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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): JULY 16, 1996 (JULY 9, 1996)
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OUTDOOR SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-28256 86-0736400
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2502 NORTH BLACK CANYON HIGHWAY, PHOENIX, ARIZONA 85009
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 246-9569
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
On July 9, 1996, the Registrant entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement") with Gannett Co., Inc. and certain
of its subsidiaries (collectively, "Gannett"), providing for the purchase (the
"Acquisition") by the Registrant of substantially all of the billboard
advertising, transit and shelter operations of the Outdoor Division (the
"Division") of Gannett for a purchase price of $640 million in cash, plus the
net book value of working capital and certain other specified assets of the
Division (which net book value is estimated to increase the purchase price by
approximately $50 million). In addition, pursuant to the Asset Purchase
Agreement, Gannett Outdoor Co. of Texas, Inc. ("Gannett of Texas") will grant
to the Registrant an option (the "Option"), to purchase, within 120 days after
the closing of the Acquisition, Gannett of Texas' outdoor operations in
Houston, Texas, for a purchase price of $10 million, plus a net book value
adjustment similar to the adjustment to the purchase price of the Division.
Pursuant to the Asset Purchase Agreement, the Registrant made a deposit to
Gannett consisting of $12 million cash and a promissory note in the principal
amount of $3 million payable on July 29, 1996, and guaranteed by William S.
Levine, Chairman of the Board and principal shareholder of the Registrant. The
deposit will be credited against the purchase price if the Acquisition is
consummated, returned to the Registrant if the Acquisition is not consummated
as a result of a breach by Gannett, retained by Gannett if the transaction is
not consummated because of a breach by the Registrant, and split equally
between the Registrant and Gannett if the Acquisition is not completed because
of the action of a third party outside of either party's control. Copies of
the Asset Purchase Agreement and the Option are attached as Exhibit 99.1 and
Exhibit 99.2, respectively, to this Report and are incorporated by reference
herein.
The consummation of the transactions contemplated by the Asset
Purchase Agreement is subject to certain conditions including the expiration or
early termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
The Registrant will finance the purchase price of the Acquisition, the
fees and expenses associated with the Acquisition and the related financing and
the retirement or refinancing of certain existing indebtedness through (i)
revolving credit and term loans of up to $530 million under a senior credit
facility, (ii) bridge loans of up to $240 million under a senior subordinated
facility, and (iii) up to $165 million in proceeds from a private placement of
preferred stock and warrants pursuant to the following agreements entered into
on July 9, 1996:
(1) The Registrant entered into a Second Amended and Restated
Credit Agreement (the "Restated Credit Agreement") with
Canadian Imperial Bank of Commerce ("CIBC"), as Administrative
Agent, and other financial institutions parties thereto
providing for the restructuring of the Registrant's existing
credit facility with CIBC and for revolving credit loans
(including letter of credit commitments) of up to $70 million
and term loans of up to $460 million. The revolving credit
loans and the term loans may be, at the option of the
Registrant, "Eurodollar loans," "ABR loans," or a combination
thereof. Eurodollar loans will bear annual interest at LIBOR
plus an applicable margin (initially 3.25% for revolving
credit loans and for the $160 million principal amount of term
loans designated as "Tranche A" and 3.50% for "Tranche B" and
"Tranche C" term loans). ABR loans will bear interest at an
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annual rate equal to the highest of (A) the CIBC base rate,
(B) the federal funds rate plus 1%, and (C) the lowest
three-week moving average of daily secondary market morning
offering rates for three-month CDs plus 1%, plus, in each
case, an applicable margin (initially 2.25% for revolving
credit loans and Tranche A term loans and 2.50% for Tranche B
and Tranche C loans). The Registrant's obligations under the
Restated Credit Agreement will be secured by a security
interest in substantially all of the Registrant's assets. The
revolving credit loans will mature on the earlier of December
31, 2001, or at such time as any revolving credit lender no
longer is obligated to make revolving credit loans to, and/or
issue or participate in letters of credit issued on behalf of,
the Registrant. The maturity dates for the Tranche A, Tranche
B, and Tranche C loans are December 31, 2000, 2002, and 2003,
respectively. The Registrant may at any time and from time to
time prepay any of the loans in whole or in part without
premium or penalty. The Registrant must use excess cash flow
and cash proceeds from the sale of securities or assets,
subject to certain exceptions (including exceptions for
refinancing of indebtedness under the Senior Subordinated
Credit Agreement (as defined below) and redemption of Series A
Preferred Stock (as defined below), in each case out of
proceeds of specified refinancings to prepay amounts
outstanding under this credit facility. The Restated Credit
Agreement contains customary affirmative and negative
covenants (including covenants limiting the Registrant's
ability to incur additional indebtedness or other obligations,
sell assets, pay dividends, and make capital expenditures and
certain investments) and customary event of default
provisions, including default upon a change in control of the
Registrant. A copy of the Restated Credit Agreement is
attached as Exhibit 99.3 to this Report and is incorporated by
reference herein.
(2) The Registrant and its subsidiaries entered into a Senior
Subordinated Credit Agreement (the "Senior Subordinated Credit
Agreement") with CIBC, as Agent, and the lenders named
therein, providing for a bridge loan to the Registrant in the
aggregate principal amount of $240 million. The bridge loan
will bear interest at LIBOR plus 6% per annum increasing by 1%
if the bridge loan remains outstanding six months after the
closing of the financing and by .5% every three months
thereafter up to a maximum of 20% per annum. Any interest due
and payable in excess of 15% per annum may be paid by the
Registrant in additional senior subordinated indebtedness.
Bridge indebtedness remaining outstanding one year following
the closing of the financing will be converted into term loans
maturing on the tenth anniversary of the closing of the
financing and will initially bear interest at the same rate as
the bridge loan plus .5%, subject to increase by .5% every
three months thereafter up to a maximum of 20% per annum. The
term loans may be exchanged by any lender holding in excess of
$5 million principal amount thereof for Senior Subordinated
Notes due 2006 (the "Exchange Notes") to be issued under an
Indenture (the "Indenture") to be entered into by the
Registrant, the subsidiary guarantors named therein, and a
trustee to be selected by the Registrant. The Exchange Notes
will bear interest at the same rate as the term loans and,
like the term loans, will mature on the tenth anniversary of
the closing of the financing. The Registrant may prepay the
bridge loan in whole or in part (provided that, in the case of
prepayment in part, at least $100 million in principal amount
remains outstanding) without penalty or premium. Term loans
and Exchange Notes may be prepaid in whole or in part
(provided that, in the case
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of prepayment in part, at least $100 million in principal
amount remains outstanding) at a premium as set forth in the
Senior Subordinated Credit Agreement and the Indenture, as
applicable. The Registrant must use excess cash flow and cash
proceeds from sales of securities and assets, subject to
prepayment of senior indebtedness under certain circumstances
and certain other exceptions, to prepay amounts outstanding
under this facility and must offer to repay or repurchase the
bridge loan or the term loans, as appropriate, upon a change
in control. The Senior Subordinated Credit Agreement contains
customary affirmative and negative covenants, including
covenants limiting the Registrant's ability to incur
additional indebtedness or other obligations, sell assets, pay
dividends, and make capital expenditures and certain other
investments. Copies of the Senior Subordinated Credit
Agreement and the form of Indenture are attached as Exhibit
99.4 and Exhibit 99.5, respectively, to this Report and are
incorporated by reference herein.
(3) The Registrant entered into a Securities Purchase Agreement
(the "Securities Purchase Agreement") with CIBC WG Argosy
Merchant Fund 2, L.L.C. (the "Purchaser"), providing for the
issuance and sale by the Registrant of up to $165 million
liquidation value of Senior Increasing Rate Cumulative
Preferred Stock, Series A (the "Series A Preferred Stock"),
and warrants to purchase up to 284,000 shares of Common Stock
of the Registrant (not adjusted for the stock split to be
effected as a stock dividend payable on July 22, 1996 to
shareholders of record on July 8, 1996) (the "Warrants"). In
addition, the Registrant and the Purchaser have agreed that
the Registrant may sell to Purchaser up to an additional $60
million liquidation value of Series A Preferred Stock solely
to enable the Registrant to maintain, as of the date of the
closing of the financing, a total leverage ratio (as defined
in the Restated Credit Agreement) no greater than 6.5 to 1.
If any such additional Series A Preferred Stock is issued, the
number of Warrants and Additional Warrants (as defined below)
issuable pursuant to the Securities Purchase Agreement will be
proportionately increased, and the term loan commitments under
the Restated Credit Agreement will be proportionately
decreased. The holders of the Series A Preferred Stock will
be entitled to receive dividends payable in additional shares
of Series A Preferred Stock at a rate per annum equal to the
three-month LIBOR rate plus 7%. If the Series A Preferred
Stock remains outstanding six months after the date such stock
was first issued, the dividend rate will increase by 1% and
for each 90-day period thereafter that such stock remains
outstanding, the dividend rate will increase by an additional
.5% up to a maximum of 20%. The Warrants will have an
exercise price per share equal to 110% of the average market
price of the Registrant's Common Stock for the 20 business day
period prior to the announcement of the Acquisition, may be
exercised for a period of five years from the date of the
closing of the financing and may be called by the Registrant
at a nominal call price after three years from the date of the
closing of the Acquisition. The Securities Purchase Agreement
provides that additional warrants ("Additional Warrants") are
to be issued to the holders of the Series A Preferred Stock if
such
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stock continues to be outstanding 60 days following the
closing of the Acquisition at the rate of 4,100 Additional
Warrants per day for the period commencing on the 61st and
ending on the 90th day following the closing, at the rate of
5,235 Additional Warrants for the period commencing on the
91st day and ending on the 120th day, and at the rate of
455,000 Additional Warrants per quarter thereafter. The
exercise price of the Additional Warrants, if any, issued
during the period between 60 and 120 days following the
closing of the Acquisition, the period during which such
Additional Warrants may be exercised and the call period
thereof will be the same as those of the initial Warrants.
The exercise price of the remaining Additional Warrants, if
any, will be 110% of the average market price of the
Registrant's Common Stock for the 20 business day period prior
to the date of issuance thereof and such Additional Warrants
will be exercisable for a period of five years, and may be
called after three years, from the date of issuance thereof.
The Series A Preferred Stock may be redeemed at any time in
whole or in part at a redemption price equal to the
liquidation value plus accrued and unpaid dividends. In
addition, the Registrant must use proceeds of certain asset
sales that are not used to retire indebtedness or to make
certain permitted investments to offer to repurchase shares of
Series A Preferred Stock and must offer to repurchase the
Series A Preferred Stock upon a change in control. A copy of
the Securities Purchase Agreement is attached as Exhibit 99.6
to this Report and is incorporated by reference herein. The
form of Certificate of Designations setting forth the terms of
the Series A Preferred Stock and the form of Warrant Agreement
pursuant to which the Warrants and the Additional Warrants
will be issued are attached as Exhibit 99.7 and Exhibit 99.8,
respectively, to this Report and are incorporated by reference
herein.
The holders of the Series A Preferred Stock and Exchange Notes will be
granted certain registration rights pursuant to a Registration Rights Agreement
to be entered into by and among the Registrant, the guarantors named therein,
and the holders named therein. The holders of the Warrants will also be
granted certain registration rights with respect to shares of Common Stock
issuable upon the exercise thereof pursuant to a Common Stock Registration
Rights Agreement to be entered into between the Registrant and the Purchaser.
The form of Registration Rights Agreement and the form of Common Stock
Registration Rights Agreement are attached as Exhibit 9 and Exhibit 10,
respectively, to this Report and are incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1. Asset Purchase Agreement dated July 9, 1996, by and
among the Registrant, Gannett Co., Inc., Combined
Communications Corporation, Gannett Transit, Inc.,
Shelter Media Communications, Inc., and Gannett
International Communications, Inc., together with
forms of Promissory Note and related Guaranty. The
Exhibit contains a list briefly identifying the
contents of Schedules and Exhibits, some of which
have been omitted. The Registrant
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agrees to furnish supplementally a copy of any
omitted Schedule or Exhibit to the Commission upon
request.
99.2. Form of Option by Gannett Outdoor Co. of Texas, Inc.,
in favor of the Registrant together with the form of
Asset Purchase Agreement by and between the
Registrant Gannett Outdoor Co. of Texas, Inc.
99.3. Second Amended and Restated Credit Agreement dated
July 9, 1996, as amended, by and among the
Registrant, Canadian Imperial Bank of Commerce, as
Administrative Agent, and the other financial
institution parties thereto, together with forms of
Revolving Credit Note, Tranche A Term Note, Tranche B
Term Note, Tranche C Term Note, and Guarantee and
Collateral Agreement. The Exhibit contains a list
briefly identifying the contents of Schedules and
Exhibits, some of which have been omitted. The
Registrant agrees to furnish supplementally a copy of
any omitted Schedule or Exhibit to the Commission
upon request.
99.4. Senior Subordinated Credit Agreement dated July 9,
1996, by and among the Registrant, the guarantors
named therein, the lenders named therein, and
Canadian Imperial Bank of Commerce, as Agent,
together with forms of Bridge Note and Term Note.
The Exhibit contains a list briefly identifying the
contents of Schedules and Exhibits, some of which
have been omitted. The Registrant agrees to furnish
supplementally a copy of any omitted Schedule or
Exhibit to the Commission upon request.
99.5. Form of Indenture by and among the Registrant, the
subsidiary guarantors named therein, and a trustee to
be selected by the Registrant.
99.6. Securities Purchase Agreement dated July 9, 1996, by
and between the Registrant and CIBC WG Argosy
Merchant Fund 2, L.L.C. The Exhibit contains a list
briefly identifying the contents of Schedules and
Exhibits which have been omitted. The Registrant
agrees to furnish supplementally a copy of any
omitted Schedule or Exhibit to the Commission upon
request.
99.7. Form of Certificate of Designations of Senior
Increasing Rate Cumulative Preferred Stock, Series A.
99.8. Form of Warrant Agreement by and between the
Registrant and a Warrant Agent to be selected by the
Registrant.
99.9. Form of Registration Rights Agreement by and among
the Registrant, the guarantors names therein, and the
holders named therein.
99.10. Form of Common Stock Registration Rights Agreement by
and between the Registrant and CIBC WG Argosy
Merchant Fund 2, L.L.C.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 16, 1996 OUTDOOR SYSTEMS, INC.
By: /s/ BILL M. BEVERAGE
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Name: Bill M. Beverage
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Title: Chief Financial Officer,
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Treasurer and Secretary
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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99.1. Asset Purchase Agreement dated July 9, 1996, by and among the
Registrant, Gannett Co., Inc., Combined Communications Corporation,
Gannett Transit, Inc., Shelter Media Communications, Inc., and Gannett
International Communications, Inc., together with forms of Promissory
Note and related Guaranty. The Exhibit contains a list briefly
identifying the contents of Schedules and Exhibits, some of which have
been omitted. The Registrant agrees to furnish supplementally a copy
of any omitted Schedule or Exhibit to the Commission upon request.
99.2. Form of Option by Gannett Outdoor Co. of Texas, Inc., in favor of the
Registrant together with the form of Asset Purchase Agreement by and
between the Registrant Gannett Outdoor Co. of Texas, Inc.
99.3. Second Amended and Restated Credit Agreement dated July 9, 1996, as
amended, by and among the Registrant, Canadian Imperial Bank of
Commerce, as Administrative Agent, and the other financial institution
parties thereto, together with forms of Revolving Credit Note, Tranche
A Term Note, Tranche B Term Note, Tranche C Term Note, and Guarantee
and Collateral Agreement. The Exhibit contains a list briefly
identifying the contents of Schedules and Exhibits, some of which have
been omitted. The Registrant agrees to furnish supplementally a copy
of any omitted Schedule or Exhibit to the Commission upon request.
99.4. Senior Subordinated Credit Agreement dated July 9, 1996, by and among
the Registrant, the guarantors named therein, the lenders named
therein, and Canadian Imperial Bank of Commerce, as Agent, together
with forms of Bridge Note and Term Note. The Exhibit contains a list
briefly identifying the contents of Schedules and Exhibits, some of
which have been omitted. The Registrant agrees to furnish
supplementally a copy of any omitted Schedule or Exhibit to the
Commission upon request.
99.5. Form of Indenture by and among the Registrant, the subsidiary
guarantors named therein, and a trustee to be selected by the
Registrant.
99.6. Securities Purchase Agreement dated July 9, 1996, by and between the
Registrant and CIBC WG Argosy Merchant Fund 2, L.L.C. The Exhibit
contains a list briefly identifying the contents of Schedules and
Exhibits which have been omitted. The Registrant agrees to furnish
supplementally a copy of any omitted Schedule or Exhibit to the
Commission upon request.
99.7. Form of Certificate of Designations of Senior Increasing Rate
Cumulative Preferred Stock, Series A.
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99.8. Form of Warrant Agreement by and between the Registrant and a Warrant
Agent to be selected by the Registrant.
99.9. Form of Registration Rights Agreement by and among the Registrant, the
guarantors names therein, and the holders named therein.
99.10. Form of Common Stock Registration Rights Agreement by and between the
Registrant and CIBC WG Argosy Merchant Fund 2, L.L.C.
</TABLE>
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EXHIBIT 99.1
ASSET PURCHASE AGREEMENT
AMONG
GANNETT CO., INC.,
COMBINED COMMUNICATIONS CORPORATION,
GANNETT TRANSIT, INC.,
SHELTER MEDIA COMMUNICATIONS, INC.,
GANNETT INTERNATIONAL COMMUNICATIONS, INC.
AND
OUTDOOR SYSTEMS, INC.
Dated July 9, 1996
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SCHEDULES
1.1(a) Advertising Structures and Personal Property
1.1(b) Advertising Contracts
1.1(c) Real Property
1.1(d) Property Agreements
1.1(g) Accounts Receivable
1.1(i) Software
1.1(j) Pension Plans
1.2(d) Excluded Software
1.4 Balance Sheet Adjustment (as of 4/30/96)
3.7 Transit and PCS Agreements
3.10 Trademarks
3.11 Litigation and Compliance with Laws
3.13 Employees and Collective Bargaining Agreements
3.14 Changes
3.16 Environmental Matters
3.17 Capitalization of Mediacom
5.11 Possible Acquisitions
EXHIBITS
A - Promissory Note and Guaranty
B - Opinion of Buyer's Counsel
C - Opinion of Sellers' Counsel
D - Option
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TABLE OF CONTENTS
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ARTICLE 1 Sale of Assets and Terms of Payment . . . . . . . . . . . . 2
1.1 Transfer of Assets . . . . . . . . . . . . . . . . . . . . 2
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . 5
1.3 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 Consideration . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 2 The Closing . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1 Time and Place of Closing . . . . . . . . . . . . . . . . . 15
ARTICLE 3 Representations and Warranties of Sellers . . . . . . . . . 15
3.1 Organization; Good Standing . . . . . . . . . . . . . . . . 16
3.2 Authority Relative to this Agreement . . . . . . . . . . . 16
3.3 Financial Statements . . . . . . . . . . . . . . . . . . . 17
3.4 Business Since the Balance Sheet Date . . . . . . . . . . . 17
3.5 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . 18
3.6 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 19
3.7 Transit and PCS Agreements . . . . . . . . . . . . . . . . 19
3.8 Licenses and Authorizations . . . . . . . . . . . . . . . . 20
3.9 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.10 Trademarks . . . . . . . . . . . . . . . . . . . . . . . . 21
3.11 Litigation and Compliance with Laws . . . . . . . . . . . . 22
3.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.13 Employees . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.14 Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.15 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.16 Environmental Laws . . . . . . . . . . . . . . . . . . . . 25
3.17 Capitalization of NY Subways and Mediacom . . . . . . . . . 26
3.18 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 4 Representations and Warranties of Buyer . . . . . . . . . . 27
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . 27
4.2 Authority Relative to this Agreement . . . . . . . . . . . 27
4.3 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . 28
4.4 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 5 Covenants of Sellers Pending the Closing Date . . . . . . . 28
5.1 Maintenance of Business . . . . . . . . . . . . . . . . . . 29
5.2 Organization, Goodwill . . . . . . . . . . . . . . . . . . 29
5.3 Further Information . . . . . . . . . . . . . . . . . . . . 29
5.4 Representations and Warranties . . . . . . . . . . . . . . 30
5.5 Notice of Proceedings . . . . . . . . . . . . . . . . . . . 30
5.6 Bulk Sales Indemnity . . . . . . . . . . . . . . . . . . . 31
5.7 Consummation of Agreement . . . . . . . . . . . . . . . . . 31
5.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.9 Hart-Scott-Rodino Act . . . . . . . . . . . . . . . . . . . 31
5.10 Interim Financial Statements . . . . . . . . . . . . . . . 32
5.11 Other Acquisitions . . . . . . . . . . . . . . . . . . . . 32
5.12 Due Diligence; Revised Schedules . . . . . . . . . . . . . 32
5.13 Transit Agreement Consents . . . . . . . . . . . . . . . . 33
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ARTICLE 6 Covenants of Buyer Pending the Closing Date . . . . . . . . 34
6.1 Representations and Warranties . . . . . . . . . . . . . . 34
6.2 Corporate Action . . . . . . . . . . . . . . . . . . . . . 34
6.3 Notice of Proceedings . . . . . . . . . . . . . . . . . . . 34
6.4 Consummation of Agreement . . . . . . . . . . . . . . . . . 35
6.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.6 Hart-Scott-Rodino Act . . . . . . . . . . . . . . . . . . . 36
6.7 Letters of Credit; Sureties . . . . . . . . . . . . . . . . 36
ARTICLE 7 Conditions to the Obligations of Sellers . . . . . . . . . 37
7.1 Representations, Warranties, Covenants . . . . . . . . . . 37
7.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 37
7.3 Hart-Scott-Rodino . . . . . . . . . . . . . . . . . . . . . 38
7.4 Receipt of Documents . . . . . . . . . . . . . . . . . . . 39
ARTICLE 8 Conditions to the Obligations of Buyer . . . . . . . . . . 39
8.1 Representations, Warranties, Covenants . . . . . . . . . . 40
8.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 41
8.3 Damage to the Assets . . . . . . . . . . . . . . . . . . . 42
8.4 Hart-Scott-Rodino . . . . . . . . . . . . . . . . . . . . . 42
8.5 Receipt of Documents . . . . . . . . . . . . . . . . . . . 43
ARTICLE 9 Indemnification . . . . . . . . . . . . . . . . . . . . . . 44
9.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.2 Indemnification of Buyer . . . . . . . . . . . . . . . . . 44
9.3 Indemnification of Sellers . . . . . . . . . . . . . . . . 45
9.4 Notice of Claims . . . . . . . . . . . . . . . . . . . . . 46
9.5 Defense of Third Party Claims . . . . . . . . . . . . . . . 47
9.6 Settlements . . . . . . . . . . . . . . . . . . . . . . . . 48
9.7 Determination of Responsibility for Loss and Expense
for Environmental Claims . . . . . . . . . . . . . . . . . 48
9.8 Buyer's Knowledge . . . . . . . . . . . . . . . . . . . . . 49
9.9 Sellers' Knowledge . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 10 Miscellaneous Provisions . . . . . . . . . . . . . . . . . 49
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 49
10.2 Employees and Employee Benefits . . . . . . . . . . . . . . 50
10.3 Imprints; Madison Avenue Lease . . . . . . . . . . . . . . 53
10.4 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . 54
10.5 Data Processing Services . . . . . . . . . . . . . . . . . 54
10.6 Access to Records . . . . . . . . . . . . . . . . . . . . . 54
10.7 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . 55
10.8 Further Assurances and Consents . . . . . . . . . . . . . . 56
10.9 Waiver of Compliance . . . . . . . . . . . . . . . . . . . 57
10.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.11 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 58
10.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 59
10.13 Confidential Information; Public Announcements . . . . . . 59
10.14 No Third Party Rights . . . . . . . . . . . . . . . . . . . 59
10.15 Option for Mission Road and other Office and
Production Facilities . . . . . . . . . . . . . . . . . . . 60
10.16 Entire Agreement; Amendments . . . . . . . . . . . . . . . 60
</TABLE>
<PAGE> 5
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is dated as of July 9,
1996, and is among GANNETT CO., INC., a Delaware corporation having its
principal place of business in Arlington, Virginia, COMBINED COMMUNICATIONS
CORPORATION, an Arizona corporation having its principal place of business in
Arlington, Virginia, GANNETT TRANSIT, INC., a Delaware corporation having its
principal place of business in Arlington, Virginia, SHELTER MEDIA
COMMUNICATIONS, INC., a California corporation having its principal place of
business in Los Angeles, California, and GANNETT INTERNATIONAL COMMUNICATIONS,
INC. ("GICI"), a Delaware corporation having its principal place of business in
Wilmington, Delaware (each of the foregoing entities individually is a "Seller"
and collectively are the "Sellers"), and OUTDOOR SYSTEMS, INC., a Delaware
corporation having its principal place of business in Phoenix, Arizona
("Buyer"). Gannett Co., Inc. owns all the issued and outstanding capital
stock of New York Subways Advertising Co., Inc. ("NY Subways"), an Arizona
corporation having its principal place of business in New York, New York. GICI
owns all the issued and outstanding capital stock of Mediacom Inc.
("Mediacom"), a Canadian corporation having its principal place of business in
Toronto, Canada.
As used herein, "Gannett" means Gannett Co., Inc. and GICI, and
"Shares" means all of the issued and outstanding capital
<PAGE> 6
-2-
stock of NY Subways and Mediacom. The Sellers other than Gannett are referred
to herein as "Asset Sellers."
Sellers, NY Subways and Mediacom, respectively, own and operate
Outdoor advertising, transit and shelter operations, including billboards,
posters, bulletins, street furniture (such as newstands and kiosks), subway and
other transit advertising structures in and around Chicago, IL; Denver, CO; New
Haven, CT; Detroit, MI; Flint, MI; Grand Rapids, MI; Kansas City, MO; New York,
NY; Rochester, NY; Philadelphia, PA; St. Louis, MO; and in various locations in
California, New Jersey and Canada being all of the locations (other than
Houston, Texas) where such Outdoor advertising, transit and shelter operations
are conducted by Sellers, NY Subways or Mediacom (the "Division").
Gannett desires to sell and Buyer desires to purchase all of the
Shares. Asset Sellers desire to sell and Buyer desires to purchase
substantially all of the assets of the Division owned by them as a going
concern. Based upon the representations, warranties and agreements made by
each party to the other in this Agreement, the parties have agreed to
consummate the sale of the Division on the terms contained herein.
ARTICLE 1 Sale of Assets and Terms of Payment
1.1 Transfer of Assets. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date (as defined in Section 2.1
hereof) (i) Gannett will sell, convey or cause to be conveyed, and deliver to
Buyer, and Buyer will purchase from
<PAGE> 7
-3-
Gannett all of the Shares, and (ii) Asset Sellers will sell, convey or cause to
be conveyed, and deliver to Buyer, and Buyer will purchase and accept from
Asset Sellers the assets and properties of Asset Sellers, tangible or
intangible, of every kind and description used by Asset Sellers in connection
with the business and operations of the Division as a going concern (the
Outdoor advertising businesses conducted by Asset Sellers, NY Subways and
Mediacom are referred to herein as the "Business" and the assets to be conveyed
by Asset Sellers are referred to as the "Assets"), but excluding the Excluded
Assets described in Section 1.2. The Assets include the following:
(a) all advertising displays and structures and other
tangible personal property, inventory, assets and
equipment owned by Asset Sellers, including without
limitation those listed in Schedule 1.1(a) (which
Schedule shall be delivered prior to Closing);
(b) all contracts, agreements and similar documents of
any nature that relate to the Assets, including
without limitation employment contracts; collective
bargaining agreements; vehicles; equipment and other
personal property leases; and all agreements for the
sale of advertising or advertising services and the
renting of space on Outdoor, transit and shelter
advertising displays, including without limitation
those advertising contracts listed in Schedule
1.1(b), those PCS agreements listed in Schedule 3.7,
and those collective bargaining agreements listed in
Schedule 3.13;
(c) all real property of Asset Sellers, including without
limitation the real property listed in Schedule
1.1(c) (which Schedule shall be delivered prior to
Closing);
(d) all leases, licenses, easements and other agreements
allowing Asset Sellers to place or construct Outdoor
advertising displays on the property of any third
party, including rights
<PAGE> 8
-4-
to locations on which structures have not yet been
built, including without limitation those listed in
Schedule 1.1(d) (which Schedule shall be delivered
prior to Closing);
(e) all of Asset Sellers' right, title and interest in
and to all licenses, permits, transit agreements
("Transit Agreements") and other governmental
authorizations (and applications therefor) used for
the Business, including without limitation those
Transit Agreements listed in Schedule 3.7;
(f) all trademarks, service marks and tradenames,
(including registrations and applications for
registration of any of the foregoing), trade secrets,
advertiser lists, and other intangible rights and
interests owned by Asset Sellers and used in
connection with the Business, including without
limitation those listed in Schedule 3.10;
(g) all accounts receivable of Asset Sellers in existence
on the Closing Date, including without limitation
those listed in Schedule 1.1(g);
(h) all files and other records of any nature available
at the Division's operating units or the Division's
headquarters (excluding files and other records at
Gannett's corporate headquarters that (i) Gannett
Co., Inc. determines are sensitive business materials
or which would not be useful to Buyer or (ii) Buyer
otherwise receives copies of) relating solely to the
Business;
(i) software related to the computer programs used in the
operations of the Business owned by Asset Sellers and
transferable under applicable license agreements
including, without limitation those listed on
Schedule 1.1(i);
(j) all of Sellers' right, title and interest in and to
the pension plan(s) in effect for Canadian employees
("Canadian Plan") and the assets of any pension plans
sponsored by a Seller pursuant to a collective
bargaining agreement ("Union Plans") (the Canadian
Plan and the Union Plans are listed on Schedule
1.1(j));
(k) cash on hand and in banks and other cash items of
Asset Sellers; and
(l) all of Sellers' goodwill in and going concern value
of the Division.
<PAGE> 9
-5-
1.2 Excluded Assets. The following assets relating to the
Business shall be retained by Sellers and shall not be sold, assigned or
transferred to Buyer (the "Excluded Assets"):
(a) claims by Sellers with respect to the Excluded Assets
or liabilities not assumed by Buyer hereunder,
including without limitation claims for tax refunds,
claims related to condemnation proceedings in
existence as of April 30, 1996, and counterclaims
with respect to obligations and liabilities not being
assumed by Buyer hereunder;
(b) all contracts of insurance except for contracts of
insurance to which Mediacom is a party;
(c) any assets related to employee benefit plans of any
nature, including pension plans, except for the
Canadian Plan and the Union Plans and Gannett's
401(k) Plan as set forth in Section 10.2;
(d) software related to computer programs used in
corporate-wide financial or accounting functions or
used in the business of Gannett and its affiliates
generally or not transferable under applicable
license agreements, including without limitation the
software listed in Schedule 1.2(d) (which Schedule
shall be delivered prior to Closing);
(e) the names "Combined Communications Corporation,"
"Gannett," or any variants of either of them;
(f) any stock other than the Shares, or any assets owned
directly or indirectly by Sellers or their affiliates
that are not used exclusively in the Business;
(g) Gannett's lease and all furniture, fixtures and
equipment located at 535 Madison Avenue, New York, NY
(the "Madison Avenue Lease"); and
(h) the real property located at Mission Road, Los
Angeles, CA (the "Mission Road Parcel").
<PAGE> 10
-6-
1.3 Liabilities.
(a) Buyer shall assume, discharge and perform the liabilities
and obligations of the Division, including:
(i) all liabilities and obligations under the
contracts and agreements assigned to Buyer which are described
in Subsections 1.1(b), (d), (e) and (i) above;
(ii) all other liabilities and obligations incurred
in the ordinary course of the Business or disclosed to Buyer
in the Schedules to this Agreement;
(iii) except as provided in Section 1.3(b)(vi), all
liability under any litigation, proceeding or claim of any
nature by any person or entity arising out of the ordinary
course of the Business or disclosed to Buyer;
(iv) all liabilities of Buyer related to employees
described in Section 10.2, and all liabilities and obligations
under the Canadian Plan and the Union Plans (other than any
withdrawal liability attributable to a multiemployer plan) and
the Gannett Co., Inc. 401(k) Plan to the extent contemplated
by Section 10.2; and
(v) all liabilities of the Division reflected on the
Closing Date Balance Sheet.
(b) Buyer does not assume and will not be liable for the
following liabilities or obligations of Sellers, NY Subways or
Mediacom with respect to the Division:
<PAGE> 11
-7-
(i) any liability under any contract of insurance
except for insurance contracts to which Mediacom is a party;
(ii) except as described in Section 10.2, any
liability to any employee or former employee of the Division,
including under any of Sellers' employee benefit plans;
(iii) any liability for federal, state, local or
foreign government taxes based on the net income of any
Seller, and any such liability of NY Subways or Mediacom for
periods prior to the Closing Date;
(iv) any liability arising out of the Madison Avenue
Lease;
(v) any liability arising out of the Mission Road
Parcel;
(vi) any liability with respect to claims by third
parties which are covered by insurance policies of Sellers and
arise from occurrences prior to the Closing Date;
(vii) any liability arising out of the redemption of
Mediacom shares owned by Mediacom minority shareholders (as
defined in Section 3.17); or
(viii) any liability or obligation not described in
Section 1.3(a).
<PAGE> 12
-8-
To the extent Buyer or its affiliates pay, with respect to NY Subways
or Mediacom, any of the liabilities described in this Section 1.3(b), Sellers
shall reimburse Buyer.
1.4 Consideration. Subject to the conditions contained in this
Agreement, and in consideration of the sale of the Assets and the Shares, Buyer
will pay on the Closing Date the sum of Six Hundred Forty Million Dollars
($640,000,000) (the "Purchase Price") subject to adjustment as provided herein.
The parties agree to negotiate a mutually agreeable allocation of the Purchase
Price within 60 days after Closing. Buyer and Sellers agree to be bound by
such allocation and to file tax returns and reports and not to take any
position with any tax authority which is inconsistent with such allocation
unless required to do so in accordance with a final determination by a tax
authority.
Simultaneously with the execution of this Agreement, Buyer shall
deliver to Sellers a deposit (the "Deposit") consisting of (i) cash in the
amount of Twelve Million Dollars ($12,000,000) and (ii) the promissory note
("Note") of Buyer in the principal amount of Three Million Dollars ($3,000,000)
payable in full on July 29, 1996, in the form attached as Exhibit A, and
guaranteed by William S. Levine. The Deposit shall be (i) returned to Buyer if
Buyer is unable to close under this Agreement solely as a result of Sellers'
breach of this Agreement or is unable to close under this Agreement as a result
of the action of a third party within the control of Sellers, (ii) retained by
Sellers if the
<PAGE> 13
-9-
Closing does not occur solely as a result of Buyer's breach of this Agreement
or as a result of the action of a third party within the control of Buyer and
(iii) split equally between Buyer and Sellers if Buyer is unable to close under
this Agreement as a result of the action of a third party completely outside
the control of either Seller or Buyer. For purposes of this Section, the
actions or inaction of governmental agencies shall be deemed to be outside the
control of a party, but the actions or inaction of Buyer's lending institutions
shall be deemed to be within the control of Buyer. If the Deposit is split
prior to July 29, 1996 as provided in clause (iii) above, the Note and Four
Million Five Hundred Thousand Dollars ($4,500,000) would be returned to Buyer.
If the Deposit is split after payment of the Note on July 29, 1996, $6,000,000
would be returned to Buyer and $1,500,000 would be returned to the entity or
person that paid the Note. Sellers shall credit the Deposit towards the
Purchase Price at Closing.
The Purchase Price shall be paid by wire transfer of immediately
available funds on the Closing Date. The adjustments to the Purchase Price
pursuant to this Section 1.4 shall be paid as described in Section 1.4(c).
All amounts described in this Agreement or in any Schedules hereto are
expressed in U.S. dollars.
(a) Balance Sheet Adjustment. Sellers and Buyer agree that
the Purchase Price will be adjusted as of the Closing Date as follows:
If on the Closing Date the Division's current assets on a consolidated
basis exceed total
<PAGE> 14
-10-
liabilities by more than $1.00, the Purchase Price will be increased
by the amount of such excess. If on the Closing Date the Division's
total liabilities exceed current assets by more than $1.00, the
Purchase Price will be reduced by the amount of such excess. As of
April 30, 1996 the adjustment would increase the Purchase Price by
$42,479,409 as shown on Schedule 1.4. In computing this balance sheet
adjustment, the balance sheet shall be prepared in accordance with the
historical accounting practices of the Division, and in accordance
with the following:
(i) Current assets for purposes of this balance sheet
adjustment shall include:
(A) all security deposits and any other
refundable deposits for the Division that are
transferable to Buyer;
(B) all inventory items and all prepaid
items, including without limitation prepaid leases,
prepaid franchise fees (regardless of the length of
the term of the underlying obligation), and other
prepaid items that the Division has expensed in
accordance with its historical accounting practices
to the extent Buyer obtains remaining future value;
(C) (i) all fixed assets acquired after April
30, 1996 and (ii) the total purchase price of
acquisitions consummated after April 30, 1996
<PAGE> 15
-11-
(other than acquisitions for which Buyer's consent is
required but not granted under Section 5.11), net of
cash received by Sellers from the sale of assets
after April 30, 1996;
(D) all long-term accounts receivable;
(E) the right to reimbursement from New York
City for expenses incurred but not previously
recorded as a receivable in connection with the
"Brand Train" in New York City; and
(F) cash on hand and in banks and other cash
items of the Division.
(ii) all intercompany and affiliate liabilities,
debts and/or receivables will be excluded from the balance
sheet or treated as shareholders' equity except for Mediacom's
liability of Ten Million One Hundred Thirty-Three Thousand,
Three Hundred Forty Dollars ($10,133,340) to Gannett
International Communications, Inc. (the "Mediacom Note"),
which Buyer will cause Mediacom to pay on the Closing Date
immediately after Closing; provided, however, that if Buyer
determines that payment of the Mediacom Note would create a
tax liability for Buyer or Mediacom, Buyer may elect (such
election to be made no later than three business days prior to
the Closing Date) not to cause Mediacom to pay the Mediacom
Note, in which event the Mediacom Note would be cancelled and
the current liabilities of the
<PAGE> 16
-12-
Division would be decreased by $10,133,340 (thereby increasing
net working capital by that amount);
(iii) all deferred taxes will be excluded from the
balance sheet or treated as shareholders' equity;
(iv) all accounts receivable of the Division shall be
net of the historical reserve for bad debts, rebates, refunds
and adjustments for accounts receivable. Buyer and Sellers
agree that such reserve shall be in lieu of any other
adjustment related to claims or disputes of any nature related
to accounts receivable; and
(v) total liabilities shall include accrued and
unpaid vacation, but shall exclude any environmental liability
for which Buyer is responsible under Section 9.7.
(b) Prorations. In computing the balance sheet adjustment,
the following proration method will be used, and the balance sheet
adjustment in Section 1.4(a) will be adjusted to reflect the
prorations described in this Section 1.4(b). All items of expense and
revenue directly relating to the Business shall be prorated between
Sellers and Buyer as of the close of business on the Closing Date.
Items to be prorated shall include without limitation power and
utility charges, personal property taxes and real property taxes,
lease rents and other prepaid items, and trade and barter
transactions. Revenues and expenses will
<PAGE> 17
-13-
be recognized using the Division's historical recognition practices;
provided, however, that revenues derived from Outdoor postings will be
prorated, where appropriate, based on the number of days of posting
before and after the Closing Date. Except as otherwise provided in
this Agreement, Buyer shall be responsible for all expenses incurred
and shall be entitled to all revenues earned in connection with the
Division after the Closing Date. Except as otherwise provided in this
Agreement, Sellers shall be responsible for all expenses incurred and
shall be entitled to all revenues earned in connection with the
Division through the Closing Date. (For example, wages, commissions
and other employee compensation for periods through the Closing Date
will either be paid by Sellers or recorded as a liability on the
Closing Date Balance Sheet.)
Sellers agree to furnish Buyer with any documents or records
in Sellers' possession that may be needed for Buyer to confirm the
adjustment and prorations in this Section 1.4.
This Section 1.4(b) shall not be interpreted so as to provide
a double payment or double credit to Seller or Buyer for any item in
the calculation of the Preliminary Balance Sheet or the Closing Date
Balance Sheet.
(c) Balance Sheet Adjustment Payment. On the Closing Date,
Sellers shall, to the extent practicable, make the adjustments to the
Purchase Price specified in this
<PAGE> 18
-14-
Section 1.4. Sellers shall prepare and provide to Buyer a
consolidated balance sheet of the Division as of the close of business
on the last day of the accounting period immediately preceding the
Closing Date, using all available financial data (the "Preliminary
Balance Sheet"). Within 90 days after the Closing Date, Sellers will
prepare and provide to Buyer an adjusted balance sheet of the Division
as of the close of business on the Closing Date, and reflecting the
items to be adjusted and prorated pursuant to this Section 1.4 and
showing the recalculation of adjustments to the Purchase Price
pursuant to the Preliminary Balance Sheet (the "Closing Date Balance
Sheet"). On the 120th day after the Closing Date, all required
refunds or payments under this Section 1.4 shall be made on the basis
of the Closing Date Balance Sheet.
If any dispute arises over any amount to be refunded or paid
under this Section 1.4 (whether pursuant to the Preliminary Balance
Sheet or the Closing Date Balance Sheet), such refund or payment shall
nonetheless be promptly made to the extent such amount is not in
dispute. If any such dispute cannot be resolved by the parties, it
shall be referred to a mutually satisfactory independent public
accounting firm of national stature that has not been employed by any
party for the two years preceding the Closing Date. The determination
of such firm shall be conclusive and binding on each party. The fees
of such firm
<PAGE> 19
-15-
shall be paid fifty percent (50%) by Sellers and fifty percent (50%)
by Buyer.
ARTICLE 2 The Closing
2.1 Time and Place of Closing. The closing (the "Closing") of the
sale and purchase of the Assets and the Shares shall be held in the offices of
Gannett at 1100 Wilson Boulevard, Arlington, Virginia 22234 on the date (the
"Closing Date") that is the later of (i) the first Friday or Monday after a
period of three business days following the expiration (including early
termination) of the waiting period provided under the Hart-Scott-Rodino Act; or
(ii) the earlier of August 15 or the first Friday or Monday after a period of
three business days following (A) the completion of a tender offer by Buyer for
those certain Senior Notes due 2003 issued pursuant to an Indenture between
Buyer and United Trust Co. of New York ("Notes") or (B) the defeasance of such
Notes; or at such other time and place as shall be mutually agreed upon by the
parties.
ARTICLE 3 Representations and Warranties of Sellers
Sellers jointly and severally represent and warrant to Buyer as
follows. For purposes of this Agreement, "Material Adverse Effect" shall mean
a material adverse effect on the Business or Assets of the Division taken as a
whole. The inclusion of any item in this Agreement or on a Schedule hereto
shall not be deemed an acknowledgment that such item is material or did not
<PAGE> 20
-16-
occur in the ordinary course of the Business or would be reasonably likely to
result in a Material Adverse Effect.
3.1 Organization; Good Standing. Each Seller, NY Subways and
Mediacom are corporations duly organized, validly existing and in good standing
under the laws of the state or country of its incorporation. Each Seller, NY
Subways and Mediacom have the full power and authority to own and operate their
assets and carry on their business as now being conducted and are qualified to
do business in the states or provinces in which they presently conduct
business.
3.2 Authority Relative to this Agreement. Each Seller has the
full corporate power, authority and legal right to execute and deliver this
Agreement and to carry out the transactions and perform its obligations
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate and shareholder action. This Agreement
has been duly and validly executed and delivered by each Seller and constitutes
a legal, valid and binding obligation of each Seller enforceable against it in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency or similar laws affecting the rights of creditors
generally.
<PAGE> 21
-17-
3.3 Financial Statements. Sellers have furnished to Buyer the
unaudited financial statements of the Division (the "Financial Statements") for
the period ending April 30, 1996 (the "Balance Sheet Date") including the
following schedules attached to the letter from Gannett to Buyer dated May 29,
1996 (the "May 29 Letter"): Consolidating Balance Sheet (4/30/96); Gannett
Outdoor Consolidated Financials (including for all entities) 1993-1996 (not
reflecting cash flow adjustments per Schedule B of the May 29 Letter); and
Gannett Outdoor Consolidated Financials (including for all entities) for
Periods 1-4, 1995 and 1996. The Financial Statements, and the interim
Financial Statements to be furnished to Buyer pursuant to Section 5.10, were
and will be prepared in accordance with the books and records regularly
maintained by Sellers with respect to the Division, are correct and complete
and fairly present, and will fairly present, in all material respects the
results of operations of the Division for the periods covered thereby in
conformity with the historical accounting practices of the Division applied
consistently for such periods. Sellers make no representation, however,
regarding the collectability of the Division's accounts receivable, or the
projected revenues of or financial prospects for the Division.
3.4 Business Since the Balance Sheet Date. To Sellers' knowledge,
since the Balance Sheet Date, the Business has been conducted in the ordinary
course and in substantially the same manner as before the Balance Sheet Date,
except for matters which
<PAGE> 22
-18-
would not be reasonably likely to result in a Material Adverse Effect.
For purposes of this Agreement, the phrase "to Sellers' knowledge"
means (i) as of the date hereof, Sellers' knowledge based solely on files
available for review at Gannett's corporate offices, without any inquiry or
investigation of files maintained at the Division's operating units or at the
Division's headquarters or elsewhere, and (ii) as of the Closing Date, Seller's
knowledge based solely on its knowledge under clause (i) above and on the
inquiry and investigation described in Section 5.12.
3.5 No Defaults. The execution, delivery and performance of this
Agreement by each Seller will not (a) conflict with or result in any breach of
any provision of the Articles of Incorporation or bylaws of any Seller, NY
Subways or Mediacom, (b) violate any law, statute, rule, regulation, order,
injunction or decree of any federal, state, local or foreign governmental
authority or agency applicable to any Seller, NY Subways or Mediacom or any of
the Assets, where such conflict, breach or violation would be reasonably likely
to result in a Material Adverse Effect, or (c) result in a default (or give
rise to any right of termination, cancellation or acceleration) under any
contract, note, bond, mortgage or other instrument or obligation relating to
the Business or to which the Assets may be subject (other than any leases,
easements, license agreements or similar
<PAGE> 23
-19-
agreements for the right to use space and other than any Transit Agreement or
any contract, note, bond, mortgage or other instrument or obligation related
thereto), where such default would be reasonably likely to result in a Material
Adverse Effect.
3.6 Undisclosed Liabilities. To Sellers' knowledge, the Division
has no obligation or liability of any nature which is normally shown on a
balance sheet prepared in accordance with the historical practices of the
Division which is not reflected or reserved against in the Financial Statements
(or if not, will be so reflected or reserved on the Closing Date Balance Sheet)
and which is reasonably likely to result in a Material Adverse Effect. No
representation or warranty made by Sellers in this Agreement, and no statement
made in any Financial Statement, certificate, document, exhibit or schedule
furnished or to be furnished in connection with the transactions herein
contemplated contains or will contain, as of the date delivered or made, any
untrue statement of fact which would be reasonably likely to result in a
Material Adverse Effect.
3.7 Transit and PCS Agreements. To Sellers' knowledge, Schedule
3.7 contains a list of the Transit Agreements and personal communication
systems ("PCS") agreements included in the Business. To Sellers' knowledge,
there are no existing defaults, events of default or other events under the
Transit and PCS agreements listed in Schedule 3.7 which, with or without notice
or lapse of time or both, would constitute a default or an event of default
under any of such agreements and which would be reasonably likely to result in
a Material Adverse Effect. Sellers are not aware whether the Transit and PCS
<PAGE> 24
-20-
agreements listed in Schedule 3.7 have been amended, modified or terminated or
whether the Division has entered into Transit or PCS agreements not listed in
Schedule 3.7.
For purposes of this Agreement, the phrase "Sellers are not aware"
means that Sellers are not aware of the matter in question based (i) as of the
date hereof, solely on files available for review at Gannett's corporate
offices, without any inquiry or investigation of files maintained at the
Division's operating units or at the Division's headquarters or elsewhere, and
(ii) as of the Closing Date, solely on files described in clause (i) above and
files actually reviewed by Sellers as a result of the inquiry and investigation
described in Section 5.12.
Sellers shall use all reasonable efforts to cooperate with Buyer in
obtaining consents to the assignment of the Transit Agreements, but the
availability of consents to such assignments shall not be a condition to
Buyer's obligation to close under this Agreement.
3.8 Licenses and Authorizations. The Division is subject to
federal, state, local and foreign laws, rules and regulations governing the
receipt of permits for the placement, size and
<PAGE> 25
-21-
location of Outdoor advertising structures and displays. Sellers, NY Subways
and Mediacom have all necessary permits, licenses and governmental
authorizations required for the conduct of the Business as presently conducted,
except where the failure to have any such permit, license or governmental
authorization would not be reasonably likely to result in a Material Adverse
Effect. The Division's operating units observe the Outdoor Advertising
Association of America code restricting the placement of Outdoor advertising
displays for the sale of alcohol or tobacco products within 500 feet of
schools, churches, and playgrounds.
3.9 Title. Sellers, NY Subways and Mediacom own and have good and
valid marketable title to all real property and personal property included in
the Business and sold hereunder, free and clear of all security interests,
mortgages, deeds of trust, pledges, conditional sales agreements, charges,
liens and encumbrances, except for liens for taxes not yet due and payable, and
except for encumbrances which would not be reasonably likely to result in a
Material Adverse Effect. The Shares, the Assets and the Excluded Assets
include all the property and rights used by Sellers in the Business of the
Division.
3.10 Trademarks. To Sellers' knowledge, Schedule 3.10 contains a
list of all trademarks, service marks and tradenames used in the Business and
sold hereunder (the "Rights"). To
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Sellers' knowledge, the registrations (if any) for the Rights are valid, in
good standing and uncontested. Sellers possess adequate rights, licenses or
other authority to use all Rights necessary to conduct the business of the
Division as presently conducted, except where the failure to possess such
Rights would not be reasonably likely to result in a Material Adverse Effect.
Sellers are not aware of any notice with respect to any alleged infringement or
unlawful or improper use of any Rights by others, or with respect to any claims
that any Rights are owned or alleged to be owned by others.
3.11 Litigation and Compliance with Laws. Except for matters (i)
that have occurred in the ordinary course of the Business, (ii) which would not
be reasonably likely to result in a Material Adverse Effect, (iii) shown on
Schedule 3.11, or (iv) described in Section 3.16:
(a) the Division has not been operating under or subject to,
or in default with respect to, any order, writ, injunction, judgment
or decree of any court or federal, state, local or foreign
governmental authority or agency;
(b) neither Sellers, NY Subways or Mediacom nor any of their
respective officers or agents has received any inquiry, written or
oral, from any such authority concerning the Business during the
12-month period prior to the date of this Agreement;
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(c) there is no litigation or proceeding pending by or
against, or threatened against, the Division or any of the Sellers; and
(d) Sellers, NY Subways and Mediacom have complied with all
laws, by-laws, regulations, orders or decrees applicable to the
Division, including zoning and land use laws and regulations, and the
present uses by such parties of the assets of the Division do not
violate or fail to comply with any such laws, regulations, orders or
decrees in any material respect, and there is no basis for any claim
for compensation or damage or other legal or equitable relief from any
violation of the foregoing.
3.12 Taxes. Sellers, NY Subways and Mediacom have filed, or caused
to be filed, or have filed extensions for, all federal, state, local and
foreign tax returns required to be filed by them with respect to the Business
and have paid, or made provisions for the payment of (a) all taxes due for the
periods covered by such returns, except such accrued and unpaid taxes for which
appropriate accruals have been made in the Financial Statements, and (b) all
deficiencies assessed as a result of any examination of such returns.
3.13 Employees. To Sellers' knowledge, Schedule 3.13 lists the
Division's full-time employee count by department and the collective bargaining
agreements in place for the Division.
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Except as disclosed on Schedule 3.13, no Seller is a party to any employment
contract or collective bargaining agreement or any other labor agreement
covering or relating to any of the employees of the Division, and neither
Seller, NY Subways nor Mediacom has recognized or received a demand for
recognition of any collective bargaining representative with respect to the
Division. To Sellers' knowledge, no labor strike, slow-down or work stoppage
is pending or threatened with respect to the Division.
3.14 Changes. Except for matters (i) that have occurred in the
ordinary course of the Business, (ii) which would not be reasonably likely to
result in a Material Adverse Effect, (iii) shown on Schedule 3.14, or (iv) that
are permitted under Section 5.11, to Sellers' knowledge, since the Balance
Sheet Date, neither Sellers, NY Subways nor Mediacom have (a) mortgaged,
pledged or subjected to a lien or any other encumbrance, any of the assets of
the Division, or incurred liabilities affecting the Business; (b) sold or
transferred any material asset used or useful in the business of the Division;
(c) made any loans, advances or capital contributions to, or investments in,
any person or entity in connection with the Business (other than cash advances
to employees, officers or directors for reimbursable expenses); (d) authorized
or made any capital expenditures or commitment or contract for any capital
improvements in connection with the Business; or (e) suffered any
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loss, damage or casualty with respect to any asset of the Division.
3.15 Brokers. There is no broker or finder or other person who
would have any valid claim against Buyer for a commission or brokerage fees in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by any Seller, NY Subways or
Mediacom.
3.16 Environmental Laws. Except for matters (i) that have occurred
in the ordinary course of the Business, (ii) which would not be reasonably
likely to result in a Material Adverse Effect, or (iii) shown on Schedule 3.16,
to Sellers' knowledge:
(a) the Division is in compliance with all applicable
environmental laws and regulations;
(b) no release, emission or discharge into the environment of
hazardous or toxic substances or waste has occurred in connection with
the Business or is presently occurring which would result in liability
under the Comprehensive Environmental Response, Compensation and
Liability Act or similar state laws or which are in excess of
permitted levels or reportable quantities under any applicable
environmental law or regulation; and
(c) the Division has not received any written notice of
investigation or been operating under or subject to, or in default
with respect to, any order, writ, injunction,
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judgment or decree of any court or federal, state, local or foreign
governmental authority or agency with respect to any applicable
environmental law or regulation.
3.17 Capitalization of NY Subways and Mediacom. The Shares consist
of (i) with respect to NY Subways, 100,000 shares of common stock, par value
$1.00 per share, of which 200 shares are outstanding as of the date hereof and
(ii) with respect to Mediacom, those shares described in Schedule 3.17 (which
Schedule shall be delivered prior to Closing). All of the Shares have been
duly authorized, validly issued and are fully paid and non-assessable. There
is no existing option, warrant, call, commitment or other security or agreement
of any kind to which NY Subways or Mediacom or Gannett is a party requiring,
and there are no convertible securities of NY Subways or Mediacom outstanding
which upon conversion would require, the issuance of any additional shares of
capital stock of NY Subways or Mediacom or other securities convertible into
shares of capital stock or any debt or equity security of NY Subways or
Mediacom of any kind. The final redemption of a limited, non-controlling
number of Mediacom shares formerly owned by third parties (the "Mediacom
minority shareholders") has not been completed, however. Gannett is the record
and beneficial owner of the Shares, free and clear of any and all encumbrances.
Gannett's delivery of the Shares to Buyer will convey to Buyer good and
marketable title to all the Shares, free and clear of any and all encumbrances.
<PAGE> 31
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3.18 Pension Plans. The Canadian Plan, the Union Plans and the
Gannett Co., Inc. 401(k) Plan are in compliance with applicable law and the
terms of such plans, except for any noncompliance which would not have a
Material Adverse Effect. Sellers, NY Subways and Mediacom either are current
in their obligations to make contributions to such plans, or such obligations
will be reflected on the Closing Date Balance Sheet. Neither Sellers, Mediacom
nor NY Subways is subject to any penalty or other tax arising from the
operation of such plans. Neither the Sellers, NY Subways nor Mediacom has made
any partial or complete withdrawal from any multiemployer pension plan covering
any employees of the Division that would result in a withdrawal liability to NY
Subways or Mediacom.
ARTICLE 4 Representations and Warranties of Buyer
Buyer represents and warrants to Sellers as follows:
4.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
4.2 Authority Relative to this Agreement. Buyer has the full
corporate power, authority and legal right to execute and deliver this
Agreement and to carry out the transactions and perform its obligations
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
<PAGE> 32
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authorized by all necessary corporate and shareholder action. This Agreement
has been duly and validly executed and delivered by Buyer and constitutes a
legal, valid and binding obligation of Buyer, enforceable against it in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency or similar laws affecting the rights of creditors
generally.
4.3 No Defaults. The execution, delivery and performance of this
Agreement by Buyer will not (a) materially conflict with or result in any
breach of any provision of the Articles of Incorporation or bylaws of Buyer,
(b) violate any law, statute, rule, regulation, order, injunction or decree of
any federal, state or local governmental authority or agency applicable to
Buyer.
4.4 Brokers. There is no broker or finder or other person who
would have any valid claim against Sellers for a commission, brokerage or fees
in connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Buyer except for Dennis
Brush, whose fees will be paid by Buyer.
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ARTICLE 5 Covenants of Sellers Pending the Closing Date
Sellers covenant and agree that from the date hereof to and including
the Closing Date and thereafter with respect to Sections 5.6 and 5.13:
5.1 Maintenance of Business. Sellers shall continue, and shall
cause NY Subways and Mediacom to continue to carry on the business of the
Division, maintain its plant and equipment and keep its books of account,
records and files in substantially the same manner as heretofore in the
ordinary course.
5.2 Organization, Goodwill. Sellers will cause the Division
substantially to preserve (i) its business organization intact, and (ii) the
goodwill of its suppliers, customers and others having business relations with
it.
5.3 Further Information. At the request of Buyer, Sellers shall
from time to time give or cause to be given to Buyer and its representatives
all information concerning the affairs of the Division as Buyer may reasonably
request, provided that such information shall be limited to information
available at Gannett's corporate headquarters until such time as Sellers have
informed the Division's executives of this Agreement or have made a public
announcement or issued a press release concerning the transactions contemplated
herein, whichever is earlier. In connection with any due diligence review of
the Business or the Assets at any time, however, Buyer may not have access to
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Division's employees or plants without Sellers' prior written consent.
5.4 Representations and Warranties. Sellers shall give written
notice to Buyer promptly upon the occurrence of, or promptly upon Sellers'
becoming aware of the existence of or the impending or threatened occurrence
of, any event which would cause or constitute a breach or which would have
caused or constituted a breach, had such event occurred or been known to
Sellers prior to the date hereof, of any of their representations or warranties
contained in this Agreement as updated pursuant to Section 5.12.
5.5 Notice of Proceedings. Sellers will promptly notify Buyer in
writing upon becoming aware of any order or decree or receiving any complaint
praying for an order or decree restraining or enjoining the consummation of
this Agreement or the transactions contemplated hereunder or that would be
reasonably likely to result in a Material Adverse Effect, or upon receiving any
notice from any governmental department, court, agency or commission of its
intention to institute an investigation into, or institute any action or
proceeding to restrain or enjoin the consummation of this Agreement or such
transactions, or to nullify or render ineffective this Agreement or such
transactions if consummated.
<PAGE> 35
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5.6 Bulk Sales Indemnity. As an inducement to Buyer to waive
compliance with the provisions of any applicable bulk transfer laws, Sellers
covenant that all debts, obligations and liabilities of Sellers not expressly
assumed by Buyer under this Agreement will be promptly paid and discharged by
Sellers as and when they become due and payable. Sellers further agree to hold
Buyer harmless from all Loss and Expense (as defined in Section 9.2) suffered
by Buyer by reason of Sellers' non-compliance with any applicable bulk
transfer law.
5.7 Consummation of Agreement. Subject to the provisions of
Section 10.1, Sellers shall use all reasonable efforts to perform and fulfill
all conditions and obligations on their part to be performed and fulfilled
under this Agreement, to the end that the transactions contemplated by this
Agreement shall be fully carried out.
5.8 Expenses. Sellers shall bear and punctually pay for all of
their expenses incurred in connection with the transactions contemplated by
this Agreement, including without limitation accounting and legal fees.
5.9 Hart-Scott-Rodino Act. As soon as possible after the
execution of this Agreement, but in no event later than three business days
thereafter, Sellers shall prepare and file all documents with the Federal Trade
Commission and the United States
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Department of Justice as are required to comply with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and all documents relating to
the Canadian filing, if any, and shall promptly furnish all materials and
information thereafter requested by any of the regulatory agencies having
jurisdiction over such filings.
5.10 Interim Financial Statements. Sellers shall deliver to Buyer
unaudited interim balance sheets and statements of revenue and expense of the
Division substantially in the form of the Financial Statements promptly after
the close of each of the Division's accounting periods that occurs between the
Balance Sheet Date and the Closing Date.
5.11 Other Acquisitions. Sellers shall not, and shall not permit
NY Subways or Mediacom to, enter into any acquisition agreement for the
purchase of assets with a net purchase price of more than $1 million per
transaction, including without limitation those described in Schedule 5.11,
without the consent of Buyer, which shall not be unreasonably withheld,
conditioned or delayed.
5.12 Due Diligence; Revised Schedules. Sellers shall conduct
reasonable due diligence to confirm Sellers' representations, warranties,
covenants and agreements hereunder. Sellers shall provide Buyer with revised
Schedules reflecting
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information obtained from the Division after execution of this Agreement and
prior to Closing. In connection therewith, Sellers will request appropriate
information from the Division's executives and general managers. Sellers shall
review all such information obtained to determine whether additional inquiry is
required.
5.13 Transit Agreement Consents. Sellers shall cooperate with
Buyer in seeking any necessary consents to the transfer of the Transit
Agreements listed in Schedule 3.7. In the event a municipal consent is
required and is not obtainable prior to the Closing Date, Sellers shall
cooperate with Buyer to restructure the proposed transfer and the relationship
between Sellers and Buyer in order to accomplish the same business, financial
and risk allocation objectives as would be accomplished under a transfer as
contemplated by this Agreement without breaching the terms of any such
agreement; provided, however, that Buyer shall assume the risk of claims,
losses, liabilities, costs or expenses arising out of any restructured
arrangement and, if no such arrangement is reasonably possible, Buyer and
Sellers shall nevertheless execute transfer documentation to effect the
transfers contemplated by this Agreement at mutually agreeable times but not
later than six (6) months after the Closing Date for all such transfers.
Sellers may elect to extend the six-month period if they determine, in their
sole discretion, that
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there is a reasonable prospect for reaching a satisfactory restructured
arrangement in the near future.
ARTICLE 6 Covenants of Buyer Pending the Closing Date
The Buyer covenants and agrees that from the date hereof to and
including the Closing Date:
6.1 Representations and Warranties. Buyer shall give written
notice to Sellers promptly upon the occurrence of, or promptly upon Buyer's
becoming aware of the impending or threatened occurrence of, any event which
would cause or constitute a breach, or which would have caused or constituted a
breach, had such event occurred or been known to Buyer prior to the date
hereof, of any of the representations or warranties contained in this Agreement.
6.2 Corporate Action. Buyer will take all necessary corporate and
other action required of it to carry out the transactions contemplated by this
Agreement.
6.3 Notice of Proceedings. Buyer will promptly notify Sellers in
writing upon becoming aware of any default or event of default, or any
condition or event which, with or without notice or lapse of time or both,
would constitute a default or event of default under any of its existing
financing agreements, or any order or decree or any complaint praying for an
order or decree restraining or enjoining the consummation of this Agreement or
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the transactions contemplated hereunder, or upon receiving any notice from any
governmental department, court, agency or commission of its intention to
institute an investigation into, or institute any action or proceeding to
restrain or enjoin the consummation of this Agreement or such transactions, or
to nullify or render ineffective this Agreement or such transactions if
consummated.
6.4 Consummation of Agreement. Subject to the provisions of
Section 10.1, Buyer shall use all reasonable efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement
shall be fully carried out.
6.5 Expenses. Buyer shall bear and punctually pay for all of its
expenses incurred in connection with the transactions contemplated by this
Agreement, including without limitation (a) accounting and legal fees, (b) all
expenses of any title insurance Buyer elects to obtain covering the real
property included in the Assets, (c) any sales or transfer taxes arising from
transfer of the Assets or Shares to Buyer, including any real estate transfer
tax payable in connection with the transfer to Buyer of any real property or
leasehold interests, and (d) the Hart-Scott-Rodino filing fee.
<PAGE> 40
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6.6 Hart-Scott-Rodino Act. As soon as possible after the
execution of this Agreement, but in no event later than three business days
thereafter, Buyer shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice as are required to
comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and all documents relating to the Canadian filing, if any, and shall
promptly furnish all materials and information thereafter requested by any of
the regulatory agencies having jurisdiction over such filings. In furtherance
of the foregoing, Buyer covenants to take all necessary and proper steps to
dispose of its Denver Outdoor operations.
6.7 Letters of Credit; Sureties. Effective as of the Closing Date
Buyer shall have (a) obtained a release of Sellers from all obligations or
agreements for letters of credit, bonds, surety arrangements and all guarantees
or similar assurances which give rise to a liability of Sellers for obligations
related to the Business, and Buyer shall have replaced all such agreements held
by third parties or (b) delivered to Sellers separate letters of credit, bonds
and/or other surety arrangements which provide complete and total indemnity for
such obligations of Seller that are not released, which arrangements must be in
form acceptable to Sellers.
<PAGE> 41
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ARTICLE 7 Conditions to the Obligations of Sellers
The obligations of Sellers under this Agreement are, at the option of
Sellers, subject to the fulfillment of the following conditions prior to or at
the Closing Date:
7.1 Representations, Warranties, Covenants.
(a) All representations and warranties of Buyer contained in
this Agreement and in any statement, certificate, schedule or other
document delivered by Buyer pursuant to this Agreement or in
connection with the transactions contemplated hereby, shall have been
true and accurate in all material respects as of the date when made
and shall be deemed to be made again at and as of the Closing Date and
shall then be true and accurate in all material respects; and
(b) Buyer shall have substantially performed and complied with
each and every covenant and agreement required by this Agreement to be
performed or complied with by it prior to or at the Closing Date.
7.2 Proceedings. No action or proceeding shall have been
instituted or threatened against any of the parties to this Agreement before
any court or governmental department, agency or commission to restrain or
prohibit, or to obtain substantial damages in respect of, this Agreement or the
consummation of the transactions contemplated hereby; and neither Buyer nor
Sellers
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shall have received written notice from any court or governmental department,
agency or commission of its intention to (a) institute any action or proceeding
to restrain or enjoin or nullify or render ineffective this Agreement or such
transactions if consummated, or (b) commence any investigation (other than a
routine letter of inquiry, including a routine Civil Investigation Demand) into
the consummation of this Agreement and the transactions contemplated hereby,
which in the reasonable opinion of Sellers would make it inadvisable to
consummate such transactions; provided that in the event an investigation is
instituted, this Agreement may not be abandoned by the Sellers for a period of
30 days from the date notice of institution thereof is first received by either
Sellers or Buyer (but consummation hereof shall be delayed during such period),
and may not be abandoned pursuant to this Section 7.2 thereafter except upon
advice of counsel to Sellers that there is a reasonable probability that such
an investigation may result in an action or proceeding of the type described in
the second clause of this Section 7.2.
7.3 Hart-Scott-Rodino. The waiting period under the Hart-
Scott-Rodino Act shall have expired, appropriate Canadian approval shall have
been obtained, if required, and there shall not be outstanding any order of a
court restraining the transactions contemplated hereby or imposing on any
Seller any conditions with respect to disposition of any of the Assets or
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Shares, or any conditions that could affect any of the Sellers' properties or
businesses not covered by this Agreement.
7.4 Receipt of Documents. Sellers shall have received at the
Closing:
(a) funds equal to the Purchase Price;
(b) an assumption agreement, pursuant to which Buyer shall
assume Sellers' liabilities and obligations as provided in Section 1.3;
(c) a release, in form and substance satisfactory to Sellers,
evidencing Sellers' release from their obligations under the Transit
Agreements and the cancellation of any related bonds, letters of
credit or deposits, or if despite Buyer's best efforts such releases
have not been obtained, Buyer shall deliver a letter of credit to
Sellers, in amount, form and substance satisfactory to Sellers, as
security for any continuing obligations of Sellers under the Transit
Agreements; and
(d) an opinion of Powell, Goldstein, Frazer & Murphy, counsel
to Buyer, in the form attached as Exhibit B.
ARTICLE 8 Conditions to the Obligations of Buyer.
The obligations of Buyer under this Agreement are, at the option of
Buyer, subject to the fulfillment of the following conditions prior to or at
the Closing Date:
<PAGE> 44
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8.1 Representations, Warranties, Covenants.
(a) All representations and warranties of Sellers contained in
this Agreement and in any statement, certificate, schedule or other
document delivered by Sellers pursuant to this Agreement or in
connection with the transactions contemplated hereby, shall have been
true and accurate as of the date when made and shall be deemed to be
made again at and as of the Closing Date and shall then be true and
accurate (taking into account (i) all modifications to the Schedules
to this Agreement pursuant to Section 5.12 and (ii) the definitions of
the phrases "to Sellers' knowledge" and "Sellers are not aware" as
provided in Sections 3.4 and 3.7, respectively);
(b) Sellers shall have substantially performed and complied
with each and every covenant and agreement required by this Agreement
to be performed or complied with by them prior to or at the Closing
Date; and
(c) There shall have been no changes in the Business or Assets
since the Balance Sheet Date resulting in a Material Adverse Effect,
other than matters arising in the ordinary course of the Business.
The word "changes" as used in this Section 8.1(c) also includes any
items included on the Revised Schedules which were not on the
Schedules delivered upon execution of this Agreement.
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8.2 Proceedings. No action or proceeding shall have been
instituted or threatened against any of the parties to this Agreement, before
any court or governmental department, agency or commission to restrain or
prohibit, or to obtain substantial damages in respect of, this Agreement or the
consummation of the transactions contemplated hereby; and neither Buyer nor
Sellers shall have received written notice from any court or governmental
department, agency or commission of its intention to (a) institute any action
or proceeding to restrain or enjoin or nullify or render ineffective this
Agreement or such transactions if consummated, or (b) commence any
investigation (other than a routine letter of inquiry, including a routine
Civil Investigation Demand) into the consummation of this Agreement and the
transactions contemplated hereby, which in the reasonable opinion of Buyer
would make it inadvisable to consummate such transactions; provided that in the
event an investigation is instituted, this Agreement may not be abandoned by
the Buyer for a period of 30 days from the date notice of institution thereof
is first received by either Sellers or Buyer (but consummation hereof shall be
delayed during such period), and may not be abandoned pursuant to this Section
8.2 thereafter except upon advice of counsel to Buyer that (i) there is a
reasonable probability that such an investigation may result in an action or
proceeding of the type described in the second clause of this Section 8.2, and
(ii) that such an investigation is not based in
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whole or in part on Buyer's failure to dispose of its Denver operations.
8.3 Damage to the Assets. If on the Closing Date the real or
personal properties used in the Division shall have suffered damage on account
of fire, explosion or other cause of any nature, but such damage has not
resulted in a Material Adverse Effect, Buyer shall complete the purchase
hereunder and collect and receive on behalf of Sellers the proceeds of any
insurance payable to Sellers on account of the damage. If such damage has
resulted in a Material Adverse Effect, Buyer shall have the right at its
election (i) to complete the purchase hereunder and collect and receive on
behalf of Sellers the proceeds of any insurance payable to Sellers on account
of the damage or (ii) to terminate this Agreement by providing written notice
to Sellers specifying the Material Adverse Effect, and upon such termination
Buyer and Sellers shall be released from any liability under this Agreement.
8.4 Hart-Scott-Rodino. The waiting period under the Hart-
Scott-Rodino Act shall have expired, and appropriate Canadian approval shall
have been obtained, if required, and there shall not be outstanding any order
of a court restraining the transactions contemplated hereby.
<PAGE> 47
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8.5 Receipt of Documents. Buyer shall have received at the
Closing:
(a) such limited warranty deeds with respect to office or
production facilities and otherwise quitclaim deeds (without specific
legal descriptions but otherwise in form and substance reasonably
satisfactory to Buyer) sufficient to transfer all of Sellers' interest
in the real property included in the Assets;
(b) a bill of sale for all personal property included in the
Assets;
(c) an opinion of Kristin H. Kent, counsel to Sellers, in the
form attached as Exhibit C (in rendering the opinion called for by
this section, Ms. Kent may rely on the opinions of other counsel
satisfactory to her with respect to any matters involving the laws of
any jurisdiction other than New York and Virginia);
(d) an assignment of all of Sellers' right, title and interest
to all contracts, leases, licenses and permits used in the Business;
(e) a receipt for the Purchase Price;
(f) certificates duly endorsed (or with powers of attorney
attached) representing all of the Shares;
(g) the Option in the form attached as Exhibit D; and
(h) revised Schedules pursuant to Section 5.12.
<PAGE> 48
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ARTICLE 9 Indemnification
9.1 Survival. The several representations, warranties, covenants
and agreements of Sellers and Buyer contained in or made pursuant to this
Agreement shall be deemed to have been made on the Closing Date, shall survive
the Closing Date and shall remain operative and in full force and effect for a
period of one year after the Closing Date, except that (i) the representations
contained in Sections 3.9, 3.11, 3.16 and 3.18 shall survive for a period of
three years after the Closing Date, and (ii) the representations, warranties,
covenants and agreements contained in Sections 3.2, 3.12, 3.17, 4.2, 6.7,
9.2(c), 9.3(c), 9.3(d) and 9.3(e) shall survive for the time limit imposed by
the statute of limitations applicable to any claim for which indemnity is
sought.
9.2 Indemnification of Buyer. Sellers agree that they shall
indemnify and hold Buyer harmless from and against any and all damages, claims,
losses, expenses, costs, obligations and liabilities, including without
limitation liabilities for reasonable attorneys' fees and disbursements ("Loss
and Expense"), suffered by Buyer by reason of:
(a) any breach of representation or warranty made by Sellers
pursuant to this Agreement;
(b) any failure by Sellers to perform or fulfill any of their
respective covenants or agreements set forth in this Agreement; and
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(c) any failure by Sellers to pay or perform when due any of
their respective liabilities or obligations arising out of or related
to the Division which have not been assumed by Buyer hereunder;
provided, however, that Sellers will not be responsible for any Loss or Expense
until the cumulative aggregate amount of such Loss or Expense results in a
Material Adverse Effect, in which case Sellers shall then be liable for all
such Loss or Expense; provided further that Sellers shall be liable for
retained tax liabilities under Section 1.3(b)(iii), retained Mediacom minority
shareholder liabilities under Section 1.3(b)(vii), and any balance sheet
adjustment refund due Buyer under Section 1.4 without regard to a Material
Adverse Effect, and provided further that Buyer shall not be entitled to
include in Loss or Expense any claims related to accounts receivable.
