the Closing (a) shall be permitted by the Law of each
jurisdiction to which such
8
Purchaser is subject, without recourse to provisions permitting limited
investments by insurance companies without restriction as to the character of
the particular investment, (b) shall not violate any applicable Law (including,
without limitation, Regulation T, U or X of the Board of Governors of the
Federal Reserve System) and (c) shall not subject such Purchaser to any tax,
penalty or liability under or pursuant to any applicable Law, which Law was not
in effect on the date hereof. If requested by any Purchaser, each Purchaser
shall have received an Officer's Certificate certifying as to such matters of
fact as such requesting Purchaser may reasonably specify to enable such
requesting Purchaser to determine whether such purchase and payment are so
permitted.
4.7 No Litigation or Other Proceedings. There shall exist no action, suit,
investigation, litigation or proceeding pending or, to the knowledge of the
Company, threatened before any Governmental Authority (i) challenging the
consummation of the Note Purchase and other Note Purchase Transactions
contemplated hereby or by the Note Documents or (ii) seeking to obtain, or
having resulted in the entry of, any Governmental Order that (A) would restrain,
prohibit or impose materially adverse conditions on any Purchaser's ability to
purchase the Tranche B Senior Secured Notes to be purchased by such Purchaser on
the Closing Date, (B) could be reasonably expected to have a Material Adverse
Effect, or (C) purports to affect the legality, validity or enforceability of
any material provision of this Agreement or any other Note Document.
4.8 No Material Adverse Change. There shall not have occurred a Material
Adverse Change or any event that is reasonably likely to result in a Material
Adverse Change (in each case in the sole opinion of the Required Purchasers)
immediately after giving pro forma effect to the Note Purchase Transactions.
4.9 Fees and Expenses. Without limiting the generality of Section 12
below, the Company shall have paid, or caused to have been paid, all accrued
fees and expenses incurred in connection with the Note Purchase and the other
Note Purchase Transactions contemplated by this Agreement and the other Note
Documents as of the Closing, including, without limitation, the Commitment Fee
and any other fees payable to the Purchasers, or any of them, in connection with
the Note Purchase Transactions.
4.10 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
the Required Purchasers, and the Purchasers shall have received all such
counterpart originals or certified or other copies of such documents as the
Purchasers may reasonably request.
4.11 Telex Exchange. The Company shall have consummated the Telex Exchange
such that more than 99% (by face value) of the existing 10.5% Subordinated Notes
and more than 99% (by face value) of the existing 11% Subordinated Notes shall
have been converted into (i) the New Telex Subordinated Notes with an aggregate
issue price of no more than $56,250,000 (assuming 100% acceptance of the Telex
Exchange) and (ii) Preferred Stock convertible into, or common stock
representing, at least 99% of the common stock and warrants to purchase
Preferred Stock or common stock of the Company (assuming 100% acceptance of the
Telex Exchange). Any New Telex Subordinated Notes, Preferred Stock or common
stock and warrants to purchase Preferred Stock or common stock of the Company
not exchanged pursuant to the
9
Telex Exchange may be retained by and may be exchanged by Telex subsequent to
the Telex Exchange, for 10.5% Subordinated Notes and 11% Subordinated Notes
which are not tendered and accepted pursuant to the Telex Exchange. The terms of
the New Telex Subordinated Notes shall be in form and substance satisfactory to
the Purchasers, such terms to include (i) maturity no earlier than September 15,
2006, (ii) no cash pay interest, (iii) accretion rate not to exceed 13% per
annum, and (iv) satisfactory subordination provisions. The terms of the Telex
Exchange shall be in form and substance satisfactory to the Purchasers.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants each of the representations and
warranties set forth in this Article 5 to each Purchaser (a) on and as the date
hereof and (b) on and as of the Closing Date, before and immediately after
giving pro forma effect to the Note Purchase and the other Note Purchase
Transactions contemplated hereby, except where otherwise expressly provided. The
Company represents and warrants each of the representations and warranties set
forth in Sections 5.1, 5.2, and 5.3 to each Purchaser on and as of each Interest
Due Date on which the Company issues additional Senior Secured Notes as PIK
Interest, before and immediately after giving effect to the issuance of such
Senior Secured Notes. Each representation and warranty made in this Article 5
shall be, and shall be deemed to be, qualified by the information and
disclosures set forth and made in the Company's Form 10-K. Further, each
representation and warranty made in this Article 5 with respect to any Foreign
Subsidiary is qualified such that no breach thereof shall occur, or be deemed to
have occurred, unless such breach has or is reasonably likely to have a Material
Adverse Effect.
5.1 Corporate Existence; Qualification; Power; Licenses and Permits. Each
of the Company and its Subsidiaries (i) is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and is authorized to do business and is in
good standing in every jurisdiction in which the failure to be so qualified
could reasonably be expected to have a Material Adverse Effect, (iii) has all
corporate power and authority required to own its properties and assets and to
carry on its business as now conducted and (iv) has all licenses,
authorizations, consents, approvals, franchises, leases, permits, certificates,
qualifications, easements, rights of way and other rights required to carry on
its business as now conducted which the failure to so have could reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is in violation of the terms of any such license, authorization,
consent, approval, franchise, lease, permit, certificate, qualification,
easement, right of way or other right in any such case which would have a
Material Adverse Effect.
5.2 Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company and its Subsidiaries of this
Agreement and the other Note Documents to which the Company and its Subsidiaries
are parties, and the consummation by the Company and its Subsidiaries of the
Note Purchase and of the other Note Purchase Transactions contemplated hereby
and thereby, (i) are within the Company's and each such Subsidiary's corporate
(or equivalent) powers, (ii) have been duly authorized by all necessary
corporate (or equivalent) action, (iii) require no action by or in respect of,
or filing with, any Governmental Authority, (iv) do not contravene, or
constitute a default under, any provision of any Governmental Order or of the
certificate of incorporation or by-laws (or equivalent constituting documents)
of the Company or any of its Subsidiaries, (v) do not contravene, or
10
constitute a default or an event that with the passage of time, the giving of
notice or both would constitute a default, under, any Governmental Order,
indenture, contract, lease, instrument or other commitment or agreement to which
the Company is a party (including, without limitation, any Senior Credit
Document or any New Telex Subordinated Note Document) or by which the Company,
its Subsidiaries or any of their respective assets are bound and which could
reasonably be expected to have a Material Adverse Effect, and (vi) will not
result in the creation or imposition of any material Lien upon any asset of the
Company or any of its Subsidiaries under any existing indenture, mortgage, deed
of trust, loan or credit agreement or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which it or any of its
assets may be bound or affected (except as contemplated herein) other than those
Liens existing under the Senior Credit Documents or under the Note Documents.
5.3 Binding Effect. This Agreement is and, when executed and delivered in
accordance with the terms hereof, the other Note Documents will be, the legal,
valid and binding obligations of the Company and its Subsidiaries parties
thereto, and are or will be, as the case may be, enforceable against the Company
and such Subsidiaries in accordance with their terms.
5.4 Financial Information.
(a) The audited consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of December 31, 1999 and December 31, 2000 and the
unaudited consolidated balance sheets of the Company and its Consolidated
Subsidiaries as of September 30, 2001 and the audited, and unaudited, as the
case may be, consolidated statements of earnings, statements of shareholders'
equity and statements of cash flows for the periods ended December 31, 1999,
December 31, 2000 and September 30, 2001 have heretofore been furnished to each
Purchaser (collectively, with the financial information delivered from time to
time pursuant to Section 7.1 hereof, the "FINANCIAL STATEMENTS"). Such Financial
Statements (including the notes thereto) (i) solely with respect to those
audited balance sheets of the Company and its Consolidated Subsidiaries have
been audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, (ii) have been prepared in accordance with
GAAP consistently applied throughout the periods covered thereby and (iii)
present fairly, in all material respects, the consolidated financial condition,
results of operations and cash flows of the Company and its Consolidated
Subsidiaries as of such dates and for such periods. During the period from
September 30, 2001 to and including the Closing Date, except as provided in the
Note Documents, there has been no sale, transfer or other disposition by the
Company and its Consolidated Subsidiaries of any material part of the business
or property of the Company and its Consolidated Subsidiaries, taken as a whole,
and no purchase or other acquisition by any of them of any business or property
(including any Capital Stock of any other Person) material in relation to the
consolidated financial condition of the Company and its Consolidated
Subsidiaries, taken as a whole, in each case, which is not reflected in the
foregoing financial statements or in the notes thereto and has not otherwise
been disclosed in a writing to the Purchasers on or prior to the Closing Date.
(b) [Intentionally Omitted.]
5.5 Litigation and Judgments. Except as set forth on Schedule 5.5, there
is no (i) injunction, stay, decree, judgment, writ or order issued and
outstanding by any court or arbitrator or any governmental body, agency or
official against the Company or any of its Subsidiaries or (ii) action, suit,
proceeding, litigation, contested claim, investigation or arbitration pending,
or to
11
the knowledge of the Company threatened, against or affecting the Company or any
of its Subsidiaries which, in any case, could have a Material Adverse Effect on,
or which in any manner impairs the validity of, this Agreement, any of the other
Note Documents or any other Credit Document.
5.6 Compliance with ERISA. During the five year period prior to each date
as of which this representation is made, or deemed made, with respect to any
Plan (or, with respect to (vi) or (viii) below, as of the date such
representation is made or deemed made), except as set forth on Schedule 5.6
hereto, none of the following events or conditions, either individually or in
the aggregate, has resulted or is reasonably likely to result in a Material
Adverse Effect: (i) a Reportable Event; (ii) an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA); (iii)
any noncompliance with the applicable provisions of ERISA or the Code; (iv) a
termination of a Single Employer Plan (other than a standard termination
pursuant to Section 4041(b) of ERISA); (v) a Lien on the property of the Company
or its Subsidiaries in favor of the PBGC or a Plan; (vi) any Underfunding with
respect to any Single Employer Plan; (vii) a complete or partial withdrawal from
any Multiemployer Plan by the Company or any Commonly Controlled Entity; (viii)
any liability of the Company or any Commonly Controlled Entity under ERISA if
the Company or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the annual valuation date most closely
preceding the date on which this representation is made or deemed made; or (ix)
the Reorganization or Insolvency of any Multiemployer Plan. There have been no
transactions that resulted or could result in any liability to the Company or
any Commonly Controlled Entity under Section 4069 of ERISA or Section 4212(c) of
ERISA.
5.7 Taxes. Except as set forth on Schedule 5.7 hereto, the Company and its
Subsidiaries have timely filed (inclusive of any permitted extensions) with the
appropriate taxing authorities all United States Federal income tax returns and
except as set forth on Schedule 5.7 hereto, all other material tax returns
(including, without limitation, information returns and other material
information) in respect of Taxes required to be filed through the date hereof.
The information filed is complete and accurate in all material respects. All
material deductions taken by the Company and its Subsidiaries as reflected in
such income tax returns have been taken in accordance with applicable laws and
regulations.
(a) Except as set forth on Schedule 5.7 hereto, all Taxes, in
respect of periods beginning prior to the date hereof, have been timely paid,
except where the same are being contested in good faith by appropriate
proceedings and appropriate reserves therefor have been established and
maintained in accordance with GAAP for the accrual thereof as reflected on the
unaudited financial statements for the Company's quarter ended September 30,
2001, and, to the extent such reserves are maintained for periods after
September 30, 2001, consistent with the Company's past practice.
(b) Except as set forth in Schedule 5.7 hereto, (i) no material
deficiencies for Taxes have been claimed, proposed or assessed by any taxing or
other Governmental Authority against the Company or any of its Subsidiaries
other than deficiencies that are being contested in good faith by appropriate
proceedings, and for which appropriate reserves have been established and
maintained as reflected on the unaudited financial statements for the Company's
quarter ended September 30, 2001 and in accordance with GAAP, and, to the extent
such reserves are maintained for periods after September 30, 2001, consistent
with the Company's past practice
12
and (ii) no material tax liens have been filed against any of the Property of
the Company or its Subsidiaries other than Liens permitted under Section 8.3 of
this Agreement or are being contested in good faith by appropriate proceedings,
and for which appropriate reserves have been established and maintained as
reflected on the unaudited financial statements for the Company's quarter ended
September 30, 2001 in accordance with GAAP and, to the extent such reserves are
maintained for periods after September 30, 2001, consistent with the Company's
past practice, and to the extent such Liens have been bonded in a manner
reasonably satisfactory to the Required Purchasers. Except as set forth in
Schedule 5.7 hereto, there are no pending or, to the knowledge of the Company,
threatened audits, investigations or claims for or relating to any material
liability in respect of Taxes, and there are no matters under discussion with
any Governmental Authorities with respect to Taxes that are likely to result in
a material additional liability for Taxes. Except as set forth on Schedule 5.7
hereto, for all years up to and including the fiscal year ended March 31, 1990,
either the periods during which any assessments may be made by the Internal
Revenue Service have expired without waiver or extension or with respect to
federal income tax returns for which the Company and its Subsidiaries have been
audited by the Internal Revenue Service, such audits have been closed.
5.8 Capitalization; Subsidiaries.
(a) There are presently issued by the Company and its Subsidiaries
and outstanding the shares of capital stock indicated on Schedule 5.8 hereto.
All of the issued and outstanding capital stock of each Subsidiary of the
Company listed is owned of record and beneficially by the entity set forth on
such Schedule. The Company and its Subsidiaries have received at least the
consideration for which such stock was authorized to be issued and have
otherwise complied in all material respects with all legal requirements relating
to the authorization and issuance of shares of stock and all such shares are
validly issued, fully paid and non-assessable. The Company and its Subsidiaries
have no other capital stock of any class outstanding other than as set forth on
Schedule 5.8 hereto. Except as set forth on Schedule 5.8 hereto, neither the
Company nor any of its Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its equity
interests. There are no voting trusts or other agreement or understandings to
which the Company or any of its Subsidiaries is a party with respect to the
voting of its equity interests.
(b) The only direct or indirect Subsidiaries of the Company are
those listed on Schedule 5.8 hereto. Except as set forth on such Schedule, the
Company is the record and beneficial owner of all of the equity interests in
each of its Subsidiaries listed on such Schedule as being owned by such Company
(other than directors' qualifying shares), there are no proxies, irrevocable or
otherwise, with respect to any such equity interests, and no equity interests in
any of the Subsidiaries of the Company are or may become required to be issued
by reason of any options, warrants, scripts, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, equity interests in any such Subsidiary,
and there are no contracts, commitments, understandings or arrangements by which
any such Subsidiary is or may become bound to issue additional shares of its
capital stock, or other equity interests, or debt or equity securities
convertible or exchangeable for such equity interests. All of such shares so
owned by Company are owned directly or indirectly by it free and clear of any
Liens (other than Liens permitted under Section 8.3 hereof), and all such shares
are validly issued, fully paid and non-assessable (except for statutory rights
of assessment for wages owed).
13
5.9 Not an Investment Company. Neither the Company nor any of its
Subsidiaries is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (iii) subject to any other Law that purports to
regulate or restrict its ability to borrow money or to consummate the
transactions contemplated by this Agreement, the other Note Documents or the
other Credit Documents, or to perform its obligations hereunder or thereunder.
5.10 No Conflicting Requirements. Neither the Company nor any of its
Subsidiaries is in default (or, with the passage of time, the giving of notice
or both, will be in default), or as a result of the Note Purchase shall be in
default (or, with the passage of time, the giving of notice or both, will be in
default), under any term or provision of (a) any charter, by-law or similar
document, (b) any mortgage, indenture, agreement, instrument, contract, lease or
other commitment to which any of them is a party or by which any of them is
bound (including, without limitation, any Senior Credit Document or New Telex
Subordinated Note Document) such that such violations or defaults individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect or (c) any Law or Governmental Order. After due inquiry by appropriate
Company personnel, the Company knows of no dispute regarding any facts or
circumstances likely to cause a default under any indenture, contract, lease,
agreement, instrument or other commitment, including, without limitation, any
Senior Credit Document or New Telex Subordinated Note Document, that would
individually, or when aggregated with other such disputes, be reasonably likely
to have a Material Adverse Effect. The offer, issuance, sale and delivery of the
Tranche B Senior Secured Notes are or will be exempt from the registration
requirements and prospectus requirements of the Securities Act and the
qualification, registration or prospectus provision of applicable U.S. state or
"blue sky" securities laws and other applicable securities laws.
5.11 Indebtedness. On and as of September 30, 2001, neither the Company
nor any Subsidiary has any Indebtedness that is senior, pari passu or
subordinated in right of payment to its Obligations under the Senior Secured
Notes or under this Agreement, except for Indebtedness under the Senior Credit
Documents or otherwise as set forth on Schedule 5.11 hereto, all of which
Indebtedness is permitted pursuant to Section 8.2 of this Agreement. Since
September 30, 2001, there has been no material change in the amount of such
Indebtedness, nor any other change with respect to such Indebtedness that would
be reasonably likely to have a Material Adverse Effect.
5.12 Title to Properties and Assets; Intellectual Property.
(a) Except as set forth in Schedule 5.12(a) hereto, the Company and
its Subsidiaries have good record and marketable fee title to all real Property
and all other Property and assets, whether tangible or intangible, owned by it
and reasonably necessary in the conduct of business of the Company and its
Subsidiaries. All of the leases for the operation of its properties and assets,
under which the Company and its Subsidiaries hold any Property or assets, real
or personal, are valid, subsisting and enforceable and afford peaceful and
undisturbed possession of the subject matter of the lease, and no default by the
Company and its Subsidiaries exists under any of the provisions thereof. To the
best of the Company's knowledge after due
14
inquiry by appropriate Company personnel, all buildings, machinery and equipment
of the Company material to its operations and business are in good repair and
working order, except for ordinary wear and tear. To the best of the Company's
knowledge all material current and proposed uses of such Property or assets of
the Company are permitted as of right and no such regulation or ordinance
interferes with such current or proposed uses. To the best of the Company's
knowledge there is no pending or formally proposed change in any such laws,
regulations and ordinances which would have a Material Adverse Effect. No
condemnation, appropriation or similar proceeding is pending or, to the
knowledge of the Company, threatened against the Company or any Subsidiary of
the Company.
(b) The Company and each of its Subsidiaries owns, or has the legal
right to use, all United States patents, patent applications, trademarks,
trademark applications, tradenames, copyrights, technology, know-how and
processes necessary for each of them to conduct its business as currently
conducted (the "INTELLECTUAL PROPERTY") except for those the failure to own or
have such legal right to use would not be reasonably expected to have a Material
Adverse Effect. Except as provided on Schedule 5.12(b) hereto, no claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Company know of any such claim, and, to the
knowledge of the Company, the use of such Intellectual Property by the Company
and its Subsidiaries does not infringe on the rights of any Person, except for
such claims and infringements which in the aggregate, would not be reasonably
expected to have a Material Adverse Effect.
(c) The Company and each of its Subsidiaries maintain insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Company or such Subsidiary operates.
5.13 Compliance with Law. Neither the Company nor any of its Subsidiaries
has violated or failed to comply with any Law applicable to its business or
operations except where, individually or in the aggregate, such violations or
failures could not reasonably be expected to have a Material Adverse Effect. The
conduct of the businesses of the Company and each of its Subsidiaries is in
conformity with all applicable Law and Governmental Orders, except where,
individually or in the aggregate, such non-conformities could not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any notice to the effect that, or otherwise been
advised that, it is not in compliance with, and neither the Company nor any of
its Subsidiaries has any reason to anticipate that any presently existing
circumstances are likely to result in the violation of, any such Law or
Governmental Order, which failure or violation could reasonably be expected to
have a Material Adverse Effect.
5.14 Compliance with Environmental Laws.
(a) Without limiting the foregoing Section 5.13, the Company and
each of its Subsidiaries has complied with and currently is in compliance with
all Environmental Laws, except where such noncompliance, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
15
(b) No solid or hazardous or toxic wastes or hazardous substances
(as defined in the Comprehensive Environmental Response Compensation and
Liability Act, the Resources Conservation and Recovery Act and the Superfund
Amendments and Reauthorization Act of 1986, as amended, or under any successor
or similar Law), are processed, discharged, stored, treated, disposed of, or
managed at any facility owned, leased or operated by the Company or any
Subsidiary thereof or, at the request or behest of the Company or any Subsidiary
thereof, at any adjoining site, so as to require a license, permit or
authorization of any type from any governmental authority, other than licenses,
permits and authorizations which have been obtained and are in full force and
effect or where the failure to obtain such a license, permit or authorization
could not reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 5.14 hereto, no governmental or private actions to enforce
environmental or pollution control laws are pending against the Company or any
Subsidiary thereof, or against or with respect to any facility owned, operated
or leased by the Company or any Subsidiary thereof. Except as disclosed on
Schedule 5.14 hereto, and except where any of the following, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect: (i) neither the Company nor any of its Subsidiaries has received any
complaint, notice of violation, alleged violation, investigation or advisory
action or of potential liability or of potential responsibility regarding
environmental protection matters or permit compliance, and (ii) neither the
Company nor any of its Subsidiaries have any contingent liability of which the
Company has knowledge in connection with any release of any hazardous or toxic
waste, substance or constituent, or other substance into the environment, nor
has the Company or any Subsidiary received any notice, letter or other
indication of potential liability arising from the disposal of any hazardous or
toxic waste, substance or constituent or other substance into the environment.
(c) Except as disclosed on Schedule 5.14 hereto, no action, suit or
proceeding brought by any employee of the Company or any Subsidiary thereof or
any other Person involving (i) a claim for damages in excess of $100,000 or (ii)
claims for damages under $100,000 and which in the aggregate could reasonably be
expected to have a Material Adverse Effect, in each case based on alleged damage
to health caused by any such hazardous or toxic substance or by any waste or
by-product thereof, is pending before any court or arbitrator or any
governmental body, agency or official.
5.15 Security Interests and Liens. Except for the Liens granted by the
Company and its Subsidiaries under the Senior Credit Documents, all of which
Liens are set forth on Schedule 5.15 hereto, and under the Note Documents, and
the Liens otherwise permitted under Section 8.3 hereof or disclosed on Schedule
5.15 hereto, there are no Liens in favor of third parties with respect to any
real or personal Property owned by the Company or any of its Subsidiaries
wherever located. After due inquiry by appropriate Company personnel, to the
best of the Company's knowledge, no lessor or warehouseman of the Company or any
of its Subsidiaries has granted any Lien with respect to the Inventory
maintained by the Company or its Subsidiaries, as the case may be, at the
property of any such lessor or warehousemen.
