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EXHIBIT 4.4
EXHIBIT A
[FORM OF PROMISSORY NOTE]
12.0% JUNIOR SUBORDINATED PROMISSORY NOTE
$[AMOUNT] New York, New York
April 1, 1999
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH. THIS NOTE IS ALSO SUBJECT TO
RESTRICTIONS ON TRANSFER SET FORTH IN THE STOCKHOLDERS AGREEMENT DATED
APRIL 1, 1999.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR THE
PURPOSES OF SECTIONS 1271-1275 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED. THE ISSUE PRICE, AMOUNT OF ORIGINAL DISCOUNT, ISSUE DATE
AND YIELD TO MATURITY OF THE NOTES MAY BE OBTAINED BY CONTACTING THE
COMPANY'S CHIEF FINANCIAL OFFICER, TELEPHONE NO. (714) 433-6000.
FOR VALUE RECEIVED, the undersigned, RC TRANSACTION CORP., a Delaware
corporation (the "Company"), promises to pay to [NAME] (the "Investor") in
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lawful money of the United States and in immediately available funds, the
principal amount of $[AMOUNT] together with interest thereon calculated from the
date hereof in accordance with the provisions of this Note.
This Note was issued pursuant to the Investment Agreement, dated as of
April 1, 1999 (the "Investment Agreement"), among Evercore Capital Partners
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L.P., Evercore Capital Partners (NQ) L.P., Evercore Capital Offshore Partners
L.P., Evercore Co-Investment Partnership L.P. and each of the investors named on
the signature pages thereto. Unless the context otherwise requires, as used
herein, "Note" means any of the Junior Subordinated Promissory Notes issued
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pursuant to the Investment Agreement and any other similar Junior Subordinated
Promissory Notes issued by the Company and "Notes" means all such Notes in the
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aggregate.
1. Accrual of Interest. Except as otherwise expressly provided in
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Section 3 hereof, interest shall accrue at the rate of twelve percent (12.0%)
per annum (based on a year of 360 days) on the unpaid principal amount of this
Note outstanding from time to time. Any accrued interest which for any reason
has not theretofore been paid when due shall be added
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automatically to the then outstanding principal amount hereof and shall be paid
in full in cash on the date on which the final principal payment on this Note is
paid. Interest shall accrue on any principal payment due under this Note until
such time as payment therefor in cash is actually received by the holder of this
Note.
2. Payment of Principal and Interest on Note.
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(a) Scheduled Payment of Principal. The Company shall pay the
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principal amount of $[AMOUNT] (or such greater or lesser principal amount then
outstanding), together with all accrued and unpaid interest thereon, in cash to
the holder of this Note on April 15, 2004.
(b) Payment of Interest. Subject to Section 2(c) and Section 8 below,
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the Company shall pay interest on this Note quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year, or if any such day is not a
business day, on the next succeeding business day (each an "Interest Payment
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Date"). Any interest payable on any Interest Payment Date may, at the option of
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the Company, be paid by adding an amount equal to the interest payable on such
Interest Payment Date to the unpaid principal amount of this Note; provided that
the Company may (i) after the payment in full in cash of the Senior Indebtedness
(as defined below) under the Credit Agreement (as defined below) and so long as
the Credit Agreement is no longer "in effect" (as defined below) or (ii) to the
extent expressly permitted by the Credit Agreement, elect to pay all or a
portion of the interest on this Note in cash and under such circumstances, the
unpaid portion of the interest payable will be added to the unpaid principal
amount of this Note as described above.
(c) Prepayments. Notwithstanding any other provision hereof, for so
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long as any principal, accrued interest, accrued fees or other amounts remains
outstanding or unpaid, or any lending commitment or letter of credit or letter
of credit guarantee remains outstanding ("in effect"), under the Credit
Agreement, the Company shall not prepay, redeem, defease or acquire any of the
principal amount hereof or interest hereon; provided that, notwithstanding the
foregoing, the Company shall pay the principal amount outstanding under the
Notes and all accrued and unpaid interest thereon (to the extent expressly
permitted by the Credit Agreement) in cash concurrently with the consummation of
a Strategic Transaction (as defined in that certain Stockholders Agreement,
dated as of April 1, 1999, as amended from time to time (the "Stockholders
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Agreement"), among the Company and the stockholders listed on schedules I, II
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and III thereto) or a Qualified Public Offering (as defined in the Stockholders
Agreement).
(d) Pro Rate Payment. The Company agrees that any payments to the
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holders of the Notes (including, without limitation, upon acceleration pursuant
to Section 3) (whether for principal, interest or otherwise) shall be made pro
rata among all such holders based upon the aggregate unpaid principal amount of
the Notes held by each such holder. If any holder of a Note obtains any payment
(whether voluntary, involuntary, by application of offset or otherwise) of
principal or interest on such Note in excess of such holder's pro rata share of
payments obtained by all holders of the Notes, such holder shall purchase from
the other holders of the Notes such participation in the Notes held by them as
is necessary to cause such holders to share the excess payment ratably among
each of them as provided in this Section.