9.3 Indemnification of Sellers. Buyer agrees that it shall
indemnify and hold Sellers harmless from and against any and all Loss and
Expense suffered by Sellers by reason of:
(a) any material breach of representation or warranty made by
Buyer pursuant to this Agreement;
(b) any material failure by Buyer to perform or fulfill any
of its covenants or agreements set forth in this Agreement;
(c) any failure by Buyer to pay or discharge on or after the
Closing Date any liabilities or obligations
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assumed by Buyer hereunder, or any obligations of Buyer under Sections
1.4, 6.7 or 10.2;
(d) any liabilities or obligations arising out of the Transit
Agreements on or after the Closing Date or any liabilities or
obligations of Buyer under Section 5.13; and
(e) any liability with respect to claims by third parties
asserted after the Closing Date which arise from occurrences prior to
the Closing Date but only to the extent that the Loss and Expense is
not reimbursed by insurance policies of Sellers.
9.4 Notice of Claims. If Gannett Co., Inc. (on behalf of any
Seller) or Buyer believes that it has suffered or incurred any Loss and Expense
(the "Indemnified Party"), it shall notify the other party (the "Indemnifying
Party") promptly in writing and within the applicable time period specified in
Section 9.1, describing such Loss and Expense, the amount thereof if known, and
the method of computation of such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred. The amount of the
Loss and Expense set forth in the notice shall not be a limitation on any claim
for the actual amount of such Loss and Expense, however.
If the Indemnifying Party does not object in writing to an
indemnification notice claim within 45 days after receiving notice, the
Indemnified Party shall be entitled to recover
<PAGE> 51
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promptly from the Indemnifying Party the amount of such claim, but such
recovery shall not be deemed to limit the amount of any additional
indemnification to which the Indemnified Party may be entitled pursuant to this
Article 9. If the Indemnifying Party asserts that it has an indemnification
obligation in a lesser amount than claimed, the Indemnified Party shall
nevertheless be entitled to recover promptly from the Indemnifying Party the
lesser amount, without prejudice to the Indemnified Party's claim for the
difference.
9.5 Defense of Third Party Claims. If any action at law or in
equity is instituted by a third party (a "Claim") with respect to which any of
the parties intends to claim a Loss and Expense under this Article 9, such
party shall promptly notify the Indemnifying Party of such Claim. The
Indemnifying Party shall have the right to conduct and control any Claim
through counsel of its own choosing, but the Indemnified Party may, at its
election, participate in the defense of any such Claim at its sole cost and
expense. If the Indemnifying Party does not notify the Indemnified Party
within ten (10) days after receipt of the notice specified in this Section 9.5
that it is defending any such Claim, then the Indemnified Party may defend such
Claim and settle such Claim, through counsel of its own choosing, and recover
from the Indemnifying Party the amount of such settlement or of any judgment
and the costs and expenses of such defense,
<PAGE> 52
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including, but not limited to, reasonable attorneys' fees and disbursements.
Notwithstanding the foregoing, the failure by a party to abide by
these terms and conditions shall not affect the other party's obligations to
indemnify such party against Loss and Expense under this Article 9.
9.6 Settlements. No settlement made by an Indemnifying Party
shall be binding on the Indemnified Party unless the proposed settlement has
been approved in writing in advance by the Indemnified Party. The Indemnifying
Party will give the Indemnified Party at least fifteen (15) days' notice of any
proposed settlement or compromise of any Claim it is defending. If the
Indemnified Party unreasonably rejects the proposed settlement or compromise,
it shall be obligated to assume the defense of and full and complete liability
and responsibility for such Claim.
9.7 Determination of Responsibility for Loss and Expense for
Environmental Claims. Notwithstanding the provisions of Sections 9.2 and 9.3,
but subject to the provisions of Section 10.15, Buyer and Sellers have agreed
to allocate responsibility for environmental matters as follows:
(a) Sellers are responsible for Loss or Expense for
environmental claims (i) arising out of circumstances, actions,
omissions or events occurring or existing prior to
<PAGE> 53
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the Closing Date that were not (or are not) in the ordinary course of
the Business, except for those matters disclosed in Schedule 3.16 and
(ii) related to the Mission Road Parcel; and
(b) Buyer is responsible for Loss or Expense for
environmental claims arising out of (i) those matters disclosed in
Schedule 3.16 and (ii) circumstances, actions, omissions or events,
whether occurring or existing before or after the Closing Date, that
were (or are) in the ordinary course of the Business.
9.8 Buyer's Knowledge. Notwithstanding anything to the contrary
contained in this Agreement, in no event shall Sellers be liable to Buyer from
and after the Closing Date for any matter of which Buyer had knowledge on or
before the Closing Date.
9.9 Sellers' Knowledge. Notwithstanding anything to the contrary
contained herein, any information that is communicated to Sellers by Buyer in
writing on or before the Closing Date becomes Sellers' knowledge as used herein.
ARTICLE 10 Miscellaneous Provisions
10.1 Termination. This Agreement may be terminated by Sellers or
Buyer at any time prior to the Closing Date (a) by the mutual consent of
Sellers and Buyer; or (b) by Sellers if any of the conditions in Article 7 have
not been met by the time
<PAGE> 54
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required and have not been waived; or (c) by Buyer if any of the conditions in
Article 8 have not been met by the time required and have not been waived; or
(d) upon notice to the other party if, without fault on the part of the
notifying party, the Closing has not taken place by September 30, 1996. In the
event of any termination pursuant to this Section 10.1, each party shall
deliver to the other upon request all documents, work papers and other
materials furnished by the other relating to the transactions contemplated
hereby, or shall destroy all such materials. A termination pursuant to this
Section 10.1 shall not relieve either party of liability it would otherwise
have for a breach of this Agreement.
10.2 Employees and Employee Benefits.
(a) Buyer agrees to hire all of the Division's active
employees upon Closing except for six senior managers of the Division
("Senior Managers") to be mutually agreed upon by the parties. For
purposes of this Section, "active employees" shall include only those
current employees who are actively working immediately prior to the
Closing Date or who are on sick leave, vacation, short-term disability
or authorized leave of absence of six months or less. Buyer shall be
responsible for and shall pay for all compensation, benefits and other
payments due to all active employees of the Division who accept
Buyer's offer of employment to become employed by Buyer after the
Closing Date pursuant to
<PAGE> 55
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this transaction ("Hired Employees"). With respect to active
employees of the Division (other than the Senior Managers) as of the
day preceding the Closing Date who are not employed by Buyer after the
Closing Date pursuant to this transaction, Buyer agrees to assume the
following liabilities and obligations: (i) severance liabilities in
accordance with a severance policy of one week of salary for every
full year of employment with the Division (or Gannett Co., Inc. or any
of its affiliates) prior to the Closing Date (with a minimum of four
weeks of salary and a maximum of twenty-six weeks of salary) (the
"Severance Policy"), (ii) all obligations under federal, state or
foreign plant closing statutes including the WARN Act, (iii) Sellers'
medical insurance costs relating to COBRA coverage, and (iv) employee
benefit obligations of Mediacom, or arising under the laws of Canada
or any of its governmental agencies or divisions. Buyer also agrees
to provide medical insurance coverage to all Hired Employees,
beginning on the Closing Date, with coverage to be effective without
any waiting period and without any exclusions for pre-existing
conditions.
(b) Sellers shall be responsible for and shall pay for (i)
all compensation, benefits and other payments due to all employees and
former employees of the Division prior to the Closing Date, (ii) all
compensation and benefits due to the Senior Managers before and after
the Closing Date, (iii) all
<PAGE> 56
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benefits payable to employees who retired from the Division prior to
the Closing Date, and (iv) all benefits payable to employees who are
not considered "active employees" immediately prior to the Closing
Date.
(c) On the Closing Date, Sellers shall transfer and assign or
cause to be transferred and assigned to Buyer all of the pension plan
assets of the Canadian Plan and the Union Plans, and Buyer shall
assume all of the obligations and liabilities to employees under such
plans and Buyer shall become the plan sponsor. Sellers shall retain
the pension plan assets and liabilities to all employees who
participate in the Gannett Co., Inc. Retirement Plan.
(d) Buyer has established a qualified employee benefit plan
and trust under Section 401(k) of the Internal Revenue Code ("Buyer's
Plan"). On the Closing Date or within 90 days thereafter, Sellers
shall transfer to the Buyer's Plan all of the assets in the Gannett
Co., Inc. 401(k) Plan ("Gannett 401(k) Plan") held for the accounts of
employees of the Division hired by Buyer, and Buyer shall assume the
liabilities of the Sellers and of the Gannett 401(k) Plan to the
employees whose accounts are so transferred. The assets shall be
liquidated and transferred in cash unless the parties agree in writing
to the transfer of all or any portion of the assets in kind. Buyer's
Plan shall preserve the accrued benefits of such employees as of the
transfer date. Buyer shall identify all employees whose accounts
<PAGE> 57
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shall be transferred at least 30 days prior to the proposed transfer.
Buyer shall indemnify and hold Sellers and the Gannett 401(k) Plan
harmless from all Loss and Expense under Section 9.3(c) in connection
with any 401(k) claims asserted with respect to the Gannett 401(k)
Plan by employees whose assets were transferred.
(e) Buyer agrees to maintain the Severance Policy for the
benefit of all Hired Employees for a period of at least six months
following the Closing Date and, in determining any benefits
thereunder, shall credit a Hired Employee with service for employment
with the Division prior to the Closing Date.
10.3 Imprints; Madison Avenue Lease. Buyer agrees by not later
than 6 months after the Closing Date to remove from all advertising displays,
vehicles and equipment included in the Assets all imprints containing the
tradenames retained by Sellers as Excluded Assets. Until the earlier of
removal or the conclusion of the 6-month period described above, Sellers agree
that Buyer may display Sellers' tradenames on the imprints of the Business.
Buyer agrees that the Division shall not occupy the space currently
used by the Division under the Madison Avenue Lease, beginning on the Closing
Date.
<PAGE> 58
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10.4 Risk of Loss. Material risk of loss or damage to the Assets
to be transferred hereunder by fire or other casualty prior to the Closing Date
shall be borne by Sellers, and on and after the Closing Date shall be borne by
Buyer.
10.5 Data Processing Services. Sellers agree that for a period of
60 days following the Closing Date Buyer may continue to use the data
processing services made available to the Division by Sellers and their
affiliated entities, at the same levels of service as presently provided, at a
cost of $15,000. Within 30 days after the Closing Date, Sellers will advise
Buyer of the service fee (which service fee shall include, among other things,
all of Sellers' direct and indirect costs for the services) and terms that
would be applicable to continuation of the data processing services arrangement
after the initial 60-day period. If Buyer does not elect to accept Sellers'
terms, then the availability of data processing services will cease at the end
of the initial 60-day period.
10.6 Access to Records. For the period beginning on the Closing
Date and ending when all of Sellers' tax years through 1996 are closed by the
IRS and the Canadian tax authorities, Buyer will retain, and make available to
Sellers as Sellers reasonably request, all files and records related to the
Division prior to the Closing Date. No such records shall be destroyed by
Buyer after that time without Buyer's first offering them to
<PAGE> 59
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Sellers. Buyer shall permit Sellers' representatives full access to and use of
the records of the Division as may be deemed appropriate by such
representatives for the purpose of preparing the balance sheet adjustments
referenced in Section 1.4(c). Sellers shall notify Buyer when all of Sellers'
tax years through 1996 are closed by the IRS and the Canadian tax authorities.
Buyer shall, and shall cause Mediacom to, cooperate with Sellers in connection
with the reporting or filing of any form, report, return or other documents
related to periods of time for which Sellers may be responsible under this
Agreement.
10.7 Tax Returns. Gannett shall remain solely responsible to file
or cause to be filed all U.S. federal, state and local tax returns required to
be filed by or on behalf of NY Subways, and all Canadian federal, provincial
and local tax returns required to be filed by or on behalf of Mediacom and its
subsidiaries, covering any period of time ending prior to or on the Closing
Date, and to pay all taxes due for the periods covered by such returns, except
such accrued and unpaid taxes not yet due for which appropriate accruals have
been made in the Closing Date Balance Sheet. Gannett shall be entitled to any
refund of taxes attributable to such returns and periods. Buyer shall remain
solely responsible to file or cause to be filed all U.S. federal, state and
local tax returns required to be filed by or on behalf of NY Subways, and all
Canadian federal, provincial and local tax returns required to be filed by or
on behalf of
<PAGE> 60
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Mediacom and its subsidiaries, covering any period of time that begins on the
date after the Closing Date, and to pay all taxes due for the periods covered
by such returns. For U.S. federal consolidated return purposes, the income or
loss of NY Subways shall be allocated to Gannett for the period up to and
including the Closing Date, and to Buyer for the period after the Closing Date,
by closing the books of NY Subways as of the close of business on the Closing
Date. Buyer shall not be permitted to make an election under Section 338(g) of
the Internal Revenue Code (U.S.) for Mediacom or any of its subsidiaries
without the prior approval of Gannett. Neither Mediacom nor any of its
subsidiaries shall effect any extraordinary transactions that would cause an
adverse tax consequence for Gannett until after 1996 without the prior approval
of Gannett.
10.8 Further Assurances and Consents. From time to time after the
Closing Date, without further consideration (a) Sellers and Buyer will execute
and deliver, or cause to be executed and delivered, such documents as the other
may reasonably request in order to effect the transactions contemplated herein
and to effectively vest in Buyer good title to the Assets or the Shares, and
(b) Sellers agree to use reasonable efforts to cooperate with Buyer to obtain
any necessary third party consents or approvals to the assignment or transfer
to Buyer of any contracts, leases, licenses and permits included in the Assets;
provided, however, that Sellers shall not be required to make any payments or
incur
<PAGE> 61
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any obligations to any third parties in connection with the obtaining of any
such consents or approvals.
10.9 Waiver of Compliance. Any failure of any of the parties to
comply with any obligation, representation, warranty, covenant, agreement or
condition herein may be waived by the other party only by a written instrument
signed by the party granting the waiver. Any such waiver or failure to insist
upon strict compliance with a term of this Agreement shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure to
comply.
10.10 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered by hand or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) If to Sellers, to:
Douglas H. McCorkindale, Vice Chairman
Gannett Co., Inc.
1100 Wilson Boulevard
Arlington, VA 22234
Fax No. 703/558-4634
<PAGE> 62
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With a copy to:
Thomas L. Chapple, Esq., Senior Vice President
and General Counsel
Gannett Co., Inc.
1100 Wilson Boulevard
Arlington, VA 22234
Fax No. 703/558-3897
(b) If to Buyer, to:
Mr. Arthur R. Moreno, President and CEO
Outdoor Systems Advertising
2502 North Black Canyon Highway
Phoenix, Arizona 85009
Fax No. 602/433-2482
With a copy to:
William B. Shearer, Jr., Esq.
Powell, Goldstein, Frazer & Murphy
191 Peachtree Street, N.E.
Sixteenth Floor
Atlanta, Georgia 30303
Fax No. 404/572-6999
10.11 Assignment. This Agreement and all of its terms shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. This Agreement shall not be assigned by either party,
except that (i) Sellers may assign or transfer this Agreement to any affiliate
or subsidiary of Gannett Co., Inc., and (ii) Buyer may assign its rights under
this Agreement as collateral security under financing agreements entered into
by Buyer for the purpose of obtaining the funds required for the Purchase
Price. In the event of any permitted assignment by Sellers or Buyer hereunder,
any such assignee shall be bound by all the terms and conditions set forth in
this Agreement, and no such assignment shall release Sellers or Buyer from
their obligations and liabilities hereunder.
<PAGE> 63
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10.12 Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Delaware without
reference to its choice of law principles or the laws of any other state.
10.13 Confidential Information; Public Announcements. The parties
agree that the Non-Disclosure Agreement between Gannett Co., Inc. and Buyer
dated May 29, 1996 (the "Non-Disclosure Agreement") remains in full force and
effect and shall survive the execution and delivery of this Agreement.
No public announcement (including an announcement to employees) or
press release concerning the transactions provided for herein shall be made by
Gannett Co., Inc. (on behalf of any Seller) or by Buyer without the prior
written approval of the other party. In no event shall any party disclose the
Purchase Price unless such disclosure is required by law, except that Buyer or
Sellers may disclose the Purchase Price to Buyer's lenders and investors and to
the Securities and Exchange Commission.
10.14 No Third Party Rights. Nothing in this Agreement shall be
deemed to create any right on the part of any person or entity not a party to
this Agreement, except that Buyer may assign its rights under this Agreement as
collateral security under financing agreements entered into by Buyer for the
purpose of obtaining the funds required for the Purchase Price.
<PAGE> 64
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10.15 Option for Mission Road and other Office and Production
Facilities.
(a) At any time prior to the fifth business day preceding the
Closing Date, Buyer may elect by written notice to Sellers that it
shall include the Mission Road property in the Assets, in
consideration for the assumption by Buyer of all Loss or Expense
related thereto without any change in the Purchase Price or the
balance sheet adjustments pursuant to Section 1.4 above.
(b) At any time prior to the fifth business day preceding the
Closing Date, Buyer may elect by written notice to Sellers to exclude
any office or production facility ("Excluded Facility") from the real
property that would otherwise be included in the Assets. In such
event, notwithstanding the provisions of Section 9.7, any such
Excluded Facility shall be an Excluded Asset under Section 1.2 above
and Sellers shall remain responsible for all Loss or Expense related
to the Excluded Facility. There shall be no reduction in the Purchase
Price or the balance sheet adjustments pursuant to Section 1.4 to
reflect the exclusion of the Excluded Facility from the Assets.
10.16 Entire Agreement; Amendments. This Agreement, including the
Exhibits and Schedules hereto and the Non-Disclosure Agreement, embodies the
entire agreement and understanding of the parties in respect of the subject
matter
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hereof and supersedes all prior agreements and understandings between the
parties. This Agreement may not be amended except in a writing signed by both
parties.
Sellers and Buyer have caused this Agreement to be signed by their
duly authorized officers as of the date first above written.
SELLERS: BUYER:
GANNETT CO., INC. OUTDOOR SYSTEMS, INC.
By: /s/Douglas H. McCorkindale By: /s/William S. Levine
------------------------------- -------------------------------
Douglas H. McCorkindale William S. Levine
Vice Chairman Chairman
GANNETT INTERNATIONAL
COMMUNICATIONS, INC.
By: /s/Douglas H. McCorkindale
-------------------------------
Douglas H. McCorkindale
President
COMBINED COMMUNICATIONS
CORPORATION
By: /s/Douglas H. McCorkindale
-------------------------------
Douglas H. McCorkindale
President
GANNETT TRANSIT, INC.
By: /s/Douglas H. McCorkindale
-------------------------------
Douglas H. McCorkindale
Vice President
SHELTER MEDIA COMMUNICATIONS, INC.
By: /s/Douglas H. McCorkindale
-------------------------------
Douglas H. McCorkindale
Vice President
<PAGE> 66
EXHIBIT A
PROMISSORY NOTE
$3,000,000 July 9, 1996
Arlington, Virginia
FOR VALUE RECEIVED, Outdoor Systems, Inc., a Delaware corporation (the
"Maker"), HEREBY PROMISES TO PAY to the order of Gannett Co., Inc., a Delaware
corporation (the "Seller"), at the Seller's office at 1100 Wilson Boulevard,
Arlington, Virginia 22234 (or such other address as Seller shall notify Maker
in writing), in lawful money of the United States and in immediately available
funds, the principal sum of Three Million Dollars ($3,000,000), without
interest, pursuant to Section 1.4 of the Asset Purchase Agreement among Gannett
Co., Inc., Combined Communications Corporation, Gannett Transit, Inc., Shelter
Media Communications, Inc., and Gannett International Communications, Inc.
("Sellers") and Maker dated as of July 9, 1996 (the "Agreement").
This Note is issued pursuant to the terms of the Agreement. Terms
defined in the Agreement are used herein with their defined meanings.
This Note is guaranteed by a Guaranty made by William S. Levine,
personally dated as of July 9, 1996, (a copy of which is attached hereto as
Exhibit A) and the holder of this Note is entitled to the benefits thereof.
Payment of principal due hereunder will be made in one payment due in
immediately available funds on July 29, 1996; provided however that payment
will not be due, and this Note will be canceled, only if the Agreement is
terminated prior to July 29, 1996 and such termination is (a) for reasons
beyond the control of Maker, or (b) for reasons attributable solely to Sellers
as described in paragraph 1.4 of the Agreement.
If any of the following events ("Events of Default") shall occur:
(a) Maker shall fail to pay principal under this Note when
due; or
(b) Maker shall: (i) apply for, or consent to the
appointment of a receiver, trustee or liquidator of Maker, (ii) make a general
assignment for the benefit of creditors, or (iii) file a voluntary petition in
bankruptcy, or a petition or an answer seeking an arrangement with creditors or
to take advantage of any insolvency law or an answer admitting the material
allegations, or a petition is filed against Maker in any bankruptcy or
insolvency proceedings, or if action shall be taken
<PAGE> 67
by the Maker for the purpose of affecting any of the foregoing; or (iv) an
order, judgment or decree shall be entered, without the application, approval
or consent of Maker by any court of competent jurisdiction, approving a
petition seeking bankruptcy of Maker, or approving a receiver or trustee of
Maker or of all or a substantial part of assets of Maker, and such order,
judgment or decree shall continue unstayed and in effect ninety (90)
consecutive days;
then, in the case of an Event of Default other than one of the type
referred to in clause (b) above, the Seller may, by notice to the Maker, (i)
declare the entire outstanding Note forthwith due and payable, whereupon the
Note shall become and be forthwith due and payable, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by the Maker; or (ii) pursue any other remedy available to it
under the Agreement or otherwise; and in the case of the occurrence of an Event
of Default of the type referred to in clause (b) above, the entire outstanding
Note shall be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by
Maker. After an Event of Default, interest shall accrue at the rate of fifteen
percent (15%) per annum or such lesser rate as equals the maximum rate
permitted by law and interest shall be due and payable upon demand.
Maker agrees that this Note shall be binding upon Maker and its
successors and assigns.
Maker promises to pay all costs of collection, including reasonable
attorneys' fees, upon default in the payment of the principal amount of this
Note at the payment date, as herein provided, whether suit be brought or not.
In the event any one or more of the provisions contained in this Note
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Note, but this Note shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein or
therein.
This Note may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. Notices and other communications
hereunder shall be given in the same manner as set forth in the Agreement.
<PAGE> 68
This Note shall be interpreted in accordance with the laws of the
Commonwealth of Virginia.
OUTDOOR SYSTEMS, INC.
By:
----------------------------------
William S. Levine
Chairman
<PAGE> 69
EXHIBIT A (to the Promissory Note)
GUARANTY
THIS GUARANTY, dated as of July 9, 1996, is made by WILLIAM S. LEVINE,
an individual residing at 2737 Arizona Biltmore Circle #18, Phoenix, Arizona
85016 ("Guarantor"), for the benefit of Gannett Co., Inc., a corporation having
its principal place of business at 1100 Wilson Boulevard, Arlington, Virginia
22234 ("Obligee").
Obligee and Outdoor Systems, Inc., a Delaware corporation having its
principal place of business in Phoenix, Arizona ("OSI"), have entered into an
Asset Purchase Agreement, dated July 9, 1996 (the "Asset Purchase Agreement")
pursuant to which Obligee is selling to OSI certain of the assets of Obligee
and several of its affiliate companies. In connection with such sale, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Guarantor covenants as follows:
1. Guarantor guarantees to Obligee the prompt payment of any and all
amounts due to Obligee under the Promissory Note delivered pursuant to Section
1.4 of the Asset Purchase Agreement. Guarantor also agrees to be liable to
Obligee for any payments made by OSI or Guarantor to Obligee that may
thereafter be recovered from Obligee for any reason whatsoever, including
without limitation as a preferential transfer or fraudulent conveyance under
the U.S. Bankruptcy Code or any applicable state law, together with any and
all costs and expenses which Obligee may incur in the defense against any such
claims, including without limitation reasonable attorney's fees and
disbursements. This Guaranty is a guaranty of payment and not of collection.
2. Obligee shall not be required to commence any action, suit or
proceeding to enforce its rights under any provision of the Promissory Note or
to pursue or exhaust any other rights or remedies which it may have against OSI
prior to making demand upon Guarantor for payment under the terms of this
Guaranty.
3. The liability of Guarantor under this Guaranty shall be direct,
immediate, absolute, continuing and unconditional, and shall not be subject to
any defense, claim, counterclaim, setoff, deduction, diminution, abatement,
recoupment, suspension, deferment or reduction which Guarantor, OSI or any
other person may have against Obligee or any other person.
4. Guarantor waives (i) notice of the acceptance of this Guaranty by
Obligee and of any action by Obligee in connection herewith, (ii) presentment
for payment, demand, protest, notice of protest and notice of dishonor, and
(iii) any other rules of suretyship law.
<PAGE> 70
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5. No delay or lack of diligence on the part of Obligee in exercising
any of its rights or remedies hereunder or under the Promissory Note and no
partial or single exercise of any such rights or remedies shall constitute or
be deemed to be a waiver of any of Obligee's rights under this Guaranty.
6. In the event that Guarantor shall advance or become obligated to
pay any sums pursuant to this Guaranty, or in the event that for any other
reason OSI shall hereafter become indebted to Guarantor, the amount of such
advance, obligation or indebtedness shall at all times be and remain subject
and subordinate to all amounts due and owing to Obligee under the Promissory
Note.
7. Upon payment under this Guaranty, Guarantor shall have a right of
subrogation with respect to the rights of Obligee under the Promissory Note and
then only to the extent of the amount paid. Notwithstanding any payments made
by Guarantor under this Guaranty, all other rights of subrogation and
participation are hereby expressly waived and released.
8. This Guaranty shall remain in full force and effect during the
term hereof notwithstanding (i) the invalidity or unenforceability of any of
the terms or provisions of the Promissory Note, (ii) the dissolution and
liquidation of OSI or Obligee, (iii) the death or legal incapacity of
Guarantor, (iv) the release or discharge, in whole or in part, of OSI or
Guarantor in any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding, or (v) any other
circumstances which might otherwise constitute a legal or equitable release or
discharge, in whole or in part, of OSI under the Promissory Note or a legal or
equitable release or discharge in whole or in part, of Guarantor under this
Guaranty.
9. Any notice, request or demand which Obligee is required to give to
Guarantor hereunder shall be in writing and shall be deemed to have been duly
given or made if delivered personally to Guarantor or if mailed to Guarantor by
registered or certified mail, return receipt requested, postage prepaid, at his
address set forth above or at such other address as Guarantor may designate by
written notice to Obligee.
10. This Guaranty may not be modified, amended or revoked without the
prior written consent of Obligee.
11. This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without giving effect to
its conflict of law rules.
12. Guarantor hereby expressly and irrevocably agrees and consents
that any action, suit or proceeding arising out of or
<PAGE> 71
-3-
relating to this Guaranty may be instituted by Obligee in the courts of the
Commonwealth of Virginia and, by the execution and delivery of this Guaranty,
Guarantor expressly waives any objection which he may have now or hereafter to
the laying of venue in, or to the jurisdiction of, such courts in any such
action, suit or proceeding, and irrevocably submits generally and
unconditionally to the jurisdiction of such courts in any such action, suit or
proceeding.
13. This Guaranty shall be binding upon Guarantor and his executors,
administrators, distributees, legal representatives and fiduciaries and shall
inure to the benefit of Obligee, its successors and assigns.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the
date first above written.
--------------------------------
William S. Levine
<PAGE> 1
EXHIBIT 99.2
OPTION
This Option (the "Option") is granted by Gannett Outdoor Co. of Texas,
Inc., a Texas corporation having its principal place of business in Houston,
Texas ("Texas Outdoor") to Outdoor Systems, Inc., a Delaware corporation having
its principal place of business in Phoenix, Arizona ("Buyer") pursuant to the
Asset Purchase Agreement dated July __, 1996 among Gannett Co., Inc.
("Gannett"), Buyer and others (the "Asset Purchase Agreement"). This Option is
granted in order to provide Buyer with an opportunity to seek the expiration of
the waiting period under the Hart-Scott-Rodino Act for the purchase of Texas
Outdoor independently of the transactions contemplated in the Asset Purchase
Agreement, and is subject to clearance under the Hart-Scott-Rodino Act.
OPTION. Texas Outdoor hereby grants to Buyer the option to acquire
the business of Texas Outdoor as a going concern for the purchase price of Ten
Million Dollars ($10,000,000) ("Texas Outdoor Purchase Price") subject to
adjustment. This Option shall expire unless exercised on or before the date
which is sixty (60) days after the Closing Date under the Asset Purchase
Agreement.
EXERCISE. This Option may be exercised by delivery on or before the
expiration date of Buyer's written notice of exercise to Texas Outdoor, c/o
Gannett Co., Inc., 1100 Wilson Boulevard, Arlington, Virginia 22234, Attention:
Douglas H. McCorkindale and the execution and delivery of the Asset Purchase
Agreement attached hereto as Exhibit A ("Houston Purchase Agreement").
Exercise of the Option shall constitute the binding commitment of Buyer to
acquire, and Texas Outdoor to transfer, all the assets of Texas Outdoor and of
Buyer to assume the liabilities of Texas Outdoor on the terms and conditions
contained in the Houston Purchase Agreement.
ASSIGNMENT. This Option shall not be assigned or otherwise
transferred by Buyer, and any purported assignment or transfer, directly or
indirectly, by contract, operation of law or otherwise, shall automatically
terminate this Option whether it occurs before or after exercise by Buyer.
Nothing herein shall prohibit Buyer from transferring the business of Texas
Outdoor immediately after the Closing as defined in the Houston Purchase
Agreement, but Sellers shall have no obligations to any purchaser from Buyer.
INCORPORATION BY REFERENCE. The provisions of Sections 5.9, 10.9,
10.10, 10.12, 10.14 and 10.15 of the Asset Purchase Agreement are incorporated
in this Option by reference and shall apply to the Option as though stated
herein.
Dated: July __, 1996 GANNETT OUTDOOR CO. OF TEXAS, INC.
By:
-----------------------------------
Title:
---------------------------------
<PAGE> 2
EXHIBIT A
ASSET PURCHASE AGREEMENT
BETWEEN
GANNETT OUTDOOR CO. OF TEXAS, INC.
AND
OUTDOOR SYSTEMS, INC.
Dated July __, 1996
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1 Sale of Assets and Terms of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3 Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Organization; Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4 Business Since the Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 PCS Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.8 Licenses and Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.9 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.10 Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.11 Litigation and Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.13 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.14 Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.15 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.16 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 4 Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.4 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.5 Adequate Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 5 Covenants of Seller Pending the Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.1 Maintenance of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.2 Organization, Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.3 Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.4 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.5 Notice of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6 Bulk Sales Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.7 Consummation of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.9 Hart-Scott-Rodino Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.10 Interim Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 6 Covenants of Buyer Pending the Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.3 Notice of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.4 Consummation of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
6.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.6 Hart-Scott-Rodino Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.7 Letters of Credit; Sureties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 7 Conditions to the Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1 Representations, Warranties, Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3 Hart-Scott-Rodino . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4 Receipt of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 8 Conditions to the Obligations of Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.1 Representations, Warranties, Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.3 Damage to the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4 Hart-Scott-Rodino . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.5 Receipt of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.2 Indemnification of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.3 Indemnification of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.4 Notice of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.5 Defense of Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.6 Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.7 Determination of Responsibility for Loss and Expense for Environmental Claims . . . . . . . . . . . . . 38
9.8 Buyer's Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.9 Seller's Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 10 Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.2 Employees and Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.3 Imprints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.4 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.5 Data Processing Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.6 Access to Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.7 [Intentionally omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.8 Further Assurances and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.9 Waiver of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.11 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.13 Confidential Information; Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.14 No Third Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.15 Option for Office and Production Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.16 Entire Agreement; Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
<PAGE> 5
SCHEDULES
1.1(a) Advertising Structures and Personal Property
1.1(b) Advertising Contracts
1.1(c) Real Property
1.1(d) Property Agreements
1.1(g) Accounts Receivable
1.1(i) Software
1.2(d) Excluded Software
3.7 PCS Agreements
3.10 Trademarks
3.11 Litigation and Compliance with Laws
3.13 Employees
3.14 Changes
3.16 Environmental Matters
EXHIBITS
A - Opinion of Buyer's Counsel
B - Opinion of Seller's Counsel
<PAGE> 6
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is dated as of July __,
1996, and is between GANNETT OUTDOOR CO. OF TEXAS, INC., a Texas corporation
having its principal place of business in Houston, Texas ("Seller") and OUTDOOR
SYSTEMS, INC., a Delaware corporation having its principal place of business in
Phoenix, Arizona ("Buyer").
This Agreement is executed in connection with Buyer's exercise of an
Option dated July __, 1996 granted by Seller pursuant to the Asset Purchase
Agreement (the "Division Agreement") among Gannett Co., Inc., Combined
Communications Corporation, Gannett Transit, Inc., Shelter Media
Communications, Inc. and Gannett International Communications, Inc.
(collectively, "Gannett") and Buyer dated July __, 1996, under which Gannett
agreed to sell the Division (as defined in the Division Agreement) to Buyer.
Seller owns and operates an Outdoor advertising business in the
Houston metropolitan area (the "Business").
Seller desires to sell and Buyer desires to purchase substantially all
of the assets of the Business as a going concern. Based upon the
representations, warranties and agreements made by each party to the other in
this Agreement, the parties have agreed to consummate the sale of the Business
on the terms contained herein.
<PAGE> 7
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ARTICLE 1 Sale of Assets and Terms of Payment
1.1 Transfer of Assets. Upon the terms and subject to the conditions
of this Agreement, on the Closing Date (as defined in Section 2.1 hereof)
Seller will sell, convey or cause to be conveyed, and deliver to Buyer, and
Buyer will purchase and accept from Seller the assets and properties of Seller,
tangible or intangible, of every kind and description used by Seller in
connection with the operations of the Business as a going concern (the
"Assets"), but excluding the Excluded Assets described in Section 1.2. The
Assets include the following:
(a) all advertising displays and structures and other
tangible personal property, inventory, assets and
equipment owned by Seller, including without
limitation those listed in Schedule 1.1(a);
(b) all contracts, agreements and similar documents of
any nature that relate to the Assets, including
without limitation employment contracts; collective
bargaining agreements; vehicles; equipment and other
personal property leases; and all agreements for the
sale of advertising or advertising services and the
renting of space on Outdoor advertising displays,
including without limitation those advertising
contracts listed in Schedule 1.1(b) and those PCS
agreements listed in Schedule 3.7;
(c) all real property of Seller, including without
limitation the real property listed in Schedule
1.1(c);
(d) all leases, licenses, easements and other agreements
allowing Seller to place or construct Outdoor
advertising displays on the property of any third
party, including rights to locations on which
structures have not yet been built, including without
limitation those listed in Schedule 1.1(d);
(e) all of Seller's right, title and interest in and to
all licenses, permits and other governmental
<PAGE> 8
- 3 -
authorizations (and applications therefor) used for
the Business;
(f) all trademarks, service marks and tradenames,
(including registrations and applications for
registration of any of the foregoing), trade secrets,
advertiser lists, and other intangible rights and
interests owned by Seller and used in connection with
the Business, including without limitation those
listed in Schedule 3.10;
(g) all accounts receivable of Seller in existence on the
Closing Date, including without limitation those
listed in Schedule 1.1(g);
(h) all files and other records of any nature available
at the headquarters of the Business located at Katy
Freeway, 1600 Studemont, Houston, Texas or the former
headquarters of the Division of Gannett Co.,
Inc.("GCI") located at 535 Madison Avenue, New York,
NY (excluding files and other records at GCI's
corporate headquarters that (i) GCI determines are
sensitive business materials which would not be
useful to Buyer or (ii) Buyer otherwise receives
copies of) relating solely to the Business;
(i) software related to the computer programs used in the
operations of the Business owned by Seller and
transferable under applicable license agreements,
including without limitation those listed on Schedule
1.1(i);
(j) cash on hand and in banks and other cash items of
Seller; and
(k) all of Seller's goodwill in and going concern value
of the Business.
1.2 Excluded Assets. The following assets relating to the Business
shall be retained by Seller and shall not be sold, assigned or transferred to
Buyer (the "Excluded Assets"):
(a) claims by Seller with respect to the Excluded Assets
or liabilities not assumed by Buyer hereunder,
including without limitation claims for tax refunds,
claims related to condemnation proceedings in
existence as of April 30, 1996, and
<PAGE> 9
- 4 -
counterclaims with respect to obligations and
liabilities not being assumed by Buyer hereunder;
(b) all contracts of insurance;
(c) any assets related to employee benefit plans of any
nature, including pension plans, except for GCI's
401(k) Plan as set forth in Section 10.2;
(d) software related to computer programs used in
corporate-wide financial or accounting functions or
used in the business of GCI and its affiliates
generally or not transferable under applicable
license agreements, including without limitation the
software listed in Schedule 1.2(d) (which Schedule
shall be delivered prior to Closing); and
(e) the names "Combined Communications Corporation,"
"Gannett," or any variants of either of them.
1.3 Liabilities.
(a) Buyer shall assume, discharge and perform the liabilities
and obligations of the Business, including:
(i) all liabilities and obligations under the
contracts and agreements assigned to Buyer which are described
in Subsections 1.1(b), (d), (e) and (i) above;
(ii) all other liabilities and obligations incurred
in the ordinary course of the Business or disclosed to Buyer
in the Schedules to this Agreement;
(iii) except as provided in Section 1.3(b)(iv), all
liability under any litigation, proceeding or claim of any
nature by any person or entity arising out of the ordinary
course of the Business or disclosed to Buyer;
<PAGE> 10
- 5 -
(iv) all liabilities of Buyer related to employees
described in Section 10.2 below; and
(v) all liabilities of the Business reflected on the
Closing Date Balance Sheet.
(b) Buyer does not assume and will not be liable for the
following liabilities or obligations of Seller with respect to the
Business:
(i) any liability under any contract of insurance;
(ii) except as described in Section 10.2 below, any
liability to any employee or former employee of the Business,
including under any of Seller's employee benefit plans;
(iii) any liability for federal, state, or local
government taxes based on the net income of Seller;
(iv) any liability with respect to claims by third
parties which are covered by insurance policies of Seller and
arise from occurrences prior to the Closing Date; or
(v) any liability or obligation not described in
Section 1.3(a) above.
1.4 Consideration. Subject to the conditions contained in this
Agreement, and in consideration of the sale of the Assets, Buyer will pay on
the Closing Date the sum of Ten Million Dollars ($10,000,000) (the "Purchase
Price") subject to adjustment as provided herein.
<PAGE> 11
- 6 -
The Purchase Price shall be paid by wire transfer of immediately
available funds on the Closing Date. The adjustments to the Purchase Price
pursuant to this Section 1.4 shall be paid as described in Section 1.4(c).
All amounts described in this Agreement or in any Schedules hereto are
expressed in U.S. dollars.
(a) Balance Sheet Adjustment. Seller and Buyer agree that the
Purchase Price will be adjusted as of the Closing Date as follows: If
on the Closing Date the Business's current assets exceed total
liabilities by more than $1.00, the Purchase Price will be increased
by the amount of such excess. If on the Closing Date the Business's
total liabilities exceed current assets by more than $1.00, the
Purchase Price will be reduced by the amount of such excess. In
computing this balance sheet adjustment, the balance sheet shall be
prepared in accordance with the historical accounting practices of the
Division, and in accordance with the following:
(i) Current assets for purposes of this balance sheet
adjustment shall include:
(A) all security deposits and any other
refundable deposits for the Business that are
transferable to Buyer;
(B) all inventory items and all prepaid
items, including without limitation prepaid leases,
prepaid franchise fees (regardless of the
<PAGE> 12
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length of the term of the underlying obligation), and
other prepaid items that the Business has expensed in
accordance with its historical accounting practices
to the extent Buyer obtains remaining future value;
(C) (i) all fixed assets acquired after April
30, 1996 and (ii) the total purchase price of
acquisitions consummated after April 30, 1996, net of
cash received by Seller from the sale of assets after
April 30, 1996;
(D) all long-term accounts receivable; and
(E) cash on hand and in banks and other cash
items of the Business.
(ii) all intercompany and affiliate liabilities,
debts and/or receivables will be excluded from the balance
sheet or treated as shareholders' equity;
(iii) all accounts receivable shall be net of the
historical reserve for bad debts, rebates, refunds and
adjustments for accounts receivable. Buyer and Seller agree
that such reserve shall be in lieu of any other adjustment
related to claims or disputes of any nature related to
accounts receivable; and
(iv) total liabilities shall include accrued and
unpaid vacation, but shall exclude any environmental liability
for which Buyer is responsible under Section 9.7.
<PAGE> 13
- 8 -
(b) Prorations. In computing the balance sheet adjustment,
the following proration method will be used, and the balance sheet
adjustment in Section 1.4(a) will be adjusted to reflect the
prorations described in this Section 1.4(b). All items of expense and
revenue directly relating to the Business shall be prorated between
Seller and Buyer as of the close of business on the Closing Date.
Items to be prorated shall include without limitation power and
utility charges, personal property taxes and real property taxes,
lease rents and other prepaid items, and trade and barter
transactions. Revenues and expenses will be recognized using the
Division's historical recognition practices; provided, however, that
revenues derived from Outdoor postings will be prorated, where
appropriate, based on the number of days of posting before and after
the Closing Date. Except as otherwise provided in this Agreement,
Buyer shall be responsible for all expenses incurred and shall be
entitled to all revenues earned in connection with the Business after
the Closing Date. Except as otherwise provided in this Agreement,
Seller shall be responsible for all expenses incurred and shall be
entitled to all revenues earned in connection with the Business
through the Closing Date. (For example, wages, commissions and other
employee compensation for periods through the Closing Date will either
be paid by Seller or recorded as a liability on the Closing Date
Balance Sheet.)
<PAGE> 14
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Seller agrees to furnish Buyer with any documents or records
in Seller's possession that may be needed for Buyer to confirm the
adjustment and prorations in this Section 1.4.
This Section 1.4(b) shall not be interpreted so as to provide
a double payment or double credit to Seller or Buyer for any item in
the calculation of the Preliminary Balance Sheet or the Closing Date
Balance Sheet.
(c) Balance Sheet Adjustment Payment. On the Closing Date,
Seller shall, to the extent practicable, make the adjustments to the
Purchase Price specified in this Section 1.4. Seller shall prepare
and provide to Buyer a balance sheet of the Business as of the close
of business on the last day of the accounting period immediately
preceding the Closing Date, using all available financial data (the
"Preliminary Balance Sheet"). Within 90 days after the Closing Date,
Seller will prepare and provide to Buyer an adjusted balance sheet of
the Business as of the close of business on the Closing Date, and
reflecting the items to be adjusted and prorated pursuant to this
Section 1.4 and showing the recalculation of adjustments to the
Purchase Price pursuant to the Preliminary Balance Sheet (the "Closing
Date Balance Sheet"). On the 120th day after the Closing Date, all
required refunds or payments under this Section 1.4 shall be made on
the basis of the Closing Date Balance Sheet.
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If any dispute arises over any amount to be refunded or paid
under this Section 1.4 (whether pursuant to the Preliminary Balance
Sheet or the Closing Date Balance Sheet), such refund or payment shall
nonetheless be promptly made to the extent such amount is not in
dispute. If any such dispute cannot be resolved by the parties, it
shall be referred to a mutually satisfactory independent public
accounting firm of national stature that has not been employed by any
party for the two years preceding the Closing Date. The determination
of such firm shall be conclusive and binding on each party. The fees
of such firm shall be paid fifty percent (50%) by Seller and fifty
percent (50%) by Buyer.
ARTICLE 2 The Closing
2.1 Time and Place of Closing. The closing (the "Closing") of the
sale and purchase of the Assets shall be held in the offices of GCI at 1100
Wilson Boulevard, Arlington, Virginia 22234 on a date (to be selected by Buyer)
no later than 120 days after the closing date under the Division Agreement (the
"Closing Date") or at such other time and place as shall be mutually agreed
upon by the parties.
ARTICLE 3 Representations and Warranties of Seller
Seller represents and warrants to Buyer as follows. For purposes of
this Agreement, "Material Adverse Effect" shall mean
<PAGE> 16
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a material adverse effect on the Business or Assets that would have constituted
a Material Adverse Effect on the Division taken as a whole if the Business were
part of the Division. The inclusion of any item in this Agreement or on a
Schedule hereto shall not be deemed an acknowledgment that such item is
material or did not occur in the ordinary course of the Business or would be
reasonably likely to result in a Material Adverse Effect.
3.1 Organization; Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. Seller has the full power and authority to own and operate its assets
and carry on its business as now being conducted and is qualified to do
business in Texas.
3.2 Authority Relative to this Agreement. Seller has the full
corporate power, authority and legal right to execute and deliver this
Agreement and to carry out the transactions and perform its obligations
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate and shareholder action. This Agreement
has been duly and validly executed and delivered by Seller and constitutes a
legal, valid and binding obligation of Seller enforceable against it in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy,
<PAGE> 17
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insolvency or similar laws affecting the rights of creditors generally.
3.3 Financial Statements. Seller has furnished to Buyer the
unaudited financial statements of the Business (the "Financial Statements") for
the period ending April 30, 1996 (the "Balance Sheet Date"). The Financial
Statements, and the interim Financial Statements to be furnished to Buyer
pursuant to Section 5.10, were and will be prepared in accordance with the
books and records regularly maintained by Seller with respect to the Business,
are correct and complete and fairly present, and will fairly present, in all
material respects the results of operations of the Business for the periods
covered thereby in conformity with the historical accounting practices of the
Business applied consistently for such periods. Seller makes no
representation, however, regarding the collectability of the Accounts
Receivable, or the projected revenues of or financial prospects for the
Business.
3.4 Business Since the Balance Sheet Date. To Seller's knowledge,
since the Balance Sheet Date, the Business has been conducted in the ordinary
course and in substantially the same manner as before the Balance Sheet Date,
except for matters which would not be reasonably likely to result in a Material
Adverse Effect.
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For purposes of this Agreement, the phrase "to Seller's knowledge"
means Seller's knowledge based on files available for review at GCI's corporate
headquarters, GCI's 535 Madison Avenue office, and on information provided by
the Business's general manager pursuant to Seller's request for such
information.
3.5 No Defaults. The execution, delivery and performance of this
Agreement by Seller will not (a) conflict with or result in any breach of any
provision of the Articles of Incorporation or bylaws of Seller, (b) violate any
law, statute, rule, regulation, order, injunction or decree of any federal,
state or local governmental authority or agency applicable to Seller or any of
the Assets, where such conflict, breach or violation would be reasonably likely
to result in a Material Adverse Effect, or (c) result in a default (or give
rise to any right of termination, cancellation or acceleration) under any
contract, note, bond, mortgage or other instrument or obligation relating to
the Business or to which the Assets may be subject (other than any leases,
easements, license agreements or similar agreements for the right to use space
or any contract, note, bond, mortgage or other instrument or obligation related
thereto), where such default would be reasonably likely to result in a Material
Adverse Effect.
3.6 Undisclosed Liabilities. To Seller's knowledge, the Business has
no obligation or liability of any nature which is
<PAGE> 19
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normally shown on a balance sheet prepared in accordance with the historical
practices of the Business which is not reflected or reserved against in the
Financial Statements (or if not, will be so reflected or reserved on the
Closing Date Balance Sheet) and which is reasonably likely to result in a
Material Adverse Effect. No representation or warranty made by Seller in this
Agreement, and no statement made in any Financial Statement, certificate,
document, exhibit or schedule furnished or to be furnished in connection with
the transactions herein contemplated contains or will contain, as of the date
delivered or made, any untrue statement of fact which would be reasonably
likely to result in a Material Adverse Effect.
3.7 PCS Agreements. To Seller's knowledge, Schedule 3.7 hereto
contains a list of the personal communication systems ("PCS") agreements
included in the Business. To Seller's knowledge, there are no existing
defaults, events of default or other events under the PCS agreements listed in
Schedule 3.7 which, with or without notice or lapse of time or both, would
constitute a default or an event of default under any of such agreements and
which would be reasonably likely to result in a Material Adverse Effect.
Seller is not aware whether the PCS agreements listed in Schedule 3.7 have been
amended, modified or terminated or whether the Business has entered into PCS
agreements not listed in Schedule 3.7.
<PAGE> 20
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For purposes of this Agreement, the phrase "Seller is not aware" means
that Seller is not aware of the matter in question based on files available for
review at GCI's corporate headquarters, GCI's 535 Madison Avenue office, and on
information provided by the Business's general manager pursuant to Seller's
request for such information.
3.8 Licenses and Authorizations. The Business is subject to federal,
state, and local laws, rules and regulations governing the receipt of permits
for the placement, size and location of Outdoor advertising structures and
displays. Seller has all necessary permits, licenses and governmental
authorizations required for the conduct of the Business as presently conducted,
except where the failure to have any such permit, license or governmental
authorization would not be reasonably likely to result in a Material Adverse
Effect. The Business observes the Outdoor Advertising Association of America
code restricting the placement of Outdoor advertising displays for the sale of
alcohol or tobacco products within 500 feet of schools, churches, and
playgrounds.
3.9 Title. Seller owns and has good and valid marketable title to
all real property and personal property included in the Business and sold
hereunder, free and clear of all security interests, mortgages, deeds of trust,
pledges, conditional sales agreements, charges, liens and encumbrances, except
for liens for
<PAGE> 21
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taxes not yet due and payable, and except for encumbrances which would not be
reasonably likely to result in a Material Adverse Effect.
3.10 Trademarks. To Seller's knowledge, Schedule 3.10 contains a list
of all trademarks, service marks and tradenames used in the Business and sold
hereunder (the "Rights"). To Seller's knowledge, the registrations (if any)
for the Rights are valid, in good standing and uncontested. Seller possesses
adequate rights, licenses or other authority to use all Rights necessary to
conduct the business of the Business as presently conducted, except where the
failure to possess such Rights would not be reasonably likely to result in a
Material Adverse Effect. Seller is not aware of any notice with respect to any
alleged infringement or unlawful or improper use of any Rights by others, or
with respect to any claims that any Rights are owned or alleged to be owned by
others.
3.11 Litigation and Compliance with Laws. Except for matters (i) that
have occurred in the ordinary course of the Business, (ii) which would not be
reasonably likely to result in a Material Adverse Effect, (iii) shown on
Schedule 3.11, or (iv) described in Section 3.16 below:
(a) the Business has not been operating under or subject to,
or in default with respect to, any order, writ,
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injunction, judgment or decree of any court or federal, state, local
or foreign governmental authority or agency;
(b) neither Seller nor any of its officers or agents has
received any inquiry, written or oral, from any such authority
concerning the Business during the 12-month period prior to the date
of this Agreement;
(c) there is no litigation or proceeding pending by or
against, or threatened against, the Business or Seller; and
(d) Seller has complied with all laws, by-laws, regulations,
orders or decrees applicable to the Business, including zoning and
land use laws and regulations, and the present uses by such parties of
the assets of the Business do not violate or fail to comply with any
such laws, regulations, orders or decrees in any material respect, and
there is no basis for any claim for compensation or damage or other
legal or equitable relief from any violation of the foregoing.
3.12 Taxes. Seller has filed, or caused to be filed, or have filed
extensions for, all federal, state, local and foreign tax returns required to
be filed by them with respect to the Business and has paid, or made provisions
for the payment of (a) all taxes due for the periods covered by such returns,
except such accrued and unpaid taxes for which appropriate accruals have been
made in the Financial Statements, and (b) all deficiencies assessed as a result
of any examination of such returns.
<PAGE> 23
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3.13 Employees. To Seller's knowledge, Schedule 3.13 lists the
Business's full-time employee count by department. Except as disclosed on
Schedule 3.13, Seller is not a party to any employment contract or collective
bargaining agreement or any other labor agreement covering or relating to any
of the employees of the Business, and Seller has not recognized or received a
demand for recognition of any collective bargaining representative with respect
to the Business. To Seller's knowledge, no labor strike, slow-down or work
stoppage is pending or threatened with respect to the Business.
3.14 Changes. Except for matters (i) that have occurred in the
ordinary course of the Business, (ii) which would not be reasonably likely to
result in a Material Adverse Effect, or (iii) shown on Schedule 3.14, to
Seller's knowledge, since the Balance Sheet Date, Seller has not (a) mortgaged,
pledged or subjected to a lien or any other encumbrance, any of the Assets or
incurred liabilities affecting the Business; (b) sold or transferred any
material Asset used or useful in the Business; (c) made any loans, advances or
capital contributions to, or investments in, any person or entity in connection
with the Business (other than cash advances to employees, officers or directors
for reimbursable expenses); (d) authorized or made any capital expenditures or
commitment or contract for any capital improvements in connection with the
Business; or (e) suffered any loss, damage or casualty with respect to any
Asset.
<PAGE> 24
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3.15 Brokers. There is no broker or finder or other person who would
have any valid claim against Buyer for a commission or brokerage fees in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Seller.
3.16 Environmental Laws. Except for matters (i) that have occurred in
the ordinary course of the Business, (ii) which would not be reasonably likely
to result in a Material Adverse Effect, or (iii) shown on Schedule 3.16, to
Seller's knowledge:
(a) the Business is in compliance with all applicable
environmental laws and regulations;
(b) no release, emission or discharge into the environment of
hazardous or toxic substances or waste has occurred in connection with
the Business or is presently occurring which would result in liability
under the Comprehensive Environmental Response, Compensation and
Liability Act or similar state laws or which are in excess of
permitted levels or reportable quantities under any applicable
environmental law or regulation; and
(c) the Business has not received any written notice of
investigation or been operating under or subject to, or in default
with respect to, any order, writ, injunction, judgment or decree of
any court or federal, state, local or foreign governmental authority
or agency with respect to any applicable environmental law or
regulation.
<PAGE> 25
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ARTICLE 4 Representations and Warranties of Buyer
Buyer represents and warrants to Seller as follows:
4.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
4.2 Authority Relative to this Agreement. Buyer has the full
corporate power, authority and legal right to execute and deliver this
Agreement and to carry out the transactions and perform its obligations
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate and shareholder action. This Agreement
has been duly and validly executed and delivered by Buyer and constitutes a
legal, valid and binding obligation of Buyer, enforceable against it in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency or similar laws affecting the rights of creditors
generally.
4.3 No Defaults. The execution, delivery and performance of this
Agreement by Buyer will not (a) materially conflict with or result in any
breach of any provision of the Articles of Incorporation or bylaws of Buyer,
(b) violate any law, statute, rule, regulation, order, injunction or decree of
any federal,
<PAGE> 26
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state or local governmental authority or agency applicable to Buyer.
4.4 Brokers. There is no broker or finder or other person who would
have any valid claim against Seller for a commission, brokerage or fees in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Buyer except for Dennis
Brush, whose fees will be paid by Buyer.
4.5 Adequate Funds. Buyer has adequate available sources of funds
to pay the Purchase Price in full on the Closing Date, and there is no default
or event of default, or any condition or event which, with or without notice or
lapse of time or both, would constitute a default or event of default under any
of its existing financing agreements.
ARTICLE 5 Covenants of Seller Pending the Closing Date
Seller covenants and agrees that from the date hereof to and including
the Closing Date and thereafter with respect to Section 5.6:
5.1 Maintenance of Business. Seller shall continue to carry on the
Business, maintain its plant and equipment and keep its books of account,
records and files in substantially the same manner as heretofore in the
ordinary course.
<PAGE> 27
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5.2 Organization, Goodwill. Subject to any impact on the Business
resulting from the sale of the Division, Seller will cause the Business
substantially to preserve (i) its business organization intact, and (ii) the
goodwill of its suppliers, customers and others having business relations with
it.
5.3 Further Information. At the request of Buyer, Seller shall from
time to time give or cause to be given to Buyer and its representatives all
information concerning the affairs of the Business as Buyer may reasonably
request. In connection with any due diligence review of the Business or the
Assets at any time, however, Buyer may not have access to the Business's
employees or plant without Seller's prior written consent.
5.4 Representations and Warranties. Seller shall give written notice
to Buyer promptly upon the occurrence of, or promptly upon Seller's becoming
aware of the existence of or the impending or threatened occurrence of, any
event which would cause or constitute a breach or which would have caused or
constituted a breach, had such event occurred or been known to Seller prior to
the date hereof, of any of its representations or warranties contained in this
Agreement.
5.5 Notice of Proceedings. Seller will promptly notify Buyer in
writing upon becoming aware of any order or decree or receiving any complaint
praying for an order or decree
<PAGE> 28
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restraining or enjoining the consummation of this Agreement or the transactions
contemplated hereunder or that would be reasonably likely to result in a
Material Adverse Effect, or upon receiving any notice from any governmental
department, court, agency or commission of its intention to institute an
investigation into, or institute any action or proceeding to restrain or enjoin
the consummation of this Agreement or such transactions, or to nullify or
render ineffective this Agreement or such transactions if consummated.
5.6 Bulk Sales Indemnity. As an inducement to Buyer to waive
compliance with the provisions of any applicable bulk transfer laws, Seller
covenants that all debts, obligations and liabilities of Seller not expressly
assumed by Buyer under this Agreement will be promptly paid and discharged by
Seller as and when they become due and payable. Seller further agrees to hold
Buyer harmless from all Loss and Expense (as defined in Section 9.2) suffered
by Buyer by reason of Seller's non- compliance with any applicable bulk
transfer law.
5.7 Consummation of Agreement. Subject to the provisions of Section
10.1, Seller shall use all reasonable efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement
shall be fully carried out.
<PAGE> 29
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5.8 Expenses. Seller shall bear and punctually pay for all of its
expenses incurred in connection with the transactions contemplated by this
Agreement, including without limitation accounting and legal fees.
5.9 Hart-Scott-Rodino Act. As soon as possible after the execution
of this Agreement, but in no event later than three (3) business days
thereafter, Seller shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice as are required to
comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and shall promptly furnish all materials and information thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings.
5.10 Interim Financial Statements. Seller shall deliver to Buyer
unaudited interim balance sheets and statements of revenue and expense of the
Business substantially in the form of the Financial Statements promptly after
the close of each of the Business's accounting periods that occurs between the
Balance Sheet Date and the Closing Date.
ARTICLE 6 Covenants of Buyer Pending the Closing Date
Buyer covenants and agrees that from the date hereof to and including
the Closing Date:
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6.1 Representations and Warranties. Buyer shall give written notice
to Seller promptly upon the occurrence of, or promptly upon Buyer's becoming
aware of the impending or threatened occurrence of, any event which would cause
or constitute a breach, or which would have caused or constituted a breach, had
such event occurred or been known to Buyer prior to the date hereof, of any of
the representations or warranties contained in this Agreement.
6.2 Corporate Action. Buyer will take all necessary corporate and
other action required of it to carry out the transactions contemplated by this
Agreement.
6.3 Notice of Proceedings. Buyer will promptly notify Seller in
writing upon becoming aware of any default or event of default, or any
condition or event which, with or without notice or lapse of time or both,
would constitute a default or event of default under any of its existing
financing agreements, or any order or decree or any complaint praying for an
order or decree restraining or enjoining the consummation of this Agreement or
the transactions contemplated hereunder, or upon receiving any notice from any
governmental department, court, agency or commission of its intention to
institute an investigation into, or institute any action or proceeding to
restrain or enjoin the consummation of this Agreement or such transactions, or
to
<PAGE> 31
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nullify or render ineffective this Agreement or such transactions if
consummated.
6.4 Consummation of Agreement. Subject to the provisions of Section
10.1, Buyer shall use all reasonable efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement
shall be fully carried out.
6.5 Expenses. Buyer shall bear and punctually pay for all of its
expenses incurred in connection with the transactions contemplated by this
Agreement, including without limitation (a) accounting and legal fees, (b) all
expenses of any title insurance Buyer elects to obtain covering the real
property included in the Assets, (c) any sales or transfer taxes arising from
transfer of the Assets to Buyer, including any real estate transfer tax payable
in connection with the transfer to Buyer of any real property or leasehold
interests, and (d) the Hart-Scott-Rodino filing fee.
6.6 Hart-Scott-Rodino Act. As soon as possible after the execution
of this Agreement, but in no event later than three (3) business days
thereafter, Buyer shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice as are required to
comply with the
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Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and shall
promptly furnish all materials and information thereafter requested by any of
the regulatory agencies having jurisdiction over such filings.
6.7 Letters of Credit; Sureties. Effective as of the Closing Date
Buyer shall have (a) obtained a release of Seller from all obligations or
agreements for letters of credit, bonds, surety arrangements and all guarantees
or similar assurances which give rise to a liability of Seller for obligations
related to the Business, and Buyer shall have replaced all such agreements held
by third parties or (b) delivered to Seller separate letters of credit, bonds
and/or other surety arrangements which provide complete and total indemnity for
such obligations of Seller that are not released, which arrangements must be in
form acceptable to Seller.
ARTICLE 7 Conditions to the Obligations of Seller
The obligations of Seller under this Agreement are, at the option of
Seller, subject to the fulfillment of the following conditions prior to or at
the Closing Date:
7.1 Representations, Warranties, Covenants.
(a) All representations and warranties of Buyer contained in
this Agreement and in any statement, certificate, schedule or other
document delivered by Buyer
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pursuant to this Agreement or in connection with the transactions
contemplated hereby, shall have been true and accurate in all material
respects as of the date when made and shall be deemed to be made again
at and as of the Closing Date and shall then be true and accurate in
all material respects; and
(b) Buyer shall have substantially performed and complied with
each and every covenant and agreement required by this Agreement to be
performed or complied with by it prior to or at the Closing Date.
7.2 Proceedings. No action or proceeding shall have been instituted
or threatened against any of the parties to this Agreement before any court or
governmental department, agency or commission to restrain or prohibit, or to
obtain substantial damages in respect of, this Agreement or the consummation of
the transactions contemplated hereby; and neither Buyer nor Seller shall have
received written notice from any court or governmental department, agency or
commission of its intention to (a) institute any action or proceeding to
restrain or enjoin or nullify or render ineffective this Agreement or such
transactions if consummated, or (b) commence any investigation (other than a
routine letter of inquiry, including a routine Civil Investigation Demand) into
the consummation of this Agreement and the transactions contemplated hereby,
which in the reasonable opinion of Seller would make it inadvisable to
consummate such
<PAGE> 34
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transactions; provided that in the event an investigation is instituted, this
Agreement may not be abandoned by Seller for a period of 30 days from the date
notice of institution thereof is first received by either Seller or Buyer (but
consummation hereof shall be delayed during such period), and may not be
abandoned pursuant to this Section 7.2 thereafter except upon advice of counsel
to Seller that there is a reasonable probability that such an investigation may
result in an action or proceeding of the type described in the second clause of
this Section 7.2.
7.3 Hart-Scott-Rodino. The waiting period under the Hart-
Scott-Rodino Act shall have expired and there shall not be outstanding any
order of a court restraining the transactions contemplated hereby or imposing
on Seller or any of Seller's affiliated companies any conditions with respect
to disposition of any of the Assets.
7.4 Receipt of Documents. Seller shall have received at the Closing:
(a) funds equal to the Purchase Price;
(b) an assumption agreement, pursuant to which Buyer shall
assume Seller's liabilities and obligations as provided in Section
1.3; and
(c) an opinion of Powell, Goldstein, Frazer & Murphy, counsel
to Buyer, in the form attached as Exhibit A.
<PAGE> 35
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ARTICLE 8 Conditions to the Obligations of Buyer.
The obligations of Buyer under this Agreement are, at the option of
Buyer, subject to the fulfillment of the following conditions prior to or at
the Closing Date:
8.1 Representations, Warranties, Covenants.
(a) All representations and warranties of Seller contained in
this Agreement and in any statement, certificate, schedule or other
document delivered by Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby, shall have been
true and accurate as of the date when made and shall be deemed to be
made again at and as of the Closing Date and shall then be true and
accurate;
(b) Seller shall have substantially performed and complied
with each and every covenant and agreement required by this Agreement
to be performed or complied with by it prior to or at the Closing
Date; and
(c) There shall have been no changes in the Business or Assets
since the Balance Sheet Date resulting in a Material Adverse Effect,
other than (i) matters arising in the ordinary course of the Business
and (ii) any impact on the Business or Assets resulting from the sale
of the Division.
8.2 Proceedings. No action or proceeding shall have been instituted
or threatened against any of the parties to this
<PAGE> 36
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Agreement, before any court or governmental department, agency or commission to
restrain or prohibit, or to obtain substantial damages in respect of, this
Agreement or the consummation of the transactions contemplated hereby; and
neither Buyer nor Seller shall have received written notice from any court or
governmental department, agency or commission of its intention to (a) institute
any action or proceeding to restrain or enjoin or nullify or render ineffective
this Agreement or such transactions if consummated, or (b) commence any
investigation (other than a routine letter of inquiry, including a routine
Civil Investigation Demand) into the consummation of this Agreement and the
transactions contemplated hereby, which in the reasonable opinion of Buyer
would make it inadvisable to consummate such transactions; provided that in the
event an investigation is instituted, this Agreement may not be abandoned by
the Buyer for a period of 30 days from the date notice of institution thereof
is first received by either Seller or Buyer (but consummation hereof shall be
delayed during such period), and may not be abandoned pursuant to this Section
8.2 thereafter except upon advice of counsel to Buyer that (i) there is a
reasonable probability that such an investigation may result in an action or
proceeding of the type described in the second clause of this Section 8.2 and
(ii) that such an investigation is not based in whole or in part on Buyer's
failure to abide by any condition imposed on Buyer by any governmental
authority in connection with
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governmental approvals obtained by Buyer for its purchase of the Division.
8.3 Damage to the Assets. If on the Closing Date the real or
personal properties used in the Business shall have suffered damage on account
of fire, explosion or other cause of any nature, but such damage has not
resulted in a Material Adverse Effect, Buyer shall complete the purchase
hereunder and collect and receive on behalf of Seller the proceeds of any
insurance payable to Seller on account of the damage. If such damage has
resulted in a Material Adverse Effect, Buyer shall have the right at its
election (i) to complete the purchase hereunder and collect and receive on
behalf of Seller the proceeds of any insurance payable to Seller on account of
the damage or (ii) to terminate this Agreement by providing written notice to
Seller specifying the Material Adverse Effect, and upon such termination Buyer
and Seller shall be released from any liability under this Agreement.
8.4 Hart-Scott-Rodino. The waiting period under the Hart-
Scott-Rodino Act shall have expired and there shall not be outstanding any
order of a court restraining the transactions contemplated hereby.
8.5 Receipt of Documents. Buyer shall have received at the Closing:
<PAGE> 38
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(a) such limited warranty deeds with respect to office or
production facilities and otherwise quitclaim deeds (without specific
legal descriptions but otherwise in form and substance reasonably
satisfactory to Buyer) sufficient to transfer all of Seller's interest
in the real property included in the Assets;
(b) a bill of sale for all personal property included in the
Assets;
(c) an opinion of Kristin H. Kent, counsel to Seller, in the
form attached as Exhibit B (in rendering the opinion called for by
this section, Ms. Kent may rely on the opinions of other counsel
satisfactory to her with respect to any matters involving the laws of
any jurisdiction other than New York and Virginia);
(d) an assignment of all of Seller's right, title and interest
to all contracts, leases, licenses and permits used in the Business;
and
(e) a receipt for the Purchase Price.
ARTICLE 9 Indemnification
9.1 Survival. The several representations, warranties, covenants and
agreements of Seller and Buyer contained in or made pursuant to this Agreement
shall be deemed to have been made on the Closing Date, shall survive the
Closing Date and shall remain operative and in full force and effect for a
period of one year after the Closing Date, except that (i) the representations
<PAGE> 39
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contained in Sections 3.9, 3.11 and 3.16 shall survive for a period of three
years after the Closing Date, and (ii) the representations, warranties,
covenants and agreements contained in Sections 3.2, 3.12, 4.2, 6.7, 9.2(c),
9.3(c) and 9.3(d) shall survive for the time limit imposed by the statute of
limitations applicable to any claim for which indemnity is sought.
9.2 Indemnification of Buyer. GCI and Seller agree that they shall
indemnify and hold Buyer harmless from and against any and all damages, claims,
losses, expenses, costs, obligations and liabilities, including without
limitation liabilities for reasonable attorneys' fees and disbursements ("Loss
and Expense"), suffered by Buyer by reason of:
(a) any breach of representation or warranty made by Seller
pursuant to this Agreement;
(b) any failure by Seller to perform or fulfill any of its
covenants or agreements set forth in this Agreement; and
(c) any failure by Seller to pay or perform when due any of
its liabilities or obligations arising out of or related to the
Business which have not been assumed by Buyer hereunder;
provided, however, that Seller will not be responsible for any Loss or Expense
until the cumulative aggregate amount of such Loss or Expense, when aggregated
with any Loss or Expense incurred by Buyer under Section 9.2 of the Division
Agreement, results in a Material Adverse Effect, in which case Seller shall
<PAGE> 40
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then be liable for all such Loss or Expense; provided further that Seller shall
be liable for retained tax liabilities under Section 1.3(b)(iii) and any
balance sheet adjustment refund due Buyer under Section 1.4 without regard to a
Material Adverse Effect, and provided further that Buyer shall not be entitled
to include in Loss or Expense any claims related to Accounts Receivable.
9.3 Indemnification of Seller. Buyer agrees that it shall indemnify
and hold Seller harmless from and against any and all Loss and Expense suffered
by Seller by reason of:
(a) any material breach of representation or warranty made by
Buyer pursuant to this Agreement;
(b) any material failure by Buyer to perform or fulfill any
of its covenants or agreements set forth in this Agreement;
(c) any failure by Buyer to pay or discharge on or after the
Closing Date any liabilities or obligations assumed by Buyer
hereunder, or any obligations of Buyer under Sections 1.4, 6.7 or
10.2; and
(d) any liability with respect to claims by third parties
asserted after the Closing Date which arise from occurrences prior to
the Closing Date but only to the extent that the Loss and Expense is
not reimbursed by insurance policies of Seller.
<PAGE> 41
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9.4 Notice of Claims. If Seller or Buyer believes that it has
suffered or incurred any Loss and Expense (the "Indemnified Party"), it shall
notify the other party (the "Indemnifying Party") promptly in writing and
within the applicable time period specified in Section 9.1, describing such
Loss and Expense, the amount thereof if known, and the method of computation of
such Loss and Expense, all with reasonable particularity and containing a
reference to the provisions of this Agreement in respect of which such Loss and
Expense shall have occurred. The amount of the Loss and Expense set forth in
the notice shall not be a limitation on any claim for the actual amount of such
Loss and Expense, however.
If the Indemnifying Party does not object in writing to an
indemnification notice claim within 45 days after receiving notice, the
Indemnified Party shall be entitled to recover promptly from the Indemnifying
Party the amount of such claim, but such recovery shall not be deemed to limit
the amount of any additional indemnification to which the Indemnified Party may
be entitled pursuant to this Article 9. If the Indemnifying Party asserts that
it has an indemnification obligation in a lesser amount than claimed, the
Indemnified Party shall nevertheless be entitled to recover promptly from the
Indemnifying Party the lesser amount, without prejudice to the Indemnified
Party's claim for the difference.
<PAGE> 42
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9.5 Defense of Third Party Claims. If any action at law or in equity
is instituted by a third party (a "Claim") with respect to which any of the
parties intends to claim a Loss and Expense under this Article 9, such party
shall promptly notify the Indemnifying Party of such Claim. The Indemnifying
Party shall have the right to conduct and control any Claim through counsel of
its own choosing, but the Indemnified Party may, at its election, participate
in the defense of any such Claim at its sole cost and expense. If the
Indemnifying Party does not notify the Indemnified Party within ten (10) days
after receipt of the notice specified in this Section 9.5 that it is defending
any such Claim, then the Indemnified Party may defend such Claim and settle
such Claim, through counsel of its own choosing, and recover from the
Indemnifying Party the amount of such settlement or of any judgment and the
costs and expenses of such defense, including, but not limited to, reasonable
attorneys' fees and disbursements.
Notwithstanding the foregoing, the failure by a party to abide by
these terms and conditions shall not affect the other party's obligations to
indemnify such party against Loss and Expense under this Article 9.
9.6 Settlements. No settlement made by an Indemnifying Party shall
be binding on the Indemnified Party unless the proposed settlement has been
approved in writing in advance by the Indemnified Party. The Indemnifying
Party will give the
<PAGE> 43
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Indemnified Party at least fifteen (15) days' notice of any proposed settlement
or compromise of any Claim it is defending. If the Indemnified Party
unreasonably rejects the proposed settlement or compromise, it shall be
obligated to assume the defense of and full and complete liability and
responsibility for such Claim.
9.7 Determination of Responsibility for Loss and Expense for
Environmental Claims. Notwithstanding the provisions of Sections 9.2 and 9.3,
Buyer and Seller have agreed to allocate responsibility for environmental
matters as follows:
(a) Seller is responsible for Loss or Expense for
environmental claims arising out of circumstances, actions, omissions
or events occurring or existing prior to the Closing Date that were
not (or are not) in the ordinary course of the Business, except for
those matters disclosed in Schedule 3.16; and
(b) Buyer is responsible for Loss or Expense for
environmental claims arising out of (i) those matters disclosed in
Schedule 3.16 and (ii) circumstances, actions, omissions or events,
whether occurring or existing before or after the Closing Date, that
were (or are) in the ordinary course of the Business.
9.8 Buyer's Knowledge. Notwithstanding anything to the contrary
contained in this Agreement, in no event shall Seller be
<PAGE> 44
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liable to Buyer from and after the Closing Date for any matter of which Buyer
had knowledge on or before the Closing Date.
9.9 Seller's Knowledge. Notwithstanding anything to the contrary
contained herein, any information that is communicated to Seller by Buyer in
writing on or before the Closing Date becomes Seller's knowledge as used
herein.
ARTICLE 10 Miscellaneous Provisions
10.1 Termination. This Agreement may be terminated by Seller or
Buyer at any time prior to the Closing Date (a) by the mutual consent of Seller
and Buyer; or (b) by Seller if any of the conditions in Article 7 have not been
met by the time required and have not been waived; or (c) by Buyer if any of
the conditions in Article 8 have not been met by the time required and have not
been waived; or (d) upon notice to the other party if, without fault on the
part of the notifying party, the Closing has not taken place by the date which
is 120 days after the closing date under the Division Agreement. In the event
of any termination pursuant to this Section 10.1, each party shall deliver to
the other upon request all documents, work papers and other materials furnished
by the other relating to the transactions contemplated hereby, or shall destroy
all such materials. A termination pursuant to this Section 10.1 shall not
relieve either party of liability it would otherwise have for a breach of this
Agreement.