5.16 Labor Relations. Neither the Company nor any of its Subsidiaries is
engaged in any material unfair labor practices which could reasonably be
expected to result in a material liability to the Company, materially increase
the costs of operations or materially decrease the revenue generated from the
Company's or any of its Subsidiaries' operations, or which could otherwise
reasonably be expected to have a Material Adverse Effect. There is (i) no unfair
labor practice complaint pending against the Company or any of its Subsidiaries
or, to the best
16
knowledge of the Company after due inquiry by appropriate Company personnel,
threatened against the Company or any of its Subsidiaries before the National
Labor Relations Board, and no material grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company or any of its Subsidiaries or, to the best knowledge
of the Company after due inquiry by appropriate Company personnel, threatened
against the Company or any of its Subsidiaries, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Company or any of its Subsidiaries or,
to the best knowledge of the Company after due inquiry by appropriate Company
personnel, threatened against it or any of its Subsidiaries, which, in the case
of the items described in the preceding clauses (i) and (ii) could reasonably be
expected to result in a material liability to the Company or any of its
Subsidiaries, materially increase the costs of the Company's operations or any
of its Subsidiaries or materially decrease the revenue generated from the
Company's or any of its Subsidiaries' operations or which could otherwise
reasonably be expected to have a Material Adverse Effect, and (iii) no union
representation question with respect to the employees of the Company or any of
its Subsidiaries and no union organizing activities which representation
question or organizing activity could reasonably be expected to have a Material
Adverse Effect. There are no controversies pending or, to the best knowledge of
the Company after due inquiry by appropriate Company personnel, threatened
between the Company or any of its Subsidiaries and any of their respective
employees, other than (i) employee grievances and other controversies arising in
the ordinary course of business which could not, in the aggregate, be reasonably
expected to have a Material Adverse Effect and (ii) employee grievances and
other controversies arising outside the ordinary course of business of which the
Purchasers have received written notice, and which grievances and other
controversies, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.17 Solvency; Material Adverse Effect.
(a) The Company, together with its Subsidiaries, on a consolidated
basis, is Solvent after giving effect to the Note Purchase Transactions. On and
at all times after the Closing Date the fair saleable value of the assets of the
Company and its Subsidiaries, on a consolidated basis, exceeds all probable
liabilities, including, without limitation, those to be incurred pursuant to
this Agreement and the other Note Documents. On and at all times after the
Closing Date, the Company and its Subsidiaries, on a consolidated basis, (i) do
not have unreasonably small capital in relation to the business in which it is
or proposes to be engaged and (ii) have not incurred, and do not believe that
they will incur after giving effect to the Note Purchase and the other Note
Purchase Transactions, debts beyond their ability to pay such debts as they
become due.
(b) Except as and to the extent disclosed on Schedule 5.17(b)
hereto, there has been no development or event relating to or affecting the
Company or any of its Subsidiaries that, immediately after giving pro forma
effect to the Note Purchase Transactions, would be reasonably expected to have a
Material Adverse Effect.
5.18 Margin Security. The Company does not own any margin security and
none of the proceeds of the sale of the Senior Secured Notes, have been or shall
be used for the purpose of purchasing or carrying any margin securities or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase any margin securities or for any other
17
purpose not permitted by Regulation U or X of the Board of Governors of the
Federal Reserve System.
5.19 Affiliate Transactions. Except as set forth on Schedule 5.19 hereto,
neither the Company nor any Subsidiary is a party to or bound by any agreement
or arrangement (whether oral or written) to which any Affiliate of the Company
or any Subsidiary is a party.
5.20 Accuracy and Completeness of Information.
(a) All factual information heretofore, contemporaneously or
hereafter furnished by or on behalf of the Company or any of its Subsidiaries in
writing to the Purchasers for purposes of or in connection with this Agreement
or any other Note Document, or any transaction contemplated hereby or thereby,
including, without limitation, the Company's Form 10-K, is or shall be true and
accurate in all material respects on the date on or as of which such information
is dated, delivered or certified and on and as of the date hereof and shall not
be incomplete by omitting to state any material fact necessary to make such
information not misleading at or as of such time. There is no fact now known to
any officer of the Company or any of its Subsidiaries that has, or is likely to
have, a Material Adverse Effect, which fact has not been set forth herein, in
the Financial Statements, or some certificate, opinion or other written
statement made or furnished by the Company to the Purchasers, including, without
limitation, the Company's Form 10-K.
(b) Except as disclosed on Schedule 5.20(b) hereto, each of the
Company's reports, including, without limitation, on SEC Form 10-K, Form 10-Q
and Form 8-K filed with the Commission since December 31, 1999 (collectively,
the "EXCHANGE ACT REPORTS") when filed with the Commission conformed in all
material respects to the requirements of the Exchange Act and none of such
documents contained as of the respective date of such filing an untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
5.21 Status of Accounts. The Company confirms to the Purchaser that any or
all Taxes or fees relating to its business, its sales, the Accounts or the goods
relating thereto, are its sole responsibility and that all such material Taxes
will be paid by the Company when due (unless duly contested and adequately
reserved for) and that none of such Taxes or fees (including any immaterial
Taxes or fees) is or will become a Lien (other than a Permitted Lien) on or
claim against the Accounts.
5.22 Use of Proceeds. The proceeds of the Tranche B Senior Secured Notes
will be used to pay for transaction expenses in connection with the Note
Purchase Transactions and the Telex Exchange and for the general corporate and
operating expenses of the Company.
5.23 No Default. Except to the extent waived pursuant to Amendment No. 5
to the Senior Credit Agreement and this Agreement, neither the Company nor any
of its Subsidiaries is in default under or with respect to any of its
Contractual Obligations (other than under the 10.5% Subordinated Notes and the
11% Subordinated Notes) in any respect which would be reasonably expected to
have a Material Adverse Effect, and no Default or Event of Default has occurred
and is continuing.
18
5.24 Collateral. Except with respect to (a) Liens on equipment
constituting fixtures, (b) any reserved rights of the United States government
as required under Law, (c) Liens upon Patents, Patent Licenses, Trademarks and
Trademark Licenses (as such terms are defined in the Guarantee and Collateral
Agreement) to the extent that (i) such Liens are not otherwise perfected by the
filing of financing statements under the Uniform Commercial Code or by the
filing and acceptance thereof in the United States Patent and Trademark Office
or (ii) such Patents, Patent Licenses, Trademarks and Trademark Licenses are
not, individually or in the aggregate, material to the business of the Company
and its Subsidiaries taken as a whole, (d) Liens on uncertificated securities,
(e) Liens on Collateral the perfection of which requires filings in or other
actions under the laws of jurisdictions outside of the United States of America,
any State, territory or dependency thereof or the District of Columbia (except
to the extent that such filings or other actions have been made or taken), (f)
Liens on contracts or Accounts Receivable on which the United States of America
or any department, agency, or instrumentality thereof is the obligor, (g) Liens
on Proceeds of Accounts Receivable and Inventory, and (h) claims of creditors of
Persons receiving goods included as Collateral for "sale or return" within the
meaning of Section 2-326 of the Uniform Commercial Code of the applicable
jurisdiction, upon filing of the financing statements delivered to the Co-Agents
by the Company and its Subsidiaries on the Closing Date in the jurisdictions
listed on Schedule 5.24 hereto (which financing statements are in proper form
for filing in such jurisdictions), the recording of the Mortgages and the
recording of the Patent and Trademark Security Agreement (and the making of
filings after the Closing Date in any other jurisdiction as may be necessary
under any Requirement of Law) and the delivery to, and continuing possession by,
the Administrative Agent, as agent for the Purchasers and the holders of the
Senior Loans, of all Instruments, Chattel Paper and Documents a security
interest in which is perfected by possession, the Liens created pursuant to each
Security Document, when executed and delivered, will constitute valid Liens on
and to the extent provided therein perfected security interests in the
collateral referred to in such Security Documents (but as to the Copyrights and
the Copyright Licenses (as defined in the Guarantee and Collateral Agreement)
and accounts arising therefrom, only to the extent the Uniform Commercial Code
of the relevant jurisdiction, from time to time in effect, is applicable) in
favor of the Co-Agents for the ratable benefit of the Secured Parties (as
defined in the Guarantee and Collateral Document), which Liens will be prior to
all other Liens of all other Persons, except for Liens in favor of the
Administrative Agent and holders of the Senior Loans pursuant to the Senior
Credit Documents, and which Liens are enforceable as such as against all other
Persons (except, with respect to goods only, buyers in the ordinary course of
business to the extent provided in Section 9-307(1) of the Uniform Commercial
Code as from time to time in effect in the applicable jurisdiction and except to
the extent that recording of an assignment or other transfer of title to the
Purchasers in the United States Patent and Trademark Office may be necessary for
such enforceability), except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
5.25 Survival of Representations. On the Closing Date, each of the Note
Documents shall have been duly executed and delivered by the Company and its
Subsidiaries parties to such Note Documents, and thereafter, the Note Documents
shall be in full force and effect enforceable in accordance with their
respective terms against the Company and such Subsidiaries. All representations
made by the Company in this Agreement and each other Note Document shall survive
the execution and delivery hereof and thereof.
19
ARTICLE 6. REPRESENTATIONS OF THE PURCHASER.
Each Purchaser represents solely with respect to itself that such
Purchaser (a) has purchased or is purchasing the Senior Secured Notes for such
Purchaser's own account or for one or more separate accounts maintained by such
Purchaser or for the account of one or more pension or trust funds and not with
a view to the distribution thereof in violation of the securities laws of the
United States or any state thereof, provided that the disposition of such
Purchaser's property shall at all times be within such Purchaser's control, and
(b) is an "accredited investor" as defined in Rule 501(a) of the Securities Act
and able to evaluate the merits and risks, including illiquidity, of the
investment. Such Purchaser understands that the Senior Secured Notes are
restricted securities and have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act and applicable state securities law, or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by Law, and that the Company is not required to
register the Senior Secured Notes.
ARTICLE 7. AFFIRMATIVE COVENANTS
The Company hereby agrees that, from and after the Closing Date and so
long as any Senior Secured Note remains in effect, and thereafter until payment
in cash in full of all Obligations and any other amount then due and owing to
any Purchaser under any Note Document, the Company shall and (except in the case
of delivery of financial information, reports and notices) shall cause each of
its Subsidiaries to:
7.1 Financial Statements. Furnish to each Purchaser:
(a) as soon as available, but in any event not later than the 90th
day following the end of each fiscal year of the Company ending on or after the
Closing Date, a copy of the consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at the end of such year and the related
consolidated statements of operations, changes in common stockholders' equity
and cash flows for such year, setting forth in each case, in comparative form
the figures for and as of the end of the previous year, reported on without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified
public accountants of nationally recognized standing not unacceptable to the
Required Purchasers in their reasonable determination;
(b) as soon as available, but in any event not later than the 45th
day following the end of each of the first three quarterly periods of each
fiscal year of the Company, the unaudited consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of operations and cash flows of the
Company and its Consolidated Subsidiaries for such quarter and the portion of
the fiscal year through the end of such quarter, setting forth in comparative
form the budgeted figures (as adjusted consistent with past practice) for the
relevant period and the figures for the corresponding period of the previous
fiscal year, certified by a Responsible Officer of the Company as being fairly
stated in all material respects (subject to normal year-end audit and other
adjustments); and
20
(c) as soon as available, but in any event not later than the 30th
day following the end of each fiscal month of each fiscal year of the Company
(or the 45th day in the case of any such month ending on the last day of a
fiscal quarter), an unaudited consolidated balance sheet for the Company and its
Consolidated Subsidiaries as at the end of such month, a statement of cash
flows, and a related unaudited consolidated income statement for such month and
for the portion of the fiscal year through the end of such month, setting forth
in comparative form the budgeted figures (as adjusted consistent with past
practice) for the relevant periods and the figures as at the end of the
corresponding fiscal month of the previous fiscal year and, in the case of such
income statement, in comparative form the figures for the corresponding periods
of the previous fiscal year; all such financial statements delivered pursuant to
Section 7.1(a) or (b) hereof above to be (and, in the case of any financial
statements delivered pursuant to Section 7.1(b) hereof shall be certified by a
Responsible Officer of the Company as being) complete and correct in all
material respects in conformity with GAAP and to be (and, in the case of any
financial statements delivered pursuant to Section 7.1(b) hereof above shall be
certified by a Responsible Officer of the Company as being) prepared in
reasonable detail in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods that began on or after the
Closing Date (except as approved by such accountants or officer, as the case may
be, and disclosed therein, and except, in the case of any financial statements
delivered pursuant to Section 7.1(b) hereof above, for the absence of certain
notes).
7.2 Certificates; Other Information. Furnish to each Purchaser:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a) hereof above, a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the audit necessary therefor no knowledge was obtained of any Default
or Event of Default insofar as the same relates to any financial accounting
matters covered by their audit, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements and
reports referred to in Sections 7.1(a) and (b) hereof above, a certificate
signed by a Responsible Officer of the Company (i) stating that, to the best of
such Responsible Officer's knowledge, the Company and its Subsidiaries during
such period has observed or performed all of its covenants and other agreements,
and satisfied every condition, contained in this Agreement, any Senior Secured
Notes or the other Note Documents to which it is a party to be observed,
performed or satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default, except, in each case, as specified
in such certificate and (ii) setting forth the calculations required to
determine (A) compliance with all covenants set forth in Section 8.1 hereof
below (in the case of a certificate furnished with the financial statements
referred to in Sections 7.1(a) and (b) hereof above), and (B) compliance with
the covenant set forth in Section 8.8 (in the case of a certificate furnished
with the financial statements referred to in Section 7.1(a) hereof).
(c) as soon as available, but in any event not later than the 90th
day after the beginning of each fiscal year of the Company, a copy of the
projections by the Company of the operating budget and cash flow budget of the
Company and its Subsidiaries for such fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer of the Company to the
effect that such Responsible Officer believes such projections to have been
prepared on the basis of reasonable assumptions;
21
(d) within five Business Days after the same are sent, copies of all
financial statements and reports which the Company sends to its public security
holders, and within five Business Days after the same are filed, copies of all
financial statements and periodic reports which the Company may file with the
SEC or any successor or analogous Governmental Authority;
(e) promptly, such additional financial and other information as any
Purchaser may from time to time reasonably request, including certificates
setting forth calculations showing that the Company is in compliance with
Sections 8.1, 8.2(d), 8.2(l), 8.3(k), 8.6(f) , 8.7, 8.8 and 8.11 of this
Agreement; and
(f) by September 30, 2002, the business plan, budget and cash flow
for 2003 on a consolidated and consolidating basis delivered to the
Administrative Agent pursuant to Section 7.2(i) of the Senior Credit Agreement.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
diligently conducted and reserves in conformity with GAAP with respect thereto
have been provided on the books of the Company or any of its Subsidiaries, as
the case may be.
7.4 Conduct of Business and Maintenance of Existence. Continue to engage
in business of the same general type as conducted by the Company and its
Subsidiaries on the Closing Date, taken as a whole, and preserve, renew and keep
in full force and effect its corporate existence and take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of the business of the Company and its Subsidiaries, taken as a
whole, except as otherwise expressly permitted pursuant to Section 8.5 hereof,
provided that the Company and its Subsidiaries shall not be required to maintain
any such rights, privileges or franchises, if the failure to do so would not
reasonably be expected to have a Material Adverse Effect; and comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith, in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in the business of the Company and its Subsidiaries, taken as a whole,
in good working order and condition; maintain with financially sound and
reputable insurance companies insurance on all property material to the business
of the Company and its Subsidiaries, taken as a whole, in at least such amounts
and against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business;
and furnish to the Purchasers, upon the written request of any Purchaser,
information in reasonable detail as to the insurance carried.
7.6 Inspection-of Property; Books and Records; Discussions.
(a) Keep proper books, records and accounts in which full, complete
and correct entries in conformity with GAAP and all material Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities; and permit representatives
22
of any Purchaser to visit and inspect any of its properties and examine and, to
the extent reasonable, make abstracts from any of its books and records and to
discuss the business, operations, properties and financial and other condition
of the Company and, its Subsidiaries with officers and employees of the Company
and its Subsidiaries and with its independent certified public accountants, in
each case at any reasonable time, upon reasonable notice, and as often as may
reasonably be desired.
(b) At any time at which any Senior Secured Notes are outstanding,
upon the reasonable request of any Purchaser or Purchasers holding Senior
Secured Notes evidencing at least $5,000,000 of Indebtedness, permit such
Purchaser or Purchasers or its or their respective professionals (including
consultants, accountants and appraisers) to conduct evaluations and appraisals
of (i) the Company's Accounts and Inventory, and other related procedures deemed
necessary by such Purchaser or Purchasers and pay the reasonable fees and
expenses thereof in connection therewith; provided, however, that no such
Purchaser or Purchasers shall be entitled to conduct such evaluations and
appraisals more frequently than once per year unless (x) an Event of Default has
occurred and is continuing or (y) such Purchaser or Purchasers reasonably
determine in consultation with the Company that a material event or material
change has occurred with respect to the Company and its Subsidiaries, their
inventory practices or the performance of the Collateral and that as a result of
such event or change more frequent evaluations or appraisals are required to
effectively monitor the Accounts and Inventory of the Company, in which case the
Company will permit such Purchaser or Purchasers to conduct such evaluations and
appraisals at such reasonable times and as often as may be reasonably requested.
7.7 Notices. Promptly give notice to each Purchaser of:
(a) as soon as possible after a Responsible Officer of the Company
knows or reasonably should know thereof, the occurrence of any Default or Event
of Default;
(b) as soon as possible after a Responsible Officer of the Company
knows or reasonably should know thereof, any (i) default or event of default
under any Contractual Obligation of the Company or any of its Subsidiaries,
other than as previously disclosed in writing to the Purchasers, or (ii)
litigation, investigation or proceeding which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority, which in
either case, if not cured or if adversely determined, as the case may be, would
reasonably be expected to have a Material Adverse Effect;
(c) as soon as possible after a Responsible Officer of the Company
knows or reasonably should know thereof, the occurrence of any default or event
of default under the New Telex Subordinated Note Documents;
(d) as soon as possible after a Responsible Officer of the Company
advisor reasonably should know thereof, the occurrence of any default or event
of default under the Senior Credit Documents.
(e) as soon as possible after a Responsible Officer of the Company
knows or reasonably should know thereof, any litigation or proceeding affecting
the Company or any of its Subsidiaries in which the amount involved (not covered
by insurance) is $1,000,000 or more or
23
in which injunctive or similar relief is sought that would reasonably be
expected to have a Material Adverse Effect;
(f) the following events, as soon as possible and in any event
within 30 days after a Responsible Officer of the Company or any of its
Subsidiaries knows or reasonably should know thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect to any Single Employer
Plan, a failure to make any required contribution to a Single Employer Plan or
Multiemployer Plan, the creation of any Lien on the property of the Company or
its Subsidiaries in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan; (ii) the
institution of proceedings or the taking of any other formal action by the PBGC
or the Company or any of its Subsidiaries or any Commonly Controlled Entity or
any Multiemployer Plan which could reasonably be expected to result in the
withdrawal from, or the termination, Reorganization or Insolvency of, any Single
Employer Plan or Multiemployer Plan; provided, however, that no such notice will
be required under clause (i) or (ii) above unless the event giving rise to such
notice, when aggregated with all other such events under clause (i) or (ii)
above, could be reasonably expected to result in liability to the Company or its
Subsidiaries in an amount that would exceed $5,000,000; or (iii) the existence
of an Underfunding under a Single Employer Plan that exceeds 10% of the value of
the assets of such Single Employer Plan, in each case, determined as of the most
recent annual valuation date of such Single Employer Plan on the basis of the
actuarial assumptions used to determine the funding requirements of such Single
Employer Plan as of such date;
(g) as soon as possible after a Responsible Officer of the Company
knows or reasonably should know thereof, any material adverse change in the
business, operations, property, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole;
(h) as soon as possible after a Responsible Officer of the Company
knows or reasonably should know thereof, (i) any release or discharge by the
Company or any of its Subsidiaries of any Materials of Environmental Concern
required to be reported under applicable Environmental Laws to any Governmental
Authority, unless the Company reasonably determines that the total Environmental
Costs arising out of such release or discharge are unlikely to exceed $2,000,000
or to have a Material Adverse Effect; (ii) any condition, circumstance,
occurrence or event not previously disclosed in writing to each Purchaser that
could result in liability under applicable Environmental Laws unless the Company
reasonably determines that the total Environmental Costs arising out of such
condition, circumstance, occurrence or event are unlikely to exceed $2,000,000
or to have a Material Adverse Effect, or could result in the imposition of any
lien or other restriction on the title, ownership or transferability of any
facilities and properties owned, leased or operated by the Company or any of its
Subsidiaries; and (iii) any proposed action to be taken by the Company or any of
its Subsidiaries that would reasonably be expected to subject the Company or any
of its Subsidiaries to any material additional or different requirements or
liabilities under Environmental Laws, unless the Company reasonably determines
that the total Environmental Costs arising out of such proposed action are
unlikely to exceed $1,000,000 or to have a Material Adverse Effect; and
(i) as soon as possible after a Responsible Officer of the Company
knows or reasonably should know thereof, the failure to make any rental payment
when due and payable
24
with respect to any property leased by the Company or any of its Domestic
Subsidiaries at which Inventory of the Company or any of its Domestic
Subsidiaries is located.
Each notice pursuant to this Section shall be accompanied by a statement
of a Responsible Officer of the Company (and, if applicable, the relevant
Commonly Controlled Entity or Subsidiary) setting forth details of the
occurrence referred to therein and stating what action the Company (or, if
applicable, the relevant Commonly Controlled Entity or Subsidiary) proposes to
take with respect thereto.
7.8 Environmental Laws.
(a) (i) Comply substantially with, and require substantial
compliance by all tenants, subtenants, contractors, and invitees with, all
applicable Environmental Laws; (ii) obtain, comply substantially with and
maintain any and all Environmental Permits necessary for its operations as
conducted and as planned; and (iii) require that all tenants, subtenants,
contractors, and invitees obtain, comply substantially with and maintain any and
all Environmental Permits necessary for their operations as conducted and as
planned, with respect to any property leased or subleased from, or operated by
the Company or its Subsidiaries.
(b) Conduct and complete or cause to be conducted and completed all
investigations, studies, sampling and testing, and all remedial, removal, and
other actions required under applicable Environmental Laws; and promptly comply
with all orders and directives of all Governmental Authorities regarding
Environmental Laws, (i) except where non-compliance with any such order or
directive would not reasonably be expected to have a Material Adverse Effect or
(ii) other than any such order or directive as to which an appeal or other
appropriate contest is or has been timely and properly taken, is being
diligently pursued in good faith, and as to which appropriate reserves have been
established in accordance with GAAP, and, if the effectiveness of such order or
directive has not been stayed, the pendency of such appeal or other appropriate
contest does not give rise to a Material Adverse Effect.