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3. Events of Default.
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(a) Definition. For purposes of this Note, an Event of Default shall
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be deemed to have occurred if:
i. the Company fails to pay when due the full amount of interest
then accrued hereon or the full amount of any principal payment hereon;
ii. (A) the Company makes an assignment for the benefit of
creditors, (B) an order, judgment or decree is entered adjudicating the Company
bankrupt or insolvent, (C) any order for relief with respect to the Company is
entered under the Bankruptcy Reform Act, Title 11 of the United States Code, (D)
the Company petitions or applies to any tribunal for the appointment of a
custodian, trustee, receiver or liquidator of the Company or of any substantial
part of the assets of the Company, or commences any proceeding relating to the
Company under any bankruptcy reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction, or (E)
any such petition or application is filed, or any such proceeding is commenced,
against the Company and either (1) the Company by any act indicates its approval
thereof, consent thereto or acquiescence therein or (2) such petition,
application or proceeding is not dismissed within 60 days;
iii. a judgment in excess of $500,000 is rendered against the
Company and, within 60 days after entry thereof, such judgment is not discharged
or execution thereof stayed pending appeal, or within 60 days after the
expiration of any such stay, such judgment is not discharged or paid;
iv. the Company defaults in the performance of any indebtedness
if the effect of such default is to cause an amount exceeding $500,000 to become
due prior to its stated maturity; or
v. for any reason the indebtedness under the Credit Agreement
shall have become due prior to its stated maturity.
Notwithstanding the foregoing, no Event of Default under clauses (i), (iii),
(iv) or (v) above shall occur or shall be deemed to have occurred (unless the
indebtedness under the Credit Agreement shall have become due prior to its
stated maturity and such acceleration shall not have been rescinded or annulled
within 30 days thereafter) so long as any Senior Indebtedness remains
outstanding or the Credit Agreement is otherwise "in effect." Nothing in this
Section 3 shall prevent a holder of Senior Indebtedness from exercising its
right to enforce the applicable provisions of this Note against the holder of
this Note in any proceeding of a type described in Section 3(a)(ii) above or any
similar proceeding.
(b) Consequences of Events of Default.
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i. If an Event of Default of the type described in subsection
3(a)(i) has occurred and continued for 15 days or any other Event of Default has
occurred, the holder or holders of the Notes representing a majority of the
aggregate principal amount then outstanding
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of the Notes may declare all or any portion of the outstanding principal amount
of the Notes due and payable and demand immediate payment of all or any portion
of the outstanding principal amount of the Notes owned by such holder or
holders, provided that in an Event of Default specified in subsection 3(a)(ii),
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all of the outstanding principal amount of the Notes shall immediately become
due and payable. The Company shall give prompt written notice of any such demand
to the other holders, if any, of any portion of the Notes, each of which may
demand immediate payment of all or any portion of such holder's portion of the
Notes. If any holder or holders of the Notes demand immediate payment of all or
any portion of such holder's portion of the Notes, the Company shall, subject to
the other provisions of this Note (including Section 8), immediately pay in cash
to such holder or holders the principal amount of the Notes requested to be paid
plus accrued interest thereon.
ii. Subject to the other provisions of this Note (including
Section 8), each holder of any portion of this Note shall also have, upon the
occurrence and continuance of an Event of Default, any other rights which such
holder may have pursuant to applicable law.
4. Amendment and Waiver. Except as otherwise expressly provided herein,
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the provisions of this Note may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the holders of at
least a majority of the aggregate principal amount then outstanding of the Notes
and, for so long as any Senior Indebtedness remains outstanding or the Credit
Agreement is "in effect," the consent of the holders of at least a majority of
the aggregate principal amount then outstanding under the Credit Agreement (if
the Credit Agreement is "in effect") or their agent or representative; provided
that no such action shall change (i) the rate at which or the manner in which
interest accrues on the Notes or is payable or the times at which such interest
becomes payable, or (ii) any provision relating to the scheduled payment of
principal on the Notes without the consent of the applicable holder if such
change is adverse to such holder.
5. Place of Payment. Payments of principal and interest and all notices
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and other communications to the Investor hereunder or with respect hereto are to
be delivered to the Investor at the following address:
_____________________
_____________________
Attn:________________
or to such other address or to the attention of such other person as specified
by prior written notice to the Company.
6. Costs of Collection. In the event that the Company fails to pay when
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due (including, without limitation upon acceleration in connection with an Event
of Default) the full amount of principal and/or interest hereunder, the Company
shall indemnify and hold harmless the holder of any portion of this Note from
and against all reasonable costs and expenses incurred
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in connection with the enforcement or collection of such principal and interest,
including, without limitation, reasonable attorneys' fees and expenses.