<PAGE> 45
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10.2 Employees and Employee Benefits.
(a) Buyer agrees to hire all of the Business's active
employees upon Closing. For purposes of this Section, "active
employees" shall include only those current employees who are actively
working immediately prior to the Closing Date or who are on sick
leave, vacation, short-term disability or authorized leave of absence
of six months or less. Buyer shall be responsible for and shall pay
for all compensation, benefits and other payments due to all active
employees of the Business who accept Buyer's offer of employment to
become employed by Buyer after the Closing Date pursuant to this
transaction ("Hired Employees"). With respect to active employees of
the Business as of the day preceding the Closing Date who are not
employed by Buyer after the Closing Date pursuant to this transaction,
Buyer agrees to assume the following liabilities and obligations: (i)
severance liabilities in accordance with a severance policy of one
week of salary for every full year of employment with the Business (or
Gannett Co., Inc. or any of its affiliates) prior to the Closing Date
(with a minimum of four weeks of salary and a maximum of twenty-six
weeks of salary) (the "Severance Policy"), (ii) all obligations under
federal or state plant closing statutes including the WARN Act, and
(iii) Seller's medical insurance costs relating to COBRA coverage.
Buyer also agrees to provide medical insurance coverage to all Hired
Employees, beginning on the
<PAGE> 46
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Closing Date, with coverage to be effective without any waiting period
and without any exclusions for pre-existing conditions.
(b) Seller shall be responsible for and shall pay for (i)
all compensation, benefits and other payments due to all employees and
former employees of the Business prior to the Closing Date, (ii) all
benefits payable to employees who retired from the Business prior to
the Closing Date, and (iii) all benefits payable to employees who are
not considered "active employees" immediately prior to the Closing
Date.
(c) Seller shall retain the pension plan assets and
liabilities to all employees who participate in the GCI Retirement
Plan.
(d) Buyer has established a qualified employee benefit
plan and trust under Section 401(k) of the Internal Revenue Code
("Buyer's Plan"). On the Closing Date or within 90 days thereafter,
Seller shall transfer to the Buyer's Plan all of the assets in the GCI
401(k) Plan ("GCI 401(k) Plan") held for the accounts of employees of
the Business hired by Buyer, and Buyer shall assume the liabilities of
the Seller and of the GCI 401(k) Plan to the employees whose accounts
are so transferred. The assets shall be liquidated and transferred in
cash unless the parties agree in writing to the transfer of all or any
portion of the assets in kind. Buyer's Plan shall preserve the
accrued benefits of such
<PAGE> 47
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employees as of the transfer date. Buyer shall identify all employees
whose accounts shall be transferred at least 30 days prior to the
proposed transfer. Buyer shall indemnify and hold Seller and the GCI
401(k) Plan harmless from all Loss and Expense under Section 9.3(c) in
connection with any 401(k) claims asserted with respect to the GCI
401(k) Plan by employees whose assets were transferred.
(e) Buyer agrees to maintain the Severance Policy for the
benefit of all Hired Employees for a period of at least six months
following the Closing Date and, in determining any benefits
thereunder, shall credit a Hired Employee with service for employment
with the Business prior to the Closing Date.
10.3 Imprints. Buyer agrees by not later than 6 months after the
Closing Date to remove from all advertising displays, vehicles and equipment
included in the Assets all imprints containing the tradenames retained by
Seller as Excluded Assets. Until the earlier of removal or the conclusion of
the 6-month period described above, Seller agrees that Buyer may display
Seller's tradenames on the imprints of the Business.
10.4 Risk of Loss. Material risk of loss or damage to the Assets to
be transferred hereunder by fire or other casualty prior to the Closing Date
shall be borne by Seller, and on and after the Closing Date shall be borne by
Buyer.
<PAGE> 48
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10.5 Data Processing Services. Seller agrees that for a period of 60
days following the Closing Date Buyer may continue to use the data processing
services made available to the Business by Seller and its affiliated entities,
at the same levels of service as presently provided, at no cost to Buyer.
Within 30 days after the Closing Date, Seller will advise Buyer of the service
fee (which service fee shall include, among other things, all of Seller's
direct and indirect costs for the services) and terms that would be applicable
to continuation of the data processing services arrangement after the initial
60-day period. If Buyer does not elect to accept Seller's terms, then the
availability of data processing services will cease at the end of the initial
60-day period.
10.6 Access to Records. For the period beginning on the Closing Date
and ending when all of Seller's tax years through 1996 are closed by the IRS,
Buyer will retain, and make available to Seller as Seller reasonably requests,
all files and records related to the Business prior to the Closing Date. No
such records shall be destroyed by Buyer after that time without Buyer's first
offering them to Seller. Buyer shall permit Seller's representatives full
access to and use of the records of the Business as may be deemed appropriate
by such representatives for the purpose of preparing the balance sheet
adjustments referenced in Section 1.4(c). Seller shall notify Buyer when all
of Seller's tax years through 1996 are closed by the IRS.
<PAGE> 49
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10.7 [Intentionally omitted]
10.8 Further Assurances and Consents. From time to time after the
Closing Date, without further consideration (a) Seller and Buyer will execute
and deliver, or cause to be executed and delivered, such documents as the other
may reasonably request in order to effect the transactions contemplated herein
and to effectively vest in Buyer good title to the Assets, and (b) Seller
agrees to use reasonable efforts to cooperate with Buyer to obtain any
necessary third party consents or approvals to the assignment or transfer to
Buyer of any contracts, leases, licenses and permits included in the Assets;
provided, however, that Seller shall not be required to make any payments or
incur any obligations to any third parties in connection with the obtaining of
any such consents or approvals.
10.9 Waiver of Compliance. Any failure of any of the parties to
comply with any obligation, representation, warranty, covenant, agreement or
condition herein may be waived by the other party only by a written instrument
signed by the party granting the waiver. Any such waiver or failure to insist
upon strict compliance with a term of this Agreement shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure to
comply.
<PAGE> 50
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10.10 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered by hand or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) If to Seller, to:
Douglas H. McCorkindale, Vice Chairman
Gannett Co., Inc.
1100 Wilson Boulevard
Arlington, VA 22234
Fax No. 703/558-4634
With a copy to:
Thomas L. Chapple, Esq., Senior Vice President
and General Counsel
Gannett Co., Inc.
1100 Wilson Boulevard
Arlington, VA 22234
Fax No. 703/558-3897
(b) If to Buyer, to:
Mr. Arthur R. Moreno, President and CEO
Outdoor Systems Advertising
2502 North Black Canyon Highway
Phoenix, Arizona 85009
Fax No. 602/433-2482
With a copy to:
William B. Shearer, Jr., Esq.
Powell, Goldstein, Frazer & Murphy
191 Peachtree Street, N.E.
Sixteenth Floor
Atlanta, Georgia 30303
Fax No. 404/572-6999
10.11 Assignment. This Agreement and all of its terms shall be
binding upon and inure to the benefit of the parties and their
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successors and permitted assigns. This Agreement shall not be assigned by
either party, except that (i) Seller may assign or transfer this Agreement to
any affiliate or subsidiary of GCI, and (ii) Buyer may assign its rights under
this Agreement as collateral security under financing agreements entered into
by Buyer for the purpose of obtaining the funds required for the Purchase
Price. In the event of any permitted assignment by Seller or Buyer hereunder,
any such assignee shall be bound by all the terms and conditions set forth in
this Agreement, and no such assignment shall release Seller or Buyer from their
obligations and liabilities hereunder.
10.12 Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Delaware without
reference to its choice of law principles or the laws of any other state.
10.13 Confidential Information; Public Announcements. The parties
agree that the Non-Disclosure Agreement between GCI and Buyer dated May 29,
1996 (the "Non-Disclosure Agreement") remains in full force and effect and
shall survive the execution and delivery of this Agreement.
No public announcement (including an announcement to employees) or
press release concerning the transactions provided for herein shall be made by
GCI (on behalf of Seller) or by Buyer without the prior written approval of the
other party. In no
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event shall any party disclose the Purchase Price unless such disclosure is
required by law, except that Buyer or Seller may disclose the Purchase Price to
Buyer's lenders and investors and to the Securities and Exchange Commission.
10.14 No Third Party Rights. Nothing in this Agreement shall be
deemed to create any right on the part of any person or entity not a party to
this Agreement, except that Buyer may assign its rights under this Agreement as
collateral security under financing agreements entered into by Buyer for the
purpose of obtaining the funds required for the Purchase Price.
10.15 Option for Office and Production Facilities. At any time prior
to the fifth business day preceding the Closing Date, Buyer may elect by
written notice to Sellers to exclude any office or production facility
("Excluded Facility") from the real property that would otherwise be included
in the Assets. In such event, notwithstanding the provisions of Section 9.7,
any such Excluded Facility shall be an Excluded Asset under Section 1.2 above
and Sellers shall remain responsible for all Loss or Expense related to the
Excluded Facility. There shall be no reduction in the Purchase Price or the
balance sheet adjustments pursuant to Section 1.4 to reflect the exclusion of
the Excluded Facility from the Assets.
<PAGE> 53
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10.16 Entire Agreement; Amendments. This Agreement, including the
Exhibits and Schedules hereto and the Non-Disclosure Agreement, embodies the
entire agreement and understanding of the parties in respect of the subject
matter hereof and supersedes all prior agreements and understandings between
the parties. This Agreement may not be amended except in a writing signed by
both parties.
Seller and Buyer have caused this Agreement to be signed by their duly
authorized officers as of the date first above written.
Seller: BUYER:
GANNETT OUTDOOR CO. OF OUTDOOR SYSTEMS, INC.
TEXAS, INC.
By: _________________________ By: _________________________
Thomas L. Chapple William S. Levine
Secretary Chairman
The undersigned is executing this Agreement for purposes of Section 9.2
only.
GANNETT CO., INC.
By: _________________________
Thomas L. Chapple
Senior Vice President and
Secretary
<PAGE> 1
EXHIBIT 99.3
===============================================================
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
among
OUTDOOR SYSTEMS, INC.,
The Several Lenders
from Time to Time Parties Hereto
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
Dated as of July 9, 1996
===============================================================
<PAGE> 2
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.2 Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.3 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . . . . . . . . . . 25
2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.5 Termination or Reduction of Revolving Credit Commitments. . . . . . . . . . . . . . . . 26
2.6 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.7 Tranche A Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.8 Tranche B Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.9 Tranche C Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.10 Procedure for Term Loan Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.11 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 Procedure for Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 31
3.3 Fees, Commissions and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.4 L/C Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.5 L/C Reimbursement Obligation of the Borrower. . . . . . . . . . . . . . . . . . . . . . 33
3.6 Obligations Absolute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.7 Letter of Credit Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.8 Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.1 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.2 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.3 Mandatory Prepayments and Reduction of Revolving Credit Commitments . . . . . . . . . . 35
4.4 Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.5 Minimum Amounts and Maximum Number of Tranches . . . . . . . . . . . . . . . . . . . . 38
4.6 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.7 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.8 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.9 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.10 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.12 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>
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SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . 45
5.4 Corporate Power; Authorization; Enforceable Obligations. . . . . . . . . . . . . . . . . 46
5.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.9 Advertising Displays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.10 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.12 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.14 Investment Company Act; Other Regulations . . . . . . . . . . . . . . . . . . . . . . . 48
5.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.16 Purpose of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.18 Regulation H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.19 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.20 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.21 Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.22 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.23 No Material Misstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.1 Conditions to Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.4 Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . 58
7.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.6 Inspection of Property; Books and Records; Discussions. . . . . . . . . . . . . . . . . 58
7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.8 Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.9 Lease Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.10 Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.11 Key Man Life Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.12 Interest Rate Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
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8.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.4 Limitation on Guarantee Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.5 Limitation on Fundamental Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.6 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.7 Limitation on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.8 Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.9 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.10 Limitation on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . 67
8.11 Limitation on Optional Payments and Modifications of Debt Instruments. . . . . . . . . . 67
8.12 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . 67
8.13 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.14 Limitation on Changes in Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.15 Limitation on Negative Pledge Clauses. . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.16 Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.6 Non-Reliance on Administrative Agent and Other Lenders . . . . . . . . . . . . . . . . . 73
10.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.8 Administrative Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . 74
10.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.10 Releases of Guarantees and Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 78
11.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.6 Successors and Assigns; Participations and Assignments . . . . . . . . . . . . . . . . . 78
11.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.8 Restatement; Update of Certain Schedules . . . . . . . . . . . . . . . . . . . . . . . . 81
11.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.11 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.13 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.14 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.15 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.16 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
</TABLE>
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SCHEDULES
SCHEDULE 1.1A Commitment Amounts and Percentages; Lending
Offices; Addresses for Notice
SCHEDULE 1.1B Pricing Grid
SCHEDULE 1.1C Mortgage Locations
SCHEDULE 5.2 Dividends, etc.
SCHEDULE 5.3 Foreign Jurisdictions
SCHEDULE 5.9 Advertising Displays
SCHEDULE 5.15 Subsidiaries
SCHEDULE 5.20 Material Agreements
SCHEDULE 6.1(g) Schedule of Uses
SCHEDULE 8.2 Indebtedness
SCHEDULE 8.3 Liens
SCHEDULE 8.12 Affiliated Transactions
EXHIBITS
EXHIBIT A-1 Form of Revolving Credit Note
EXHIBIT A-2 Form of Tranche A Term Note
EXHIBIT A-3 Form of Tranche B Term Note
EXHIBIT A-4 Form of Tranche C Term Note
EXHIBIT B Form of Guarantee and Collateral Agreement
EXHIBIT C-1 Form of Fee Mortgage
EXHIBIT C-2 Form of Leasehold Mortgage
EXHIBIT D-1 Form of Borrower's Counsel Opinion
EXHIBIT D-2 Form of Local Counsel Opinion
EXHIBIT E Form of Assignment and Acceptance
</TABLE>
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<PAGE> 6
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 9,
1996 (this "Agreement"), among OUTDOOR SYSTEMS, INC., a Delaware corporation
(the "Borrower"), the several banks and other financial institutions
(collectively, the "Lenders") from time to time parties hereto, and CANADIAN
IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as administrative agent for the
Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the First Amended and Restated Credit
Agreement, dated as of December 14, 1994 (as amended by the First Amendment,
dated as of December 31, 1994, the "Existing Credit Agreement"), among the
several banks and other financial institutions parties thereof and CIBC Inc.,
as administrative agent, such lenders have agreed to make, and have made,
certain loans and other extensions of credit to the Borrower;
WHEREAS, pursuant to the Asset Purchase Agreement, dated as of
July 9, 1996 (as amended, supplemented or modified from time to time, the
"Purchase Agreement"), among Gannett Co., Inc., Combined Communications
Corporation, Gannett Transit, Inc., Gannett Outdoor Co. of Texas, Shelter Media
Communications, Inc., Gannett International Communications, Inc. (collectively,
the "Sellers") and the Borrower, the Borrower has agreed to acquire (the
"Acquisition"), and the Sellers have agreed to sell, substantially all of the
assets of the Sellers used in connection with the Seller's outdoor advertising,
transit and shelter operations (with exceptions as set forth in the Purchase
Agreement) and all the shares of the issued and outstanding Capital Stock of
New York Subways Advertising Co., Inc. and Mediacom Inc. (collectively, the
"Division"); and
WHEREAS, the Borrower has requested that the Lenders and the
Administrative Agent enter into this Second Amended and Restated Credit
Agreement, and, subject to the terms hereof, the Lenders have agreed, that the
Lenders amend certain provisions of the Existing Credit Agreement to provide a
source of funds to enable the Borrower to consummate the Acquisition, to
repurchase its Senior Notes and to assist the Borrower in financing its working
capital requirements following the Acquisition and to modify the Existing
Credit Agreement in certain other respects;
NOW THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": on any particular date, a rate of interest per annum
equal to the highest of:
<PAGE> 7
2
(a) the rate of interest most recently announced by
CIBC-Bank as its Base Rate (the "CIBC Base Rate");
(b) the Federal Funds Rate for such date plus 1%; and
(c) the C/D Published Moving Rate most recently
determined by CIBC-Bank plus 1%.
The CIBC Base Rate is not necessarily intended to be the lowest rate
of interest charged by CIBC-Bank in connection with extensions of
credit.
"ABR Loans": Loans the rate of interest applicable to which
is based upon the ABR.
"Acquisition": as defined in the recitals hereto.
"Adjustment Date": each date on or after June 30, 1997 that
is the second Business Day following receipt by the Lenders of both
(i) the financial statements required to be delivered pursuant to
subsection 7.1(a) or 7.1(b), as applicable, for the most recently
completed fiscal period and (ii) the related Compliance Certificate
required to be delivered pursuant to subsection 7.2(b) with respect to
such fiscal period.
"Administrative Agent": Canadian Imperial Bank of Commerce,
New York Agency, together with its affiliates, as the arranger of the
Commitments and as the administrative agent for the Lenders under this
Agreement and the other Loan Documents.
"Advertising Displays": all posters, signs, billboards and
other outdoor advertising displays and related sites therefor owned or
leased (as lessee) by the Borrower and its Subsidiaries.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Second Amended and Restated Credit
Agreement, as amended, supplemented or otherwise modified from time to
time.
"Aggregate Outstanding Revolving Extensions of Credit": as to
any Revolving Credit Lender at any time, an amount equal to the sum of
(a) the aggregate principal
<PAGE> 8
3
amount of all Revolving Credit Loans made by such Revolving
Credit Lender then outstanding and (b) such Lender's Revolving Credit
Commitment Percentage of the L/C Obligations then outstanding.
"Applicable Margin": (a) as applied to a given Type of
Tranche C Term Loan, the rate per annum set forth under the relevant
column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
2.50% 3.50%;
and (b) as applied to a given Type of Revolving Credit Loan or
Tranche A Term Loan or Tranche B Term Loan, the rate per annum
determined as follows: during the period from the Closing Date until
the first Adjustment Date, the Applicable Margin in respect of (1)
Revolving Credit Loans and Tranche A Term Loans shall equal (i) with
respect to ABR Loans, 2.25% per annum and (ii) with respect to
Eurodollar Loans, 3.25% per annum or (2) Tranche B Term Loans shall
equal (i) with respect to ABR Loans, 2.50% per annum and (ii) with
respect to Eurodollar Loans, 3.50% per annum; provided such Applicable
Margins will be adjusted on each Adjustment Date to the applicable rate
per annum set forth under the heading "ABR Loans Applicable Margin" or
"Eurodollar Loans Applicable Margin" on Schedule 1.1B which corresponds
to the Total Leverage Ratio determined from the financial statements
and Compliance Certificate relating to the end of the fiscal quarter
immediately preceding such Adjustment Date; provided, further that in
the event that the financial statements required to be delivered
pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the related
Compliance Certificate required to be delivered pursuant to subsection
7.2(b), are not delivered when due, then
(a) if such financial statements and Compliance
Certificate are delivered after the date such financial
statements and Compliance Certificate were required to be
delivered (without giving effect to any applicable cure
period) and the Applicable Margins increases from that
previously in effect as a result of the delivery of such
financial statements and Compliance Certificate, then the
Applicable Margins in respect of Revolving Credit Loans,
Tranche A Term Loans and Tranche B Term Loans during the
period from the date upon which such financial statements and
Compliance Certificate were required to be delivered (without
giving effect to any applicable cure period) until the date
upon which they actually are delivered shall, except as
otherwise provided in clause (c) below, be the Applicable
Margin as so increased;
(b) if such financial statements and Compliance
Certificate are delivered after the date such financial
statements and Compliance Certificate were required to be
delivered and the Applicable Margin decreases from that
previously in effect as a result of the delivery of such
financial statements and Compliance Certificate, then such
decrease in the Applicable Margin shall not
<PAGE> 9
4
become applicable until the date upon which such financial
statements and Compliance Certificate actually are delivered;
and
(c) if such financial statements and Compliance
Certificate are not delivered prior to the expiration of the
applicable cure period, then, effective upon such expiration,
for the period from the date upon which such financial
statements and Compliance Certificate were required to be
delivered (after the expiration of the applicable cure period)
until two Business Days following the date upon which such
financial statements and Compliance Certificate actually are
delivered, the Applicable Margin in respect of (i) Revolving
Credit Loans and Tranche A Term Loans shall be 2.25% per
annum, in the case of ABR Loans, and 3.25% per annum, in the
case of Eurodollar Loans and (ii) Tranche B Term Loans shall
be 2.50% per annum, in the case of ABR Loans, and 3.50% per
annum, in the case of Eurodollar Loans.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing
Lender to open a Letter of Credit.
"Assignee": as defined in subsection 11.6(c).
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender, at any time, an amount equal to the excess, if any, of
(a) such Revolving Credit Lender's Revolving Credit Commitment over
(b) such Lender's Aggregate Outstanding Revolving Credit Extensions of
Credit.
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.3, 2.6 or 3.2 as a date on which the Borrower
requests the Lenders to make Loans hereunder or the Issuing Lender to
issue Letters of Credit hereunder.
"Bridge Preferred Stock": the Senior Increasing Rate
Cumulative Preferred Stock, Series A, to be issued by the Borrower and
having the terms set forth in the Certificate of Designations
substantially in the form of Exhibit 1 to the Securities Purchase
Agreement, dated July 9, 1996, among the Borrower and CIBC WG Argosy
Merchant Fund 2, L.L.C.
"Bridge Preferred Warrants": the warrants for the purchase of
common stock of the Borrower to be issued under a Warrant Agreement to
be entered into among the Borrower and the Warrant Agent thereunder,
substantially in the form of Exhibit 3 to the Securities Purchase
Agreement, dated July 9, 1996, among the Borrower and CIBC WG Argosy
Merchant Fund 2, L.L.C
"Bridge Take-Out Date": the date on which Take-Out Securities
(as defined in the Subordinated Bridge Agreement) are issued to
refinance the entire outstanding amount of Indebtedness under the
Subordinated Bridge Agreement, and such Indebtedness is so refinanced
thereby, if such date occurs prior to the Conversion
<PAGE> 10
5
Date (as defined in the Subordinated Bridge Agreement), provided that
such Take-Out Securities (i) have no maturity, mandatory redemption,
repurchase or defeasance, or sinking fund requirement falling due
prior to the ninth anniversary of the date hereof and (ii) bear
interest at a rate per annum not in excess of 13.5% per annum and that
such Take-Out Securities have other material terms no more restrictive
on nor less favorable to the Borrower than those set forth in the
Senior Subordinated Indenture.
"Business": as defined in subsection 5.17.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close, except that, when used in connection with a
Eurodollar Loan, "Business Day" shall mean any Business Day on which
dealings in Dollars between banks may be carried on in London, England
and New York, New York.
"Capital Stock": 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": (i) securities issued or directly and
fully guaranteed or insured by the United States Government or
any agency or instrumentality thereof having maturities of not more
than 30 days from the date of acquisition, (ii) time deposits and
certificates of deposit having maturities of not more than 30 days from
the date of acquisition of any Bank or of any domestic commercial bank
the senior unsecured long-term debt of which is rated at least A or the
equivalent thereof by Standard & Poor's Ratings Services ("S&P") or A2
or the equivalent thereof by Moody's Investors Service, Inc.
("Moody's") and having capital and surplus in excess of $500,000,000,
(iii) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (i) and
(ii) entered into with any bank meeting the qualifications specified in
clause (ii) above, and (iv) commercial paper rated at least A-1 or the
equivalent thereof by S&P or P-1 or the equivalent thereof by Moody's
and in either case maturing within 30 days after the date of
acquisition.
"C/D Published Moving Rate": on any particular date, the
latest three-week moving average of daily secondary market morning
offering rates in the United States for three-month certificates of
deposit of major United States money market lenders, such three-week
moving average (adjusted to the basis of a year of 360 days) being
determined weekly for the three-week period ending on the previous
Friday by the Administrative Agent on the basis of:
(a) such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New
York (as adjusted for reserves and assessments in the same
manner as the C/D Quoted Rate); or
<PAGE> 11
6
(b) if such publication shall be suspended or
terminated, the C/D Quoted Rate determined by the
Administrative Agent on the basis of quotations for such rates
by the Administrative Agent.
"C/D Quoted Rate": relative to any determination of the C/D
Published Moving Rate in circumstances when publication of the rates
referred to in clause (a) of the definition thereof has been suspended
or terminated, the rate of interest per annum determined by the
Administrative Agent to be the sum (rounded upward to the nearest
1/16th of 1%) of:
(a) the rate obtained by dividing (i) the average
(rounded upward to the nearest 1/16th of 1%) of the bid rates
quoted to the Administrative Agent, in CIBC-Bank's domestic
secondary market at approximately 10:00 A.M., New York City time
(or as soon thereafter as practicable), from time to time by three
certificate of deposit dealers of recognized standing selected by
the Administrative Agent in its reasonable discretion for the
purchase at face value of three-month certificates of deposit of
CIBC-Bank in an amount approximately equal or comparable to the
amount of CIBC-Bank's portion of the Loans outstanding hereunder
with respect to which the C/D Quoted Rate is being determined by
(ii) a percentage equal to 100% minus the average of the daily
percentages specified during such period by the Board of Governors
of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, but not limited to,
any marginal reserve requirement) for a member bank of the Federal
Reserve System in respect of liabilities consisting of or
including (among other liabilities) three-month Dollar nonpersonal
time deposits in the United States; and
(b) the daily average during such period of the
net annual assessment rates estimated by the Administrative
Agent for determining the then current annual assessment
payable by CIBC-Bank to the FDIC for FDIC's insuring Dollar
deposits of CIBC-Bank in the United States.
"CIBC-Bank": Canadian Imperial Bank of Commerce, a Canadian
chartered bank, or one or more of its agencies, branches or affiliates
in its or their respective capacity or capacities, as the case may be,
as a Lender or Lenders hereunder.
"Closing Date": the date on which the conditions precedent
set forth in subsection 6.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
<PAGE> 12
7
"Commitments": the collective reference to the Revolving
Credit Commitments, the Term Loan Commitments and the L/C Commitment;
individually, a "Commitment".
"Commitment Percentage": as to any Lender, the percentage of
the aggregate Revolving Credit Commitments and Term Loan
Commitments constituted by such Lender's Revolving Credit Commitment
and Term Loan Commitment, or, following the Closing Date, the
percentage representing a fraction the numerator of which is the sum of
(i) the aggregate principal amount of such Lender's Term Loans then
outstanding plus (ii) the Revolving Credit Commitment of such Lender
(or, following the termination or expiration of the Revolving Credit
Commitments, the sum of (x) the aggregate principal amount of such
Lender's Revolving Credit Loans then outstanding plus (y) such Lender's
Revolving CommitmentPercentage of all L/C Obligations then
outstanding), and the denominator of which is the sum of (i) the
aggregate principal amount of Term Loans of all Lenders then
outstanding plus (ii) the aggregate Revolving Credit Commitments of all
Lenders (or, following the termination or expiration of the Revolving
Credit Commitments, the sum of (x) the aggregate principal amount of
all Revolving Credit Loans then outstanding plus (y) the aggregate
principal amount of all L/C Obligations then outstanding).
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414(b) or (c) of the Code.
"Compliance Certificate": as defined in subsection 7.2(b).
"Consolidated Current Assets": on any date, with respect to
the Borrower and its Subsidiaries on a consolidated basis, all assets
of the Borrower and its Subsidiaries on such date which would, in
accordance with GAAP, be classified on a consolidated balance sheet of
the Borrower as "current assets".
"Consolidated Current Liabilities": on any date, with respect
to the Borrower and its Subsidiaries on a consolidated basis, all
liabilities of the Borrower and its Subsidiaries on such date which,
in accordance with GAAP, would be classified on a consolidated balance
sheet of the Borrower as "current liabilities".
"Consolidated Fixed Charges": for any period, an amount equal
to the sum of (a) scheduled payments of principal of the Term Loans
during such period, (b) the excess, if any, of the aggregate principal
amount of Revolving Credit Loans outstanding on the first day of such
period over the maximum aggregate amount of the Revolving Credit
Commitments on the last day of such period, giving effect to the
reductions required under subsection 2.5(b) but not to any reductions
thereof made during such period pursuant to subsection 2.5(a) or
subsection 4.3, (c) Consolidated Interest Expense for such period, (d)
capital expenditures made by the Borrower and
<PAGE> 13
8
its Subsidiaries during such period as permitted by subsection 8.9 and
(e) taxes based upon income deducted in determining Consolidated Net
Income for such period.
"Consolidated Interest Expense": for any period, the amount
paid in cash during such period in respect of interest expense of the
Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP, for such period with respect to leases of real and personal
property (net of income from sub-leases thereof, but including taxes,
insurance, maintenance and similar expenses which the lessee is
obligated to pay under the terms of such leases), excluding, however,
obligations under Financing Leases and leases in respect of
Advertising Displays.
"Consolidated Net Income": for any period, the net income (or
deficit) of the Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Operating Cash Flow": for any period, an amount
equal to the sum of (a) the Consolidated Net Income for such period,
disregarding all items (other than actual cash losses) which should be
classified as extraordinary, unusual or non-recurring and proceeds
from the sale of assets, all determined on a consolidated basis in
accordance with GAAP, plus (b) all amounts deducted in computing such
Consolidated Net Income in respect of (i) Consolidated Interest
Expense (after giving effect to all Hedging Agreements and payments
and receipts thereunder), (ii) non-cash amortization expense
(including amortization of noncurrent assets and non-cash charges
relating to billboard removal), (iii) depreciation and (iv) income
taxes.
"Consolidated Working Capital": on any date, with respect to
the Borrower and its Subsidiaries on a consolidated basis, the
Consolidated Current Assets (other than cash and Cash Equivalents) of
the Borrower and its Subsidiaries on such date, minus the Consolidated
Current Liabilities (other than the current portion of long term
Indebtedness) of the Borrower and its Subsidiaries on such date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Denver Disposition": the sale by the Borrower of all or
substantially all of the outdoor advertising assets of the Borrower
that, prior to the Closing Date and
<PAGE> 14
9
without giving effect to the Acquisition, serve the Denver, Colorado
advertising market.
"Designated Holder": each of (i) William S. Levine, any trust
solely for the benefit of Mr. Levine or his immediate family members,
or any partnership all the ownership interests in which are
beneficially owned or controlled by any of the foregoing, and (ii)
Arthur R. Moreno, any trust solely for the benefit of Mr. Moreno or
his immediate family members, or any partnership all the ownership
interests in which are beneficially owned or controlled by any of the
foregoing; provided that with respect to any such trust or partnership
either Mr. Levine or Mr. Moreno, as the case may be, shall at all
times directly or indirectly have the exclusive power to direct the
voting of the shares of Capital Stock of the Borrower held by such
trust or partnership.
"Division": as defined in the recitals hereto.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
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 now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained
by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined by the Administrative Agent to be the arithmetic mean
(rounded to the nearest 1/100th of 1%) of the offered rates for
deposits in Dollars with a term comparable to such Interest Period
that appears on the Telerate British Bankers Assoc. Interest
Settlement Rates Page (as defined below) at approximately 11:00 A.M.,
London time, on the second full Business Day preceding the first day
of such Interest Period; provided, however, that
<PAGE> 15
10
if there shall at any time no longer exist a Telerate British
Bankers Assoc. Interest Settlement Rates Page, "Eurodollar Base Rate"
shall mean, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum equal to the rate
at which CIBC-Bank is offered Dollar deposits at or about 10:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar
and foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein and in
an amount comparable to the amount of its Eurodollar Loan to be
outstanding during such Interest Period. " Telerate British Bankers
Assoc. Interest Settlement Rates Page" shall mean the display
designated as Page 3750 on the Telerate System Incorporated Service (or
such other page as may replace such page on such service for the
purpose of displaying the rates at which Dollar deposits are offered by
leading banks in the London interbank deposit market).
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": with respect to any fiscal year of the
Borrower, an amount equal to (a) Consolidated Net Income for
such fiscal year, plus (b) amortization and depreciation for such
fiscal year, plus (c) extraordinary, unusual or non-recurring losses
for such fiscal year, minus (d) extraordinary, unusual or non-recurring
gains for such fiscal year, minus (e) capital expenditures made in
accordance with subsection 8.9 during such fiscal year, minus (f)
payments of principal on Indebtedness resulting in a permanent
reduction of such Indebtedness during such fiscal year, minus (g)
amounts arising from sales of assets permitted by subsection 8.6 during
such fiscal year to the extent included in Consolidated Net Income and
paid to the Lenders as a mandatory prepayment pursuant to subsection
4.3(c), minus (h) increases in Consolidated Working Capital for such
fiscal year, plus (i) decreases in Consolidated Working Capital for
such fiscal year.
"Existing Credit Agreement": as defined in the recitals hereto.
<PAGE> 16
11
"Fee Mortgages": the Fee Mortgages to be executed and
delivered by the Borrower and certain Subsidiaries of the Borrower on
the Closing Date covering the assets listed on Schedule 1.1C under the
heading "Fee Mortgage Properties", in substantially the form of
Exhibit C-1 attached hereto, as the same may be amended, supplemented
or otherwise modified from time to time.
"Federal Funds Rate": for any particular date, an interest
rate per annum equal to the interest rate (rounded upward to the
nearest 1/16th of 1%) offered in the interbank market to the
Administrative Agent as the overnight Federal Funds Rate at or about
10:00 A.M., New York City time, on such day (or, if such day is not a
Business Day, for the next preceding Business Day).
"Financing Lease": 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.
"GAAP": generally accepted accounting principles in the
United States of America on the date hereof, except that, for purposes
of subsection 7.1, such term shall mean such principles in effect from
time to time.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each of its Subsidiaries (it being understood that the Canadian
Subsidiaries of the Borrower shall be parties thereto in respect of
their acknowledgement of the pledge therein of their Capital Stock and
not as guarantors or grantors of Collateral) on the Closing Date, in
substantially the form attached hereto as Exhibit B, as the same may
be amended, supplemented or otherwise modified from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), without duplication, 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 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
<PAGE> 17
12
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 or indemnities issued in the ordinary course of
business not to exceed $150,000 in the aggregate for all such
indemnities. 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 Borrower in good faith.
"Guarantor": any Person which is now or hereafter a party to
(a) the Guarantee and Collateral Agreement or (b) any other
guarantee (a " Guarantee") hereafter delivered to the Administrative
Agent guaranteeing the obligations and liabilities of each of the Loan
Parties hereunder or under any other Loan Documents, including, without
limitation, any guarantee delivered pursuant to subsection 7.10.
"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances,
petroleum products (including crude oil or any fraction thereof),
defined or regulated as such in or under any Environmental Law.
"Hedging Agreements": (a) any interest rate protection
agreement, interest rate future, interest rate option, interest rate
swap, interest rate cap or other interest rate hedge or arrangement
under which the Borrower or any of its Subsidiaries is a party or a
beneficiary and (b) any agreement or arrangement designed to limit or
eliminate the risk and/or exposure of either of the Borrower or any of
its Subsidiaries to fluctuations in currency exchange rates.
"Hedging Lender": any Lender, or any Affiliate of any Lender,
which from time to time enters into a Hedging Agreement with either of
the Borrower or any of its Subsidiaries.
"Houston Acquisition": the consummation of the acquisition of
the outdoor advertising assets serving the Houston, Texas, market
contemplated by the Option in respect thereof referred to in the
Purchase Agreement in accordance with the terms thereof and receipt by
the Administrative Agent of evidence satisfactory to it that all
conditions precedent set forth in subsections 6.1 applicable to the
assets subject to
<PAGE> 18
such acquisition and the transactions contemplated thereby have been
satisfied to the same extent as if such assets and such transactions
had been included in the Acquisition consummated on the Closing Date
and covered by subsection 6.1 for the purposes thereof.
"Houston Disposition": the sale by the Borrower of either (i)
all or a portion of the assets representing outdoor advertising assets
serving the Houston, Texas, market or (ii) the sale by the Borrower of
the option in respect thereof described in and in accordance with the
Purchase Agreement.
"Indebtedness": 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 current
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 and in
respect of reimbursement obligations with respect to drawings made
under any letter of credit issued for the account of such Person, (e)
all liabilities 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 and (f) for purposes of subsection 8.2
and Section 9(e), all obligations of such Person in respect of Hedging
Agreements.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan
is outstanding, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period,
and (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day
of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three, six or, if
acceptable to each of the Lenders, twelve months thereafter,
as selected by the Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect
thereto; and
<PAGE> 19
14
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three, six or, if
acceptable to each of the Lenders, twelve months thereafter,
as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior
to the last day of the then current Interest Period with
respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on
the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond (a) the Revolving Credit Commitment Termination Date
(in the case of Revolving Credit Loans) shall end on the
Revolving Credit Commitment Termination Date, (b) the Tranche
A Maturity Date (in the case of the Tranche A Term Loans)
shall end on the Tranche A Maturity Date, (c) the Tranche B
Maturity Date (in the case of the Tranche B Term Loans) shall
end on the Tranche B Maturity Date, or (d) the Tranche C
Maturity Date (in the case of the Tranche C Term Loans) shall
end on the Tranche C Maturity Date;
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(4) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.
"Interim Adjustments": for the first three full fiscal
quarters of the Borrower following the Closing Date, the Total
Leverage Ratio and the Senior Leverage Ratio shall be calculated by
including in Consolidated Operating Cash Flow for the applicable
four-quarter period the actual Consolidated Operating Cash Flow for
the portion of such period of the Borrower and its Subsidiaries
occurring prior to the Closing Date, on a pro forma basis assuming (i)
that the Acquisition had been consummated on the first day of such
period and (ii) adjustments to such pro forma Consolidated Operating
Cash Flow for such pre-Closing period attributable to the Borrower's
projected cost savings resulting from the Acquisition as determined by
Deloitte & Touche LLP and reasonably acceptable to the Administrative
Agent.
<PAGE> 20
15
"Issuing Lender": CIBC-Bank, in its capacity as issuer of any
Letter of Credit.
"Leasehold Mortgages": the Leasehold Mortgages to be executed
and delivered by the Borrower and certain Subsidiaries of the Borrower
on the Closing Date with respect to the assets listed on Schedule 1.1C
under the heading "Leasehold Mortgage Properties", in substantially
the form attached hereto as Exhibit C-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"L/C Commitment": $30,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant
to subsection 3.5(a).
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the Issuing Lender.
"L/C Participating Interest": with respect to any Letter of
Credit (a) in the case of the Issuing Lender with respect thereto, its
interest in such Letter of Credit and any Application relating thereto
after giving effect to the granting of participating interests
therein, if any, pursuant hereto and (b) in the case of each L/C
Participant, its undivided participating interest in such Letter of
Credit and any Application relating thereto.
"L/C Reimbursement Obligation": the obligation of the
Borrower to reimburse the Issuing Lender pursuant to subsection 3.5(a)
for amounts drawn under Letters of Credit.
"Letters of Credit": as defined in subsection 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement (other than those provisions of
the Borrower's Certificate of Incorporation in effect on the date
hereof which provide for preferential rights of any class of the
Borrower's preferred or common stock over any other class of the
Borrower's preferred or common stock) 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).
<PAGE> 21
16
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, any Notes, the
Applications, the Security Documents and any Guarantees.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Majority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole (
provided
that prior to the Closing Date, for the purposes of determining the
materiality of any such adverse effect, the Borrower and its
Subsidiaries shall be deemed to be the Borrower and its Subsidiaries
on the Closing Date after giving effect to the Acquisition) or (b) the
validity or enforceability of this Agreement, any of the Notes or any
Application or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Mortgages": the collective reference to each of the
Mortgages executed and delivered by the Borrower pursuant to the
Existing Credit Agreement, as amended by a Mortgage Supplement, and to
each of the Fee Mortgages and the Leasehold Mortgages, as the same may
be amended, supplemented or otherwise modified from time to time.
"Mortgage Supplement": each amended and restated mortgage (or
equivalent document, as each jurisdiction may require) amending each
Mortgage (as defined in the Existing Credit Agreement) under the
Existing Credit Agreement, to be executed and delivered by the
Borrower on the Closing Date, in substantially the form of Exhibit C-1
or C-2, as the case may be (as such form may be modified to reflect
its character as an amendment and restatement).
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) with respect to any sale or other
disposition of assets by the Borrower or any of its Subsidiaries, the
net amount equal to the
<PAGE> 22
aggregate amount received in cash (including any cash received by way
of deferred payment pursuant to a note receivable, other non-cash
consideration or otherwise, but only as and when such cash is so
received) in connection with such sale or other disposition minus the
sum of (i) the reasonable fees (including, without limitation,
reasonable attorneys' fees), commissions and other out-of-pocket
expenses (as evidenced by supporting documentation reasonably
satisfactory to the Administrative Agent) incurred or paid for by the
Borrower or such Subsidiary in connection with such sale or other
disposition and (ii) federal, state and local taxes incurred in
connection with such sale or other disposition, whether payable at
such time or thereafter.
(b) with respect to any issuance, sale or other disposition of
any Capital Stock or debt security by the Borrower or any of its
Subsidiaries (other than to the Borrower or any of its Subsidiaries),
the net amount equal to the aggregate amount received in cash in
connection with such issuance, sale or other disposition minus the sum
of (i) the reasonable fees, commissions and other out-of-pocket
expenses incurred by the Borrower or such Subsidiary in connection
with such issuance, sale or other disposition and (ii) federal, state
and local taxes incurred in connection with such issuance, sale or
other disposition, whether payable at such time or thereafter.
"Non-Excluded Taxes": as defined in subsection 4.11.
"Notes": the collective reference to the Revolving Credit
Notes and the Term Notes, if any.
"Obligations": the collective reference to the unpaid principal of
and interest (including, without limitation , interest accruing after
the maturity of the Loans and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) on the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent and the
Lenders and their respective Affiliates, including, without
limitation, the L/C Reimbursement Obligation and any obligation of the
Borrower under any Hedging Agreement entered into with any Hedging
Lender, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, the Notes, the
other Loan Documents or any Hedging Agreement entered into with any
Hedging Lender or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all
reasonable fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrower
pursuant to the terms hereof or any other Loan Document).
"Participant": as defined in subsection 11.6(b).
<PAGE> 23
18
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permanent Subordinated Indebtedness": Indebtedness of the
Borrower that replaces or refinances the Subordinated Bridge
Indebtedness, or into which such Indebtedness is exchanged or
converted, in each case (i) having no maturity, mandatory redemption,
repurchase or defeasance, or sinking fund requirement falling due
prior to the eighth anniversary of the date hereof, (ii) bearing
interest at a total rate per annum not in excess of 20% per annum and
bear cash interest at a rate per annum not in excess of 15% per annum
and (iii) having other material terms no more restrictive on or less
favorable to the Borrower than those set forth in the Senior
Subordinated Indenture.
"Permitted Acquisitions": any acquisition made on or after
the later of the Bridge Take-Out Date and January 1, 1997 by the
Borrower or any of its Subsidiaries, whether through a purchase of
Capital Stock or assets or through a merger, consolidation or
amalgamation, of another Person or the assets constituting an operating
business unit of another Person, provided that (a)(i) in the event that
the Total Leverage Ratio as at the end of either of the two consecutive
fiscal quarters for which financial statements have been delivered
pursuant to subsection 7.1 most recently ended prior to the
consummation of any such acquisition is equal to or greater than
5.0:1.0, such acquisition shall not be permitted to the extent that the
aggregate amount of consideration (other than consideration consisting
of shares of common stock of the Borrower) given by the Borrower and
its Subsidiaries for all such acquisitions in the fiscal year of the
Borrower during which such acquisition would be consummated would
exceed $7,500,000, (ii) in the event that the Total Leverage Ratio as
at the end of the two consecutive fiscal quarters for which financial
statements have been delivered pursuant to subsection 7.1 most recently
ended prior to the consummation of any such acquisition is less than
5.0:1.0, such acquisition shall not be permitted to the extent that the
aggregate amount of consideration (other than consideration consisting
of shares of common stock of the Borrower) given by the Borrower and
its Subsidiaries for all such acquisitions in the fiscal year of the
Borrower during which such acquisition would be consummated would
exceed $15,000,000, (b)(i) at the time of such acquisition and after
giving effect thereto no Default or Event of Default shall have
occurred and be continuing and (ii) the business so acquired operates
within markets in which the Borrower and its Subsidiaries are operating
at the time of such acquisition, and (c) in the case of any acquisition
the consideration for which would cause the aggregate amount of
consideration for all such acquisitions in any fiscal year of the
Borrower to exceed $3,000,000 (other than consideration consisting of
shares of common stock of the Borrower), the Borrower shall have
provided to each Lender reasonably prior to the date of consummation of
such acquisition (x) all then available information relating to such
business, including, without limitation, historical and projected
revenue and cash flow information and information regarding Advertising
Displays such as type,
<PAGE> 24
19
number, location and occupancy and (y) pro forma projections showing
compliance with this Agreement after giving effect to such
acquisition.
"Permitted Liens": Liens permitted under subsection 8.3.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Properties": as defined in subsection 5.17.
"Purchase Agreement": as defined in the recitals hereto.
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty
day notice period is waived under subsections .13, .14, .16, .18, .19
or .20 of PBGC Reg. Section 2615.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chairman of the Board of Directors
or the chief executive officer of the Borrower or, with respect to
financial matters, the chief financial officer of the Borrower.
"Revolving Credit Commitment": as to any Revolving Credit
Lender, its obligation to make Revolving Credit Loans to, and/or issue
or participate in Letters of Credit issued on behalf of, the Borrower
in an aggregate amount not to exceed at any one time outstanding the
amount set forth under such Revolving Credit Lender's name on Schedule
1.1A opposite the heading "Revolving Credit Commitment" or, in the
<PAGE> 25
20
case of any Lender that is an Assignee, the amount of the assigning
Lender's Revolving Credit Commitment assigned to such Assignee
pursuant to subsection 11.6 (in each case as such amount may be
adjusted from time to time as provided herein).
"Revolving Credit Commitment Percentage": as to any Revolving
Credit Lender, the percentage of the aggregate Revolving Credit
Commitments constituted by its Revolving Credit Commitment (or, if the
Revolving Credit Commitments have terminated or expired, the
percentage which (i) the sum of (a) such Lender's then outstanding
Revolving Credit Loans plus (b) such Lender's interests in the
aggregate L/C Obligations then outstanding then constitutes of (ii)
the sum of (a) the aggregate Revolving Credit Loans of all the
Revolving Credit Lenders then outstanding plus (b) the aggregate L/C
Obligations then outstanding).
"Revolving Credit Commitment Period": the period from and
including the Closing Date to but not including the Revolving Credit
Commitment Termination Date.
"Revolving Credit Commitment Termination Date": the earlier
of (a) December 31, 2001 or, if such date is not a Business Day, the
Business Day next preceding such date and (b) the date upon which the
Revolving Credit Commitments shall be terminated pursuant hereto.
"Revolving Credit Lender": any Lender having a Revolving
Credit Commitment or that holds outstanding Revolving Credit Loans or
L/C Participating Interests hereunder.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Note": as defined in subsection 2.2.
"SEC": United States Securities and Exchange Commission.
"Securities Act": the Securities Act of 1933, as amended.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, the Mortgage
Supplements and all other security documents hereafter delivered to
the Administrative Agent granting a Lien on any asset or assets of any
Person to secure the obligations and liabilities of the Borrower
hereunder or under any of the other Loan Documents or to secure any
guarantee of any such obligations and liabilities, including, without
limitation, any security document delivered pursuant to subsection
7.10.
"Sellers" as defined in the recitals.
<PAGE> 26
21
"Senior Leverage Ratio": as of any date of determination, the
ratio of (a) the sum (on a consolidated basis without duplication)
of (i) all Indebtedness of the Borrower and its Subsidiaries
outstanding on such date other than any Subordinated Indebtedness and
(ii) all Guarantee Obligations of the Borrower and its Subsidiaries
outstanding on such date in respect of Indebtedness of any third Person
other than any subordinated Guarantee Obligations in respect of
Subordinated Indebtedness to (b) Consolidated Operating Cash Flow for
the then most recently ended period of four consecutive calendar
quarters for which financial statements shall have been delivered to
the Lenders pursuant to subsection 7.1, provided that, for any such
period that includes periods prior to the Closing Date, Consolidated
Operating Cash Flow shall be adjusted by giving effect to the Interim
Adjustments with respect thereto.
"Senior Notes": the $115,000,000 in aggregate principal
amount of 10-3/4% Senior Notes due 2003 issued by the Borrower
pursuant to the Senior Note Indenture.
"Senior Note Indenture": the Indenture dated as of August 15,
1993, between the Borrower and United States Trust Company of New
York, relating to the Senior Notes.
"Senior Subordinated Indenture": the Senior Subordinated
Indenture, substantially in the form attached to the Subordinated
Bridge Agreement as Exhibit V, pursuant to which Take-Out Securities
(as defined in the Subordinated Bridge Agreement) are issued.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent" and "Solvency": with respect to any Person on a
particular date, the condition 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 salable 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 or liabilities beyond such Person's ability
to pay as such debts and liabilities mature, and (d) such Person is
not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
"Subordinated Bridge Agreement": the Senior Subordinated
Credit Agreement, dated as of July 9, 1996, among the Borrower, the
Guarantors parties thereto and Canadian Imperial Bank of Commerce, as
in effect on the date hereof.
<PAGE> 27
22
"Subordinated Indebtedness": the collective reference to (i)
Indebtedness under the Subordinated Bridge Agreement and (ii)
Permanent Subordinated Indebtedness.
"Subsidiary": as 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
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower in existence on the date of
this Agreement.
"Subsidiary Guarantor": each Subsidiary of the Borrower that
is a party to the Guarantee and Collateral Agreement or a Guarantee as
a guarantor thereunder.
"Term Loan": as defined in subsection 2.7.
"Term Loan Commitments": the collective reference to the
Tranche A Term Loan Commitments, the Tranche B Term Loan Commitments
and the Tranche C Term Loan Commitments; collectively, as to all the
Term Loan Lenders, the "Term Commitments."
"Term Loan Lenders": the collective reference to the Tranche
A Term Loan Lenders, the Tranche B Term Loan Lenders and the Tranche C
Term Loan Lenders.
"Term Note" and "Term Notes": as defined in subsection 2.10.
"Tobacco Advertising Revenue": the net revenue the Borrower
and its Subsidiaries derive from posting tobacco advertisements on
Advertising Displays.
"Total Leverage Ratio": as of any date of determination, the
ratio of (a) the sum (on a consolidated basis without duplication) of
(i) all Indebtedness of the Borrower and its Subsidiaries outstanding
on such date and (ii) all Guarantee Obligations of the Borrower and
its Subsidiaries outstanding on such date in respect of Indebtedness
of any third Person to (b) Consolidated Operating Cash Flow for the
then most recently ended period of four consecutive calendar quarters
for which financial statements shall have been delivered to the
Lenders pursuant to subsection 7.1, provided that for any such period
that includes periods prior to the Closing Date, Consolidated
Operating Cash Flow shall be adjusted by giving effect to the Interim
Adjustments with respect thereto.
"Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on
the same date and end on the
<PAGE> 28
23
same later date (whether or not such Loans shall originally have been
made on the same day).
"Tranche A Maturity Date": December 31, 2000.
"Tranche A Term Loan Commitment": as to any Tranche A Term
Loan Lender, its obligation to make a Tranche A Term Loan to the
Borrower pursuant to subsection 2.7 in an aggregate amount equal to the
amount set forth under such Tranche A Term Loan Lender's name in
Schedule 1.1A opposite the heading "Tranche A Term Loan Commitment";
collectively, the "Tranche A Term Loan Commitments", provided that each
Lender's Tranche A Term Loan Commitment as so set forth shall be
automatically reduced on the Closing Date by such Lender's Tranche A
Term Loan Commitment Percentage of (i) the aggregate amount of gross
cash proceeds received by the Borrower pursuant to the issuance on the
Closing Date of Bridge Preferred Stock and/or common stock described in
subsection 6.1(j)(iii) multiplied by (ii) the percentage of the
aggregate Term Loan Commitments represented by the aggregate Tranche A
Term Loan Commitments before giving effect to such reduction.
"Tranche A Term Loan Commitment Percentage": as to any
Tranche A Term Loan Lender, the percentage of the aggregate Tranche A
Term Loan Commitments constituted by its Tranche A Term Loan
Commitment or, following the Closing Date, the percentage of the
aggregate outstanding Tranche A Term Loans constituted by its Tranche
A Term Loan.
"Tranche A Term Loan Lender": any Lender having a Tranche A
Term Loan Commitment hereunder or that holds outstanding Tranche A
Term Loans.
"Tranche A Term Loan": as defined in subsection 2.7.
"Tranche A Term Note": as defined in subsection 2.8(a).
"Tranche B Maturity Date": December 31, 2002.
"Tranche B Term Loan Commitment": as to any Tranche B Term
Loan Lender, its obligation to make a Tranche B Term Loan to the
Borrower pursuant to subsection 2.7 in an aggregate amount equal to the
amount set forth under such Tranche B Term Loan Lender's name in
Schedule 1.1A opposite the heading "Tranche B Term Loan Commitment"
collectively, the " Tranche B Term Loan Commitments", provided that
each Lender's Tranche B Term Loan Commitment as so set forth shall be
automatically reduced on the Closing Date by such Lender's Tranche B
Term Loan Commitment Percentage of (i) the aggregate amount of gross
cash proceeds received by the Borrower pursuant to the issuance on the
Closing Date of Bridge Preferred Stock and/or common stock described in
subsection 6.1(j)(iii) multiplied by (ii) the percentage of the
aggregate Term Loan Commitments
<PAGE> 29
24
represented by the aggregate Tranche B Term Loan Commitments before
giving effect to such reduction.
"Tranche B Term Loan Commitment Percentage": as to any
Tranche B Term Loan Lender, the percentage of the aggregate Tranche B
Term Loan Commitments constituted by its Tranche B Term Loan
Commitment or, following the Closing Date, the percentage of the
aggregate outstanding Tranche B Term Loans constituted by its Tranche
B Term Loan.
"Tranche B Term Loan Lender": any Lender having a Tranche B
Term Loan Commitment hereunder or that holds outstanding Tranche B
Term Loans.
"Tranche B Term Loan": as defined in subsection 2.7.
"Tranche B Term Note": as defined in subsection 2.9(a).
"Tranche C Maturity Date": December 31, 2003.
"Tranche C Term Loan Commitment": as to any Tranche C Term
Loan Lender, its obligation to make a Tranche C Term Loan to the
Borrower pursuant to subsection 2.7 in an aggregate amount equal to
the amount set forth under such Tranche C Term Loan Lender's name in
Schedule 1.1A opposite the heading "Tranche C Term Loan Commitment";
collectively, the "Tranche C Term Loan Commitments", provided that
each Lender's Tranche C Term Loan Commitment as so set forth shall be
automatically reduced on the Closing Date by such Lender's Tranche C
Term Loan Commitment Percentage of (i) the aggregate amount of gross
cash proceeds received by the Borrower pursuant to the issuance on the
Closing Date of Bridge Preferred Stock and/or common stock described
in subsection 6.1(j)(iii) multiplied by (ii) the percentage of the
aggregate Term Loan Commitments represented by the aggregate Tranche C
Term Loan Commitments before giving effect to such reduction.
"Tranche C Term Loan Commitment Percentage": as to any
Tranche C Term Loan Lender, the percentage of the aggregate Tranche C
Term Loan Commitments constituted by its Tranche C Term Loan
Commitment or, following the Closing Date, the percentage of the
aggregate outstanding Tranche C Term Loans constituted by its Tranche
C Term Loan.
"Tranche C Term Loan Lender": any Lender having a Tranche C
Term Loan Commitment hereunder or that holds outstanding Tranche C
Term Loans.
"Tranche C Term Loan": as defined in subsection 2.7.
"Tranche C Term Note": as defined in subsection 2.10(a).
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25
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": means any Subsidiary, all of the
outstanding voting securities of which are owned, directly or
indirectly, by the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Revolving Credit
Lender's Commitment Percentage of the then outstanding L/C Obligations, does
not exceed (i) prior to the Houston Acquisition, the amount of such Lender's
Revolving Credit Commitment less such Lender's Commitment Percentage of
$10,000,000 and (ii) upon and after the Houston Acquisition, the amount of such
Lender's Revolving Credit Commitment. During the Revolving Credit Commitment
Period the Borrower may use the Revolving Credit Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof.
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26
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Administrative Agent in accordance with
subsections 2.3 and 2.7, provided that no Revolving Credit Loan shall be made
as a Eurodollar Loan after the day that is one month prior to the Revolving
Credit Commitment Termination Date.
2.2 Revolving Credit Notes. The Borrower agrees that, upon
the request to the Administrative Agent by any Revolving Credit Lender made on
or prior to the Closing Date or in connection with any assignment pursuant to
subsection 11.6, to evidence such Lender's Revolving Credit Loans the Borrower
will execute and deliver to such Lender a promissory note substantially in the
form of Exhibit A-1, with appropriate insertions as to payee, date and
principal amount (each, as amended, supplemented, replaced or otherwise
modified from time to time, a "Revolving Credit Note"), payable to the order of
such Lender and in a principal amount equal to the lesser of (a) the amount of
the initial Revolving Credit Commitment of such Revolving Credit Lender and (b)
the aggregate unpaid principal amount of all Revolving Credit Loans made by
such Revolving Credit Lender. Each Revolving Credit Lender is hereby
authorized to record the date, Type and amount of each Revolving Credit Loan
made by such Revolving Credit Lender, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof and, in the case of Eurodollar
Loans, the length of each Interest Period with respect thereto, on the schedule
annexed to and constituting a part of its Revolving Credit Note, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided, however, that the failure to make any such
recordation shall not affect the obligations of the Borrower hereunder or under
any Revolving Credit Note. Each Revolving Credit Note shall (x) be dated the
Closing Date, (y) be stated to mature on the Revolving Credit Commitment
Termination Date and (z) provide for the payment of interest in accordance with
subsection 4.1.
2.3 Procedure for Revolving Credit Borrowing. The Borrower
may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans, or (b)
one Business Day prior to the requested Borrowing Date, otherwise), specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof
and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$250,000 or a whole multiple of $100,000 in excess thereof (or, if the then
Available Revolving Credit Commitments are less than $250,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $2,500,000 or a whole multiple
of $100,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof.
Each Lender will make the amount of its
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27
pro rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified in
subsection 11.2 prior to 11:00 A.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Revolving Credit Lenders and in like funds as received by the
Administrative Agent.
2.4 Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the first day of the Revolving
Credit Commitment Period to the Revolving Credit Commitment Termination Date,
computed at the rate of 1/2 of 1% per annum on the average daily amount of the
Available Revolving Credit Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Revolving Credit Commitment
Termination Date or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the Closing Date.
(b) The Borrower agrees to pay to the Administrative Agent
the fees set forth in the letter agreement, dated the date hereof, between the
Administrative Agent and the Borrower.
2.5 Termination or Reduction of Revolving Credit Commitments.
(a) The Borrower shall have the right, upon not less than five Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments; provided that no such termination or reduction shall be permitted
if, after giving effect thereto and to any prepayments of the Revolving Credit
Loans made on the effective date thereof, the aggregate principal amount of the
Revolving Credit Loans then outstanding, when added to the then outstanding L/C
Obligations, would exceed the Revolving Credit Commitments then in effect. Any
such reduction shall be in an amount equal to $2,500,000 or a whole multiple of
$100,000 in excess thereof and shall reduce permanently the Revolving Credit
Commitments then in effect.
(b) The Revolving Credit Commitments shall automatically be
permanently reduced on December 31 of each year, commencing on December 31,
1998, by the aggregate amount of Revolving Credit Commitments set forth below
opposite each such date:
December 31, 1998 $10,000,000
December 31, 1999 $10,000,000
December 31, 2000 $10,000,000
December 31, 2001 $40,000,000
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Each such reduction shall be accompanied by prepayment of the Revolving Credit
Loans (together with fees and interest accrued thereon to the date of such
prepayment and any additional amounts owing under subsection 4.12) to the
extent, if any, that the Revolving Credit Loans then outstanding, when added to
the L/C Obligations then outstanding, exceed the amount of the Revolving Credit
Commitments as so reduced. If, after giving effect to such prepayment of the
Revolving Credit Loans, the L/C Obligations then outstanding exceed the
Revolving Credit Commitments as so reduced, the Borrower shall deposit in a
cash collateral account with the Administrative Agent an amount equal to the
amount by which the L/C Obligations then outstanding exceed the Revolving
Credit Commitments as so reduced.
2.6 Term Loans. Subject to the terms and conditions hereof,
each Term Loan Lender severally agrees to make (a) a term loan (a "Tranche A
Term Loan") on the Closing Date in the principal amount set forth under such
Lender's name in Schedule 1.1A opposite the heading "Tranche A Term Loan
Commitment", (b) a term loan (a "Tranche B Term Loan") on the Closing Date in
the principal amount set forth under such Lender's name in Schedule 1.1A
opposite the heading "Tranche B Term Loan Commitment", and/or (c) a term loan
(a "Tranche C Term Loan", and together with the Tranche A Term Loans and the
Tranche B Term Loans, the "Term Loans") on the Closing Date in the principal
amount set forth under such Lender's name in Schedule 1.1A opposite the
heading "Tranche C Term Loan Commitment". The Term Loans may from time to time
be (a) Eurodollar Loans, (b) ABR Loans or (c) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsection 4.4.
2.7 Tranche A Term Notes. (a) The Borrower agrees that,
upon the request to the Administrative Agent by any Tranche A Term Loan Lender
made on or prior to the Closing Date or in connection with any assignment
pursuant to subsection 11.6, to evidence such Lender's Tranche A Term Loan the
Borrower will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A-2 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "Tranche A Term Note"),
with appropriate insertions therein as to payee, date and principal amount,
payable to the order of such Tranche A Term Loan Lender and in a principal
amount equal to the amount set forth under such Tranche A Term Loan Lender's
name on Schedule 1.1A opposite the heading "Tranche A Term Loan Commitment."
Any Tranche A Term Note shall (i) be dated the Closing Date, (ii) be payable as
provided in subsection 2.7(b) and (iii) provide for the payment of interest in
accordance with subsection 4.1.
(b) The Tranche A Term Loans shall be payable in consecutive
quarterly installments, payable during each calendar year in four equal
installments on each March 31, June 30, September 30 and December 31 in the
aggregate principal amounts for such year set forth opposite such year below,
commencing on March 31, 1997 (or, if less, the aggregate amount of the Tranche
A Term Loans then outstanding):
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29
Year Amount
---- ------
1997 $28,000,000
1998 43,750,000
1999 64,750,000
2000 38,500,000;
provided that each of the amounts set forth above shall be reduced ratably in
the event that the Tranche A Term Loan Commitments shall be reduced pursuant to
the proviso to the term "Tranche A Term Loan Commitment".
2.8 Tranche B Term Notes. (a) The Borrower agrees that,
upon the request to the Administrative Agent by any Tranche B Term Loan Lender
made on or prior to the Closing Date or in connection with any assignment
pursuant to subsection 11.6, to evidence such Lender's Tranche B Term Loan the
Borrower will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A-3 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "Tranche B Term Note"),
with appropriate insertions therein as to payee, date and principal amount,
payable to the order of such Tranche B Term Loan Lender and in a principal
amount equal to the amount set forth under such Tranche B Term Loan Lender's
name on Schedule 1.1A opposite the heading "Tranche B Term Loan Commitment."
Any Tranche B Term Note shall (i) be dated the Closing Date, (ii) be payable as
provided in subsection 2.8(b) and (iii) provide for the payment of interest in
accordance with subsection 4.1.
(b) The Tranche B Term Loans shall be payable in consecutive
quarterly installments, payable during each calendar year in four equal
installments on each March 31, June 30, September 30 and December 31 in the
aggregate principal amounts for such year set forth opposite such year below,
commencing on March 31, 1997 (or, if less, the aggregate amount of the Tranche
A Term Loans then outstanding):
Year Amount
---- ------
1997 $ 1,500,000
1998 1,500,000
1999 1,500,000
2000 37,500,000
2001 75,000,000
2002 33,000,000;
provided that each of the amounts set forth above shall be reduced ratably in
the event that the Tranche B Term Loan Commitments shall be reduced pursuant to
the proviso to the term "Tranche B Term Loan Commitment".
2.9 Tranche C Term Notes. (a) The Borrower agrees that,
upon the request to the Administrative Agent by any Tranche C Term Loan Lender
made on or prior to the
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30
Closing Date or in connection with any assignment pursuant to subsection 11.6,
to evidence such Lender's Tranche C Term Loan the Borrower will execute and
deliver to such Lender a promissory note substantially in the form of Exhibit
A-4 (each, as amended, supplemented, replaced or otherwise modified from time
to time, a "Tranche C Term Note"; and together with the Tranche A Term Notes
and the Tranche B Term Notes, the "Term Notes"), with appropriate insertions
therein as to payee, date and principal amount, payable to the order of such
Tranche C Term Loan Lender and in a principal amount equal to the amount set
forth under such Tranche C Term Loan Lender's name on Schedule 1.1A opposite
the heading "Tranche C Term Loan Commitment." Any Tranche C Term Note shall
(i) be dated the Closing Date, (ii) be payable as provided in subsection 2.9(b)
and (iii) provide for the payment of interest in accordance with subsection
4.1.
(b) The Tranche C Term Loans shall be payable in consecutive
quarterly installments, payable during each calendar year in four equal
installments on each March 31, June 30, September 30 and December 31 in the
aggregate principal amounts for such year set forth opposite such year below,
commencing on March 31, 1997 (or, if less, the aggregate amount of the Tranche
C Term Loans then outstanding):
Year Amount
---- ------
1997 $ 1,500,000
1998 1,500,000
1999 1,500,000
2000 1,500,000
2001 1,500,000
2002 60,000,000
2003 82,500,000;
provided that each of the amounts set forth above shall be reduced ratably in
the event that the Tranche C Term Loan Commitments shall be reduced pursuant to
the proviso to the term "Tranche C Term Loan Commitment".
2.10 Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the Closing Date, if all or any part of the Term Loans
are to be initially Eurodollar Loans or (b) one Business Day prior to the
Closing Date, otherwise) requesting that the Term Loan Lenders make the Term
Loans on the Closing Date and specifying (i) whether the Term Loans are to be
initially Eurodollar Loans, ABR Loans or a combination thereof, and (ii) if the
Term Loans are to be entirely or partly Eurodollar Loans the amount of such
Type of Loan and the length of the initial Interest Periods therefor. Upon
receipt of such notice the Administrative Agent shall promptly notify each Term
Loan Lender thereof. On the Closing Date each Term Loan Lender shall make
available to the Administrative Agent at its office specified in subsection
11.2 the amount in immediately available funds equal to the Term
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Loan to be made by such Term Loan Lender. The Administrative Agent shall on
such date credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders.
2.11 Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of:
(i) each Revolving Credit Lender, the then unpaid principal amount of each
Revolving Credit Loan of such Lender made to the Borrower, on the Revolving
Credit Commitment Termination Date (or such earlier date on which the Revolving
Credit Loans become due and payable pursuant to Section 9); (ii) each Tranche A
Term Loan Lender, the amounts specified in subsection 2.7(b) on the dates
specified in subsection 2.7(b) (or such earlier date on which the Tranche A
Term Loans become due and payable pursuant to Section 9); (iii) each Tranche B
Term Loan Lender, the amounts specified in subsection 2.8(b) on the dates
specified in subsection 2.8(b) (or such earlier date on which the Tranche B
Term Loans become due and payable pursuant to Section 9); and (iv) each Tranche
C Term Loan Lender, the amounts specified in subsection 2.9(b) on the dates
specified in subsection 2.9(b) (or such earlier date on which the Tranche C
Term Loans become due and payable pursuant to Section 9). The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in subsection 4.1.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including,
without limitation, the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to subsection 11.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Loan made hereunder, the Type
thereof and each Interest Period, if any, applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) both the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.11(c) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made
to the Borrower by such Lender in accordance with the terms of this Agreement.
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SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in subsection 3.4(a), agrees to issue letters of credit ("Letters of
Credit") for the account of the Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
Available Revolving Credit Commitment would be less than zero. On the Closing
Date all letters of credit then outstanding on such date under the Existing
Credit Agreement shall automatically be deemed to be Letters of Credit.
(b) Each Letter of Credit shall (i) be denominated in Dollars
and shall be a stand-by letter of credit issued to finance the working capital
and business needs of the Borrower and its Subsidiaries in the ordinary course
of business and (ii) expire no later than the earlier of (x) the one year
anniversary of its issuance and (y) the Revolving Credit Commitment Termination
Date; provided that so long as no Event of Default has occurred and is
continuing, any Letter of Credit that expires prior to the Revolving Credit
Commitment Termination Date may be renewed at the request of the Borrower for a
term of up to one year (or, if shorter, for a term expiring on the Revolving
Credit Commitment Termination Date).
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(d) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The
Borrower may from time to time request that the Issuing Lender issue a Letter
of Credit by delivering to the Issuing Lender at its address for notices
specified herein an Application therefor, completed to the reasonable
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may reasonably request.
Upon receipt of any Application, the Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the
Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit to
the Borrower promptly following the issuance thereof.
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3.3 Fees, Commissions and Other Charges. (a) The Borrower
shall pay to the Administrative Agent, for the account of the Issuing Lender
and the L/C Participants, a letter of credit fee with respect to each Letter of
Credit, computed for the period from and including the date of issuance of such
Letter of Credit to the expiration date of such Letter of Credit, computed at a
rate per annum equal to the Applicable Margin then in effect for Eurodollar
Loans that are Revolving Credit Loans calculated on the basis of the actual
number of days elapsed over a 360-day year, of the aggregate face amount of
Letters of Credit outstanding, payable in arrears on each L/C Fee Payment Date
and on the Revolving Credit Commitment Termination Date. Such fee shall be
payable to the Administrative Agent to be shared ratably among the Revolving
Credit Lenders in accordance with their respective Revolving Credit Commitment
Percentages. In addition, the Borrower shall pay to the Issuing Lender, for
its own account a fee equal to 0.25% per annum of the aggregate face amount of
outstanding Letters of Credit, payable quarterly in arrears on each L/C Fee
Payment Date and on the Revolving Credit Commitment Termination Date and
calculated on the basis of the actual number of days elapsed over a 360-day
year.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing Lender
in issuing, effecting payment under, amending or otherwise administering any
Letter of Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C Participants all
fees and commissions received by the Administrative Agent for their respective
accounts pursuant to this subsection.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights under each Letter of Credit issued hereunder and the
amount of each draft paid by the Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms
of this Agreement, such L/C Participant shall pay to the Issuing Lender upon
demand at the Issuing Lender's address for notices specified herein an amount
equal to such L/C Participant's Revolving Credit Commitment Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed; provided
that, if such demand is made prior to 12:00 Noon, New York City time, on a
Business Day, such L/C Participant shall make such payment to the Issuing
Lender prior to the end of such Business Day and otherwise such L/C Participant
shall make such payment on the next succeeding Business Day.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to paragraph 3.4(a) in respect of any
unreimbursed portion of any payment
<PAGE> 39
34
made by the Issuing Lender under any Letter of Credit is paid to the Issuing
Lender within three Business Days after the date such payment is due, such L/C
Participant shall pay to the Issuing Lender on demand an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Rate, as
quoted by the Issuing Lender, during the period from and including the date
such payment is required to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. If any such amount required to be paid by any L/C Participant
pursuant to paragraph 3.4(a) is not in fact made available to the Issuing
Lender by such L/C Participant within three Business Days after the date such
payment is due, the Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this subsection shall be conclusive in the absence
of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with subsection 3.4(a), the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Lender), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
3.5 L/C Reimbursement Obligation of the Borrower. (a) The
Borrower agrees to reimburse the Issuing Lender on each date on which the
Issuing Lender notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender for the
amount of (i) such draft so paid and (ii) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender at its address
for notices specified herein in lawful money of the United States of America
and in immediately available funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which would be payable on any
outstanding ABR Loans which were then overdue.
(c) Each drawing under any Letter of Credit shall constitute
a request by the Borrower to the Administrative Agent for a borrowing pursuant
to subsection 2.3 of ABR Loans in the amount of such drawing. The Borrowing
Date with respect to such borrowing shall be the date of such drawing.
<PAGE> 40
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3.6 Obligations Absolute. (a) The Borrower's obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender or
any beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's L/C
Reimbursement Obligation under subsection 3.5(a) shall not be affected by,
among other things, (i) subject to subsection 3.7, the validity or genuineness
of documents or of any endorsements thereon, even though such documents shall
in fact prove to be invalid, fraudulent or forged, or (ii) any dispute between
or among the Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred or (iii) any claims
whatsoever of the Borrower against any beneficiary of such Letter of Credit or
any such transferee.
(c) The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted by
the Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender to the
Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.
3.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. GENERAL PROVISIONS
4.1 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
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(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan,
(ii) any interest payable thereon, (iii) any commitment fee or (iv) any other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), the principal of the Loans and any
such overdue interest, commitment fee or other amount shall bear interest at a
rate per annum which is (x) in the case of principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of any such overdue interest, commitment
fee or other amount, the rate described in paragraph (b) of this subsection
plus 2%, in each case from the date of such non-payment until such overdue
principal, interest, commitment fee or other amount is paid in full (as well
after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
4.2 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans made to it in whole or in part, without
premium or penalty on any Business Day, provided that (i) the Borrower shall
have given (x) at least three Business Days' irrevocable notice to the
Administrative Agent (in the case of Eurodollar Loans) or (y) one Business
Day's irrevocable notice to the Administrative Agent (in the case of ABR
Loans), (ii) such notice specifies, in the case of any prepayment of Loans, the
date and amount of prepayment and whether the prepayment is (x) of Term Loans
or Revolving Credit Loans, or a combination thereof, and in each case if a
combination thereof, the amount allocable to each, (y) of Eurodollar Loans, ABR
Loans or a combination thereof, and, in each case if a combination thereof, the
principal amount allocable to each and (iii) each prepayment is in a minimum
principal amount of $1,000,000 and a multiple of $100,000 in excess thereof.