(c) Maintain, update as appropriate, and implement in all material
respects an ongoing program to ensure that all the properties and operations of
the Company and its Subsidiaries are regularly and reasonably reviewed by
competent professionals to identify and promote compliance with and to
reasonably and prudently manage any liabilities or potential liabilities under
any Environmental Law that may affect the Company or any of its Subsidiaries,
including, without limitation, compliance and liabilities relating to:
discharges to air and water, acquisition, transportation, storage and use of
hazardous materials; waste disposal; repair, maintenance and improvement of
properties; employee health and safety; species protection; and recordkeeping
(the "ENVIRONMENTAL PROGRAM").
7.9 After-Acquired Real Property and Fixtures.
(a) With respect to any owned real property or fixtures, in each
case with a purchase price or a fair market value of at least $500,000, in which
the Company or any of its Subsidiaries acquires ownership rights at any time
after the Closing Date, promptly grant to the Purchasers a Lien of record on all
such owned real property and fixtures, upon terms reasonably satisfactory in
form and substance to the Required Purchasers and in accordance with any
applicable requirements of any Governmental Authority (including, without
limitation, any
25
required appraisals of such property under FIRREA); provided that (i) nothing in
this Section 7.9 hereof shall defer or impair the attachment or perfection of
any security interest in any Collateral covered by any of the Security Documents
which would attach or be perfected pursuant to the terms thereof without action
by the Company, any of its Subsidiaries or any other Person and (ii) no such
Lien shall be required to be granted as contemplated by this Section 7.9 hereof
on any owned real property or fixtures the acquisition of which is financed, or
is to be financed within any time period permitted by Section 8.2(d) or (e)
hereof, in whole or in part, through the incurrence of Indebtedness permitted by
Section 8.2(d) or (e) hereof, until such Indebtedness is repaid in full (and not
refinanced as permitted by Section 8.2(d) or (e) hereof) or, as the case may be,
the Company determines not to proceed with such financing or refinancing. In
connection with any such grant to the Purchasers, of a Lien of record on any
such real property in accordance with this Section, the Company or such
Subsidiary shall deliver or cause to be delivered to the Co-Agents any surveys,
title insurance policies, environmental reports and other documents in
connection with such grant of such Lien obtained by it in connection with the
acquisition of such ownership rights in such real property or as the Required
Purchasers shall reasonably request (in light of the value of such real property
and the cost and availability of such surveys, title insurance policies,
environmental reports and other documents and whether the delivery of such
surveys, title insurance policies, environmental reports and other documents
would be customary in connection with such grant of such Lien in similar
circumstances).
(b) At its own expense, execute, acknowledge and deliver, or cause
the execution, acknowledgement and delivery of, and thereafter register, file or
record in an appropriate governmental office, any document or instrument
reasonably deemed by the Co-Agents, or either of them, to be necessary or
desirable for the creation, perfection and priority and the continuation of the
validity, perfection and priority of the foregoing Liens or any other Liens
created pursuant to the Security Documents.
(c) At its own expense, request, and use reasonable efforts to
obtain, prior to entering into a lease of a facility located in the United
States in which Inventory will be located on or after the Closing Date (other
than any such facility for which there is not a lease of more than one year and
which the Company and its Subsidiaries intends to use as a seasonal storage
facility), a consent in such form as may be reasonably satisfactory to the
Required Purchasers, from each landlord of any such facility, in which such
landlord acknowledges the Purchasers' second priority security interest in the
Inventory pledged by the Company and each of the other grantors to the
Purchasers under the Security Documents.
7.10 Pledged Stock and Pledged Notes. Simultaneously with the earlier to
occur of (a) the payment in full in cash of the Senior Debt Obligations and (b)
the termination of the Intercreditor Agreement absent a successor provision to
Section 2(b) thereof (which successor provision is in form and substance
acceptable to the Required Purchasers), the Company shall instruct the
Administrative Agent to deliver, immediately upon such payment in full of such
Senior Debt Obligations, to the Co-Agents (i) the certificates, notes and other
instruments evidencing the Pledged Stock and Pledged Notes (together with any
stock powers and endorsements executed in blank and delivered to the
Administrative Agent) and (ii) at the request of the Co-Agents, to such
depository account as the Co-Agents shall direct, the cash and other items
credited to the Collateral Proceeds Account (as defined in the Guarantee and
Collateral Agreement). The Company shall, and shall cause each of its
Subsidiaries to, deliver such stock powers, endorsements, instruments and
agreements as the Required Purchasers determine
26
necessary or advisable to perfect, and to maintain the perfection of, the
security interest granted or purported to be granted by the Company and its
Subsidiaries parties to the Guarantee and Collateral Agreement to the Purchasers
under the Note Documents in connection with the events contemplated by the
foregoing sentence.
7.11 Conditions Subsequent to Closing.
(a) [Intentionally Omitted].
(b) Surveys. Not later than 90 days following the Closing Date, the
Company shall deliver to the Co-Agents and the title insurance company issuing
the policies referred to in Section 4.4(l) (the "TITLE INSURANCE COMPANY")
letters from independent professional licensed land surveyor(s) certifying that
the maps or plats of an as-built survey of the sites of each of the Mortgaged
Properties certified to the Purchasers and the Title Insurance Company in
connection with the sale of the Tranche A Senior Secured Notes in April 11, 2001
shall, as of the Closing Date, still be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps, plats or surveys the
following: (i) the locations on such sites of all the buildings, structures and
other improvements and the established building setback lines; (ii) the lines of
streets abutting the sites and width thereof; (iii) all access and other
easements appurtenant to the sites necessary to use the sites; (iv) all
roadways, paths, driveways, easements, encroachments and overhanging projections
and similar encumbrances affecting the sites, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor; (v) any
encroachments on any adjoining property by the building structures and
improvements on the sites; and (vi) if the site is described as being on a filed
map, a legend relating the survey to said map.
ARTICLE 8. NEGATIVE COVENANTS
The Company hereby agrees that, from and after the Closing Date and so
long as any Senior Secured Note remain outstanding, and thereafter until payment
in full of all Obligations of the Company hereunder and under the other Note
Documents, and any other amount then due and owing to any Purchaser, the Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
8.1 Minimum Consolidated EBITDA. Permit the Consolidated EBITDA of the
Company for any fiscal period of the Company set forth below to be less than the
amount set forth opposite such period below:
Period Amount
------ ------
January 1, 2002 -- March 31, 2002 $ 5,000,000
January 1, 2002 -- June 30, 2002 $10,000,000
January 1, 2002 -- September 30, 2002 $15,000,000
January 1, 2002 -- December 31, 2002 $20,000,000
The four fiscal quarters ending on March 31, 2003 $21,400,000
The four fiscal quarters ending on June 30, 2003 $22,800,000
The four fiscal quarters ending on September 30, 2003 $24,200,000
The four fiscal quarters ending on December 31, 2003 $25,600,000
The four fiscal quarters ending on March 31, 2004 $25,600,000
The four fiscal quarters ending on June 30, 2004 $25,600,000
27
provided, that if the "Minimum Consolidated EBITDA" for any fiscal period set
forth in Section 8.1(a) of the Senior Credit Agreement (as such is in effect on
the Closing Date) shall be reduced, the Minimum Consolidated EBITDA for the
corresponding period herein shall be reduced correspondingly such that the
Minimum Consolidated EBITDA required hereunder for any such fiscal period shall
equal 80% of the "Minimum Consolidated EBITDA" required thereunder for the same
fiscal period.
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness (including any Indebtedness of any of its Subsidiaries),
except:
(a) Indebtedness of the Company (i) under this Agreement, any Senior
Secured Notes and other Note Documents or (ii) that constitutes Senior Debt
Obligations;
(b) Indebtedness under or evidenced by the 10.5% Subordinated Note
Documents, the 11% Subordinated Note Documents and the New Telex Subordinated
Note Documents; provided that such Indebtedness shall not be extended, renewed,
replaced, refinanced or otherwise amended, except as otherwise permitted by
Section 8.12(d) hereof;
(c) Indebtedness (i) of the Company owed to any of its Subsidiaries
and (ii) of any Subsidiary owed to the Company or any other Subsidiary;
(d) Indebtedness of the Company and any of its Subsidiaries incurred
to finance or refinance the acquisition of fixed or capital assets (whether
pursuant to a loan, a Financing Lease or otherwise) otherwise permitted pursuant
to this Agreement, and any other Financing Leases, in an aggregate principal
amount not exceeding in the aggregate as to the Company and its Subsidiaries
$3,000,000 at any one time outstanding, provided that such Indebtedness is
incurred substantially simultaneously with such acquisition or within six months
after such acquisition or in connection with a refinancing thereof;
(e) to the extent that any Indebtedness may be incurred or arise
thereunder, Indebtedness of the Company and its Subsidiaries under Permitted
Hedging Arrangements;
(f) other Indebtedness outstanding or incurred under facilities in
existence on the Closing Date and listed on Schedule 8.2(f) hereto, and any
refinancings, refundings, renewals or extensions thereof on financial and other
terms, in the reasonable judgment of the Company, no more onerous to the Company
or any of its Subsidiaries in the aggregate than the financial and other terms
of such Indebtedness, provided that the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to the premium or other amounts paid, and fees and
expenses incurred, in connection with such refinancing, refunding, renewal or
extension;
(g) Indebtedness of Foreign Subsidiaries for working capital
purposes or pursuant to Section 8.6(b) hereof (including in respect of
overdrafts) in an aggregate principal amount at any one time outstanding not
exceeding, as to all such Foreign Subsidiaries, the
28
Foreign Subsidiary Indebtedness Amount, provided that such Indebtedness may
exceed the Foreign Subsidiary Indebtedness Amount so long as the "Available
Revolving Credit Commitments" under the Senior Credit Agreement shall have been
reduced by the amount by which such Indebtedness exceeds the Foreign Subsidiary
Indebtedness Amount;
(h) to the extent that any Guarantee Obligation permitted under
Section 8.4 hereof constitutes Indebtedness, such Indebtedness;
(i) Indebtedness of the Company or any of its Subsidiaries incurred
to finance insurance premiums in the ordinary course of business;
(j) Indebtedness arising from the honoring of a check, draft or
similar instrument against insufficient funds; provided that such Indebtedness
is extinguished within two Business Days of its incurrence;
(k) Indebtedness of the Company or any of its Subsidiaries not
exceeding $5,000,000 in aggregate principal amount at any one time outstanding
under additional senior secured notes (the "ADDITIONAL SENIOR SECURED NOTES")
issued by the Company or any of its Subsidiaries after the date hereof, (i) the
terms of which are identical to the terms of the Senior Secured Notes, except
that the initial interest rate of the Additional Senior Secured Notes shall be
the Adjusted Interest Rate of the Senior Secured Notes in effect on the date of
the closing of the issuance of the Additional Senior Secured Notes and the
applicable initial interest rate under the Additional Senior Secured Notes shall
thereafter increase as provided in Section 1.2(b) of this Agreement and (ii) the
proceeds of which are used to repay other Indebtedness of the Company or its
Subsidiaries, to satisfy trade payables or for investment in working capital;
and
(l) Indebtedness of the Company and any of its Subsidiaries not
otherwise permitted by the preceding clauses of this Section 8.2 hereof which is
secured solely by a lien on Excluded Foreign Accounts of the Company and its
Subsidiaries and which does not exceed $5,000,000 in aggregate principal amount
at any one time outstanding, provided that the "Available Revolving Credit
Commitments" under the Senior Credit Agreement (as defined therein) shall have
been reduced by the amount of such Indebtedness.
With respect to any Indebtedness denominated in a foreign currency, for purposes
of determining compliance with any Dollar-denominated restriction on the
Incurrence of such Indebtedness under this Section 8.2 hereof, the amount of
such Indebtedness shall be calculated monthly based on the currency exchange
rate in effect at such time.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes, assessments and similar charges not yet
delinquent or the nonpayment of which in the aggregate would not reasonably be
expected to have a Material Adverse Effect, or which are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves with
respect thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of
29
more than 60 days or which are being contested in good faith by appropriate
proceedings diligently conducted;
(c) Liens of landlords or of mortgagees of landlords arising by
operation of Law or pursuant to the terms of real property leases, provided that
the rental payments secured thereby are not yet due and payable;
(d) pledges, deposits or other Liens in connection with workers'
compensation, unemployment insurance, other social security benefits or other
insure related obligations (including, without limitation, pledges or deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements);
(e) Liens arising by reason of any judgment, decree or order of any
court or other Governmental Authority, if appropriate legal proceedings which
may have been duly initiated for the review of such judgment, decree or order,
are being diligently prosecuted and shall not have been finally terminated or
the period within which such proceedings may be initiated shall not have
expired;
(f) Liens to secure the performance of bids, trade contracts (other
than for borrowed money), obligations for utilities, leases, statutory
obligations, surety and appeal bonds, performance bonds, judgment and like
bonds, replevin and similar bonds and other obligations of alike nature incurred
in the ordinary course of business;
(g) zoning restrictions, easements, rights-of-way, restrictions on
the use of property, other similar encumbrances incurred in the ordinary course
of business and minor irregularities of title which do not materially interfere
with the ordinary conduct of the business of the Company and its Subsidiaries
taken as a whole;
(h) Liens securing or consisting of Indebtedness of the Company and
its Subsidiaries permitted by Section 8.2(d) hereof incurred to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall be
created no later than the later of the date of such acquisition or the date of
the incurrence or assumption of such Indebtedness, and (ii) such Liens do not at
any time encumber any property other than the property financed by such
Indebtedness and, in the case of Indebtedness assumed in connection with any
such acquisition, the property subject thereto immediately prior to such
acquisition;
(i) Liens existing on assets or properties at the time of the
acquisition thereof by the Company or any of its Subsidiaries that do not
materially interfere with the use, occupancy, operation and maintenance of
structures existing on the property subject thereto or extend to or cover any
assets or properties of the Company or such Subsidiary other than the assets or
property being acquired;
(j) Liens in existence on the Closing Date and listed in Schedule
8.3(j) hereto and other Liens securing Indebtedness of the Company and its
Subsidiaries permitted by Section 8.2(f) hereof, provided that no such Lien is
spread to cover any additional property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased except as permitted by
Section 8.2(f) hereof;
30
(k) Liens first arising prior to the Closing Date securing Guarantee
Obligations permitted under Section 8.4(d) hereof not exceeding (as to the
Company and all its Subsidiaries) $1,000,000 in aggregate amount at any time
outstanding;
(l) Liens created pursuant to the Security Documents or otherwise
securing Indebtedness permitted by Section 8.2(a) hereof or securing Guarantee
Obligations permitted by Section 8.4(i) hereof;
(m) any encumbrance or restriction (including, without limitation,
put and call agreements) with respect to the Capital Stock of any joint venture
or similar arrangement pursuant to the joint venture or similar agreement with
respect to such joint venture or similar arrangement, provided that no such
encumbrance or restriction affects in any way the ability of the Company or any
of its Subsidiaries to comply with Section 8.15(b) hereof;
(n) Liens on property of any Foreign Subsidiary of the Company
securing Indebtedness of such Foreign Subsidiary permitted by Section 8.2(g)
hereof or otherwise permitted under this Agreement;
(o) Liens on Intellectual Property and foreign patents, patent
applications, trademarks, trademark applications, tradenames, copyrights,
technology, know-how and processes to the extent such Liens arise from the
granting of licenses to use such Intellectual Property and foreign patents,
patent applications, trademarks, trademark applications, tradenames, copyrights,
technology, know-how and processes to any Person in the ordinary course of
business of the Company or any of its Subsidiaries;
(p) Liens on Excluded Foreign Accounts of the Company and its
Subsidiaries securing Indebtedness permitted by Section 8.2(l) hereof; and
(q) Liens securing the Indebtedness of the Company or its
Subsidiaries permitted by Section 8.2(k).
8.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer
to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the Closing Date and
listed in Schedule 8.4(a) hereto, and any refinancings, refundings, extensions
or renewals thereof, provided that the amount of such Guarantee Obligation shall
not be increased at the time of such refinancing, refunding, extension or
renewal except to the extent that the amount of Indebtedness in respect of such
Guarantee Obligations is permitted to be increased by Section 8.2(f) hereof;
(b) Guarantee Obligations for performance, appeal, judgment,
replevin and similar bonds and suretyship arrangements, all in the ordinary
course of business;
(c) Reimbursement Obligations in respect of the letters of credit
issued under the Senior Credit Agreement;
(d) Guarantee Obligations in respect of third-party loans and
advances to officers or employees of the Company or any of its Subsidiaries (i)
for travel and entertainment
31
expenses incurred in the ordinary course of business and (ii) for relocation
expenses incurred in the ordinary course of business;
(e) obligations to insurers required in connection with worker's
compensation and other insurance coverage incurred in the ordinary course of
business;
(f) obligations of the Company and its Subsidiaries under Permitted
Hedging Arrangements;
(g) guarantees made in the ordinary course of its business by the
Company or any of its Subsidiaries of obligations of the Company or any of its
Subsidiaries, which obligations are otherwise permitted under this Agreement;
(h) Guarantee Obligations in connection with sales or other
dispositions permitted under Section 8.6 hereof, including indemnification
obligations with respect to leases, and guarantees of collectability in respect
of accounts receivable or notes receivable for up to face value;
(i) Guarantee Obligations incurred pursuant to the Guarantee and
Collateral Agreement or otherwise in respect of Indebtedness permitted by
Section 8.2(a) hereof;
(j) guarantees by Subsidiaries of the Company set forth in the 10.5%
Subordinated Note Documents, the 11% Subordinated Note Documents and the New
Telex Subordinated Note Documents, which guarantees are subordinated as provided
in each such document;
(k) guarantees of Indebtedness of Foreign Subsidiaries permitted by
Section 8.2(g) hereof;
(l) Guarantee Obligations in respect of letters of credit issued for
the account of Foreign Subsidiaries, and guarantees thereof, provided that the
aggregate amount of such Guarantee Obligations, taken together with the
aggregate amount of other Indebtedness of Foreign Subsidiaries outstanding
pursuant to Section 8.2(g) hereof, shall not exceed the aggregate amount of such
Indebtedness permitted pursuant to such Section;
(m) Guarantee Obligations made by the Company or any of its
Subsidiaries to enable customers of the Company or any of its Subsidiaries to
obtain financing for the purchase of goods or services of the Company or any of
its Subsidiaries, provided that the aggregate amount of all such Guarantee
Obligations shall not at any one time exceed $1,000,000; and
(n) Guarantee Obligations made by the Company or any of its
Subsidiaries in respect of Indebtedness permitted by Section 8.2(k) hereof.
8.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except:
32
(a) any Subsidiary of the Company may be merged or consolidated with
or into the Company, or with or into any one or more Wholly Owned Subsidiaries
of the Company, provided that the Company or such Wholly Owned Subsidiary or
Subsidiaries of the Company shall be the continuing or surviving entity;
(b) any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Company or any Wholly Owned Subsidiary of the Company; and
(c) as expressly permitted by Sections 8.6 and 8.15 hereof.
8.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, Accounts and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary of the Company, issue or sell any
shares of such Subsidiary's Capital Stock, to any Person other than the Company
or any Wholly Owned Subsidiary of the Company, except:
(a) the sale or other Disposition of any property (including
Inventory) in the ordinary course of business;
(b) the sale or discount without recourse of accounts receivable or
notes receivable arising in the ordinary course of business, or the conversion
or exchange of accounts receivable into or for notes receivable, in connection
with the compromise or collection thereof provided that, in the case of any
Foreign Subsidiary of the Company, any such sale or discount may be with
recourse if such sale or discount is consistent with customary practice in such
Foreign Subsidiary's country of business and the aggregate amount of any such
recourse shall be included in the determination of such Foreign Subsidiary's
Indebtedness for purposes of Section 8.2(g) hereof;
(c) as permitted by Section 8.5(b) hereof and pursuant to Sale and
Leaseback Transactions permitted by Section 8.11 hereof;
(d) Dispositions of any assets or property by the Company or any of
its Subsidiaries to the Company or any Wholly Owned Subsidiary of the Company;
(e) the abandonment or other Disposition of patents, trademarks or
other intellectual property that are, in the reasonable judgment of the Company,
no longer economically practicable to maintain or useful in the conduct of the
business of the Company and its Subsidiaries taken as a whole; provided that an
amount equal to 100% of the Net Cash Proceeds of any such abandonment or other
Disposition is applied in accordance with Section 4.4(d) of the Senior Credit
Agreement;
(f) Asset Sales or other Dispositions by the Company or any of its
Subsidiaries so long as (i) the aggregate consideration received by the Company
or such Subsidiary in connection therewith is not less than the fair market
value of the property subject of such Asset Sale or Disposition and (unless
otherwise consented to by the Required Purchasers) at least 75% of such
consideration is cash, provided that with respect to the sale or Disposition by
the Company of Audio Consultants Co. Ltd., the minimum cash consideration shall
be at least 50%, (ii) the Net Cash Proceeds of any such Asset Sale or
Disposition is applied
33
in accordance with Section 4.4(d) of the Senior Credit Agreement, provided that
the Company shall not be obligated to so apply the Net Cash Proceeds from any
Asset Sale or Disposition until each such time that the cumulative Net Cash
Proceeds from such Asset Sales and Dispositions that have theretofore not been
applied in accordance with Section 4.4 of the Senior Credit Agreement equals or
exceeds $100,000 and (iii) unless otherwise consented to by the Purchasers
(which consent shall not be unreasonably withheld), the Net Cash Proceeds to be
received in connection with such Asset Sale or Disposition to be retained by the
Company with the consent of the Administrative Agent or the holders of the
Senior Loans under the Senior Credit Agreement do not exceed $10,000,000,
provided that such Net Cash Proceeds shall not be applied to the payment of any
Indebtedness (whether principal, interest accrued thereon or costs, expenses or
other amounts connected therewith) ranking pari passu with, or subordinated to,
the Company's Obligations under the Senior Secured Notes and other Note
Documents without the prior written consent of the Required Purchasers;
(g) the sale of all or any part of the assets or Capital Stock of
the Subsidiary or Subsidiaries comprising the Company's military antennae
business, provided that an amount equal to 100% of the Net Cash Proceeds of any
such Asset Sale is applied to mandatory prepayments of the Senior Loans pursuant
to the Senior Credit Agreement, in accordance with Section 4.4(d) thereof (or
any successor provision);
(h) the Disposition by the Company and its Affiliates, in one or
more transactions, of all or part of its hearing aid business (including any
real estate associated therewith) provided, that each such Disposition is to a
non-Affiliate of the Company, is for cash consideration and is entered into on
arms length terms; and
(i) (x) the issuance of Preferred Stock or common stock and warrants
to purchase Preferred Stock or common stock of the Company in consummation of
the Telex Exchange or any exchange, subsequent to the Telex Exchange, of New
Telex Subordinated Notes and/or Preferred Stock or common stock and warrants to
purchase Preferred Stock or common stock of the Company for the 10.5%
Subordinated Notes and the 11% Subordinated Notes and (y) the issuance of
registered securities substantially identical to the New Telex Subordinated
Notes and the Preferred Stock or common stock and warrants to purchase Preferred
Stock or common stock of the Company in exchange for the New Telex Subordinated
Notes and the Preferred Stock or common stock and the warrants to purchase
Preferred Stock or common stock of the Company pursuant to the registration
obligations of the Company under the Telex Exchange.