7. Waivers. The Company hereby waives presentment, demand, notice,
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protest and all other demand and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Note.
8. Subordination. The Company agrees, and by the acceptance hereof each
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holder agrees, as follows:
(a) Subordination of Liabilities. The Company, for itself, its
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successors and assigns, covenants and agrees, and each holder of this Note
(together with its successors and assigns, the "holder of this Note") by its
acceptance hereof likewise covenants and agrees, that the payment of the
principal of, interest on, and all other amounts owing in respect of, this Note
(the "Subordinated Indebtedness") is hereby expressly subordinated, to the
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extent and in the manner hereinafter set forth, to the prior payment in full in
cash of all Senior Indebtedness. The provisions of this Section 8, and the
provisions of Sections 2 and 3 of this Note, each shall constitute a continuing
offer to all persons or other entities who, in reliance upon such provisions,
become holders of, or continue to hold, Senior Indebtedness, and such provisions
are made for the benefit of the holders of Senior Indebtedness, and such holders
are hereby made obligees hereunder the same as if their names were written
herein as such and they and/or each of them may proceed to enforce such
provisions.
(b) Company Not to Make Payments with Respect to Subordinated
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Indebtedness in Certain Circumstances. (i) Upon the maturity of any Senior
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Indebtedness (including interest thereon or fees or any other amounts owing in
respect thereof), whether at stated maturity, by acceleration or otherwise, all
Obligations (as defined in Section 8(g)) owing in respect thereof shall first be
paid in full in cash, before any payment of any kind or character (whether in
cash, property, securities or otherwise) is made on account of the Subordinated
Indebtedness.
(ii) The Company may not, directly or indirectly, make any
payment of any kind or character of any Subordinated Indebtedness and may not
acquire any Subordinated Indebtedness for cash or property until all Senior
Indebtedness has been paid in full in cash if such payment is prohibited by the
terms of any Senior Indebtedness or if any default or event of default under any
Senior Indebtedness is then in existence or would result therefrom.
(iii) In the event that, notwithstanding the other provisions of
this Section 8(b), the Company shall make (or any other person or entity on
behalf of the Company shall make) any payment on account of the Subordinated
Indebtedness or shall acquire any Subordinated Indebtedness for cash or property
at a time when payment is not permitted by such provisions, such payment shall
be held by the holder of this Note, in trust for the benefit of, and shall be
paid forthwith over and delivered to, the holders of Senior Indebtedness or
their representative, agent or trustee under the loan agreement, indenture or
other agreement pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may appear, for
application pro rata to the payment of all Senior
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Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash in accordance with the terms of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness. Without in any way modifying the
provisions of this Section 8 or affecting the subordination effected hereby, if
notice has not been previously given, the Company shall give the holder of this
Note prompt written notice of any event which would prevent payments under this
Section 8(b).
(c) Subordination to Prior Payment of All Senior Indebtedness on
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Dissolution, Liquidation or Reorganization of the Company. Upon any payment or
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distribution of assets of the Company of any kind or character (whether in cash,
properties or securities) upon any total or partial dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership or similar proceedings or upon an assignment for the benefit of
creditors, marshaling of assets of the Company or otherwise):
(i) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior Indebtedness
(including, without limitation, post-petition interest at the rate provided in
the documentation with respect to such Senior Indebtedness, whether or not such
post-petition interest is an allowed claim against the debtor in any bankruptcy
or similar proceeding) before the holder of this Note is entitled to receive any
payment of any kind or character on account of the Subordinated Indebtedness;
(ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities to which the holder
of this Note would be entitled except for the provisions of this Section 8,
shall be paid by the liquidating trustee or agent or other person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative, agent or trustee under any loan agreement,
indenture or other agreement under which any instruments evidencing any such
Senior Indebtedness may have been issued, to the extent necessary to make
payment in full in cash of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness; and
(iii) in the event that, notwithstanding the foregoing provisions
of this Section 8(c), any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, shall be
received by the holder of this Note on account of Subordinated Indebtedness
before all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be received and held in trust for and shall be paid over to
the holders of the Senior Indebtedness remaining unpaid or their representative,
agent or trustee under any loan agreement, indenture or other agreement under
which any instruments evidencing any of such Senior Indebtedness may have been
issued, for application to the payment of such Senior Indebtedness until all
such Senior Indebtedness shall have been paid in full in cash after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared
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to be fraudulent or preferential, set aside or required to be paid to any
receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
person under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then, if such payment is recovered by, or paid over to, such
receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
person, the Senior Indebtedness or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
has not occurred. If the holder of this Note does not file a proper claim or
proof of debt in the form required in any bankruptcy, insolvency, receivership,
reorganization or similar proceeding prior to 30 days before the expiration of
the time to file such claim or claims, then any of the holders of the Senior
Indebtedness or their representative, agent or trustee is hereby authorized to
file an appropriate claim for and on behalf of the holder of this Note.