Upon the receipt of any such notice the Administrative Agent shall promptly
notify each of the Lenders thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to subsection 4.12, if any,
and, in the case of prepayments of the Term Loans only, accrued interest to
such date on the amount prepaid. Partial prepayments of (i) the Term Loans
pursuant to this subsection shall be applied (x) pro rata (based on outstanding
principal amount) to the Tranche A Term Loans, the Tranche B Term Loans and the
Tranche C Term Loans and (y) to the respective installments of principal of the
Term Loans in the inverse order of the respective maturity dates thereof and
(ii) the Revolving Credit Loans and the Letters of Credit pursuant to this
subsection shall be applied, first, to payment of the Revolving Credit Loans
then outstanding and, then, to cash collateralize any outstanding L/C
Obligations upon terms reasonably satisfactory to the Administrative Agent.
Notwithstanding the foregoing, so long as any amounts remain outstanding under
the Tranche A Term Loans, any Lender having a Tranche B Term Loan or a Tranche
C Term Loan outstanding may decline receipt of its share of any such
prepayment, and, if such Lender so declines, such share shall be applied as an
additional prepayment of the Tranche A Term
<PAGE> 42
37
Loans in accordance with clause (y) of the immediately preceding sentence. Any
such Lender that wishes to decline receipt of its share of any such prepayment
shall promptly, and in any event no later than the date specified for such
prepayment, notify the Administrative Agent.
4.3 Mandatory Prepayments and Reduction of Revolving Credit
Commitments. (a) If, in any fiscal year, commencing with the fiscal year
ending December 31, 1997, there shall be Excess Cash Flow for such fiscal year
and the Total Leverage Ratio on the last day of such fiscal year is not less
than 4.00:1.00, then on the date that is the earlier of (i) the date on which
the audited financial statements for such fiscal year are required to be
delivered pursuant to subsection 7.1(a) and (ii) the date two Business Days
after the delivery of such financial statements, 75% (or, if the Total Leverage
Ratio on the last day of such fiscal year shall be less than 5.75 to 1.0 and
the Bridge Take- Out Date has occurred, 50%) of such Excess Cash Flow shall be
applied toward the prepayment of the Loans and the permanent reduction of the
Revolving Credit Commitments in accordance with subsection 4.3(f).
(b) If, subsequent to the Closing Date, the Borrower or any
of its Subsidiaries shall issue any Capital Stock, then 100% of the Net Cash
Proceeds thereof shall, on the first Business Day after receipt thereof, be
applied toward the prepayment of the Loans and the permanent reduction of the
Revolving Credit Commitments in accordance with subsection 4.3(f), provided
that (A) in the case of any such issuance occurring at any time that no Default
or Event of Default has occurred and is continuing, the Borrower may apply the
Net Cash Proceeds thereof to repurchase Bridge Preferred Stock and, if the
Bridge Take-Out Date has not occurred prior to such time, Indebtedness under
the Subordinated Bridge Agreement, and (B) in the case of any such issuance
occurring (i) after the Bridge Take-Out Date, (ii) at a time when no Default or
Event of Default has occurred and is continuing and (iii) at a time when the
Total Leverage Ratio as at the end of the two consecutive fiscal quarters of
the Borrower for which financial statements have been delivered pursuant to
subsection 7.1 most recently ended prior to such time is less than 5.00:1.00,
the Borrower may apply a portion of the Net Cash Proceeds thereof to repurchase
Permanent Subordinated Indebtedness permitted to be so repurchased under the
Senior Subordinated Indenture at a premium of not greater than 1% so long as an
amount of such Net Cash Proceeds equal to the amount of such portion so applied
is simultaneously applied toward the prepayment of the Loans and the permanent
reduction of the Revolving Credit Commitments in accordance with subsection
4.3(f), and provided, further, that if no Default or Event of Default has
occurred and is continuing at the time of the receipt thereof, the Borrower
shall not be required to apply to prepayments under this clause (b) an
aggregate amount of up to $10,000,000 of Net Cash Proceeds from the exercise of
the Bridge Preferred Warrants.
(c) If, subsequent to the Closing Date, the Borrower or any
of its Subsidiaries shall receive Net Cash Proceeds from any asset sales or
other dispositions permitted by subsection 8.6(d), then 100% of such Net Cash
Proceeds shall on the first Business Day after receipt thereof, be applied
toward the prepayment of the Loans and the permanent reduction of the Revolving
Credit Commitments in accordance with subsection 4.3(f); provided that (i)
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such Net Cash Proceeds from any such asset sales or other dispositions shall
not be required to be so applied until the amount of such unapplied Net Cash
Proceeds exceeds $2,000,000 in the aggregate, at which time 100% of such
unapplied Net Cash Proceeds shall be applied immediately toward the prepayment
of the Loans and the permanent reduction of the Revolving Credit Commitments in
accordance with subsection 4.3(f) and (ii) in the case of any such disposition
made after the Bridge Take-Out Date, the Borrower may notify the Administrative
Agent in writing that it intends to use the Net Cash Proceeds from any such
asset sale or other disposition to acquire fixed or capital assets within 269
days of receipt of such Net Cash Proceeds, in which case the prepayment and
reduction otherwise required by this paragraph need not be made, but if such
Net Cash Proceeds are not so used within such 269-day period, such Net Cash
Proceeds shall be applied toward the repayment of the Loans and the permanent
reduction of the Revolving Credit Commitments in accordance with subsection
4.3(f) on the earlier of (x) the 269th day after receipt of such Net Cash
Proceeds and (y) the date on which the Borrower has reasonably determined that
such Net Cash proceeds shall not be so used; provided, further, that such Net
Cash Proceeds from any such asset sales or other disposition to the extent that
they may be used for the purposes described in clause (ii) of the immediately
preceding proviso within 269 days of receipt thereof shall be deposited with
the Administrative Agent which shall hold such Net Cash Proceeds in a cash
collateral account upon terms reasonably satisfactory for the period beginning
on the date of receipt thereof and ending on the date on which such Net Cash
Proceeds are used for the purposes described in clause (ii) of the immediately
preceding proviso or are applied toward the repayment of the Loans and the
permanent reduction of the Revolving Credit Commitments pursuant to such
clause.
(d) If, subsequent to the Closing Date, the Borrower or any
of its Subsidiaries shall receive any cash proceeds of any casualty or
condemnation with respect to any of its property or assets, then 100% of such
proceeds shall on the first Business Day after receipt thereof be deposited
with the Administrative Agent which shall hold such proceeds in a cash
collateral account upon terms reasonably satisfactory to it. From time to time
upon the request of the Borrower, the Administrative Agent shall release such
proceeds to the Borrower or such Subsidiary, as necessary, to pay for
replacement or rebuilding of the property lost or condemned. If such property
is not replaced or rebuilt within 179 days following the condemnation or
casualty or if the Borrower fails to notify the Administrative Agent in writing
on or before 179 days after such casualty or condemnation that the Borrower has
commenced the replacement or rebuilding of such property, then, in either case,
the Administrative Agent shall apply any amounts in the cash collateral account
toward the prepayment of the Loans and the permanent reduction of the Revolving
Credit Commitments in accordance with subsection 4.3(f).
(e) If, at any time during the Revolving Credit Commitment
Period, the Aggregate Outstanding Revolving Extensions of Credit with respect
to all Revolving Credit Lenders exceeds the aggregate Revolving Credit
Commitments then in effect, the Borrower shall, without notice or demand,
immediately repay the Revolving Credit Loans in an aggregate principal amount
equal to such excess, together with interest accrued to the date of such
payment or prepayment and any amounts payable under subsection 4.12, if any.
To the
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38
extent that after giving effect to any prepayment of the Revolving Credit Loans
required by the preceding sentence, the Aggregate Outstanding Revolving
Extensions of Credit with respect to all Revolving Credit Lenders exceeds the
aggregate Revolving Credit Commitments then in effect, the Borrower shall,
without notice or demand, immediately cash collateralize the then outstanding
L/C Obligations in an amount equal to such excess upon terms reasonably
satisfactory to the Administrative Agent. On the Business Day next succeeding
the date on which a payment has caused the Aggregate Outstanding Revolving
Extensions of Credit with respect to all Revolving Credit Lenders to be equal
to or less than the Revolving Credit Commitments then in effect, the
Administrative Agent shall return to the Borrower the cash used to cash
collateralize the then outstanding L/C Obligations pursuant to the preceding
sentence.
(f) Prepayments of the Loans and permanent reductions of the
Revolving Credit Commitments pursuant to subsections 4.3(a), (b), (c) and (d)
shall be applied, first, to payment of the Term Loans then outstanding and,
second, (to the extent that there are no Term Loans then outstanding) to
permanent reduction of the Revolving Credit Commitments then in effect.
Prepayments of the Term Loans pursuant to subsections 4.3(a), (b), (c) and (d)
shall be applied (x) pro rata (based on outstanding principal amount) to the
Tranche A Term Loans, the Tranche B Term Loans and the Tranche C Term Loans and
(y) to the respective installments of principal of the respective Term Loans in
the inverse order of the respective maturity dates thereof. Notwithstanding
the foregoing, so long as any amounts remain outstanding under the Tranche A
Term Loans, any Lender having a Tranche B Term Loan or a Tranche C Term Loan
outstanding may decline receipt of its share of any such prepayment to the
extent that the aggregate amount so declined does not exceed the aggregate
amount of Tranche A Loans outstanding at such time, and, if such Lender so
declines, such share shall be applied as an additional prepayment of the
Tranche A Term Loans in accordance with clause (y) of the immediately preceding
sentence. Any such Lender that wishes to decline receipt of its share of any
such prepayment shall promptly, and in any event no later than the date
specified for such prepayment, notify the Administrative Agent.
(g) Amounts prepaid on account of Term Loans pursuant to this
subsection may not be reborrowed.
4.4 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice
of such election, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans
by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans and ABR Loans may be converted as provided herein,
provided that (i) no Loan may be converted into a Eurodollar Loan when any
Event of Default has occurred and is continuing and the Administrative Agent
has or the Majority
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Lenders have determined that such a conversion is not appropriate and (ii) no
Loan may be converted into a Eurodollar Loan after the date that is one month
prior to the Revolving Credit Termination Date (in the case of conversions of
Revolving Credit Loans) or the date of the final installment of principal of
the Term Loans.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection
1.1, of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing and the Administrative Agent has or the
Majority Lenders have determined that such a continuation is not appropriate or
(ii) after the date that is one month prior to the Revolving Credit Commitment
Termination Date (in the case of conversions of Revolving Credit Loans) or the
date of the final installment of principal of the Term Loans and provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted
to ABR Loans on the last day of such then expiring Interest Period.
4.5 Minimum Amounts and Maximum Number of Tranches. All
borrowings, conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising (i) each Tranche shall be equal to $2,500,000 or
a whole multiple of $100,000 in excess thereof. In no event shall there be
more than (a) 20 Tranches outstanding at any time or (b) 10 Tranches in respect
of Revolving Credit Loans, 10 Tranches in respect of Tranche A Term Loans, 10
Tranches in respect of Tranche B Term Loans or 10 Tranches in respect of
Tranche C Term Loans outstanding at any time.
4.6 Computation of Interest and Fees. (a) Interest (except
as provided in the following sentence) and commitment and letter of credit fees
and commissions shall be calculated on the basis of a 360-day year for the
actual days elapsed. Interest on ABR Loans (when it is based upon the CIBC
Base Rate) shall be calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed. The Administrative Agent shall as
soon as practicable notify the Borrower and the Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from
a change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the
<PAGE> 46
41
request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Administrative Agent in determining any interest rate
pursuant to subsection 4.1(a) or (c).
4.7 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower in the
absence of manifest error) that, by reason of circumstances affecting
the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Lenders as soon as practicable thereafter. If such notice
is given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as ABR Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to ABR Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Loans to Eurodollar Loans.
4.8 Pro Rata Treatment and Payments. (a) Each borrowing of
Revolving Credit Loans by the Borrower from the Revolving Credit Lenders
hereunder shall be made, each payment by the Borrower on account of any
commitment fee in respect of the Revolving Credit Commitments hereunder shall
be allocated by the Administrative Agent, and any reduction of the Revolving
Credit Commitments of the Revolving Credit Lenders shall be allocated by the
Administrative Agent, pro rata according to the Revolving Credit Commitment
Percentages of the Revolving Credit Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on any
Revolving Credit Loan shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such Revolving
Credit Loans then held by the Revolving Credit Lenders. Each payment
(including each prepayment) by the Borrower on account of principal of and
interest on any Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans shall be allocated by the Administrative Agent pro rata according to the
respective outstanding principal amounts of such Tranche A Term Loans, Tranche
B Term Loans or Tranche C Term Loans then held by the Term Loan Lenders. All
payments (including prepayments) to be made by the Borrower hereunder and under
any Notes, whether on account of principal, interest, fees, L/C Reimbursement
Obligation or otherwise, shall be made without set-off or counterclaim and
shall be made prior to 12:00 Noon, New
<PAGE> 47
42
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders holding the relevant Loans or the L/C Participants, as
the case may be, at the Administrative Agent's office specified in subsection
11.2, in Dollars and in immediately available funds. Payments received by the
Administrative Agent after such time shall be deemed to have been received on
the next Business Day. If any payment hereunder (other than payments on
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
the maturity of such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business Day, the
maturity of such payment shall be extended to the next succeeding Business Day
(and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension) unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its Commitment Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent, and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If such amount is not made available
to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans
hereunder, on demand, from the Borrower.
4.9 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to subsection 4.12.
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43
4.10 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any Application or any Eurodollar Loan made by it, or change
the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by subsection 4.11 and changes
in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefore, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower,
through the Administrative Agent, of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to
this subsection submitted by such Lender, through the Administrative Agent, to
the Borrower shall be conclusive in the absence of manifest error.
<PAGE> 49
44
This covenant shall survive the termination of this Agreement and the payment
of the Notes and all other amounts payable hereunder.
4.11 Taxes. (a) All payments made by the Borrower under
this Agreement, any Note or any Application shall be made free and clear of,
and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement, any Notes or any Application). If any such non-excluded taxes,
levies, imposts, duties, charges, fees deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder or under any Note or any
Application, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, the Notes and the Applications, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of America or
a state thereof if such Lender fails to comply with the requirements of
paragraph (b) of this subsection. Whenever any Non-Excluded Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of such Lender,
as the case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative
Agent (A) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, or successor applicable form, as the case
may be, and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
<PAGE> 50
45
(ii) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification on or
before the date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested
by the Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 11.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a
Participant such Participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.
4.12 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market. This covenant shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
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46
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower
hereby represents and warrants to the Administrative Agent and each Lender
that:
5.1 Financial Condition. (a) The consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at December 31, 1995 and
the related consolidated statements of income and of cash flows for the fiscal
year ended on such date, reported on by Deloitte & Touche, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at March 31, 1996 and the related unaudited
consolidated statements of income and of cash flows for the three-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the three-month period
then ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein). Neither the Borrower nor any of its
consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign
currency swap or exchange transaction, which is not reflected in the foregoing
statements or in the notes thereto. During the period from December 31, 1995
to and including the Closing Date there has been no sale, transfer or other
disposition by the Borrower or any of its consolidated Subsidiaries of any
material part of its business or property and no purchase or other acquisition
of any business or property (including any capital stock of any other Person)
material in relation to the consolidated financial condition of the Borrower
and its consolidated Subsidiaries at December 31, 1995.
(b) The Division financial statements referred to in Section
3.3 of the Purchase Agreement, copies of which have heretofore been furnished
to each Lender, present fairly the consolidated financial condition of the
business, operations and assets of the Division as at the respective dates
thereof, and the consolidated results of operations and consolidated cash flows
thereof for the fiscal periods then ended.
(c) The pro forma balance sheet of the Borrower and its
consolidated Subsidiaries (the "Pro Forma Balance Sheet"), copies of which have
heretofore been furnished to each Lender, is the balance sheet of the Borrower
and its consolidated Subsidiaries as of June 30, 1996 (the "Pro Forma Date"),
adjusted to give effect (as if such
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47
events had occurred on such date) to (i) the consummation of the Acquisition,
(ii) the repayment in full of all loans under, and all other amounts due in
respect of, the Existing Credit Agreement, (iii) the making of the Loans and
other extensions of credit hereunder to be made on the Closing Date and the
application of the proceeds thereof as contemplated hereby, (iv) the incurrence
of the bridge indebtedness under the Subordinated Bridge Agreement contemplated
by subsection 6.1(j)(i) and the incurrence of the Bridge Preferred Stock
contemplated by subsection 6.1(j)(ii), (v) the repayment of the Senior Notes
and any other Indebtedness required to be repaid in order for no Default or
Event of Default to exist on the Closing Date and (vi) the payment of the fees
and expenses payable in connection with the consummation of the Acquisition and
the financing thereof.
5.2 No Change. Since May 31, 1996 (in the case of the
Division) or March 31, 1996 (in the case of the Borrower and its Subsidiaries)
(a) there has been no development or event which has had or could reasonably be
expected to have a Material Adverse Effect and (b) other than as disclosed on
Schedule 5.2, no dividends or other distributions have been declared, paid or
made upon the Capital Stock of the Borrower nor has any of the Capital Stock of
the Borrower been redeemed, retired, purchased or otherwise acquired for value
by the Borrower or any of its Subsidiaries.
5.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction set forth
on Schedule 5.3 on the date hereof and, as such Schedule may be supplemented
pursuant to subsection 11.8, set forth thereon on and after the Closing Date,
which includes each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification, except to
the extent that the failure to be so qualified or in good standing could not,
in the aggregate, reasonably be expected to have a Material adverse Effect and
(d) is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations.
(a) Each of the Borrower and the other Loan Parties has the corporate power
and authority, and the legal right, to make, deliver and perform those Loan
Documents to which it is a party and, in the case of the Borrower, to borrow
hereunder, and each of the Borrower and the other Loan Parties has taken all
necessary corporate action to authorize (in the case of the Borrower) the
borrowings on the terms and conditions of this Agreement and to authorize the
execution, delivery and performance of each Loan Document to which it is a
party.
(b) No consent or authorization of, approval by, notice to,
filing with or other act by or in respect of, any Governmental Authority or any
other Person is required to be obtained or made by the Borrower or any other
Loan Party in connection with the
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48
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Loan Document to which it is a
party.
(c) This Agreement has been, and other Loan Document to which
it is a party will be, duly executed and delivered on behalf of the Borrower
and each other Loan Party which is a party thereto.
(d) This Agreement constitutes, and each other Loan Document
to which it is a party when executed and delivered will constitute, a legal,
valid and binding obligation of the Borrower or each Loan Party, as the case
may be, enforceable against the Borrower or such Loan Party in accordance with
its terms, except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to the enforcement
of creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
5.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of the Borrower or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien on any of its
or their respective properties or revenues pursuant to any such Requirement of
Law or Contractual Obligation.
5.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
5.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
5.8 Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has good record and valid title in fee simple to, or a
leasehold interest enforceable in accordance with outdoor advertising industry
standards in, all its real property, and good title to, or a leasehold interest
enforceable in accordance with outdoor advertising industry standards in, all
its other property, and none of such property is subject to any Lien except as
permitted by subsection 8.3, and except to the extent, in the case of such real
property other than that required to be subject to a Mortgage hereunder, that
the failure to have such good title or leasehold interest, as the case may be,
could not reasonably be expected to have a Material Adverse Effect.
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5.9 Advertising Displays. Schedule 5.9 sets forth, under the
heading "Locations and Leases", on the date hereof and, as supplemented
pursuant to subsection 11.8, on the Closing Date, (i) the location by street of
each Advertising Display of the Borrower or any of its Subsidiaries, (ii) the
location and legal description of all real property owned by the Borrower or
any of its Subsidiaries and (iii) each lease to which the Borrower or any of
its Subsidiaries is a party as lessee. Schedule 5.9 sets forth under the
heading "Jurisdictions", on the date hereof and, as supplemented pursuant to
subsection 11.8, on the Closing Date, the county and state where each
Advertising Display of the Borrower is located.
5.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
5.11 Taxes. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all tax returns which, to the knowledge of the
Borrower, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of the Borrower or its Subsidiaries, as the case may be); no tax
Lien has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
5.12 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
Regulations of such Board of Governors. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U.
5.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Single
Employer Plan, and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code where failure to comply could
reasonably be expected to result in a liability to the Borrower or any Commonly
Controlled Entity. No termination of a Single Employer Plan has occurred, and
no Lien on the property, assets or revenues of the Borrower or any Commonly
Controlled Entity in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on
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50
which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits. Neither the Borrower
nor any Commonly Controlled Entity has had a complete or partial withdrawal
from any Multiemployer Plan, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization, Insolvent or terminating where any
liability could result from any such event. Notwithstanding the foregoing,
there shall be no breach of the representations set forth in this subsection
hereof unless the amount of any liability of the Borrower or any Commonly
Controlled Entity which arises or which could be reasonably expected to arise
in connection with such representation, individually or in the aggregate,
exceeds $500,000.
5.14 Investment Company Act; Other Regulations. The Borrower
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
5.15 Subsidiaries. Schedule 5.15 sets forth each of the
Subsidiaries of the Borrower on the date hereof and, as such Schedule may be
supplemented pursuant to subsection 11.8, on the Closing Date.
5.16 Purpose of Loans. The proceeds of the Loans shall be
used by the Borrower for:
(a) working capital purposes in the ordinary course of
business;
(b) retirement of the Indebtedness of the Borrower referred
to in subsection 6.1(k) and any other Indebtedness required to be
repaid on the Closing Date in order for no Default or Event of Default
to exist and notified to the Administrative Agent prior thereto; and
(c) the Acquisition.
5.17 Environmental Matters. (a) The facilities and
properties owned, leased or operated by the Borrower or any of its Subsidiaries
(the "Properties") do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which (i)
constitute or constituted a violation of, or (ii) could reasonably be expected
to give rise to liability under, any Environmental Law except in either case
insofar as such violation or liability, or any aggregation thereof, could not
reasonably be expected to have a Material Adverse Effect.
(b) The Properties and all operations at the Properties are
in compliance, and have been in compliance, in all material respects with all
applicable Environmental Laws,
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51
and there is no contamination at, under or about the Properties or violation of
any Environmental Law with respect to the Properties or the business operated
by the Borrower or any of its Subsidiaries (the "Business") which could
materially interfere with the continued operation of the Properties or
materially impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Borrower have knowledge or reason to believe that any such notice will
be received or is being threatened except insofar as such notice or threatened
notice, or any aggregation thereof, does not involve a matter or matters that
is or could reasonably be expected to have a Material Adverse Effect.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could reasonably be expected to
give rise to liability under, any applicable Environmental Law except insofar
as any such violation or liability referred to in this paragraph, or any
aggregation thereof, could not reasonably be expected to have Material Adverse
Effect.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named
as a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding
under any Environmental Law with respect to the Properties or the Business
except insofar as such proceeding, action, decree, order or other requirement,
or any aggregation thereof, could not reasonably be expected to have a Material
Adverse Effect.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from
or related to the operations of the Borrower or any Subsidiary in connection
with the Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could reasonably give rise to liability
under Environmental Laws except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, could not reasonably
be expected to have Material Adverse Effect.
5.18 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968.
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5.19 Solvency. On and as of the Closing Date, before and
after giving effect to the Acquisition and the other transactions contemplated
hereby and thereby, the Borrower will be Solvent.
5.20 Material Agreements. Set forth on Schedule 5.20 are all
the indentures, loan or credit agreements, leases, guarantees, mortgages,
security agreements, bonds, notes and other agreements or instruments, and
orders, writs, judgments, awards, injunctions and decrees, which affect or
purport to affect the Borrower's right to borrow money or to undertake and
perform the Borrower's obligations under the Loan Documents.
5.21 Purchase Agreement. Each of the Lenders and the
Administrative Agent has received a complete copy of the Purchase Agreement
(including all exhibits, schedules and disclosure letters referred to therein
or delivered pursuant thereto, if any (other than any schedules thereto which
are permitted to be updated on or before the Closing Date in accordance with
the provisions of the Purchase Agreement, provided that complete copies of such
updated schedules shall be delivered to each of the Lenders on or prior to the
Closing Date)) and all amendments thereto, waivers relating thereto and other
side letters or agreements affecting the terms thereof. Except for revised
schedules and other agreements supplementing the Purchase Agreement that are
expressly contemplated by the terms thereof, none of such documents and
agreements has been amended or supplemented, nor have any of the provisions
thereof been waived, in any case in any material respect. The Purchase
Agreement has been duly executed and delivered by the parties thereto and is in
full force and effect. The representations and warranties of the Borrower and
the other parties to the Purchase Agreement are true and correct in all
material respects on the Closing Date as if made on and as of such date
(disregarding, for purposes of this Agreement, any references in such
representations to the phrases "to Seller's knowledge" and "of which we are
aware" (or words of similar purport)). Such representations and warranties,
together with the definitions of all defined terms used therein, are by this
reference deemed incorporated herein mutatis mutandis, and each Lender is
entitled to rely on the accuracy of such representations and warranties.
5.22 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). 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, except for
such claims which, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, nor does the Borrower know of any valid basis for any
such claim. The use of such Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person, except for such
infringements that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
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5.23 No Material Misstatements. The information, reports,
financial statements, exhibits and schedules furnished by or on behalf of the
Borrower and each other Loan Party to the Administrative Agent and the Lenders
in connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto do not contain, and will not contain as of the
Closing Date, any material misstatement of fact and do not, taken as a whole,
omit, and will not, taken as a whole, omit as of the Closing Date, to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading. It is
understood that no representation or warranty is made concerning the forecasts,
estimates, pro forma information, projections and statements as to anticipated
future performance or conditions, and the assumptions on which they were based,
contained in any such information, reports, financial statements, exhibits or
schedules, except that as of the date such forecasts, estimates, pro forma
information, projections and statements were generated, (a) such forecasts,
estimates, pro forma information, projections and statements were based on the
good faith assumptions of the management of the Borrower, as the case may be,
and (b) such assumptions were believed by such management to be reasonable.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Loans. The agreement of each
Lender to make any extension of Credit on the Closing Date shall be subject to
the satisfaction of the following conditions precedent on or prior to September
30, 1996:
(a) Documentation. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by the Borrower,
the Administrative Agent and the Lenders and (ii) for the account of
each Lender, which has requested a Note pursuant to any of subsections
2.2, 2.7, 2.8 and 2.9, a Revolving Credit Note, a Tranche A Term Note,
a Tranche B Term Note or a Tranche C Term Note, as the case may be,
each conforming to the requirements hereof and executed and delivered
by a duly authorized officer of the Borrower, (iii) the Guarantee and
Collateral Agreement, executed and delivered by a duly authorized
officer of each party thereto, with a counterpart or a conformed copy
for each Lender, (iv) each of the Fee Mortgages, each executed and
delivered by a duly authorized officer of the party thereto, with a
counterpart or a conformed copy for each Lender and (v) each of the
Leasehold Mortgages, each executed and delivered by a duly authorized
officer of the party thereto, with a counterpart or a conformed copy
for each Lender.
(b) Existing Mortgages. The Administrative Agent shall have
received (i) an endorsement to the existing title insurance policies
updating the effective date and amending the description of the
insured Mortgages executed and delivered pursuant to the Existing
Credit Agreement to include the applicable Mortgage Supplement and
(ii) with a counterpart for each Lender, a Mortgage Supplement with
respect to each such Mortgage, duly executed and delivered by a duly
authorized officer of the Borrower.
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(c) Purchase Agreement. The Administrative Agent shall have
received, with a copy for each Lender, a true and correct copy
of all closing documents delivered pursuant to the Purchase
Agreement in connection with the closing of the Acquisition,
all of which shall be consistent with the Purchase Agreement.
The Administrative Agent shall have received, with a copy for
each Borrower, a certificate of a Responsible Officer of the
Borrower certifying that the only condition to the
consummation of the Acquisition (other than the Houston
Acquisition to the extent not required under the Purchase
Agreement to be concurrently consummated) remaining to be
satisfied under the Purchase Agreement (which condition shall
be satisfied substantially simultaneously with the
consummation of the transactions contemplated hereby) is the
delivery of funds sufficient to pay the amount of the purchase
price required pursuant to the Purchase Agreement to be paid
on the closing date of the Acquisition. Simultaneously with
the consummation of the transactions contemplated hereby, the
Acquisition (other than the Houston Acquisition to the extent
not required under the Purchase Agreement to be concurrently
consummated) shall have been completed in accordance with the
terms of the Purchase Agreement, without any waiver or
modification of any of the terms thereof.
(d) Opinions. The Administrative Agent and each Lender
shall have received the following executed legal opinions
dated the Closing Date:
(i) the executed legal opinion of Powell,
Goldstein, Frazer & Murphy, counsel to the Borrower and the
other Loan Parties, in substantially the form of Exhibit D-1
hereto; and
(ii) the executed legal opinion of special local
counsel to the Borrower in each jurisdiction where any Loan
Party is incorporated, has its principal place of business or
has material Collateral (with exceptions agreed to by the
Administrative Agent), substantially in the form attached
hereto as Exhibit D-2.
(e) Authorizing Actions. The Administrative Agent shall have
received, with a copy for each Lender, a copy of the resolutions, in
form and substance reasonably satisfactory to the Administrative
Agent, of the Boards of Directors of the Borrower and each other Loan
Party authorizing the (i) execution, delivery and performance of the
Loan Documents to which it is a party and the creation and perfection
of any Liens contemplated thereby and (ii) in the case of the
Borrower, the execution, delivery and performance of the Purchase
Agreement and all closing documents delivered in connection therewith,
certified by the Secretary or an Assistant Secretary of the Borrower
or such Loan Party, as the case may be, as of the Closing Date, which
certificate shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded as of the date of
such certificate.
(f) Incumbency Certificates. The Administrative Agent shall
have received, with a copy for each Lender, a certificate of the
Secretary or Assistant Secretary of
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each of the Borrower and each other Loan Party dated the Closing Date,
as to the incumbency and signature of each of the officers signing the
Loan Documents to which it is a party and any other instrument or
document to which it is a party, together with evidence of the
incumbency of such Secretary or Assistant Secretary.
(g) Schedule of Uses. The Administrative Agent shall have
received, with a copy for each Lender, a schedule of uses setting
forth the application of the proceeds of the Loans and the other
amounts received or paid in connection with the Acquisition and the
financing thereof, and such schedule shall be consistent with Schedule
6.1(g) hereto, subject to adjustments contemplated by the terms of the
Purchase Agreement.
(h) Closing Certificates. The Administrative Agent shall
have received, with a copy for each Lender, a closing certificate of
the Borrower and each other Loan Party, in form and substance
reasonably satisfactory to the Administrative Agent and dated the
Closing Date, to which shall be attached, among other things, true and
complete copies of the certificate of incorporation and by-laws of the
Borrower and each other Loan Party.
(i) Lien Perfection. The Administrative Agent shall have
received evidence in form and substance reasonably satisfactory to it
(i) that all filings, recordings, registrations and other actions,
including, without limitation the filing of duly executed financing
statements on form UCC-1 and the delivery of stock certificates and
related blank stock powers, necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created by the
Security Documents shall have been completed and (ii) of the payment
of any necessary fees, taxes or expenses relating thereto.
(j) Proceeds of Subordinated Bridge Loan and Bridge Preferred
Stock. The Borrower shall have received not less than (i)
$240,000,000 in gross cash proceeds of loans to be made to it under the
Subordinated Bridge Agreement by CIBC Inc. and certain other lenders,
(ii) $165,000,000 of gross cash proceeds from the issuance to CIBC WG
Argosy Merchant Fund 2, L.L.C., and certain other purchasers of its
Bridge Preferred Stock and (iii) in the event that the Total Leverage
Ratio on the Closing Date would otherwise exceed 6.50 to 1.00, such
additional amount of gross cash proceeds of Bridge Preferred Stock
issued to CIBC WG Argosy Merchant Fund 2, L.L.C. or other purchasers
and/or common stock issued to William S. Levine and/or Arthur R. Moreno
or other purchasers (no more than $60,000,000 of which shall
constitute gross proceeds of Bridge Preferred Stock) as shall be
necessary to cause the Total Leverage Ratio on the Closing Date to be
equal to or less than 6.50 to 1.00, and all the terms and conditions of
the Indebtedness under the Subordinated Bridge Agreement and of the
Bridge Preferred Stock (including, without limitation, terms and
conditions relating to the interest and dividend rates, fees,
amortization, maturity, subordination, covenants, events of default and
remedies) shall be reasonably satisfactory in all material respects to
the Lenders.
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(k) Purchase of Senior Notes. The Administrative Agent shall
have received, with a copy for each Lender, evidence reasonably
satisfactory to it that the Borrower shall have purchased the Senior
Notes pursuant to a tender offer at a price reasonably satisfactory to
the Lenders (and, if fewer than 100% of all outstanding Senior Notes
shall have been so purchased, the remaining Senior Notes shall have
been defeased in accordance with the terms of the Senior Note
Indenture).
(l) Title Insurance Policy. The Administrative Agent shall
have received in respect of each parcel covered by each Fee Mortgage
and Leasehold Mortgage a 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 satisfactory to the
Administrative Agent; (ii) insure that the Mortgage insured thereby
creates a valid first Lien on such parcel free and clear of all
defects and encumbrances, except as may be approved by the
Administrative Agent; (iii) name the Administrative Agent for the
benefit of the Lenders as the insured thereunder; (iv) be in the form
of ALTA Loan Policy - 1992; (v) contain such endorsements (to the
extent generally available in the applicable jurisdiction) and
affirmative coverage as the Administrative Agent may request and (vi)
be issued by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or
reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory to it
that all premiums in respect of each such policy, and all charges for
mortgage recording tax, if any, have been paid.
(m) Flood Insurance. If requested by the Administrative Agent, the
Administrative Agent shall have received (i) a policy of flood
insurance which (A) covers any parcel of improved real property
located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards
and in which flood insurance has been made available under the Flood
Insurance Act of 1968, which is encumbered by any Mortgage, (B) is
written in an amount not less than the outstanding principal amount of
the indebtedness secured by such Mortgage which is reasonably
allocable to such real property or the maximum limit of coverage made
available with respect to the particular type of property under the
National Flood Insurance Act of 1968, whichever is less, and (C) has a
term ending not earlier than the maturity of the indebtedness secured
by such Mortgage and (ii) confirmation that the Company has received
the notice required pursuant to Section 208(e)(3) of Regulation H of
the Board of Governors of the Federal Reserve System.
(n) Copies of Documents. The Administrative Agent shall have
received a copy of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies referred to in
subsection 6.1(p) and a copy, certified by such parties as the
Administrative Agent may deem appropriate, of all other documents
affecting the property covered by each Mortgage.
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(o) Surveys. The Administrative Agent shall have received,
and the title insurance company issuing the policy referred to in
subsection 6.1(p) (the "Title Insurance Company") shall have received,
maps or plats of an as-built survey of the sites of the property
covered by each Fee Mortgage and Leasehold Mortgage certified to the
Administrative Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the Administrative
Agent and the Title Insurance Company by an independent professional
licensed land surveyor satisfactory to the Administrative Agent and
the Title Insurance Company, which maps or plats and the surveys on
which they are based shall 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 or necessary or desirable to use
the sites; (iv) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting the site, 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.
(p) Insurance. The Administrative Agent shall have received
evidence in form and substance reasonably satisfactory to it
that all of the requirements relating to insurance of subsection 7.5 of
the Guarantee and Collateral Agreement and of each of the Mortgages
shall have been satisfied.
(q) Environmental and Other Disclosure. The Administrative
Agent shall not have received information not disclosed to it prior to
the date hereof, including any information contained in any of the
environmental assessments referred to below, that (giving effect to
any exclusions, in accordance with the provisions of Section 10.15(b)
of the Purchase Agreement, of office and production facilities from
the real property that would otherwise be the subject of the
Acquisition) could reasonably be expected to have a Material Adverse
Effect or a material adverse effect on the ability of the Borrower to
remain in compliance with, or perform its obligations under, this
Agreement. The Administrative Agent shall have received the results
of "Phase I" environmental assessments with respect to all real
property on which the Borrower or its Subsidiaries has offices and/or
production facilities and any other real property owned or leased by
any of them that is located at a site that is known to involve
material environmental liability.
(r) Fees. The Administrative Agent shall have received the
fees to be received on the Closing Date referred to in subsection
2.4(b).
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(s) Existing Credit Agreement. All loans outstanding under
the Existing Credit Agreement on the Closing Date shall have been paid
in full and all interest, fees and other amounts accrued and unpaid
under the Existing Credit Agreement on the Closing Date shall have
been paid in full.
6.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and each other
Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on
and as of such date except to the extent such representations and
warranties relate solely to an earlier date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
Each borrowing by and Letter of Credit issued on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such borrowing or issuance that the conditions contained in this
subsection have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, on and after the Closing Date
and so long thereafter as the Commitments remain in effect, any Loan or any
Letter of Credit remains outstanding and unpaid or any other amount is owing to
any Lender or the Administrative Agent hereunder, the Borrower 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 Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Deloitte & Touche or other independent certified
public accountants of nationally recognized standing; and
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(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 7.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except
as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 7.1(a) and 7.1(b), a certificate
of a Responsible Officer (a "Compliance Certificate") (i) stating
that, to the best of such Officer's knowledge, the Borrower during
such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement
and in other Loan Documents to which it is a party to be observed,
performed or satisfied by it, and that such Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate, (ii) setting forth in reasonable detail calculations
required to determine compliance with the covenants set forth in
subsections 8.1, 8.5(c), 8.6(b), 8.6(d), 8.7, 8.9, 8.10(c) and 8.10(d)
(x) for the most recently completed fiscal quarter, (y) for the
corresponding fiscal quarter during the preceding fiscal year and (z)
as budgeted pursuant to subsection 7.2(c)(i) for the most recently
completed fiscal quarter and (iii) setting forth in reasonable detail
the Borrower's consolidated gross revenues, net revenues and cash flow
(x) for the most recently completed fiscal quarter, (y) for the
corresponding fiscal quarter during the preceding fiscal year and (z)
as budgeted pursuant to subsection 7.2(c)(i) for the most recently
completed fiscal quarter;
(c) not later than thirty days prior to the end of each
fiscal year of the Borrower, a copy of the projections by the Borrower
setting forth in reasonable detail the (i) quarterly and annual
operating budget and cash flow budget of the Borrower and its
Subsidiaries for the succeeding fiscal year, including, without
limitation, the
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Borrower's projected consolidated gross revenues, net revenues
and cash flow for the succeeding fiscal year and (ii) quarterly and
annual calculations required to determine compliance by the Borrower
and its Subsidiaries, based on the projections provided pursuant to
subsection 7.2(c)(i), with the covenants set forth in subsections 8.1,
8.5(c), 8.6(b), 8.6(d), 8.7, 8.9, 8.10(c) and 8.10(d), such projections
and calculations to be accompanied by a certificate of a Responsible
Officer to the effect that such projections and calculations have been
prepared on the basis of sound financial planning practice and that
such Officer believes, in good faith, that such projections and
calculations are based on reasonable assumptions;
(c) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to its
stockholders, and within five days after the same are filed, copies of
all financial statements and reports which the Borrower may make to,
or file with, the SEC or any successor or analogous Governmental
Authority; and
(d) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
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 obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries and except to the extent that the
failure to so pay such obligations could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, as the case may be; provided,
however, that any failure to comply with the provisions of this subsection with
respect to Indebtedness or Guarantee Obligations shall not constitute a Default
under Section 9(d) unless and until such failure to comply herewith with
respect to Indebtedness or Guarantee Obligations would constitute a Default
under Section 9(e).
7.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted by it
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 its business except
as otherwise permitted pursuant to subsection 8.5; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Maintain the
condition of all property useful and necessary in its business in accordance
with standards existing in the outdoor advertising business; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies engaged in the
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same or a similar business; and furnish to each Lender, upon written request,
full information as to the insurance carried.
7.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities; and
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
7.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower 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, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $500,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to 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 Plan, the creation of any Lien in favor of the PBGC
or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan, provided, however, that no
such notice shall be required if individually or in the aggregate the
foregoing events could not be reasonably expected to result in the
imposition of a Lien on the property, assets or revenues of the
Borrower or any Commonly Controlled Entity or liability to the
Borrower or any Commonly Controlled Entity in excess of $500,000; and
<PAGE> 67
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(e) any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
7.8 Environmental Laws. (a) Comply in all material
respects with, and require compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and require that all tenants
and subtenants obtain and comply in all material respects with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except to the extent that failure to
do so could not be reasonably expected to have a Material Adverse Effect.
(b) Promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of such proceedings
could not be reasonably expected to have a Material Adverse Effect.
7.9 Lease Renewals. Use its best efforts upon expiry of all
existing leases that do not automatically renew and consistent with industry
practice to become, as soon as practicable following the Closing Date, the
tenant under all leases that are part of the assets acquired pursuant to the
Acquisition with respect to which the Borrower or any Subsidiary shall not have
become the tenant on the Closing Date.
7.10 Additional Collateral. (a) With respect to any assets
(or any interest therein) acquired after the Closing Date by the Borrower or
any of its Subsidiaries, promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the Administrative Agent such
amendments to the relevant Security Documents or such other documents as the
Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a Lien on such assets (or
such interest therein), (ii) take all actions necessary or advisable to cause
such Lien to be duly perfected in accordance with all applicable Requirements
of Law, including, without limitation, the filing of financing statements and
the recording of Mortgages in such jurisdictions as may be requested by the
Administrative Agent, (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described in
clauses (i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent such surveys, title insurance and flood insurance as the
Administrative Agent shall reasonably request.
(b) With respect to any Person that, subsequent to the
Closing Date, becomes a Subsidiary, promptly upon the request of the
Administrative Agent: (i) execute and deliver to the Administrative Agent, for
the benefit of the Lenders, such amendments to the
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63
Guarantee and Collateral Agreement as the Administrative Agent shall deem
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a Lien on the all of the Capital Stock, in the case of a domestic
Subsidiary, and 66% of the Capital Stock, in the case of a foreign Subsidiary,
of such Subsidiary which is owned by the Borrower or any of its Subsidiaries,
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Borrower or such Subsidiary, as the
case may be, (iii) in the case of any such domestic Subsidiary, cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, in
each case pursuant to an annex to the Guarantee and Collateral Agreement or
otherwise pursuant to documentation which is in form and substance satisfactory
to the Administrative Agent, and (B) to take all actions necessary or advisable
to cause the Lien created by the Guarantee and Collateral Agreement to be duly
perfected in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such jurisdictions as
may be requested by the Administrative Agent and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described in clauses (i), (ii) and (iii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
7.11 Key Man Life Insurance. Maintain in full force and
effect a "key man" life insurance policy covering Arthur R. Moreno in an amount
not less than $5,000,000, the proceeds of which are assigned to the
Administrative Agent, for the benefit of the Lenders, on terms satisfactory to
the Administrative Agent.
7.12 Interest Rate Protection. No later than 90 days
following the Closing Date, enter into Hedging Agreements which shall provide
interest rate protection in respect of at least $265,000,000 of Indebtedness of
the Borrower, which shall be in form and substance reasonably satisfactory to
the Administrative Agent and for a term of at least two years.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, on and after the Closing Date
and so long thereafter as the Commitments remain in effect, any Loan or any
Letter of Credit remains outstanding and unpaid or any other amount is owing to
any Lender or the Administrative Agent hereunder, the Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly:
8.1 Financial Condition Covenants.
<PAGE> 69
64
(a) Maintenance of Total Leverage Ratio. Permit the Total
Leverage Ratio as at the last day of any fiscal quarter ending during
any period set forth below to be more than the ratio set forth
opposite such period below:
Period Total Leverage Ratio
------ --------------------
Closing Date - 12/30/96 6.50 to 1.0
12/31/96 - 6/29/97 6.00 to 1.0
6/30/97 - 12/30/97 5.75 to 1.0
12/30/97 - 6/29/98 5.25 to 1.0
6/30/98 - 12/30/98 4.75 to 1.0
12/31/98 - 6/29/99 4.25 to 1.0
6/30/99 - 12/30/99 4.00 to 1.0
12/31/99 and thereafter 3.50 to 1.0
(b) Maintenance of Senior Leverage Ratio. Permit the Senior
Leverage Ratio as at the last day of any fiscal quarter ending during
any period set forth below to be more than the ratio set forth
opposite such period below:
Period Senior Leverage Ratio
------ ---------------------
Closing Date - 12/30/96 4.50 to 1.0
12/31/96 - 6/29/97 4.25 to 1.0
6/30/97 - 12/30/97 4.00 to 1.0
12/30/97 - 6/29/98 3.75 to 1.0
6/30/98 - 12/30/98 3.50 to 1.0
12/31/98 - 6/29/99 3.25 to 1.0
6/30/99 and thereafter 3.00 to 1.00
(c) Interest Coverage. Permit, as at the last day of (i) the
first full quarter following the Closing Date, (ii) the first two
consecutive full quarters following the Closing Date, (iii) the first
three consecutive full quarters following the Closing Date and (iv)
any period of four consecutive fiscal quarters thereafter, the ratio
of (x) Consolidated Operating Cash Flow for such period to (y)
Consolidated Interest Expense for such period to be less than the
ratio set forth below opposite the period which includes the last day
of such period:
Period Interest Coverage Ratio
------ -----------------------
Closing Date - 12/30/98 2.00 to 1.0
12/31/98 - 12/30/99 2.25 to 1.0
12/31/99 and thereafter 2.50 to 1.0
(d) Fixed Charge Coverage. Permit, as at the last day of (i)
the first two consecutive full quarters following the Closing Date,
(iii) the first three consecutive
<PAGE> 70
65
full quarters following the Closing Date and (iv) any period of
four consecutive fiscal quarters thereafter, the ratio of (x)
Consolidated Operating Cash Flow for such period to (y) Consolidated
Fixed Charges for such period to be less than 1.05:1.0.
(e) Tobacco Revenues Ratio. Permit for any twelve-month
period ending on the Closing Date or on the last day of any fiscal
quarter of the Borrower ending thereafter (on a pro forma basis
assuming the Acquisition had occurred on the first day of such period
in the case of any such period including periods prior to the Closing
Date), the percentage represented by (i) the Tobacco Advertising
Revenues of the Borrower and its Subsidiaries for such fiscal year of
(ii) the net revenues derived from all Advertising Displays by the
Borrower and its Subsidiaries for such fiscal year to exceed 15%.
8.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) until the Closing Date, Indebtedness of the Borrower in
respect of the Senior Notes;
(c) Indebtedness of the Borrower to any Subsidiary Guarantor
and of any Subsidiary to the Borrower or any other Subsidiary
Guarantor;
(d) Indebtedness of a corporation which becomes a Subsidiary
after the Closing Date, provided that (i) such Indebtedness existed at
the time such corporation became a Subsidiary and was not created in
anticipation thereof and (ii) immediately after giving effect to the
acquisition of such corporation by the Borrower no Default or Event of
Default shall have occurred and be continuing, and any refinancings,
refundings, renewals or extensions thereof;
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 8.2 and any refinancings, refundings, renewals or extensions
thereof, in aggregate principal amounts not to exceed the amounts set
forth thereon in respect thereof, except that all Indebtedness which
is designated on such Schedule as Indebtedness to be paid on the
Closing Date shall be paid on the Closing Date;
(f) Indebtedness under Hedging Agreements entered into (i) in
accordance with the requirements of subsection 7.11 or (ii) in the
ordinary course of business; and
(g) Indebtedness under the Subordinated Bridge Agreement or
the Permanent Subordinated Indebtedness, in an aggregate principal
amount not to exceed $240,000,000 at any time outstanding.
<PAGE> 71
66
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 or other governmental
charges not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) landlords', 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 more than 60
days or which are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, zoning or restrictions and
other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do
not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on
Schedule 8.3, securing Indebtedness permitted by subsection 8.2(e),
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;
(g) Liens on the property or assets of a corporation which
becomes a Subsidiary after the Closing Date securing Indebtedness
permitted by subsection 8.2(d), provided that (i) such Liens existed
at the time such corporation became a Subsidiary and were not created
in anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of such corporation after the time such corporation
becomes a Subsidiary, and (iii) the amount of Indebtedness secured
thereby is not increased; and
(h) Liens created pursuant to the Security Documents.
8.4 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation.
<PAGE> 72
67
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, or make any material change in its present method of
conducting business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
one or more Wholly Owned Subsidiaries of the Borrower (provided that
the Wholly Owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation);
(b) any Wholly Owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other Wholly Owned
Subsidiary of the Borrower; and
(c) the Borrower or any of its Subsidiaries may enter into
any merger, consolidation or amalgamation necessary to effect a
Permitted Acquisition.
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, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person other
than the Borrower or any Wholly Owned Subsidiary, except:
(a) the sale or other disposition of property in the
ordinary course of business;
(b) the exchange, in the ordinary course of the outdoor
advertising business, of any interest of the Borrower or any
of its Subsidiaries in any Advertising Display or Displays for
a similar interest in an Advertising Display or Displays of a
Person other than the Borrower or such Subsidiary; provided
that (i) the aggregate fair market value (as determined in
good faith by the Board of Directors of the Borrower) of the
Advertising Display or Displays being transferred by the
Borrower or such Subsidiary is not greater than the aggregate
fair market value (as determined in good faith by the Board of
Directors of the Borrower) of the Advertising Display or
Displays received by the Borrower or such Subsidiary in such
exchange and (ii) the aggregate fair market value (as
determined in good faith by the Board of Directors of the
Borrower) of all Advertising Displays transferred by the
Borrower and its Subsidiaries in connection with exchanges in
any period of twelve consecutive months shall not exceed
$250,000;
(c) as permitted by subsection 8.5(b); and
(d) any other sale or other disposition of assets,
provided that (i) consideration in an amount not less than
the fair market value thereof shall be received in
<PAGE> 73
68
connection therewith, (ii) 100% of such consideration shall
consist of cash, (iii) the requirements of subsection 4.3(c) shall be
complied with in connection therewith and (iv) the aggregate fair
market value of the assets sold or otherwise disposed of during any
fiscal year of the Borrower shall not exceed 5% of the consolidated
total assets of the Borrower set forth on the audited balance sheet of
the Borrower then most recently delivered to the Lenders pursuant to
subsection 5.1(a) or 7.1(a) and (v) the portion of Consolidated
Operating Cash Flow attributable to the assets so sold or otherwise
disposed of during any fiscal year of the Borrower shall not exceed 10%
of Consolidated Operating Cash Flow of the Borrower for the then most
recently ended fiscal year of the Borrower for which audited financial
statements shall have been delivered to the Lenders pursuant to
subsection 5.1(a) or 7.1(a), provided that (A) in the event that the
Denver Disposition is consummated prior to December 31, 1996, the
consideration therefor may consist of consideration other than cash if
(x) at least 50% of such consideration comprises cash and/or
Indebtedness that is secured by all or substantially all of the assets
that are the subject thereof and has terms satisfactory to the
Administrative Agent and (y) all of such non-cash consideration is
pledged to the Administrative Agent, for the benefit of the Lenders, on
terms satisfactory to the Administrative Agent, and (B) in the event
that the Houston Disposition is consummated prior to December 31, 1996,
up to 60% of the consideration therefor may consist of consideration
other than cash if all of such non-cash consideration is pledged to the
Administrative Agent, for the benefit of the Lenders, on terms
satisfactory to the Administrative Agent, and provided, further, that
to the extent that the Houston Disposition or the Denver Disposition is
consummated prior to December 31, 1996, the fair market value thereof
and the portion of Consolidated Operating Cash Flow attributable
thereto shall not be included in determining compliance with the limits
set forth in clauses (iv) and (v), respectively, of the first proviso
to this clause (d).
8.7 Limitation on Leases. Permit the aggregate Consolidated
Lease Expense of the Borrower to exceed $4,000,000 for any fiscal year.
8.8 Limitation on Dividends and Interest. (a) Declare or pay
any dividend (other than dividends payable solely in common stock of the
Borrower) 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 (other than for payment solely in common
stock of the Borrower), any shares of any class of Capital Stock of the
Borrower or any warrants or options to purchase any such Stock, whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Subsidiary, or (b) pay interest on Subordinated
Indebtedness (i) in cash at a rate per annum greater than 15% per annum on the
principal thereof or (ii) in any form, including, without limitation,
capitalized interest and payment in kind, at a rate per annum greater than 20%
per annum on the principal thereof; provided that the Borrower may pay non-cash
dividends in kind on the Bridge Preferred Stock in accordance with the terms
thereof at a rate per annum not greater than 20% per annum on the liquidation
preference thereof.
<PAGE> 74
8.9 Limitation on Capital Expenditures. Make any expenditure
in respect of the purchase or other acquisition of, or improvement to, any
assets which are characterized as fixed or capital assets in accordance with
GAAP (excluding any such asset acquired in connection with normal replacement
and maintenance programs properly charged to current operations) except for
expenditures in the ordinary course of business not exceeding, in the aggregate
for the Borrower and its Subsidiaries during any of the fiscal years of the
Borrower set forth below, the amount set forth opposite such fiscal year below:
Fiscal Year Amount
----------- ------
1996 $12,000,000
1997 $20,000,000
1998 $21,000,000
Each year thereafter $22,000,000;
provided that any capital expenditures permitted to be made during any fiscal
year that are not made during such fiscal year may be carried over and expended
during the next succeeding fiscal year.
8.10 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, any Person,
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Permitted Acquisitions;
(d) loans and advances to employees of the Borrower or its
Subsidiaries for travel and relocation expenses in the ordinary course
of business and consistent with past practice in an aggregate amount
for the Borrower and its Subsidiaries not to exceed $750,000 at any
one time outstanding; and
(e) the Acquisition.
8.11 Limitation on Optional Payments and Modifications of
Debt Instruments. (a) Except for the prepayment on or before the Closing Date
of the Senior Notes and the Indebtedness which is to be paid on the Closing
Date as described in subsection 5.16(b) and except for the refinancing of the
Subordinated Bridge Indebtedness with the proceeds of the Permanent
Subordinated Indebtedness, make any optional payment or prepayment on or
redemption or defeasance of any Indebtedness (other than the Loans), or (b)
amend, modify or change, or consent or agree to any amendment, modification or
change to any of the terms relating to the payment or prepayment or principal
of or interest on, any Indebtedness
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70
(other than any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or which
would reduce the rate or extend the date for payment of interest thereon), or
(c) designate or permit to be designated any "Designated Senior Indebtedness"
under and as defined in the Subordinated Bridge Agreement or the Senior
Subordinated Indenture, other than the Indebtedness under this Agreement.
8.12 Limitation on Transactions with Affiliates. Except as
set forth on Schedule 8.12, 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, (b) in the ordinary course of the Borrower's or
such Subsidiary's business and (c) upon fair and reasonable terms no less
favorable to the Borrower 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.
8.13 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or 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 Borrower or such
Subsidiary.
8.14 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Borrower to end on a day other than December 31.
8.15 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement, other than any industrial revenue bonds, purchase
money mortgages, liens or security interests or Financing Leases permitted by
this Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, to secure the Obligations.
8.16 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or which are directly related thereto.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or any L/C Reimbursement Obligation when due in accordance with the
terms thereof or hereof; or the Borrower shall fail to pay any
interest on any Loan, or any other amount
<PAGE> 76
payable hereunder, within five days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document
or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall prove to
have been incorrect in any material respect on or as of the date made
or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 8
hereof or in any negative covenant contained in any Security Document;
or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest of any Indebtedness (other
than the Loans) in the aggregate principal amount of $7,500,000 or
more or in the payment of any Guarantee Obligation in the aggregate
principal amount of $7,500,000 or more, beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; 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 payable; or
(f) (i) The Borrower 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, conservator or other similar official
for it or for all or any substantial part of its assets, or the
Borrower or any of its Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced
against the Borrower or
<PAGE> 77
72
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 a period of 60 days;
or (iii) there shall be commenced against the Borrower 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 within 60 days
from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
of its Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower 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 Majority Lenders, 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) the Borrower or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Majority Lenders 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 reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $7,500,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Borrower or any other
Loan Party which is a party to any of the Security Documents or any
Guarantee shall so assert or (ii) the Lien created by any of the
Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
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(j) (i) Except for the Designated Holders, any Person or
"group" (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) (A) shall have acquired
beneficial ownership of 20% or more of any outstanding class of Capital
Stock having ordinary voting power in the election of directors of the
Borrower or (B) shall obtain the power (whether or not exercised) to
elect a majority of the Borrower's directors, or (ii) the aggregate
amount of Capital Stock having ordinary voting power in the election of
directors of the Borrower held the Designated Holders (on a fully
diluted basis) shall not constitute at least 40% (or, at any time that
the Total Leverage Ratio as of the last day of the two most recently
completed fiscal quarters of the Borrower for which financial
statements have been delivered pursuant to subsection 7.1 is less than
3.50 to 1.00, 25%) of the issued and outstanding Capital Stock having
such voting power, or (iii) either of the Designated Holders shall own
fewer than 60% of the number of shares of Capital Stock of the Borrower
of any class held by them on the Closing Date (without giving effect to
any stock split or distribution of additional shares in respect
thereof), or (iv) a "Change of Control" (as defined in the Subordinated
Bridge Agreement or in any agreement or indenture under which
Indebtedness is issued to replace or refinance any Indebtedness
thereunder) shall have occurred, or (v) the Board of Directors of the
Borrower shall not consist of a majority of Continuing Directors; as
used in this paragraph " Continuing Directors" shall mean the directors
of the Borrower on the Closing Date and each other director, if such
other director's nomination for election to the Board of Directors of
the Borrower is recommended by a majority of the then Continuing
Directors; or
(k) If the aggregate number of signs owned by the Borrower or
any of its Subsidiaries at the beginning of any period of twelve
consecutive months that are destroyed or otherwise lost to the
Borrower or such Subsidiary during such period (whether as a result of
a casualty loss, a governmental condemnation, a termination or
expiration of a lease or otherwise (but excluding as a result of a
sale of assets permitted hereunder)) and that shall not have been
replaced by the end of such period (whether with the proceeds of
insurance, condemnation awards or otherwise) shall exceed, in the case
of the signs in all the Borrower's markets, 5% of the signs in such
markets at the beginning of such period, on a pro forma basis assuming
the Acquisition had occurred at or prior to the commencement of such
fiscal year;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of Section 9(f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and any Notes shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Majority Lenders, the Administrative Agent may, or upon the request of the
Majority Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the
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Commitments shall immediately terminate; and (ii) with the consent of the
Majority Lenders, the Administrative Agent may, or upon the request of the
Majority Lenders, the Administrative Agent shall, by notice of default to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) and any Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender and the L/C Participants, a security interest in such cash
collateral to secure all obligations of the Borrower under this Agreement and
the other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other Obligations. After all such Letters of Credit shall have expired or
been fully drawn upon, all L/C Reimbursement Obligations shall have been
satisfied and all other Obligations shall have been paid in full, the balance,
if any, in such cash collateral account shall be returned to the Borrower. The
Borrower shall execute and deliver to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, such further documents and
instruments as the Administrative Agent may request to evidence the creation
and perfection of the within security interest in such cash collateral account.
Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates
and appoints Canadian Imperial Bank of Commerce, New York Agency, as the
Administrative Agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes Canadian Imperial Bank
of Commerce, New York Agency, as the Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no
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implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes or any other Loan Document or for any failure of the Borrower to
perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
10.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the Notes and the other Loan Documents in accordance
with a request of the Majority Lenders, and such request and any action taken
or
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failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
10.5 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower which
may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought under this subsection (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Obligations shall have been paid in full, ratably in
accordance with
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77
their Commitment Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement,
any of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Administrative Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
10.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to its Loans made or renewed by it and any
Note issued to it and with respect to any Letter of Credit issued or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
10.9 Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 10 days' notice to the Lenders.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Majority Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrower, whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this subsection shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement and
the other Loan Documents.
10.10 Releases of Guarantees and Collateral. In connection
with the sale or other disposition of all of the Capital Stock of any Guarantor
or the sale or other disposition of Collateral (as defined in each of the
Security Documents) permitted under subsection 8.6, the Administrative Agent
shall, and is hereby authorized by the Lenders to, promptly, upon the request
of the Borrower and at the sole expense of the Borrower, take all actions
reasonably necessary to release such Guarantor from its guarantee contained in
the Guarantee
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and Collateral Agreement or its Guarantee or to release the Collateral subject
to such sale or other disposition, as the case may be, and shall take any other
actions reasonably requested by the Borrower to effect the transactions
permitted under subsection 8.6.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement, any
Note or any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this subsection. The Majority Lenders may, or, with the written consent of the
Majority Lenders, the Administrative Agent may, from time to time, (a) enter
into with the Borrower written amendments, supplements or modifications hereto
and to any Notes and the other Loan Documents for the purpose of adding any
provisions to this Agreement, any Notes or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Borrower hereunder or
thereunder or (b) waive, on such terms and conditions as the Majority Lenders
or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement, any Notes or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or any installment thereof or any L/C Obligation
or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitments, in
each case without the consent of each Lender affected thereby; or
(ii) amend, modify or waive any provision of this
subsection 11.1 or reduce the percentage specified in the definition
of Majority Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and
the other Loan Documents or release any guarantee obligation contained
in the Guarantee and Collateral Document or any of the other
Guarantees or release all or a substantial part of the Collateral
(other than in connection with any release permitted by subsection
10.10), in each case without the written consent of all the Lenders;
or
(iii) amend, modify or waive any provision of Section 10
without the written consent of the then Administrative Agent; or
(iv) amend, modify or waive any provision of this
Agreement regarding the allocation of prepayment amounts among the
Term Loans or the application of such prepayment amounts to the
respective installments of principal under the respective Term Loans
without the written consent of (x) the Tranche A Term Loan Lenders the
Tranche A Term Loan Commitment Percentages of which aggregate more
than 50%, (y) the Tranche B Term Loan Lenders the Tranche B Term Loan
Commitment
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Percentages of which aggregate more than 50% and (z) the Tranche C
Term Loan Lenders the Tranche C Term Loan Commitment Percentages of
which aggregate more than 50%; or
(v) subject to clause (i) above as it relates to reducing
the amount or extending the scheduled date of maturity of any Loan or
any installment thereof, amend, modify or waive any provision of (x)
subsection 2.6 (to the extent subsection 2.6 relates to the Tranche A
Term Loans) or subsection 2.7 without the written consent of Tranche A
Term Loan Lenders the Tranche A Term Loan Commitment Percentages of
which aggregate more than 50%, (y) subsection 2.6 (to the extent
subsection 2.6 relates to the Tranche B Term Loans) or subsection 2.8
without the written consent of Tranche B Term Loan Lenders the Tranche
B Term Loan Percentages of which aggregate more than 50% or (z)
subsection 2.6 (to the extent that subsection 2.6 relates to the
Tranche C Term Loans) or subsection 2.9 without the written consent of
Tranche C Term Loan Lenders the Tranche C Term Loan Percentages of
which aggregate more than 50%; or
(vi) amend, modify or waive any provision of subsection
2.1, 2.2, 2.3 or 2.5 or, subject to paragraph (i) above as it relates
to reducing the amount or extending the scheduled date of maturity of
any L/C Obligation, Section 3 without the written consent of the
Revolving Credit Lenders the Revolving Credit Commitment Percentages
of which aggregate more than 50%; or
(vii) amend, modify or waive the provisions of any Letter
of Credit or any L/C Obligation without the written consent of the
Issuing Lender; or
(viii) amend, modify or waive any provision of any Security
Document that provides for the ratable sharing by the Lenders under
such Security Document of the proceeds of any realization on the
Collateral to provide for a non-ratable sharing thereof, without the
consent of (w) the Revolving Credit Lenders the Revolving Credit
Commitment Percentages of which aggregate more than 50%, (x) Tranche A
Term Loan Lenders the Tranche A Term Loan Commitment Percentages of
which aggregate more than 50%, (y) Tranche B Term Loan Lenders the
Tranche B Term Loan Commitment Percentages of which aggregate more
than 50% and (z) Tranche C Term Loan Lenders the Tranche C Term Loan
Commitment Percentages of which aggregate more than 50%.
In the case of any waiver, the Borrower, the Lenders and the Administrative
Agent shall be restored to their former position and rights hereunder and under
any outstanding Notes and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless
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otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or five days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, addressed
as follows in the case of the Borrower and the Administrative Agent, and as set
forth in Schedule 1.1A in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto and
any future holders of the Revolving Credit Notes:
The Borrower: Outdoor Systems, Inc.
2502 North Black Canyon Highway
Phoenix, Arizona 85009
Attention: William S. Levine
Telecopy: (602) 433-2482
The Administrative Canadian Imperial Bank of Commerce
Agent: 425 Lexington Avenue
New York, New York 10017
Attention: Matthew Jones
Telecopy: (212) 856-3558
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.3, 2.5, 2.6, 2.10, 3.2, 4.2, 4.4 or 4.8
shall not be effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and any Notes and the making of the Loans hereunder.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement,
any Notes and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for
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all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, any Notes, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel to the Administrative Agent and to the several
Lenders, and (c) to pay, indemnify, and hold each Lender and the Administrative
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, any Notes, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, any Notes, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrower, any of its Subsidiaries or any of the
Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided, that the Borrower shall have no
obligation hereunder to the Administrative Agent or any Lender with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Administrative Agent or any such Lender or (ii) legal
proceedings commenced against the Administrative Agent or any such Lender by
any security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
The agreements in this subsection shall survive repayment of the Loans and all
other amounts payable hereunder.
11.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of any
Notes and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Loan owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. The
Borrower agrees that if amounts outstanding under this
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Agreement and any Notes are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement or any Note, provided that, in
purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Lenders the proceeds thereof as provided in
subsection 11.7(a) as fully as if it were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of
subsections 4.10, 4.11 and 4.12 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it was a Lender;
provided that, in the case of subsection 4.11, such Participant shall have
complied with the requirements of said subsection and provided, further, that
no Participant shall be entitled to receive any greater amount pursuant to any
such subsection than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
of the Borrower (except in the case of assignments made by CIBC Inc. in
connection with its initial syndication of the Loans) and the Administrative
Agent (which in each case shall not be unreasonably withheld), to an additional
bank or financial institutions ("an Assignee") all or any part of its rights
and obligations under this Agreement and any Notes pursuant to an Assignment
and Acceptance, substantially in the form of Exhibit E, executed by such
Assignee, such assigning Lender (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower (except in connection
with the initial syndication by CIBC Inc. referred to above) and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register, provided that the aggregate amount of
Term Loans and Revolving Credit Commitments assigned pursuant to any such
assignment, and the amount retained by the assigning Lender (unless such Lender
is assigning all of its Loans and Commitments), must be in an amount not less
than $5,000,000. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
subsection, the consent of the Borrower shall not be required, and, unless
requested by the Assignee and/or the assigning Lender, new Notes shall not be
required to be executed and delivered by the Borrower, for any assignment which
occurs at any time when any of the events described in Section 7(f) shall have
occurred and be continuing.
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(d) The Administrative Agent shall maintain at its address
referred to in subsection 11.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitments of, and principal amount
of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may (and, in the case of any
Loan or other obligation hereunder not evidenced by a Note, shall) treat each
Person whose name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Agreement. Any assignment of any Loan or
other obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Borrower (except in
connection with the initial syndication by CIBC Inc. referred to above) and the
Administrative Agent), together with payment to the Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
subject to the provisions of subsection 11.15, any and all financial
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
11.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") at any time shall receive any payment of all or part of its Loans or
the L/C Obligations owing to it, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 9(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans
or the L/C Reimbursement Obligations owing to it, or interest thereon, such
benefitted Lender shall purchase for cash from the other Lenders such portion
of each such other Lender's Loan or the L/C Reimbursement Obligations owing to
it, or shall provide such other Lenders with the
<PAGE> 89
84
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; and if after taking
into account such sharing the benefitted Lender continues to have access to
addition funds of or collateral granted by the Borrower for application on
account of its debt, then the benefitted Lender shall use such funds or
collateral to reduce indebtedness of the Borrower held by it and share such
payments and the benefits of such collateral with the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loan may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under any Notes (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
11.8 Restatement; Update of Certain Schedules. The parties
hereto agree that, effective the Closing Date, the Existing Agreement shall be
amended and restated in its entirety by this Agreement. The Borrower agrees
that it will provide to the Administrative Agent (i) the information covered by
Schedules 5.3, 5.9 and 5.15 and necessary to be included therein in order for
the representations and warranties contained herein and applicable to such
Schedules to be true and correct on the Closing Date after giving effect to the
Acquisition and (ii) descriptions of all material properties owned or leased by
the Borrower or any of Subsidiaries, to be included on Schedule 1.1C (with such
exceptions as the Administrative Agent may agree). On the Closing Date, such
representations and warranties shall be deemed to be made giving effect to the
inclusion of such information in such applicable Schedules, and such Schedules
shall be deemed respectively to be amended as of the Closing Date to include
such information.
11.9 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
<PAGE> 90
85
11.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.11 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth
or referred to herein or in the other Loan Documents.
11.12 GOVERNING LAW. THIS AGREEMENT AND THE REVOLVING CREDIT
NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND
THE REVOLVING CREDIT NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.13 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 11.2
or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
<PAGE> 91
86
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
11.14 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Revolving Credit
Notes and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
11.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE REVOLVING CREDIT NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
11.16 Confidentiality. Each Lender agrees to keep
confidential all non-public information provided to it by the Borrower pursuant
to this Agreement that is designated by the Borrower in writing as
confidential; provided that nothing herein shall prevent any Lender from
disclosing any such information (i) to the Administrative Agent or any other
Lender, (ii) to any Transferee which agrees to comply with the provisions of
this subsection, (iii) to its employees, directors, agents, attorneys,
accountants and other professional advisors, (iv) upon the request or demand of
any Governmental Authority having jurisdiction over such Lender, (v) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (vi) which has been
publicly disclosed other than in breach of this Agreement, or (vii) in
connection with the exercise of any remedy hereunder.
<PAGE> 92
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
OUTDOOR SYSTEMS, INC.
By:/s/William S. Levine
----------------------------
Title: Chairman
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as
Administrative Agent
By:/s/Matthew B. Jones
-----------------------------
Title: Authorized Signatory
CIBC INC., as a Lender
By:/s/Matthew B. Jones
-----------------------------
Title: Authorized Signatory
<PAGE> 93
Schedule 1.1A
Commitment Amounts and Percentages;
Lending Offices; Addresses for Notice
A. Commitment Amounts
<TABLE>
<CAPTION>
Tranche A Tranche B Tranche C
Revolving Credit Term Loan Term Loan Term Loan
Commitment Commitment Commitment Commitment
---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CIBC INC. $70,000,000 $160,000,000 $150,000,000 $150,000,000
</TABLE>
B. Lending Offices; Addresses for Notice
CIBC INC.
Address for Notices: CIBC Inc.
425 Lexington Avenue
New York, New York 10017
<PAGE> 94
2
Schedule 1.1B
APPLICABLE MARGIN GRID
<TABLE>
<CAPTION>
APPLICABLE MARGIN FOR EURODOLLAR LOANS:
Revolving Credit
Loans and Tranche Tranche B
Total Leverage Ratio A Term Loans Term Loans
-------------------- ---------------- ----------
<S> <C> <C>
Greater than or equal to 6.50:1.00 3.25% 3.50%
Greater than or equal to 6.00:1.00
and less than 6.50:1.00 3.00% 3.50%
Greater than or equal to 5.50:1.00
and less than 6.00:1.00 2.75% 3.50%
Greater than or equal to 5.00:1.00
and less than 5.50:1.00 2.50% 3.50%
Greater than or equal to 4.50:1.00
and less than 5.00:1.00 2.25% 3.00%
Less than 4.50:1.00 2.00% 3.00%
</TABLE>
APPLICABLE MARGIN FOR ABR LOANS: For each applicable Total Leverage Ratio, a
margin that is 1.00% per annum less than the
Applicable Margin for Eurodollar Loans set
forth above
<PAGE> 95
EXHIBIT A-1
REVOLVING CREDIT NOTE
$___________ New York, New York
July __, 1996
FOR VALUE RECEIVED, the undersigned, OUTDOOR SYSTEMS, INC., a Delaware
corporation (the " Borrower"), hereby unconditionally promises to pay to the
order of ________________ (the "Lender") at the office of CANADIAN IMPERIAL
BANK OF COMMERCE, located at 425 Lexington Avenue, New York, New York 10017, in
lawful money of the United States of America and in immediately available
funds, on the Revolving Credit Commitment Termination Date the principal amount
of (a) _____ __________ DOLLARS ($__________), or, if less, (b) the aggregate
unpaid principal amount of all Revolving Credit Loans made by the Lender to the
Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter
defined. The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time outstanding at
the rates and on the dates specified in subsection 4.1 of such Credit
Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in
the case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrower in respect of such Revolving
Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of July __, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the other banks and financial institutions from time to
time parties thereto and Canadian Imperial Bank of Commerce, as administrative
agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms
and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
<PAGE> 96
2
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
OUTDOOR SYSTEMS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
<PAGE> 97
Schedule A
to Revolving Credit Note
------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans Made By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 98
Schedule B
to Revolving Credit Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Interest Period and Amount of Principal Amount of Eurodollar
Amount of Amount Converted to Eurodollar Rate with of Eurodollar Loans Loans Converted to
Date Eurodollar Loans Eurodollar Loans Respect Thereto Repaid ABR Loans
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ------------------------------------------------
Unpaid Principal
Balance of Eurodollar Notation
Loans Made by
- ------------------------------------------------
<C> <C>
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
</TABLE>
<PAGE> 99
EXHIBIT A-2
-----------
FORM OF TRANCHE A TERM NOTE
$__________ New York, New York
July __, 1996
FOR VALUE RECEIVED, the undersigned, OUTDOOR SYSTEMS INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of _____________________(the "Lender") at the office of CANADIAN IMPERIAL
BANK OF COMMERCE, located at 425 Lexington Avenue, New York, New York 10017, in
lawful money of the United States of America and in immediately available
funds, the principal amount of _______________________ DOLLARS ($_________),
or, if less, the unpaid principal amount of the Tranche A Term Loan made by the
Lender pursuant to subsection 2.6 of the Credit Agreement, as hereinafter
defined. The principal amount shall be paid in the amounts and on the dates
specified in subsection 2.7. The Borrower further agrees to pay interest in
like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in subsection 4.1 of
such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Tranche A Term Loan and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto. Each such endorsement shall constitute prima facie evidence
of the accuracy of the information endorsed. The failure to make any such
endorsement shall not affect the obligations of the Borrower in respect of such
Tranche A Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit
Agreement dated as of July __, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and Canadian Imperial Bank of Commerce, as administrative agent, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the
rights of the holder of this Note in respect thereof.