8.7 Limitation on Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of the Company or options,
warrants or other rights to purchase common stock of the Company) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of the Company or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution (other than distributions payable
solely in common stock of the Company or options, warrants or other rights to
purchase common stock of the Company) in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Company.
34
8.8 Limitation on Capital Expenditures. Make or commit to make any Capital
Expenditures (excluding any expenses incurred in connection with normal
replacement and maintenance programs properly charged to current operations and
excluding any Reinvested Amounts); provided that the Company and its
Subsidiaries may make Capital Expenditures in an amount not to exceed, for any
test period set forth below, the amount set forth opposite such test period
below:
Test Period Amount
----------- ------
January 1, 2001 - December 31, 2001 $8,000,000
January 1, 2002 - December 31, 2002 $8,000,000
January 1, 2003 - December 31, 2003 $8,000,000
January 1, 2004 - July 31, 2004 $4,666,667;
provided that an amount, not to exceed $4,000,000 for any test period, of
Capital Expenditures permitted to be made during any test period and not made
during such test period may be carried over and expended during the next
succeeding test period only.
8.9 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment, in cash or by transfer of assets or
property, in (each an "INVESTMENT"), any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in cash and Cash Equivalents;
(c) Investments existing on the Closing Date and described in
Schedule 8.9(c) hereto, setting forth the respective amounts of such Investments
as of a recent date;
(d) Investments in notes receivable and other instruments and
securities obtained in connection with transactions permitted by Section 8.6(c)
hereof;
(e) (i) loans and advances to officers, directors or employees of
the Company or any of its Subsidiaries in the ordinary course of business for
travel and entertainment expenses or relocation expenses or (ii) relating to
indemnification or reimbursement of any officers, directors or employees in
respect of liabilities relating to their serving in any such capacity or as
otherwise specified in Section 8.10 hereof;
(f) Investments by the Company in its Wholly Owned Subsidiaries and
by such Wholly Owned Subsidiaries in the Company and in Wholly Owned
Subsidiaries of the Company;
(g) Investments of the Company and its subsidiaries under Permitted
Hedging Arrangements;
(h) Investments in the nature of pledges or deposits with respect to
leases or utilities provided to third parties in the ordinary course of business
or otherwise described in Section 8.3(c), (d) or (f) hereof;
35
(i) Investments representing non-cash consideration received by the
Company or any of its Subsidiaries in connection with any Asset Sale, provided
that, unless the Required Purchasers shall otherwise consent, in the case of any
Asset Sale permitted under Section 8.6(g) hereof, such non-cash consideration
constitutes not more than 25% of the aggregate consideration received in
connection with such Asset Sale and any such non-cash consideration received by
the Company or any of its Domestic Subsidiaries is pledged to the Purchasers
pursuant to the Security Documents;
(j) Investments representing evidences of Indebtedness, securities
or other property received from another Person by the Company or any of its
Subsidiaries in connection with any bankruptcy proceeding or other
reorganization of such other Person or as a result of foreclosure, perfection or
enforcement of any Lien or exchange for evidences of Indebtedness, securities or
other property of such other Person held by the Company or any of its
Subsidiaries; provided that any such securities or other property received by
the Company or any of its Domestic Subsidiaries is pledged to the Purchasers
pursuant to the Security Documents; and
(k) Investments by the Company or any of its Subsidiaries in a
Person in connection with a joint venture or similar arrangement in respect of
which no other coinvestor or other Person has a greater legal or beneficial
ownership interest than the Company or such Subsidiary so long as any such
Investment either was first made prior to the Closing Date, or if made
thereafter, the cash Investment does not in the aggregate exceed, unless
otherwise agreed by the Required Purchasers, an amount equal to $500,000
(exclusive of any undistributed profits of any such joint venture or similar
arrangement that may accumulate).
8.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement and (b) upon
terms no less favorable to the Company or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate; provided that nothing contained in this Section 8.10
hereof shall be deemed to prohibit:
(i) the payment of transaction expenses in connection with
this Agreement, the Note Purchase Transactions and the Telex Exchange,
including, but not limited to, the payment by the Company of the
Commitment Fee due to GSCP Recovery or any of its Affiliates other than
the Company or any of its Subsidiaries;
(ii) the Company or any of its Subsidiaries from entering into
or performing an agreement with GSCP for the rendering of management
consulting or financial advisory services for compensation not to exceed
in the aggregate $1,720,000 per year plus reasonable out-of-pocket
expenses; provided that at any time during which a Default or an Event of
Default has occurred and is continuing, the Company and its Subsidiaries
may not make any payments to GSCP under any such agreement and such
payments may accrue to GSCP and may be paid in full after such Default or
Event or Default has been cured or waived; provided further that at any
time during which the Company and its Subsidiaries are not permitted to
make payments to GSCP under any such agreements, GSCP may elect to receive
Capital Stock of the Company in lieu of such payments;
36
(iii) the Company or any of its Subsidiaries from entering
into, making payments pursuant to and otherwise performing an
indemnification and contribution agreement in favor of any person who is
or becomes a director, officer, agent or employee of the Company or any of
its Subsidiaries, in respect of liabilities (A) arising under the
Securities Act, the Exchange Act and any other applicable securities laws
or otherwise, in connection with any offering of securities by the Company
or any of its Subsidiaries, (B) incurred to third parties for any action
or failure to act of the Company or any of its Subsidiaries, predecessors
or successors, (C) arising out of the fact that any indemnitee was or is a
director, officer, agent or employee of the Company or any of its
Subsidiaries, or is or was serving at the request of any such corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or enterprise or (D) to the fullest
extent permitted by Delaware or other applicable state Law, arising out of
any breach or alleged breach by such indemnitee of his or her fiduciary
duty as a director or officer of the Company or any of its Subsidiaries;
(iv) the Company or any of its Subsidiaries from performing
any agreements or commitments with or to any Affiliate existing on the
Closing Date and described on Schedule 8.10 hereto;
(v) any transaction permitted under Section 8.3(k), 8.4(d),
8.4(i), 8.4(j), 8.4(k), 8.5, 8.7, 8.9(e) or 8.9(k) hereof, or any
transaction with a Wholly Owned Subsidiary of the Company;
(vi) [Intentionally Omitted]; or
(vii) the making of loans to the Company or its Subsidiaries
by GSCP Recovery or any Affiliate thereof other than the Company and its
Subsidiaries pursuant to this Agreement or the Additional Senior Secured
Notes.
For purposes of this Section 8.10, any transaction with any Affiliate shall be
deemed to have satisfied the standard set forth in clause (b) of the first
sentence hereof if (i) such transaction is approved by a majority of the
Disinterested Directors of the board of directors of the Company or such
Subsidiary or (ii) in the event that at the time of any such transaction, there
are no Disinterested Directors serving on the board of directors of the Company
or such Subsidiary, such transaction shall be approved by a nationally
recognized expert with expertise in appraising the terms and conditions of the
type of transaction for which approval is required.
8.11 Limitation on Sale and Leaseback Transactions. Enter into any
arrangement with any Person providing for the leasing by the Company or any of
its Subsidiaries of real or personal property which has been or is to be sold or
transferred by the Company or any such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary (any of such arrangements, a "SALE AND LEASEBACK TRANSACTION"), other
than in connection with any Disposition permitted under Section 8.6 hereof and
except for Sale and Leaseback Transactions entered into by the Company or any
such Subsidiary with respect to real or personal property with an aggregate book
value not to exceed $1,000,000 at any one time.
37
8.12 Limitation on Optional Payments and Modifications of Debt Instruments
and Other Documents.
(a) Make any purchase or redemption of any of the 10.5% Subordinated
Notes, the 11% Subordinated Notes or the New Telex Subordinated Notes,
including, without limitation, any payments on account of, or for a sinking or
other analogous fund for, the purchase, redemption, defeasance or other
acquisition thereof, except payments of interest, as required by the terms of
the 10.5% Subordinated Notes and the 10.5% Subordinated Note Indenture, as the
case may be, or the 11% Subordinated Notes and the 11% Subordinated Note
Indenture, as the case may be (such interest payments not to exceed, in
aggregate $50,000.00 following the Closing Date to the end of 2001 and in
aggregate $100,000.00 for each fiscal year thereafter), in each case, only to
the extent permitted under the subordination provisions, if any, applicable
thereto. However, the foregoing shall not prohibit (i) the Telex Exchange or any
exchange, subsequent to the Telex Exchange, of New Telex Subordinated Notes
and/or Preferred Stock or common stock and warrants to purchase Preferred Stock
or common stock of the Company for the 10.5% Subordinated Notes and the 11.5%
Subordinated Notes or (ii) the issuance by the Company of registered securities
substantially identical to the New Telex Subordinated Notes and the Preferred
Stock or common stock and warrants to purchase Preferred Stock or common stock
of the Company in exchange for the New Telex Subordinated Notes and the
Preferred Stock or common stock and warrants to purchase Preferred Stock or
common stock of the Company pursuant to the registration obligations of the
Company under the Telex Exchange.
(b) Without prejudice to Section 8.12(a) above, make any payment to
or for the benefit of holders of the New Telex Subordinated Notes in respect of
the New Telex Subordinated Notes or the New Telex Senior Subordinated Indenture,
unless the Company shall have (i) made payment in full of the Senior Secured
Notes and all Obligations of the Company and any other amounts then due and
owing to any Purchaser hereunder and under any other Note Document or (ii) made
an offer to pay the Senior Secured Notes and all Obligations of the Company and
any amounts then due and owing to each Purchaser hereunder and under any other
Note Document and shall have made payment in full thereof to each such Purchaser
that has accepted such.
(c) In the event of the occurrence of a Change of Control, purchase
the 10.5% Subordinated Notes, the 11% Subordinated Notes or the New Telex
Subordinated Notes or any portion of any thereof, unless the Company shall have
(i) made payment in full of the Senior Secured Notes and all Obligations of the
Company and any other amounts then due and owing to any Purchaser hereunder and
under any other Note Document or (ii) made an offer to pay the Senior Secured
Notes and all Obligations of the Company and any amounts then due and owing to
each Purchaser hereunder and under any other Note Document and shall have made
payment in full thereof to each such Purchaser that has accepted such.
(d) Amend, supplement, waive or otherwise modify, including by an
exchange (other than in the case of the 10.5% Subordinated Notes and the 11%
Subordinated Notes, by the Telex Exchange and other than in connection with the
issuance by the Company of registered securities substantially identical to the
New Telex Subordinated Notes in exchange for the New Telex Subordinated Notes
pursuant to the registration obligations of the Company under the Telex
Exchange), any of the provisions of any of the 10.5% Subordinated Notes, the
10.5%
38
Subordinated Note Documents, the 11% Subordinated Notes, the 11% Subordinated
Note Documents, the New Telex Subordinated Notes or the New Telex Subordinated
Note Documents:
(i) which amends or modifies the subordination provisions, if
any, contained therein or relating thereto;
(ii) which shortens the fixed maturity or increases the
principal amount of, or increases the rate or shortens the time of payment
of interest on, or increases the amount or shortens the time of payment of
any principal or premium payable whether at maturity, at a date fixed for
prepayment or by acceleration or otherwise of the Indebtedness evidenced
by the 10.5% Subordinated Notes, the 11% Subordinated Notes or the New
Telex Subordinated Notes, or increases the amount of, or accelerates the
time of payment of, any fees or other amounts payable in connection
therewith, or changes scheduled interest payment dates;
(iii) which relates to any material affirmative or negative
covenants or any events of default or remedies thereunder and the effect
of which is to subject the Company or any of its Subsidiaries to any more
onerous or more restrictive provisions; or
(iv) which otherwise adversely affects the interests of the
Purchasers as senior creditors with respect to the 10.5% Subordinated
Notes, the 11% Subordinated Notes or the New Telex Subordinated Notes or
the interests of the Purchasers, or any of them, hereunder or under any
other Note Document in any material respect.
(e) Amend, supplement, waive or otherwise modify, including by a
refinancing, any of the provisions of the Senior Credit Documents except in a
manner that does not conflict with the Intercreditor Agreement and as is not
reasonably likely to materially adversely affect the rights and remedies of the
Purchasers hereunder. The Company shall use its reasonable best efforts to give
written notice to each Purchaser at least three Business Days, but not more than
ten Business Days, prior to entering into any agreement with respect to any such
proposed amendment, supplement, waiver or other modification.
(f) Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Indebtedness that
permits, extends, renews, replaces or otherwise refinances (collectively,
"REFINANCED INDEBTEDNESS") Indebtedness that is subordinated in right of payment
to the Senior Secured Notes or any Guarantor's Obligations under the Note
Documents unless such Refinanced Indebtedness shall be subordinated to the
Company's Obligations under or in connection with the Senior Secured Notes (or
such Obligations of the Guarantors, as the case may be) to at least the same
extent as such subordinated Indebtedness that has been refinanced; provided that
the Additional Senior Secured Notes shall not be prohibited hereunder.
(g) Incur, or permit any of its Subsidiaries to incur, any
Indebtedness that by its terms (or by the terms of any agreement governing such
Indebtedness) is subordinated in right of payment to any other Indebtedness of
the Company or any of its Subsidiaries unless such Indebtedness is also by its
terms (or by the terms of any agreement governing such Indebtedness) made
expressly subordinate in right of payment to the Company's Obligations under or
in
39
connection with the Senior Secured Notes or any Guarantor's Obligations under
the Note Documents pursuant to subordination provisions of such Indebtedness (or
such agreement) that are most favorable to the holders of any other Indebtedness
of the Company or such Subsidiary, as the case may be; provided that the
Additional Senior Secured Notes shall not be prohibited hereunder.
(h) Directly or indirectly incur, contingently or otherwise, or
permit any Guarantor to, directly or indirectly, incur, contingently or
otherwise, any Indebtedness (other than the Senior Secured Notes and the
Guarantor's Obligations under the Note Documents, as the case may be) that is
(i) subordinate in right of payment to the Senior Debt Obligations and (ii)
senior in right of payment to the Company's Obligations under or in connection
with the Senior Secured Notes and other Note Documents or the Obligations of any
Guarantor hereunder or thereunder, as the case may be; provided that the
Additional Senior Secured Notes shall not be prohibited hereunder. For purposes
of this Section 8.12, Indebtedness shall be deemed to be the senior in right of
payment to the Senior Secured Notes (and the Company's Obligations thereunder or
with respect thereto) or the Obligations of any Guarantor hereunder or under any
other Note Document, as the case may be, if it is not expressly subordinated in
right of payment to the Senior Debt Obligations at least to the same extent as
the Senior Secured Notes and the Obligations of any Guarantor hereunder or
thereunder, as the case may be, are subordinated to the Senior Debt Obligations;
provided that this Section 8.12(h) shall not apply to Indebtedness incurred by
any Foreign Subsidiary with Excluded Foreign Accounts.
Notwithstanding anything in this Section 8.12, any refinancing of the Company's
Obligations under the New Telex Subordinated Note Documents shall be permitted
(such Refinanced Indebtedness, the "PERMITTED REFINANCED INDEBTEDNESS") provided
that (x) such Indebtedness shall mature and the principal thereof become due and
payable after the Maturity Date, (y) the annual interest payable thereon in cash
shall not exceed the aggregate annual interest payable in cash on the New Telex
Subordinated Notes, and (z) such Indebtedness shall be subordinate in right of
payment to the Senior Secured Notes at least to the same extent as the
Indebtedness being refinanced.
8.13 Limitations on Changes in Fiscal Year. Permit the fiscal year of the
Company to end on a day other than December 31.
8.14 Limitation on Negative Pledge Clauses. Enter into with any Person any
agreement, other than (a) this Agreement, the other Note Documents and any
related documents, (b) the Senior Credit Documents, and (c) any purchase money
mortgages, acquisition agreements, Financing Leases or operating leases of real
property entered into in the ordinary course of business, which prohibits or
limits the ability of the Company or any of its Subsidiaries to create, incur,
assume or suffer to exist any lien in favor of the Purchasers in respect of
obligations and liabilities under this Agreement, any Senior Secured Notes or
any other Note Documents upon any of its property, assets or revenues, whether
now owned or hereafter acquired except for any such agreement relating to
Indebtedness of a Foreign Subsidiary permitted by Section 8.2(g) hereof or
otherwise permitted under this Agreement.
40
8.15 Limitation on Lines of Business; Creation of Subsidiaries.
(a) Enter into any business, either directly or through any
Subsidiary or joint venture, except for those businesses of the same general
type as those in which the Company and its Subsidiaries are engaged on the
Closing Date or which are directly related thereto.
(b) Create any new Subsidiary of the Company other than any new
Subsidiary that (i) in the case of a new Domestic Subsidiary, shall execute and
deliver to the Co-Agents, as applicable, a Guarantee and Collateral Agreement
supplement and appropriate Mortgages and other security documents and take any
necessary steps to perfect the security interests to be created thereby and (ii)
for which the relevant parent corporation, if such parent corporation is the
Company or a Domestic Subsidiary (other than Telex Communications International,
Ltd.), shall execute and deliver to the Co-Agents a stock pledge agreement and
take any necessary steps to perfect the security interest to be created thereby,
which security interest shall not apply to more than 65% of such parent
corporation's ownership interest in any Foreign Subsidiary.
(c) To the extent not prohibited by this Agreement, convey, sell or
otherwise transfer shares of Capital Stock of a Foreign Subsidiary to the
Company or any Domestic Subsidiary of the Company unless at the time of such
conveyance, sale or transfer (or promptly thereafter) the Company or such
Domestic Subsidiary shall execute and deliver to the Co-Agents a Guarantee and
Collateral Agreement (or supplement thereto), together with any other Security
Documents that the Required Purchasers may determine necessary and take any
necessary steps to perfect the security interest to be created thereby (which
security interest shall not apply to (i) more than 65% of the Company's or such
Domestic Subsidiary's ownership interest in any Foreign Subsidiary or (ii) any
ownership interest in a non-Wholly Owned Foreign Subsidiary to the extent that
the grant of such security interest would violate the terms of any agreements
under which the Investment by the Company or any or its Subsidiaries was made
therein).
8.16 Limitations on Currency and Commodity Hedging Transactions. Enter
into, purchase or otherwise acquire agreements or arrangements relating to
currency, commodity or other hedging except, to the extent and only to the
extent that, such agreements or arrangements are entered into, purchased or
otherwise acquired in the ordinary course of business of the Company or any of
its Subsidiaries with reputable financial institutions and not for purposes of
speculation (any such agreement or arrangement permitted by this Section, a
"PERMITTED HEDGING ARRANGEMENT").
8.17 Holding Company Status of Telex Communications International, Ltd. In
the case of Telex Communications International, Ltd., permit Telex
Communications International, Ltd. to engage in any business other than (i) the
owning of the Capital Stock of the Foreign Subsidiaries and (ii) any business or
other activities reasonably related to the foregoing, or to incur any material
liabilities other than any liabilities (x) reasonably related to the foregoing
or (y) arising by operation of Law.
8.18 Payment of Special Bonuses to Management. At any time when a Default
or an Event of Default has occurred and is continuing, make any cash payments to
its management in respect of special bonuses, provided that such payments may
accrue to such persons otherwise entitled to such payments and may be paid in
full after such Default or Event or Default has been cured or waived, and
provided further that at any time when the Company and its Subsidiaries
41
are not permitted to make such payments to management, any of such persons
otherwise entitled to such payments may elect to receive Capital Stock of the
Company in lieu of such payments.
ARTICLE 9. EVENTS OF DEFAULT.
9.1 Events of Default. The occurrence of any of the following events shall
constitute an "EVENT OF DEFAULT" hereunder:
(a) failure of the Company to pay any principal, interest, fees or
expenses or other Obligations of the Company under or in connection with the
Senior Secured Notes or any other Note Document in accordance with the terms
hereof or thereof when due, whether at stated maturity, by acceleration or
otherwise;
(b) breach by the Company of any representation or warranty, or
failure to comply with any covenant, contained in this Agreement (other than
under a provision covered by subsection (a) above), the other Note Documents or
any other agreement, document, instrument or certificate among the Company and
the Purchasers (or any of them) or executed by the Company in favor of any
Purchaser, which breach or failure shall continue unremedied more than 14
Business Days after receipt of notice of such breach from any Purchaser or
Purchasers holding Senior Secured Notes evidencing at least $5,000,000 of
Indebtedness, (such grace period to apply only to the extent such breach or
failure is curable within such 14-Business Day period);
(c) (i) the Company or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future Law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Company or any
of its Subsidiaries shall make a general assignment for the benefit of
creditors; or (ii) there shall be commenced against the Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for 60 days after the entry thereof; or (iii) there shall be commenced
against the Company or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal for 60 days;
(d) an event of default shall occur and be continuing under the
Senior Credit Documents, the New Telex Subordinated Note Documents, or any of
them;
(e) a Change in Control shall have occurred;
(f) the Company or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness or in the payment of any
Guarantee Obligation (other than as provided in Section 9.1(a) above) the
aggregate principal amount of the series of Indebtedness under which such
Indebtedness is issued and the aggregate principal amount of the
42
obligation guaranteed by such Guarantee equals or exceeds $1,000,000; or (ii)
default in the observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become due prior to its stated maturity or such Guarantee
Obligations to become payable;
(g) (i) any material covenant, agreement or obligation of any party
contained in or evidenced by any of the Note Documents, including, without
limitation, that any guarantee made by any Guarantor (as defined therein) under
the Guarantee and Collateral Agreement, shall for any reason cease to be
enforceable in accordance with its terms, or any party (other than Purchasers)
to any Note Document shall deny or disaffirm it obligations under any of the
Note Documents (including, without limitation, any such Guarantor shall so
assert with respect to such Guarantor's guarantee under the Guarantee and
Collateral Agreement), or any Note Document shall be cancelled, terminated,
revoked or rescinded without the express prior written consent of Purchasers,
(ii) any of the Note Documents shall cease for any reason to be in full force
and effect (other than in accordance with the terms hereof or thereof) or any
action or proceeding shall have been commenced by any Person (other than other
than the Purchasers) seeking to cancel, revoke, rescind or disaffirm the
obligations of any party to any Note Document, (iii) any court or other
governmental authority shall issue a final judgment, order, decree or ruling for
the payment of money (a "JUDGMENT") and such Judgment is in an amount
(determined after an allowance for the application of any insurance proceeds to
such Judgment) in excess of $250,000 and enforcement proceedings shall have been
commenced upon any such Judgment or any such Judgment shall remain unpaid after
a period of 10 consecutive days during which a stay of such enforcement of any
such Judgment, including, without limitation, by reason of a pending appeal or
otherwise, shall not be in effect;
(h) any Security Document after delivery thereof pursuant to Section
4.4 or 7.9 hereof shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected Lien, (which Liens, or any of
them, become subordinated in right or priority to any Lien granted other than
pursuant to the Senior Credit Documents and/or in accordance with the terms of
the Intercreditor Agreement or any Lien permitted hereunder), on and security
interest in the Collateral purported to be covered thereby; and
(i) the Company or any of its Subsidiaries shall have concealed,
removed or permitted to be concealed or removed any part of its assets or
property with an intent to hinder, delay or defraud its creditors or any of them
or made or suffered a transfer of any of its assets or property or incurred an
obligation which may be fraudulent under any Bankruptcy Law, fraudulent
conveyance or other similar Law;
(j) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the
43
assets of either of the Company or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is in the reasonable opinion of the
Administrative Agent likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) either of the Company or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Administrative
Agent is likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan, or (vi) any other
event or condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could be reasonably expected to result
in a Material Adverse Effect;
(k) The 10.5% Subordinated Notes and the 11% Subordinated Notes, for
any reason, shall not be or shall cease to be validly subordinated as provided
therein and in the 10.5% Subordinated Note Documents and the 11% Subordinated
Note Documents to the Obligations of the Company under this Agreement, any
Senior Secured Notes and the other Note Documents, or the Obligations of any
Guarantor (as defined in the Guarantee and Collateral Agreement) under a
guarantee of the 10.5% Subordinated Notes and the 11% Subordinated Notes, for
any reason, shall not be or shall cease to be validly subordinated as provided
therein and in the 10.5% Subordinated Note Documents and the 11% Subordinated
Note Documents to the obligations of such Guarantor under the Guarantee and
Collateral Agreement; or
(l) The New Telex Subordinated Notes, for any reason, shall not be
or shall cease to be validly subordinated as provided therein and in the New
Telex Subordinated Note Documents to the Obligations of the Company under this
Agreement, any Senior Secured Notes and the other Note Documents, or the
Obligations of any Guarantor (as defined in the Guarantee and Collateral
Agreement) under a guarantee of the New Telex Subordinated Notes, for any
reason, shall not be or shall cease to be validly subordinated as provided
therein and in the New Telex Subordinated Note Documents to the obligations of
such Guarantor under the Guarantee and Collateral Agreement.