(d) Subrogation. Subject to the prior payment in full in cash
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of all Senior Indebtedness, the holder of this Note shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on this Note shall be paid in full, and for the purpose
of such subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the holder of
this Note by virtue of this Section 8 which otherwise would have been made to
the holder of this Note shall, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holder of this Note, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Section 8 are and are intended solely for
the purpose of defining the relative rights of the holder of this Note, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
(e) Obligation of the Company Unconditional. Nothing contained in
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this Section 8 or in this Note is intended to or shall impair, as between the
Company and the holder of this Note, the obligation of the Company, which is
absolute and unconditional, to pay to the holder of this Note the principal of
and interest on this Note as and when the same shall become due and payable in
accordance with its terms, or is intended to or shall affect the relative rights
of the holder of this Note and creditors of the Company other than the holders
of the Senior Indebtedness, nor shall anything herein or therein prevent the
holder of this Note from exercising all remedies otherwise permitted by
applicable law upon an event of default under this Note, subject to the
provisions of this Section 8 and Section 3 of this Note, including the rights of
the holders of Senior Indebtedness in respect of assets of the Company received
upon the exercise of any such remedy. Upon any distribution of assets of the
Company referred to in this Section 8, the holder of this Note shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
person making any distribution to the holder of this Note, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section 8.
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(f) Subordination Rights Not Impaired by Acts or Omissions of
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Company or Holders of Senior Indebtedness. No right of any present or future
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holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act by any such
holder, or by any noncompliance by the Company with the terms and provisions of
this Note, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of the Senior Indebtedness may, without
in any way affecting the obligations of the holder of this Note with respect
hereto, at any time or from time to time and in their absolute discretion,
change the manner, place or terms of payment of, change or extend the time of
payment of, or renew, alter or increase, any Senior Indebtedness or amend,
modify or supplement any agreement or instrument governing or evidencing such
Senior Indebtedness or any other document referred to therein, or exercise or
refrain from exercising any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of default thereunder and the release
or impairment of any collateral securing such Senior Indebtedness, all without
notice to or assent from the holder of the Note.
(g) Senior Indebtedness. The term "Senior Indebtedness" shall
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mean all Obligations (i) of the Company under, or in respect of, the Credit
Agreement (as amended, modified, supplemented, extended, restated, refinanced,
replaced or refunded from time to time, the "Credit Agreement"), dated as of
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April 1, 1999, among the Company, RCLLC Acquisition Corp., Re:sources Connection
LLC, the lenders from time to time party thereto, BankBoston, N.A., as
Syndication Agent, U.S. Bank National Association, as Documentation Agent, and
Bankers Trust Company, as Administrative Agent, and the other Credit Documents
(as defined in the Credit Agreement), and any renewal, extension, restatement,
refinancing or refunding of any thereof, (ii) of the Company under, or in
respect of, any Interest Rate Protection Agreements (as defined in the Credit
Agreement) or Other Hedging Agreements (as defined in the Credit Agreement)
entered into at a time when the Credit Agreement is in "effect" and (iii) of the
Company under, or in respect of, any other indebtedness, whether outstanding on
the date hereof or hereafter created, incurred or assumed, unless, in the case
of any indebtedness to any Lender (as defined in the Credit Agreement) or any of
its affiliates under this clause (iii), such indebtedness expressly provides
that it shall not be "Senior Indebtedness" for purposes of this Note and, in the
case of any other indebtedness referred to in this clause (iii), which the
Company specifically designates in writing as "Senior Indebtedness" for purposes
of this Note; provided, however, that no such other Senior Indebtedness
described in this clause (iii) shall by its terms prohibit the repayment of the
principal amount outstanding under this Note and accrued interest thereon at
maturity unless an event of default has occurred and is continuing thereunder.
As used herein, the term "Obligation" shall mean any principal, interest,
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premium, penalties, fees, expenses, indemnities, reimbursements and other
liabilities and obligations (including any guaranties of the foregoing
liabilities and obligations) payable under the documentation governing any
indebtedness (including interest after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided for in the
respective issue of Senior Indebtedness, whether or not such interest is an
allowed claim against the debtor in any such proceeding).
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(h) Amendments. As long as any Senior Indebtedness is
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outstanding or any amounts are owing in respect thereof, the provisions of this
Section 8 shall not be amended or modified without the written consent of the
holders of such Senior Indebtedness.
9. Governing Law. This Note shall be governed by the laws of the State
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of New York.
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IN WITNESS WHEREOF, the Company has executed and delivered this Note
on __________________ ___, 1999.
RC TRANSACTION CORP
By:_______________________________
Name:
Title:
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