<PAGE> 100
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
OUTDOOR SYSTEMS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
<PAGE> 101
Schedule A
to Tranche A Term Loan Note
---------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans Made By
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
</TABLE>
<PAGE> 102
Schedule B
to Tranche A Term Loan Note
---------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Period Amount of Amount of
Amount Converted and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Amount of to Eurodollar Rate with Respect Eurodollar Loans Converted to ABR Balance of Notation
Date Eurodollar Loans Loans Thereto Repaid Loans Eurodollar Loans Made By
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
</TABLE>
<PAGE> 103
EXHIBIT A-3
-----------
FORM OF TRANCHE B TERM NOTE
$__________ New York, New York
July __, 1996
FOR VALUE RECEIVED, the undersigned, OUTDOOR SYSTEMS, INC. ,
a Delaware corporation (the "Borrower"), hereby unconditionally promises to
pay to the order of _____________________(the "Lender") at the office of
CANADIAN IMPERIAL BANK OF COMMERCE, located at 425 Lexington Avenue, New York,
New York, 10017, in lawful money of the United States of America and in
immediately available funds, the principal amount of ________________ ______
DOLLARS ($_________), or, if less, the unpaid principal amount of the Tranche B
Term Loan made by the Lender pursuant to subsection 2.6 of the Credit
Agreement, as hereinafter defined. The principal amount shall be paid in the
amounts and on the dates specified in subsection 2.8. The Borrower further
agrees to pay interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates and on the dates
specified in subsection 4.1 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Tranche B Term Loan and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto. Each such endorsement shall constitute prima facie evidence
of the accuracy of the information endorsed. The failure to make any such
endorsement shall not affect the obligations of the Borrower in respect of such
Tranche B Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit
Agreement dated as of July ___, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and Canadian Imperial National Bank of Commerce, as administrative
agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms
and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
<PAGE> 104
2
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
OUTDOOR SYSTEMS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
<PAGE> 105
Schedule A
to Tranche B Term Loan Note
---------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans Made By
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 106
LOANS, CONTINUATIONS, CONVERSIONS AND
REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Period Amount of Amount of
Amount Converted and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Amount of to Eurodollar Rate with Respect Eurodollar Loans Converted to ABR Balance of Notation
Date Eurodollar Loans Loans Thereto Repaid Loans Eurodollar Loans Made By
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 107
EXHIBIT A-4
-----------
FORM OF TRANCHE C TERM NOTE
$________ New York, New York
July ___, 1996
FOR VALUE RECEIVED, the undersigned, OUTDOOR SYSTEMS, INC., a Delaware
corporation (the " Borrower"), hereby unconditionally promises to pay to the
order of _____________________(the "Lender") at the office of CANADIAN IMPERIAL
BANK OF COMMERCE, located at 425 Lexington Avenue, New York, New York, 10017,
in lawful money of the United States of America and in immediately available
funds, the principal amount of _______________________ DOLLARS ($_________),
or, if less, the unpaid principal amount of the Tranche C Term Loan made by the
Lender pursuant to subsection 2.6 of the Credit Agreement, as hereinafter
defined. The principal amount shall be paid in the amounts and on the dates
specified in subsection 2.9. The Borrower further agrees to pay interest in
like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in subsection 4.1 of
such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Tranche C Term Loan and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto. Each such endorsement shall constitute prima facie evidence
of the accuracy of the information endorsed. The failure to make any such
endorsement shall not affect the obligations of the Borrower in respect of such
Tranche C Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit
Agreement dated as of July ___, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and Canadian Imperial Bank of Commerce, as administrative agent, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the
rights of the holder of this Note in respect thereof.
<PAGE> 108
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
OUTDOOR SYSTEMS, INC.
By:
---------------------------------
Name:
------------------------------
Title:
-----------------------------
<PAGE> 109
Schedule A
to Tranche C Term Loan Note
---------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans Made By
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<S> <C> <C> <C> <C> <C> <C>
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</TABLE>
<PAGE> 110
Schedule B
to Tranche C Term Loan Note
---------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Period Amount of Amount of
Amount Converted and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Amount of to Eurodollar Rate with Respect Eurodollar Loans Converted to ABR Balance of Notation
Date Eurodollar Loans Loans Thereto Repaid Loans Eurodollar Loans Made By
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
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- -----------------------------------------------------------------------------------------------------------------------------------
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- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 111
EXHIBIT B
---------
================================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
OUTDOOR SYSTEMS, INC.
and certain of its Subsidiaries
in favor of
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
Dated as of July __, 1996
================================================================================
<PAGE> 112
FORM OF
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of July __, 1996,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of CANADIAN
IMPERIAL BANK OF COMMERCE, as Administrative Agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
"Lenders") from time to time parties to the Second Amended and Restated Credit
Agreement, dated as of July __, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Outdoor Systems,
Inc., a Delaware corporation (the "Borrower"), the Lenders and the
Administrative Agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each such Grantor will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:
SECTION I.. DEFINED TERMS
A. Definitions. 1. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms which are defined in
the Uniform Commercial Code in
<PAGE> 113
effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Farm Products,
Instruments and Inventory.
2. The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Obligations": the collective reference to the
unpaid principal of and interest on the Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of
the Loans and Reimbursement Obligations and interest accruing at the
then applicable rate provided in the Credit Agreement after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post- petition interest is allowed
in such proceeding) to the Administrative Agent or any Lender (or, in
the case of any Hedge Agreement referred to below, any Affiliate of
any Lender), whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit or any Hedge
Agreement entered into by the Borrower with any Lender (or any
Affiliate of any Lender) or any other document made, delivered or
given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all
reasonable fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrower
pursuant to the terms of any of the foregoing agreements).
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Contracts": all contracts and agreements to which any
Grantor is a party, as the same may be amended, supplemented or
otherwise modified from time to time, including, without limitation,
(i) all rights of any Grantor to receive moneys due and to become due
to it thereunder or in connection therewith, (ii) all rights of any
Grantor to damages arising thereunder and (iii) all rights of any
Grantor to perform and to exercise all remedies thereunder.
"Copyrights": (i) all copyrights, whether published or
unpublished (including, without limitation, those listed in Schedule
6), all registration and recordings thereof, and all applications in
connection therewith, including, without limitation, all
registrations, recordings and applications in the United States
Copyright Office, and (ii) all renewals thereof.
<PAGE> 114
"Copyright Licenses": any written agreement naming any
Grantor as licensor or licensee (including, without limitation, those
listed in Schedule 6), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-106 of the Uniform Commercial Code in effect
in the State of New York on the date hereof and, in any event, shall
include, without limitation, with respect to any Grantor, all
Contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of such Grantor to receive moneys
due and to become due to it thereunder or in connection therewith,
(ii) all rights of such Grantor to damages arising thereunder and
(iii) all rights of such Grantor to perform and to exercise all
remedies thereunder, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its
right, title and interest in such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, would not
give any other party to such contract, agreement, instrument or
indenture the right to terminate its obligations thereunder, or is
permitted with consent if all necessary consents to such grant of a
security interest have been obtained from the other parties thereto
(it being understood that the foregoing shall not be deemed to
obligate such Grantor to obtain such consents); provided, that the
foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this
Agreement in any Receivable or any money or other amounts due or to
become due under any such Contract, agreement, instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement or any other Loan Document to which
such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all
reasonable fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by such Guarantor
pursuant to the terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Hedge Agreements": as to any Person, all interest rate
swaps, caps or collar agreements or similar arrangements entered into
by such Person providing for protection against fluctuations in
interest rates or currency exchange rates or the exchange of nominal
interest obligations, either generally or under specific
contingencies.
<PAGE> 115
"Intellectual Property": the collective reference to the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses,
the Trademarks and the Trademark Licenses.
"Intercompany Note": any promissory note evidencing loans
made by any Grantor to any of its Subsidiaries.
"Issuers": the collective reference to the Persons identified
on Schedule 2 as the issuers of the Pledged Securities.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States or any
other country, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the
foregoing referred to in Schedule 6, and (ii) all applications for
letters patent of the United States or any other country and all
divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule 6.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any of the foregoing referred to in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Pledgor and all other
promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates,
options or rights of any nature whatsoever in respect of the Capital
Stock of any Issuer that may be issued or granted to, or held by, any
Grantor while this Agreement is in effect.
"Pledgor": each Grantor owning Pledged Securities.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Securities,
collections thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper
<PAGE> 116
and whether or not it has been earned by performance (including,
without limitation, any Account).
"Reimbursement Obligation":the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5(a) of the Credit
Agreement for amounts drawn under Letters of Credit.
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
of the foregoing referred to in Schedule 6, and (ii) all renewals
thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing
referred to in Schedule 6.
B. Other Definitional Provisions. 1. The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references are
to this Agreement unless otherwise specified.
2. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
3. Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION II.. GUARANTEE
A. Guarantee. 1. Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
2. Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
<PAGE> 117
3. Each Guarantor agrees that the Borrower Obligations may at
any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section 2
or affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
4. The guarantee contained in this Section 2 shall remain in
full force and effect until all the Borrower Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.
5. No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time
in reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid
in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
B. Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek
and receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment. Each Guarantor's right
of contribution shall be subject to the terms and conditions of Section 2.3.
The provisions of this Section 2.2 shall in no respect limit the obligations
and liabilities of any Guarantor to the Administrative Agent and the Lenders,
and each Guarantor shall remain liable to the Administrative Agent and the
Lenders for the full amount guaranteed by such Guarantor hereunder.
C. No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall
be paid to any Guarantor on account of such subrogation rights at any time when
all of the Borrower Obligations shall not have been paid in full, such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt
<PAGE> 118
by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
D. Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Administrative Agent or any Lender, and
the Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent
(or the Majority Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time
held by the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither
the Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
E. Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower against the Administrative
Agent or any Lender, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Borrower Obligations, or of such Guarantor under the guarantee
contained in this Section 2, in bankruptcy or in any other instance. When
making any demand hereunder or otherwise
015571\0104\01852\966RERCX.OTH
<PAGE> 119
pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release
of the Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
F. Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded
or must otherwise be restored or returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
G. Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in
Dollars at the office of the Administrative Agent located at 425 Lexington
Avenue, New York, New York 10017.
SECTION III.. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Lenders, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the "Collateral"), as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor's Obligations:
1. all Accounts;
2. all Chattel Paper;
3. all Contracts;
4. all Documents;
5. all Equipment;
<PAGE> 120
6. all General Intangibles;
7. all Instruments;
8. all Intellectual Property;
9. all Inventory;
10. all Pledged Securities;
11. all books and records pertaining to the Collateral; and
12. to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
SECTION IV.. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each Lender that:
A. Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 5 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty
to the Borrower's knowledge shall, for the purposes of this Section 4.1, be
deemed to be a reference to such Guarantor's knowledge.
B. Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Lenders
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as
have been filed in favor of the Administrative Agent, for the ratable benefit
of the Lenders, pursuant to this Agreement or as are permitted by the Credit
Agreement.
C. Perfected First Priority Liens. The security interests
granted pursuant to this Agreement 1. upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any
<PAGE> 121
Persons purporting to purchase any Collateral from such Grantor and 2. are
prior to all other Liens on the Collateral in existence on the date hereof
except for unrecorded Liens permitted by the Credit Agreement which have
priority over the Liens on the Collateral by operation of law.
D. Chief Executive Office. On the date hereof, such
Grantor's jurisdiction of organization and the location of such Grantor's chief
executive office or sole place of business are specified on Schedule 4.
E. Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
F. Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
G. Pledged Securities. 1. The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such
Grantor.
2. All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
3. Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
4. Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
H. Receivables. 1. No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent.
2. None of the obligors on any Receivables is a Governmental
Authority.
3. The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables will
at such times be accurate.
I. Contracts. 1. No consent of any party (other than such
Grantor) to any Contract is required, or purports to be required, in connection
with the execution, delivery and performance of this Agreement, except such
consents that have been obtained and are in full force and effect.
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2. Each Contract is in full force and effect and constitutes
a valid and legally enforceable obligation of the parties thereto, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
3. No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or
general in nature.
4. Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof.
5. To the best of such Grantor's knowledge, the right, title
and interest of such Grantor in, to and under the Contracts are not subject to
any defenses, offsets, counterclaims or claims.
6. Such Grantor has delivered to the Administrative Agent a
complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto.
7. No amount payable to such Grantor under or in connection
with any Contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Administrative Agent.
8. None of the parties to any Contract is a Governmental
Authority.
J. Intellectual Property. 1. Schedule 6 lists all
Intellectual Property owned by such Grantor in its own name on the date hereof.
2. To the best of such Grantor's knowledge, each Copyright,
Patent and Trademark is on the date hereof valid, subsisting, unexpired,
enforceable and has not been abandoned.
3. Except as set forth in Schedule 6, none of the Copyrights,
Patents or Trademarks is on the date hereof the subject of any licensing or
franchise agreement.
4. No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of
any Copyright, Patent or Trademark in any respect that could reasonably be
expected to have a Material Adverse Effect.
5. No action or proceeding is pending on the date hereof (i)
seeking to limit, cancel or question the validity of any Copyright, Patent or
Trademark, or (ii) which, if
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adversely determined, would have a material adverse effect on the value of any
Patent or Trademark.
SECTION V.. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
A. Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take
such action or to refrain from taking such action by such Guarantor or any of
its Subsidiaries.
B. Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.
C. Maintenance of Insurance. 1. Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i) insuring
the Inventory, Equipment and Vehicles against loss by fire, explosion, theft
and such other casualties as may be reasonably satisfactory to the
Administrative Agent and (ii) to the extent requested by the Administrative
Agent, insuring such Grantor against liability for personal injury and property
damage relating to such Inventory, and Equipment, such policies to be in such
form and amounts and having such coverage as is custmary for similar companies
in similar businesses.
2. All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as insured party or
loss payee, (iii) if reasonably requested by the Administrative Agent, include
a breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Administrative Agent.
3. The Borrower shall deliver to the Administrative Agent and
the Lenders a report of a reputable insurance broker with respect to such
insurance during the month of _________ in each calendar year and such
supplemental reports with respect thereto as the Administrative Agent may from
time to time reasonably request.
D. Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount or validity
thereof is currently being
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contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
E. Maintenance of Perfected Security Interest; Further
Documentation. 1. Such Grantor shall maintain the security interest created
by this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
2. Such Grantor will furnish to the Administrative Agent and
the Lenders from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
3. At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
F. Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of (a) all additional executed financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written supplement to Schedule 5
showing any additional location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5;
(ii) change the location of its chief executive office or sole
place of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Administrative
Agent in connection with this Agreement would become misleading.
G. Notices. Such Grantor will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, of:
1. any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral which
would adversely affect the ability of the Administrative Agent to exercise any
of its remedies hereunder; and
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2. of the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
H. Pledged Securities. 1. If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any Issuer shall be paid over
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant
to the reorganization thereof, the property so distributed shall, unless
otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums
of money or property so paid or distributed in respect of the Pledged
Securities shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Administrative Agent, hold such
money or property in trust for the Lenders, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.
2. Without the prior written consent of the Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature of
any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Pledged Securities or Proceeds thereof
(except pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Pledged Securities or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Pledged Securities or Proceeds thereof.
3. In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative
Agent promptly in writing of the occurrence of any of the events described in
Section 5.8(a) with respect to the Pledged Securities issued by it and (iii)
the
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terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.7 with respect to the Pledged Securities issued by it.
I. Receivables. 1. Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
2. Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Receivables.
J. Contracts. 1. Such Grantor will perform and comply in
all material respects with all its obligations under the Contracts.
2. Such Grantor will not amend, modify, terminate or waive
any provision of any Contract in any manner which could reasonably be expected
to materially adversely affect the value of such Contract as Collateral.
3. Such Grantor will exercise promptly and diligently each
and every material right which it may have under each Contract (other than any
right of termination).
4. Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it relating in any
way to any Contract that questions the validity or enforceability of such
Contract.
K. Intellectual Property. 1. Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) employ such Trademark with the appropriate notice of
registration, (iv) not adopt or use any mark which is confusingly similar or a
colorable imitation of such Trademark unless the Administrative Agent, for the
ratable benefit of the Lenders, shall obtain a perfected security interest in
such mark pursuant to this Agreement, and (v) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby
such Trademark may become invalidated.
2. Such Grantor will not do any act, or omit to do any act,
whereby any material Patent may become abandoned or dedicated.
3. Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the
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Copyrights may become invalidated. Such Grantor will not (either itself or
through licensees) do any act whereby any material portion of the Copyrights
may become injected into the public domain.
4. Such Grantor will notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Patent or Trademark may become abandoned
or dedicated, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office
or any court or tribunal in any country) regarding such Grantor's ownership of
any material Patent or Trademark or its right to register the same or to keep
and maintain the same.
5. Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, such Grantor shall report such filing to the
Administrative Agent and the Lenders within five Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver any and all
agreements, instruments, documents, and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent's and the Lenders'
security interest in any Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.
6. Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the material Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
7. In the event that any material Patent or Trademark is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark and (ii) if such Patent or
Trademark is of material economic value, promptly notify the Administrative
Agent and the Lenders after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and
to recover any and all damages for such infringement, misappropriation or
dilution.
SECTION VI.. REMEDIAL PROVISIONS
A. Certain Matters Relating to Receivables. 1. After the
occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information
as the Administrative Agent may require in connection with such test
verifications. At any time and from time to time, upon the Administrative
Agent's request and at the expense of the relevant Grantor, such Grantor shall
cause independent public
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accountants or others satisfactory to the Administrative Agent to furnish to
the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables, in each case, unless
an Event of Default has occurred and is continuing, in form consistent with the
form of such reports prepared by such Grantor in the normal conduct of its
business.
2. The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Administrative Agent's
direction and control, and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of
an Event of Default. If required by the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, any payments
of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in
any event, within two Business Days) deposited by such Grantor in the exact
form received, duly indorsed by such Grantor to the Administrative Agent if
required, in a Collateral Account maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Lenders only as provided in Section
6.5, and (ii) until so turned over, shall be held by such Grantor in trust for
the Administrative Agent and the Lenders, segregated from other funds of such
Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by
a report identifying in reasonable detail the nature and source of the payments
included in the deposit.
3. At the Administrative Agent's request after the occurrence
and during the continuance of an Event of Default, each Grantor shall deliver
to the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the
Receivables, including, without limitation, all original orders, invoices and
shipping receipts.
B. Communications with Obligors; Grantors Remain Liable. 1.
At any time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent in its own name or in the name of others may
at any time communicate with obligors under the Receivables and parties to the
Contracts to verify with them to the Administrative Agent's satisfaction the
existence, amount and terms of any Receivables or Contracts.
2. Upon the request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables and parties to the Contracts
that the Receivables and the Contracts have been assigned to the Administrative
Agent for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Administrative Agent.
3. Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Administrative Agent nor any Lender shall
have any obligation or liability under any Receivable (or any agreement giving
rise thereto) or Contract by reason of or arising out of this Agreement or the
receipt by the Administrative Agent or any Lender of any payment relating
thereto, nor shall the Administrative Agent or any Lender be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to
any Receivable (or any agreement giving rise
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thereto) or Contract, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of
any performance by any party thereunder, to present or file any claim, to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
C. Pledged Stock. 1. Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Pledged Securities; provided,
however, that no vote shall be cast or corporate right exercised or other
action taken which, in the Administrative Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
2. If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other
Proceeds paid in respect of the Pledged Securities and make application thereof
to the Obligations in such order as the Administrative Agent may determine, and
(ii) any or all of the Pledged Securities shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such Pledged Securities as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Pledged Securities upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by any Grantor or the Administrative Agent of any
right, privilege or option pertaining to such Pledged Securities, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Securities with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have no duty to any
Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
3. Each Grantor hereby authorizes and instructs each Issuer
of any Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Administrative Agent in writing that
(x) states that an Event of Default has occurred and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Administrative Agent.
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D. Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Lenders specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, all Proceeds received by any Grantor consisting
of cash, checks and other near- cash items shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned
over to the Administrative Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent
and the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
E. Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations
in such order as the Administrative Agent may elect, and any part of such funds
which the Administrative Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Administrative Agent to the Borrower or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.
F. Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Lenders,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code or any other applicable law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Administrative Agent or
any Lender or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent or
any Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived or released
to the maximum extent not prohibited or expressly invalidated by applicable
law. Each Grantor further agrees, at the Administrative Agent's request, to
assemble the Collateral and make it available to the
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Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this
Section 6.6, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of
any of the Collateral or in any way relating to the Collateral or the rights of
the Administrative Agent and the Lenders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Lender arising
out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition.
G. Registration Rights. 1. If the Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 6.6, and if in the opinion of the Administrative Agent it
is necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as
may be, in the opinion of the Administrative Agent, reasonably necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use its best efforts to cause
the registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering
of the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of
the Administrative Agent, are reasonably necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause the such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
2. Each Grantor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer
<PAGE> 132
thereof to register such securities for public sale under the Securities Act,
or under applicable state securities laws, even if such Issuer would agree to
do so.
3. Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales
of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid
and binding and in compliance with any and all other applicable Requirements of
Law. Each Grantor further agrees that a breach of any of the covenants
contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall
be specifically enforceable against such Grantor, and such Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the Credit Agreement.
H. Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
Code. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the reasonable fees and disbursements of any attorneys employed
by the Administrative Agent or any Lender to collect such deficiency.
SECTION VII.. THE ADMINISTRATIVE AGENT
A. Administrative Agent's Appointment as Attorney-in-Fact,
etc. 1. Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or Contract or with
respect to any other Collateral whenever payable;
(ii) in the case of any Copyright, Patent or Trademark,
execute and deliver any and all agreements, instruments, documents and
papers as the Administrative Agent may reasonably request to evidence
the Administrative Agent's and the Lenders' security interest in such
Copyright, Patent or Trademark and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
<PAGE> 133
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) a. direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; b. ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; c. sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; d.
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; e. defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; f.
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; g. assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which
any such Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner,
as the Administrative Agent shall in its sole discretion determine;
and h. generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent's option
and such Grantor's expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the
Administrative Agent's and the Lenders' security interests therein and
to effect the intent of this Agreement, all as fully and effectively
as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.
2. If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
3. The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due ABR Loans under the Credit
Agreement, from the date of payment by the Administrative Agent to
<PAGE> 134
the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to the Administrative Agent on demand.
4. Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
B. Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. Neither the Administrative Agent,
any Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative
Agent and the Lenders hereunder are solely to protect the Administrative
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any Lender to exercise any such powers.
The Administrative Agent and the Lenders shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
C. Execution of Financing Statements. Pursuant to Section
9-402 of the Code and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
D. Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
no Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION VIII.. MISCELLANEOUS
<PAGE> 135
A. Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by each affected Grantor and the
Administrative Agent, provided that any provision of this Agreement imposing
obligations on any Grantor may be waived by the Administrative Agent in a
written instrument executed by the Administrative Agent.
B. Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 11.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
C. No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Administrative Agent or such Lender
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
D. Enforcement Expenses; Indemnification. 1. Each Guarantor
agrees to pay or reimburse each Lender and the Administrative Agent for all its
costs and expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, the reasonable fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Administrative Agent.
2. Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
3. Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement (collectively, the "indemnified liabilities") to the extent the
Borrower would be required to do so pursuant to Section 11.5 of the Credit
Agreement.
<PAGE> 136
4. The agreements in this Section 8.4 shall survive repayment
of the Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
E. Amendment and Restatement; Update of Schedules. (a) The
undersigned parties to the Security Agreement as defined in the Existing Credit
Agreement agree that such Security Agreement is hereby amended and restated in
its entirety by this Agreement.
(b) Each Grantor agrees that prior to the consummation of the
Acquisition it will provide such information as is necessary in the
determination of the Administrative Agent in order to include in the Schedules
hereto information related to the Collateral and appropriately addressed in
such Schedules, and upon such consummation such Schedules shall be deemed
automatically to be amended to include such applicable information provided by
the Grantors and determined by the Administrative Agent to be appropriate for
inclusion therein. On the date of such consummation, all representations and
warranties by each Grantor shall be deemed to be confirmed, reaffirmed and
restated as of such date giving effect to such amendments to the Schedules
hereto.
F. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Administrative Agent and the Lenders and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
G. Set-Off. Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time while an
Event of Default or a Default pursuant to subsection 9(a) of the Credit
Agreement shall have occurred and be continuing, without notice to such
Guarantor, any other Guarantor or the Borrower, any such notice being expressly
waived by each Guarantor and by the Borrower, to set-off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Administrative Agent or
such Lender to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Administrative Agent or such Lender may elect,
against and on account of the obligations and liabilities of such Guarantor to
the Administrative Agent or such Lender hereunder and claims of every nature
and description of the Administrative Agent or such Lender against such
Guarantor, in any currency, whether arising hereunder, under the Credit
Agreement, any other Loan Document or otherwise, as the Administrative Agent or
such Lender may elect, whether or not the Administrative Agent or any Lender
has made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Administrative Agent and each
Lender shall notify such Guarantor promptly of any such set-off and the
application made by the Administrative Agent or such Lender of the proceeds
thereof, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Administrative
Agent and each Lender under this Section 8.6 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.
<PAGE> 137
H. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
I. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
J. Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
K. Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
L. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
M. Submission To Jurisdiction; Waivers. Each Guarantor
hereby irrevocably and unconditionally:
1. submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
2. consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
3. agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Guarantor at its address referred to in Section 8.2
or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
4. agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
<PAGE> 138
5. waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
N. Acknowledgements. Each Guarantor hereby acknowledges
that:
1. it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
2. neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Guarantor arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Guarantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
3. no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Guarantors and the
Lenders.
O. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
P. Additional Grantors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 7.10(b) of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in
the form of Annex 1 hereto.
Q. Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor
following any such termination, the Administrative Agent shall deliver to such
Grantor any Collateral held by the Administrative Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral. At the request and sole expense of the
Borrower, a Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Guarantor shall be sold, transferred
or otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrower shall have
<PAGE> 139
delivered to the Administrative Agent, at least ten Business Days prior to the
date of the proposed release, a written request for release identifying the
relevant Guarantor and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection therewith,
together with a certification by the Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
[NAME OF GRANTOR]
By:____________________________
Title:
<PAGE> 140
Schedule 1
----------
NOTICE ADDRESSES OF GUARANTORS
<PAGE> 141
Schedule 2
----------
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Stock Certificate
Issuer Class of Stock No. No. of Shares
----------------------- -------------- ----------------- -------------
</TABLE>
PLEDGED NOTES:
<TABLE>
<CAPTION>
Issuer Payee Principal Amount
---------------------------- ------------- -------------------------
<S> <C> <C>
</TABLE>
<PAGE> 142
Schedule 3
----------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock
Other Actions
[Describe other actions to be taken]
<PAGE> 143
Schedule 4
----------
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
<PAGE> 144
Schedule 5
----------
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
<PAGE> 145
Schedule 6
----------
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
<PAGE> 146
Annex 1 to
Guarantee and Collateral Agreement
----------------------------------
ASSUMPTION AGREEMENT, dated as of July __, 199_, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, as administrative
agent (in such capacity, the "Administrative Agent") for the banks and other
financial institutions (the "Lenders") parties to the Credit Agreement referred
to below. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Outdoor Systems, Inc. (the "Borrower"), the Lenders
and the Administrative Agent have entered into a Credit Agreement, dated as of
July, 1996 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower
and certain of its Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of July __, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
____________* to the Guarantee and Collateral Agreement. The Additional
Grantor hereby represents and warrants that each of the representations and
warranties contained in Section 3 of the Guarantee and Collateral Agreement is
true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
__________________________________
* Refer to each Schedule which needs to be supplemented.
<PAGE> 147
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:_____________________________________
Name:
Title:
<PAGE> 148
AMENDMENT
AMENDMENT, dated as of July 15, 1996 (this "Amendment"), to the Second
Amended and Restated Credit Agreement, dated as of July 9, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among OUTDOOR SYSTEMS, INC., (the "Borrower"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders") and
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as administrative agent
(in such capacity, the "Administrative Agent"). All terms defined in the
Credit Agreement and not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Borrower, the Lenders and the Administrative Agent hereby agree
that subsection 6.1(k) of the Credit Agreement is amended by replacing such
subsection in its entirety with the following:
"(k) Purchase of Senior Notes. The Administrative Agent
shall have received, with a copy for each Lender, evidence reasonably
satisfactory to it that the Borrower shall have received tenders that
have not been withdrawn for at least a majority of the Senior Notes
pursuant to a tender offer at a price reasonably satisfactory to the
Lenders; and, if fewer than 100% of all outstanding Senior Notes have
been purchased on the Closing Date, the Borrower shall have agreed
(pursuant to an undertaking satisfactory to the Administrative Agent)
that the Senior Notes, if any, remaining outstanding after the
completion of such tender offer shall be defeased in amounts
determined on or after the Closing Date by the Majority Lenders in
their sole discretion."
This Amendment shall become effective on and as of the date that the
Administrative Agent shall have received counterparts of this Amendment, duly
executed and delivered by a duly authorized officer of each of the Borrower,
the Administrative Agent, and the Majority Lenders. Except as expressly
amended herein, the Credit Agreement shall continue to be, and shall remain, in
full force and effect. This Amendment shall not be deemed to be a waiver of,
or consent to, or a modification or amendment of, any other term or condition
of the Credit Agreement or any other Loan Document or to prejudice any other
right or rights which the Lenders may now have or may have in the future under
or in connection with the Credit Agreement or any of the instruments or
agreements referred to therein, as the same may be amended from time to time.
This Amendment may be executed by one or more of the parties hereto in
any number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. This Amendment
shall be governed by, and construed and interpreted in accordance with, the
laws of the State of New York.
<PAGE> 149
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their respective duly authorized officers as of
the date first above written.
OUTDOOR SYSTEMS, INC.
By: /s/ WILLIAM S. LEVINE
--------------------------------
William S. Levine,
Title: Chairman
CIBC, INC., as a Lender
By: /s/ MATTHEW B. JONES
--------------------------------
Matthew B. Jones,
Title: Authorized Signatory
<PAGE> 1
EXHIBIT 99.4
SENIOR SUBORDINATED CREDIT AGREEMENT
dated as of
July 9, 1996
among
OUTDOOR SYSTEMS, INC.,
as Borrower,
THE GUARANTORS named herein
THE LENDERS named herein
and
CANADIAN IMPERIAL BANK OF COMMERCE, as Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Heading Page
- ------- ------- ----
<S> <C> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
1.3 Other Definitional Provisions;
Anniversaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT
AND LOANS; NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.1 Bridge Loan and Bridge Note . . . . . . . . . . . . . . . . . . . . . . . 34
A. Bridge Loan Commitment . . . . . . . . . . . . . . . . . . . . . . . . 34
B. Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 35
C. Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . 35
D. Bridge Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
E. Scheduled Payment of Bridge Loan . . . . . . . . . . . . . . . . . . . 36
F. Termination of Bridge Loan
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
G. Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.2 Term Loan and Term Note . . . . . . . . . . . . . . . . . . . . . . . . . 37
A. Term Loan Commitment . . . . . . . . . . . . . . . . . . . . . . . . . 37
B. Notice of Conversion/Borrowing . . . . . . . . . . . . . . . . . . . . 37
C. Making of Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . 37
D. Maturity of Term Loan . . . . . . . . . . . . . . . . . . . . . . . . 37
E. Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.3 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 38
A. Rate of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
B. Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 38
C. Post-Maturity Interest . . . . . . . . . . . . . . . . . . . . . . . . 39
D. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . 39
2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.5 Prepayments and Payments . . . . . . . . . . . . . . . . . . . . . . . . . 40
A. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
B. Manner and Time of Payment . . . . . . . . . . . . . . . . . . . . . . 44
C. Payments on Non-Business Days . . . . . . . . . . . . . . . . . . . . 44
D. Notation of Payment . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.6 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
A. Bridge Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
B. Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
C. Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.1 Conditions to Bridge Loan . . . . . . . . . . . . . . . . . . . . . . . . 45
3.2 Conditions to Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . 50
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SECTION 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 52
4.1 Organization and Good Standing;
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.2 Authorization and Power . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.3 No Conflicts or Consents . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.4 Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.5 Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.7 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.8 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.9 Compliance with Contracts, Etc. . . . . . . . . . . . . . . . . . . . . . 57
4.10 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.11 Use of Proceeds; Margin Stock, Etc. . . . . . . . . . . . . . . . . . . . 58
4.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.14 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.15 Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.16 Capital Structure and Subsidiaries . . . . . . . . . . . . . . . . . . . . 60
4.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.19 Survival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.20 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.21 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.22 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.23 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.24 Senior Subordinated Indenture; etc. . . . . . . . . . . . . . . . . . . . 67
4.25 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . 68
5.2 Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 74
5.3 Payment of Taxes and Claims; Tax
Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . 74
5.5 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.6 Equal Security for Loans and Notes . . . . . . . . . . . . . . . . . . . . 75
5.7 Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 76
5.8 Maintenance of Accurate Records, Etc. . . . . . . . . . . . . . . . . . . 76
5.9 Take-Out Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.10 Exchange of Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.11 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
5.12 Payments in U.S. Dollars . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.13 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.14 Lenders Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.3 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
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6.4 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . 84
6.5 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.6 Senior Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . 85
6.7 Restriction on Fundamental Changes . . . . . . . . . . . . . . . . . . . . 86
6.8 Limitation on Dividend and Other
Payment Restrictions Affecting
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.9 Transactions with Shareholders and
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.10 Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.11 Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.12 Amendments or Waivers of Certain
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.13 Amendments to Charter Documents . . . . . . . . . . . . . . . . . . . . . 89
6.14 Refinancing of the Loans in Part . . . . . . . . . . . . . . . . . . . . . 89
6.15 Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
6.16 Transfer of Assets to Subsidiaries . . . . . . . . . . . . . . . . . . . . 90
6.17 Additional Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 7 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.1 Failure To Make Payments When Due . . . . . . . . . . . . . . . . . . . . 91
7.2 Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . 91
7.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . 92
7.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.5 Other Defaults Under Agreement or Loan
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.6 Involuntary Bankruptcy; Appointment of
Custodian, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.7 Voluntary Bankruptcy; Appointment of
Custodian, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.8 Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . 93
7.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.10 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.11 Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 8 SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
8.1 Obligations Subordinated to Senior
Indebtedness of the Company . . . . . . . . . . . . . . . . . . . . . . 95
8.2 Priority and Payment Over of Proceeds
in Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
8.3 Payments May Be Paid Prior to
Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.4 Rights of Holders of Senior
Indebtedness of the Company Not To
Be Impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.5 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.6 Obligations of the Company
Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.7 Lenders Authorize Agent to Effectuate
Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
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SECTION
9 THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
9.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
9.6 Non-Reliance on Agent and Other
Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
9.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . 106
9.9 Resignation of the Agent; Successor Agent . . . . . . . . . . . . . . . . 106
SECTION 10 GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.1 Unconditional Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 108
10.2 Subordination of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 108
10.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
10.4 Release of a Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . 108
10.5 Limitation of Guarantor's Liability . . . . . . . . . . . . . . . . . . . 109
10.6 Guarantors May Consolidate, etc., on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.7 Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
10.8 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . 111
10.9 Evidence of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 111
10.10 Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 11 SUBORDINATION OF GUARANTEE OBLIGATIONS . . . . . . . . . . . . . . . . . . 112
11.1 Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 112
11.2 Priority and Payment Over of Proceeds
in Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.3 Payments May Be Paid Prior to
Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
11.4 Rights of Holders of Guarantor Senior
Indebtedness Not To Be Impaired . . . . . . . . . . . . . . . . . . . . 116
11.5 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
11.6 Obligations of the Guarantors
Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
11.7 Lenders Authorize Agent to Effectuate
Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 12 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
12.1 Representation of the Lenders . . . . . . . . . . . . . . . . . . . . . . 119
12.2 Participations in and Assignments of
Loans and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
12.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
12.4 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
12.5 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
12.6 Amendments and Waivers; Payments for
Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
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12.7 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . 125
12.8 Entirety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
12.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
12.10 Survival of Warranties and Certain
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.11 Failure or Indulgence Not Waiver;
Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.13 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.14 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.15 Successors and Assigns; Subsequent
Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.16 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . 128
12.17 Consent to Jurisdiction; Venue; Waiver
of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
12.18 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
12.19 Taxes and Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 130
12.20 Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
12.21 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
12.22 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
12.23 Role of Special Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 133
SIGNATURE PAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
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SCHEDULES
<S> <C>
A SUBSIDIARIES
B EXISTING INDEBTEDNESS
C ENVIRONMENTAL MATTERS
D EXISTING LIENS
E LITIGATION
F ERISA
G EXISTING INVESTMENTS
H INTELLECTUAL PROPERTY
I PERMITS
J BROKERS FEES
K TAXES
L PRO FORMA CAPITAL STRUCTURE
EXHIBITS
I FORM OF BRIDGE NOTE
II FORM OF TERM NOTE
III FORM OF COMPLIANCE CERTIFICATE
IV-A FORM OF NOTICE OF BORROWING
IV-B FORM OF NOTICE OF CONVERSION
V FORM OF SENIOR SUBORDINATED INDENTURE
VI FORM OF REGISTRATION RIGHTS AGREEMENT
VII FORM OF OPINION OF POWELL, GOLDSTEIN,
FRAZER & MURPHY - SPECIAL COUNSEL
FOR THE COMPANY AND THE GUARANTORS
VIII FORM OF OPINION OF CAHILL GORDON & REINDEL
- SPECIAL COUNSEL FOR THE LENDERS
IX FORM OF NOTATION OF GUARANTEE
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This Senior Subordinated Credit Agreement is dated as of July
9, 1996, and entered into by and among Outdoor Systems, Inc., a Delaware
corporation (the "Company"), the Subsidiary Guarantors named on the signature
pages hereto, the Lenders named on the signature pages hereto (the "Lenders"),
and Canadian Imperial Bank of Commerce ("CIBC"), as agent for the Lenders (in
such capacity, the "Agent").
RECITALS
WHEREAS, the Company desires that the Lenders extend a senior
subordinated credit facility to the Company in connection with the Acquisition
(as defined herein);
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the
following meanings:
"Acquired Business" means the capital stock and the assets
comprising the outdoor advertising business of Gannett Co., Inc. and its
affiliates as described in the Acquisition Agreement.
"Acquisition" means the acquisition by the Company of the
Acquired Business pursuant to the Acquisition Agreement.
"Acquisition Agreement" means the Asset Purchase Agreement
dated July 9, 1996 among Gannett Co., Inc., Combined Communications
Corporation, Gannett Transit, Inc., Shelter Media Communications, Inc., Gannett
International Communications, Inc. and the Company.
"Adjusted Net Assets" shall have the meaning provided in
Section 10.7.
"Advertising Displays" means all posters, signs, billboards
and other outdoor advertising displays and related sites therefor owned or
leased (as lessee) by the Company and its Subsidiaries.
<PAGE> 9
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"Affiliate," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means (i) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise, or (ii) the ownership of more than 10%
of the voting securities of that Person; provided that neither CIBC nor any of
its Affiliates shall be treated as an Affiliate of the Company or of any
Subsidiary of the Company.
"Agent" has the meaning ascribed to such term in the
introduction to this Agreement.
"Agreement" means this Senior Subordinated Credit Agreement
dated as of July 9, 1996, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Amount of Unfunded Benefit Liability" means, with respect to
any Pension Plan, (i) if set forth on the most recent actuarial valuation
report with respect to such Pension Plan, the amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise,
the excess of (a) the greater of the current liability (as defined in Section
412(l)(7) of the Internal Revenue Code) or the actuarial present value of the
accrued benefits with respect to such Pension Plan over (b) the market value of
the assets of such Pension Plan.
"Applicable Rate" means for each Monthly Period the LIBOR Rate
then in effect.
"Applicable Spread" means (i) 6% for the period from and
including the Closing Date to but excluding the sixth Monthly Anniversary
following the Closing Date, (ii) 7% for the period from and including the sixth
Monthly Anniversary following the Closing Date to but excluding the ninth
Monthly Anniversary following the Closing Date, and (iii) 7.5% for the period
from and including the ninth Monthly Anniversary following the Closing Date to
but excluding the Conversion Date. In addition to the foregoing, on the
Conversion Date, the Applicable Spread shall increase by .5% over the then
current Applicable Spread and increase .5% on each third Monthly Anniversary
following the Conversion Date.
<PAGE> 10
-3-
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, lease, assignment, transfer or other disposition for value
(including, without limitation, pursuant to any amalgamation, merger or
consolidation or pursuant to any sale-and-leaseback transaction) by the Company
or by any of its Subsidiaries to any Person other than the Company or any of
its wholly-owned Subsidiaries (any such transaction, a "disposition") of (i)
any of the stock of any of the Company's Subsidiaries, (ii) substantially all
of the assets of any division or line of business of the Company or of any of
its Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
the Company or of any of its Subsidiaries; excluding (a) any disposition of
Cash Equivalents or inventory in the ordinary course of business or obsolete
equipment in the ordinary course of business consistent with past practices of
the Company or the lease or sub-lease of any real or personal property in the
ordinary course of business and (b) any disposition of stock or assets in any
single transaction or related series of transactions the aggregate value of
which is equal to $250,000 or less.
"Available Cash Flow" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) Consolidated Tax Expense, (iv)
depreciation, (v) amortization and (vi) all other non-cash charges deducted in
the calculation of Consolidated Net Income (but excluding any non-cash charges
related to the items described in clauses (i) through (v) of the definition of
"Consolidated Net Income") for the period as to which the computation of
Available Cash Flow is made, all as determined in accordance with GAAP.
"Bank Indebtedness" means any and all obligations of every
nature of the Guarantors, the Company and its Subsidiaries under or in respect
of the Senior Credit Facilities whether for principal, reimbursements,
interest, fees, expenses, indemnities or otherwise, and whether primary,
secondary, direct, indirect, contingent, fixed or otherwise (including
obligations of performance).
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute
or any other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
<PAGE> 11
-4-
"Bankruptcy Order" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation, winding
up, dissolution or reorganization, or appointing a custodian of a debtor or of
all or any substantial part of a debtor's property, or providing for the
staying, arrangement, adjustment or composition of indebtedness or other relief
of a debtor.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person or any duly authorized committee of that
Board.
"Bridge Loan Commitment" means the commitment of the Lenders
to make the Bridge Loan as set forth in Section 2.1A.
"Bridge Loan" means, collectively, the loans made by the
Lenders pursuant to Section 2.1A.
"Bridge Notes" has the meaning ascribed to such term in
Section 2.1D.
"Business Day" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of New York, New York or the
State of California or is a day on which banking institutions therein located
are authorized or required by law or other governmental action to close.
"Capital Lease," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is required to be accounted for as a capital lease on
the balance sheet of that Person.
"Capitalized Lease Obligation" means obligations under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations determined in
accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including,
without limitation, each class of Common Stock and Preferred Stock of such
Person and (ii) with respect to any Person that is not a
<PAGE> 12
-5-
corporation, any and all partnership or other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Rating Group ("S&P") or Moody's Investors
Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than one
year from the date of creation thereof and, at the time of acquisition, having
the highest rating obtainable from either S&P's or Moody's; and (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District
of Columbia that (a) is at least "adequately capitalized" (as defined in the
regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; (v)
shares of any money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i)
and (ii) above, (b) has net assets of not less than $500,000,000, and (c) has
the highest rating obtainable from either S&P's or Moody's; and (vi) repurchase
agreements with respect to, and which are fully secured by a perfected security
interest in, obligations of a type described in clause (i) or clause (ii) above
and are with any commercial bank described in clause (iv) above.
"Cash Flow Leverage Ratio" means the ratio of (i) the sum of
the aggregate outstanding principal amount of all Indebtedness of the Company
and its Subsidiaries determined as of the date of such calculation on a
consolidated basis in accordance with GAAP to (ii) Available Cash Flow of the
Company and its Subsidiaries determined on a consolidated basis for the period
of such calculation.
"Cash Proceeds" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant to,
or monetization of, a note receivable or otherwise (other than the portion of
such
<PAGE> 13
-6-
deferred payment constituting interest, which shall be deemed not to constitute
Cash Proceeds) but only as and when so received) received from such Asset Sale.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group"), together with any
Affiliates thereof; (ii) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution of the
Company; (iii) the Permitted Holders, individually or in the aggregate, shall
cease to beneficially own (within the meaning of Rule 13d-3 under the Exchange
Act), directly or indirectly, Voting Stock representing at least 40% (or at any
time that the Company's Cash Flow Leverage Ratio for the Company's most
recently ended two full fiscal quarters for which internal financial statements
are available as determined on a pro forma basis in accordance with the last
paragraph of Section 6.1 hereof is less than 3.5 to 1, 25%) of the total voting
power of all Voting Stock of the Company; (iv) any Person or Group (other than
the Permitted Holders) shall become the owner, directly or indirectly,
beneficially or of record, of Voting Stock representing more than 20% of the
total voting power of all Voting Stock of the Company; (v) the replacement of a
majority of the Board of Directors of the Company over a two-year period from
the directors who constituted the Board of Directors of the Company at the
beginning of such period, and such replacement shall not have been approved by
a vote of at least two-thirds of the Board of Directors of the Company then
still in office who either were members of such Board of Directors at the
beginning of such period or whose election as a member of such Board of
Directors was previously so approved; or (vi) the occurrence of any "Change of
Control" as defined in the Senior Subordinated Indenture or the indenture
pursuant to which any Demand Take-Out Notes are issued.
"Change of Control Date" has the meaning ascribed to such term
in Section 2.5A(iv).
"Change of Control Offer" has the meaning ascribed to such
term in Section 2.5A(iv).
"Closing Date" means the date on or before September 30, 1996
on which the Bridge Loan is made and the
<PAGE> 14
-7-
conditions set forth in Section 3.1 are satisfied or waived in accordance with
Section 12.6.
"Closing Date Guarantor" means the following entity which will
become a Guarantor hereunder on the Closing Date: New York Subways Advertising
Co., Inc., an Arizona corporation.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of, such Person's common stock, whether
outstanding on the Closing Date or issued after the Closing Date, and includes,
without limitation, all series and classes of such common stock.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Company Common Stock" means the common stock, par value $.01
per share, of the Company.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit III annexed hereto delivered to the Agent by the Company
pursuant to Section 5.1(iv)(b).
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the total interest
expense of such Person and its Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP (including amortization of original
issue discount, non-cash interest payments and the interest component of
Capitalized Lease Obligations), whether paid or accrued, to the extent such
expense was deducted in computing the Consolidated Net Income of such Person,
and (ii) all dividends paid or declared during such period on any preferred
stock of such Person and its Subsidiaries.
"Consolidated Net Income" means, with respect to any Person,
for any period, the aggregate of the net income (or loss) of such Person and
its Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (a) the net income of any other Person in
which such Person or any of its Subsidiaries has an interest (which interest
does not cause the net income of such other Person to
<PAGE> 15
-8-
be consolidated with the net income of such Person and its Subsidiaries in
accordance with GAAP) shall be included only to the extent of the amount of
dividends or distributions actually paid to such Person or such Subsidiary by
such other Person during such period; (b) the net income of any Subsidiary of
such Person that is subject to any Payment Restriction shall be excluded to the
extent such Payment Restriction would prevent the payment of an amount that
otherwise could have been paid to such Person or to a Subsidiary of such Person
not subject to any Payment Restriction; and (c) there shall be excluded (i) the
net income (or loss) of any other Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition, (ii) all
gains and losses realized on any Asset Sale (without regard to the $250,000
threshold set forth in the definition of Asset Sale), (iii) all gains and
losses realized on the purchase or other acquisition by such Person or any of
its Subsidiaries of any Securities of such Person or any of its Subsidiaries,
(iv) all other net extraordinary gains, and (v)(A) all non-cash charges
(provided, however, that any cash payments actually made with respect to the
liabilities for which such charges were created shall be deducted from
Consolidated Net Income in the period when made) and (B) all deferred financing
costs written off in connection with the early extinguishment of any
Indebtedness, in each case, incurred by the Company or any of its Subsidiaries
in connection with the Transactions.
"Consolidated Net Worth" means, as at any date of
determination, the sum of the Capital Stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of the Company and its
Subsidiaries on a consolidated basis determined in conformity with GAAP.
"Consolidated Tax Expense" means, for any Person, for any
period, the aggregate income tax expense of such Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, excluding, however,
the income tax expense of such Person attributable to a disposition of assets
the gain from which is excluded form the calculation of "Consolidated Net
Income," but only to the extent such income tax expense does not exceed the
cash portion of the consideration received by such Person in connection with
the disposition of such assets.
"Contested Claim" means any Tax, Indebtedness or other claim
or liability (i) the validity or amount of which is being diligently contested
in good faith, (ii) for which adequate reserve, or other appropriate provision,
if any, as
<PAGE> 16
-9-
required in conformity with GAAP shall have been made, and (iii) with respect
to which any right to execute upon or sell any assets of the Company or of any
of its Subsidiaries has not matured or has been and continues to be effectively
enjoined, superseded or stayed.
"Contingent Obligation," as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-performance
by any other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or any balance
sheet item, level of income or financial condition of another if, in the case
of any agreement described under subclause (X) or (Y) of this sentence, the
primary purpose or intent thereof is as described in the preceding sentence.
The amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to
which such Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party
<PAGE> 17
-10-
or by which it or any of its properties is bound or to which it or any of its
properties is subject.
"Controlled Group" means (i) a controlled group of
corporations as defined in Section 1563(a) of the Internal Revenue Code or (ii)
a group of trades or businesses under common control, as defined in Section
414(c) of the Internal Revenue Code, of which the Company or any of its
Subsidiaries is a part or becomes a part.
"Conversion Date" means the one year anniversary of the
Closing Date or such later date to which the Conversion Date may be deferred
pursuant to Section 3.2D.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement designed to protect Company or any of
its Subsidiaries against fluctuations in currency values.
"Custodian" means any receiver, interim receiver, receiver and
manager, trustee, assignee, liquidator, sequestrator or similar official
charged with maintaining possession or control over property for one or more
creditors, whether under any Bankruptcy Law or otherwise.
"Demand Take-Out Notes" means senior subordinated notes of the
Company issued under an indenture substantially similar to the Senior
Subordinated Indenture the proceeds of which shall be used to repay the Bridge
Notes in whole or in part, which Demand Take-Out Notes shall be guaranteed by
each entity that guarantees the Bridge Loan.
"Denver Disposition" means the sale by the Company of any or
all of the outdoor advertising assets of the Company that, prior to the Closing
Date, serve the Denver, Colorado market.
"Designated Senior Indebtedness" as to the Company or any
Guarantor, as the case may be, means any Senior Indebtedness (a) under or in
respect of the Senior Credit Facilities, or (b) which at the time of
determination exceeds $25,000,000 in aggregate principal amount (or accreted
value in the case of Indebtedness issued at a discount) outstanding or
available under a committed facility, and (x) unless such designation is
prohibited by the Senior Credit Facilities, which is specifically designated in
the instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by
<PAGE> 18
-11-
such Person and (y) as to which the Agent has been given written notice of such
designation.
"Disqualified Capital Stock" means any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event (other than an
event which would constitute a Change of Control), (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except upon the
occurrence of a Change of Control), in whole or in part, on or prior to the
final maturity date of the Notes, or (ii) is convertible into or exchangeable
for (whether at the option of the issuer or the holder thereof) (a) debt
securities or (b) any Capital Stock referred to in (i) above, in each case at
any time prior to the final maturity of the Notes; provided that only the
portion of Capital Stock which so matures or is mandatorily redeemable, is so
convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such final maturity date shall be deemed to be Disqualified
Capital Stock.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Eligible Assignee" means any "accredited investor" (as
defined in Regulation D under the Securities Act of 1933, as amended) which
extends credit or buys loans or securities as one of its businesses, including,
but not limited to, commercial banks, insurance companies, mutual funds and
lease financing companies.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA (i) which is maintained or contributed to by
any of the Company or its Subsidiaries or any of their respective ERISA
Affiliates or (ii) with respect to which the Company or any of its Subsidiaries
retains any liability, including any potential joint and several liability as a
result of an affiliation with an ERISA Affiliate or a party that would be an
ERISA Affiliate except for the fact the affiliation ceased more than five
calendar years prior to the date hereof.
"Environmental Claim" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
response or corrective action, any damage, including, without limitation,
<PAGE> 19
-12-
personal injury (including sickness, disease or death), tangible or intangible
property damage, contribution, indemnity, indirect or consequential damages,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in each
case arising under any Environmental Law, including without limitation,
relating to, resulting from or in connection with Hazardous Materials and
relating to the Company, any of its Subsidiaries or any of their respective
properties or predecessors in interest.
"Environmental Laws" means the common law and all statutes,
ordinances, orders, rules, regulations, plans, policies or decrees and the like
relating to (i) environmental matters, including, without limitation, those
relating to fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section
1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section
1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, and any analogous future or present
statutes and regulations promulgated pursuant thereto, each as in effect as of
the date of determination.
"Environmental Lien" means a Lien in favor of a Tribunal or
other Person (i) for any liability under an Environmental Law or (ii) for
damages arising from or costs incurred by such Tribunal or other Person in
response to a release or threatened release of hazardous or toxic waste,
substance or constituent into the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
<PAGE> 20
-13-
"ERISA Affiliate", as applied to any Person, means (i) any
corporation which is, or was at any time within the five calendar years
immediately preceding the date hereof, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time within the five calendar years
immediately preceding the date hereof, a member; (ii) any trade or business
(whether or not incorporated) which is, or was at any time within the five
calendar years immediately preceding the date hereof, a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section 414(m) or
(o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. ERISA Affiliate shall also include any Person that was an
ERISA Affiliate of the Company and its Subsidiaries at any time within the five
calendar years immediately preceding the date hereof, but only with respect to
any Employee Benefit Plan.
"ERISA Event" means (i) a Reportable Event; (ii) the failure
to meet the minimum funding standard of Section 412 of the Internal Revenue
Code with respect to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make by its due
date a required installment under Section 412(m) of the Internal Revenue Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (iv) the withdrawal by any of the Company or its Subsidiaries
or any of their respective ERISA Affiliates from any Pension Plan with two or
more contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
any of the Company or its Subsidiaries or any of their respective ERISA
Affiliates by reason of the application of Section 4069 of ERISA or Section
4212(c) of ERISA; (vii) the withdrawal by any of the Company or its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial
<PAGE> 21
-14-
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or the receipt
by any of the Company or its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization
or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could reasonably be expected to give
rise to the imposition on any of the Company or its Subsidiaries or any of
their respective ERISA Affiliates of fines, penalties, taxes or related charges
under Chapter 43 of the Internal Revenue Code or under Sections 409, 502(c),
(i) or (l) or 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against any of the Company or its Subsidiaries or any of their
respective ERISA Affiliates in connection with any such Employee Benefit Plan;
(x) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"Event of Default" means each of the events set forth in
Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Exchange Notes" has the meaning ascribed to it in Section
5.10(ii).
"Exchange Request" has the meaning ascribed to it in Section
5.10.
"Facilities" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by any of
the Company or its Subsidiaries or any of their respective predecessors in
interest.
<PAGE> 22
-15-
"Federal Funds Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Funding Guarantor" shall have the meaning provided in Section
10.7.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of the Closing Date, except that, for
purposes of Section 5.1, such term shall mean such principles in effect from
time to time.
"Guarantee Obligations" shall have the meaning provided in
Section 11.1.
"Guarantees" means, collectively, the guarantees delivered to
the Lenders by the Guarantors pursuant to Section 10 which are evidenced by
notations of guarantee substantially in the form of Exhibit IX hereto.
"Guarantor Payment Blockage Period" shall have the meaning
provided in Section 11.2.
"Guarantor Senior Indebtedness" means, with respect to any
Guarantor, the principal of, premium, if any, and interest on and all other
obligations with respect to any Indebtedness of such Guarantor, whether
outstanding on the Closing Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Guarantee of such Guarantor. Without limiting the generality of the foregoing,
"Guarantor Senior Indebtedness" shall include (x) the principal of, premium, if
any, and interest on all obligations of every nature of such Guarantor from
time to time owed to the lenders under the Senior Credit Facilities, including,
without limitation, all obligations with respect to letters of credit and
principal of and interest on, and all fees, indemnities and expenses payable
under the Senior Credit
<PAGE> 23
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Facilities, and all obligations under Interest Rate Agreements (including
guarantees thereof) entered into with lenders under the Senior Credit
Facilities and their Affiliates, (y) interest accruing thereon subsequent to
the occurrence of any Event of Default specified in Sections 7.6 and 7.7
relating to the Guarantors, whether or not the claim for such interest is
allowed under any applicable Bankruptcy Law and (z) all deferrals, renewals,
extensions, refinancings and restructuring of, and amendments, modifications
and supplements to any of the Guarantor Senior Indebtedness described above.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall not
include (a) Indebtedness evidenced by the Guarantee of such Guarantor, (b)
Indebtedness that is expressly subordinate or junior in right of payment to any
other Indebtedness of such Guarantor, (c) Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Title 11, United
States Code, is without recourse to such Guarantor, (d) Indebtedness which is
represented by Disqualified Capital Stock, (e) obligations for goods, materials
or services purchased in the ordinary course of business or obligations
consisting of trade payables, (f) Indebtedness of or amounts owed by such
Guarantor for compensation to employees or for services rendered to such
Guarantor, (g) any liability for federal, state, local or other taxes owed or
owing by such Guarantor, (h) Indebtedness of such Guarantor representing a
guarantee of Subordinated Indebtedness or Pari Passu Indebtedness of the
Company or any other Guarantor, (i) Indebtedness of such Guarantor to a
Subsidiary of the Company and (j) that portion of any Indebtedness (other than
Indebtedness described in clause (x) of the second sentence of this definition
which relates to reimbursement obligations (whether in the form of loans or
otherwise) under letters of credit with respect to drawings made thereunder and
not yet reimbursed) which is incurred by such Guarantor in violation of this
Agreement.
"Guarantors" means (i) each of the Subsidiary Guarantors, (ii)
the Closing Date Guarantor and (iii) each of the Company's Subsidiaries which
becomes a Subsidiary Guarantor pursuant to Section 6.17 hereof.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," "infectious waste," "toxic substances" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as
<PAGE> 24
-17-
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws or publications promulgated pursuant thereto;
(ii) any oil, petroleum, petroleum fraction or petroleum derived substance;
(iii) any drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any radioactive
materials; (vi) asbestos in any form; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty parts per
million; (ix) pesticides; and (x) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority or which may or could pose a hazard to human health or safety or the
environment.
"Houston Disposition" means the sale by the Company of any or
all of the assets representing outdoor advertising assets serving the Houston,
Texas market prior or subsequent to the Closing Date.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring"
shall have meanings correlative to the foregoing); provided, however, that any
amendment, modification or waiver of any document pursuant to which
Indebtedness was previously Incurred shall only be deemed to be an Incurrence
of Indebtedness if and to the extent such amendment, modification or waiver (i)
increases the principal thereof or interest rate or premium payable thereon or
(ii) changes to an earlier date the stated maturity thereof or the date of any
scheduled or required principal payment thereon or the time or circumstances
under which such Indebtedness shall be redeemed; provided, further, that any
Indebtedness of a Person existing at the time such Person becomes (after the
Closing Date) a Subsidiary of the Company (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at
the time it becomes a Subsidiary of the Company.
<PAGE> 25
-18-
"Indebtedness" means, with respect to any Person, (i) all
indebtedness, obligations and liabilities of such Person for borrowed money or
for reimbursement of any obligor on any letter of credit with respect to
drawings made thereunder and not yet reimbursed, (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet of such Person in conformity with GAAP, (iii)
notes payable and drafts accepted representing extensions of credit, whether or
not representing obligations for borrowed money, of such Person, (iv) any
indebtedness, obligation or liability of such Person owed for all or any part
of the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than
six months (or a longer period of up to one year, if such terms are available
from suppliers in the ordinary course of business) from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, (v) all indebtedness, obligations and liabilities secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person except that "Indebtedness" shall
not include trade payables and accrued liabilities Incurred in the ordinary
course of business for the purchase of goods or services which are not secured
by a Lien other than a Permitted Encumbrance and obligations under Interest
Rate Agreements and Currency Agreements (which constitute Contingent
Obligations, not Indebtedness), (vi) guarantees of such Person in respect of
Indebtedness of other Persons and (vii) all Disqualified Capital Stock issued
by such Person with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased on any date
on which Indebtedness shall be required to be determined pursuant to this
Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value to be
determined reasonably and in good faith by the board of directors of the issuer
of such Disqualified Capital Stock.
"indemnified liabilities" has the meaning ascribed to such
term in Section 12.4.
<PAGE> 26
-19-
"Indemnitees" has the meaning ascribed to such term in
Section 12.4.
"Independent Financial Advisor" means an accounting,
appraisal, investment banking or consulting firm of nationally recognized
standing that is, in the reasonable and good faith judgment of the Board of
Directors of the Company, qualified to perform the task for which such firm has
been engaged and disinterested and independent with respect to the Company and
its Affiliates.
"Intellectual Property" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of the Company as currently conducted that are
material to the condition (financial or otherwise), business or operations of
the Company and its Subsidiaries, taken as a whole.
"Intercompany Indebtedness" means any Indebtedness of the
Company or any Subsidiary of the Company which, in the case of the Company, is
owing to any wholly-owned Subsidiary of the Company and which, in the case of
any such Subsidiary, is owing to the Company or any wholly-owned Subsidiary of
the Company; provided, however, that if as of any date any Person other than
the Company or a wholly-owned Subsidiary of the Company or any lender under the
Senior Credit Facilities owns or holds such Indebtedness, or holds any Lien in
respect thereof, such Indebtedness shall no longer be Intercompany Indebtedness
permitted to be Incurred pursuant to Section 6.1(vi).
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in interest rates.
"Interest Rate Determination Date" means, with respect to any
Monthly Period, the second Business Day on which banks in New York and London
are open prior to the first Business Day of such Monthly Period.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor code or statute.
"Investment" means (i) any direct or indirect purchase or
other acquisition of, or of a beneficial interest in, any Securities of any
other Person or (ii) any direct or
<PAGE> 27
-20-
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business), extension of credit or capital contribution
to any other Person, including all indebtedness and accounts receivable from
that other Person that are not current assets or did not arise from sales to
that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided, however, that, as to any such arrangement in corporate form, such
corporation shall not, as to any Person of which such corporation is a
Subsidiary, be considered to be a Joint Venture to which such Person is a
party.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees of any
state, commonwealth, nation, territory, possession, province, county, parish,
town, township, village, municipality or Tribunal, and "Law" means each of the
foregoing.
"Lenders" has the meaning ascribed to that term in the
introduction to this Agreement and shall include any assignee of any Loan, Note
or Loan Commitment to the extent of such assignment.
"LIBOR Rate" means the rate determined on the basis of the
offered rates for deposits in U.S. Dollars for a period of three months which
appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on the
Interest Rate Determination Date for such Monthly Period. If at least two
rates appear on the Reuters Screen LIBO Page, the rate for such Monthly Period
will be the arithmetic mean of such rates rounded upwards, if necessary, to the
nearest 1/16 of 1%. If fewer than two rates appear on the Reuters Screen LIBO
Page, then such rate shall equal the arithmetic mean (rounded upward to the
nearest 1/16 of 1%) of the interest rates per annum at which deposits in U.S.
Dollars for a period of three months are offered by CIBC or its designee at
approximately 11:00 a.m., London time, on such Interest Rate Determination Date
to first class banks in the London interbank market.
<PAGE> 28
-21-
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Litigation" means any action, suit, proceeding, claim,
lawsuit and/or investigation conducted or threatened by or before any Tribunal.
"Loan Commitment" means the Bridge Loan Commitment and the
Term Loan Commitment.
"Loan Documents" means this Agreement, the Bridge Notes, the
Term Notes, the Guarantees, the Senior Subordinated Indenture, the Exchange
Notes and the Registration Rights Agreement.
"Loans" means the Bridge Loan and the Term Loan as each may be
outstanding.
"Margin Stock" has the meaning assigned to that term in
Regulation U and Regulation G of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole,
after giving effect to the Acquisition or (ii) the material impairment of the
ability of the Company and its Subsidiaries after giving effect to the
Acquisition to perform, or the material impairment of the ability of the Agent
or Lenders to enforce, the Obligations.
"Material Subsidiary" means, with respect to any accounting
period, any Subsidiary of the Company (i) whose revenues constitute greater
than 10% of the aggregate dollar value of the revenues of the Company and its
Subsidiaries, taken as a whole, for such accounting period or (ii) the fair
market value of whose assets at any time during such accounting period is
greater than 10% of the fair market value of all of the assets of the Company
and its Subsidiaries at such time.
"Maximum Cash Interest Rate" means an interest rate of 15% per
annum; provided that in computing such interest
<PAGE> 29
-22-
rate, fees paid to the Lenders shall not be deemed an interest payment.
"Monthly Anniversary" has the meaning ascribed to such term in
Section 1.3.
"Monthly Period" shall mean the period commencing on the 15th
calendar day of each month, if such day is a Business Day, or the first
Business Day succeeding the 15th calendar day of each month and ending on the
day next preceding the first Business Day of the following Monthly Period;
provided, however, that the first Monthly Period shall commence on the Closing
Date.
"Multiemployer Plan" means a Pension Plan which is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale,
Cash Proceeds of such Asset Sale net of bona fide direct costs of sale
including (i) income taxes reasonably estimated to be actually payable as a
result of such Asset Sale within two years of the date of such Asset Sale or
within two years of any installment payment with respect to such Asset Sale,
(ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on, any Indebtedness that is secured by a Lien on the stock
or assets in question and that is required to be repaid under the terms thereof
as a result of such Asset Sale and (iii) reasonable and customary brokerage,
legal and other expenses incurred in connection with such Asset Sale.
"Non-payment Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to act to
accelerate the maturity of any Designated Senior Indebtedness.
"Notes" means, collectively, the Bridge Notes and the Term
Notes.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit IV-A annexed hereto with respect to a proposed borrowing.
"Notice of Conversion" means a notice substantially in the
form of Exhibit IV-B annexed hereto with respect to a proposed conversion.
<PAGE> 30
-23-
"Obligations" means all obligations of every nature of the
Company from time to time owed to the Lenders and the Agent under the Loan
Documents, whether for principal, reimbursements, interest, fees, expenses,
indemnities or otherwise, and whether primary, secondary, direct, indirect,
contingent, fixed or otherwise (including obligations of performance).
"Offer Payment Date" has the meaning ascribed to such term in
Section 2.5A(iv).
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Controller, the Treasurer or
the Secretary of the Company.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by two Officers; provided,
however, that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of the Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"Original Bridge Notes" has the meaning ascribed to such term
in Section 2.1D.
"Original Term Notes" has the meaning ascribed to such term in
Section 2.2E.
"Other Taxes" has the meaning ascribed to such term in Section
12.19.
"Pari Passu Indebtedness" means, with respect to the Company
or any Guarantor, Indebtedness of such Person which
<PAGE> 31
-24-
ranks pari passu in right of payment to the Loans or the Guarantee of such
Guarantor, as the case may be.
"Payment Blockage Period" has the meaning ascribed to such
term in Section 8.2(b).
"Payment Default" means any default in the payment of
principal, premium, if any, or interest on any Designated Senior Indebtedness
beyond any applicable grace period with respect thereto.
"Payment Office" shall mean the office of the Agent located at
425 Lexington Avenue, New York, New York, 10017 or such other office as the
Agent may designate to the Company and the Lenders from time to time.
"Payment Restriction" has the meaning ascribed to such term in
Section 6.8.
"PBGC" means the Pension Benefit Guaranty Corporation, and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"Pension Plan" means an Employee Benefit Plan which is subject
to the provisions of Title IV of ERISA.
"Permits" has the meaning ascribed to such term in Section
4.20.
"Permitted Asset Swap" means the exchange, in the ordinary
course of the outdoor advertising business, of any interest of the Company or
any of its Subsidiaries in any Advertising Display or Displays for a similar
interest in an Advertising Display or Displays of a Person other than the
Company or such Subsidiary; provided that (i) the aggregate fair market value
(as determined in good faith by the Board of Directors of the Company) of the
Advertising Display or Displays being transferred by the Company or such
Subsidiary is not greater than the aggregate fair market value (as determined
in good faith by the Board of Directors of the Company) of the Advertising
Display or Displays received by the Company or such Subsidiary in such exchange
and (ii) the aggregate fair market value (as determined in good faith by the
Board of Directors of the Company) of all Advertising Displays transferred by
the Company and its Subsidiaries in connection with exchanges in any period of
twelve consecutive months shall not exceed $500,000.
<PAGE> 32
-25-
"Permitted Encumbrances" means (i) Liens granted to secure the
Bank Indebtedness and the Obligations hereunder and obligations under Interest
Rate Agreements entered into with lenders under the Senior Credit Facilities
and their Affiliates; (ii) Liens existing on the Closing Date set forth on
Schedule D (which Schedule D may be updated on the Closing Date; provided that
such additional Liens are reasonably acceptable to the Lenders) hereto to the
extent and in the manner such Liens are in effect on the Closing Date; (iii)
Liens for taxes, assessments or governmental charges or claims the payment of
which is not, at the time, required by Section 5.3; (iv) statutory Liens of
landlords and banks and rights of offset, and Liens of carriers, warehousemen,
workmen, repairmen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP shall have been made therefor; (v) Liens
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
utility payments, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money); (vi)
any attachment or judgment Lien not constituting an Event of Default; (vii)
leases or subleases granted to others not interfering in any material respect
with the ordinary conduct of the business of the Company and its Subsidiaries,
taken as a whole; (viii) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of the Company and its Subsidiaries, taken as a whole; (ix) any
(a) interest or title of a lessor or sublessor (other than the Company or any
of its Subsidiaries) under any lease, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to (including
without limitation ground leases or other prior leases of the demised premises,
mortgages, mechanics liens, tax liens, and easements), or (c) subordination of
the interest of the lessee or sublessee under such lease to any restrictions or
encumbrance referred to in the preceding clause (b); (x) Liens arising from
filing UCC financing statements for precautionary purposes relating solely to
true leases of personal property permitted by this Agreement under which the
Company or any of its Subsidiaries is a lessee; (xi) Liens in favor of customs
and revenue authorities arising
<PAGE> 33
-26-
as a matter of law to secure payment of customs duties in connection with the
importation of goods; (xii) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate the use of
any real property; (xiii) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating, reciprocal
easement or similar agreements entered into in the ordinary course of business
of the Company and its Subsidiaries; (xiv) Liens upon specific items of
inventory or other goods and proceeds of any Person securing such Person's
obligations in respect of bankers' acceptances issued or created for the
account of such Person to facilitate the purchase, shipment or storage of such
inventory or other goods in the ordinary course of business; (xv) Liens
securing reimbursement obligations with respect to letters of credit which
encumber documents and other property relating to such letters of credit and
the products and proceeds thereof; (xvi) Liens arising out of consignment or
similar arrangements for the sale of goods entered into by the Company or any
Subsidiary in the ordinary course of business in accordance with past
practices; (xvii) Liens to secure Permitted Refinancing Indebtedness to the
extent the Indebtedness Refinanced was secured and such Liens do not extend to
any property other than the property which was subject to the Lien under the
Indebtedness being Refinanced; (xviii) Liens on assets of the Company securing
Indebtedness which would constitute Senior Indebtedness but for the provisions
of clause (c) in the third sentence of the definition of Senior Indebtedness
and Liens on assets of a Subsidiary Guarantor securing Indebtedness which would
constitute Guarantor Senior Indebtedness but for the provisions of clause (c)
in the third sentence of the definition of Guarantor Senior Indebtedness; and
(xix) Liens to secure Senior Indebtedness or Guarantor Senior Indebtedness.
"Permitted Holders" means William S. Levine, Arthur R. Moreno,
any trust solely for the benefit of Messrs. Levine and Moreno or their
respective immediate family members, or any partnership all the ownership
interests in which are beneficially owned or controlled by any of the
foregoing; provided that with respect to any such trust or partnership either
Mr. Levine or Mr. Moreno shall at all times have the exclusive power to direct
the voting of the shares of Voting Stock of the Company held by such trust or
partnership.
"Permitted Indebtedness" has the meaning ascribed to such term
in Section 6.1.
<PAGE> 34
-27-
"Permitted Investments" means (a) Investments in cash and Cash
Equivalents; (b) Investments by the Company or by any Subsidiary of the Company
in any Person that is or will become immediately after such Investment a
wholly-owned Subsidiary of the Company that either (I) has not Incurred (and
will not Incur as a result of or in connection with such transaction) any
Indebtedness (other than Indebtedness permitted to be Incurred by such
Subsidiary under Section 6.1) or (II) is a Subsidiary Guarantor; provided,
however, that (x) such Investment shall be a Permitted Investment only for so
long as any such Subsidiary in which the Investment has been made meets the
conditions set forth above and (y) no Investment in any such Person or
Subsidiary (including any transaction pursuant to which any Person becomes a
Subsidiary of the Company) will be a Permitted Investment if and for so long as
such Subsidiary is or would be subject to any Payment Restriction; (c) any
Investments in the Company by any Subsidiary of the Company; provided, however,
that any Indebtedness of the Company for payment in respect of such Investment
is subordinated in right of payment, pursuant to a written agreement, to the
Company's Obligations at least to the same extent and in the same manner as the
Loans are subordinated to the Bank Indebtedness; (d) Investments made by the
Company or by its Subsidiaries out of the Net Cash Proceeds of an Asset Sale
made in compliance with Section 2.5A(ii)(a); and (e) Intercompany Indebtedness
by and between the Company and its Subsidiaries.
"Permitted Refinancing Indebtedness" means (A) any Refinancing
by the Company of Indebtedness of the Company or of its Subsidiaries (other
than Indebtedness Incurred or outstanding pursuant to clauses (ii), (iv) and
(v) of Section 6.1) and (B) any Indebtedness incurred pursuant to a Refinancing
by any Subsidiary of the Company of Indebtedness Incurred by such Subsidiary
(other than Indebtedness Incurred or outstanding pursuant to clauses (ii), (iv)
and (v) of Section 6.1), in the case of each of (A) and (B), that does not (1)
result in an increase in the total of the aggregate principal amount of the
Indebtedness of such Person being Refinanced as of the date of such proposed
Refinancing (if such Indebtedness that is Refinancing the existing Indebtedness
is issued at a price less than 100% of the principal amount thereof, an
increase shall not be deemed to have occurred unless the gross proceeds of such
Indebtedness that is Refinancing the existing Indebtedness is in excess of the
total of the aggregate principal amount of the Indebtedness being Refinanced as
of the date of such proposed Refinancing) or (2) create Indebtedness with a
Weighted Average Life to Maturity that is less than the Weighted Average Life
to
<PAGE> 35
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Maturity of the Indebtedness being Refinanced; provided, however, that (x) if
such Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if
such Indebtedness being Refinanced is subordinate or junior in right of payment
to the Loans or if recourse in respect of the Indebtedness being Refinanced is
limited in any respect, then such Indebtedness proposed to be Incurred to
Refinance the existing Indebtedness shall be subordinate in right of payment to
the Loans and recourse with respect thereto, as the case may be, shall be
limited at least to the same extent and in the same manner as the Indebtedness
being Refinanced.