9.2 Acceleration. The Purchasers, and each of them, upon the occurrence of
an Event of Default that has not been waived by the Required Purchasers, by
delivery of written notice to the Company may, subject in each case to the terms
of the Intercreditor Agreement, take any or all of the following actions without
prejudice to the rights of any Purchaser to enforce its claims against the
Company:
(a) declare all or any part of the Obligations hereunder to be
immediately due and payable (except with respect to any Event of Default set
forth in Section 9.1(c) hereof, in which case all such Obligations shall
automatically become immediately due and payable without the necessity of any
notice or other demand) without presentment, demand, protest or any other action
or obligation of any Purchaser; and
(b) deliver notice to the trustee for each of the 10.5% Subordinated
Notes, the 11% Subordinated Notes and the New Telex Subordinated Notes for the
purpose of blocking payments to such trustees and the holders of the 10.5%
Subordinated Notes, the 11% Subordinated Notes and the New Telex Subordinated
Notes, or any of them.
44
If at any time after acceleration of the maturity of the Senior Secured Notes
held by any Purchaser, the Company shall pay all arrears of interest, costs and
expenses and all payments on account of principal of such Senior Secured Notes,
which shall have become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by Law, on overdue interest, at the rates
specified in this Agreement) and all Events of Default and Defaults (other than
nonpayment of principal of and accrued interest on such Senior Secured Notes and
other Obligations hereunder due and payable solely by virtue of acceleration)
shall have been remedied or waived, then by written notice to the Company, the
Required Purchasers may elect, in their sole discretion, to rescind and annul
the acceleration and its consequences. Any action pursuant to the foregoing
sentence shall not affect any subsequent Default or Event of Default or impair
any right or remedy consequent thereon. The provisions of the preceding
sentences are intended merely to bind the Required Purchasers to a decision that
may be made at their election. In no event are the provisions of this Section
9.2 intended to benefit the Company or any other Person, nor does this Section
9.2 give the Company or any other Person the right to require the Required
Purchasers to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
9.3 Remedies on Default.
(a) If an Event of Default occurs and is continuing, the Required
Purchasers may, subject in each case to the terms of the Intercreditor
Agreement, pursue for the ratable benefit of the Purchasers and the other
holders of Senior Secured Notes any available remedy to collect the payment of
principal of, or premium or interest on, the Senior Secured Notes, or to enforce
the performance of any provision of the Senior Secured Notes, the Security
Documents, this Agreement or any other Note Document. A delay or omission by any
Purchaser or the Required Purchasers in exercising any right or remedy with
respect to any Event of Default shall not impair such right or remedy or
constitute a waiver of or acquiescence on the Event of Default. All remedies are
cumulative to the extent permitted by Law.
(b) Subject to the terms of the Intercreditor Agreement, the
Required Purchasers may direct the time, method and place of conducting any
proceeding for any remedy available to the Purchasers.
(c) Notwithstanding any other provision of this Agreement, but
subject to the terms of the Intercreditor Agreement, the right of any Purchaser
or other holder of Senior Secured Notes to receive payment of principal of, and
interest on the Senior Secured Notes held by such Purchaser or other holder, or
to being suit for the enforcement of any such payment or to exercise such
Purchaser's or other holder's rights with respect to the Collateral under the
Security Documents or otherwise at law or equity, shall not be impaired or
affected without the consent of such Purchaser.
ARTICLE 10. REGISTRATION; EXCHANGE; SUBSTITUTION OF SENIOR SECURED NOTES.
10.1 Registration of Senior Secured Notes. The Company shall keep at its
principal executive office a register for the registration of the Senior Secured
Notes and transfers thereof. The name and address of each holder of one or more
Senior Secured Notes, each transfer thereof and the name and address of each
transferee of such Senior Secured Notes shall be registered in
45
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Senior Secured Note shall be registered shall be deemed to be
and treated as the owner and holder thereof for all purposes hereunder and under
the other Note Documents, and the Company shall not be affected by any notice or
knowledge to the contrary. The Company shall give to each holder of a Senior
Secured Note, promptly upon request therefor, a complete and correct copy of the
names and addresses of all registered holders of Senior Secured Notes.
10.2 Transfer and Exchange of Senior Secured Notes.
(a) Upon surrender of any Senior Secured Note at the principal
executive office of the Company for registration of transfer or exchange (and,
in the case of a surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Senior Secured Note, or its attorney duly authorized in writing,
and accompanied by the address for notices of each transferee of such Senior
Secured Note or part thereof), the Company shall execute and deliver, at the
Company's expense (except as provided below), one or more new Senior Secured
Notes (as requested by the holder thereof) in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Senior
Secured Note. Each such new Senior Secured Note shall be payable to such Person
or Persons as such holder may request and shall be substantially in the form of
Exhibit A hereto. Each such new Senior Secured Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered
Senior Secured Note or dated the date of the surrendered Senior Secured Note if
no interest shall have been paid thereon. The Company shall pay any stamp tax or
governmental charge imposed in respect of any transfer of Senior Secured Notes.
Senior Secured Notes shall not be transferred by any holder of Senior Secured
Notes to any Person that is a direct competitor of the Company without the
Company's prior written consent and shall be transferred solely in denominations
equal to or greater than the lesser of $100,000 or the entire principal amount
of the Senior Secured Note to be transferred, which Senior Secured Note shall be
transferable solely in whole and not in part.
(b) Each transferee, by its acceptance of a Senior Secured Note
registered in its name (or the name of its nominee), shall be deemed (i) to be a
"Purchaser" for all purposes hereunder, including, without limitation, to have
made the representations set forth in Article 6 hereof and (ii) to confirm to
and agree with the transferor of such Senior Secured Note and the other parties
hereto as follows: (A) other than as provided in any written instrument of
transfer executed by such transferor and such transferee, such transferor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Note Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, this Agreement or any
other Note Document or any other instrument or document furnished pursuant
hereto or thereto; (B) such transferor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or the performance or observance by the Company of any of its obligations under
any Note Document or any other instrument or document furnished pursuant
thereto; (C) such transferee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 5.4 hereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to purchase the Senior
Secured Note; and (D) such transferee will, independently and without reliance
upon the transferor or any other holder of Senior Secured Notes, and based on
such documents and information as it shall deem appropriate at the time,
46
continue to make its own credit decisions in taking or not taking action under
this Agreement; and (D) such transferee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a holder of a Senior Secured
Note.
(c) Notwithstanding anything to the contrary in this Section 10.2,
for so long as the Senior Secured Notes shall be or be deemed to be restricted
securities under any applicable Law, no Senior Secured Notes shall be
transferable unless registered under the Securities Act and applicable state
securities laws or exempt from such registration. The Company shall be entitled
to an opinion of counsel in form and substance reasonably acceptable to the
Company with respect to any such exemption.
10.3 Replacement of Senior Secured Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Senior Secured Note, and
(a) in the case of loss, theft or destruction, of an indemnity
reasonably satisfactory to the Company, or
(b) in the case of mutilation, upon surrender and cancellation
thereof, the Company, at its own expense, shall execute and deliver, in lieu
thereof, a new Senior Secured Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed or mutilated
Senior Secured Note or dated the date of such lost, stolen, destroyed or
mutilated Senior Secured Note if no interest shall have been paid thereon.
ARTICLE 11. PREPAYMENT; PAYMENT OF SENIOR SECURED NOTES.
11.1 Voluntary Prepayments. The Company may, upon not less than seven, and
not more than 14, Business Days' notice to the Purchasers, prepay the unpaid
principal amount of the Senior Secured Notes, in whole or in part, in cash in
U.S. dollars together with accrued interest thereon and costs incurred in
connection therewith to the date of such prepayment; provided that each partial
prepayment shall be in an aggregate principal amount of not less than the lesser
of $100,000 (so long as the total outstanding principal amount of the Senior
Secured Notes is at least $5,000,000) and the total outstanding principal amount
of the Senior Secured Notes. Each prepayment hereunder shall be made by wire
transfer in immediately available funds to the account or accounts specified in
writing therefor by the Purchasers or other holders holding the Senior Secured
Notes.
11.2 Allocation of Partial Prepayments. Each partial prepayment of the
Senior Secured Notes pursuant to Section 11.1 hereof shall be allocated (in
integral multiples of $1,000) to all Senior Secured Notes then outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment, with adjustments to the extent
applicable to compensate for any prior prepayments not made exactly in such
proportion.
11.3 Payment. The Company will repay the Principal Amount and any other
outstanding principal amount of the Senior Secured Notes, together with accrued
and unpaid
47
interest thereon and costs, expenses and other amounts due with respect thereto,
in full in U.S. dollars in immediately available funds on the Maturity Date.
11.4 Maturity; Surrender, etc. In the case of each prepayment of Senior
Secured Notes pursuant to Section 11.1 hereof, the principal amount of each
Senior Secured Note to be so prepaid or repurchased shall mature and become due
and payable on the date fixed for such prepayment or repurchase, together with
the interest accrued thereon and all costs, expenses and other amounts incurred
in connection therewith to such date. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with such interest and costs, no investor costs shall accrue on such
principal amount. Any Senior Secured Note paid or prepaid in full shall be
surrendered to the Company and canceled and shall not be reissued, and no Senior
Secured Note shall be issued in lieu of any prepaid or repurchased principal
amount of any Senior Secured Note.
11.5 Purchase of Senior Secured Notes. The Company will not purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Senior Secured Notes except in accordance with the terms of this
Agreement, the Senior Secured Notes and the other Note Documents. The Company
will promptly cancel all Senior Secured Notes acquired by it pursuant to any
payment, prepayment or purchase of Senior Secured Notes pursuant to any
provision of this Agreement and no Senior Secured Notes may be issued in
substitution of or exchange for any such Senior Secured Notes. So long as any
Purchaser or any Purchaser's nominee shall be the holder of any Senior Secured
Note, the Company will pay all sums becoming due on such Senior Secured Note(s)
for principal and interest by the method provided for in this Agreement and at
the address specified for such purpose below such Purchaser's name in Schedule I
hereto, or at such other address as such Purchaser shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Senior Secured Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Senior Secured
Note, Purchaser shall surrender such Senior Secured Note for cancellation,
reasonably promptly after any such request, to the Company at its principal
executive office. Prior to any permitted sale, transfer or other disposition of
any Senior Secured Note held by any Purchaser or any Purchaser's nominee, such
Purchaser will, at Purchaser's election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Senior Secured Note to the Company in exchange for a new
Senior Secured Note or Senior Secured Notes pursuant to Section 10.2 above. The
Company will afford the benefits of this Section 11 to any holder of Senior
Secured Notes that is the direct or indirect transferee of any Senior Secured
Note purchased by Purchaser under this Agreement and that has made the same
agreement relating to such Senior Secured Note as such Purchaser has made in
this Section 11.
ARTICLE 12. EXPENSES AND INDEMNIFICATION.
12.1 Transaction Expenses. Whether or not the Note Purchase and the other
Note Purchase Transactions are consummated, the Company will pay all costs and
expenses (including reasonable attorney's fees of a special counsel and, if
reasonably required, local or other counsel) incurred by the Purchasers or any
holders of Senior Secured Notes in connection with the administration of the
Note Documents, including (a) the costs and expenses of any amendments, waivers
or consents under or in respect of this Agreement, the Senior Secured
48
Notes (whether or not such amendment, waiver or consent becomes effective), or
any other Note Document, (b) the costs and expenses incurred in defending (or
determining whether or how to enforce or defend) any rights under this
Agreement, the Senior Secured Notes or any of the other Note Documents or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement, the Senior Secured Notes or any
of the other Note Documents, or by reason of being a holder of any Senior
Secured Note, and (c) subject to the terms of the Intercreditor Agreement, the
reasonable costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or in connection
with any work-out, renegotiation or restructuring of the transactions
contemplated hereby, by the Senior Secured Notes and by the other Note
Documents. The Company will pay and will save each Purchaser and each other
holder of a Senior Secured Note harmless from all claims in respect of any fees,
costs or expenses if any, of brokers and finders (other than those retained by
such Purchaser) or such holder.
12.2 Indemnification.
(a) In the event that the Purchasers, or any of them, or any holder
of any Senior Secured Note becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter contemplated by this
Agreement or any other Note Document, the Company will reimburse each such
Purchaser and holder for legal and other expenses (including, without
limitation, the cost of any investigation and preparation) as they are incurred
by each such Purchaser and holder whether or not such investigation, litigation,
or proceeding is brought by the Company, its directors, shareholders or
creditors or an Indemnified Party, or an Indemnified Party is otherwise a party
thereto. The Company also agrees to indemnify and hold harmless each Purchaser
and each holder of a Senior Secured Note and their respective affiliates and
their respective directors, officers, members, employees, partners, affiliates
and agents (the "INDEMNIFIED PARTIES") from and against any and all losses,
claims, damages, liabilities, obligations, deficiencies, actions, suits,
proceedings, demands, assessments, penalties, costs and expenses (each, a
"LOSS"), joint or several, related to or arising out of any matters contemplated
by this Agreement, unless and only to the extent that a court of competent
jurisdiction shall finally determine that such Loss resulted primarily from such
Purchaser's or such holder's, as the case may be, gross negligence or willful
misconduct and, in the event such Purchaser or such holder is found in any
action, proceeding or investigation to have acted with gross negligence or
willful misconduct, or to have breached such Purchaser's or such holder's
obligations under Section 19.5 hereof, such Purchaser or holder shall repay to
the Company any portion of the amounts paid by the Company pursuant to this
paragraph that is attributable to such action that is the subject of such
finding. The Indemnified Parties will promptly notify the Company upon receipt
of written notice of any claim or threat to institute a claim; provided that any
failure by the Indemnified Parties to give such notice shall not relieve the
Company from the obligation to indemnify the Indemnified Parties.
(b) If any action, claim, investigation or other proceeding is
instituted or threatened against any Indemnified Parties in respect of which
indemnity may be sought hereunder, the Company shall be entitled to assume the
defense thereof with counsel selected by the Company (which counsel shall be
reasonably satisfactory to such Indemnified Parties) and after notice from the
Company to such Indemnified Parties of its election so to assume the defense
thereof, the Company will not be liable to such Indemnified Parties hereunder
for any legal or other expenses subsequently incurred by such Indemnified
Parties in connection with the
49
defense thereof other than reasonable costs of investigation; provided that (i)
if counsel for such Indemnified Parties determines in good faith that there is a
conflict that requires separate representation for the Company and such
Indemnified Parties or (ii) the Company fails to assume or proceed in a timely
and reasonable manner with the defense of such action or fails to employ counsel
reasonably satisfactory to such Indemnified Parties in any such action, then in
either such event, such Indemnified Parties shall be entitled to select one
primary counsel and, if necessary, one local counsel in each relevant
jurisdiction, of their own choice to represent such Indemnified Parties, and the
Company shall not, or no longer, be entitled to assume the defense thereof on
behalf of such Indemnified Parties and such Indemnified Parties shall be
entitled to indemnification for the reasonable expenses (including, without
limitation, reasonable fees and expenses of such counsel) to the extent provided
in the preceding paragraph. Such counsel shall, to the fullest extent consistent
with its professional responsibilities, cooperate with the Company and any
counsel designated by the Company. Nothing contained herein shall preclude any
Purchaser or holder, as the case may be, at its own expense, from retaining
additional counsel to represent such Indemnified Parties in any action with
respect to which indemnity may be sought from the Company hereunder. The Company
shall not be liable under this Agreement for any settlement made by any
Indemnified Parties without the Company's prior written consent, which consent
shall not be unreasonably withheld, unless such Indemnified Parties have made a
reimbursement request pursuant to the provision of this Article 12 and the
Company has failed to satisfy in full such request or made a good faith
objection to such request within 30 days of delivery of such request. The
Company agrees to indemnify and hold harmless any Indemnified Parties from and
against any Loss arising from or under reason of any settlement with the consent
of the Company. The Company shall not settle any such claim or action without
the prior written consent of the applicable Indemnified Parties unless such
settlement provides for a full release of claims against the Indemnified
Parties.
(c) If the indemnification provided for herein is unavailable to an
Indemnified Party in respect of any losses, claims, damages, liabilities or
judgments referred to therein, then the Company, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities and
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and Purchaser on the other from
this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable Law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and Purchaser on the other in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
12.3 Survival. The obligations of the Company under this Section 12 will
survive the payment or transfer of any Senior Secured Note, the enforcement,
amendment or waiver of any provision of this Agreement, the Senior Secured Notes
or any other Note Document, and the termination of this Agreement. This
indemnity is in addition to any other remedies that the Co-Agents and the
Purchasers, or any of them, may have at law or equity.
ARTICLE 13. ENTIRE AGREEMENT.
All statements contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant to this Agreement or any other Note
Document shall be deemed
50
representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement, the Senior Secured Notes and the other
Note Documents embody the entire agreement and understanding among the
Purchasers and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
ARTICLE 14. AMENDMENT AND WAIVER.
14.1 Requirements. This Agreement, the Senior Secured Notes and the other
Note Documents may be amended, and the observance of any term hereof, of the
Senior Secured Notes or of the other Note Documents may be waived (either
retroactively or prospectively), with, and only with, the written consent of the
Company and the Required Purchasers, except that (a) no amendment or waiver of
any of the provisions of Section 1, 2, 3, 4, or 17 hereof, or any defined term
as it is used therein, will be effective as to any Purchaser unless consented to
in writing by such Purchaser and (b) no such amendment or waiver may, without
the written consent of the holder of each Senior Secured Note at the time
outstanding affected thereby (i) change the amount or time of any prepayment,
repurchase or payment of principal of, or reduce the rate, or change the time
fixed for any payment or change the method of computation of interest on, the
Senior Secured Notes, or make any other change that affects the priority or
ranking of the Senior Secured Notes (other than the release of, or other matters
affecting, any Collateral), (ii) modify in any way the definition of "Required
Purchasers" or (iii) amend Article 9 or this Article 14.
14.2 Solicitation of Holders of Senior Secured Notes.
(a) Solicitation. The Company will provide each holder of the Senior
Secured Notes (irrespective of the amount of Senior Secured Notes then owned or
otherwise then held by such holder) with sufficient information, sufficiently
far in advance of the date a decision is required, to enable such holder to make
an informed and considered decision with respect to any proposed amendment,
waiver or consent in respect of any of the provisions hereof or of any other
Note Documents. The Company will deliver executed or true and correct copies of
each amendment, waiver or consent effected pursuant to the provisions of this
Article 14 to each holder of outstanding Senior Secured Notes promptly following
the date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Senior Secured Notes.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Senior
Secured Notes as consideration for or as an inducement to the entering into by
any holder of Senior Secured Notes, or any waiver or amendment of any of the
terms and provisions hereof or of any other Note Document, unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Senior Secured Notes then outstanding even
if such holder did not consent to such waiver or amendment.
14.3 Binding Effect, etc. Any amendment or waiver consented to as provided
in this Article 14 applies equally to all holders of Senior Secured Notes and is
binding upon them, and each of them, and upon each future holder of any Senior
Secured Note and upon the Company without regard to whether such Senior Secured
Note has been marked to indicate such
51
amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived, or impair any right, power or remedy consequent thereon. No
course of dealing nor any delay on the part of any holder of any Senior Secured
Note in exercising any right, power or remedy hereunder or under any other Note
Document shall operate as a waiver of any right, power or remedy of any such
holder of a Senior Secured Note, 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. The remedies provided under
this Agreement and the other Note Documents are cumulative and not exclusive of
any rights, power or remedies provided by applicable Law.
14.4 Senior Secured Notes Held by Company, Etc. Solely for the purpose of
determining whether Required Purchasers have approved or consented to any
amendment, waiver or consent to be given under this Agreement or any other Note
Document, or have directed the taking of any action provided herein or in any
other Note Document to be taken upon the direction thereof, Senior Secured Notes
directly or indirectly owned by the Company or any of its Subsidiaries shall be
deemed not to be outstanding.
ARTICLE 15. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by facsimile if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to a Purchaser or such Purchaser's nominee, to such
Purchaser or its nominee at the address specified for such communications
in Schedule I hereto, or at such other address as such Purchaser or its
nominee shall have specified to the Company in writing,
(ii) if to any other holder of any Senior Secured Note, to
such holder at such address as such other holder shall have specified to
the Company in writing, or
(iii) if to the Company, to Telex Communications, Inc., ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention Chief
Financial Officer, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or at such other address
as the Company shall have specified to the holder of each Senior Secured
Note in writing.
All notices and other communications provided for under this Section 15 will be
deemed given and effective only when actually received.
ARTICLE 16. REPRODUCTION OF DOCUMENTS.
This Agreement, each of the other Note Documents and all documents
relating thereto, including, without limitation, (a) amendments, waivers and
consents of this Agreement or any other Note Document that may hereafter be
executed, (b) documents received by or on behalf of the Purchasers at the
Closing (except the Senior Secured Notes themselves) and (c) financial
statements, certificates and other information previously or hereafter furnished
to the Purchasers,
52
or any of them, may be reproduced by the Purchaser by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process and Purchaser may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable Law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by a Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 16 shall not prohibit the Company or any other holder of Senior Secured
Notes from contesting any such reproduction to the same extent that it could
contest the original, or from introducing evidence to demonstrate the inaccuracy
of any such reproduction.
ARTICLE 17. CONFIDENTIAL INFORMATION.
For the purposes of this Section 17, "CONFIDENTIAL INFORMATION" means
materials, documents and other information delivered to the Purchasers by or on
behalf of the Company in connection with the Note Purchase Transactions, whether
before or after the Closing, that is proprietary in nature and that is clearly
marked or labeled, or otherwise adequately identified when received by the
Purchasers as being confidential information of the Company, provided that such
term does not include information that (a) was publicly known or otherwise known
to any Purchaser prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by any Purchaser or any Person acting
on any Purchaser's behalf in violation of this Section 17, (c) otherwise becomes
known to any Purchaser other than through disclosure by the Company, or (d)
constitutes financial statements delivered to Purchaser under Section 5.4 that
are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser; provided that any Purchaser may
deliver or disclose Confidential Information to (i) such Purchaser's directors,
officers, members, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by such Purchaser's Senior Secured Notes), (ii) such Purchaser's
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 17, (iii) any other holder of any Senior Secured Note,
(iv) any transferee (that is a permitted transferee under this Agreement) to
which such Purchaser sells or offers to sell such Senior Secured Note or any
part thereof or any participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 17), (v) any Person from which such Purchaser offers
to purchase any security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 17), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser's investment portfolio or any other regulatory authority, or (viii)
any other Person to which such delivery or disclosure may be necessary or
appropriate (A) to effect compliance with any Law applicable to such Purchaser,
(B) in response to any subpoena or other legal process, (C) in connection with
any litigation to which such Purchaser is a party or (D) if an Event of Default
shall have occurred and be continuing, to the extent such Purchaser may
reasonably determine such delivery and
53
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under such Purchaser's Senior Secured
Notes, this Agreement and the other Note Documents. Each holder of a Senior
Secured Note, by its acceptance of a Senior Secured Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 17 as
though it were an original party to this Agreement. On the reasonable request of
the Company in connection with the delivery to any holder of a Senior Secured
Note of information required to be delivered to such holder under this Agreement
or requested by such holder (other than a holder that is a party to this
Agreement or its nominee), such holder will enter into an agreement with the
Company embodying the provisions of this Section 17.
ARTICLE 18. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates that constitutes an "accredited investor" as the
purchaser of all or a part of the Senior Secured Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, the term
"Purchaser" as is used in this Agreement shall mean and be a reference to such
Affiliate in addition to (in the case of Section 17 hereof) and in lieu of
(other than under such Section 17), such Purchaser.
ARTICLE 19. THE CO-AGENTS
19.1 Authorization and Action. Each Purchaser hereby appoints and
authorizes the applicable Co-Agent to take such action as Co-Agent on such
Purchaser's behalf and to exercise such powers and discretion under this
Agreement and the other Note Documents as are delegated to the Co-Agents by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Note Documents (including, without limitation, enforcement or collection of
the Company's Obligations hereunder and under the Note Documents), the Co-Agents
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required
Purchasers, and such instructions shall be binding upon all Purchasers and all
other holders of Senior Secured Notes; provided, however, that the Co-Agents, or
either of them shall not be required to take any action that exposes the
Co-Agents, or either of them, to personal liability or that is contrary to this
Agreement or applicable Law. Each Co-Agent agrees to give to the applicable
Purchasers prompt notice of each notice given to it by the Company pursuant to
the terms of this Agreement or any other Note Document. For the avoidance of
doubt, no Co-Agent may act unless authorized to so act (i) expressly hereunder
or under any other Note Document or (ii) by the Required Purchasers.
19.2 Co-Agents' Reliance. Neither Co-Agent nor any of their directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with the Note Documents, except
for its or their own gross negligence or willful misconduct. Without limitation
on the generality of the foregoing, the Co-Agents, and each of them: (a) may
treat the Purchaser that purchased the Senior Secured Note from the
54
Company as the holder of the Indebtedness evidenced thereby until such Co-Agent
receives written notice of a transfer duly made pursuant to Section 10.2 hereof;
(b) may consult with legal counsel (including counsel for the Company or any
Affiliate thereof party to any Note Document), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Purchaser and shall not be responsible to any Purchaser for any statements,
warranties or representations (whether written or oral) made in, or in
connection with, the Note Documents; (d) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of any Note Document on the part of the Company or any of its
Subsidiaries or to inspect the property (including the books and records) of the
Company or any of its Subsidiaries; (e) shall not be responsible to any
Purchaser for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Note Document or any other instrument or document furnished pursuant
thereto; and (f) shall incur no liability under or in respect of any Note
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, telecopy or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
19.3 GSCP Recovery or GoldenTree and Affiliates. With respect to any
Senior Secured Notes issued to it, GSCP Recovery or GoldenTree, shall have the
same rights and powers under the Note Documents as any other Purchaser and may
exercise the same as though it were not a Co-Agent; and the term "Purchaser" or
"Purchasers" shall, unless otherwise expressly indicated, include GSCP Recovery
and GoldenTree, each in its individual capacity. GSCP Recovery and its
Affiliates (other than the Company or any of its Subsidiaries) and GoldenTree
and its Affiliates may accept investment banking engagements from and generally
engage in any kind of business with, the Company, any of its Subsidiaries and
any Person who may do business with or own securities of any of the Company or
any such Subsidiary, all as if GSCP Recovery and GoldenTree were not the
Co-Agents and without any duty to account therefore to the Purchasers.
19.4 Purchaser Credit Decision. Each Purchaser acknowledges that it has,
independently and without reliance upon either Co-Agent or any other Purchaser
and, based on the financial statements referred to in Section 5.4 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Purchaser also
acknowledges that it will, independently and without reliance upon either
Co-Agent or any other Purchaser and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
19.5 Indemnification. Each Purchaser severally agrees to indemnify the
Co-Agents (to the extent not promptly reimbursed by the Company) from and
against such Purchaser's ratable share (determined as provided below) of any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including without limitation reasonable fees and expenses or counsel) that may
be imposed on, incurred by, or asserted against the Co-Agents in any way
relating to or arising out of the Note Documents or any action taken or omitted
by the Co-Agents under the Note Documents (collectively, the "INDEMNIFIED
COSTS"); provided, however, that no Purchaser
55
shall be liable for any portion of such Indemnified Costs resulting from the
Co-Agents' (or either of their) gross negligence or willful misconduct, provided
that any gross negligence or willful misconduct of one Co-Agent shall not be
imputed to the other Co-Agent. Without limitation of the foregoing, each
Purchaser agrees to reimburse the Co-Agents promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Company under Section 12.1, to the extent
that the Co-Agents are not promptly reimbursed for such costs and expenses by
the Company. For purposes of this Section 19.5, the Purchasers' respective
ratable shares of any amount shall be determined, at any time, according to the
Principal Amount outstanding at such time and owing to the respective
Purchasers. In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Costs, this Section 19.5 applies whether any such
investigation, litigation, or proceeding is brought by the Co-Agent or either of
them, any other Purchaser or a third party. The failure of any Purchaser to
reimburse the Co-Agents promptly upon demand for its ratable share of any amount
required to be paid by the Purchasers to any Co-Agents as provided herein shall
not relieve any other Purchaser of its obligation hereunder to reimburse the
Co-Agents for its ratable share of such amount, but no Purchaser shall be
responsible for the failure of any other Purchaser to reimburse the Co-Agents
for such other Purchaser's ratable share of such amount. Without prejudice to
the survival of any other agreement of any Purchaser hereunder, the agreement
and obligations of each Purchaser contained in this Section 19.5 shall survive
the payment in full of principal, interest and all other amounts payable
hereunder and under the other Note Documents.
19.6 Successor Co-Agent. Any Co-Agent may resign at any time by giving
written notice thereof to the Purchasers and the Company and may be removed at
any time with or without cause by two-thirds of the applicable Purchasers. Upon
any such resignation or removal, two-thirds of the applicable Purchasers shall
have the right to appoint a successor to such Co-Agent, provided that, so long
as the consent of the Company is not unreasonably withheld, the Company shall
have the right to consent to any such successor Co-Agent (other than a successor
Co-Agent that is a Purchaser at such time holding, individually or with its
Affiliates, at least 45% of the Principal Amount then outstanding). If no
successor Co-Agent shall have been so appointed by such applicable Purchasers,
and shall have accepted such appointment, within 30 days after such retiring
Co-Agent's giving of notice of resignation or such applicable Purchasers'
removal of the retiring Co-Agent, then the retiring Co-Agent may, on behalf of
such applicable Purchasers, without the approval of the Company, appoint a
successor Co-Agent. Upon the acceptance of any appointment as Co-Agent hereunder
by a successor Co-Agent and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the two-thirds of the
applicable Purchasers may request, in order to continue the perfection of the
Liens granted or purported to be granted by the Security Documents, such
successor Co-Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of such retiring Co-Agent, and the
retiring Co-Agent shall be discharged from its duties and obligations under the
Note Documents. After any retiring Co-Agent's resignation or removal hereunder
as Co-Agent, the provisions of this Article 19 inure to its benefit as to any
actions taken or omitted to be taken by it while it was Co-Agent under this
Agreement.
56
ARTICLE 20. MISCELLANEOUS.
20.1 Successors and Assigns. All covenants and other agreements contained
in this Agreement or any other Note Document by or on behalf of any of the
parties hereto bind and inure to the benefit of their respective successors and
assigns (including, without limitation, any subsequent holder of a Senior
Secured Note) whether so expressed or not, except that the Company shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Purchasers and the Co-Agents.
20.2 Payments Due on Non-Business Days. Anything in this Agreement, the
Senior Secured Notes or any other Note Document to the contrary notwithstanding,
any payment of principal of, or interest on, any Senior Secured Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.
20.3 Satisfaction Requirement. Except as otherwise provided herein or in
any other Note Document, if any agreement, certificate or other writing, or any
action taken or to be taken, is by the terms of this Agreement or any other Note
Document required to be satisfactory to the Purchasers or to the Required
Purchasers, the determination of such satisfaction shall be made by the
Purchasers or the Required Purchasers, as the case may be, in the sole and
exclusive judgment of the Person or Persons making such determination.
20.4 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by Law) not invalidate or
render unenforceable such provision in any other jurisdiction.
20.5 Construction. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
20.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.
Each counterpart may consist of a number of copies hereof, each signed by less
than all, but together signed by all, of the parties hereto.
20.7 Governing Law. This Agreement and each Senior Secured Note shall be
governed by, and construed in accordance with, the laws of the State of New York
without giving effect to conflicts of laws principles thereof.
20.8 Consent to Jurisdiction.
(a) The Company hereby irrevocably submits to the jurisdiction of
any New York or Federal court sitting in New York City, New York, in any action
or proceeding arising out of or relating to this Agreement or any other Note
Document, and the Company hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such New York court
or such Federal court. The Company hereby
57
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
Company hereby irrevocably consents to the service of copies of any summons and
complaint and any other process which may be served in any such action or
proceeding by certified mail, return receipt requested, or by delivering a copy
of such process to the Company, at its address specified in Section 15 or by any
other method permitted by Law. The Company agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or by any other manner provided by Law.
(b) Nothing in this Section 20.8 shall affect the right of any
holder of Senior Secured Notes to serve legal process in any other manner
permitted by Law or affect the right of any such holder to bring any action or
proceeding against the Company or its property in the courts of other
jurisdictions.
20.9 Intercreditor Agreement. Notwithstanding anything to the contrary
contained herein, so long as the Senior Debt Obligations are outstanding, the
Co-Agents' or any Purchaser's right to consent (or withhold consent) to an Asset
Sale or Disposition and other actions not expressly permitted by the terms
hereof, and the exercise of rights and remedies by the Co-Agents or any of the
Purchasers of the Senior Secured Notes upon the occurrence and continuance of an
Event of Default, is subject to the terms and conditions of the Intercreditor
Agreement; provided that nothing in this Section shall, or shall be deemed to,
relieve the Company of its Obligations or obligations hereunder, including,
without limitation, pursuant to Articles 1 and 11 hereof.
20.10 Waiver of Jury Trial. EACH OF THE COMPANY AND THE HOLDERS OF SENIOR
SECURED NOTES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE NOTE DOCUMENTS, ANY DOCUMENT
DELIVERED UNDER THE NOTE DOCUMENTS OR THE ACTIONS OF ANY HOLDER OF SENIOR
SECURED NOTES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
20.11 Management Fees. Notwithstanding anything to the contrary contained
in this Agreement, the Company represents and warrants that GSCP has consented
to not accept at any time or for any period subsequent to December 31, 2000 and
prior to the repayment in full of the Senior Secured Notes any payment in cash
or other property for its management fee (as more fully set forth in the
agreement between the Company and GSCP for the rendering of management
consulting or financial advisory services described in Section 8.10(ii) of this
Agreement), and the Company agrees not to pay such management fee in cash or any
other property at any such time; however, such fees may accrue and remain an
obligation of the Company.
20.12 Holdings. Notwithstanding anything to the contrary contained in this
Agreement or any other Note Document, the Purchasers agree that Holdings shall
not have any liability or
58
obligation whatsoever to the Purchasers under this Agreement or any other Note
Document and shall not be deemed to be a party to any Note Document after the
Closing Date.
20.13 Security Documents. Notwithstanding anything to the contrary
contained in this Agreement or any other Note Document, the Purchasers agree
that (i) the New Telex Subordinated Notes, the Preferred Stock or common stock
and the warrants to purchase Preferred Stock or common stock of the Company to
be issued in connection with the Telex Exchange and (ii) the registered
securities substantially identical to the New Telex Subordinated Notes, the
Preferred Stock or common stock and warrants to purchase Preferred Stock or
common stock of the Company to be issued in exchange for the New Telex
Subordinated Notes, the Preferred Stock or common stock and the warrants to
purchase Preferred Stock or common stock pursuant to the registration
obligations of the Company under the Telex Exchange, in each case, shall not be
subject to any of the Security Documents or the Liens created thereunder.
20.14 Waivers. The Purchasers hereby waive any Default or Event of Default
under (i) Section 9(b) of the Note Purchase Agreement as a result of the
Company's failure to maintain the Minimum Consolidated EBITDA required pursuant
to Section 8.1 of the Note Purchase Agreement for the period of three fiscal
quarters ending September 30, 2001 and (ii) Sections 9(d) and 9(f) of the Note
Purchase Agreement as a result of the Company's failure to pay interest on the
11% Subordinated Notes on September 17, 2001, the Company's failure to pay
interest on the 10.5% Subordinated Notes in November 2001 and the Company's
failure to maintain the Minimum Consolidated EBITDA required pursuant to Section
8.1 of the Senior Credit Agreement for the period of three fiscal quarters
ending on September 30, 2001.
59
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Note Purchase Agreement to be duly executed and delivered by their
respective proper and duly authorized officers as of the day and year first
above written.
TELEX COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and
Chief Financial Officer
GSCP RECOVERY (US), LLC
(FORMERLY TCI INVESTMENTS LLC)
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
GOLDENTREE ASSET MANAGEMENT, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Partner
DEUTSCHE BANK SHARPS ▇▇▇▇▇▇ INC.
By: GoldenTree Asset Management, LP,
as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Partner
60
HIGHBRIDGE CAPITAL MANAGEMENT, LLC
By: GoldenTree Asset Management, LP,
as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Partner
GOLDENTREE HIGH YIELD MASTER FUND, LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Partner
GOLDENTREE HIGH YIELD OPPORTUNITIES I, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
GOLDENTREE HIGH YIELD OPPORTUNITIES II, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BROAD FOUNDATION
By: GoldenTree Asset Management, LP,
as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Partner
61
B&W MASTER RETIREMENT BY GOLDENTREE
ASSET MANAGEMENT, LP AS AGENT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Partner
▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Partner
UNIVERSITY OF CHICAGO ENDOWMENT,
BY GOLDENTREE ASSET MANAGEMENT, LP AS AGENT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Partner
62
SCHEDULE I
TRANCHE A TRANCHE B
SENIOR SECURED SENIOR SECURED
NOTES NOTES ORIGINAL PURCHASERS
----- ----- -------------------
$9,800,000 $5,000,000 GSCP RECOVERY (US), LLC
(FORMERLY TCI INVESTMENTS LLC)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
$550,000 N/A DEUTSCHE BANK SHARPS ▇▇▇▇▇▇ INC.
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
$2,100,000 N/A HIGHBRIDGE CAPITAL MANAGEMENT, LLC
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
$3,625,000 N/A GOLDENTREE HIGH YIELD MASTER FUND, LTD
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
$3,925,000 N/A GOLDENTREE HIGH YIELD OPPORTUNITIES I, L.P.
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TRANCHE A TRANCHE B
SENIOR SECURED SENIOR SECURED
NOTES NOTES NEW PURCHASERS
----- ----- --------------
N/A $4,250,000 GOLDENTREE HIGH YIELD
OPPORTUNITIES II, L.P.
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
N/A $100,000 BROAD FOUNDATION
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
N/A $300,000 B&W MASTER RETIREMENT BY GOLDENTREE ASSET MANAGEMENT, LP AS AGENT
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
N/A $100,000 ▇▇▇ ▇▇▇▇▇
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2
TRANCHE A TRANCHE B
SENIOR SECURED SENIOR SECURED
NOTES NOTES NEW PURCHASERS
----- ----- --------------
N/A $250,000 UNIVERSITY OF CHICAGO ENDOWMENT, BY GOLDENTREE ASSET MANAGEMENT, LP
AS AGENT
c/o GoldenTree Asset Management, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
3
SCHEDULE II
DEFINED TERMS
As used in the Agreement, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:
"10.5% SUBORDINATED NOTE DOCUMENTS" means the collective reference to the
10.5% Subordinated Notes, the 10.5% Subordinated Note Indenture and each of the
other instruments and documents executed and delivered pursuant to any of the
foregoing, as the same may be amended, supplemented, waived or otherwise
modified from time to time in accordance with Section 8.12 hereof to the extent
applicable.
"10.5 % SUBORDINATED NOTE INDENTURE" means the Indenture, dated as of May
2, 1997, between GST Acquisition Corp. and Manufacturers and Traders Trust
Company, as trustee, as amended by the First Supplemental Indenture dated as of
May 6, 1997, the Second Supplemental Indenture dated as of February 2, 1998 and
the Third Supplemental Indenture dated as of April 11, 2001, and as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with its terms and the terms of the Senior Credit Agreement and this
Agreement.
"10.5% SUBORDINATED NOTES" means the notes issued under the 10.5%
Subordinated Indenture.
"11% SUBORDINATED NOTE INDENTURE" means the Indenture, dated as of March
24, 1997, between EVI and The Bank of New York, as trustee, as amended by the
First Supplemental Indenture dated as of April 11, 2001, and as the same may be
further amended, supplemented or otherwise modified from time to time in
accordance with its terms and the terms of the Senior Credit Agreement and this
Agreement.
"11% SUBORDINATED NOTES" means the notes issued under the 11% Subordinated
Indenture.
"11% SUBORDINATED NOTE DOCUMENTS" means, collectively, the 11%
Subordinated Notes, the 11% Subordinated Note Indenture and each of the other
instruments and documents executed and delivered pursuant to any of the
foregoing, as amended, supplemented, waived or otherwise modified from time to
time in accordance with Section 8.12 hereof to the extent applicable.
"ACCOUNT" has the meaning ascribed thereto in the Uniform Commercial Code
as in effect in New York from time to time.
"ADDITIONAL SENIOR SECURED NOTES" has the meaning specified in Section
8.2.
"ADJUSTED INTEREST RATE" has the meaning specified in Section 1.2.
"ADMINISTRATIVE AGENT" means, collectively, JPMorgan Chase Bank (f/k/a The
Chase Manhattan Bank), in its capacity as the Administrative Agent under the
Senior Credit Agreement and its successors and assigns thereunder.
"AFFILIATE" means (i) a Controlling Person or any Person which is
controlled by or is under common control with a Controlling Person and (ii) any
other Person who is a director, officer or member of management of the Company,
any of its Subsidiaries or any Controlling Person. For purposes of the
Agreement, control of a Person means the power, direct or indirect, (a) to vote
10% or more of the outstanding stock or other ownership interests having
ordinary voting power for the election of directors of such Person or (b) to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"AGREEMENT" means this Amended and Restated Note Purchase Agreement, as
the same may be amended, supplemented or otherwise modified from time to time.
"AMENDMENT NO. 1 TO THE SENIOR CREDIT AGREEMENT" means the Amendment No.
1, dated as of January 30, 1998, to the Senior Credit Agreement among the
Administrative Agent, the Documentation Agent, the Company and the other parties
thereto.
"AMENDMENT NO. 2 TO THE SENIOR CREDIT AGREEMENT" means the Amendment No.
2, dated as of December 23, 1998, to the Senior Credit Agreement among the
Administrative Agent, the Documentation Agent, the Company and the other parties
thereto.
"AMENDMENT NO. 3 TO THE SENIOR CREDIT AGREEMENT" means the Amendment No.
3, dated as of October 29, 1999, to the Senior Credit Agreement among the
Administrative Agent, the Documentation Agent, the Company and the other parties
thereto.
"AMENDMENT NO. 4 TO THE SENIOR CREDIT AGREEMENT" means the Waiver,
Amendment No. 4, Agreement and Consent, dated as of April 11, 2001, among the
Administrative Agent, the Documentation Agent, the Company and the other parties
thereto.
"AMENDMENT NO. 5 TO THE SENIOR CREDIT AGREEMENT" means the Waiver,
Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and Consent, dated as of November 21,
2001, among the Administrative Agent, the Documentation Agent, the Company and
the other parties thereto.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, through a Sale and Leaseback
Transaction) (a "DISPOSITION") by the Company or any of its Subsidiaries, in one
or a series of related transactions, of any real or personal, tangible or
intangible, property (including, without limitation, Capital Stock) of the
Company or such Subsidiary to any Person (other than to any of its domestic
Wholly Owned Subsidiaries a party to the Guarantee and Collateral Agreement);
provided, that a Disposition to a joint venture or similar arrangement otherwise
permitted under clause (k) of Section 8.9 hereof shall not constitute an Asset
Sale.
"BANKRUPTCY LAW" means Title 11 of the United States Code, as the same may
be amended from time to time.