"Person" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.
"PIK Interest Amount" has the meaning ascribed to such term in
Section 2.3B.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of Default if
that condition or event were not cured or removed within any applicable grace
or cure period.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights (as compared to any other Capital
Stock of such Person) with respect to dividends or redemptions or upon
liquidation.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Real Property Assets" means interests in land, buildings,
improvements, and fixtures attached thereto or used in the operation thereof,
in each case owned or leased (as lessee) by the Company or its Subsidiaries.
"Refinance" means, in respect of any security or Indebtedness,
to refinance, extend, renew, refund or defease, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in
<PAGE> 36
-29-
part. "Refinanced" and "Refinancing" shall have correlative meanings.
"Registration Rights Agreement" means a registration rights
agreement substantially in the form of Exhibit VI annexed hereto (with such
changes therein as the Agent and the Company shall approve).
"Related Business Investment" means (i) any Investment by a
Person in any other Person a majority of whose revenues are derived from the
operation of any line of business engaged in by the Company or any of its
Subsidiaries as of the Closing Date and (ii) any capital expenditure or
Investment, in each case reasonably related to the business of the Company and
its Subsidiaries as it is conducted as of the Closing Date and as such business
may thereafter evolve or change.
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or disposal
of any barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Reportable Event" has the meaning set forth in Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension
Plan, but excluding any event for which the 30-day notice requirement has been
waived by applicable regulations of the PBGC.
"Required Lenders" means Lenders holding in the aggregate more
than 50% of the outstanding principal amount of Notes.
"Restricted Payment" has the meaning ascribed to such term in
Section 6.3.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options, warrants,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim
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certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Senior Credit Facilities" means the Second Amended and
Restated Credit Agreement dated as of July 9, 1996 among the Company, the
several lenders from time to time parties thereto and CIBC, as administrative
agent, together with the documents related thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness
under such agreement or any successor or replacement agreement and whether by
the same or any other agent, lender or group of lenders.
"Senior Indebtedness" means for any Person the principal of,
premium, if any, and interest on and all other obligations with respect to any
Indebtedness of such Person, whether outstanding on the Closing Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Loans. Without limiting the
generality of the foregoing, "Senior Indebtedness" shall include (x) the
principal of, premium, if any, and interest on all obligations of every nature
of the Company from time to time owed to the lenders under the Senior Credit
Facilities, including, without limitation, all obligations in respect of
letters of credit and principal of and interest on and all fees, indemnities,
and expenses payable under the Senior Credit Facilities, and all obligations
under Interest Rate Agreements (including guarantees thereof) entered into with
lenders under the Senior Credit Facilities and their Affiliates, (y) interest
accruing thereon subsequent to the occurrence of any Event of Default specified
in Sections 7.6 and 7.7 relating to the Company, whether or not the claim for
such interest is allowed under any applicable Bankruptcy Law and (z) all
deferrals, renewals, extensions, refinancings and restructuring of, and
amendments, modifications and supplements to any of the Senior Indebtedness
described above. Notwithstanding the foregoing, "Senior Indebtedness" of any
Person shall not include (a) Indebtedness evidenced by the Loans, the Exchange
Notes or the Take-Out Securities, (b) Indebtedness that is expressly
subordinate or
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junior in right of payment to any other Indebtedness of such Person, (c)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to such
Person, (d) Indebtedness which is represented by Disqualified Capital Stock,
(e) obligations for goods, materials or services purchased in the ordinary
course of business or obligations consisting of trade payables, (f)
Indebtedness of or amounts owed by such Person for compensation to employees or
for services rendered such Person, (g) any liability for federal, state, local
or other taxes owed or owing by such Person, (h) Indebtedness of such Person to
a Subsidiary of such Person and (i) that portion of any Indebtedness (other
than Indebtedness described in clause (x) of the second sentence of this
definition which relates to reimbursement obligations (whether in the form of
loans or otherwise) under letters of credit with respect to drawings made
thereunder and not yet reimbursed) which is incurred by such Person in
violation of this Agreement.
"Senior Notes" means the Company's 10-3/4% Senior Notes due
2003.
"Senior Officers" means each of the Chief Executive Officer,
Senior Vice President and Chief Financial Officer of the Company.
"Senior Preferred Stock" means the Company's Senior Increasing
Rate Redeemable PIK Preferred Stock, par value $1.00 per share.
"Senior Subordinated Indenture" means an indenture between the
Company and a trustee substantially in the form of Exhibit V annexed hereto
(with such changes therein as the Agent and the Company shall approve, and, at
such time as notes issued thereunder are sold in a public offering, with other
appropriate changes to reflect such public offering), as the same may at any
time be amended, modified and supplemented and in effect.
"Subordinated Indebtedness" means Indebtedness of the Company
or any Guarantor which is expressly subordinated in right of payment to the
Notes or the Guarantee of such Guarantor, as the case may be.
"Subsequent Bridge Note" has the meaning ascribed to such term
in Section 2.1D.
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"Subsequent Term Note" has the meaning ascribed to such term
in Section 2.2E.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of stock or other equity interest entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereto is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof.
"Subsidiary Guarantors" means each of the following
subsidiaries of the Company who are executing this Agreement: OS Baseline,
Inc., an Arizona corporation; Outdoor Systems Painting, Inc., an Arizona
corporation; OS Advertising of Texas Painting, Inc., a Texas corporation;
Decade Communications Group, Inc., a Colorado corporation; and Bench
Advertising Company of Colorado, Inc., a Colorado corporation.
"Take-Out Banks" has the meaning ascribed to such term in
Section 5.9.
"Take-Out Securities" means any Securities of the Company
and/or the Guarantors the proceeds of which are used to repay the Notes in full
and any Securities of the Company and/or the Guarantors issued in accordance
with Section 6.14 the proceeds of which are used to Refinance the Notes in
part, including, without limitation, the Demand Take-Out Notes.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other charges of
any nature whatsoever, including interest penalties, from time to time or at
any time imposed by any Law or any Tribunal.
"Tender Offer" means a cash tender offer for up to all, but
not less than a majority, of the Senior Notes, together with a related consent
solicitation of certain amendments to the indenture governing the Senior Notes
to permit consummation of the Transactions.
"Term Loan Commitment" has the meaning ascribed to such term
in Section 2.2A.
"Term Notes" has the meaning ascribed to such term in Section
2.2E.
<PAGE> 40
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"Transactions" shall mean, collectively, (i) the Acquisition,
(ii) the incurrence of the term loans and the revolving loans drawn down on the
Closing Date under the Senior Credit Facilities, (iii) the incurrence of the
Loans hereunder on the Closing Date, (iv) the repayment of all Indebtedness and
other obligations of the Company and its Subsidiaries (except for Indebtedness
listed on Schedule B hereto), (v) the Tender Offer, (vi) the issuance of the
Senior Preferred Stock, (vii) any other transaction on the Closing Date
contemplated in relation to the foregoing and (viii) the payment of fees and
expenses in connection with the foregoing.
"Transaction Costs" means the fees, costs and expenses payable
by the Company pursuant hereto and other fees, costs and expenses payable by
the Company or a Subsidiary of the Company in connection with the Transactions.
"Tribunal" means any government, any arbitration panel, any
court or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state, province,
commonwealth, nation, territory, possession, county, parish, town, township,
village or municipality, whether now or hereafter constituted and/or existing.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Voting Stock" means, with respect to any Person, securities
of any class or classes of Capital Stock in such Person entitling the holders
thereof to vote under ordinary circumstances in the election of members of the
board of directors or other governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"wholly-owned Subsidiary" means, with respect to any Person,
any corporation, association or other business entity
<PAGE> 41
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of which 100% of the total voting power of shares of stock or other equity
interest entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other wholly-owned Subsidiaries of that Person or a combination thereof.
1.2 Accounting Terms
For the purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP.
1.3 Other Definitional Provisions; Anniversaries
Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference. For purposes of this Agreement, a monthly anniversary of the
Closing Date (each, a "Monthly Anniversary") shall occur on the same day of the
applicable month as the day of the month on which the Closing Date occurred;
provided, however, that if the applicable month has no such day (i.e., 29, 30
or 31), the monthly anniversary shall be deemed to occur on the last day of the
applicable month.
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES
2.1 Bridge Loan and Bridge Note
A. Bridge Loan Commitment. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Company herein set forth, the Lenders hereby agree to lend to
the Company on the Closing Date $240,000,000 (subject to reduction as provided
in Section 3.1(W)) in the aggregate (the "Bridge Loan"), each such Lender
committing to lend the amount set forth next to such Lender's name on the
signature pages hereto. The Lenders' commitments to make the Bridge Loan to
the Company pursuant to this Section 2.1A are herein called individually, the
"Bridge Loan Commitment" and collectively, the "Bridge Loan Commitments."
B. Notice of Borrowing. When the Company desires to
borrow under this Section 2.1, it shall deliver to the Agent a Notice of
Borrowing no later than 11:00 A.M. (New York time),
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at least two Business Days in advance of the Closing Date or such later date as
shall be agreed to by the Agent. The Notice of Borrowing shall specify the
applicable date of borrowing (which shall be a Business Day). Upon receipt of
such Notice of Borrowing, the Agent shall promptly notify each Lender of its
share of the Bridge Loan and the other matters covered by the Notice of
Borrowing.
C. Disbursement of Funds. (a) No later than 12:00 Noon
(New York time) on the Closing Date, each Lender will make available its pro
rata share of the Bridge Loan requested to be made on such date in the manner
provided below. All amounts shall be made available to the Agent in U.S.
dollars and immediately available funds at the Payment Office and the Agent
promptly will make available to the Company by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Agent shall have been notified by any Lender prior
to the Closing Date that such Lender does not intend to make available to the
Agent its portion of the Bridge Loan to be made on such date, the Agent may
assume that such Lender has made such amount available to the Agent on such
date, and the Agent, in reliance upon such assumption, shall make available to
the Company a corresponding amount. Notwithstanding the receipt of the
notification set forth in the immediately preceding sentence, the Agent shall
loan to the Company the entire amount of the Bridge Loan. If such
corresponding amount is not in fact made available to the Agent by such Lender
and the Agent has made available same to the Company, the Agent shall be
entitled to recover such corresponding amount from such Lender but not from the
Company. The Agent shall be entitled to recover from the Lender but not the
Company, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Agent to the Company
to the date such corresponding amount is recovered by the Agent, at a rate per
annum equal to the overnight Federal Funds Rate.
(b) Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its Bridge Loan Commitment hereunder or to
prejudice any rights which the Company may have against any Lender as a result
of any default by such Lender hereunder.
D. Bridge Notes. The Company shall execute and deliver
to each Lender on the Closing Date a Bridge Note dated the Closing Date
substantially in the form of Exhibit I annexed hereto to evidence the portion
of the Bridge Loan made on such
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date by such Lender and with appropriate insertions ("Original Bridge Notes").
On each interest payment date prior to the Conversion Date on which the Company
elects to pay a PIK Interest Amount pursuant to Section 2.3B, the Company shall
execute and deliver to each Lender on such interest payment date a Bridge Note
dated such interest payment date substantially in the form of Exhibit I annexed
hereto in a principal amount equal to such Lender's pro rata portion of such
PIK Interest Amount and with other appropriate insertions (each a "Subsequent
Bridge Note" and, together with the Original Bridge Notes, the "Bridge Notes").
A Subsequent Bridge Note shall bear interest from the date of its issuance at
the same rate borne by all Bridge Notes.
E. Scheduled Payment of Bridge Loan. Subject to Section
2.2, the Company shall pay in full the outstanding amount of the Bridge Loan
and all other Obligations owing hereunder no later than the Conversion Date.
F. Termination of Bridge Loan Commitment. The Bridge
Loan Commitment hereunder shall terminate on the earliest of (i) the date on
which the Company informs the Lenders that it has decided not to proceed with
the Acquisition if the Acquisition Agreement has not been executed, (ii) the
date on which the Acquisition Agreement is terminated in accordance with its
terms or (iii) September 30, 1996 if the Bridge Loan is not made on or before
such date. The Company shall have the right, without premium or penalty, to
reduce or terminate the Bridge Loan Commitment of the Lenders hereunder at any
time.
G. Pro Rata Borrowings. The Bridge Loan made under this
Agreement shall be made by the Lenders pro rata on the basis of their
respective Bridge Loan Commitments. It is understood that no Lender shall be
responsible for any default by any other Lender of its obligation to make its
portion of the Bridge Loan hereunder and that each Lender shall be obligated to
make its portion of the Bridge Loan hereunder, regardless of the failure of any
other Lender to fulfill its commitments hereunder.
2.2 Term Loan and Term Note
A. Term Loan Commitment. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Company herein set forth, the Lenders hereby agree, on the
Conversion Date, upon the request of the Company, to convert the then
outstanding
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principal amount of the Bridge Notes into a term loan (the "Term Loan"), such
Term Loan to be in the aggregate principal amount of the then outstanding
principal amount of the Bridge Notes. The Lenders' commitments under this
Section 2.2A are herein called collectively, the "Term Loan Commitment."
B. Notice of Conversion/Borrowing. If the Company has
not repaid the Bridge Loan in full on or prior to the Conversion Date, then the
Company shall convert the then outstanding principal amount of the Bridge Notes
into a Term Loan under this Section 2.2. The Company shall deliver to the
Lenders a Notice of Conversion no later than 11:00 A.M. (New York time), at
least two Business Days in advance of the Conversion Date. The Notice of
Conversion shall specify the principal amount of the Bridge Notes outstanding
on the Conversion Date to be converted into a Term Loan.
C. Making of Term Loan. Upon satisfaction or waiver of
the conditions precedent specified in Section 3.2 hereof, each Lender shall
extend to the Company the Term Loan to be issued on the Conversion Date by such
Lender by cancelling on its records a corresponding principal amount of the
Bridge Notes held by such Lender, which corresponding principal amount of the
Bridge Notes shall be satisfied by the conversion into a Term Loan in
accordance with this Section 2.2.
D. Maturity of Term Loan. The Term Loan shall mature
and the Company shall pay in full the outstanding principal amount thereof and
accrued interest thereon on the tenth anniversary of the Closing Date (the
"Maturity Date").
E. Term Notes. The Company, as borrower, shall execute
and deliver to each Lender on the Conversion Date a Term Note dated the
Conversion Date substantially in the form of Exhibit II annexed hereto to
evidence the Term Loan made on such date, in the principal amount of the Bridge
Notes held by such Lender on such date and with other appropriate insertions
(collectively the "Original Term Notes"). On or after the Conversion Date, on
each interest payment date on which the Company elects to pay a PIK Interest
Amount pursuant to Section 2.3B, the Company shall execute and deliver to each
Lender on such interest payment date a Term Note dated such interest payment
date substantially in the form of Exhibit II annexed hereto in a principal
amount equal to such Lender's pro rata portion of such PIK Interest Amount and
with other appropriate insertions (each a "Subsequent Term Note" and, together
with the Original Term Notes, the "Term Notes"). A Subsequent Term
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Note shall bear interest from the date of its issuance at the same rate borne
by all Term Notes.
2.3 Interest on the Loans
A. Rate of Interest. (i) The Loans shall bear interest
on the unpaid principal amount thereof from the date made through maturity
(whether by prepayment, acceleration or otherwise) for each Monthly Period at a
rate per annum equal to the Applicable Rate for such period plus the Applicable
Spread.
(ii) Notwithstanding clause (i) of this Section 2.3A or
any other provision herein, in no event will the combined sum of interest (cash
or otherwise) on the Loans exceed 20.00% per annum.
B. Interest Payments. Interest shall be payable (i)
with respect to the Bridge Loan, in arrears on October 15, 1996, January 15,
1997, April 15, 1997, July 15, 1997, and upon any prepayment of the Bridge Loan
(to the extent accrued on the amount being prepaid) and at maturity of the
Bridge Loan in respect of any amounts paid on such date and not converted to
Term Loans and (ii) with respect to the Term Loan, in arrears on each October
15, January 15, April 15 and July 15 of each year, commencing on the first of
such dates to follow the Conversion Date, upon any prepayment of the Term Loan
(to the extent accrued on the amount being prepaid) and at maturity of the Term
Loan; provided, however, that if, on any interest payment date, the interest
rate borne by the Bridge Loan or the Term Loan, as the case may be, exceeds the
Maximum Cash Interest Rate, the Company may pay all or a portion of the
interest payable in excess of the Maximum Cash Interest Rate by issuance of
Subsequent Bridge Notes or Subsequent Term Notes, as the case may be, in an
aggregate principal amount equal to the amount of such interest being so paid
(the "PIK Interest Amount").
C. Post-Maturity Interest. Any principal payments on
the Loans not paid when due and, to the extent permitted by applicable law, any
interest payment on the Loans not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate which is 2.00% per annum
in excess of the rate of interest otherwise payable under this Agreement for
the Loans.
D. Computation of Interest. Interest on the Loans shall
be computed on the basis of a 360-day year and the actual
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number of days elapsed in the period during which it accrues. In computing
interest on the Loans, the date of the making of the Loans shall be included
and the date of payment shall be excluded; provided, however, that if a Loan is
repaid on the same day on which it is made, one day's interest shall be paid on
that Loan.
2.4 Fees
The Company agrees to pay to the Agent for the accounts of the
Lenders the following fees:
(a) a commitment fee (the "Commitment Fee") in an amount
equal to 1.5% of the full amount of the Bridge Loan Commitments which
shall be earned and due and payable upon execution of this Agreement; and
(b) a takedown fee (the "Takedown Fee") in an amount
equal to 1.5% of the principal amount of the Bridge Loan borrowed
payable at the time of such borrowing.
Once paid, the fees shall not be refundable under any
circumstances and, in the case of the Commitment Fee, shall be payable whether
or not any Bridge Loans are made. Notwithstanding the foregoing, (i) if the
entire principal amount of the Bridge Loan is repaid prior to the 90th day
following the Closing Date, the Lenders shall return to the Company 50% of the
Takedown Fee received pursuant to clause (b) of the immediately preceding
paragraph and (ii) if the Bridge Loans are not made on the Closing Date solely
due to the Lenders' breach of this Agreement, then the Lenders will return to
the Company the Commitment Fee received pursuant to clause (a) of the
immediately preceding paragraph. All fees (and refunds thereof, if any)
payable hereunder shall be paid in immediately available funds.
2.5 Prepayments and Payments
A. Prepayments
(i) Voluntary Prepayments. The Company may, upon not
less than three Business Days' prior written or telephonic notice
confirmed in writing to the Agent at any time and from time to time,
prepay the Loans made to the Company without penalty or premium and in
whole or in part in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount; provided that
unless Loans are to be prepaid in full, such
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voluntary prepayments shall not result in the aggregate amount of the Loans
outstanding being less than $100,000,000 or shall not be made at time when the
aggregate amount of the Loans outstanding is less than $100,000,000; provided,
however, that after the Conversion Date, the Loans will be redeemable at the
option of the Company, in whole or in part, at any time at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest to the redemption date, if redeemed during the
12-month period beginning on the anniversaries of the Closing Date (excluding
the Conversion Date in the case of the 12-month period beginning on the 1st
anniversary of the Closing Date) indicated below:
<TABLE>
<CAPTION>
Anniversary Percentage
- ----------- ----------
<S> <C>
1st . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101%
2nd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
3rd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
4th . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5th . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
6th . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
7th . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8th . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
9th . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
</TABLE>
Notice of prepayment having been given as aforesaid, the principal
amount of the Loans to be prepaid shall become due and payable on the
prepayment date. Amounts of the Loans so prepaid may not be reborrowed.
(ii) Mandatory Prepayments
(a) Prepayments from Asset Sales. At any time following receipt
by the Company or any Subsidiary of the Company of Cash Proceeds of any Asset
Sale occurring after the Closing Date, the Company or any Subsidiary of the
Company may use the Net Cash Proceeds of such Asset Sale to (i) prepay the term
loans outstanding under the Senior Credit Facilities or (ii) prepay revolving
loans outstanding under the Senior Credit Facilities provided that the
commitment thereunder is permanently reduced to the extent of the prepayment.
Concurrently with the consummation of an Asset Sale, the Company shall deliver
to the Agent an Officer's Certificate demonstrating the derivation of Net Cash
Proceeds from the gross sales price of such Asset Sale.
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To the extent not used as above, the Company shall, or shall cause its
Subsidiaries to, prepay the Loans (without penalty or premium) with the Net
Cash Proceeds in excess of $5,000,000 received from any Asset Sale on a date
not later than the Business Day next succeeding the 270th day after the
consummation of such Asset Sale if and to the extent that such Net Cash
Proceeds are not applied by the Company or any Subsidiary of the Company within
270 days to a Related Business Investment.
(b) Prepayments from Issuances of Securities. Subject to
compliance with the terms of the Senior Credit Facilities, concurrently with
the receipt by the Company of proceeds from the issuance of Securities, the
Company shall prepay the Loans in a principal amount equal to the lesser of the
proceeds thereof (net of expenses payable by the Company to any Person other
than an Affiliate of the Company in connection with the issuance thereof and
net of accrued interest due pursuant to Section 2.5A(iii) as a result of such
prepayment) or the aggregate principal amount of the Notes then outstanding;
provided that in the case of the issuance of any equity Securities, the Company
may, at its option, use the proceeds thereof to repurchase any outstanding
shares of Senior Preferred Stock.
(c) Notice. The Company shall notify the Agent of any prepayment
to be made pursuant to this Section 2.5A(ii) at least two Business Days prior
to such prepayment date (unless shorter notice is satisfactory to the Required
Lenders).
(iii) Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued interest on the
principal amount so prepaid and shall be applied to payment of interest before
application to principal.
(iv) Mandatory Offer to Purchase Notes.
(a) Upon the occurrence of a Change of Control (the date of such
occurrence, the "Change of Control Date"), the Lenders shall have the right, in
accordance with this Section 2.5A(iv), to require the repurchase of all of the
Notes pursuant to an offer to purchase (the "Change of Control Offer") at a
purchase price equal to 100% of the aggregate principal amount thereof, plus
accrued interest thereon to the date of repurchase. Prior to the mailing of
the notice to the Agent provided for in paragraphs (b)
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and (c) below but in any event within 30 days following any Change of Control,
the Company hereby covenants to (i) repay in full all Indebtedness under the
Senior Credit Facilities or to offer to repay in full all such Indebtedness and
to repay the Indebtedness of each lender under the Senior Credit Facilities who
has accepted such offer or (ii) obtain the requisite consents under the Senior
Credit Facilities to permit the payment of the Notes as provided for in
paragraph (d) below. The Company shall first comply with the covenant in the
preceding sentence before it shall be required to pay the Notes pursuant to
this Section 2.5A(iv).
(b) The notice to the Agent shall contain all instructions and
materials necessary to enable the Lenders to tender Notes.
(c) Within 30 days following any Change of Control the Company
shall mail a notice to the Agent stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 2.5(A)(iv) and that all Notes validly tendered
prior to the expiration date stated in such notice will be accepted for
payment;
(2) the purchase price and the purchase date, which shall
be no earlier than 30 days nor later than 40 days from the date such
notice is mailed (the "Offer Payment Date");
(3) that any Note not timely tendered in accordance with
such notice will remain outstanding and will continue to accrue interest;
(4) that any Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Offer
Payment Date unless the Company shall default in the payment of the
repurchase price of the Notes;
(5) that if a Lender elects to have a Note purchased
pursuant to the Change of Control Offer it will be required to
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Company prior to
5:00 p.m. New York time on the Offer Payment Date;
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(6) that a Lender will be entitled to withdraw its
election if the Company receives, not later than 5:00 p.m. New York
time on the Business Day preceding the Offer Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the principal
amount of Notes such Lender delivered for purchase, and a statement
that such Lender is withdrawing its election to have such Note
purchased; and
(7) that if Notes are purchased only in part a new Note
of the same type will be issued in principal amount equal to the
unpurchased portion of the Notes surrendered.
(d) On or before the Offer Payment Date, the Company shall (i)
accept for payment Notes or portions thereof which are to be purchased in
accordance with the above, and (ii) deposit at the Payment Office U.S. Legal
Tender sufficient to pay the purchase price of all Notes to be purchased. The
Agent shall promptly mail to the Lenders whose Notes are so accepted payment in
an amount equal to the purchase price unless such payment is prohibited
pursuant to Section 8 hereof or otherwise.
(e) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
purchase of Notes pursuant to an offer hereunder. To the extent the provisions
of any securities laws or regulations conflict with the provisions under this
Section, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section by virtue thereof.
B. Manner and Time of Payment. All payments of
principal and interest and fees hereunder and under the Notes by the Company
shall be made without defense, set-off or counterclaim and in same-day funds
and delivered to the Agent, unless otherwise specified, not later than 12:00
Noon (New York time) on the date due at the Payment Office for the account of
the Lenders; funds received by the Agent after that time shall be deemed to
have been paid by the Company on the next succeeding Business Day. The Company
hereby authorizes the Agent to charge its account with the Agent in order to
cause timely payment to be made of all principal, interest and fees
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due hereunder (subject to sufficient funds being available in its account for
that purpose).
C. Payments on Non-Business Days. Whenever any payment
to be made hereunder or under the Notes shall be stated to be due on a day
which is not a Business Day, the payment shall be due on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest hereunder or under the Notes or of the commitment and
other fees hereunder, as the case may be.
D. Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by granting
participations therein), such Lender will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid and will notify the Company of the name and address of
the transferee of that Note; provided, however, that the failure to make (or
any error in the making of) such a notation or to notify the Company of the
name and address of such transferee shall not limit or otherwise affect the
obligation of the Company hereunder or under such Notes with respect to the
Loans and payments of principal or interest on any such Note.
2.6 Use of Proceeds
A. Bridge Loan. The proceeds of the Bridge Loan shall
be applied by the Company, together with borrowings under the Senior Credit
Facilities, to pay Transaction Costs, to pay the consideration for the
Acquisition, to repurchase Senior Notes pursuant to the Tender Offer, to
defease such Senior Notes, in whole or in part, and to repay certain
indebtedness of the Company and its Subsidiaries.
B. Term Loan. The proceeds of the Term Loan shall be
used to cancel any outstanding amount of Bridge Notes converted to Term Notes
on such date.
C. Margin Regulations. No portion of the proceeds of
any borrowing under this Agreement shall be used by the Company in any manner
which might cause the borrowing or the application of such proceeds to violate
the applicable requirements of Regulation G, Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of the Board or to violate the Exchange Act, in each case as
in effect on the date or dates of such borrowing and such use of proceeds.
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SECTION 3 CONDITIONS
3.1 Conditions to Bridge Loan
The obligation of the Lenders to make the Bridge Loan is
subject to prior or concurrent satisfaction of each of the following
conditions:
A. On or before the Closing Date, all corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Agent shall be reasonably satisfactory in form and substance
to the Agent, and the Agent shall have received on behalf of the Lenders the
following items, each of which shall be in form and substance satisfactory to
the Agent and, unless otherwise noted, dated the Closing Date:
1. a certified copy of the Company's, each Guarantor's
and any other of the Company's Subsidiaries' charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company and each Guarantor issued by the
appropriate government officials of the jurisdiction of its
incorporation and of each jurisdiction in which it owns any material
assets or carries on any material business, each to be dated a
recent date prior to the Closing Date;
2. a copy of the Company's and each Guarantor's and any
other of the Company's Subsidiaries' bylaws, certified as of the
Closing Date by its Secretary or one of its Assistant Secretaries;
3. resolutions of the Company's and each Guarantor's
Board of Directors approving and authorizing the execution, delivery
and performance of this Agreement, each of the other Loan Documents,
the Senior Credit Facilities and any other documents, instruments and
certificates required to be executed by the Company or such Guarantor
in connection herewith and therewith and approving and authorizing the
execution, delivery and payment of the Notes and the consummation of
the Transactions, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force and
effect without modification or amendment;
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4. signature and incumbency certificates of the
Company's and each Guarantor's officers executing this Agreement and/or
the Bridge Notes;
5. executed copies of this Agreement and the Bridge Notes
substantially in the form of Exhibit I annexed hereto executed in
accordance with Section 2.1D drawn to the order of the Lenders and with
appropriate insertions;
6. an originally executed Notice of Borrowing
substantially in the form of Exhibit IV-A annexed hereto, signed by the
President or a Vice President of the Company on behalf of the Company
in writing delivered to the Agent;
7. originally executed copies of one or more favorable
written opinions of Powell, Goldstein, Frazer & Murphy, special counsel
for the Company and the Guarantors, substantially in the form of
Exhibit VII annexed hereto and addressed to the Lenders and other
special counsel in the jurisdictions of Arizona, Colorado and Texas;
8. a certificate of the chief financial officer of the
Company stating that, after giving effect to the consummation of the
Transactions, the fair saleable value of the assets of the Company and
its Subsidiaries will not be less than the probable liability on their
debts, that each of the Company and its Subsidiaries will be able to
pay its debts as they mature and that each will not have unreasonably
small capital to conduct its business;
9. true and correct copies of the Acquisition Agreement,
which shall not have been amended in any material respect without the
Agent's consent and which shall be in full force and effect and each of
the conditions to purchase contained therein shall have been satisfied
and not waived in any material respect without the Agent's prior written
consent;
10. (i) executed or conformed copies of the Senior Credit
Facilities and any amendments thereto made on or prior to the Closing
Date and a copy of each legal opinion delivered in connection with the
Senior Credit Facilities, and the terms and provisions of the Senior
Credit Facilities and all documents and instruments relating thereto
shall be reasonably satisfactory to the Agent, (ii) an Officers'
Certificate from the Company that the
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Senior Credit Facilities are in full force and effect on the Closing
Date and no material term or condition thereof has been amended,
modified or waived from the form most recently provided to the Agent a
reasonable time prior to the Closing Date except with the prior written
consent of the Agent and (iii) an Officers' Certificate from the
Company to the effect that such party has performed or complied with
all agreements and conditions contained in the Senior Credit Facilities
and any agreements or documents referred to therein required to be
performed or complied with by such party on or before the Closing
Date, and the Company is not in default in the performance or
compliance with any of the terms or provisions thereof;
11. copies of all documents actually delivered to the
lenders and/or agent under the Senior Credit Facilities as a condition
to the loans thereunder not otherwise required to be delivered under
this Section 3.1;
12. a notation of Guarantee, executed and delivered by each
Guarantor, dated the Closing Date, substantially in the form of Exhibit
IX annexed hereto, as applicable; and
13. a copy of all closing documents relating to the
Acquisition and all such counterpart originals or certified copies of
such documents, instruments, certificates and opinions as the Agent may
reasonably request.
B. On or before the Closing Date, all authorizations,
consents and approvals necessary in connection with the Transactions and, with
respect to the Acquisition, such consents and approvals as are contemplated by
the Acquisition Agreement shall have been obtained and remain in full force and
effect and all applicable waiting periods under Law applicable to the
Acquisition shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal).
C. On or before the Closing Date, the Senior Credit
Facilities shall have been executed and delivered by all parties thereto. No
default or event of default shall have occurred under the Senior Credit
Facilities, all conditions to borrowing thereunder shall have been satisfied
without waiver (except for any written waivers delivered in respect of a
condition that in the opinion of the Agent is immaterial) and the Company shall
have received the cash proceeds of loans
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under the Senior Credit Facilities of not more than $460,000,000 on a term
basis and shall have available to it a revolving credit facility of not less
than $70,000,000, of which, as of the Closing Date and after giving effect to
the Transactions, there will be at least $40,000,000 of undrawn availability
thereunder (excluding any outstanding letters of credit).
D. On or before the Closing Date, all existing
Indebtedness of the Company and its Subsidiaries (other than the Indebtedness
set forth on Schedule B hereto) shall be repaid in full and all commitments
thereunder shall be terminated.
E. On or before the Closing Date, the Company shall have
paid to the Agent the fees payable on the Closing Date pursuant to Section 2.4.
F. Simultaneously with the making of the Bridge Loan by
the Lenders, the Company shall have delivered to the Agent an Officers'
Certificate from the Company in form and substance satisfactory to the Agent to
the effect that (i) the representations and warranties in Section 4 and the
representations and warranties of the Company in the Senior Credit Facilities
are true, correct and complete in all material respects on and as of the
Closing Date to the same extent as though made on and as of that date, (ii) on
or prior to the Closing Date, the Company has performed and complied with in
all material respects all covenants and conditions to be performed and observed
by the Company on or prior to the Closing Date and (iii) all conditions to the
consummation of the Acquisition in the Acquisition Agreement have been
satisfied substantially on the terms set forth therein and have not been waived
or amended without the Agent's prior written consent.
G. Immediately following the making of the Bridge Loan
by the Lenders, the Acquisition shall be consummated without the waiver of any
conditions precedent thereto except for any waiver approved by the Lenders.
H. Neither the Company nor any of its Subsidiaries shall
have sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, which loss or interference has had or has a Material
Adverse Effect; there shall not have been any
<PAGE> 56
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material adverse change or any development involving a prospective material
adverse change, which change or prospective change could reasonably be expected
to have a Material Adverse Effect.
I. No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by the Notice
of Borrowing which would constitute an Event of Default or Potential Event of
Default.
J. No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain the Lenders from
making the Bridge Loan.
K. There shall not be pending or, to the knowledge of
the Company, threatened any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Company or any of its
Subsidiaries, or any property or asset of the Company or any of its
Subsidiaries which has not been disclosed by the Company in writing to the
Agent (and the Agent shall have received on the Closing Date an Officer's
Certificate dated the Closing Date attesting to the same) and there shall have
occurred no development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, which, in each case,
singly or in the aggregate, could reasonably be expected to have a Material
Adverse Effect. No injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to restrain, enjoin, delay, prohibit or otherwise prevent
the consummation of, or to recover any damages or obtain relief as a result of,
the Transactions. There shall not be threatened, instituted or pending any
action, proceeding or application before or by any Tribunal, or any other
Person, domestic or foreign (i) challenging the Transactions or seeking to
restrain, delay or prohibit the consummation thereof; (ii) seeking to prohibit
or impose material limitations on the Company's ownership or operation of all
or any portion of the Company's business or assets (including the business or
assets of any Subsidiary of the Company) or to compel the Company to dispose of
or hold separate all or any portion of the Company's business or assets
(including the business or assets of any Subsidiary of the Company) as a result
of the Acquisition; or (iii) seeking to impose any materially adverse
conditions upon the Transactions, in each of the foregoing clauses (i), (ii) or
(iii) which could reasonably be expected to have, singly or in the aggregate, a
Material Adverse Effect.
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L. The making of the Bridge Loan in the manner
contemplated in this Agreement shall not violate the applicable provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve Board
or any other regulation of the Board.
M. The pro forma consolidated capitalization of the
Company and its Subsidiaries, after giving effect to the Transactions, shall be
substantially as described on Schedule L hereto, subject to any adjustments
contemplated by the Loan Documents, the Senior Credit Facilities and the
documentation relating to the purchase of the Senior Preferred Stock.
N. The Agent shall have received audited, unaudited and
pro forma financial statements meeting the requirements of Regulation S-X under
the Securities Act of 1933, as amended, of the Company and each Guarantor.
O. The Company shall have received the required consents
of the holders of the Senior Notes pursuant to the Tender Offer to permit the
consummation of the Transactions and the Bridge Loan Commitment shall, at the
Agent's discretion, be reduced by the aggregate principal amount (plus the
premium offered) of the Senior Notes not tendered in the Tender Offer unless
the Company shall have notified the Lenders, on or before the Closing Date,
that it intends to defease all of the outstanding Senior Notes on the Closing
Date.
3.2 Conditions to Term Loan
The obligation of the Lenders to make the Term Loan on the
Conversion Date is subject to the prior or concurrent satisfaction or waiver of
the following conditions precedent:
A. The Agent shall have received in accordance with the
provisions of Section 2.2B an originally executed Notice of Conversion.
B. The Company or any of its Material Subsidiaries shall
not be subject to a Bankruptcy Order or a bankruptcy or other insolvency
proceeding and an Event of Default or Potential Event of Default shall not have
occurred under Section 7.6, 7.7 or 7.9.
C. No Event of Default or Potential Event of Default
(whether matured or not) shall have occurred under Section 7.1.
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D. No Event of Default or Potential Event of Default
shall have occurred under Section 7.2; provided that if an event described in
this Section 3.2D is continuing at the Conversion Date but 30 days has not
passed since the date of written notice of the commencement of such 30-day
period from the holder or holders of not less than 25% in aggregate principal
amount of the Loans then outstanding (the "Grace Period"), the Conversion Date
shall be deferred until the earlier to occur of (x) the cure of such event or
(y) the expiration of such Grace Period.
E. On the Conversion Date, the Agent shall have received
an Officers' Certificate from the Company dated the Conversion Date and
satisfactory in form and substance to the Agent, to the effect that the
conditions in this Section 3.2 are satisfied on and as of the Conversion Date.
F. The Company shall have executed and delivered to the
Agent on the Conversion Date for delivery to the Lenders Term Notes dated the
Conversion Date substantially in the form of Exhibit II annexed hereto to
evidence the Term Loan, in the principal amount of (which principal amount
shall be the aggregate principal amount of the Bridge Loan outstanding on the
Conversion Date) the Term Loan and with other appropriate insertions.
G. The Company shall have paid any fees owing pursuant
to Section 2.4 in cash to the Agent.
H. The making of the Term Loan shall not violate
Regulation G, T, U or X of the Board of Governors of the Federal Reserve Board
or any other regulation of the Board.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make the Loans, the Company represents and warrants to the Lenders that,
at the time of execution hereof and after consummation of the Transactions, the
following statements are true, correct and complete:
4.1 Organization and Good Standing; Capitalization
(a) Each of the Company and its Subsidiaries is a
corporation duly organized and existing and in good standing under the laws of
its jurisdiction of incorporation. Each of the Company and its Subsidiaries
has the corporate power and
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authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which it is doing
business, except where failure to be so qualified or in good standing, singly
or in the aggregate, has not had and will not have a Material Adverse Effect.
(b) All of the Subsidiaries of the Company as of the
Closing Date, after giving effect to the Transactions, are identified in
Schedule A annexed hereto. The Capital Stock of each of the Company's
Subsidiaries identified in Schedule A annexed hereto is, and in the case of any
entities that become Subsidiaries of the Company in connection with the
Acquisition will be, duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock.
(c) As of the date hereof, there are issued and
outstanding 12,053,598 shares of Company Common Stock. Such shares of Company
Common Stock have been duly and validly issued, fully paid and nonassessable.
As of July 22, 1996 after giving effect to a three-for-two stock split, there
will be issued and outstanding 18,080,397 shares of Company Common Stock, and
such shares will, as of such date, have been duly and validly issued, fully
paid and nonassessable. No stockholder of the Company has or will have any
preemptive rights to subscribe for any additional equity securities of the
Company. As of the Closing Date and after giving effect to the Transactions,
there will be 165,000 shares of issued and outstanding Senior Preferred Stock.
Such shares of Senior Preferred Stock will be duly and validly issued, fully
paid and nonassessable.
4.2 Authorization and Power
Each of the Company and its Subsidiaries has the corporate
power and requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its obligations
under the Loan Documents, the Senior Credit Facilities and each other document
and instrument to be delivered in connection with the Transactions executed or
to be executed by it and to issue the Notes and the Exchange Notes.
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4.3 No Conflicts or Consents
(a) The execution and delivery of the Loan Documents, the
Senior Credit Facilities and each other document to be executed and delivered
in connection with the Transactions, the issuance of the Senior Preferred
Stock, the consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and provisions hereof or
thereof, and the issuance, delivery and performance of the Notes, the Senior
Credit Facilities, the Senior Preferred Stock and the Exchange Notes, do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to any of the Company and its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of any of them or any order,
judgment or decree of any court or other agency of government binding on any of
them, (ii) conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any Contractual Obligation of any of
the Company and its Subsidiaries which could reasonably be expected to result
in a Material Adverse Effect, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of any of the
Company and its Subsidiaries (other than any Liens created under the Senior
Credit Facilities), (iv) require any approval of stockholders or any approval
or consent of any Person under any Contractual Obligation of any of the Company
and its Subsidiaries except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to Lenders or
such approvals or consents the failure to obtain which could not reasonably be
expected to singly or in the aggregate result in a Material Adverse Effect.
(b) No consent, approval, authorization or order of any
Tribunal or other Person that is customarily obtained in the industry in which
the Company and the Acquired Business operate is required in connection with
the execution and delivery by the Company or any of its Subsidiaries of the
Loan Documents or any other document or instrument to be delivered in
connection with the Transactions or the consummation of the transactions
contemplated hereby or thereby, other than in connection with the Transit
Agreements (as defined in the Acquisition Agreement) and other than any such
consent, approval, authorization or order which has been obtained and remains
in full force and effect or which has been waived in writing by the Agent on
behalf of the Lenders or the failure of which to obtain would not, singly or in
the aggregate, have a Material Adverse Effect.
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4.4 Enforceable Obligations
Each of the Loan Documents, the Senior Credit Facilities and
each other document or instrument to be delivered in connection therewith has
been duly authorized; each of the Loan Documents, the Senior Credit Facilities
and each other document or instrument to be delivered in connection therewith
to be executed and delivered on or prior to the Closing Date has been duly
executed and delivered by the Company and each of its Subsidiaries that are a
party thereto; and each of the Loan Documents, the Senior Credit Facilities and
each other document or instrument to be delivered in connection therewith to be
executed and delivered on or prior to the Closing Date is, and each of the Loan
Documents to be executed and delivered after the Closing Date will be, upon
such execution and delivery, the legal, valid and binding obligations of the
Company and each such Subsidiary (to the extent a party thereto), enforceable
in accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.5 Properties; Liens
Each of the Company and its Subsidiaries has, and after
consummation of the Acquisition will have, good, sufficient and legal title to
all their respective properties and assets, and all properties held under lease
by any of them, are, and immediately after the consummation of the Acquisition
will be, held under valid, subsisting and enforceable leases, and none of the
Company or its Subsidiaries and, to the knowledge of the Company, any other
party thereto, is in default under any lease, except in each case for such
defects or defaults that, singly or in the aggregate, would not have a Material
Adverse Effect. Except as permitted by this Agreement, all such properties and
assets owned or leased are so owned or leased free and clear of Liens, except
for Permitted Encumbrances.
4.6 Financial Condition
(a) The audited consolidated balance sheets of the
Company and its Subsidiaries as at December 31, 1995 and 1994 and the related
consolidated statements of operations, common stockholders' capital deficiency
and cash flows of the Company
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and its Subsidiaries for the three-year period ended December 31, 1995,
certified by the Company's independent certified public accountants, copies of
which have been delivered to the Agent, were prepared in accordance with GAAP,
have been prepared from, and are consistent with, the books and records of the
Company and its Subsidiaries and fairly present the consolidated financial
position of the Company and its Subsidiaries as at the respective dates thereof
and the consolidated results of operations and cash flows of the Company and
its Subsidiaries for the periods then ended. Neither the Company nor any of
its Subsidiaries had at December 31, 1995 any material contingent liabilities,
liabilities for Taxes or long-term leases, unusual forward or long-term
commitments or unrealized or unanticipated losses from any unfavorable
commitments which are not reflected or reserved against in the foregoing
statements or in the notes thereto. No events which have had or could
reasonably be expected to have a Material Adverse Effect have occurred since
December 31, 1995.
(b) The unaudited consolidated balance sheet of the
Company and its Subsidiaries as at March 31, 1996 and the related consolidated
statements of operations and cash flows of the Company and its Subsidiaries for
the period then ended, a copy of which has been delivered to the Agent, were
prepared in accordance with GAAP consistently applied, have been prepared from,
and are consistent with, the books and records of the Company and its
Subsidiaries and fairly present the consolidated financial position of the
Company and its Subsidiaries as of such date and the consolidated results of
operations and cash flows of the Company and its Subsidiaries for the period
covered thereby, subject to normal year-end audit adjustments, consistent with
past practices. Neither the Company nor any of its Subsidiaries had on such
date any material contingent liabilities, liabilities for Taxes or long-term
leases, unusual forward or long-term commitment or unrealized or unanticipated
losses from any unfavorable commitment which are not reflected or reserved
against in the foregoing statements or in the notes thereto.
(c) The pro forma balance sheet of the Company as of June
30, 1996, a copy of which shall have been furnished to the Agent prior to the
Closing Date, fairly presents the consolidated balance sheet of the Company
assuming the Transactions had occurred as of such date, and the financial
condition of the Company and its Subsidiaries, taken as a whole, on the Closing
Date does not differ in any material respect from the information therein set
forth.
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(d) Upon giving effect to the Transactions:
(i) The fair saleable value of the assets of the Company
and each of its Subsidiaries, on a stand-alone basis, exceeds the
amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent
liabilities) of such Person as they mature.
(ii) The assets of each of the Company and its
Subsidiaries, on a stand-alone basis, do not constitute unreasonably
small capital for any such Person to carry out its business as now
conducted and as proposed to be conducted including the capital needs
of any such Person, taking into account the particular capital
requirements of the business conducted by such Person, and projected
capital requirements and capital availability thereof.
(iii) The Company does not intend to, and will not permit
any of its Subsidiaries to, incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of debt of each of such Person).
The cash flow of the Company and each of its Subsidiaries, after
taking into account all anticipated uses of the cash of each such
Person, will at all times be sufficient to pay all amounts on or in
respect of debt of each such company when such amounts are required to
be paid.
(iv) The Company does not intend, and does not believe,
that final judgments against any of the Company or its Subsidiaries in
actions for money damages will be rendered at a time when, or in an
amount such that, any such Person will be unable to satisfy any such
judgments promptly in accordance with their terms (taking into account
the maximum reasonable amount of such judgments in any such actions
and the earliest reasonable time at which such judgments might be
rendered). The cash flow of the Company and each of its Subsidiaries,
on a stand-alone basis, after taking into account all other
anticipated uses of the cash of each such Person (including the
payments on or in respect of debt referred to in paragraph (iii) of
this Section 4.6(d)), will at all times be sufficient to pay all such
judgments promptly in accordance with their terms.
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4.7 Full Disclosure
The financial projections (including, without limitation, the
pro forma financial statements included therewith) heretofore furnished to the
Agent by the Company are complete, were prepared by or under the direction of
an officer of the Company and were prepared in good faith on the basis of
information and assumptions that the Company believed to be fair, complete and
reasonable as of the date of such information, and which assumptions are
believed to be fair, complete and reasonable as of the date hereof. All other
factual information heretofore or contemporaneously furnished in writing by or
on behalf of the Company or any of its Subsidiaries to the Agent or Lenders for
purposes of or in connection with this Agreement (including, but not limited
to, the Senior Credit Facilities and all exhibits and appendices thereto) does
not contain any untrue statement of a material fact or omit to state any
material fact necessary to keep the statements contained herein or therein from
being misleading. No fact is known, no condition exists nor has any event
occurred which has not been disclosed herein or in any other document,
certificate or statement furnished to the Agent or the Lenders for use in the
transactions contemplated hereby which, singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
4.8 No Default
No event has occurred and is continuing which constitutes a
Potential Event of Default or an Event of Default.
4.9 Compliance with Contracts, Etc.
None of the Company or any of its Subsidiaries is in violation
of (A) its certificate of incorporation, by-laws or other organizational
documents or (B) any applicable law, ordinance, administrative or governmental
rule or regulation, except, with respect to this clause (B), for such
violations that would not, singly or in the aggregate, have a Material Adverse
Effect, or (C) any order, decree or judgment of any Tribunal having
jurisdiction over any of them; no event of default or event that but for the
giving of notice or the lapse of time, or both, would constitute an event of
default exists under any material Contractual Obligation.
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4.10 No Litigation
Except as described in Schedule E attached hereto, there is no
Litigation pending or, to the best knowledge of the Company after due
investigation, threatened, by, against, or which may relate to or affect (a)
any benefit plan or any fiduciary or administrator thereof, (b) the
Transactions, or (c) the Company or any of its Subsidiaries which, singly or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
or that could reasonably be expected to materially and adversely affect the
ability of the Company to consummate the Transactions in a timely manner.
There are no outstanding injunctions or restraining orders prohibiting
consummation of any of the transactions contemplated by the Loan Documents or
the Senior Credit Facilities. Neither the Company nor any of its Subsidiaries
is in default with respect to any judgment, order, writ, injunction or decree
of any court or governmental agency, and there are no unsatisfied judgments
against any such Person or its business or activities. Except as specifically
noted on Schedule E, neither the Company nor any of its Subsidiaries has been
advised that there is a reasonable likelihood of an adverse determination of
any Litigation which adverse determination, should it occur, would have a
Material Adverse Effect.
4.11 Use of Proceeds; Margin Stock, Etc.
The proceeds of the Bridge Loan will be used solely for the
purposes specified herein. None of such proceeds will be used for the purpose
of purchasing or carrying any Margin Stock within the meaning of the applicable
provisions of Regulation G, T, U or X, or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of the applicable provisions of Regulation
G, T, U or X. Neither the Company nor any of its Subsidiaries has taken or
will take any action which might cause any of the Loan Documents to violate the
applicable provisions of Regulation G, T, U or X, or any other regulation of
the Board of Governors of the Federal Reserve System.
4.12 Taxes
Except as set forth on Schedule K hereto, all material tax
returns, foreign and domestic, required to be filed by the Company and each of
its Subsidiaries in any jurisdiction have been filed, and all material Taxes
for which
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they are directly or indirectly liable or to which any of their respective
properties or assets are subject have been paid prior to the time that such
Taxes could give rise to a Lien thereon. There is no material proposed tax
assessment against the Company or any of its Subsidiaries, and there is no
basis for such assessment, except for Contested Claims.
4.13 ERISA
A. The Company, each Subsidiary of the Company and each
of their respective ERISA Affiliates are in material compliance with all
applicable provisions and requirements of the Internal Revenue Code and ERISA
and the regulations and published interpretations thereunder with respect to
each Employee Benefit Plan, and have performed all their material obligations
under each Employee Benefit Plan, except for such noncompliance and
nonperformance which in the aggregate would not have a Material Adverse Effect
on the Company and its Subsidiaries, taken as a whole.
B. No ERISA Events have occurred or are reasonably
expected to occur which individually or in the aggregate resulted in or might
reasonably be expected to result in a liability of the Company or any
Subsidiary of the Company in excess of $500,000.
C. Except as disclosed on Schedule F annexed hereto and
except to the extent required under Section 4980B of the Internal Revenue Code,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employees of the
Company or any Subsidiary of the Company.
D. In accordance with the most recent actuarial
valuations, the Amount of Unfunded Benefit Liabilities individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans which have a negative Amount of Unfunded Benefit Liabilities),
does not exceed $500,000.
E. The Company and each of its Subsidiaries and each of
the Foreign Plans are in compliance in all material respects with all
applicable laws and regulations with respect to the Foreign Plans and the terms
of the Foreign Plans, and all required contributions have been made to the
Foreign Plans, except for such noncompliance and required contributions which
in the aggregate would not have a Material Adverse Effect on the Company and
its Subsidiaries considered as a whole. For
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purposes hereof, the term "Foreign Plans" shall mean any plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into with,
the Company or any of its Subsidiaries with respect to employees employed
outside the United States.
4.14 Compliance with Law
The Company and each of its Subsidiaries are in compliance
with all Laws, except where the failure to comply, singly or in the aggregate,
would not have a Material Adverse Effect.
4.15 Government Regulation
Neither the Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 (as any of the preceding acts
have been amended) or other Law which regulates the Incurrence by the Company
or any of its Subsidiaries of Indebtedness, including, but not limited to, Laws
relating to common contract carriers or the sale of electricity, gas, steam,
water or other public utility services.
4.16 Capital Structure and Subsidiaries
After giving effect to the Transactions, the Company will have
no interest in any Person other than the Subsidiaries of the Company set forth
on Schedule A and other Investments of the Company as set forth on Schedule G
attached hereto and the Company will own, free and clear of all Liens, claims
or restrictions on voting or transfer (other than as permitted by this
Agreement), 100% of all classes of outstanding Capital Stock of each of the
entities set forth on such Schedule A, except as specified on Schedule A. All
of the issued and outstanding shares of Capital Stock of the Company and of
each of its Subsidiaries is, and at and as of the date of consummation of the
Transactions will be, duly authorized, validly issued, fully paid and
nonassessable. Neither the Company nor any of its Subsidiaries has granted or
issued, or has agreed to grant or issue, any options, warrants or similar
rights to any Person to acquire any shares of, or other securities convertible
into, the Company's or any of its Subsidiaries' Capital Stock other than
pursuant to the Company's stock option plans.
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4.17 Intellectual Property
A. Schedule H annexed hereto sets forth a complete and
correct list, as of the Closing Date, of: (i) all patented or registered
Intellectual Property and pending patent applications or applications for
registration of Intellectual Property owned or filed by or on behalf of the
Company or any of its Subsidiaries; (ii) all trade names and unregistered
trademarks or service marks owned by or used by the Company or any of its
Subsidiaries; and (iii) all licenses of Intellectual Property to which the
Company or any of its Subsidiaries is a party, either as licensee or licensor.
Except as set forth on Schedule H, the Company and its Subsidiaries own or are
licensed to use all Intellectual Property necessary to permit the operation of
their businesses as currently conducted.
B. Except as disclosed in Schedule H, no material claim
has been asserted by any Person with respect to the use of any such
Intellectual Property, or challenging or questioning the validity or
effectiveness of any such Intellectual Property. Except as disclosed in
Schedule H, the use of such Intellectual Property by the Company or any of its
Subsidiaries does not infringe on the rights of any Person, subject to such
claims and infringements as do not, in the aggregate, give rise to any
liabilities on the part of the Company or any of its Subsidiaries that are
material to the Company and its Subsidiaries, taken as a whole. The
consummation of the Transactions will not in any material manner or to any
material extent impair the ownership of (or the license to use, as the case may
be) any of such Intellectual Property by the Company or any of its
Subsidiaries.
4.18 Environmental Matters
Except as set forth in Schedule C annexed hereto:
(i) the operations of each of the Company and its
Subsidiaries (including, without limitation, all operations and
conditions at or in the Facilities) comply in all material respects
with all Environmental Laws except for any such noncompliance which
would not reasonably be expected to have a Material Adverse Effect;
(ii) each of the Company and its Subsidiaries has obtained
all Permits under Environmental Laws necessary to their respective
operations, and all such Permits are being maintained in good
standing, and each of the Company
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and its Subsidiaries is in compliance with all material terms
and conditions of such Permits except for any such failure to obtain,
maintain or comply which would not reasonably be expected to have a
Material Adverse Effect;
(iii) none of the Company or its Subsidiaries has received
(a) any notice or written claim to the effect that it is or may be
liable to any Person under any Environmental Law, including without
limitation, any relating to any Hazardous Materials except as would
not reasonably be expected to have a Material Adverse Effect or (b)
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9604) or comparable foreign or state laws
regarding any matter which could reasonably be expected to result in a
Material Adverse Effect, and, to the best of the Company's knowledge,
none of the Company or its Subsidiaries is involved in any
investigation, response or corrective action relating to or in
connection with any Hazardous Materials at any Facility or at any
other location except for such of the foregoing which would not
reasonably be expected to have a Material Adverse Effect;
(iv) none of the Company or its Subsidiaries is subject to
any judicial or administrative proceeding alleging the violation of or
liability under any Environmental Laws which if adversely determined
could reasonably be expected to have a Material Adverse Effect;
(v) none of the Company or its Subsidiaries or any of their
respective Facilities or operations are subject to any outstanding
written order or agreement with any governmental authority or private
party relating to (a) any actual or potential violation of or
liability under Environmental Laws or (b) any Environmental Claims
except for such of the foregoing which would reasonably be expected to
have a Material Adverse Effect;
(vi) none of the Company or its Subsidiaries has any
contingent liability in connection with any Release or threatened
Release of any Hazardous Materials by any of the Company or its
Subsidiaries except for such of the foregoing which would not
reasonably be expected to have a Material Adverse Effect;
(vii) none of the Company or its Subsidiaries or, to the
best of the Company's knowledge, any predecessor of
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any of the Company or its Subsidiaries has filed any notice
under any Environmental Law indicating past or present treatment,
storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent;
(viii) no Hazardous Materials exist on, under or about any
Facility in a manner that would reasonably be expected to give rise to
an Environmental Claim having a Material Adverse Effect, and none of
the Company or its Subsidiaries has filed any notice or report of a
Release of any Hazardous Materials that would reasonably be expected
to give rise to an Environmental Claim having a Material Adverse
Effect;
(ix) none of the Company or its Subsidiaries or, to the
best of the Company's knowledge, any of their respective predecessors
has disposed of any Hazardous Materials in a manner that would
reasonably be expected to give rise to an Environmental Claim having a
Material Adverse Effect;
(x) no underground storage tanks or surface impoundments
are on or at any Facility except for any underground storage tanks or
surface impoundments, the existence of which would not reasonably be
expected to have a Material Adverse Effect; and
(xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been
attached to any Facility or other assets of the Company or any of its
Subsidiaries except for any such Lien which would not reasonably be
expected to have a Material Adverse Effect.
Notwithstanding anything in this subsection 4.18 to the contrary, no event or
condition has occurred which may interfere with present compliance by the
Company or its Subsidiaries with any Environmental Law, or which may give rise
to any liability under any Environmental Law, including, without limitation,
any matter disclosed on Schedule C annexed hereto, which, individually, or in
the aggregate, has had a Material Adverse Effect.
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4.19 Survival of Representations and Warranties
Subject to Section 12.10B, all representations and warranties
in the Loan Documents shall survive delivery of the Bridge Notes and the making
of the Bridge Loan and shall continue until one year after repayment of the
Notes and the Obligations, and any investigation at any time made by or on
behalf of the Lenders shall not diminish the Lenders' right to rely thereon.
4.20 Permits
Except as disclosed on Schedule I, the Company and its
Subsidiaries have, and immediately after the consummation of the Transactions
will have, such certificates, permits, licenses, franchises, consents,
approvals, authorizations and clearances the failure of which to have obtained
could reasonably be expected to have a Material Adverse Effect ("Permits"), and
are (and will be immediately after the consummation of the Transactions) in
compliance in all material respects with all applicable Laws of all Tribunals
as are necessary to own, lease or operate their respective properties and to
conduct their businesses in the manner as presently conducted and to be
conducted immediately after the consummation of the Transactions, and all such
Permits are valid and in full force and effect and will be valid and in full
force and effect immediately upon consummation of the Transactions; provided
that Permits authorizing Advertising Displays and previously issued to the
current owners of the Acquired Business may have to be transferred to, or
reissued in the name of, the Company after the Acquisition. The Company and
its Subsidiaries are, and immediately after the consummation of the
Transactions will be, in compliance in all material respects with their
respective obligations under such Permits and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or termination
of such Permits, except for any such revocation or termination as would not,
singly or in the aggregate, have a Material Adverse Effect.
4.21 Insurance
The Company and its Subsidiaries carry or are entitled to the
benefits of insurance (including self-insurance) in such amounts and covering
such risks as is generally maintained by companies of established repute
engaged in the same or similar businesses, and all such insurance is
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(and will be immediately after the consummation of the Transactions) in full
force and effect.
4.22 Labor Matters
No labor disturbance by the employees of the Company and its
Subsidiaries exists or, to the best knowledge of the Company, is threatened,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of the Company's or its Subsidiaries' principal suppliers,
manufacturers or customers that could, singly or in the aggregate, have a
Material Adverse Effect.
4.23 Guarantees
Each Guarantor shall, on the date it executes and delivers a
Guarantee hereunder, have the full corporate power, authority and capacity to
execute and deliver such Guarantee and to perform all of its obligations to be
performed thereunder; all corporate and other acts, conditions and things
required to be done and performed or to have occurred prior to such execution
and delivery to constitute such Guarantee as a valid and legally binding
obligation of such Guarantor enforceable in accordance with its terms shall
have been done and performed and shall have occurred in due compliance with all
applicable Laws; on the date of such execution and delivery, the execution,
delivery and performance of such Guarantee by such Guarantor will not (i)
violate any provision of Law or any provision of the charter or bylaws of such
Guarantor, or (ii) result in a breach of, a default under (including, without
limitation, any event which with notice or lapse of time, or both, would
constitute a breach of or a default under), or the creation of any Lien on the
properties or assets of such Guarantor, the Company or any other Subsidiary of
the Company under any Contract to which such Guarantor or the Company or any
other Subsidiary of the Company is a party or by which the properties or assets
of such Guarantor, the Company or any other Subsidiary of the Company may be
bound or affected; on the date of such execution and delivery, each Guarantee
executed and delivered by a Guarantor shall constitute legal, valid, binding
and unconditional obligations of the Guarantor executing and delivering it to
the Lenders hereunder, enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in
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equity or at law); and the foregoing representations and warranties of the
Company shall be deemed for all purposes to have been made on each date when a
Guarantee is delivered hereunder with respect solely to that Guarantee and the
Guarantor so issuing such Guarantee.
4.24 Senior Subordinated Indenture; etc.
Each of the Company and the Guarantors shall, on the date it
executes and delivers the Senior Subordinated Indenture and the Exchange Notes
and the Demand Take-Out Notes and the indenture governing the Demand Take-Out
Notes (or the guarantees related thereto, as the case may be), have the full
corporate power, authority and capacity to do so and to perform all of its
obligations to be performed thereunder; all corporate and other acts,
conditions and things required to be done and performed or to have occurred
prior to such execution and delivery to constitute them as valid and legally
binding obligations of the Company enforceable against the Company and the
Guarantors in accordance with their respective terms except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law), shall have been
done and performed and shall have occurred in due compliance with all
applicable Laws; on the date of such execution and delivery by the Company and
the Guarantors, the Senior Subordinated Indenture and the Exchange Notes and
the Demand Take-Out Notes (and the guarantees) and the indenture governing the
Demand Take-Out Notes shall constitute legal, valid, binding and unconditional
obligations of the Company and the Guarantors, as the case may be, enforceable
against the Company and the Guarantors, as the case may be, in accordance with
their respective terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
4.25 Broker's or Finder's Fees
Except as disclosed on Schedule J, no broker's or finder's
fees or commissions will be payable by the Company or any of its Subsidiaries
with respect to any transaction contemplated hereby or by the Senior Credit
Facilities and no similar fees or commissions will be payable by the Company or
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any of its Subsidiaries for any other services rendered to the Company or any
of its Subsidiaries in connection with the transactions contemplated hereby and
thereby. The Company represents, warrants, covenants and agrees that the
Company will indemnify the Lenders and the Agent against, and hold each of them
completely harmless from and against, any and all claims, demands or
liabilities for broker's or finder's fees or similar fees or commissions
asserted to have been incurred in connection with any of the transactions
contemplated hereby or by the Senior Credit Facilities.
SECTION 5 AFFIRMATIVE COVENANTS
The Company covenants and agrees that, until the Loans and the
Notes and all other amounts due under this Agreement have been indefeasibly
paid in full it shall perform all covenants in this Section 5 required to be
performed by it:
5.1 Financial Statements and Other Reports
The Company will maintain, and cause each of its Subsidiaries
to maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of consolidated financial
statements in conformity with GAAP. The Company will deliver to each Lender
and the Agent:
(i) at any time during which any Bridge Loans are
outstanding, as soon as available and in any event within 40 days after
the end of each month ending after the Closing Date, (1) the
consolidated balance sheets of the Company and its Subsidiaries and the
consolidating balance sheets of the Company and the Material
Subsidiaries, in each case as at the end of such month, (2) the related
consolidated and consolidating statements of operations, stockholders'
equity and cash flows, in each case for such month and for the period
from the beginning of the then current fiscal year to the end of such
month, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous fiscal year and
the corresponding figures from the consolidated plan and financial
forecast for the current fiscal year delivered pursuant to Section
5.1(x), all in reasonable detail and certified by the chief financial
officer of the Company that they fairly present the financial condition
of such entities as at the dates indicated and the results of their
operations and their
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cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, and (3) a
narrative report describing the operations of the Company and its
Subsidiaries in the form prepared for presentation to Senior
Management for such monthly period and for the period from the
beginning of the then current fiscal year to the end of such monthly
period;
(ii) as soon as available and in any event within 45 days
after the end of each of the first three fiscal quarters of each
fiscal year and within 90 days after the end of the fourth fiscal
quarter of each fiscal year, (1) the consolidated balance sheets of
the Company and its Subsidiaries and the consolidating balance sheets
of the Company and the Material Subsidiaries as at the end of such
fiscal quarter, (2) the related consolidated and consolidating
statements of operations, stockholders' equity and cash flows for such
fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, setting forth
in each case in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the
corresponding figures from the consolidated plan and financial
forecast for the current fiscal year delivered pursuant to Section
5.1(x), all in reasonable detail and certified by the chief financial
officer of the Company that they fairly present the financial
condition of each the Company and its Subsidiaries and the Company and
the Material Subsidiaries, as the case may be, as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, (3) the Company's quarterly report on
Form 10-Q for such quarterly period, and (4) only if the Company does
not file quarterly reports on Form 10-Q with the Commission, a
narrative report describing the operations of the Company and its
Subsidiaries (in the form of management's discussion and analysis of
such operations which would comply with the disclosure requirements of
the Exchange Act and rules and regulations promulgated thereunder with
respect to management's discussion and analysis set forth in quarterly
reports on Form 10-Q) prepared for such fiscal quarter and for the
period from the beginning of the then current fiscal year to the end
of such fiscal quarter;
(iii) as soon as available and in any event within 90 days
after the end of each fiscal year, (1) the
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consolidated balance sheets of the Company and its Subsidiaries
and the consolidating balance sheets of the Company and the Material
Subsidiaries as at the end of such fiscal year, (2) the related
consolidated and consolidating statements of operations, stockholders'
equity and cash flows for such fiscal year, setting forth in each case
in comparative form the corresponding figures for the previous fiscal
year and the corresponding figures from the consolidated plan and
financial forecast for the current fiscal year delivered pursuant to
Section 5.1(x) for the fiscal year covered by such financial
statements, all in reasonable detail and certified by the chief
financial officer of the Company that they fairly present the
financial condition of the Company and its Subsidiaries and the
Company and the Material Subsidiaries, as the case may be, as at the
dates and the results of their operations and their cash flows for the
periods indicated, (3) the Company's annual report on Form 10-K for
such year, (4) only if the Company does not file annual reports on
Form 10-K with the Commission, a narrative report describing the
operations of the Company and its Subsidiaries (in the form of
management's discussion and analysis of such operations which would
comply with the disclosure requirements of the Exchange Act and rules
and regulations promulgated thereunder with respect to management's
discussion and analysis set forth in quarterly reports on Form 10-K)
prepared for such fiscal year, and (5) a report thereon of independent
certified public accountants of recognized national standing, which
report shall be unqualified as to scope of audit, shall express no
doubts about the ability of the Company and its Subsidiaries to
continue as a going concern, and shall state that such consolidated
financial statements fairly present the consolidated financial
position of the Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(iv) together with each delivery of financial statements
pursuant to Sections (ii) and (iii) above, (a) an Officers'
Certificate of the Company stating that the signers have reviewed the
terms of this Agreement and
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the Notes and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of the Company and its Subsidiaries during the accounting
period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as
at the date of the Officers' Certificate, of any condition or event
which constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Company has
taken, is taking and proposes to take with respect thereto; and (b) a
Compliance Certificate demonstrating in reasonable detail compliance
(as determined in accordance with GAAP) during and at the end of such
accounting periods with the restrictions contained in Sections 6.1,
6.2, 6.3, 6.4, 6.5, 6.6, 6.9 and 6.15;
(v) together with each delivery of consolidated financial
statements pursuant to Section (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating whether, in connection with their audit examination, any
condition or event that constitutes an Event of Default or Potential
Event of Default that relates to accounting matters has come to their
attention and, if any such condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their
audit examination, and (b) stating that based on their audit
examination nothing has come to their attention that causes them to
believe that the information contained in the certificates delivered
therewith is not correct;
(vi) promptly upon receipt thereof (unless restricted by
applicable professional standards), copies of all reports (other than
reports of a routine or ministerial nature which are not material)
submitted to the Company by independent certified public accountants
in connection with each annual, interim or special audit of the
financial statements of the Company and its Subsidiaries made by such
accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
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(vii) promptly upon the sending or filing thereof, copies
of (a) all financial statements, reports, notices and proxy statements
sent or made available generally by the Company to its security
holders or by any Subsidiary of the Company to its security holders
other than the Company or another Subsidiary of the Company, (b) all
other reports and all registration statements (other than on Form S-8
or a similar form) and prospectuses, if any, filed by the Company or
any of its Subsidiaries or the Company with any securities exchange or
with the Commission or any governmental authority (other than reports
of a routine or ministerial nature which are not material), and (c)
all press releases and other statements made available generally by
the Company or any of its Subsidiaries to the public concerning
material developments in the business of the Company or any of its
Subsidiaries;
(viii) promptly upon any Senior Officer obtaining knowledge
(a) of any condition or event which constitutes an Event of Default or
Potential Event of Default, or becoming aware that any Lender or Agent
has given any notice or taken any other action with respect to a
claimed Event of Default or Potential Event of Default under this
Agreement, (b) that any Person has given any notice to the Company or
any Subsidiary of the Company or taken any other action with respect
to a claimed default or event or condition which might result in an
Event of Default referred to in Section 7.2, (c) of any condition or
event which would be required to be disclosed in a current report
filed with the Commission on Form 8-K whether or not the Company is
required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect, an
Officers' Certificate specifying the nature and period of existence of
any such condition or event, or specifying the notice given or action
taken by such holder or Person and the nature of such claimed default,
Event of Default, Potential Event of Default, event or condition, and
what action the Company has taken, is taking and proposes to take with
respect thereto;
(ix) promptly upon any Senior Officer obtaining knowledge
of (X) the institution of, or non-frivolous threat of, any action,
suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting the
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Company or any of its Subsidiaries or any property of the Company or
any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by the Company to Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief
as a result of, the Transactions;
written notice thereof together with such other information as
may be reasonably available to the Company or any of its Subsidiaries
to enable Lenders and their counsel to evaluate such matters;
(x) as soon as practicable but in any event no later than
40 days following the first day of each fiscal year a forecast for
each of the next succeeding twelve months of the consolidated balance
sheet and the consolidated statements of income, cash flow and cash
position of the Company and its Subsidiaries and the consolidating
balance sheet and the consolidating statements of income, cash flow
and cash position of the Company and the Material Subsidiaries,
together with an outline of the major assumptions upon which the
forecast is based. Together with each delivery of financial
statements pursuant to Sections 5.1(ii) and (iii) above, the Company
shall deliver a comparison of the current year to date financial
results against the budget required to be submitted pursuant to this
Section;
(xi) not later than the last day of each fiscal year of the
Company, a report in form and substance satisfactory to the Agent
outlining all material insurance coverage maintained as of the date of
such report by the Company and its Subsidiaries and all material
insurance coverage planned to be maintained by such Persons in the
subsequent fiscal year;
(xii) in writing, promptly upon a Senior Officer obtaining
knowledge that the Company or any of its Subsidiaries has received
notice or otherwise learned of any claim, demand, action, event,
condition, report or investigation indicating any potential or actual
liability
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arising in connection with (x) the non-compliance with or
violation of the requirements of any Environmental Law which could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (y) the release or threatened release of any
toxic or hazardous waste, substance or constituent into the
environment which could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect or which release the
Company or any of its Subsidiaries would have a duty to report to a
Tribunal under an Environmental Law, or (z) the existence of any
Environmental Lien on any properties or assets of the Company or any
of its Subsidiaries;
(xiii) promptly after the availability thereof, copies of
all material amendments to the certificate of incorporation or by-laws
of the Company or any of its Subsidiaries; and
(xiv) promptly upon any Person becoming a Subsidiary of the
Company, a written notice setting forth with respect to such Person
(a) the date on which such Person became a Subsidiary of the Company
and (b) all of the data required to be set forth in Schedule A annexed
hereto with respect to all Subsidiaries of the Company;
(xv) with reasonable promptness, such other information and
data with respect to the Company or any of its Subsidiaries or any of
their respective property, business or assets as from time to time may
be reasonably requested by any Lender; provided that no information or
data shall be required to be delivered hereunder or under any other
provision of this Agreement if it would violate any applicable
attorney-client or accountant-client privilege.
5.2 Corporate Existence, Etc.
The Company will at all times preserve and keep in full force
and effect its corporate existence and rights and franchises to its business
and those of each of its Subsidiaries, except as permitted by Section 6.7 or
where the failure to so preserve or keep will not, singly or in the aggregate,
have a Material Adverse Effect.
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5.3 Payment of Taxes and Claims; Tax Consolidation
A. The Company will, and will cause each of its
Subsidiaries to, pay all material Taxes, assessments and other governmental
charges imposed upon it or any of its material properties or assets or in
respect of any of its franchises, business, income or property before any
material penalty accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien upon any
of its properties or assets prior to the time when any material penalty or fine
shall be incurred with respect thereto, provided, however, that no such charge
or claim need be paid if the validity or amount of such charge or claim is
being diligently contested in good faith and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
B. The Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than the Company or any of its Subsidiaries so
long as the filing of such consolidated income tax return is permitted by
applicable law).
5.4 Maintenance of Properties; Insurance
The Company will maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of the Company and its
Subsidiaries and from time to time promptly will make or cause to be made all
necessary repairs, renewals and replacements thereof; provided, however, that
nothing in this Section 5.4 shall prevent the Company or any of its
Subsidiaries from discontinuing the use, operation or maintenance of any such
properties, or disposing of any of them, if such action is in the ordinary
course of business or, in the reasonable good faith judgment of the Company,
necessary or desirable in the conduct of its business or otherwise permitted by
this Agreement. The Company will maintain or cause to be maintained, with
financially sound and reputable insurers or with self insurance programs, in
each case to the extent consistent with prudent business practices and
customary in its industries, insurance with respect to its properties and
business and the properties and businesses of its Subsidiaries against loss or
damage of the kinds and in the amounts customarily carried or maintained under
similar circumstances by corporations of established reputation engaged in
similar
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businesses and owning similar properties in the same general respective areas
in which the Company and its Subsidiaries operate.
5.5 Inspection
The Company shall permit any authorized representatives
designated by the Lenders to visit and inspect any of the properties of the
Company or its Subsidiaries, including, without limitation, its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that
representatives of the Company or any of its Subsidiaries may, if it so
chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested; provided that, prior to the occurrence
of an Event of Default or a Potential Event of Default, it shall not be more
often than once a month.