2
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Company or any
ERISA Affiliate is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other
day on which commercial banks are required by Law or authorized to close in New
York, New York.
"CAPITAL EXPENDITURES" means with respect to any Person for any period,
the sum of the aggregate of all expenditures by such Person and its Consolidated
Subsidiaries during such period which, in accordance with GAAP, are or should be
included in "capital expenditures".
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"CASH EQUIVALENTS" means (a) securities issued or fully guaranteed or
insured by the United States Government or any agency or instrumentality
thereof, (b) time deposits, certificates of deposit or bankers' acceptances of
any commercial bank having capital and surplus in excess of $500,000,000 and the
commercial paper of the holding company of which is rated at least A-2 or the
equivalent thereof by Standard & Poor's Ratings Group (a division of McGraw Hill
Inc.) or any successor rating agency ("S&P") or at least P-2 or the equivalent
thereof by ▇▇▇▇▇'▇ Investors Service, Inc. or any successor rating agency
("MOODY'S") (or if at such time neither is issuing ratings, then a comparable
rating of such other nationally recognized rating agency as shall be approved by
the Required Purchasers, which approval shall not be unreasonably withheld), (c)
commercial paper rated at least A-2 or the equivalent thereof by S&P or at least
P-2 or the equivalent thereof by Moody's (or if at such time neither is issuing
ratings, then a comparable rating of such other nationally recognized rating
agency as shall be approved by the Required Purchasers, which approval shall not
be unreasonably withheld) and (d) investments in money market funds complying
with the risk limiting conditions of Rule 2a-7 or any successor rule of the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(i) any Person or group (with the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof) other than the Permitted Holders shall in the aggregate
beneficially, directly or indirectly, own shares of Capital Stock having more
than 35% of the total voting power of all of the outstanding Capital Stock of
the Company or (ii) a "Change of Control" as defined in the New Telex Senior
Subordinated Indenture shall have occurred at a time when any principal amount
of Indebtedness is outstanding under the New Telex Senior Subordinated
Indenture.
"CLOSING" has the meaning specified in Section 3 hereof.
"CLOSING DATE" has the meaning specified in Section 3 hereof.
3
"CO-AGENTS" means, collectively, GSCP Recovery and GoldenTree and each of
their successors pursuant to Section 19.6 hereof. The tem "applicable
Purchasers" means, with respect to GSCP Recovery, GSCP Recovery and each of its
successors, assigns and transferees hereunder; conversely, the term "Applicable
Co-Agent" means and refers to GSCP Recovery, in its capacity as a Co-Agent, and
its successors pursuant to Section 19.6 hereof, with respect to such Purchasers.
The term "applicable Purchasers" means, with respect to GoldenTree, GoldenTree
High Yield Opportunities I, L.P., Deutsche Bank Sharps ▇▇▇▇▇▇ Inc., Highbridge
Capital Management, LLC, GoldenTree High Yield Master Fund, Ltd., GoldenTree
High Yield Opportunities II, L.P., Broad Foundation, B&W Master Retirement by
GoldenTree Asset Management, LP as agent, ▇▇▇ ▇▇▇▇▇, University of Chicago
Endowment, by GoldenTree Asset Management, LP as agent, and each of their
respective successors, assigns and transferees hereunder; conversely, the term
"applicable Co-Agent, shall mean and be a reference to GoldenTree, in its
capacity as a Co-Agent, and its successors pursuant to Section 19.6 hereof, with
respect to such Purchasers.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time,
and any successor statute.
"COLLATERAL" means all assets of the Company and each of its Subsidiaries
from time to time party to any Security Documents, now owned or hereafter
acquired, upon which a Lien is created or purported to be created by any
Security Document.
"COMMITMENT FEES" has the meaning ascribed thereto in Section 1.4 hereof.
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not incorporated,
which is under common control with the Company within the meaning of Section
4001 of ERISA or is part of a group which includes the Company and which is
treated as a single employer under Section 414(b) or (c) of the Code or, solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Sections 414(m) and (o) of the Code.
"COMPANY" has the meaning specified in the preamble hereof.
"CONFIDENTIAL INFORMATION" has the meaning specified in Section 17 hereof.
"CONSOLIDATED EBITDA" means for any period, Consolidated Net Income for
such period adjusted to exclude the following items (without duplication) of
income or expense to the extent that such items are included in the calculation
of Consolidated Net Income: (a) Consolidated Interest Expense, (b) any non-cash
expenses and charges, (c) total income tax expense, (d) depreciation expense,
(e) the expense associated with amortization of intangible and other assets
(including amortization or other expense recognition of any costs associated
with asset write-ups in accordance with APB Nos. 16 and 17) and the non-cash
expense associated with write-offs of impaired intangibles, (f) non-cash
provisions for reserves for discontinued operations, (g) any gain or loss
associated with the sale or write-down of assets not in the ordinary course of
business, (h) any income or loss accounted for by the equity method of
accounting (except in the case of income to the extent of the amount of cash
dividends or cash distributions paid to the Company or any of its Subsidiaries
by the entity accounted for by the equity method of accounting), (i) accruals
for any fees earned by GSCP in respect of
4
management consulting or financial advisory services as contemplated by Section
8.10(ii) hereof but not paid in cash as provided in Section 3.2 of Amendment No.
4 to the Senior Credit Agreement, (j) for any period that is part of fiscal year
2001, and to the extent incurred prior to the Closing Date, all nonrecurring
restructuring or other charges and transaction fees relating to the Telex/EVI
Mergers (as such term is defined in the Senior Credit Agreement), including any
such nonrecurring charges which may reasonably be classified as restructuring
charges but are not classified as restructuring charges under GAAP; provided
that the aggregate amount of all such charges and fees paid in cash shall not
exceed $3,100,000 in the aggregate; (k) non-cash charges, of up to $161,000 in
each fiscal year, relating to that certain operating lease of the Company for
its corporate headquarters in Burnsville, Minnesota; (l) expenses incurred and
paid by the Company prior to the Closing Date in connection with the negotiation
and consummation of Amendment No. 4 to the Senior Credit Agreement, the
placement and consummation of the transactions relating to the Tranche A Senior
Secured Notes and the amendment and modification of the 10.5% Subordinated Notes
Documents and the 11% Subordinated Notes Documents to permit the issuance of the
Tranche A Senior Secured Notes; provided that the aggregate amount of all such
expenses shall not exceed $1,500,000, unless otherwise agreed by the Required
Purchasers; (m) expenses incurred by the Borrower in connection with the
negotiation and consummation of Amendment No. 5 to the Senior Credit Agreement,
the Note Purchase Transaction, the negotiation and the consummation of the Telex
Exchange and the issuance of the New Telex Subordinated Notes; provided that
placement fees for the Note Purchase shall not exceed $600,000 and provided
further, that the aggregate amount of all such expenses (including placement
fees for the Note Purchase) shall not exceed $7,000,000, unless otherwise agreed
by the Co-Agents; (n) cash payments not to exceed an aggregate amount of
$100,000 to be paid prior to the Closing Date made to the Company's management
employees in respect of bonuses (to the extent not prohibited pursuant to
Section 8.18 hereof) in accordance with the terms of such employees' employment
agreements; (o) for the fiscal year ended December 31, 2001 non-cash write-offs
for impaired inventory and bad debts in an amount not to exceed $9,000,000; and
(p) non-cash extraordinary gains or losses attributable to the Telex Exchange.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum of (a)
interest expense (accrued and paid or payable in cash for such period, and in
any event excluding any amortization or write-off of financing costs) on
Indebtedness of the Company and its consolidated Subsidiaries for such period
minus (b) interest paid in cash during such period in respect of the
Indebtedness evidenced by the 10.5% Subordinated Notes and the 11% Subordinated
Notes minus (c) interest income (accrued and received or receivable in cash for
such period) of the Company and its Consolidated Subsidiaries for such period,
in each case determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, net income of the Company
and its Consolidated Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" of any Person means at any date any Subsidiary
or other entity the accounts of which in accordance with GAAP would be
consolidated with those of such Person in its consolidated financial statements
as of such date.
5
"CONSOLIDATED TANGIBLE ASSETS" means, as of the any date of determination,
the total assets, less goodwill, deferred financing costs and other intangibles
(other than patents, trademarks, copyrights, licenses and other intellectual
property) less accumulated amortization, shown on the balance sheet of the
Company and its Consolidated Subsidiaries as of the most recent date for which
such a balance sheet is available, determined on a consolidated basis in
accordance with GAAP.
"CONTRACTUAL OBLIGATION" means, with respect to any Person, any term or
provision of any securities issued by such Person, or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement to
which such Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CONTROLLING PERSON" means any Person that is in control of the Company or
any of its Subsidiaries (such control being the power to direct or cause the
direction of the management and policies of the Company or any such Subsidiary,
whether through the ownership of voting stock, by contract or otherwise).
"CREDIT DOCUMENT" means the Note Documents, the Senior Credit Documents and the
New Telex Subordinated Note Documents.
"CREDIT DOCUMENT" means the Note Documents, the Senior Credit Documents
and the New Telex Subordinated Note Documents.
"DEFAULT" means an event, condition or default that with the giving of
notice, the passage of time or both would be an Event of Default.
"DEFAULT RATE" has the meaning specified in Section 1.2 hereof.
"DISINTERESTED DIRECTOR" means, with respect to any Person and
transaction, a member of the board of directors of such Person who does not have
any material direct or indirect financial interest in or with respect to such
transaction.
"DISPOSITION" has the meaning ascribed thereto in the definition of the
term "Asset Sale" above.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Company which is not a
Foreign Subsidiary.
"EMPLOYEE BENEFIT PLAN" means an "employee benefit plan" as defined in
Section 3(3) of ERISA, maintained or contributed by the Company or with respect
to which the Company may incur liability.
"ENVIRONMENTAL COSTS" means any and all costs or expenses (including,
without limitation, attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, fines,
penalties, damages, settlement payments, judgments and awards), of whatever kind
or nature, known or unknown, contingent or otherwise, arising out of, or in any
way relating to, any violation of, noncompliance with or liability under any
Environmental Laws or any orders, requirements, demands, or investigations of
any person related to any Environmental Laws. Environmental Costs include any
and all of the foregoing, without regard to whether they arise out of or are
related to any past, pending or threatened proceeding of any kind.
6
"ENVIRONMENTAL LAW" means any Law and such requirements of any
Governmental Authority properly promulgated and having the force and effect of
law or other Requirements of Law (including common law) regulating, relating to
or imposing liability or standards of conduct concerning protection of human
health or the environment, as have been, or now or at any relevant time
hereafter are, in effect, pertaining to health, industrial hygiene, or the
environmental conditions on, under or about any real property owned, operated or
leased by the Company or any Subsidiary thereof.
"ENVIRONMENTAL PERMITS" means any and all permits, licenses,
registrations, notifications, exemptions and any other authorization required
under any Environmental Law.
"ENVIRONMENTAL PROGRAM" has the meaning ascribed thereto in Section 7.8(c)
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute thereto and all final or
temporary regulations promulgated thereunder, and all published, generally
applicable rulings entitled to precedential effect.
"ERISA AFFILIATE" means any (i) corporation which is or was at any time
during the immediately preceding six years a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Code) as the
Company; (ii) partnership or other trade or business (whether or not
incorporated) at any time during the immediately preceding six years under
common control (within the meaning of Section 414(c) of the Code) with the
Company; and (iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as the Company, any corporation described
in clause (i) above, or any partnership or trade or business described in clause
(ii) above.
"EVENT OF DEFAULT" or "Events of Default" shall have the meaning provided
for in Section 9 of this Agreement.
"EVI" means EV International, Inc., a Delaware corporation.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCLUDED FOREIGN ACCOUNT" means an Account the sale giving rise to which
is to an Obligor in any jurisdiction outside the United States or Canada.
"FINANCIAL STATEMENTS" means the consolidated and consolidating balance
sheets, consolidated and consolidating statements of operations, consolidated
statements of changes in cash flows and consolidated statements of changes in
stockholders' equity of the Company and its Consolidated Subsidiaries for the
period specified prepared in accordance with GAAP and consistent with prior
practices.
"FINANCING LEASE" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
7
"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended from time to time.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Company which is
organized and existing under the laws of any jurisdiction outside of the United
States of America and Telex Communications International Ltd.
"FOREIGN SUBSIDIARY INDEBTEDNESS AMOUNT" means, as of any date of
determination, the greater of (x) $10,000,000 and (y) an amount equal to 10% of
Consolidated Tangible Assets as of such date.
"FORM 10-K" means the Company's annual report on SEC Form 10-K for the
fiscal year ended December 31, 2000.
"GAAP" means, with respect to the covenants contained in Sections 8.1, 8.2
and 8.8 hereof and all defined terms relating thereto, generally accepted
accounting principles in the United States of America in effect on the Closing
Date and, for all other purposes under this Agreement, generally accepted
accounting principles in the United States of America in effect from time to
time.
"GENERAL COUNSEL" has the meaning set forth in Section 4.5 hereof.
"GOVERNMENTAL AUTHORITY" means any government or political subdivision or
any agency, authority, board, bureau, central bank, commission, department or
instrumentality of the United States of America, any local or state jurisdiction
therein, the European Union, or local or state jurisdiction therein, therefore,
or any other non-United States local, state or supranational jurisdiction, any
court, tribunal, grand jury or arbitrator or any of the foregoing jurisdictions,
in any case whether foreign or domestic, or any entity of any of the foregoing
jurisdictions exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree,
stipulation, arbitration award or other award or determination entered by or
with any Governmental Authority.
"GSCP" means Greenwich Street Capital Partners, Inc., a Delaware
corporation.
"GSCP GROUP" means Greenwich Street Capital Partners, L.P., Greenwich
Street Capital Offshore Fund, Ltd., The Travelers Insurance Company, The
Travelers Life and Annuity Company, TRV Employees Fund, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇
Holdings Inc. and their respective Affiliates; any other investment fund or
vehicle managed or sponsored by Greenwich Street Capital Partners, Inc., The
Travelers Insurance Company, The Travelers Life and Annuity Company, ▇▇▇▇▇
▇▇▇▇▇▇ Holdings Inc. or any of their respective Affiliates; and any limited or
general partners of, or other investors in, any member of the GSCP Group.
"GUARANTEE AND COLLATERAL AGREEMENT" has the meaning specified in Section
4.4(f).
8
"GUARANTEE OBLIGATION" means, as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any such
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Company in good
faith.
"GUARANTOR" has the meaning ascribed thereto in the Guarantee and
Collateral Agreement.
"HEARING AID DISPOSITION" means the Disposition by the Company and its
Affiliates, in one or more transactions, of all or part of its hearing aid
business (including any real estate associated therewith).
"HOLDINGS" means Telex Communications Group, Inc., a Delaware corporation.
"INDEBTEDNESS" means, of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of acceptances issued or created
for the account of such Person, (e) for purposes of Section 8.2 hereof and
Section 9(e) hereof only, all obligations of such Person in respect of interest
rate protection agreements, interest rate futures, interest rate options,
interest rate caps and any other interest rate hedge arrangements, (f) for
purposes of Section 8.2 hereof only, all preferred stock issued by such person
and (g) all indebtedness or obligations of the types referred to in the
preceding clauses (a) through (f) secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof provided, that Indebtedness shall not include accruals
for
9
any fees earned by GSCP in respect of management consulting or financial
advisory services as contemplated by Section 8.10(ii) hereof but not paid in
cash as provided in Section 3.2 of Amendment No. 4 to the Senior Credit
Agreement.
"INDEMNIFIED COSTS" has the meaning set forth in Section 19.5 hereof.
"INDEMNIFIED PARTIES" has the meaning specified in Section 12.2 hereof.
"INTEREST DUE DATE" has the meaning specified in Section 1.2(c) hereof.
"INITIAL INTEREST RATE" has the meaning specified in Section 1.2 hereof.
"INSOLVENCY" means, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 hereof of ERISA.
"INSURANCE PROCEEDS" means the proceeds of any insurance or any judgments
or settlements made in lieu thereof resulting from a casualty with respect to
any Property.
"INTELLECTUAL PROPERTY" has the meaning ascribed thereto in Section 5.12
hereof.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated as of
April 11, 2001 among JPMorgan Chase Bank (f/k/a The Chase Manhattan Bank), as
Administrative Agent on behalf of the Lenders under the Senior Credit Agreement,
the Purchasers and the Company, as amended by the Intercreditor Amendment, as
the same may be amended, supplemented or modified from time to time.
"INTERCREDITOR AMENDMENT" means the Intercreditor Amendment Agreement
dated as of November 21, 2001 among the parties to the Intercreditor Agreement.
"INTERNAL REVENUE SERVICE" means the Internal Revenue Service and any
successor agency.
"INVENTORY" has the meaning ascribed thereto in the Uniform Commercial
Code as in effect in New York from time to time, and including, without
limitation, raw materials and all sub-assemblies held for sale.
"INVESTMENTS" has the meaning ascribed thereto in Section 8.9 hereof.
"JUDGMENT" has the meaning specified in Section 9.1(g) hereof.
"LAW" means any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order or other rule of law.
"LIEN" means any mortgage, pledge, hypothecation, assignment, security
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the
foregoing).
10
"LOSS" has the meaning set forth in Section 12.2(a) hereof.
"MATERIAL ADVERSE CHANGE" means a material adverse change in the business,
operations, results of operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Company and its Consolidated Subsidiaries taken
as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, operations, results of operations, assets, liabilities, condition
(financial or otherwise) or prospects of the Company and its Consolidated
Subsidiaries taken as a whole, (ii) the Company's ability to perform its
obligations under the Note Documents, (iii) the Company's ability to perform its
obligations under any Senior Credit Document, or (iv) the rights and remedies of
the Purchasers under the Note Documents.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or petroleum
(including, without limitation, crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances or materials or wastes defined or
regulated as such in or under or which may give rise to liability under any
applicable Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" has the meaning specified in Section 1.1.
"MORTGAGED PROPERTIES" means, collectively, the real properties owned in
fee by the Company or any of its Subsidiaries parties to the Guarantee and
Collateral Agreement, including, without limitation, all buildings,
improvements, structures and fixtures now or subsequently located thereon and
owned by the Company or any such Subsidiary. "MORTGAGES" means (i) each of the
amended and restated mortgages executed and delivered by the Company or any of
its Subsidiaries encumbering any Mortgaged Properties, in form and substance
reasonably acceptable to the Required Purchasers on the Closing Date, and (ii)
each of the amended and restated mortgages and deeds of trust, if any, executed
and delivered by the Company or any of its Subsidiaries to the Co-Agents
pursuant to Section 7.9 hereof; in each case, as amended, supplemented or
otherwise modified from time to time.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) hereof of ERISA.
"NET CASH PROCEEDS" means, with respect to any Asset Sale (including,
without limitation, any Sale and Leaseback Transaction permitted under Section
8.11 hereof) hereof, any sale or issuance of equity securities of the Company or
any of its Subsidiaries, the issuance of any debt securities or any borrowings
by the Company or any of its Subsidiaries (other than issuances and borrowings
permitted pursuant to Section 8.2 hereof, except as otherwise specified), an
amount equal to the gross proceeds in cash and Cash Equivalents (including cash
payments received by way of deferred payment of principal pursuant to note,
installment receivable, purchase price adjustment or otherwise, but only when
such cash payments are received) of such Asset Sale, sale, issuance or
borrowing, net of (i) reasonable attorneys' fees, accountants' fees, brokerage,
consultant and other customary fees, underwriting commissions and other
reasonable fees and expenses actually incurred in connection with such Asset
Sale, sale, issuance or borrowing, (ii) taxes paid or reasonably estimated to be
payable as a result
11
thereof, (iii) appropriate amounts provided or to be provided by the Company or
any of its Subsidiaries as a reserve, in accordance with GAAP, with respect to
any liabilities associated with such Asset Sale and retained by the Company or
any such Subsidiary after such Asset Sale and other appropriate amounts to be
used by the Company or any of its Subsidiaries to discharge or pay on a current
basis any other liabilities associated with such Asset Sale and (iv) in the case
of a sale or Sale and Leaseback Transaction of or involving an asset subject to
a Lien securing any Indebtedness, payments made and installment payments
required to be made to repay such Indebtedness, including, without limitation,
payments in respect of principal, interest and prepayment premiums and
penalties.
"NEW PURCHASERS" has the meaning specified in the preamble hereof.
"NEW TELEX SENIOR SUBORDINATED INDENTURE" means the Indenture, dated as of
November 21, 2001, between the Company and BNY Midwest Trust Company, as
trustee, pursuant to which the Company may issue subordinated discount notes in
an aggregate issue price not to exceed $56,250,000, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms and the terms of the Senior Credit Agreement and this Agreement.
"NEW TELEX SUBORDINATED NOTE DOCUMENTS" means the collective reference to
the New Telex Subordinated Notes, the New Telex Senior Subordinated Indenture
and each of the other instruments and documents executed and delivered pursuant
to any of the foregoing, together with any indentures, instruments and documents
pursuant to which any registered securities substantially identical to the notes
issued under the New Telex Senior Subordinated Indenture are issued pursuant to
the registration obligations of the Company under the Telex Exchange, as the
same may be amended, supplemented, waived or otherwise modified from time to
time in accordance with Section 8.12 hereof to the extent applicable.
"NEW TELEX SUBORDINATED NOTES" means the notes issued pursuant to the
Telex Exchange under the New Telex Senior Subordinated Indenture and any
registered securities substantially identical to the notes issued under the New
Telex Senior Subordinated Indenture, issued pursuant to the registration
obligations of the Company under the Telex Exchange.
"NOTE DOCUMENTS" means this Agreement, the Senior Secured Notes, the
Intercreditor Agreement, the Security Documents and all other documents,
agreements, instruments, opinions and certificates executed in connection
therewith, as the same may be modified, amended, extended, restated or
supplemented from time to time.
"NOTE PURCHASE" has the meaning specified in Article 2 hereof.
"NOTE PURCHASE TRANSACTIONS" has the meaning specified in Article 2
hereof.
"OBLIGATION" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 9.1(c). Without limiting the generality of the
foregoing, the
12
Obligations of the Company under the Note Documents include the obligations to
pay principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by the Company under any
Note Document.
"OBLIGOR" means, with respect to an Account, the purchaser of the goods or
services giving rise to such Account or any other Person obligated to make
payment in respect of such purchase of such goods or services.
"ORIGINAL PURCHASERS" has the meaning specified in the preamble hereof.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor thereto).
"PATENT AND TRADEMARK SECURITY AGREEMENT" has the meaning set forth in
Section 4.4(f) hereof.
"PERMITTED HEDGING ARRANGEMENT" has the meaning specified in Section 8.16
hereof.