5.6 Equal Security for Loans and Notes
If the Company or any of its Subsidiaries shall create, assume
or suffer to exist any Lien upon any of their respective property or assets,
whether now owned or hereafter acquired, other than Liens permitted by the
provisions of Section 6.2, the Company shall, at the request of the Agent, make
or cause to be made effective provision whereby the Obligations under this
Agreement will be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured as long as any such Indebtedness shall be
secured; provided, however, that this covenant shall not be construed as or
deemed to be a consent by the Lenders to any violation of the provisions of
Section 6.2; and provided, further, that the Company shall under no
circumstances be required to make or cause to be made effective provision
whereby the Obligations under this Agreement will be secured, directly or
indirectly, by Margin Stock.
5.7 Compliance with Laws, Etc.
The Company shall and shall cause each of its Subsidiaries to
comply with the requirements of all applicable Laws of any Tribunal,
noncompliance with which, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
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5.8 Maintenance of Accurate Records, Etc.
The Company shall keep, and will cause each of its
Subsidiaries to keep, true books and records and accounts in which full and
correct entries will be made of all its respective business transactions, and
will reflect, and cause each of its Subsidiaries to reflect, in its respective
financial statements adequate accruals and appropriations to reserves.
5.9 Take-Out Financing
The Company agrees that upon request (a "Request") from one or
more investment banks (collectively, the "Take-Out Banks") made at any time
after the Closing Date and prior to the Conversion Date, the Company will take
all reasonable actions necessary or desirable, to the extent within its power,
so that the Take-Out Banks can, as soon as practicable after such Request,
publicly sell or privately place the Demand Take-Out Notes (the "Initial
Request Date"). The Company further agrees that upon notice by the Take-Out
Banks, at any time and from time to time following the Initial Request Date,
the Company will exercise best efforts to issue and sell Demand Take-Out Notes
upon terms and conditions in accordance with this Section 5.9; provided that
(i) the interest rate thereon shall be determined in accordance with customary
procedures for establishing the interest rate on comparable securities and by
reference to the current yield on senior subordinated high yield debt
securities having a maturity of not less than 10 years and having no principal
payments due prior to maturity, but in no event shall the interest rate on the
Demand Take-Out Notes exceed (A) the rate then available in the market for
comparable securities if such Demand Take-Out Notes are to be issued on or
prior to the six-month anniversary of the Closing Date or (B) if such Demand
Take-Out Notes are to be issued after the six-month anniversary of the Closing
Date, the rate borne by direct obligations of the United States with a maturity
date as close as possible to that of the Demand Take-Out Notes proposed to be
issued plus 6%; (ii) the Company, in its reasonable discretion after
consultation with the Take-Out Banks, shall determine whether the Demand
Take-Out Notes shall be issued through a public offering or a private placement
and, if issued in a private placement, the Demand Take-Out Notes will be
accompanied by customary registration rights; (iii) the maturity of any Demand
Take-Out Notes shall not be earlier than one year after the scheduled final
maturity of the term loans under the Senior Credit Facilities (as in effect on
the Closing Date); (iv) the aggregate principal amount of Demand Take-Out
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Notes to be issued by the Company shall be determined by the Company, in
consultation with the Take-Out Banks, in light of the then prevailing market
conditions; provided that the aggregate principal amount of Demand Take-Out
Notes shall not exceed the amount calculated to yield net proceeds sufficient
to repay the Bridge Notes in full; and (v) all other arrangements with respect
to the Demand Take-Out Notes shall be reasonably satisfactory in all respects
to the Take-Out Banks and the Company in light of the then prevailing market
conditions. The foregoing shall not limit the Company's right to refinance the
Bridge Loan by any other means.
5.10 Exchange of Term Notes
The Company will, on the 5th Business Day following the
written request (the "Exchange Request") of the holder of any Term Note (or
beneficial owner of a portion thereof):
(i) Execute and deliver, cause each Guarantor to execute
and deliver, and cause a bank or trust company acting as trustee
thereunder to execute and deliver, the Senior Subordinated Indenture
substantially in the form of Exhibit V annexed hereto, if such Senior
Subordinated Indenture has not previously been executed and delivered;
(ii) Execute and deliver to such holder or beneficial owner
in accordance with the Senior Subordinated Indenture a note in the
form attached to the Senior Subordinated Indenture (the "Exchange
Notes") bearing interest as set forth therein in exchange for such
Term Note dated the date of the issuance of such Exchange Note,
payable to the order of such holder or owner, as the case may be, in
the same principal amount as such Term Note (or portion thereof) being
exchanged, and cause each Guarantor to endorse its guarantee thereon;
and
(iii) Execute and deliver, and cause each Guarantor to
execute and deliver, to such holder or owner, as the case may be, a
Registration Rights Agreement in the form of Exhibit VI annexed
hereto, if such Registration Rights Agreement has not previously been
executed and delivered or, if such Registration Rights Agreement has
previously been executed and delivered and such holder or owner is not
already a party thereto, permit such holder or owner to become a party
thereto.
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The Exchange Request shall specify the principal amount of the
Term Notes to be exchanged pursuant to this Section 5.10 which shall be at
least $5,000,000 and integral multiples of $10,000 in excess thereof. Term
Notes delivered to the Company under this Section 5.10 in exchange for Exchange
Notes shall be cancelled by the Company and the corresponding amount of the
Term Loan deemed repaid and the Exchange Notes shall be governed by and
construed in accordance with the terms of the Senior Subordinated Indenture.
The bank or trust company acting as trustee under the Senior
Subordinated Indenture shall at all times be a corporation organized and doing
business under the laws of the United States of America or the State of New
York, in good standing and having its principal offices in the Borough of
Manhattan, in The City of New York, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal or State authority and which has a combined capital and surplus of not
less than $50,000,000.
5.11 ERISA Compliance
Each of the Company and its Subsidiaries will (i) make timely
payment of all contributions which it is obligated to make under all Pension
Plans and which are required to meet the minimum funding standard set forth in
ERISA with respect to each of the Pension Plans, (ii) within 30 days after the
filing thereof, furnish to the Lenders each Schedule B to the annual
return/report (Form 5500 Series), required to be filed with the Department of
Labor and/or the Internal Revenue Service pursuant to ERISA, with respect to
each of the Pension Plans that is not a Multiemployer Plan for each Plan year,
and (iii) notify the Lenders promptly upon becoming aware of any fact,
including but not limited to, any Reportable Event arising in connection with
any of the Pension Plans that is not a Multiemployer Plan, which could be
reasonably expected to constitute grounds for termination thereof by the PBGC
or for the appointment by the appropriate United States District Court of a
trustee to administer such Pension Plan, together with a statement as to the
action, if any, proposed to be taken with respect thereto.
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5.12 Payments in U.S. Dollars
Other than with respect to PIK Interest Amounts, all payments
of any Obligations to be made hereunder or under the Notes by the Company or
any other obligor with respect thereto shall be made solely in U.S. Dollars or
such other currency as is then legal tender for public and private debts in the
United States of America.
5.13 Register
The Company hereby designates the Agent to serve as the
Company's agent, solely for purposes of this Section 5.13, to maintain a
register (the "Register") on which it will record the Loans made by each of the
Lenders and each repayment in respect of the principal amount of the Loans of
each Lender. Failure to make any such recordation, or any error in such
recordation shall not affect the Company's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Loan Commitments of
such Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Loan Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Loan Commitments and Loans and prior to such recordation all amounts owing
to the transferor with respect to such Loan Commitments and Loans shall remain
owing to the transferor. The registration of assignment or transfer of all or
part of any Loan Commitments and Loans shall be recorded by the Agent on the
Register only upon the receipt by the Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 12.2A.
Coincident with the delivery of such an Assignment and Assumption Agreement to
the Agent for acceptance and registration of assignment or transfer of all or
part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Loan, and thereupon
one or more new Notes of the same type and in the same aggregate principal
amount shall be issued to the assigning or transferor Lender and/or the new
Lender.
5.14 Lenders Meeting
The Company will participate in a meeting with the Lenders
once during each fiscal year to be held at a location and a time selected by
the Company and reasonably satisfactory to the Lenders.
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SECTION 6 NEGATIVE COVENANTS
The Company covenants and agrees that until the satisfaction
in full of the Loans and the Notes and all other Obligations due under this
Agreement it will fully and timely perform all covenants in this Section 6,
unless consent of the Required Lenders is obtained.
6.1 Indebtedness
Each of the Company and the Company shall not, nor shall
either of them cause or permit any of its Subsidiaries to, directly or
indirectly, Incur, or remain or become directly or indirectly liable with
respect to, any Indebtedness, except for the following ("Permitted
Indebtedness"):
(i) the Company and the Guarantors may Incur and remain
liable with respect to the Obligations;
(ii) the Company and the Guarantors may Incur and remain
liable with respect to the Bank Indebtedness; provided, however, that
the aggregate principal amount of Indebtedness under the Senior Credit
Facilities shall not exceed the sum of (x) $530,000,000 less the sum
of (a) the aggregate amount of scheduled amortization payments of the
principal amount thereof actually made, other than under the revolving
loan portion thereof (unless the commitments thereunder are
permanently reduced), (b) the aggregate amount of mandatory
prepayments of the principal amount thereof actually made and (c) each
permanent reduction of commitments to extend credit thereunder not
otherwise caused pursuant to clause (a) or (b) and (y) any
Indebtedness incurred under the Senior Credit Facilities pursuant to
and in compliance with the last paragraph of this Section 6.1;
(iii) the Company and the Guarantors may Incur and remain
liable with respect to the Bridge Notes, Term Notes, Take-Out
Securities and Exchange Notes;
(iv) the Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by Section 6.5
and, upon any matured obligations actually arising pursuant thereto,
the Indebtedness corresponding to the Contingent Obligations so
extinguished;
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(v) the Company and its Subsidiaries may Incur and remain
liable with respect to Intercompany Indebtedness;
(vi) the Company and its Subsidiaries may remain liable
with respect to the Indebtedness which is existing on the Closing Date
and is described on Schedule B attached hereto;
(vii) the Company and its Subsidiaries may Incur and remain
liable with respect to Permitted Refinancing Indebtedness; and
(viii) Subsidiaries of the Company acquired after the
Closing Date may remain liable with respect to Indebtedness existing
immediately prior to the time any such entity became a Subsidiary of
Company in an aggregate amount for all such Subsidiaries not to exceed
$5,000,000 at any time outstanding; provided that such Indebtedness is
not incurred in contemplation of such acquisition.
In addition to the foregoing, at any time after the Closing
Date, if no Default with respect to payment of principal of, or interest on,
the Notes or Event of Default shall have occurred and be continuing at the time
of or as a consequence of the incurrence of any such Indebtedness, the Company
or any Subsidiary Guarantor may incur Indebtedness if the Cash Flow Leverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the time at
which such additional Indebtedness is incurred would have been not greater than
6.5 to 1, determined on a pro forma basis in accordance with GAAP to give
effect to the incurrence of such additional Indebtedness and (if applicable)
the application of the net proceeds therefrom (including, without limitation,
to refinance other Indebtedness and/or consummate the Company's or any of the
Company's Subsidiaries' acquisition of any Person or operating assets), as if
such additional Indebtedness had been incurred and any such refinancing and/or
acquisition, including, without limitation, the Acquisition, had occurred at
the beginning of such four-quarter period, and including giving pro forma
effect to any expense and cost reductions in connection with the Acquisition
that are directly attributable to the Acquisition and factually supportable.
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6.2 Liens
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset (including any
document or instrument in respect of goods or accounts receivable) of the
Company or of any of its Subsidiaries, whether now owned or hereafter acquired,
or assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any
such property, asset, income or profits under the Uniform Commercial Code of
any State or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens on (a) Real Property Assets or (b) equipment,
fixtures and other similar property of the Company and any of its
Subsidiaries, in each case securing Indebtedness incurred under Capital
Leases or incurred to finance the purchase price of such assets described
in clauses (a) and (b) above in an aggregate amount not to exceed
$4,000,000 at any one time outstanding; provided that such Liens shall
extend only to the Real Property Assets and the equipment, fixtures, and
other similar property so financed (and improvements or attachments
thereto) and the proceeds thereof;
(iii) Liens securing Indebtedness permitted under Section
6.1(viii), which Liens are existing prior to the time the entity which
incurred such Indebtedness became a Subsidiary of the Company; provided
that such Liens were not incurred in connection with, or in contemplation
of, the acquisition of such Subsidiary of the Company and such Liens extend
or cover only the property and assets of such entity which were covered by
such Liens and which were owned by such entity, in each case at the time
such entity became a Subsidiary of the Company (and improvements or
attachments thereto); and
(iv) the replacement, extension or renewal of any Lien permitted by
this Section 6.2 upon or in the same property subject to such Lien and as
security for the same obligations or any refinancings thereof to the extent
such refinancings are permitted under Section 6.1; provided that such Lien
does not extend to or cover any property
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other than the property covered by such Lien immediately prior to such
replacement, extension or renewal of such Lien (and improvements or
attachments thereto) and the principal of the obligations secured thereby
is not increased.
6.3 Restricted Payments
(a) The Company shall not, nor shall it cause or permit
any of its Subsidiaries to, directly or indirectly (i) declare or pay any
dividend, or make any distribution, on any Capital Stock of the Company (other
than dividends or distributions payable solely in Qualified Capital Stock of
the Company), (ii) purchase, redeem or otherwise acquire or retire for value
any of the Company's Capital Stock, or any warrants, rights or options to
acquire shares of any class of such Capital Stock or (iii) make any principal
payment on, purchase, defease, redeem, prepay, or otherwise acquire or retire
for value, other than any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Indebtedness of the Company
(any such dividend, distribution, purchase, redemption, acquisition,
retirement, defeasance or prepayment set forth in clauses (i), (ii) and (iii)
above a "Restricted Payment").
(b) Notwithstanding the foregoing, if no Default or Event
of Default shall have occurred and be continuing or shall be caused as a
consequence thereof, the provisions set forth in the immediately preceding
paragraph will not prevent (1) the acquisition of any shares of Capital Stock
of the Company or the repurchase, redemption or other repayment of any
Subordinated Indebtedness of the Company in exchange for or solely out of the
proceeds of the substantially concurrent sale (other than to a Subsidiary of
the Company) of shares of Qualified Capital Stock of the Company, and (2) the
repurchase, redemption or other repayment of any Subordinated Indebtedness of
the Company in exchange for or solely out of the proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Company) of Subordinated
Indebtedness of the Company with a Weighted Average Life to Maturity equal to
or greater than the then remaining Weighted Average Life to Maturity of the
Subordinated Indebtedness repurchased, redeemed or repaid.
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6.4 Investments; Joint Ventures
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment (other than
Permitted Investments) in any Person, including any Joint Venture, except:
(i) the Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date (after giving effect to
the Acquisition) in any Subsidiaries of the Company and described on
Schedule A annexed hereto;
(ii) the Company and its Subsidiaries may continue to own the
Investments owned by them and described on Schedule G annexed hereto;
(iii) the Company and its Subsidiaries may accept promissory
notes received in consideration of, or the deferral of a portion of the
sales price accepted with respect to, any Asset Sale permitted under Section
6.15;
(iv) the Company and its Subsidiaries may make and own
Investments received in connection with the bankruptcy of suppliers and
customers or received pursuant to a plan of reorganization of any supplier
or customer, in each case in settlement of delinquent obligations or
disputes with such suppliers or customers; and
(v) after the Conversion Date, the Company and its
Subsidiaries may make and own other Investments in an aggregate amount not
to exceed $10,000,000 at any time outstanding.
6.5 Contingent Obligations
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) the Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of letters
of credit under the Senior Credit Facilities;
(ii) the Guarantors may become and remain liable with
respect to Contingent Obligations under the Guarantees;
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(iii) the Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets; provided that the
maximum assumable liability in respect of all such obligations shall at no
time exceed the gross proceeds actually received by the Company and its
Subsidiaries in connection with such Asset Sales and other sales;
(iv) the Company and its Subsidiaries, as applicable, may
remain liable with respect to existing Contingent Obligations described in
Schedule B annexed hereto;
(v) the Company and the Guarantors may become and remain
liable with respect to (A) Contingent Obligations under guarantees made
under the Senior Credit Facilities and (B) Interest Rate Agreements
(including guarantees thereof) entered into with lenders under the Senior
Credit Facilities and their Affiliates; and
(vi) the Company and its Subsidiaries may become and
remain liable with respect to guarantees of Indebtedness or Contingent
Obligations of a wholly-owned Subsidiary of the Company and a Subsidiary of
the Company may become and remain liable with respect to guarantees of
Indebtedness or Contingent Obligations of the Company or a wholly-owned
Subsidiary of the Company.
6.6 Senior Subordinated Indebtedness
Neither the Company nor any of the Guarantors shall, directly
or indirectly, Incur any Indebtedness (other than the Notes, the Exchange Notes
and the Take-Out Securities) that is by its terms (or by the terms of any
agreement governing such Indebtedness) subordinated in right of payment to any
other Indebtedness of the Company or of such Guarantor unless such Indebtedness
is also by its terms (or by the terms of any agreement governing such
Indebtedness) made expressly subordinate to the Loans and the Notes and the
Guarantees to the same extent and in the same manner as such Loans and Notes
and Guarantees are subordinated to the Senior Credit Facilities.
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6.7 Restriction on Fundamental Changes
Subject to Section 5.2 and other than the sale of 100% of a
Subsidiary of the Company in accordance with Section 2.5A.(ii)(a) and Section
6.15, the Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, enter into any transaction, or series
of related transactions, of merger, amalgamation, consolidation or combination,
or consolidate, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or in a series of transactions, all or
substantially all of its business, property or assets, whether now owned or
hereafter acquired, except:
(i) in connection with the Acquisition; and
(ii) any Subsidiary of the Company may be merged,
amalgamated, consolidated or combined with or into the Company or any
wholly-owned Subsidiary of the Company or be liquidated, wound up or
dissolved, or all or substantially all of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or in a series of transactions, to the Company or to any
wholly-owned Subsidiary of the Company; provided, however, that, (A) no
Potential Event of Default or Event of Default shall have occurred and be
continuing or would result therefrom, (B) in the case of such a merger,
amalgamation, consolidation or combination of the Company and a Subsidiary
of the Company, the Company shall be the continuing or surviving
corporation, and (C) where one or more of the predecessor entities is the
Company or a Subsidiary Guarantor, the surviving entity (i) if it is the
Company or a Subsidiary Guarantor (I) continues to be bound as such under
this Agreement or the Guarantee of such Subsidiary Guarantor, as the case
may be, and (II) executes and delivers to the Agent immediately upon
consummation of such transaction a written confirmation or acknowledgment
to such effect, in form and substance satisfactory to the Agent, together
with evidence of appropriate corporate power, authority and action and a
written legal opinion in form and substance satisfactory to the Agent to
the effect that this Agreement and such Guarantee continue to be a legal,
valid and binding obligation of such entity, enforceable against such
entity in accordance with its terms (subject to customary exceptions in
respect of bankruptcy, insolvency and other
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equitable remedies) and with respect to such other matters as
the Agent may reasonably request, and (ii) if it is not the Company or
a Subsidiary Guarantor, executes and delivers to the Agent immediately
upon the consummation of such transaction an assumption agreement, in
form and substance satisfactory to the Agent, whereby such surviving
entity assumes the due and punctual performance of all obligations and
liabilities of such predecessor Subsidiary Guarantor under its
Guarantee, together with evidence of appropriate corporate power,
authority and action and a written legal opinion in form and substance
satisfactory to the Agent to the effect that such Guarantee is the
legal, valid and binding obligation of such surviving entity,
enforceable against such surviving entity in accordance with its terms
(subject to customary exceptions in respect of bankruptcy, insolvency
and other equitable remedies) and with respect to such other matters
as the Agent may reasonably request.
6.8 Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary of the Company to (a) pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in,
or measured by, such Subsidiary's profits; (b) make loans or advances or pay
any Indebtedness or other obligation owed to the Company or to any Subsidiary
of the Company; or (c) transfer any of its property or assets to the Company or
to any Subsidiary of the Company (any such restriction or encumbrance a
"Payment Restriction"), except for such encumbrances or restrictions existing
under or by reason of: (1) any restrictions contained in (i) the Loan
Documents, the Senior Subordinated Indenture and any instrument governing the
Take-Out Securities or Exchange Notes to the extent Incurred in accordance with
this Agreement; (ii) the Senior Credit Facilities as in effect on the Closing
Date; (iii) the Indebtedness pertaining to a Subsidiary of the Company that is
not a Subsidiary of the Company on the Closing Date in existence at the time
such Subsidiary becomes a Subsidiary of the Company; provided, however, that
any such Indebtedness was not incurred as a result of, in connection with or in
anticipation of the transaction pursuant to which such entity becomes a
Subsidiary of the Company and it does not apply to any Person, or the
properties of assets of any Person, other
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than the Subsidiary acquired and such Indebtedness is otherwise permitted to be
incurred pursuant to Section 6.1; (iv) secured Indebtedness otherwise permitted
to be incurred pursuant to Sections 6.1 and 6.2 that limits the right of the
debtor to dispose of the assets securing such Indebtedness; (2) customary
non-assignment provisions of any lease governing a leasehold interest of any
Subsidiary of the Company; (3) customary net worth provisions contained in
leases and other agreements entered into by a Subsidiary in the ordinary course
of business; (4) customary restrictions with respect to a Subsidiary pursuant
to an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary; (5)
applicable law; and (6) any instrument that Refinances any Indebtedness
effecting any such encumbrance or restriction pursuant to clause (1) above;
provided, however, that the provisions relating to any such encumbrance or
restriction in any such instrument are not materially less favorable to the
Company or its Subsidiaries or the Lenders than those contained in the
agreements referred to in clause (1).
6.9 Transactions with Shareholders and Affiliates
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
the Company; provided, however, that the foregoing restriction shall not apply
to the following "Permitted Affiliate Transactions": (i) any transaction
exclusively between the Company and any of its Subsidiaries or exclusively
between any of the Company's Subsidiaries, in each case to the extent any are
consistent with past practice and are otherwise in compliance with all of the
terms of this Agreement, (ii) reasonable and customary fees paid to members of
the Board of Directors of the Company and (iii) reasonable and customary fees
and compensation paid to, and indemnity provided on behalf of, officers,
directors or employees of the Company or any of its Subsidiaries, as determined
by the Board of Directors of the Company or any such Subsidiary or the senior
management thereof in good faith, including, without limitations, issuances of
stock, payment of bonuses and other transactions pursuant to employment or
compensation agreements, stock option agreements, indemnification agreements
and other arrangements in effect on the Closing Date or substantially similar
thereto.
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6.10 Subsidiary Stock
Except for any sale of 100% of the Capital Stock or other
equity securities of any of the Company's Subsidiaries in compliance with the
provisions of Section 6.7, the Company will not and will not permit any of its
Subsidiaries to directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of Capital Stock or other equity securities
of any of its Subsidiaries, except (i) to qualify directors if required by
applicable law, (ii) in the case of the Company's Subsidiaries, to the Company
or to a wholly-owned Subsidiary of the Company, (iii) Asset Sales made in
compliance with this Agreement or (iv) Liens in favor of the lenders under the
Senior Credit Facilities.
6.11 Business Activities
The Company shall not, nor shall the Company cause or permit
any of its Subsidiaries to, directly or indirectly, materially alter the nature
of the consolidated business of the Company and its Subsidiaries from that in
existence immediately after giving effect to the Transactions or similar or
related businesses.
6.12 Amendments or Waivers of Certain Documents
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, enter into any amendment,
modification, supplement or waiver with respect to the Senior Credit Facilities
as in effect on the Closing Date that would modify any of the provisions
thereof or any of the definitions relating to the provisions thereof in respect
of issuances of Take-Out Securities, the Term Notes or the Exchange Notes in a
manner materially adverse to the Lenders.
6.13 Amendments to Charter Documents
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, amend its certificate of incorporation or bylaws in any
respect which could be materially adverse to the interests of the Lenders.
6.14 Refinancing of the Loans in Part
The Company shall not, nor shall the Company cause or permit
any of its Subsidiaries to, Incur any Indebtedness to Refinance the Loans in
part other than the Demand Take-Out Notes or the Exchange Notes, unless the
terms, conditions,
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covenants, events of default and other provisions in respect of the instruments
evidencing the Indebtedness Incurred to Refinance the Loans in part shall have
been approved in writing by the Agent (which approval shall not be unreasonably
withheld) prior to the Incurrence of any such Indebtedness; and provided that
no Refinancing in part shall result in the amount of the Loans outstanding
being less than $100,000,000 and no Refinancing in part shall occur at a time
when the amount of the Loans outstanding is less than $100,000,000.
6.15 Asset Sales
The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, consummate any Asset Sale unless (1)
the Company or such Subsidiary, as the case may be, receives consideration
therefor at the time thereof at least equal to the fair market value at the
time of such Asset Sale of the property, assets or stock that is the subject of
such Asset Sale, (2) at least 85% of the consideration received therefor by the
Company or such Subsidiary is in the form of cash or Cash Equivalents and (3)
all of the Net Cash Proceeds in respect thereof are applied by the Company or a
Subsidiary of the Company in accordance with Section 2.5A(ii)(a); provided that
the Company or such Subsidiary will not be required to comply with clause (2)
of this sentence with respect to a Permitted Asset Swap or a Houston
Disposition. Notwithstanding the foregoing or Section 2.5A(ii)(a), the Company
shall not be required to comply with this Section 6.15 with respect to a Denver
Disposition other than clause (1) of the immediately preceding sentence if any
securities received by the Company as consideration for such Denver Disposition
(including the related cash flow) shall be pledged to secure the Obligations
under the Senior Credit Facilities.
6.16 Transfer of Assets to Subsidiaries
The Company shall not, nor shall the Company cause or permit
any of its Subsidiaries to, directly or indirectly, transfer (other than in the
ordinary course of business and other than pursuant to a Permitted Investment)
any assets or property to any Subsidiary of the Company unless such Subsidiary
pays fair market value therefor to the Company or to a wholly-owned Subsidiary
of the Company, except where such transfer is to a Subsidiary Guarantor and
except as provided in Sections 6.4, 6.5, 6.7 and 6.9. For purposes of this
Section 6.16, the fair market value paid by such Subsidiary shall not consist
in whole or in part of any securities or debt
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instruments of such Subsidiary or of any Affiliate of such Subsidiary.
6.17 Additional Guarantees
The Company will not permit any of its domestic Subsidiaries
to (a) incur, guarantee or secure through the granting of Liens the payment of
the Bank Indebtedness or any Refinancings thereof or (b) pledge any
intercompany notes representing obligations of any of its Subsidiaries to
secure the payment of the Bank Indebtedness or any Refinancings thereof, in
each case unless such Subsidiary executes a Guarantee of the Obligations of the
Company under this Agreement. Thereafter, such Subsidiary shall be a
Subsidiary Guarantor for all purposes of this Agreement.
SECTION 7 EVENTS OF DEFAULT
If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
7.1 Failure To Make Payments When Due
Failure to pay any installment of principal of the Loans when
due, whether at stated maturity, by acceleration, by notice of prepayment or
otherwise (whether or not such payment is prohibited by Section 8); or failure
to pay any interest on the Loans or any other amount due under this Agreement
within ten days or more after the date due (whether or not such payment is
prohibited by Section 8); or
7.2 Default in Other Agreements
Failure of the Company or any of its Subsidiaries to pay at
final maturity any principal on one or more issues of Indebtedness or
Contingent Obligations of the Company or of any of its Subsidiaries (other than
Indebtedness referred to in Section 7.1) or breach or default by the Company or
any of its Subsidiaries with respect to any other term of any one or more
issues of Indebtedness or Contingent Obligations of the Company or of any of
its Subsidiaries or any agreement or instrument evidencing or securing such
Indebtedness or Contingent Obligations and such default or breach results in
the acceleration of that Indebtedness or Contingent Obligation prior to its
stated maturity and, in either case, the principal amount of such Indebtedness
or Contingent Obligation and all other such Indebtedness or Contingent
Obligations of the
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Company and its Subsidiaries in respect of which there is a failure to pay
principal or interest or which has been so accelerated equals $10,000,000 or
more; or
7.3 Breach of Certain Covenants
Failure of the Company to perform or comply with any covenant,
term or condition contained in Section 2.5A(iv) or 5.2; or
7.4 Breach of Warranty
Any representation, warranty or certification made by the
Company in any Loan Document or in any statement or certificate at any time
given by the Company in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false or incorrect in any material respect on
the date as of which made or deemed made; or
7.5 Other Defaults Under Agreement or Loan Documents
The Company shall default in the performance of or compliance
with any covenant, term or condition contained in this Agreement or the other
Loan Documents (other than those covered by Sections 7.1, 7.3, 7.4, 7.10 or
7.11) and such default shall not have been remedied or waived in accordance
with this Agreement within 30 days after the date of written notice from the
holder or holders of not less than 25% in aggregate principal amount of the
Loans then outstanding of such default; or
7.6 Involuntary Bankruptcy; Appointment
of Custodian, Etc.
A court of competent jurisdiction enters a Bankruptcy Order
under any Bankruptcy Law that:
(A) is for relief against the Company or any Material
Subsidiary in an involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any Material
Subsidiary for all or substantially all of its properties, or
(C) orders the liquidation of the Company or any Material
Subsidiary,
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and in each case the order or decree remains unstayed and in effect for 60
days.
7.7 Voluntary Bankruptcy; Appointment
of Custodian, Etc.
The Company or any Material Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for relief
against it in an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors or files a proposal or scheme of arrangement involving the
rescheduling or composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy again
against it, or
(F) shall generally not pay its debts when such debts become
due or shall admit in writing its inability to pay its debts generally.
7.8 Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar
process involving in any individual case or in the aggregate at any time an
amount in excess of $10,000,000 (to the extent not covered by third-party
insurance as to which the insurance company has acknowledged coverage) shall be
entered or filed against the Company or any of its Subsidiaries or any of their
respective properties or assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days or in any event later than five
days prior to the date of any proposed sale thereunder; or
7.9 Dissolution
Any order, judgment or decree shall be entered against the
Company or any Material Subsidiary decreeing the dissolution or split-up of the
Company or that Material
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Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
7.10 Guarantee
(i) Any Guarantee or any material provision thereof shall
cease to be in full force or effect (other than in accordance with its express
terms), or (ii) any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under its
Guarantee, or (iii) any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed, after giving effect to any applicable grace periods, pursuant to its
Guarantee; or
7.11 Foreclosure
The agent under the Senior Credit Facilities or any other
party entitled to act thereunder commences judicial proceedings to foreclose on
the collateral securing the Bank Indebtedness or exercises any right under
applicable law or any instrument evidencing a security interest or other
encumbrance in respect of such collateral to take ownership or effect the
transfer of such collateral in lieu of foreclosure;
THEN (i) upon the occurrence of any Event of Default described
in the foregoing Sections 7.6 or 7.7, all of the unpaid principal amount of and
accrued interest on the Loans and all other outstanding Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by the Company, and the commitments of the Lenders hereunder shall
thereupon terminate, and (ii) upon the occurrence of any other Event of
Default, the Agent shall, upon written notice of the holder or holders of at
least 25% in aggregate principal amount of the Loans then outstanding, by
written notice to the Company and the agent under the Senior Credit Facilities,
declare all of the unpaid principal amount of and accrued interest on the Loans
and all other outstanding Obligations to be, and the same shall forthwith
become, due and payable, and the obligations of the Lenders hereunder shall
thereupon terminate unless any Designated Senior Indebtedness is outstanding,
in which case the same shall become due and payable upon the first to occur of
an acceleration under such Designated Senior Indebtedness or 5 days after
receipt by the Company and the representatives of the holders of Designated
Senior Indebtedness of such notice of acceleration; provided, however, that if
any declaration of
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acceleration under this Agreement occurs solely because an Event of Default set
forth in Section 7.2 has occurred and is continuing, such declaration of
acceleration shall be automatically annulled if the holders of the Indebtedness
which is the subject of such Event of Default have rescinded their declaration
of acceleration in respect of such Indebtedness within thirty days of such
acceleration of such Indebtedness and the Agent has received written notice
thereof within such time and if no other Event of Default has occurred during
such thirty-day period which has not been cured or waived in accordance with
this Agreement. Nevertheless, if at any time after acceleration of the
maturity of the Loans, the Company shall pay all arrears of interest and all
payments on account of the principal thereof 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
or the Notes) and all Events of Default and Potential Events of Default (other
than non-payment of principal of and accrued interest on the Loans and the
Notes due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to Section 12.6, then the Agent shall, upon written notice of
the holders of a majority in aggregate principal amount of the Loans then
outstanding, by written notice to the Company rescind and annul the
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon.
SECTION VIII. SUBORDINATION
8.1 Obligations Subordinated to Senior Indebtedness of the
Company
The Lenders covenant and agree that payments of the
Obligations by the Company shall be subordinated in accordance with the
provisions of this Section 8 to the prior payment in full, in cash or Cash
Equivalents, of all amounts payable in respect of Senior Indebtedness of the
Company, whether now outstanding or hereafter created (including any interest
accruing subsequent to an event specified in Section 7.6 or 7.7 whether or not
such interest is an allowed claim against the Company), that the subordination
is for the benefit of the holders of Senior Indebtedness of the Company, and
that each holder of Senior Indebtedness of the Company whether now outstanding
or hereafter created, incurred, assumed or guaranteed shall be deemed to have
acquired Senior Indebtedness
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of the Company in reliance upon the covenants and provisions contained in this
Agreement.
8.2 Priority and Payment Over of Proceeds in Certain Events
(a) Subordination on Dissolution, Liquidation or
Reorganization of the Company. Upon any payment or distribution of assets or
securities of the Company of any kind or character, whether in cash, property
or securities, upon any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all Senior
Indebtedness of the Company (including any interest accruing subsequent to an
event specified in Section 7.6 or 7.7 whether or not such interest is an
allowed claim enforceable against the Company) shall first be paid in full in
cash or Cash Equivalents, before the Lenders shall be entitled to receive any
payment by the Company of any Obligations and upon any such dissolution or
winding up or liquidation or reorganization, any payment or distribution of
assets or securities of the Company of any kind or character, whether in cash,
property or securities, to which the Lenders would be entitled except for the
provisions of this Section 8 shall be made by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, directly to the holders of the Senior Indebtedness of
the Company or their representatives to the extent necessary to pay all of the
Senior Indebtedness of the Company to the holders of such Senior Indebtedness
of the Company.
(b) Subordination on Default on Designated Senior
Indebtedness. Upon the maturity of any Designated Senior Indebtedness of the
Company by lapse of time, acceleration or otherwise, all Designated Senior
Indebtedness of the Company then due and payable shall first be paid in full in
cash or Cash Equivalents, before any payment is made by the Company or any
Person acting on behalf of the Company with respect to the Obligations. No
direct or indirect payment by the Company or any Person acting on behalf of the
Company of any Obligations whether pursuant to the terms of the Loans or upon
acceleration or otherwise shall be made, if at the time of such payment, there
exists a default (as defined in the document governing any Designated Senior
Indebtedness of the Company) in the payment of all or any portion of any
Designated Senior Indebtedness of the Company and such default shall not have
been cured or waived or the benefits of this sentence waived by
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or on behalf of the holders of such Designated Senior Indebtedness. In
addition, during the continuation of any other event of default with respect to
the Designated Senior Indebtedness of the Company pursuant to which the
maturity thereof may be accelerated, upon the (i) receipt by the Agent of
written notice from the agent or representative of the holders of such
Designated Senior Indebtedness or (ii) if such Non-Payment Default results from
the acceleration of the Loans, the date of the acceleration of the Loans, no
such payment may be made by the Company upon or in respect of the Obligations,
for a period ("Payment Blockage Period") commencing on the date of receipt of
such notice and ending on the earlier to occur of 179 days after receipt of
such notice (unless such Payment Blockage Period shall be terminated by written
notice to the Agent from such agent). Notwithstanding anything herein to the
contrary, (x) in no event will a Payment Blockage Period or successive Payment
Blockage Periods with respect to the same payment on the Obligations extend
beyond 179 days from the date the payment on the Obligations was due (the
"Initial Blockage Period") and (y) there must be 180 consecutive days in any
365-day period during which no Payment Blockage Period is in effect. For all
purposes of this Section 8.2(b), no event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness of the Company initiating such
Payment Blockage Period shall be, or be made, the basis for the commencement of
a second Payment Blockage Period by the holders or by the agent or other
representative of such Designated Senior Indebtedness whether or not within a
period of 365 consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days. Any number
of additional Payment Blockage Periods may be commenced during the Initial
Blockage Period; provided, however, that no such additional Payment Blockage
Period shall extend beyond the Initial Blockage Period. After the expiration
of the Initial Blockage Period, no Payment Blockage Period may be commenced
under this Section 8.2(b) and no Guarantor Payment Blockage Period may be
commenced under Section 11.2(b) until at least 180 consecutive days have
elapsed from the last day of the Initial Blockage Period.
(c) Rights and Obligations of the Lenders. In the event
that, notwithstanding the foregoing provisions prohibiting such payment or
distribution, the Agent or any Lender shall have received any payment on
account of any Obligation (other than as permitted by Sections (a) and (b) of
this Section 8.2) at a time when such payment is prohibited by this Section
8.2, then and in such event such payment or
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distribution shall be received and held in trust for the holders of the Senior
Indebtedness of the Company and shall be paid over or delivered to the holders
of the Senior Indebtedness of the Company remaining unpaid to the extent
necessary to pay in full in cash or Cash Equivalents all Senior Indebtedness of
the Company in accordance with their terms after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness
of the Company.
If payment of the Obligations is accelerated because of an
Event of Default, the Company shall promptly notify the agent or other
representatives for Senior Indebtedness of the Company of the acceleration.
Upon any payment or distribution of assets or securities
referred to in this Section 8, the Lenders (notwithstanding any other provision
of this Agreement) shall be entitled to rely upon any order or decree of a
court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making any such payment or distribution, delivered to the Lenders for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior 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.
The Company shall give written notice to each of the Lenders
of any default or event of default under any Senior Indebtedness of the Company
or under any agreement pursuant to which Senior Indebtedness of the Company may
have been issued, and, in the event of any such event of default, shall provide
to the Agent the names and address of the trustees or other representatives of
holders of such Senior Indebtedness of the Company.
With respect to the holders and owners of Senior Indebtedness
of the Company, each Lender undertakes to perform only such obligations on the
part of such Lender as are specifically set forth in this Section 8, and no
implied covenants or obligations with respect to the holders or owners of
Senior Indebtedness of the Company shall be read into this Agreement against
the Lenders. The Lenders shall not be deemed to owe any fiduciary duty to the
holders or owners of Senior Indebtedness of the Company or to the agent under
the Senior
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Credit Facilities or any other representative of the holders of the Senior
Indebtedness of the Company.
8.3 Payments May Be Paid Prior to Dissolution
Nothing contained in this Section 8 or elsewhere in this
Agreement shall prevent or delay (i) the Company, except under the conditions
described in Section 8.2, from making payments at any time for the purpose of
paying Obligations, or from depositing with the Agent any moneys for such
payments, or (ii) subject to Section 8.2, the application by the Agent of any
moneys deposited with it for the purpose of paying Obligations.
8.4 Rights of Holders of Senior Indebtedness of the Company
Not To Be Impaired
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as provided in this
Section 8 shall at any time in any way be prejudiced or impaired by any act or
failure to act by any such holder, or by any noncompliance by the Company with
the terms and provisions and covenants herein, regardless of any knowledge
thereof any such holder may have or otherwise be charged with. The Lenders
agree that without in any way limiting the generality of the foregoing Section,
such holders of Senior Indebtedness of the Company may, at any time and from
time to time without impairing or releasing the subordination provided in this
Section 8 or the obligations of the Lenders hereunder to the holders of Senior
Indebtedness of the Company, do any one or more of the following: (i) change
the manner, place, terms or time of payment of, or renew or alter, Senior
Indebtedness of the Company or otherwise amend or supplement in any manner
Senior Indebtedness of the Company or any instrument evidencing the same or any
agreement under which any Senior Indebtedness of the Company is outstanding;
(ii) sell, exchange, release, or otherwise deal with such holders' rights and
interest in and to any property pledged, mortgaged, or otherwise securing
Senior Indebtedness of the Company or fail to perfect or delay in the
perfection of the security interest in such property; (iii) release any Person
liable in any manner for the collection of Senior Indebtedness of the Company;
and (iv) exercise or refrain from exercising any rights against the Company and
any other Person. Each Lender by purchasing or accepting a Note waives any and
all notice of the creation, modification, renewal, extension or accrual of any
Senior Indebtedness of the Company and notice of or proof of reliance by any
holder or owner of Senior Indebtedness of the Company
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upon this Section 8 and the Senior Indebtedness of the Company shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Section 8, and all dealings between the Company and the holders and
owners of the Senior Indebtedness of the Company shall be deemed to have been
consummated in reliance upon this Section 8.
The provisions of this Section 8 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of the Senior
Indebtedness of the Company.
8.5 Subrogation
Upon the payment in full in accordance with the terms of
Section 8.2 of all amounts payable under or in respect of the Senior
Indebtedness of the Company, the Lenders shall be subrogated to the rights of
the holders of such Senior Indebtedness of the Company to receive payments or
distributions of assets of Company made on such Senior Indebtedness of the
Company until the Obligations shall be paid in full in cash or Cash
Equivalents; and for purposes of such subrogation no payments or distributions
to holders of such Senior Indebtedness of the Company of any cash, property or
securities to which the Lenders would be entitled except for the provisions of
this Section 8, and no payment over pursuant to the provisions of this Section
8 to holders of such Senior Indebtedness of the Company by the Lenders, shall,
as between the Company, its creditors other than holders of such Senior
Indebtedness of the Company and the Lenders, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness of the Company, it being
understood that the provisions of this Section 8 are solely for the purpose of
defining the relative rights of the holders of such Senior Indebtedness of the
Company, on the one hand, and the Lenders, on the other hand. A release of any
claim by any holder of Senior Indebtedness of the Company shall not limit the
Lenders' rights of subrogation under this Section 8.5.
If any payment or distribution to which the Lenders would
otherwise have been entitled but for the provisions of this Section 8 shall
have been applied, pursuant to the provisions of this Section 8, to the payment
of all amounts payable under the Senior Indebtedness of the Company, then and
in such case, the Lenders shall be entitled to receive from the holders of such
Senior Indebtedness of the Company at the time outstanding the full amount of
any such payments or distributions received by such holders of Senior
Indebtedness of the Company in excess of the amount sufficient to pay all
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Senior Indebtedness of the Company payable under or in respect of the Senior
Indebtedness of the Company in full in cash or Cash Equivalents in accordance
with the terms of Section 8.2.
8.6 Obligations of the Company Unconditional
Nothing contained in this Section 8 or elsewhere in this
Agreement is intended to or shall impair as between the Company and the Lenders
the obligations of the Company, which are absolute and unconditional, to pay to
the Lenders the Obligations as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Lenders and creditors of the Company other than the holders of
the Senior Indebtedness of the Company, nor shall anything herein or therein
prevent the Lenders from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the rights, if
any, under this Section 8 of the holders of such Senior Indebtedness of the
Company in respect of cash, property or securities of the Company received upon
the exercise of any such remedy.
The failure to make a payment on account of Obligations by
reason of any provision of this Section 8 shall not prevent the occurrence of
an Event of Default under Section 7.
8.7 Lenders Authorize Agent to
Effectuate Subordination
Each Lender hereby authorizes and expressly directs the Agent
on its behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Section 8 and appoints the Agent
its attorney in fact for such purpose, including, without limitation, in the
event of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or any
other similar remedy or otherwise) tending towards liquidation of the business
and assets of the Company, the immediate filing of a claim for the unpaid
balance of the Obligations in the form required in said proceedings and causing
said claim to be approved. If the Agent does not file a proper claim or proof
of debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of the
Senior Indebtedness of the Company are hereby authorized to have the right to
file and are hereby authorized
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to file an appropriate claim for and on behalf of the Lenders. In the event of
any such proceeding, until the Senior Indebtedness of the Company is paid in
full in cash or Cash Equivalents, without the consent of the holders of a
majority in principal amount outstanding of Senior Indebtedness of the Company,
no Lender shall waive, settle or compromise any such claim or claims relating
to the Obligations that such Lender now or hereafter may have against the
Company.
SECTION 9 THE AGENT
9.1 Appointment
Each Lender hereby irrevocably designates and appoints CIBC as
Agent of such Lender to act as specified herein and in the other Loan
Documents, and each Lender hereby irrevocably authorizes CIBC as the Agent to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent agrees to act as such upon the express conditions contained
in this Section 9. Notwithstanding any provision to the contrary elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in the
other Loan Documents, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Agent. The provisions of this Section 9 are solely for the benefit of the
Agent and the Lenders, and neither the Company nor any of its Subsidiaries
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Lenders and the Agent does not assume and
shall not be deemed to have assumed any obligation or relationship of agent or
trust with or for the Company or any of its Subsidiaries.
9.2 Delegation of Duties
The Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
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any agents or attorneys-in-fact selected by it with reasonable care except to
the extent otherwise required by Section 9.3.
9.3 Exculpatory Provisions
Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Company or any of its Subsidiaries or
any of their respective officers contained in this Agreement, any other Loan
Documents, or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in connection with,
this Agreement or any other Loan Document or for any failure of the Company or
any of its Subsidiaries or any of their respective officers to perform its
obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Loan Documents, or to inspect the properties, books or
records of the Company or any of its Subsidiaries. The Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the Agent to
the Lenders or by or on behalf of the Company or any of its Subsidiaries to the
Agent or any Lender or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.
9.4 Reliance by Agent
The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement,
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order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Company or any of its Subsidiaries), independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. As between the Agent and the Lenders, the Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.
9.5 Notice of Default
The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the Agent
has actually received notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided, that, as
between the Agent and the Lenders unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 Non-Reliance on Agent and Other Lenders
Each Lender expressly acknowledges that neither the Agent nor
any of its respective officers, directors, employees, agents, attorneys-in-fact
or affiliates have made any representations or warranties to it and that no act
by the Agent hereinafter taken, including any review of the affairs of the
Company or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents
to the Agent that it has,
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independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Company or its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other condition, prospects and
creditworthiness of the Company and its Subsidiaries. The Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial
and other condition, prospects or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification
The Lenders agree to indemnify the Agent in its capacity as
such ratably according to their respective "percentages" as used in determining
the Required Lenders at such time, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Loan Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby of any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Company or any of its
Subsidiaries; provided, that no Lender shall be liable to the Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the gross negligence or willful misconduct of the Agent.
If any indemnity furnished to the Agent for any purpose shall, in the opinion
of the Agent be
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insufficient or become impaired, the Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this Section 9.7 shall
survive the payment of all Obligations.
9.8 Agent in Its Individual Capacity
The Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Company and
its Subsidiaries as though the Agent were not the Agent hereunder. With
respect to the Loans made by it and all Obligations owing to it, the Agent
shall have the same rights and powers under this Agreement as any Lender and
may exercise the same as though it were not the Agent and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity.
9.9 Resignation of the Agent; Successor Agent
The Agent may resign as the Agent upon 20 days' notice to the
Lenders and the Company. Upon the resignation of the Agent, the Required
Lenders shall appoint from among the Lenders a successor Agent which is a bank
or a trust company for the Lenders subject to prior approval by the Company
(such approval not to be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent,
and the term "Agent" shall include such successor agent effective upon its
appointment, and the resigning Agent's rights, powers and duties as the Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After the
resignation of the Agent hereunder, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
SECTION 10 GUARANTEE
10.1 Unconditional Guarantee
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee"),
subject to Section 11, to each of the Lenders and to the Agent and their
respective successors and assigns, that: (i) the principal of and interest on
the Loans will be promptly paid in full when due, subject to any
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applicable grace period, whether at maturity, by acceleration or otherwise and
interest on the overdue principal, if any, and interest on any interest, to the
extent lawful, of the Loans and all other obligations of the Company to the
Lenders or the Agent hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (ii) in
case of any extension of time of payment or renewal of any of the Loans or of
any such other obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 10.5. Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Loans or this Agreement, the absence of any
action to enforce the same, any waiver or consent by any of the Lenders with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Loans, this Agreement and in this Guarantee. If any Lender or
the Agent is required by any court or otherwise to return to the Company, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Agent or such Lender, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the one hand,
and the Lenders and the Agent, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 7 for
the purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Section 7, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of
this Guarantee.
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10.2 Subordination of Guarantee
The obligations of each Guarantor to the Lenders and to the
Agent pursuant to the Guarantee of such Guarantor and this Agreement are
expressly subordinate and subject in right of payment to the prior payment in
full of all Guarantor Senior Indebtedness of such Guarantor, to the extent and
in the manner provided in Section 11.
10.3 Severability
In case any provision of this Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
10.4 Release of a Guarantor
Upon (i) the release by the lenders under the Senior Credit
Facilities, related documents and future refinancings thereof of all guarantees
of a Guarantor and all Liens on the property and assets of such Guarantor
relating to such Indebtedness, or (ii) the sale or disposition (whether by
merger, stock purchase, asset sale or otherwise) of a Guarantor (or all or
substantially all its assets) to an entity which is not a Subsidiary of the
Company and which sale or disposition is otherwise in compliance with the terms
of this Agreement, such Guarantor shall be deemed released from all obligations
under this Section 10 without any further action required on the part of the
Agent or any Lender; provided, however, that any such termination shall occur
only to the extent that all obligations of such Guarantor under all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, such Indebtedness of the Company shall also terminate
upon such release, sale or transfer.
The Agent shall deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 10.4.
Any Guarantor not so released remains liable for the full amount of principal
of and interest on the Loans as provided in this Section 10.
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10.5 Limitation of Guarantor's Liability
Each Guarantor and by its acceptance hereof each of the
Lenders hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the
Lenders and such Guarantor hereby irrevocably agree that the obligations of
such Guarantor under the Guarantee shall be limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor (including, but not limited to, the Guarantor Senior Indebtedness of
such Guarantor) and after giving effect to any collections from or payments
made by or on behalf of any other Guarantor in respect of the obligations of
such other Guarantor under its Guarantee or pursuant to Section 10.7, result in
the obligations of such Guarantor under the Guarantee not constituting such
fraudulent transfer or conveyance.
10.6 Guarantors May Consolidate, etc.,
on Certain Terms
(a) Nothing contained in this Agreement or in the Loans shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Guarantor or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety, to the Company or
another Guarantor. Upon any such consolidation, merger, sale or conveyance,
the Guarantee given by such Guarantor shall no longer have any force or effect.
(b) Except as set forth in Section 6.7, nothing contained in
this Agreement or in the Loans shall prevent any consolidation or merger of a
Guarantor with or into a corporation or corporations other than the Company or
another Guarantor (whether or not affiliated with the Guarantor); provided,
however, that, subject to Sections 10.4 and 10.6(a), (i) immediately after such
transaction, and giving effect thereto, no Potential Event of Default or Event
of Default shall have occurred as a result of such transaction and be
continuing, and (ii) upon any such consolidation, merger, sale or conveyance,
the Guarantee of such Guarantor set forth in this Section 10, and the due and
punctual performance and observance of all of the covenants and conditions of
this Agreement to be performed by such Guarantor, shall be expressly
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assumed (in the event that the Guarantor is not the surviving corporation in
the merger), by supplemental indenture satisfactory in form to the Agent,
executed and delivered to the Agent, by the corporation formed by such
consolidation, or into which the Guarantor shall have merged, or by the
corporation that shall have acquired such property. In the case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture executed and delivered to the
Agent and satisfactory in form to the Agent of the due and punctual performance
of all of the covenants and conditions of this Agreement to be performed by the
Guarantor, such successor corporation shall succeed to and be substituted for
the Guarantor with the same effect as if it had been named herein as a
Guarantor.
10.7 Contribution
In order to provide for just and equitable contribution among
the Guarantors, the Guarantors agree, inter se, that in the event any payment
or distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Obligations. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of (x) the amount by which the fair
value of the property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date (other than liabilities of such Guarantor under Subordinated
Indebtedness)), but excluding liabilities under the Guarantee, of such
Guarantor at such date and (y) the amount by which the present fair salable
value of the assets of such Guarantor at such date exceeds the amount that will
be required to pay the probable liabilities of such Guarantor on its debts
including, without limitation, Guarantor Senior Indebtedness (after giving
effect to all other fixed and contingent liabilities incurred or assumed on
such date and after giving effect to any collection from any Subsidiary of such
Guarantor in respect of the obligations of such Subsidiary under the
Guarantee), excluding debt in respect of the Guarantee of such Guarantor, as
they become absolute and matured.
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10.8 Waiver of Subrogation
Each Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise
from the existence, payment, performance or enforcement of such Guarantor's
obligations under its Guarantee and this Agreement, including, without
limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Lender against the Company, whether or not such claim, remedy or right arises
in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding sentence and the
Loans shall not have been paid in full, such amount shall be deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Lenders, and shall, subject to the provisions of Section 8,
Section 10.2 and Section 11, forthwith be paid to the Agent for the benefit of
such Lenders to be credited and applied upon the Loans, whether matured or
unmatured, in accordance with the terms of this Agreement. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Agreement and that the waiver set
forth in this Section 10.8 is knowingly made in contemplation of such benefits.
10.9 Evidence of Guarantee
To evidence their guarantees to the Lenders set forth in this
Section 10, each of the Guarantors hereby agrees to execute the notation of
Guarantee in substantially the form included in Exhibit IX. Each such notation
of Guarantee shall be signed on behalf of each Guarantor by two Officers, or an
Officer and an Assistant Secretary or one Officer shall sign and one Officer or
an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to such notation of
Guarantee.
10.10 Waiver of Stay, Extension or Usury Laws
Each Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive such Guarantor
from
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performing its Guarantee as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Agreement; and (to the extent that it may lawfully do so)
each Guarantor hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Agent, but will suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 11 SUBORDINATION OF GUARANTEE OBLIGATIONS
11.1 Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness
The Lenders covenant and agree that payments of the
obligations by a Guarantor in respect of its Guarantee (collectively, as to any
Guarantor, its "Guarantee Obligations") shall be subordinated in accordance
with the provisions of this Section 11 to the prior payment in full, in cash or
Cash Equivalents, of all amounts payable in respect of Guarantor Senior
Indebtedness of such Guarantor whether now outstanding or hereafter created
(including any interest accruing subsequent to an event specified in Section
7.6 or 7.7 whether or not such interest is an allowed claim against such
Guarantor), that the subordination is for the benefit of the holders of
Guarantor Senior Indebtedness, and that each holder of Guarantor Senior
Indebtedness whether now outstanding or hereafter created, incurred, assumed or
guaranteed shall be deemed to have acquired Guarantor Senior Indebtedness in
reliance upon the covenants and provisions contained in this Agreement.
11.2 Priority and Payment Over of
Proceeds in Certain Events
(a) Subordination of Guarantee Obligations on
Dissolution, Liquidation or Reorganization of Such Guarantor. Upon any payment
or distribution of assets or securities of any Guarantor of any kind or
character, whether in cash, property or securities, upon any dissolution or
winding up or total or partial liquidation or reorganization of such Guarantor,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings (other than a liquidation or dissolution of such Guarantor
into the Company or another Guarantor), all Guarantor Senior Indebtedness of
such Guarantor (including any interest accruing subsequent to an event
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specified in Section 7.6 or 7.7 whether or not such interest is an allowed
claim enforceable against such Guarantor) shall first be paid in full in cash
or Cash Equivalents, before the Lenders shall be entitled to receive any
payment with respect to any Guarantee Obligations of such Guarantor and upon
any such dissolution or winding up or liquidation or reorganization, any
payment or distribution of assets or securities of such Guarantor of any kind
or character, whether in cash, property or securities, to which the Lenders
would be entitled except for the provisions of this Section 11 shall be made by
such Guarantor or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, directly to the
holders of the Guarantor Senior Indebtedness of such Guarantor or their
representatives to the extent necessary to pay all of the Guarantor Senior
Indebtedness of such Guarantor to the holders of such Guarantor Senior
Indebtedness.
(b) Subordination of Guarantee Obligations on Default on
Designated Senior Indebtedness. Upon the maturity of any Designated Senior
Indebtedness of a Guarantor by lapse of time, acceleration or otherwise, all
Designated Senior Indebtedness of such Guarantor then due and payable shall
first be paid in full in cash or Cash Equivalents, before any payment is made
by such Guarantor or any Person acting on behalf of such Guarantor with respect
to the Guarantee Obligations of such Guarantor. No direct or indirect payment
by any Guarantor or any Person acting on behalf of such Guarantor of any
Guarantee Obligations of such Guarantor whether pursuant to the terms of the
Loans or upon acceleration or otherwise shall be made, if at the time of such
payment, there exists a default (as defined in the document governing any
Designated Senior Indebtedness of such Guarantor) in the payment of all or any
portion of any Designated Senior Indebtedness of such Guarantor and such
default shall not have been cured or waived or the benefits of this sentence
waived by or on behalf of the holders of such Designated Senior Indebtedness.
In addition, during the continuation of any other event of default with respect
to any Designated Senior Indebtedness of such Guarantor pursuant to which the
maturity thereof may be accelerated, upon the earlier of (i) receipt by the
Agent of written notice from the agent or representative of the holders of such
Designated Senior Indebtedness or (ii) if such non-payment default results from
the acceleration of the Loans, the date of acceleration of the Loans, no such
payment may be made by such Guarantor under its Guarantee for a period
("Guarantor Payment Blockage Period") commencing on the date of receipt of such
notice or the date of the acceleration referred to in clause (ii) above,
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as the case may be, and ending on the earlier to occur of 179 days after
receipt of such written notice by the Agent (unless such Guarantor Payment
Blockage Period shall be terminated by written notice to the Agent from such
agent) or the date of the acceleration of the Loans, as the case may be
(provided such Guarantor Senior Indebtedness shall theretofore not have been
accelerated). Notwithstanding anything herein to the contrary, (x) in no event
will a Guarantor Payment Blockage Period or successive Guarantor Payment
Blockage Periods with respect to the same payment on such Guarantee extend
beyond 179 days from the date the payment on such Guarantee was due and (y)
there must be 180 consecutive days in any 365-day period during which no
Guarantor Payment Blockage Period is in effect. For all purposes of this
Section 11.2(b), no event of default which existed or was continuing on the
date of the commencement of any Guarantor Payment Blockage Period with respect
to the Designated Senior Indebtedness initiating such Guarantor Payment
Blockage Period shall be, or be made, the basis for the commencement of a
second Guarantor Payment Blockage Period by the holders or by the agent or
other representative of such Designated Senior Indebtedness whether or not
within a period of 365 consecutive days, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
(c) Rights and Obligations of the Lenders. In the event
that, notwithstanding the foregoing provisions prohibiting such payment or
distribution, the Agent or any Lender shall have received any payment on
account of any Guarantee Obligation with respect to the Loans (other than as
permitted by Sections (a) and (b) of this Section 11.2) at a time when such
payment is prohibited by this Section 11.2, then and in such event such payment
or distribution shall be received and held in trust for the holders of the
Guarantor Senior Indebtedness and shall be paid over or delivered to the
holders of the Guarantor Senior Indebtedness remaining unpaid to the extent
necessary to pay in full in cash or Cash Equivalents all Guarantor Senior
Indebtedness in accordance with their terms after giving effect to any
concurrent payment or distribution to the holders of such Guarantor Senior
Indebtedness.
Nothing contained in this Section 11 will limit the right of
the Lenders to take any action to accelerate the maturity of the Loans pursuant
to Section 7 or to pursue any rights or remedies hereunder or otherwise.
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Upon any payment or distribution of assets or securities
referred to in this Section 11, the Lenders (notwithstanding any other
provision of this Agreement) shall be entitled to rely upon any order or decree
of a court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making any such payment or distribution, delivered to the Lender for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of Guarantor Senior Indebtedness, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Section 11.
The Guarantors shall give written notice to each of the
Lenders of any default or event of default under any Guarantor Senior
Indebtedness or under any agreement pursuant to which Guarantor Senior
Indebtedness may have been issued, and, in the event of any such event of
default, shall provide to the Agent the names and address of the trustees or
other representatives of holders of such Guarantor Senior Indebtedness.
With respect to the holders and owners of Guarantor Senior
Indebtedness, each Lender undertakes to perform only such obligations on the
part of such Lender as are specifically set forth in this Section 11, and no
implied covenants or obligations with respect to the holders or owners of
Guarantor Senior Indebtedness shall be read into this Agreement against the
Lenders. The Lenders shall not be deemed to owe any fiduciary duty to the
holders or owners of Guarantor Senior Indebtedness or to the agent under the
Senior Credit Facilities or any other representative of the holders of the
Guarantor Senior Indebtedness.
11.3 Payments May Be Paid Prior to Dissolution
Nothing contained in this Section 11 or elsewhere in this
Agreement shall prevent or delay (i) Guarantors, except under the conditions
described in Section 11.2, from making payments at any time for the purpose of
paying Guarantee Obligations, or from depositing with the Agent any moneys for
such payments, or (ii) subject to Section 11.2, the application by the Agent of
any moneys deposited with it for the purpose of paying Guarantee Obligations.
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11.4 Rights of Holders of Guarantor Senior
Indebtedness Not To Be Impaired
No right of any present or future holder of any Guarantor
Senior Indebtedness to enforce subordination as provided in this Section 11
shall at any time in any way be prejudiced or impaired by any act or failure to
act by any such holder, or by any noncompliance by the Guarantors with the
terms and provisions and covenants herein, regardless of any knowledge thereof
any such holder may have or otherwise be charged with. The Lenders agree that
without in any way limiting the generality of the foregoing Section, such
holders of Guarantor Senior Indebtedness may, at any time and from time to time
without impairing or releasing the subordination provided in this Section 11 or
the obligations of the Lenders hereunder to the holders of Guarantor Senior
Indebtedness, do any one or more of the following: (i) change the manner,
place, terms or time of payment of, or renew or alter, Guarantor Senior
Indebtedness or otherwise amend or supplement in any manner Guarantor Senior
Indebtedness or any instrument evidencing the same or any agreement under which
any Guarantor Senior Indebtedness is outstanding; (ii) sell, exchange, release,
or otherwise deal with such holders' rights and interest in and to any property
pledged, mortgaged, or otherwise securing Guarantor Senior Indebtedness or fail
to perfect or delay in the perfection of the security interest in such
property; (iii) release any Person liable in any manner for the collection of
Guarantor Senior Indebtedness; and (iv) exercise or refrain from exercising any
rights against the Guarantors and any other Person. Each Lender by purchasing
or accepting a Note waives any and all notice of the creation, modification,
renewal, extension or accrual of any Guarantor Senior Indebtedness and notice
of or proof of reliance by any holder or owner of Guarantor Senior Indebtedness
upon this Section 11 and the Guarantor Senior Indebtedness shall conclusively
be deemed to have been created, contracted or incurred in reliance upon this
Section 11, and all dealings between the Guarantors and the holders and owners
of the Guarantor Senior Indebtedness shall be deemed to have been consummated
in reliance upon this Section 11.
The provisions of this Section 8 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of the Guarantor
Senior Indebtedness.
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11.5 Subrogation
Upon the payment in full in accordance with the terms of
Section 11.2 of all amounts payable under or in respect of the Guarantor Senior
Indebtedness, the Lenders shall be subrogated to the rights of the holders of
such Guarantor Senior Indebtedness to receive payments or distributions of
assets of the Guarantors made on such Guarantor Senior Indebtedness until the
Guarantee Obligations shall be paid in full in cash or Cash Equivalents in a
manner satisfactory to the holders of such Guarantor Senior Indebtedness in
accordance with the terms of Section 11.2; and for purposes of such subrogation
no payments or distributions to holders of such Guarantor Senior Indebtedness
of any cash, property or securities to which the Lenders would be entitled
except for the provisions of this Section 11, and no payment over pursuant to
the provisions of this Section 11 to holders of such Guarantor Senior
Indebtedness by the Lenders, shall, as between such Guarantor, its creditors
other than holders of such Guarantor Senior Indebtedness and the Lenders, be
deemed to be a payment by such Guarantor to or on account of such Guarantor
Senior Indebtedness, it being understood that the provisions of this Section 11
are solely for the purpose of defining the relative rights of the holders of
such Guarantor Senior Indebtedness, on the one hand, and the Lenders, on the
other hand. A release of any claim by any holder of Guarantor Senior
Indebtedness shall not limit the Lenders' rights of subrogation under this
Section 11.5.
If any payment or distribution to which the Lenders would
otherwise have been entitled but for the provisions of this Section 11 shall
have been applied, pursuant to the provisions of this Section 11, to the
payment of all amounts payable under the Guarantor Senior Indebtedness, then
and in such case, the Lenders shall be entitled to receive from the holders of
such Guarantor Senior Indebtedness at the time outstanding the full amount of
any payments or distributions received by such holders of Guarantor Senior
Indebtedness in excess of the amount sufficient to pay all Guarantor Senior
Indebtedness payable under or in respect of the Guarantor Senior Indebtedness
in full in cash or Cash Equivalents in accordance with the terms of Section
11.2.
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11.6 Obligations of the Guarantors Unconditional
Nothing contained in this Section 11 or elsewhere in this
Agreement or in the Guarantees is intended to or shall impair as between the
Guarantors and the Lenders the obligations of the Guarantors, which are
absolute and unconditional, to pay to the Lenders the Guarantee Obligations as
and when the same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the Lenders and
creditors of the Guarantors other than the holders of the Guarantor Senior
Indebtedness, nor shall anything herein or therein prevent the Lenders from
exercising all remedies otherwise permitted by applicable law upon default
under this Agreement, subject to the rights, if any, under this Section 11 of
the holders of such Guarantor Senior Indebtedness in respect of cash, property
or securities of the Guarantors received upon the exercise of any such remedy.
The failure to make a payment on account of Guarantee
Obligations by reason of any provision of this Section 11 shall not prevent the
occurrence of an Event of Default under Section 7.
11.7 Lenders Authorize Agent to
Effectuate Subordination
Each Lender hereby authorizes and expressly directs the Agent
on its behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Section 11 and appoints the Agent
its attorney in fact for such purpose, including, without limitation, in the
event of any dissolution, winding up, liquidation or reorganization of any
Guarantor (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or any
other similar remedy or otherwise) tending towards liquidation of the business
and assets of any Guarantor, the immediate filing of a claim for the unpaid
balance of the Guarantee Obligations in the form required in said proceedings
and causing said claim to be approved. If the Agent does not file a proper
claim or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or claims, then the
holders of the Guarantor Senior Indebtedness are hereby authorized to have the
right to file and are hereby authorized to file an appropriate claim for and on
behalf of the Lenders. In the event of any such proceeding, until the
Guarantor Senior Indebtedness is paid in full in cash or Cash
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Equivalents, without the consent of the holders of a majority in principal
amount outstanding of Guarantor Senior Indebtedness, no Lender shall waive,
settle or compromise any such claim or claims relating to the Obligations that
such Lender now or hereafter may have against the Guarantors.
SECTION 12 MISCELLANEOUS
12.1 Representation of the Lenders
Each Lender hereby represents that it is a commercial lender
which makes loans in the ordinary course of its business and that it will make
the Loans hereunder for its own account or the account of its affiliates in the
ordinary course of such business.
12.2 Participations in and Assignments
of Loans and Notes
A. Each Lender shall have the right, with the consent of
the Company which consent shall not be unreasonably withheld, at any time to
sell, assign, transfer or negotiate all or any portion of its Notes or its Loan
Commitment to one or more Eligible Assignees; provided that no Lender shall be
entitled at any time to sell, assign, transfer or negotiate all or any portion
of its Notes or its Loan Commitment to an Eligible Assignee which has, or has
an Affiliate which has, a material line of business similar to any principal
line of business of the Company or any of its Subsidiaries without the consent
of the Company. In the case of any sale, transfer or negotiation of all or
part of the Notes or any Loan Commitment authorized under this Section 12.2A,
the assignee, transferee or recipient shall become a party to this Agreement as
a Lender by execution of an Assignment and Assumption Agreement; provided that
(i) at such time Section 2.1A or 2.2A, as the case may be, shall be deemed
modified to reflect the Loan Commitment of such new Lender and of the existing
Lenders, (ii) upon surrender of the Notes, new Notes will be issued, at the
Company's expense, to such new Lender and to the assigning Lender, such new
Notes to be in conformity with the requirements of Section 2.1D or 2.2E as the
case may be (with appropriate modifications) to the extent needed to reflect
the revised Loan Commitment, and (iii) the Agent shall receive at the time of
each such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500; and provided, further, that such
transfer or assignment will not be effective until recorded by the Agent on
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the Register pursuant to Section 5.13. To the extent of any assignment
pursuant to this Section 12.2A, the assigning Lender shall be relieved of its
obligations hereunder with respect to its assigned Loan Commitment, and the
assignee, transferee or recipient shall have, to the extent of such sale,
assignment, transfer or negotiation, the same rights, benefits and obligations
as it would if it were a Lender with respect to such Notes or Loan Commitment,
including, without limitation, the right to approve or disapprove actions
which, in accordance with the terms hereof, require the approval of a Lender.
At the time of each assignment pursuant to this Section 12.2A to a Person which
is not already a Lender hereunder and which is not a United States Person (as
such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for
Federal income tax purposes, such Person shall provide to the Company and the
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 12.2E(ii) Certificate) described in Section 12.2E.
B. Each Lender may grant participations in all or any
part of its Notes or its Loan Commitment to one or more Eligible Assignees,
other than to an Eligible Assignee which has, or has an Affiliate which has, a
material line of business similar to any principal line of business of the
Company or any of its Subsidiaries.
C. Nothing in this Agreement shall prevent or prohibit
any Lender from pledging its Loan and Notes hereunder to a Federal Reserve Bank
in support of borrowings made by such Lender from such Federal Reserve Bank.
D. Each Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 12.2A (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer) and that is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) agrees to deliver to the
Company and the Agent, on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Agreement and under any Note, or
(ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Internal Revenue Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, two accurate and complete
original signed copies of Internal Revenue Service Form W-8 (or
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successor form) certifying to such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note. In addition, each Lender agrees
that, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver
to the Company and the Agent two new accurate and complete original signed
copies of Internal Revenue Service Form 4224 or 1001, or Form W-8, as the case
may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Company and the
Agent of its inability to deliver any such Form or Certificate. Subject to
Section 12.2A and the immediately succeeding sentence, the Company shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or
other amounts payable hereunder or made on any other Loan Document for the
account of any Lender which is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. Federal
income tax purposes to the extent that such Lender has not provided to the
Company U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 12.2D and
except as set forth in Section 12.2A, the Company agrees to pay additional
amounts and to indemnify and hold harmless each Lender (without regard to the
identity of the jurisdiction requiring the deduction or withholding), and
reimburse such Lender upon its written request, in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence
as a result of any changes after the date of any assignment or transfer in any
applicable law, treaty, governmental rule, regulation, guideline or order, or
in the interpretation thereof, relating to the deducting or withholding of
income or similar Taxes; provided that such Lender will provide the Company
with any refund received by such Lender for which the Company reimbursed such
Lender pursuant to this Section 12.2D.
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12.3 Expenses
Whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to promptly pay (i) all the actual and
reasonable costs and expenses of preparation of the Loan Documents and all the
costs of furnishing all opinions by counsel for the Company (including without
limitation any opinions requested by the Lender as to any legal matters arising
hereunder), and of the Company's performance of and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with; (ii) the fees, expenses and disbursements of counsel to the
Lenders in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans hereunder, and any
amendments, modifications and waivers hereto or thereto and consents to
departures from the terms hereof and thereof; and (iii) after the occurrence of
an Event of Default, all reasonable costs and expenses (including reasonable
attorneys fees, including allocated costs of internal counsel, and costs of
settlement) actually incurred by the Lenders or the Agent in enforcing any
Obligations of or in collecting any payments due from the Company hereunder or
under the Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings.
12.4 Indemnity
In addition to the payment of expenses pursuant to Section
12.3, whether or not the transactions contemplated hereby shall be consummated,
the Company agrees to indemnify, pay and hold each of the Lenders, the Agent
and any holder of any of the Notes, and each of their officers, directors,
employees, agents, and affiliates (collectively called the "Indemnitees"),
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated as a party
thereto), which may be suffered by, imposed on, incurred by, or asserted
against that Indemnitee, in any manner resulting from, connected with, in
respect of, relating to or arising out of this Agreement, the other Loan
Documents, the Lenders' agreements to make the Loans or the use or intended use
of any of the proceeds of the
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Loans hereunder, the issuance of the Exchange Notes or the Take-Out Securities
or the Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities (i) to the extent such is finally judicially determined
to have resulted solely from (A) the gross negligence or willful misconduct of
that Indemnitee or (B) the failure of such Indemnitee to perform its
obligations under any Loan Document or (C) such Indemnitee's violation of law
or (ii) in connection with the obligations of any Indemnitee under any Loan
Document or for any transfer fees. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Company
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
12.5 Setoff
Subject to Section 8, in addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence of any Event of Default, each Lender, the Agent and
each subsequent holder of any Note is hereby authorized by the Company at any
time or from time to time, without notice to the Company, or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured but not including trust accounts or any other accounts
held for the benefit of another Person) and any other Indebtedness at any time
held or owing by such Person or that subsequent holder to or for the credit or
the account of the Company against and on account of the obligations and
liabilities of the Company to such Person or that subsequent holder under this
Agreement and the Notes, including, but not limited to, all claims of any
nature or description arising out of or connected with this Agreement or the
Notes, irrespective of whether or not (a) such Person or that subsequent holder
shall have made any demand hereunder or (b) such Person or that subsequent
holder shall have declared the principal of or the interest on its portion of
the Loans and its Notes and other amounts due hereunder to be due and payable
as permitted by Section 7 and although said obligations and liabilities, or any
of them, may be contingent or unmatured.