"PERMITTED HOLDERS" means, collectively, (i) the GSCP Group; (ii) Wayland
Investment Fund, LLC, Wayland Investment Fund II, LLC and their respective
Affiliates; (iii) ▇▇▇▇▇▇▇▇▇ and Company, Inc., Jefferies Opportunity Fund, LLC,
Jefferies Opportunity Fund II, LLC, Jefferies Employees Opportunity Fund, LLC
and their respective Affiliates; and (iv) Massachusetts Mutual Life Insurance
Company, MassMutual High Yield Partners II LLC, SAAR Holdings CDO Limited,
▇▇▇▇▇▇ CDO Limited, Wilbraham CBO Limited, Suffield CLO Limited, MassMutual
Corporate Investor, MassMutual Global CBO I Limited and their respective
Affiliates.
"PERMITTED REFINANCED INDEBTEDNESS" has the meaning specified in Section
8.12 hereof.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (including any division, agency or
department thereof), and, as applicable, the successors, heirs and assigns of
each.
"PIK INTEREST" has the meaning specified in Section 1.2(c) hereof.
"PLAN" means, at any particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Company or a Commonly Controlled
Entity is an "employer" as defined in Section 3(5) hereof of ERISA.
"PREFERRED STOCK" means the preferred stock of the Company, the terms of
which have been approved by the Administrative Agent and the holders of the
Senior Loans prior to the Closing Date.
"PRINCIPAL AMOUNT" has the meaning specified in Section 1.1 hereof.
13
"PROPERTY" means any assets or property of any kind or nature whatsoever,
real, personal or mixed (including fixtures), whether tangible or intangible.
"PURCHASERS" has the meaning set forth in the first paragraph of this
Agreement.
"REFINANCED INDEBTEDNESS" has the meaning ascribed thereto in Section 8.12
hereof.
"REINVESTED AMOUNT" means, with respect to any Asset Sale permitted by
Section 8.6(g) or (h) hereof, that portion of the Net Cash Proceeds thereof as
shall, according to a certificate of a Responsible Officer of the Company
delivered to the Purchasers within 30 days of such Asset Sale, be reinvested in
the business of the Company and its Subsidiaries in a manner consistent with the
requirements of Section 8.15(a) hereof and the other provisions hereof within
one year of the receipt of such Net Cash Proceeds or, if such reinvestment is in
a project authorized by the board of directors of the Company that will take
longer than one year to complete, the period of time necessary to complete such
project; provided that (i) if any such certificate of a Responsible Officer is
not delivered to the Purchasers on the date of such Asset Sale, any Net Cash
Proceeds of such Asset Sale shall be immediately (x) deposited in a cash
collateral account established at the offices of the Administrative Agent, or if
the Senior Debt Obligations have been paid in full, at a depositary bank
directed by the Co-Agents, to be held as collateral in favor of the
Administrative Agent for the benefit of the holders of the Senior Loans and the
Secured Parties (or the Co-Agents in favor of the Secured Parties, as the case
may be) on terms reasonably satisfactory to the Administrative Agent, or
Co-Agents, as the case may be, and shall remain on deposit in such cash
collateral account until such certificate of a Responsible Officer is delivered
to the Purchasers or used to make a prepayment under Section 4.4(a) of the
Senior Credit Agreement or of the Company's Obligations under the Senior Secured
Notes, hereunder or under the other Note Documents.
"REORGANIZATION" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
hereof of ERISA.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c)
hereof of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .13, .14, .16, .18, .19 or .20 hereof of PBGC
Reg. Section 2615 hereof or any successor regulation thereto.
"REQUIRED PURCHASERS" means, at any date of determination, the registered
holders of at least a two-thirds in interest of the aggregate principal amount
then outstanding of the Senior Secured Notes excluding therefrom any Senior
Secured Notes then owned or held by the Company and any of its Subsidiaries;
provided that solely for the purposes of amending, waiving, supplementing or
otherwise modifying (a) Section 8.1 hereof or (b) waiving a Default or Event of
Default under Section 9.1(b) hereof with respect to such Section 8.1, the term
"Required Purchasers" shall mean the registered holders of at least 40% in
interest of the aggregate principal amount then outstanding, excluding therefrom
any Senior Secured Notes held by the Company and any of its Subsidiaries;
provided further, that for the purposes of directing the Co-Agents to act or
refrain from acting hereunder, under the Security Documents or under any other
Note Document, including, without limitation for the purposes of, and as
contemplated under, Section 19.1 hereof, the term "Required Purchasers" shall
mean and be a
14
reference to Purchasers holding at least a majority of the aggregate principal
amount of the Senior Secured Notes then outstanding, excluding therefrom any
Senior Secured Notes held by the Company or any of its Subsidiaries.
"REQUIREMENT OF LAW" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any Law, statute, ordinance, or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its material property or to which such Person or any
of its material property is subject, including, without limitation, laws,
ordinances and regulations pertaining to zoning, occupancy and subdivision of
real properties; provided that the foregoing shall not apply to any non-binding
recommendation of any Governmental Authority.
"RESPONSIBLE OFFICER" means, as to any Person, any of the following
officers of such Person: (i) the chief executive officer or the president of
such Person and, with respect to financial matters, the chief financial officer,
the senior vice president - finance, the treasurer or the controller of such
Person, (ii) any vice president of such Person or, with respect to financial
matters, any assistant treasurer or assistant controller of such Person, who has
been designated in writing to the Purchasers as a Responsible Officer by such
chief executive officer or president of such Person or, with respect to
financial matters, such chief financial officer of such Person, (iii) with
respect to Section 7.7 hereof and without limiting the foregoing, the general
counsel of such Person and (iv) with respect to ERISA matters, the senior vice
president - human resources (or substantial equivalent) of such Person.
"SALE AND LEASEBACK TRANSACTION" has the meaning ascribed thereto in
Section 8.11 hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY DOCUMENTS" means, collectively, the Mortgages, the Guarantee and
Collateral Agreement, the Patent and Trademark Security Agreement, and all other
similar security documents hereafter delivered to the Co-Agents granting, or
purporting to grant, a Lien on any asset or assets of any Person to secure the
obligations and liabilities of the Company hereunder, under any Senior Secured
Notes and/or under any of the other Note Documents or to secure any guarantee of
any such obligations and liabilities, including, without limitation, any
security documents executed and delivered or caused to be delivered to the
Purchasers pursuant to Section 8.15(b) or 8.15(c) hereof.
"SENIOR CREDIT DOCUMENTS" means the Credit Agreement dated as of May 6,
1997, among Telex Communications Inc. (successor by assumption to GST
Acquisition Corp.), the several banks and financial institutions parties
thereto, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Documentation Agent, and
JPMorgan Chase Bank (f/k/a The Chase Manhattan Bank), as Administrative Agent,
as amended by the Telex Assumption Agreement dated as of May 6, 1997, Amendment
No. 1 to the Senior Credit Agreement, Amendment No. 2 to the Senior Credit
Agreement, Amendment No. 3 to the Senior Credit Agreement, Amendment No. 4 to
the Senior
15
Credit Agreement and Amendment No. 5 to the Senior Credit Agreement (as so
amended and as further amended, restated, supplemented, refinanced or otherwise
modified from time to time in accordance with its terms, the "SENIOR CREDIT
AGREEMENT") and the Loan Documents as therein defined.
"SENIOR DEBT OBLIGATIONS" means, as of any date of determination, the
Company's Obligations under the Senior Credit Documents; provided that the
principal amount of the Senior Debt Obligations shall not exceed $120,000,000 on
the date hereof, and, on any date thereafter, $120,000,000 less (a) the amount
of each prepayment of "Term Loans" (as defined in the Senior Credit Agreement)
and each permanent reduction of the aggregate "Revolving Credit Commitment" (as
defined in the Senior Credit Agreement), from time to time by or on behalf of
the Company pursuant to Section 4.4 of the Senior Credit Agreement (or any
successor provision thereof), and (b) (without duplication) any "Net Cash
Proceeds" (as defined in the Senior Credit Agreement) of any Disposition or
Asset Sale, other than the Hearing Aid Disposition, retained by the Company;
provided further that in connection with any financing or use of cash collateral
or other Collateral (as such term is defined hereunder and under the Senior
Credit Documents) with respect to the commencement of a case under Bankruptcy
Law (a "DIP FINANCING"), the principal amount of the Senior Debt Obligations
outstanding on the date on which such case is commenced shall be increased by
the lesser of (x) the amount of such DIP Financing and (y) $25,000,000, which
newly adjusted amount shall remain subject to reductions as set forth in clause
(b) of the first proviso clause of this definition.
"SENIOR LOANS" means the "Loans" under the Senior Credit Agreement (as the
term "Loan" is defined thereunder).
"SENIOR SECURED NOTES" has the meaning specified in Section 1.1 hereof.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOLVENT" AND "SOLVENCY" mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts and liabilities beyond such Person's ability to pay as such
debts and liabilities mature and (d) such Person is not engaged in a business or
a transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute an unreasonably small capital.
"SUBSIDIARY" means, with respect to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other persons performing similar functions are at
the time, directly or indirectly through one or more intermediaries, or both,
owned or controlled, by such Person. Unless otherwise expressly indicated to the
contrary
16
herein, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Company.
"TAXES" means all taxes, charges, fees, levies or other assessments,
including all net income, gross income, gross receipts, sales, use, ad valorem,
value added, transfer, franchise, profits, alternative minimum, license,
withholding, employment, payroll, excise, estimated, severance, stamp,
occupation, real or personal property or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any federal,
state, local or foreign tax authority.
"TELEX EXCHANGE" has the meaning specified in the preamble hereof.
"TERMINATION DATE" means the later to occur of the Maturity Date and the
first Business Day on which the Company is permitted under the terms of the
Intercreditor Agreement to pay in full in cash the Company's Obligations under
the Senior Secured Notes and the other Note Documents.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan which is likely to constitute grounds for
termination of such Benefit Plan or Multiemployer Plan; (ii) the withdrawal
(within the meaning of Section 4063 of ERISA) of the Company or any ERISA
Affiliate from a Benefit Plan during a plan year in which such entity was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii) the
providing of notice of intent to terminate a Benefit Plan in a distress
termination described in Section 4041 (c) of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any
event or condition (a) described in Section 4042(a) of ERISA and which could
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) described in Section 4041A(a) of ERISA and that
could reasonably be expected to result in termination of a Multiemployer Plan
pursuant to Section 4041 A of ERISA; or (vi) the partial or complete withdrawal
within the meaning of Sections 4203 and 4205 of ERISA, of any Company or any
ERISA Affiliate from a Multiemployer Plan.
"TITLE INSURANCE COMPANY" has the meaning specified in Section 7.11(b)
hereof.
"TRANCHE A PRINCIPAL AMOUNT" has the meaning specified in Section 1.1.
"TRANCHE B PRINCIPAL AMOUNT" has the meaning specified in Section 1.1.
"TRANCHE A SENIOR SECURED NOTES" has the meaning specified in Section 1.1.
"TRANCHE B SENIOR SECURED NOTES" has the meaning specified in Section 1.1.
"UNDERFUNDING" means the excess of the present value of all accrued
benefits under a Plan (based on those assumptions used to fund such Plan),
determined as of the most recent annual valuation date, over the value of the
assets of such Plan allocable to such accrued benefits.
17
"U.S. DOLLARS, "$" OR "DOLLARS" means United States dollars and any lawful
currency of the United States of America successor thereto.
"WHOLLY OWNED SUBSIDIARY" means as to any Person, any Subsidiary of such
Person of which such Person owns, directly or indirectly through one or more
Wholly Owned Subsidiaries, all of the Capital Stock of such Subsidiary other
than directors qualifying shares or shares held by nominees.
"WORKING INVESTMENT" means, at any date of determination thereof, (a) the
sum (determined without duplication for the Company and its Subsidiaries) of (i)
the unpaid face amount of all accounts receivable of the Company and its
Subsidiaries as at such date of determination, plus (ii) the aggregate amount of
prepaid expenses and other current assets (other than cash) of the Company and
its Subsidiaries as at such date of determination, minus (b) the sum (determined
without duplication for the Company and its Subsidiaries) of (i) the unpaid
amount of all accounts payable of the Company and its Subsidiaries as at such
date of determination, plus (ii) the aggregate amount of all accrued expenses of
the Company and its Subsidiaries as at such date of determination (but excluding
from accounts payable and accrued expenses, the current portion of long-term
debt and all accrued interest and taxes).
18
EXHIBIT A
FORM OF SENIOR SECURED NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES AND BLUE SKY LAWS AND MAY NOT BE SOLD,
TRANSFERRED, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT (1) PURSUANT TO A
REGISTRATION STATEMENT WITH RESPECT TO SUCH NOTE WHICH IS EFFECTIVE UNDER THE
ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT
RELATING TO THE DISPOSITION OF THIS NOTE AND (3) IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES AND BLUE SKY LAWS.
THIS NOTE IS SUBJECT TO THE PROVISIONS OF AN INTERCREDITOR AGREEMENT DATED AS OF
APRIL 11, 2001, AS AMENDED, MODIFIED OR SUPPLEMENTED FROM TIME TO TIME (THE
"INTERCREDITOR AGREEMENT"), INCLUDING THEREIN CERTAIN RESTRICTIONS ON THE
PAYMENT OF PRINCIPAL AND INTEREST.
TELEX COMMUNICATIONS, INC.
AMENDED AND RESTATED 19.5% ADJUSTED INTEREST
PIK SENIOR SECURED NOTE
Tranche B Note: B___
Initial Principal Amount: $____ November 21, 2001
FOR VALUE RECEIVED, Telex Communications, Inc., a Delaware corporation (the
"Maker"), hereby promises to pay to the order of [NAME OF PAYEE] or its
registered assign and transferee (collectively, the "PAYEE") the principal sum
of [INITIAL PRINCIPAL AMOUNT] (payable in United States dollars), plus the
aggregate amount of accrued interest from time to time capitalized thereon, less
the aggregate amount of principal prepaid or repaid from time to time, in each
case, pursuant to the terms and conditions of the Purchase Agreement (as
hereinafter defined).
1. Notes. This Note is one of the 19.5% Adjusted Interest PIK Senior Secured
Notes issued pursuant to and is subject to the terms and entitled to the
benefits of the Amended and Restated Note Purchase Agreement dated as of
November 21, 2001 (as further amended, supplemented or otherwise modified
from time to time in accordance with its terms, the "PURCHASE AGREEMENT"),
among the Maker, the Payee hereof and the other Purchasers referred to
therein. Terms used herein and not otherwise defined herein shall have the
meanings ascribed thereto in the Purchase Agreement. This Note is subject
to the terms and entitled to the benefits of the Purchase Agreement. The
Maker's Obligations under this Note and the other Note Documents, and the
Obligations of the Guarantors under the other Note Documents, are secured
by the Collateral referred to, and as provided in, the Security Documents.
A-1
2. Maturity. This Note shall mature and all principal payments, all accrued
and unpaid interest thereon, and all cost, expenses and other amounts
incurred in connection therewith shall be due and payable in full (without
set-off, deduction or counterclaim) on July 31, 2004 (the "MATURITY DATE")
unless sooner prepaid or accelerated in accordance with the terms of the
Purchase Agreement. Principal and interest due on the Maturity Date shall
be due and payable in U.S. dollars in immediate available funds and shall
be paid by wire transfer as directed in writing by the Payee.
3. Interest. This Senior Secured Note shall accrue interest at the rate of
19.5% per annum from the Closing Date through December 31, 2001 (the
"INITIAL INTEREST RATE"). Beginning on January 1, 2002 and on the first
day of each calendar quarter thereafter (i.e., April 1, July 1, October 1
and January 1), the then applicable interest rate shall increase by an
additional 0.75% per annum (each such adjusted interest rate, the
"ADJUSTED INTEREST RATE") and this Note shall thereafter accrue interest
at the applicable Adjusted Interest Rate for so long as this Note remains
outstanding; provided that the Adjusted Interest Rate applicable
(excluding any default interest or other amounts payable under Section 1
of the Purchase Agreement or otherwise thereunder) to this Note shall not
exceed 25% per annum. Notwithstanding the foregoing, so long as any Event
of Default shall have occurred and be continuing, interest shall accrue on
the unpaid principal amount of this Note at the Initial Interest Rate or
the Adjusted Interest Rate, as applicable, plus 3.00% per annum (the
"DEFAULT RATE") and shall be due in arrears on a quarterly basis on each
Interest Due Date during the continuation of such Event of Default.
Interest shall be computed on the basis of a 360-day year for the actual
number of days (including the first day and the last day) occurring in the
period for which such interest is payable.
4. Method of Payments. Interest shall be due quarterly in arrears on December
31, March 31, June 30 and September 30 of each year on the first such date
occurring after the date of this Note, on the Maturity Date and, if the
Maturity Date shall not be the Termination Date, on the Termination Date
(each such date, an "INTEREST DUE DATE") and shall be compounded
quarterly. On each Interest Due Date other than the Maturity Date and, if
applicable, the Termination Date, payment of the interest due on such
Interest Due Date shall be paid in the form of a Senior Secured Note in
the principal amount of such accrued interest and issued on the applicable
Interest Due Date (an "INTEREST NOTE"). Notwithstanding the foregoing, if
the Consolidated EBITDA of the Maker for the four fiscal quarters ending
prior to the Interest Due Date other than the Maturity Date and, if
applicable, the Termination Date, is greater than or equal to two times
the Consolidated Interest Expense of the Maker for the same four fiscal
quarters (after including an amount equal to $5,600,000 in the definition
of Consolidated Interest Expense), then such accrued interest shall be
paid in U.S. dollars in immediately available funds (up to, on each
quarterly interest payment date, $1,400,000 WITH RESPECT TO ALL INTEREST
NOTES ISSUED PRIOR TO, OR ISSUABLE AS OF, SUCH INTEREST DUE DATE PURSUANT
TO THE PURCHASE AGREEMENT, and an aggregate $5,600,000 WITH RESPECT TO ALL
INTEREST NOTES ISSUED PRIOR TO, OR ISSUABLE AS OF, SUCH INTEREST DUE DATE
PURSUANT TO THE PURCHASE AGREEMENT in any fiscal year) if and to the
extent permitted by Section 8.12(e) of the Senior Credit Agreement and the
Intercreditor Agreement. Such cash interest shall be allocated pro rata
among all such Interest Notes based on the respective principal amounts of
such Interest Notes. . The failure of the Maker to issue any Interest Note
shall not affect the obligations of the Maker under this Note.
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5. Optional Prepayment. This Note may be prepaid in whole at any time, or in
part from time to time, without premium or penalty, at the option of the
Maker; provided that all outstanding Interest Notes have been paid in
full; provided further that any such prepayment of this Note and the other
Senior Secured Notes shall be in an aggregate principal amount of not less
than the lesser of $100,000 (so long as the total outstanding principal
amount of the Senior Secured Notes is at least $5,000,000) and the total
outstanding principal amount of the Senior Secured Notes; provided further
that any such prepayment, together with any prepayments in respect of any
other outstanding Senior Secured Notes, shall be allocated among all
outstanding Senior Secured Notes pro rata, in the same proportion as the
outstanding principal amount of each Senior Secured Note bears to the
aggregate outstanding principal amount of all Senior Secured Notes, and
the Payee of this Note, by its acceptance of this Note, agrees that in the
event the Payee receives any prepayment in respect of this Note in excess
of the Payee's pro rata share of such prepayment, the Payee shall promptly
return such excess to the Maker and the Maker shall promptly cause such
excess to be distributed to the holders of all outstanding Senior Secured
Notes, pro rata, in the same proportion as the outstanding principal
amount of each Senior Secured Note bears to the aggregate outstanding
principal amount of all Senior Secured Notes.
6. Remedies on Default, Etc. Reference is made to Article 9 of the Purchase
Agreement for the remedies available to the Payee upon the occurrence of
an Event of Default as described in the Purchase Agreement. The Maker
hereby agrees to pay on demand all reasonable costs and expenses,
including without limitation reasonable attorneys' fees and costs of
collection, incurred or paid by the holder of this Note in enforcing this
Note in accordance with the Purchase Agreement.
7. SUBORDINATION. THIS NOTE, AND THE OBLIGATIONS OF THE MAKER HEREUNDER,
SHALL BE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL SENIOR DEBT
OBLIGATIONS ON THE TERMS AND CONDITIONS SET FORTH IN THE INTERCREDITOR
AGREEMENT AND SECTION 1.3(b) OF THE PURCHASE AGREEMENT, WHICH SECTION
1.3(b) IS HEREIN INCORPORATED BY REFERENCE AND MADE A PART HEREOF AS IF
SET FORTH HEREIN IN ITS ENTIRETY.
8. No Impairment. No provision of the Purchase Agreement or this Note shall
alter or impair the obligation of the Maker, which is absolute and
unconditional, to pay the principal and interest on this Note at the
times, places and rates, and in the coin or currency provided.
9. No Waivers; Amendments. No failure or delay on the part of the Maker or
the Payee in exercising any right, power or remedy hereunder or under the
Purchase Agreement shall operate as a 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. The remedies provided for herein and in the Purchase Agreement are
cumulative and are not exclusive of any remedies that may be available to
the Maker or the Payee at law or in equity or otherwise. This Note may not
be amended and the provisions hereof may not be waived, except in
accordance with the terms of the Purchase Agreement.
10. Lost Notes, etc. If this Note is mutilated, destroyed, lost or stolen,
then the affidavit of the Payee's treasurer or assistant treasurer (or
other responsible official), setting forth the
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circumstances with respect to such mutilation, destruction, loss or theft,
shall be accepted as satisfactory evidence thereof, and an indemnity,
security or payment of charges or expenses may be required as a condition
to the execution and delivery by the Maker of a Note for a like aggregate
principal amount in substitution therefor as set forth in Article 10 of
the Purchase Agreement.
11. Waivers. The Maker hereby waives presentment, demand, protest and notice
of any kind. No failure on the part of the holder hereof to exercise, and
no delay in exercising, any right, power or privilege hereunder shall
operate as a waiver thereof or a consent thereto; nor shall a single or
partial exercise of any other right, power or privilege.
12. Governing Law. This Note shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws thereof.
In witness whereof, the Maker has caused this Note to be duly executed and
delivered on the date set forth above by the duly authorized representative of
the Maker.
TELEX COMMUNICATIONS, INC.
By:_____________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇
President
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EXHIBIT B
FORM OF GUARANTEE AND COLLATERAL AGREEMENT
This exhibit has been filed as Exhibit 4.4(e) to the Report on Form 10-Q/A
for the quarter ended September 30, 2001.
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EXHIBIT C
FORM OF PATENT AND TRADEMARK SECURITY AGREEMENT
This exhibit has been filed as Exhibit 4.4(f) to the Report on Form 10-Q/A
for the quarter ended September 30, 2001.
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EXHIBIT E
FORM OF INTERCREDITOR AGREEMENT
This exhibit has been filed as Exhibit 4.3(o) to the Report on Form 10-Q/A
for the quarter ended September 30, 2001.
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