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12.6 Amendments and Waivers; Payments for Consent
(a) No amendment, modification, termination or waiver of
any term or provision of this Agreement, of the Notes, any Guarantee or, prior
to the execution and delivery thereof, of the form of the Registration Rights
Agreement or the form of the Senior Subordinated Indenture or consent to any
departure by the Company or any Guarantor therefrom, shall in any event be
effective without the prior written concurrence of the Company or such
Guarantor, as the case may be, and the Required Lenders, and, upon the request
of any Lender, the receipt of a written opinion of counsel of the Company
addressed to the Lenders to the effect that such amendment, modification,
termination, waiver or consent does not violate or conflict with any of the
terms and provisions of the Senior Credit Facilities or any other Contractual
Obligation of the Company; provided, however, that, without the prior written
consent of each Lender affected, an amendment, modification, termination or
waiver of this Agreement, any Notes, any Guarantee, and, prior to the execution
and delivery thereof, of the form of Registration Rights Agreement and the form
of Senior Subordinated Indenture or consent to departure from a term or
provision hereof or thereof may not: (i) reduce the principal amount of Notes
whose holders must consent to any such amendment, modification, termination,
waiver or consent; (ii) reduce the rate of or extend the time for payment of
principal or interest on any Note; (iii) reduce the principal amount of any
Note; (iv) make any Note payable in money other than that stated in the Note;
(v) make any change in Section 2.5A(iv) or in the definition of Change of
Control, in the last paragraph of Section 7 or in Section 8.5, 11.5 or this
12.6; (vi) reduce the rate or extend the time of payment of fees or other
compensation payable to the Lenders hereunder; (vii) modify the provisions of
Sections 8 or 11 or any of the defined terms related thereto in any manner
adverse to the Lenders; or (viii) waive performance by the Company of its
obligations under, or consent to any departure from any of the terms and
provisions of, Section 2.5A(iv); and provided, further, that without the
consent of the Agent, no such amendment, modification, termination or waiver
may amend, modify, terminate or waive any provision of Section 9 as the same
applies to the Agent or any other provision of this Agreement as it relates to
the rights or obligations of the Agent. No amendment, modification or waiver
of any provision of this Agreement, the Notes, any Guarantee or the form of the
Senior Subordinated Indenture shall adversely affect the rights of the holders
of Senior Indebtedness or the holders of Guarantor Senior Indebtedness without
their consent. Any
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waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on the Company
in any case shall entitle the Company to any further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 12.6(a) shall be
binding upon each holder of the Notes at the time outstanding, each further
holder of the Notes, and, if signed by the Company or a Guarantor, on the
Company and such Guarantor.
(b) Neither the Company nor any of its Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any holder of any Notes for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Agreement or the Notes unless such consideration is offered
to be paid or agreed to be paid to all holders of the Notes which so consent,
waive or agree to amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
12.7 Independence of Covenants
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitation of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
12.8 Entirety
The Loan Documents embody the entire agreement of the parties
and supersede all prior agreements and understandings, if any, relating to the
subject matter hereof and thereof.
12.9 Notices
Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by mail and shall be
deemed to have been given when delivered in person, upon receipt of telecopy or
telex against receipt of answer back or four Business Days after depositing it
in the mail, registered or certified, with postage prepaid and properly
addressed; provided, however, that notices shall
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not be effective until received. For the purposes hereof, the addresses of the
parties hereto (until notice of a change thereof is delivered as provided in
this Section 12.9) shall be set forth under each party's name on the signature
pages hereto and any additional Guarantors shall (until notice of a change
thereof is delivered as provided in this Section 12.9) have the address set
forth under the Company's name on the signature page hereto.
12.10 Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement, the making
of the Loans hereunder and the execution and delivery of the Notes and,
notwithstanding the making of the Loans, the execution and delivery of the
Notes or any investigation made by or on behalf of any party, shall continue in
full force and effect. The closing of the transactions herein contemplated
shall not prejudice any right of one party against any other party in respect
of anything done or omitted hereunder or in respect of any right to damages or
other remedies.
B. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of the Company set forth in Sections
12.3, 12.4 and 12.22 and the agreements of the Lenders set forth in Section
12.22 shall survive the payment of the Loans and the Notes and the termination
of this Agreement.
12.11 Failure or Indulgence Not Waiver;
Remedies Cumulative
No failure or delay on the part of the Agent or any Lender or
any holder of any Note in the exercise of any power, right or privilege
hereunder, under a Guarantee or under the Notes shall impair such power, right
or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing under this Agreement,
under a Guarantee or the Notes are cumulative to and not exclusive of any
rights or remedies otherwise available.
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12.12 Severability
In case any provision in or obligation under this Agreement,
under a Guarantee or the Notes shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
12.13 Headings
Sections and Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
12.14 Applicable Law
THIS AGREEMENT, EACH GUARANTEE AND THE NOTES SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
12.15 Successors and Assigns; Subsequent
Holders of Notes
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of the Lenders. The terms and
provisions of this Agreement and each Guarantee shall inure to the benefit of
any assignee or transferee of the Notes pursuant to Section 12.2A, and in the
event of such transfer or assignment, the rights and privileges herein
conferred upon the Lenders shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. Except
as provided in Section 12.6, in determining whether the holders of a sufficient
aggregate principal amount of the Loans shall have consented to any action
under this Agreement, any amount of the Loans owned or held by the Company, any
Guarantor or any of their respective Affiliates shall be disregarded. The
Company's rights or any interest therein hereunder may not be assigned without
the prior express written consent of each of the Lenders.
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12.16 Counterparts; Effectiveness
This Agreement and any amendments, waivers, consents or
supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. This Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto, and delivery thereof to the Agent or, in the case of the Lenders,
written telex or facsimile notice or telephonic notification (confirmed in
writing) of such execution and delivery. The Agent will give the Company and
each Lender prompt notice of the effectiveness of this Agreement.
12.17 Consent to Jurisdiction; Venue;
Waiver of Jury Trial
A. Any legal action or proceeding with respect to this
Agreement, any Note or any Guarantee may be brought in the courts of the State
of New York or of the United States for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the parties to this
Agreement hereby irrevocably accepts for itself and in respect of its
respective property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each of the parties to this Agreement hereby further
irrevocably waives any claim that any such courts lack jurisdiction over
itself, and agrees not to plead or claim, in any legal action or proceeding
with respect to this Agreement, the Notes or the Guarantees brought in any of
the aforesaid courts, that any such court lacks jurisdiction over such party.
Each of the parties to this Agreement irrevocably consents to the service of
process in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such party, at its respective
address for notices pursuant to Section 12.9, such service to become effective
30 days after such mailing. To the extent permitted by law, each of the
parties to this Agreement hereby irrevocably waives any objection to such
service of process and further irrevocably waives and agrees not to plead or
claim in any action or proceeding commenced hereunder or under any Note or any
Guarantee that service of process was in any way invalid or ineffective.
Nothing herein shall affect the right of any party to this Agreement to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against any party in any other jurisdiction.
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B. Each of the parties to this Agreement hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement, the Notes or the Guarantees brought in
the courts referred to in clause A above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, the Notes or the
Guarantees or the transactions contemplated hereby or thereby.
12.18 Payments Pro Rata
A. The Agent agrees that promptly after its receipt of
each payment of any interest or premium on or principal of the Notes from or on
behalf of the Company or any Guarantor, it shall, except as otherwise provided
in this Agreement, distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of such
payment) pro rata based upon their respective pro rata shares, if any, of such
payment.
B. Each of the Lenders agrees that, if it should receive
any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Loan
Documents, or otherwise) which is applicable to the payment of the principal
of, or interest on, the Loans of a sum which with respect to the related sum or
sums received by other Lenders is in a greater proportion than the total of
such Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the Company to such Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such amount; provided that
if all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
<PAGE> 137
-130-
12.19 Taxes and Other Taxes
A. Any and all payments by the Company hereunder or
under any of the other Loan Documents shall be made free and clear of and
without deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to be
deducted or withheld and excluding (i) in the case of each Lender and the
Agent, Taxes imposed on its net income and franchise taxes imposed on it by the
jurisdiction under the laws of which such Person is organized or any political
subdivision thereof, (ii) in the case of each such Lender and the Agent, any
Taxes that are in effect and that would apply to a payment to such Person, as
applicable, as of the Closing Date, and (iii) if any Person acquires any
interest in this Agreement (a "Transferee"), any Taxes to the extent that they
are in effect and would apply to a payment to such Transferee as of the date of
the acquisition of such interest, as the case may be (all such nonexcluded
Taxes being hereinafter referred to as "Covered Taxes"). If the Company shall
be required by Law or the administration thereof to deduct or withhold any
Covered Taxes from or in respect of any sum payable hereunder or under any
other Loan Document, (a) unless such requirement results from the failure of
the payee to perform its obligations under Section 12.2D, the sum payable shall
be increased as may be necessary so that after making all required deductions
or withholdings (including deductions or withholdings applicable to additional
amounts paid under this paragraph), the Lender receives an amount equal to the
sum it would have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and (c) the Company
forthwith shall pay the full amount deducted or withheld to the relevant
taxation or other authority in accordance with applicable Law; provided that
the Company shall be entitled to any refunds a Lender receives of any amounts
paid by the Company on behalf of such Lender pursuant to this Section 12.19A.
B. The Company agrees to pay forthwith any present or
future stamp documentary taxes or any other excise or property taxes, charges
or similar levies (all such taxes, charges and levies being herein referred to
as "Other Taxes") imposed by any jurisdiction (or any political subdivision or
taxing authority thereof or therein) which arise from any payment made by the
Company hereunder or under any of the other Loan Documents or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any of the other Loan Documents.
<PAGE> 138
-131-
C. The Company agrees to indemnify the Agent and each of
the Lenders for the full amount of Covered Taxes or Other Taxes not deducted or
withheld and paid by the Company in accordance with Section 12.19(A) and (B) to
the relevant taxation or other authority and any Taxes other than Covered Taxes
or Other Taxes imposed by any jurisdiction on amounts payable by the Company
under this Section 12.19 paid by the Lender or the Agent and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not any such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days from
the date the Agent or such Lender makes written demand therefor. A certificate
as to the amount of such Taxes or Other Taxes and evidence of payment thereof
submitted to the Company shall be prima facie evidence, absent manifest error,
of the amount due from the Company to the Agent or such Lender.
D. The Company shall furnish to the Agent and each of
the Lenders the original or a certified copy of a receipt evidencing any
payment of Taxes or Other Taxes made by the Company as soon as such receipt
becomes available.
E. The provisions of this Section 12.19 shall survive
the termination of the Agreement and repayment of all Obligations.
12.20 Waiver of Stay, Extension or Usury Laws
The Company and the Guarantors covenant (to the extent that
they may lawfully do so) that they will not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company or the Guarantors from paying all or any portion of the principal of or
interest on the Loans as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance
of this Agreement; and (to the extent that they may lawfully do so) the Company
and the Guarantors hereby expressly waive all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Agent, but will suffer and permit the execution
of every such power as though no such law had been enacted.
<PAGE> 139
-132-
12.21 Requirements of Law
(a) In the event that any change in law occurring after
the date that any lender becomes a Lender party to this Agreement with respect
to such Lender shall, in the opinion of such Lender, require that any Bridge
Loan Commitment of such Lender be treated as an asset or otherwise be included
for purposes of calculating the appropriate amount of capital to be maintained
by such Lender or any corporation controlling such Lender, and such change in
law shall have the effect of reducing the rate of return on such Lender's or
such corporation's capital, as the case may be, as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation, as the case may be, could have achieved but for such change in law
(taking into account such Lender's or such corporation's policies, as the case
may be, with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time following notice by such Lender to the
Company of such change in law as provided in paragraph (b) of this Section
12.21, within 15 days after demand by such Lender, the Company shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such corporation, as the case may be, for such reduction.
(b) The Company shall not be required to make any
payments to any Lender for any additional amounts pursuant to this Section
12.21 unless such Lender has given written notice to the Company, through the
Agent, of its intent to request such payments prior to or within 60 days after
the date on which such Lender became entitled to claim such amounts. If any
Lender requests compensation from the Company under this Section 12.21, the
Company may, by notice to such Lender (with a copy to the Agent), suspend the
obligation of such Lender thereafter to make or continue Loans, until the
requirement of law giving rise to such request ceases to be in effect; provided
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.
12.22 Confidentiality
Each Lender shall hold all non-public information obtained
pursuant to the requirements of or in connection with this Agreement which has
been identified as confidential by the Company in accordance with such Lender's
customary procedures (which shall be reasonably prudent for purposes of
maintaining confidentiality) for handling confidential information of this
nature and in accordance with safe and sound banking practices,
<PAGE> 140
-133-
it being understood and agreed by the Company that in any event a Lender may
make disclosures reasonably required by any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any participation therein or as required or requested by
any governmental agency or representative thereof or pursuant to legal process;
provided that unless specifically prohibited by applicable law or court order,
each Lender shall notify the Company of any request by any governmental agency
or representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further, that in no event shall any Lender
be obligated or required to return any materials furnished by the Company or
any of its Subsidiaries. In connection with any sales, assignments or
transfers referred to in Section 12.2A, a Lender shall obtain agreements from
the purchasers, assignees or transferees, as the case may be, reasonably
satisfactory to the Company, that such parties will comply with this Section
12.22.
12.23 Role of Special Counsel
The role of Cahill Gordon & Reindel, special counsel to the
Lenders, has been limited to functioning on the Loan Documents and such firm
has not performed a due diligence investigation with respect to the Company,
any of its Subsidiaries, the Acquired Business or their respective affairs.
<PAGE> 141
-134-
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written above.
COMPANY:
OUTDOOR SYSTEMS, INC.
By: /s/William S. Levine
----------------------------------
Name: William S. Levine
Title:
Notice Address:
2502 N. Black Canyon Highway
Phoenix, Arizona 85009
Telephone: (602) 246-9569
Telecopy: (602) 248-0884
GUARANTORS:
OS BASELINE, INC.
By: /S/William S. Levine
---------------------------------
Name: William S. Levine
Title:
Notice Address:
2502 N. Black Canyon Highway
Phoenix, Arizona 85009
Telephone: (602) 246-9569
Telecopy: (602) 248-0884
<PAGE> 142
-135-
OUTDOOR SYSTEMS PAINTING, INC.
By: /s/William S. Levine
----------------------------------
Name: Williams S. Levine
Title:
Notice Address:
2502 N. Black Canyon Highway
Phoenix, Arizona 85009
Telephone: (602) 246-9569
Telecopy: (602) 248-0884
OS ADVERTISING OF TEXAS
PAINTING, INC.
By: /s/William S. Levine
------------------------------
Name: William S. Levine
Title:
Notice Address:
2502 N. Black Canyon Highway
Phoenix, Arizona 85009
Telephone: (602) 246-9569
Telecopy: (602) 248-0884
DECADE COMMUNICATIONS GROUP, INC.
By: /s/William S. Levine
--------------------------------
Name: William S. Levine
Title:
Notice Address:
2502 N. Black Canyon Highway
Phoenix, Arizona 85009
Telephone: (602) 246-9569
Telecopy: (602) 248-0884
<PAGE> 143
-136-
BENCH ADVERTISING COMPANY OF
COLORADO, INC.
By: /s/Williams S. Levine
------------------------------------
Name: William S. Levine
Title:
Notice Address:
2502 N. Black Canyon Highway
Phoenix, Arizona 85009
Telephone: (602) 246-9569
Telecopy: (602) 248-0884
AGENT:
CANADIAN IMPERIAL BANK OF
COMMERCE, as agent
By: /s/William P. Phoenix
------------------------------------
Name: William P. Phoenix
Title: Managing Director
Notice Address:
425 Lexington Avenue
New York, New York 10017
Attention: Deborah Jacob
Telephone: (212) 856-3675
Telecopy: (212) 856-3799
<PAGE> 144
-137-
LENDERS:
Commitment: $240,000,000 CIBC, INC.
By: /s/William P. Phoenix
-----------------------------------
Name: William P. Phoenix
Title: Managing Director
Notice Address:
425 Lexington Avenue
New York, New York 10017
Attention: Timothy Doyle
Telephone: (212) 856-3650
Telecopy: (212) 856-3991
<PAGE> 145
EXHIBIT I
[FORM OF BRIDGE NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
aK UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY,
IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR SUCH
TRANSFER IS MADE IN ACCORDANCE WITH CLAUSES (D) OR (E) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE> 146
-2-
OUTDOOR SYSTEMS, INC.
SENIOR SUBORDINATED PROMISSORY NOTE
New York, New York
$__________ , 1996
FOR VALUE RECEIVED, Outdoor Systems, Inc., a Delaware
corporation (the "Company"), promises to pay to the order of
("Payee"), on , 1997, the principal amount of Dollars
($ ).
The Company also promises to pay interest on the unpaid
principal amount hereof from the date hereof until paid in full at the rates
and at the times which shall be determined in accordance with the provisions of
the Senior Subordinated Credit Agreement dated as of July 9, 1996, as the same
may at any time be amended, modified or supplemented and in effect (the "Credit
Agreement") between the Company, the Guarantors named therein, the Lenders
named therein, and Canadian Imperial Bank of Commerce, as Agent.
This Note is issued pursuant to and entitled to the benefits
of the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Bridge Loan evidenced
hereby was made and is to be repaid. Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest (other than Subsequent
Bridge Notes issued in payment of PIK Interest Amounts) in respect of this Note
shall be made in lawful money of the United States of America in same day funds
to Payee at the office of Canadian Imperial Bank of Commerce located at Two
Paces West, 2727 Paces Ferry Road, Suite 1200, Atlanta, Georgia 30339, or at
such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Each of Payee and any
subsequent holder of this Note agrees, by its acceptance hereof, that before
disposing of this Note or any part hereof it will make a notation hereon of all
principal payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a notation of
any payment made on this Note shall not limit or otherwise affect the
obligation of the Company hereunder with respect to payments of principal or
interest on this Note.
<PAGE> 147
-3-
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.5.A(ii) of the Credit Agreement and prepayment at the option of
the Company as provided in subsection 2.5.A(i) of the Credit Agreement. This
Note may be repaid on the Conversion Date by conversion of this Note into a
Term Note pursuant to Section 2.2 of the Credit Agreement.
This Note is subordinated in right of payment to all Senior
Indebtedness of the Company as and to the extent provided in Section 8 of the
Credit Agreement.
The obligations of the Company under this Note are guaranteed,
on a senior subordinated basis, by the Guarantors as provided in Section 10 of
the Credit Agreement. Attached hereto are endorsements of the Guarantors
evidencing the Guarantees.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued but unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
The Company promises to pay all reasonable costs and expenses,
including all reasonable attorneys' fees, all as provided in Section 12.3 of
the Credit Agreement, actually incurred in the collection and enforcement of
this Note. The Company and endorsers of this Note hereby consent to renewals
and extensions of time at or after the maturity hereof, without notice, and
hereby waive diligence, presentment, protest, demand
<PAGE> 148
-4-
and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day and year
and at the place first above written.
OUTDOOR SYSTEMS, INC.
By:
Title:
<PAGE> 149
TRANSACTIONS ON BRIDGE NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Principal Principal
Paid Balance Notation
Date This Date This Date Made By
- ---- --------- --------- -------
<S> <C> <C> <C>
</TABLE>
<PAGE> 150
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have this Bridge Note purchased by the
Company pursuant to Section 2.5A(iv) of the Credit Agreement (which relates to
a Change of Control), check the box: [__]
If you wish to elect to have only part of this Bridge Note
purchased by the Company pursuant to Section 2.5A(iv) of the Credit Agreement,
state the amount: $[ ]
Date: _______________________ Your Signature:
(Sign exactly as
your name appears
on the other side
of this Bridge Note)
Signature Guarantee:
<PAGE> 151
[GUARANTEE ENDORSEMENTS TO BE ATTACHED]
<PAGE> 152
EXHIBIT II
[FORM OF TERM NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY,
IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR SUCH
TRANSFER IS MADE IN ACCORDANCE WITH CLAUSES (D) OR (E) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE> 153
-2-
OUTDOOR SYSTEMS, INC.
SENIOR SUBORDINATED PROMISSORY NOTE
New York, New York
[Date]
$________________________
FOR VALUE RECEIVED, Outdoor Systems, Inc., a Delaware
corporation (the "Company"), promises to pay to the order of
("Payee"), on , 2006, Dollars ($ ).
The Company also promises to pay interest on the unpaid
principal amount hereof from the date hereof until paid in full at the rates
and at the times which shall be determined in accordance with the provisions of
the Senior Subordinated Credit Agreement dated as of July 9, 1996, as the same
may at any time be amended, modified or supplemented and in effect (the "Credit
Agreement") between the Company, the Guarantors named therein, the Lenders
named therein, and Canadian Imperial Bank of Commerce, as Agent.
This Note is issued pursuant to and entitled to the benefits
of the Credit Agreement to which reference is hereby made for a more complete
statement of the terms and conditions under which the Term Loan evidenced
hereby was made and is to be repaid. Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest (other than Subsequent
Term Notes issued in payment of PIK Interest Amounts) in respect of this Note
shall be made in lawful money of the United States of America in same day funds
to Payee at the office of Canadian Imperial Bank of Commerce located at Two
Paces West, 2727 Paces Ferry Road, Suite 1200, Atlanta, Georgia 30339, or at
such other place as shall be designated in writing for such purposes in
accordance with the terms of the Credit Agreement. Each of Payee and any
subsequent holder of this Note agrees, by its acceptance hereof, that before
disposing of this Note or any part hereof it will make a notation hereon of all
principal payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a notation
of any payment made on this Note shall not limit or otherwise affect the
obligation of the Company
<PAGE> 154
-3-
hereunder with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.5A(ii) of the Credit Agreement and prepayment at the option of the
Company as provided in subsection 2.5A(i) of the Credit Agreement.
This Note is subordinated in right of payment to Senior
Indebtedness of the Company as and to the extent provided in Section 8 of the
Credit Agreement.
The obligations of the Company under this Note are guaranteed,
on a senior subordinated basis, by the Guarantors as provided in Section 10 of
the Credit Agreement. Attached hereto are endorsements of the Guarantors
evidencing the Guarantees.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued but unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
The Company promises to pay all reasonable costs and expenses,
including reasonable attorneys' fees, all as provided in Section 12.3 of the
Credit Agreement, actually incurred in the collection and enforcement of this
Note. The Company and endorsers of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice
<PAGE> 155
-4-
of every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day and year
and at the place first above written.
OUTDOOR SYSTEMS, INC.
By:
Title:
<PAGE> 156
TRANSACTIONS ON TERM NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Principal Principal
Paid Balance Notation
Date This Date This Date Made By
- ---- --------- --------- -------
<S> <C> <C> <C>
</TABLE>
<PAGE> 157
-6-
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have this Term Note purchased by the
Company pursuant to Section 2.5A(iv) of the Credit Agreement (which relates to
a Change of Control), check the box: [__]
If you wish to elect to have only part of this Term Note
purchased by the Company pursuant to Section 2.5A(iv) of the Credit Agreement,
state the amount: $[ ]
Date: __________________ Your Signature:
(Sign exactly as
your name appears
on the other side
of this Term Note)
Signature Guarantee:
<PAGE> 158
[GUARANTEE ENDORSEMENTS TO BE ATTACHED]
<PAGE> 1
EXHIBIT 99.5
OUTDOOR SYSTEMS, INC.,
as Issuer,
AND
THE SUBSIDIARY GUARANTORS
named herein
AND
[_____________________________________],
as Trustee
_________________
INDENTURE
Dated as of ,
________________
$[_______________]
Senior Subordinated Notes
due 2006
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10; 8.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.08; 8.10; 13.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.06; 13.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07; 5.09; 13.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02; 13.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02; 13.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05; 13.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.07
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
- ----------------------
</TABLE>
N.A. means Not Applicable NOTE: This Cross-Reference Table shall not, for any
purpose, be deemed to be a part of the Indenture.
-i-
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of TIA . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.02. Execution and Authentication; PIK
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.04. Paying Agent to Hold Assets in Trust . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.05. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.08. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.09. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.13. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.02. Selection of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE FOUR
SUBORDINATION
SECTION 4.01. Securities Subordinated to Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.02. Suspension of Payment When Senior
Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 4.03. Securities Subordinated to Prior
Payment of All Senior Indebtedness
on Dissolution, Liquidation or
Reorganization of Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.04. Securityholders to Be Subrogated to
Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.05. Obligations of the Company Unconditional . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.06. Trustee Entitled to Assume Payments
Not Prohibited in Absence of Notice . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.07. Application by Trustee of Assets
Deposited with It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.08. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.09. Securityholders Authorize Trustee to
Effectuate Subordination of Securities . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.10. Right of Trustee to Hold Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.11. No Suspension of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.12. No Fiduciary Duty of Trustee to
Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE FIVE
COVENANTS
SECTION 5.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.03. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.04. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.05. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.06. Maintenance of Properties and
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.07. Compliance Certificate; Notice of
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.08. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.09. Commission Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.10. Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.11. Limitation on Transactions with
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.12. Limitation on Incurrences of
Additional Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5.13. Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 5.14. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.15. Limitation on Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 5.16. Offer to Repurchase Securities with
Net Cash Proceeds of Certain Asset
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 5.17. Guarantees of Certain Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 5.18. Limitation on Preferred Stock of
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 5.19. Limitation on Other Senior
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.20. Offer to Repurchase Securities with
the Net Cash Proceeds of Certain
Issuances of Debt and Equity Securities . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.21. Payments for Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE SIX
SUCCESSOR CORPORATION
SECTION 6.01. Limitations on Mergers and Certain
Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.02. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE SEVEN
DEFAULT AND REMEDIES
SECTION 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 7.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 7.07. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7.11. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7.12. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE EIGHT
TRUSTEE
SECTION 8.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.05. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8.09. Successor Trustee by Merger, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 8.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 8.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 9.01. Termination of the Obligations of
the Company and the Subsidiary
Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 9.02. Legal Defeasance and Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9.03. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.04. Repayment to the Company or the
Subsidiary Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 9.05. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.03. Compliance with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.04. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.05. Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 10.06. Trustee to Sign Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 11.02. Subordination of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.03. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.04. Release of a Subsidiary Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.05. Limitation of Subsidiary Guarantor's
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.06. Subsidiary Guarantors May Consolidate,
etc., on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.07. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 11.08. Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 11.09. Execution of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 11.10. Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
</TABLE>
-v-
<PAGE> 7
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01. Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 12.02. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness
in Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 12.03. Guarantee Obligations Subordinated
to Prior Payment of All Guarantor
Senior Indebtedness on Dissolution,
Liquidation or Reorganization of
Such Subsidiary Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.04. Holders of Guarantee Obligations to
Be Subrogated to Rights of Holders
of Guarantor Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 12.05. Obligations of the Subsidiary
Guarantors Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 12.06. Trustee Entitled to Assume Payments
Not Prohibited in Absence of Notice . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.07. Application by Trustee of Assets
Deposited with It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.08. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 12.09. Holders Authorize Trustee to Effectuate
Subordination of Guarantee Obligations . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.10. Right of Trustee to Hold Guarantor
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.11. No Suspension of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.12. No Fiduciary Duty of Trustee to
Holders of Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.03. Communications by Holders with
Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 13.05. Statements Required in Certificate
or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 13.06. Rules by Trustee, Paying Agent,
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 13.07. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 13.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
</TABLE>
-vi-
<PAGE> 8
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 13.09. No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 13.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 13.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 13.12. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 13.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 13.14. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SIGNATURES
Exhibit A - Form of Note and Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture.
-vii-
<PAGE> 9
INDENTURE dated as of , , among OUTDOOR SYSTEMS,
INC., a Delaware corporation (the "Company"), the SUBSIDIARY GUARANTORS and
, as Trustee.
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Company's Senior Subordinated Notes due 2006:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means (i) with respect to any Person
that becomes a Subsidiary of the Company (or is merged into the Company or any
of its Subsidiaries) after the Issue Date, Indebtedness of such Person or any
of its Subsidiaries existing at the time such Person becomes a Subsidiary of
the Company (or is merged into the Company or any of its Subsidiaries) and
which was not incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary of the Company (or being merged into the Company or any
of its Subsidiaries) and (ii) with respect to the Company or any of its
Subsidiaries, any Indebtedness assumed by the Company or any of its
Subsidiaries in connection with the acquisition of any assets from another
Person (other than the Company or any of its Subsidiaries), and which was not
incurred by such other Person in connection with, or in contemplation of, such
acquisition.
"Adjusted Net Assets" shall have the meaning provided in
Section 11.07.
"Advertising Displays" mean all posters, signs, billboards and
other outdoor advertising displays and related sites therefor owned or leased
(as lessee) by the Company and its Subsidiaries.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing. Notwithstanding the foregoing, the
<PAGE> 10
-2-
term "Affiliate," with respect to the Company and its Subsidiaries, shall not
include Canadian Imperial Bank of Commerce or any of its Affiliates.
"Affiliate Transaction" shall have the meaning provided in
Section 5.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" means, with respect to any Person, any sale,
transfer or other disposition or series of sales, transfers or other
dispositions (including, without limitation, by merger or consolidation or by
exchange of assets and whether by operation of law or otherwise) made by such
Person or any of its Subsidiaries to any Person other than such Person or one
of its wholly-owned Subsidiaries (or, in the case of a sale, transfer or other
disposition by a Subsidiary of the Company, to any Person other than the
Company or a directly or indirectly wholly-owned Subsidiary of the Company) of
any assets of such Person or any of its Subsidiaries including, without
limitation, assets consisting of any Capital Stock or other securities held by
such Person or any of its Subsidiaries, and any Capital Stock issued by any
Subsidiary of such Person, in each case, outside of the ordinary course of
business, excluding, however, any sale, transfer or other disposition, or
series of related sales, transfers or other dispositions (i) resulting in Net
Proceeds to the Company and its Subsidiaries of $250,000 or less, (ii) of Cash
Equivalents or inventory in the ordinary course of business or obsolete
equipment in the ordinary course of business consistent with past practices of
the Company and (iii) the lease or sublease of any real or personal property in
the ordinary course of business.
"Available Cash Flow" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) Consolidated Tax Expense, (iv)
depreciation, (v) amortization and (vi) all other non-cash charges deducted in
the calculation of Consolidated Net Income (but excluding any non-cash charges
related to the items described in clauses (i) through (v) of the definition of
"Consolidated Net Income") for the period as to which the computation of
Available Cash Flow is made, all as determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
<PAGE> 11
-3-
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Bridge Agreement" means the Senior Subordinated Credit
Agreement, dated as of July 9, 1996, by and among the Company, the guarantors
referred to therein, the lenders referred to therein and Canadian Imperial Bank
of Commerce, as agent, as the same may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including adding Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Business Day" means a day that is not a Legal Holiday.
"Capital Lease," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is required to be accounted for as a capital lease on
the balance sheet of that Person.
"Capitalized Lease Obligation" means an obligation under a
Capital Lease, and the amount of Indebtedness represented by such obligations
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including,
without limitation, each class of Common Stock and Preferred Stock of such
Person and (ii) with respect to any Person that is not a corporation, any and
all partnership or other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such
<PAGE> 12
-4-
state or any public instrumentality thereof maturing within one year from the
date of acquisition thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Rating Group ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P's or Moody's;
and (iv) certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any commercial bank
organized under the laws of the United States of America or any state thereof
or the District of Columbia that (a) is at least "adequately capitalized" (as
defined in the regulations of its primary Federal banking regulator) and (b)
has Tier 1 capital (as defined in such regulations) of not less than
$100,000,000; (v) shares of any money market mutual fund that (a) has at least
95% of its assets invested continuously in the types of investments referred to
in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P's or
Moody's; and (vi) repurchase agreements with respect to, and which are fully
secured by a perfected security interest in, obligations of a type described in
clause (i) or clause (ii) above and are with any commercial bank described in
clause (iv) above.
"Cash Flow Leverage Ratio" means the ratio of (i) the sum of
the aggregate outstanding principal amount of all Indebtedness of the Company
and its Subsidiaries determined as of the date of such calculation on a
consolidated basis in accordance with GAAP to (ii) Available Cash Flow of the
Company and its Subsidiaries determined on a consolidated basis for the period
of such calculation.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group"), together with any
Affiliates thereof; (ii) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution of the
Company; (iii) the Permitted Holders, individually or in the aggregate, shall
cease to beneficially own (within the meaning of Rule 13d-3 under the Exchange
Act), directly or indirectly, Voting Stock representing at least 40% (or at any
time that the Company's Cash Flow Leverage Ratio for the Company's most
recently ended two full fiscal quarters for which internal financial statements
are available determined on a pro forma basis in accordance with Section 5.12
hereof is less than 3.5 to 1, 25%) of the total voting
<PAGE> 13
-5-
power of all Voting Stock of the Company; (iv) any Person or Group (other than
the Permitted Holders) shall become the owner, directly or indirectly,
beneficially or of record, of Voting Stock representing more than 20% of the
total voting power of all Voting Stock of the Company; or (v) the replacement
of a majority of the Board of Directors of the Company over a two-year period
from the directors who constituted the Board of Directors of the Company at the
beginning of such period, and such replacement shall not have been approved by
a vote of at least two-thirds of the Board of Directors of the Company then
still in office who either were members of such Board of Directors at the
beginning of such period or whose election as a member of such Board of
Directors was previously so approved.
"Change of Control Date" shall have the meaning provided
in Section 5.15.
"Change of Control Offer" shall have the meaning provided
in Section 5.15.
"Change of Control Payment Date" shall have the meaning
provided in Section 5.15.
"Closing Date" means , 1996, the date on which the
loan pursuant to the Bridge Agreement was made.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of, such Person's common stock,
whether outstanding at the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
such successor.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the total interest
expense of such Person and its Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP (including amortization of original
issue discount, non-cash interest payments and the interest component of
Capitalized Lease Obligations), whether paid or accrued, to the extent such
expense was deducted in computing the Consolidated Net Income of such
<PAGE> 14
-6-
Person, and (ii) all dividends paid or declared during such period on any
preferred stock of such Person and its Subsidiaries.
"Consolidated Net Income" means, with respect to any Person,
for any period, the aggregate of the net income (or loss) of such Person and
its Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (a) the net income of any other Person in
which such Person or any of its Subsidiaries has an interest (which interest
does not cause the net income of such other Person to be consolidated with the
net income of such Person and its Subsidiaries in accordance with GAAP) shall
be included only to the extent of the amount of dividends or distributions
actually paid to such Person or such Subsidiary by such other Person during
such period; (b) the net income of any Subsidiary of such Person that is
subject to any Payment Restriction shall be excluded to the extent such Payment
Restriction actually prevented the payment of an amount that otherwise could
have been paid to such Person or to a Subsidiary of such Person not subject to
any Payment Restriction; and (c) there shall be excluded (i) the net income (or
loss) of any other Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition, (ii) all gains and losses
realized on any Asset Sale (without regard to the $250,000 threshold set forth
in the definition of Asset Sale), (iii) all gains and losses realized on the
purchase or other acquisition by such Person or any of its Subsidiaries of any
securities of such Person or any of its Subsidiaries, (iv) all other net
extraordinary gains, and (v) (A) all non-cash charges (provided, however, that
any cash payments actually made with respect to the liabilities for which such
charges were created shall be deducted from Consolidated Net Income in the
period when made) and (B) all deferred financing costs written off in
connection with the early extinguishment of any Indebtedness, in each case,
incurred by the Company or any of its Subsidiaries in connection with the
Transactions.
"Consolidated Net Worth" means, as at any date of
determination, the sum of the Capital Stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of the Company and its
Subsidiaries on a consolidated basis determined in conformity with GAAP.
"Consolidated Tax Expense" means, for any Person, for any
period, the aggregate income tax expense of such Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, excluding, however,
the income tax expense of such Person attributable to a disposition of assets
the gain from which is excluded from the calculation of "Consolidated Net
Income," but only to the extent such income tax expense does not exceed the
cash
<PAGE> 15
-7-
portion of the consideration received by such Person in connection with the
disposition of such assets.
"Credit Agent" means, at any time, the then-acting
Administrative Agent as defined in and under the Senior Credit Facilities,
which initially shall be Canadian Imperial Bank of Commerce. The Company shall
promptly notify the Trustee of any change in the Credit Agent.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an
Event of Default.
"Denver Disposition" means the sale by the Company of any or
all of the outdoor advertising assets of the Company that, prior to the Closing
Date, serve the Denver, Colorado market.
"Designated Senior Indebtedness" as to the Company or any
Guarantor, as the case may be, means any Senior Indebtedness (a) under or in
respect of the Senior Credit Facilities, or (b) which at the time of
determination exceeds $25,000,000 in aggregate principal amount (or accreted
value in the case of Indebtedness issued at a discount) outstanding or
available under a committed facility, and (x) unless such designation is
prohibited by the Senior Credit Facilities, which is specifically designated in
the instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by such Person and (y) as to which the Trustee has been given
written notice of such designation.
"Disqualified Capital Stock" means any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event (other than an
event which would constitute a Change of Control), (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except upon the
occurrence of a Change of Control), in whole or in part, on or prior to the
final maturity date of the Notes, or (ii) is convertible into or exchangeable
for (whether at the option of the issuer or the holder thereof) (a) debt
securities or (b) any Capital Stock referred to in (i) above, in each case at
any time prior to the final maturity of the Notes; provided, that only the
portion of Capital Stock which so matures or is mandatorily redeemable, is so
convertible or exchangeable or is so redeemable
<PAGE> 16
-8-
at the option of the holder thereof prior to such final maturity date shall be
deemed to be Disqualified Capital Stock.
"Event of Default" shall have the meaning provided in Section
7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
thereunder.
"fair market value" means, unless otherwise specified, with
respect to any asset or property, the price which could be negotiated in an
arm's-length, free market transaction, for cash, between a willing seller and a
willing and able buyer, neither of whom is under undue pressure or compulsion
to complete the transaction. Fair market value shall be determined by the
Board of Directors of the Company acting reasonably and in good faith and shall
be evidenced by a resolution of the Board of Directors of the Company delivered
to the Trustee.
"Foreign Exchange Agreement" means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect against fluctuations in currency values.
"Funding Subsidiary Guarantor" shall have the meaning provided
in Section 11.07.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of the Closing Date, except that, for
purposes of Section 5.09, such term shall mean such principles in effect from
time to time.
"Guarantee" means the guarantee of each Subsidiary Guarantor
set forth in Article Eleven and any additional guarantee of the Securities
executed by any Subsidiary of the Company.
"Guarantee Obligations" shall have the meaning provided in
Section 12.01.
"Guarantor Payment Blockage Period" shall have the meaning
provided in Section 12.02.
"Guarantor Senior Indebtedness" means, with respect to any
Subsidiary Guarantor, the principal of, premium, if any, and interest on and
all other Obligations with respect to any Indebtedness of such Subsidiary
Guarantor, whether outstanding on the Issue Date or thereafter created,
incurred or assumed, unless,
<PAGE> 17
-9-
in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Guarantee of such Subsidiary Guarantor. Without limiting the generality of the
`foregoing, "Guarantor Senior Indebtedness" shall include (x) the principal of,
premium, if any, and interest on all obligations of every nature of such
Subsidiary Guarantor from time to time owed to the lenders under the Senior
Credit Facilities, including, without limitation, the Letter of Credit
Obligations and principal of and interest on, and all fees, indemnities and
expenses payable under the Senior Credit Facilities, (y) interest accruing
thereon subsequent to the occurrence of any Event of Default specified in
clause (vi) or (vii) of Section 7.01 relating to such Subsidiary Guarantor,
whether or not the claim for such interest is allowed under any applicable
Bankruptcy Law and (z) all deferrals, renewals, extensions, refinancings and
restructurings of, and amendments, modifications and supplements to, any of the
Guarantor Senior Indebtedness described above. Notwithstanding the foregoing,
"Guarantor Senior Indebtedness" shall not include (a) Indebtedness evidenced by
the Guarantee of such Subsidiary Guarantor, (b) Indebtedness that is expressly
subordinate or junior in right of payment to any Indebtedness of such
Subsidiary Guarantor, (c) Indebtedness which, when incurred and without respect
to any election under Section 1111(b) of Title 11, United States Code, is
without recourse to such Subsidiary Guarantor, (d) Indebtedness which is
represented by Disqualified Capital Stock, (e) obligations for goods, materials
or services purchased in the ordinary course of business or obligations
consisting of trade payables, (f) Indebtedness of or amounts owed by such
Subsidiary Guarantor for compensation to employees or for services rendered to
such Subsidiary Guarantor, (g) any liability for federal, state, local or
other taxes owed or owing by such Subsidiary Guarantor, (h) Indebtedness of
such Guarantor representing a guarantee of Subordinated Indebtedness or Pari
Passu Indebtedness of the Company or any other Subsidiary Guarantor, (i)
Indebtedness of such Subsidiary Guarantor to a Subsidiary of the Company and
(j) that portion of any Indebtedness (other than Indebtedness described in
clause (x) of the second sentence of this definition which relates to
reimbursement obligations (whether in the form of loans or otherwise) under
letters of credit with respect to drawings made thereunder and not yet
reimbursed) which is incurred by such Subsidiary Guarantor in violation of this
Indenture.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
<PAGE> 18
-10-
"Houston Disposition" means the sale by the Company of any or
all of the assets representing outdoor advertising assets serving the Houston,
Texas market prior or subsequent to the Closing Date.
"Indebtedness" means with respect to any Person, without
duplication, (i) all liabilities of such Person (a) for borrowed money (whether
or not the recourse of the lender is to the whole of the assets of such Person
or only to a portion thereof), (b) evidenced by bonds, notes, debentures,
drafts accepted or similar instruments or representing the balance deferred and
unpaid of the purchase price of any property (other than any such balance that
represents an account payable or any other monetary obligation to a trade
creditor (whether or not an Affiliate) created, incurred, assumed or guaranteed
by such Person in the ordinary course of business of such Person in connection
with obtaining goods, materials or services and due within twelve months (or
such longer period for payment as is customarily extended by such trade
creditor) of the incurrence thereof, which account is not overdue by more than
90 days, according to the original terms of sale, unless such account payable
is being contested in good faith), or (c) for the payment of money relating to
a Capitalized Lease Obligation; (ii) the maximum fixed repurchase price of all
Disqualified Capital Stock of such Person; (iii) reimbursement obligations of
such Person with respect to letters of credit; (iv) obligations of such Person
with respect to Interest Swap Obligations and Foreign Exchange Agreements; (v)
all liabilities of others of the kind described in the preceding clause (i),
(ii), (iii) or (iv) that such Person has guaranteed or that is otherwise its
legal liability; and (vi) all obligations of others secured by a Lien to which
any of the properties or assets (including, without limitation, leasehold
interests and any other tangible or intangible property rights) of such Person
are subject, whether or not the obligations secured thereby shall have been
assumed by such Person or shall otherwise be such Person's legal liability
(provided that if the obligations so secured have not been assumed by such
Person or are not otherwise such Person's legal liability, such obligations
shall be deemed to be in an amount equal to the fair market value of such
properties or assets, as determined in good faith by the Board of Directors of
such Person, which determination shall be evidenced by a Board Resolution).
For purposes of the preceding sentence, the "maximum fixed repurchase price" of
any Disqualified Capital Stock that does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capital
Stock as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
<PAGE> 19
-11-
Disqualified Capital Stock (or any equity security for which it may be
exchanged or converted), such fair market value shall be determined in good
faith by the Board of Directors of such Person, which determination shall be
evidenced by a Board Resolution.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.
"Independent Financial Advisor" means an accounting,
appraisal, investment banking or consulting firm of nationally recognized
standing that is, in the reasonable and good faith judgment of the Board of
Directors of the Company, qualified to perform the task for which such firm has
been engaged hereunder and disinterested and independent with respect to the
Company and its Affiliates.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Securities.
"Interest Swap Obligation" means any obligation of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a fixed or floating rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or floating rate of interest on the same
notional amount; provided that the term "Interest Swap Obligation" shall also
include interest rate exchange, collar, cap, swap option or similar agreements
providing interest rate protection.
"Investment" means (i) any direct or indirect purchase or
other acquisition of, or of a beneficial interest in, any Securities of any
other Person or (ii) any direct or indirect loan, advance (other than advances
to employees for moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business), extension of
credit or capital contribution to any other Person, including all indebtedness
and accounts receivable from that other Person that are not current assets or
did not arise from sales to that other Person in the ordinary course of
business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Issue Date" means the date of original issuance of the
Securities under this Indenture.
<PAGE> 20
-12-
"Legal Holiday" shall have the meaning provided in Section
13.07.
"Letter of Credit Obligations" means Indebtedness of the
Company or any of its Subsidiaries with respect to letters of credit issued
pursuant to the Senior Credit Facilities, and for purposes of the definition of
the term "Permitted Indebtedness," the aggregate principal amount of
Indebtedness outstanding at any time with respect thereto shall be deemed to
consist of (a) the aggregate maximum amount then available to be drawn under
all such letters of credit (the determination of such maximum amount to assume
compliance with all conditions for drawing), and (b) the aggregate amount that
has been paid by, and not reimbursed to, the issuers under such letters of
credit; provided that if any such letters of credit are issued to support
letters of credit issued by another Person on behalf of the Company or any of
its Subsidiaries, then the principal amount of Indebtedness outstanding shall
not include such other letters of credit to the extent of such support letters
of credit.
"Lien" means any mortgage, pledge, lien, encumbrance, charge
or adverse claim affecting title or resulting in an encumbrance against real or
personal property, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell which is intended to constitute
or create a security interest, mortgage, pledge or lien, and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction); provided that in no event shall an
operating lease be deemed to constitute a Lien under this Indenture.
"Material Subsidiary" means, with respect to any accounting
period, any Subsidiary of the Company (i) whose revenues constitute greater
than 10% of the aggregate dollar value of the revenues of the Company and its
Subsidiaries, taken as a whole, for such accounting period or (ii) the fair
market value of whose assets at any time during such accounting period is
greater than 10% of the fair market value of all of the assets of the Company
and its Subsidiaries at such time.
"Maturity Date" means , 2006.
"Net Cash Proceeds" means the Net Proceeds of any Asset Sale
received in the form of cash or Cash Equivalents.
"Net Proceeds" means (a) in the case of any Asset Sale or any
issuance and sale by any Person of Qualified Capital Stock, the
<PAGE> 21
-13-
aggregate net proceeds received by such Person after payment of expenses,
income taxes reasonably estimated to be actually payable as a result of such
Asset Sale within two years of such Asset Sale, commissions and the like
incurred in connection therewith (and, in the case of any Asset Sale, net of
the amount of cash applied to repay Indebtedness secured by the asset involved
in such Asset Sale), whether such proceeds are in cash or in property (valued
at the fair market value thereof at the time of receipt, as determined with
respect to any Asset Sale resulting in Net Proceeds in excess of $500,000 in
good faith by the Board of Directors of such Person, which determination shall
be evidenced by a Board Resolution) and (b) in the case of any conversion or
exchange of any outstanding Indebtedness or Disqualified Capital Stock of such
Person for or into shares of Qualified Capital Stock of such Person, the sum of
(i) the fair market value of the proceeds received by such Person in connection
with the issuance of such Indebtedness or Disqualified Capital Stock on the
date of such issuance and (ii) any additional amount paid by the holder to such
Person upon such conversion or exchange.
"Non-payment Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to act to
accelerate the maturity of any Designated Senior Indebtedness.
"Obligations" means all obligations of every nature whether
for principal, reimbursements, interest, fees, expenses, indemnities or
otherwise, and whether primary, secondary, direct, indirect, contingent, fixed
or otherwise (including obligations of performance) under the documentation
governing any Indebtedness.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Controller, the Treasurer or
the Secretary of the Company.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee complying with the
requirements of Sections 13.04 and 13.05. Unless otherwise required by the
Trustee, the legal counsel may be an employee of or counsel to the Company or
the Trustee.
<PAGE> 22
-14-
"Pari Passu Indebtedness" means, with respect to the Company
or any Subsidiary Guarantor, Indebtedness of such Person which ranks pari passu
in right of payment to the Securities or the Guarantee of such Subsidiary
Guarantor, as the case may be.
"Paying Agent" shall have the meaning provided in Section
2.03, except that, for the purposes of Articles Three and Nine and Sections
5.15 and 5.16, the Paying Agent shall not be the Company or an Affiliate of the
Company.
"Payment Blockage Notice" shall have the meaning provided in
Section 4.02.
"Payment Blockage Period" shall have the meaning provided in
Section 4.02.
"Payment Default" means any default in the payment of
principal, premium, if any, or interest on any Designated Senior Indebtedness
beyond any applicable grace period with respect thereto.
"Payment Restriction" means, with respect to a Subsidiary of
any Person, any encumbrance, restriction or limitation, whether by operation of
the terms of its charter or by reason of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation, on the ability of (i)
such Subsidiary to (a) pay dividends or make other distributions on its Capital
Stock or make payments on any obligation, liability or Indebtedness owed to
such Person or any other Subsidiary of such Person, (b) make loans or advances
to such Person or any other Subsidiary of such Person, or (c) transfer any of
its properties or assets to such Person or any other Subsidiary of such Person,
or (ii) such Person or any other Subsidiary of such Person to receive or retain
any such (a) dividends, distributions or payments, (b) loans or advances, or
(c) transfer of properties or assets.
"Permitted Asset Swap" means the exchange, in the ordinary
course of the outdoor advertising business, of any interest of the Company or
any of its Subsidiaries in any Advertising Display or Displays for a similar
interest in an Advertising Display or Displays of a Person other than the
Company or such Subsidiary; provided that (i) the aggregate fair market value
(as determined in good faith by the Board of Directors of the Company) of the
Advertising Display or Displays being transferred by the Company or such
Subsidiary is not greater than the aggregate fair market value (as determined
in good faith by the Board of Directors of the Company) of the Advertising
Display or Displays received by the Company or such Subsidiary in such exchange
and
<PAGE> 23
-15-
(ii) the aggregate fair market value (as determined in good faith by the Board
of Directors of the Company) of all Advertising Displays transferred by the
Company and its Subsidiaries in connection with exchanges in any period of
twelve consecutive months shall not exceed $500,000.
"Permitted Encumbrances" means (i) Liens existing on the Issue
Date to the extent and in the manner such Liens are in effect on the Issue
Date; (ii) Liens for taxes, assessments or governmental charges or claims not
yet due or which are being diligently contested in good faith and if a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor; (iii) statutory Liens of landlords and
banks and rights of offset, and Liens of carriers, warehousemen, workmen,
repairmen, mechanics and materialmen and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor; (iv) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, utility payments,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money); (v) any attachment or
judgment Lien not constituting an Event of Default; (vi) leases or subleases
granted to others not interfering in any material respect with the ordinary
conduct of the business of the Company and its Subsidiaries, taken as a whole;
(vii) easements, rights-of-way, restrictions, minor defects, encroachments or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business
of the Company and its Subsidiaries, taken as a whole; (viii) any (a) interest
or title of a lessor or sublessor (other than the Company or any of its
Subsidiaries) under any lease, (b) restriction or encumbrance that the interest
or title of such lessor or sublessor may be subject to (including without
limitation ground leases or other prior leases of the demised premises,
mortgages, mechanics liens, tax liens, and easements), or (c) subordination of
the interest of the lessee or sublessee under such lease to any restrictions or
encumbrance referred to in the preceding clause (b); (ix) Liens arising from
filing UCC financing statements for precautionary purposes relating solely to
true leases of personal property permitted under the applicable indenture and
under which the Company or any of its Subsidiaries is a lessee; (x) Liens in
favor of customs and revenue authorities arising as a matter of law to secure
payment of customs
<PAGE> 24
-16-
duties in connection with the importation of goods; (xi) any zoning or similar
law or right reserved to or vested in any governmental office or agency to
control or regulate the use of any real property; (xii) Liens securing
obligations (other than obligations representing Indebtedness for borrowed
money) under operating, reciprocal easement or similar agreements entered into
in the ordinary course of business of the Company and its Subsidiaries; (xiii)
Liens upon specific items of inventory or other goods and proceeds of any
Person securing such Person's obligations in respect of bankers' acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods in the ordinary course of
business; (xiv) Liens securing reimbursement obligations with respect to
letters of credit which encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (xv) Liens arising out
of consignment or similar arrangements for the sale of goods entered into by
the Company or any Subsidiary in the ordinary course of business in accordance
with past practices; (xvi) Liens to secure Refinancing Indebtedness to the
extent the Indebtedness refinanced was secured and such Liens do not extend to
any property other than the property which was subject to the Lien under the
Indebtedness being Refinanced; (xvii) Liens on assets of the Company securing
Indebtedness which would constitute Senior Indebtedness but for the provisions
of clause (c) in the third sentence of the definition of Senior Indebtedness
and Liens on assets of a Subsidiary Guarantor securing Indebtedness which would
constitute Guarantor Senior Indebtedness but for the provisions of clause (c)
in the third sentence of the definition of Guarantor Senior Indebtedness; and
(xviii) additional Liens securing Indebtedness at any one time outstanding not
to exceed $5,000,000.
"Permitted Holders" means William S. Levine, Arthur R. Moreno,
any trust solely for the benefit of Messrs. Levine and Moreno or their
respective immediate family members, or any partnership all the ownership
interests in which are beneficially owned or controlled by any of the
foregoing; provided that with respect to any such trust or partnership either
Mr. Levine or Mr. Moreno shall at all times have the exclusive power to direct
the voting of the shares of Voting Stock of the Company held by such trust or
partnership.
"Permitted Indebtedness" means (a) Indebtedness of the Company
and its Subsidiaries (and the Company and each Subsidiary of the Company (to
the extent it is not an obligor) may guarantee such Indebtedness) pursuant to
(i) the Senior Credit Facilities in an aggregate principal amount at any one
time outstanding not to exceed $530,000,000, less the aggregate amount of all
principal
<PAGE> 25
-17-
repayments thereunder (to the extent, in the case of payments of revolving
credit Indebtedness, that the corresponding commitments have been permanently
reduced) pursuant to and in accordance with the requirements of Section 5.16
subsequent to the Issue Date, and (ii) any Indebtedness incurred under the
Senior Credit Facilities pursuant to and in compliance with (A) clause (l) of
this definition or (B) Section 5.12, (b) any Indebtedness of the Company or any
Subsidiary of the Company which, in the case of the Company, is owing to any
wholly-owned Subsidiary of the Company and which, in the case of any such
Subsidiary, is owing to the Company or any wholly-owned Subsidiary of the
Company, (c) Indebtedness incurred by the Company or any Subsidiary in
connection with the purchase or improvement of property (real or personal) or
equipment or other capital expenditures in the ordinary course of business or
consisting of Capitalized Lease Obligations; provided that at the time of the
incurrence thereof, such Indebtedness, together with any other Indebtedness
incurred during the most recently completed four fiscal quarter period in
reliance upon this clause (c), does not exceed, in the aggregate, $2,000,000 at
any time outstanding; (d) Indebtedness of the Company incurred under Foreign
Exchange Agreements and Interest Swap Obligations entered into with respect to
Indebtedness in a notional amount not exceeding the aggregate principal amount
of Indebtedness and otherwise permitted to be outstanding pursuant to Section
5.12; (e) guarantees incurred in the ordinary course of business, by the
Company or a Subsidiary of the Company, of Indebtedness of any other Person in
the aggregate not to exceed $2,000,000 at any time outstanding; (f) guarantees
by the Company or a Subsidiary of the Company of Indebtedness incurred by a
wholly-owned Subsidiary so long as the incurrence of such Indebtedness incurred
by such wholly-owned Subsidiary is permitted under the terms of this Indenture;
(g) Refinancing Indebtedness; (h) Indebtedness for letters of credit relating
to workers' compensation claims and self-insurance or similar requirements in
the ordinary course of business; (i) other Indebtedness outstanding on the
Issue Date and specified on a schedule to this Indenture; (j) Indebtedness
arising from guarantees of Indebtedness of the Company or any Subsidiary of the
Company or other agreements of the Company or a Subsidiary of the Company
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or Subsidiary of the Company, other than
guarantees of Indebtedness incurred by any Person acquiring all or any portion
of such business, assets or Subsidiary of the Company for the purpose of
financing such acquisition; provided that the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
actually received by the Company and its Subsidiaries in connection with such
disposition; (k) obligations in respect of
<PAGE> 26
-18-
performance bonds and completion guarantees provided by the Company or any
Subsidiary of the Company in the ordinary course of business; (l) additional
Indebtedness of the Company and the Subsidiary Guarantors in an amount not to
exceed $5,000,000 at any time outstanding; (m) any Securities issued after the
Issue Date in exchange for Term Notes; (n) any notes issued in exchange for
Securities in an exchange offer contemplated by, and in accordance with, the
Registration Rights Agreement; and (o) any guarantees of Indebtedness of the
types set forth in clauses (m) and (n) above.
"Permitted Investment" by any Person means (i) any Related
Business Investment, (ii) Investments in securities not constituting cash or
Cash Equivalents and received in connection with an Asset Sale made pursuant to
Section 5.16 or any other disposition of assets not constituting an Asset Sale
by reason of the $250,000 threshold contained in the definition thereof, (iii)
cash and Cash Equivalents, (iv) Investments existing on the Issue Date, (v)
Investments by the Company or by any Subsidiary of the Company in any Person
that is or will become immediately after such Investment a wholly-owned
Subsidiary of the Company that either (a) has not incurred (and will not incur
as a result of or in connection with such transaction) any Indebtedness (other
than Indebtedness permitted to be incurred by such Subsidiary under Section
5.12) or (b) is a Subsidiary Guarantor; provided, however, that (x) such
Investment shall be a Permitted Investment only for so long as any such
Subsidiary in which the Investment has been made meets the conditions set forth
above and (y) no Investment in any such Person or Subsidiary (including any
transaction pursuant to which any Person becomes a Subsidiary of the Company)
will be a Permitted Investment if and for so long as such Subsidiary is or
would be subject to any Payment Restriction; (vi) any Investments in the
Company by any Subsidiary of the Company; provided, however, that any
Indebtedness of the Company for payment in respect of such Investment is
subordinated in right of payment, pursuant to a written agreement, to the
Securities at least to the same extent and in the same manner as the Securities
are subordinated to the Bank Indebtedness; and (vii) additional Investments in
an aggregate amount not exceeding $10,000,000.
"Person" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.
<PAGE> 27
-19-
"PIK Securities" means Securities issued after the Issue Date
in lieu of payment in cash of Interest due on the Securities in accordance with
Section 2.02.
"Plan of Liquidation" means, with respect to any Person, a
plan that provides for, contemplates or the effectuation of which is preceded
or accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and
all or substantially all of the remaining assets of such Person to holders of
Capital Stock of such Person.
"Preferred Stock" means, with respect to any Person, Capital
Stock of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"principal" of any Indebtedness (including the Securities)
means the principal of such Indebtedness plus the premium, if any, on such
Indebtedness.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act as
interpreted by the Company's chief financial officer or Board of Directors in
consultation with its independent certified public accountants.
"Qualified Capital Stock" means, with respect to any Person,
any Capital Stock of such Person that is not Disqualified Capital Stock.
"Record Date" means the Record Dates specified in the
Securities; provided that if any such date is a Legal Holiday, the Record Date
shall be the first day immediately preceding such specified day that is not a
Legal Holiday.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture and Paragraph 5 of the Securities annexed hereto as Exhibit A.
<PAGE> 28
-20-
"Redemption Price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture and Paragraph 5 of the Securities annexed hereto as Exhibit A.
"Reference Date" shall have the meaning provided in Section
5.03.
"Refinance" means, in respect of any security or Indebtedness,
to refinance, extend, renew, refund or defease, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Refinancing Indebtedness" means, with respect to any Person,
any Refinancing of any Indebtedness of such Person existing on the Issue Date
or Indebtedness (other than Permitted Indebtedness, except Permitted
Indebtedness incurred pursuant to clause (i) of the definition thereof)
incurred in accordance with this Indenture (a) in a principal amount (or, if
such Refinancing Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon the acceleration thereof, with an
original issue price) not in excess of (without duplication) (i) the principal
amount or the original issue price, as the case may be, of the Indebtedness so
refinanced (or, if such Refinancing Indebtedness Refinances Indebtedness under
a revolving credit facility or other agreement providing a commitment for
subsequent borrowings, with a maximum commitment not to exceed the maximum
commitment under such revolving credit facility or other agreement) plus (ii)
unpaid and accrued interest on such Indebtedness plus (iii) premiums,
penalties, fees and expenses actually incurred by such Person in connection
with the Refinancing thereof and (b) with respect to Refinancing Indebtedness
that Refinances Subordinated Indebtedness, such Refinancing Indebtedness (x)
shall not have any fixed mandatory redemption or sinking fund requirement in an
amount greater than or at a time prior to the amounts and times specified in
such Subordinated Indebtedness being Refinanced, except to the extent that any
such requirement applies on a date after the Maturity Date and (y) shall
contain subordination and default provisions no less favorable in any material
respect to Holders than those contained in such Subordinated Indebtedness being
Refinanced.
"Registrar" shall have the meaning provided in Section 2.03.
"Registration Rights Agreement" shall have the meaning set
forth in the Bridge Agreement.
<PAGE> 29
-21-
"Related Business Investment" means (i) any Investment by a
Person in any other Person a majority of whose revenues are derived from the
operation of any line of business engaged in by the Company or any of its
Subsidiaries as of the Issue Date; and (ii) any capital expenditure or
Investment, in each case reasonably related to the business of the Company and
its Subsidiaries as it is conducted as of the Issue Date and as such business
may thereafter evolve or change.
"Representative" means the Administrative Agent under the
Senior Credit Facilities and the indenture trustee or other trustee, agent or
representative for any other Designated Senior Indebtedness; provided that in
no event shall [ ], in its capacities as Trustee, Registrar,
co-Registrar or Paying Agent, serve as Representative.
"Restricted Debt Prepayment" means any principal payment on,
purchase, redemption, defeasance, prepayment or other acquisition or retirement
for value of, any Subordinated Indebtedness, directly or indirectly, by the
Company or any Subsidiary of the Company, other than any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment.
"Restricted Payment" means any (i) Stock Payment, (ii)
Investment (other than a Permitted Investment) or (iii) Restricted Debt
Prepayment.
"Securities" means the Company's Senior Subordinated Notes due
2006, as amended or supplemented from time to time in accordance with the terms
hereof, that are issued pursuant to this Indenture including, without
limitation, the PIK Securities and the registered Securities, if any, having
the same terms and conditions which are issued by the Company in exchange for
such Securities upon exercise of the registration rights accompanying such
Securities.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Senior Credit Facilities" means the Second Amended and
Restated Credit Agreement dated as of July 9, 1996 among the Company, the
several lenders from time to time parties thereto and Canadian Imperial Bank of
Commerce, as administrative agent, together with the documents related thereto
(including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise
<PAGE> 30
-22-
modified from time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (including adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"Senior Indebtedness" means the principal of, premium, if any,
and interest on and all other Obligations with respect to any Indebtedness of
the Company, whether outstanding on the Issue Date or thereafter created,
incurred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to the Securities. Without limiting the generality of the
foregoing, "Senior Indebtedness" shall include (x) the principal of, premium,
if any, and interest on all Obligations of every nature of the Company from
time to time owed to the lenders under the Senior Credit Facilities, including,
without limitation, the Letter of Credit Obligations and principal of and
interest on and all fees, indemnities, and expenses payable under the Senior
Credit Facilities, (y) interest accruing thereon subsequent to the occurrence
of any Event of Default specified in clause (vi) or (vii) of Section 7.01
relating to the Company, whether or not the claim for such interest is allowed
under any applicable Bankruptcy Law and (z) all deferrals, renewals,
extensions, refinancings and restructuring of, and amendments, modifications
and supplements to, any of the Senior Indebtedness described above.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include (a)
Indebtedness evidenced by the Securities or the Take-Out Notes, (b)
Indebtedness that is expressly subordinate or junior in right of payment to any
Indebtedness of the Company, (c) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Title 11, United States Code,
is without recourse to the Company, (d) Indebtedness which is represented by
Disqualified Capital Stock, (e) obligations for goods, materials or services
purchased in the ordinary course of business or obligations consisting of trade
payables, (f) Indebtedness of or amounts owed by the Company for compensation
to employees or for services rendered to the Company, (g) any liability for
federal, state, local or other taxes owed or owing by the Company, (h)
Indebtedness of the Company to a Subsidiary of the Company, (i) that portion of
any Indebtedness (other than Indebtedness described in clause (x) of the second
sentence of this definition which relates to reimbursement obligations (whether
in the form of loans or otherwise) under letters of credit with respect to
drawings made thereunder and not yet reimbursed) which is incurred
<PAGE> 31
-23-
by the Company in violation of this Indenture and (j) Indebtedness evidenced by
the Bridge Agreement.
"Significant Stockholder" means, with respect to any Person,
any other Person who is the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of more than 10% of any class of equity securities of
such Person that are entitled to vote on a regular basis for the election of
directors of such Person.
"Stock Payment" means (a) the declaration or payment either in
cash or in property, of any dividend on (except dividends payable solely in
Qualified Capital Stock of the Company), or the making by the Company or any
of its Subsidiaries of any other distribution in respect of, the Company's
Capital Stock or any warrants, rights or options to purchase or acquire shares
of any class of such Capital Stock (other than exchangeable or convertible
Indebtedness of the Company), or (b) the redemption, repurchase, retirement or
other acquisition for value by the Company or any of its Subsidiaries, directly
or indirectly, of the Company's Capital Stock or any warrants, rights or
options to purchase or acquire shares of any class of such Capital Stock (other
than exchangeable or convertible Indebtedness of the Company), other than
solely in exchange for Qualified Capital Stock of the Company.
"Subordinated Indebtedness" means, with respect to the Company
or any Subsidiary Guarantor, Indebtedness of such Person which is expressly
subordinated in right of payment to the Securities or the Guarantee of such
Subsidiary Guarantor, as the case may be.
"Subsidiary" means with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of stock or other equity interest entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereto is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof.
"Subsidiary Guarantors" means (i) each of OS Baseline, Inc.,
an Arizona corporation, Outdoor Systems Painting, Inc., an Arizona corporation,
New York Subways Advertising Co., Inc., an Arizona corporation, OS Advertising
of Texas Painting, Inc., a Texas corporation, Decade Communications Group,
Inc., a Colorado corporation, and Bench Advertising Company of Colorado, Inc.,
a Colorado corporation, (ii) each of the Company's Subsidiaries which becomes a
guarantor of the Securities in compliance with the
<PAGE> 32
-24-
provisions of Section 5.17 and (iii) each of the Company's Subsidiaries
executing a supplemental indenture in which such Subsidiary agrees to be bound
by the terms of this Indenture.
"Take-Out Notes" means any Indebtedness issued by the Company
to refinance amounts outstanding under the Bridge Agreement.
"Term Loans" means the term loan facility under the Senior
Credit Facilities.
"Term Notes" shall have the meaning set forth in the Bridge
Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Section Section 77aaa-77bbbb), as amended, as in effect on the date of the
execution of this Indenture until such time as this Indenture is qualified
under the TIA, and thereafter as in effect on the date on which this Indenture
is qualified under the TIA, except as otherwise provided in Section 10.03.
"Transactions" shall have the meaning set forth in the Bridge
Agreement.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"Trust Officer" means any officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"U.S. Government Obligations" shall have the meaning provided in Section 9.02.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Voting Stock" means, with respect to any Person, securities
of any class or classes of Capital Stock in such Person entitling the holders
thereof to vote under ordinary circumstances in the election of members of the
board of directors or other governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the products obtained by
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multiplying (i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment.
"wholly-owned Subsidiary" means, with respect to any Person,
any corporation, association or other business entity of which 100% of the
total voting power of shares of stock or other equity interest entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other wholly-owned
Subsidiaries of that Person or a combination thereof.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company, any
Subsidiary Guarantor, or any other obligor on the Securities or the Guarantees.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
therein.
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SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities, the notation thereon relating to the Guarantee
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit A. Any registered Securities may be issued in exchange for a
like principal amount of the Securities pursuant to a registered exchange
offer. The registered Securities shall be in the same form of Exhibit A,
except that the restrictive legend shall not apply. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Securities
and any notation, legend or endorsement on them. Each Security shall be dated
the date of its authentication.
The terms and provisions contained in the Securities and the
Guarantee shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
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SECTION 2.02. Execution and Authentication; PIK Securities.
The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $240,000,000 plus the amount of PIK
Securities outstanding at such time, except as provided in Section 2.07, and
registered exchange Securities from time to time for issue only in exchange for
a like principal amount of Securities, in each case upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on
which the Securities are to be authenticated. The aggregate principal amount
of Securities outstanding at any time may not exceed $240,000,000 plus the
amount of PIK Securities outstanding at such time, except as provided in
Section 2.07. Upon the written order of the Company in the form of an
Officers' Certificate, the Trustee shall authenticate Securities in
substitution of Securities originally issued to reflect any name change of the
Company.
The Company may at its option, on any Interest Payment Date
(as set forth in the Securities) in lieu of payment in cash of interest due on
the Securities in excess of 15% per annum pay such excess by issuing PIK
Securities by giving notice to the Holders and the Trustee of such election not
less than 5 nor more than 30 days prior to the Record Date for such Interest
Payment (as set forth in the Securities). The Trustee or an authenticating
agent, on each such Interest Payment Date as to which the Issuer has elected to
make such interest payments in PIK Securities, in full or in part, shall upon
written order of the Company signed by one Officer, given not less than 5 nor
more than 30 days prior to the Interest Payment Date, authenticate for original
issue and deliver additional Securities, in an aggregate principal amount equal
to the amount of interest not paid in cash on each such Interest Payment Date.
Each issuance of PIK Securities in lieu of payment in cash of interest on the
Securities shall be made pro rata with respect to the then outstanding
Securities.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign and one Officer or an Assistant Secretary (each
of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Securities for the Company by manual or
facsimile signature. Each Subsidiary Guarantor shall execute the Guarantee in
the manner set forth in Section 11.09.
If an Officer whose signature is on a Security was an Officer
at the time of such execution but no longer holds that
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office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise
provided in the appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
and Affiliates of the Company.
The Securities (other than PIK Securities) shall be issuable
only in registered form without coupons in denominations of $1,000 and integral
multiples thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served. The Company may also from time to time designate
one or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York, for such purposes.
The Company may act as its own Registrar or Paying Agent except that for the
purposes of Articles Three and Nine and Sections 5.15 and 5.16, neither the
Company nor any Affiliate of the Company shall act as Paying Agent. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company, upon notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional paying agent.
The Company initially appoints the Trustee as Registrar and Paying Agent until
such time as the Trustee has resigned or a successor has been appointed.
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The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee, in advance, of the name and address of any such Agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such.
SECTION 2.04. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that, subject to Article Four and Article Twelve,
each Paying Agent shall hold in trust for the benefit of Holders or the Trustee
all assets held by the Paying Agent for the payment of principal of, or
interest on, the Securities (whether such assets have been distributed to it by
the Company or any other obligor on the Securities), and shall notify the
Trustee of any Default by the Company (or any other obligor on the Securities)
in making any such payment. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate such assets and hold them as a separate trust fund,
subject to Article Four and Article Twelve. The Company at any time may
require a Paying Agent to distribute all assets held by it to the Trustee and
account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee
and to account for any assets distributed. Upon distribution to the Trustee of
all assets that shall have been delivered by the Company to the Paying Agent,
the Paying Agent shall have no further liability for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee on or before each Interest Payment Date and at such
other times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee.
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SECTION 2.06. Transfer and Exchange.
When Securities are presented to the Registrar or a co-
Registrar with a request to register the transfer of such Securities or to
exchange such Securities for an equal principal amount of Securities of other
authorized denominations, the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Securities surrendered for
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's or co-Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Sections
2.02, 2.07, 2.10, 3.06, 5.15, 5.16 or 10.05). The Registrar or co-Registrar
shall not be required to register the transfer of or exchange of any Security
(i) during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of Securities and ending at the close of
business on the day of such mailing and (ii) selected for redemption in whole
or in part pursuant to Article Three, except the unredeemed portion of any
Security being redeemed in part.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements are met. If required by the
Trustee or the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced. The Company may charge such Holder for
its reasonable out-of-pocket expenses in replacing a Security, including
reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
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SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those cancelled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Security does not cease to be outstanding because the Company,
the Subsidiary Guarantors or any of their respective Affiliates holds the
Security.
If a Security is replaced pursuant to Section 2.07 (other than
a mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or a Subsidiary) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest due
on the Securities payable on that date, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue
unless, pursuant to the provisions of Article Four and Article Twelve, the
Paying Agent is unable to make payments on the Securities to the Holders
thereof.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company, the Subsidiary Guarantors or any of their
respective Affiliates shall be disregarded (unless all of the outstanding
Securities are then collectively owned by the Company, the Subsidiary
Guarantors or any of their respective Affiliates), except that, for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities that the Trustee knows
or has reason to know are so owned shall be disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the
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Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent (other than the Company or a Subsidiary), and no one else, shall cancel
and, at the written direction of the Company, shall dispose of all Securities
surrendered for transfer, exchange, payment or cancellation. Subject to
Section 2.07, the Company may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation. If the Company
or any Subsidiary Guarantor shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall, unless the Trustee fixes another record date pursuant to
Section 7.10, pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest
or the next succeeding Business Day if such date is not a Business Day. At
least 15 days before the subsequent special record date, the Company shall mail
to each Holder, with a copy to the Trustee, a notice that states the subsequent
special record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Securities, and
that reliance may be
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placed only on the other identification numbers printed on the Securities.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to
Paragraph 5 of the Securities, it shall notify the Trustee, with a copy to the
Credit Agent, of the Redemption Date and the principal amount of Securities to
be redeemed and whether it wants the Trustee to give notice of redemption to
the Holders at least 20 days (unless a shorter notice shall be satisfactory to
the Trustee) but not more than 60 days before the Redemption Date. Any such
notice may be cancelled at any time prior to notice of such redemption being
mailed to any Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection of Securities to Be Redeemed.
If fewer than all of the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed pro rata, by lot or by any
other method that the Trustee considers fair and appropriate and, if such
Securities are listed on any securities exchange, by a method that complies
with the requirements of such exchange.
The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption and shall promptly notify
the Company in writing of the Securities selected for redemption and, in the
case of any Security selected for partial redemption, the principal amount
thereof to be redeemed. Securities in denominations of $1,000 may be redeemed
only in whole. The Trustee may select for redemption portions (equal to $1,000
or integral multiples thereof) of the principal amount of Securities that have
denominations larger than $1,000; provided that if no Securities other than PIK
Securities in denominations of less than $1,000 (or if greater than $1,000, not
in integral multiples of $1,000) remain outstanding or have not been called for
redemption, such PIK Securities may be redeemed. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.
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SECTION 3.03. Notice of Redemption.
At least 20 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first class mail to each
Holder whose Securities are to be redeemed at such Holder's registered
address, with a copy to the Credit Agent. At the Company's request, the
Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. Each notice for redemption shall identify the Securities to
be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(5) that, unless (a) the Company defaults in making the
redemption payment or (b) such redemption payment is prohibited
pursuant to Article Four or Article Twelve hereof or otherwise,
interest on Securities called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the Redemption Date, and upon surrender of such Security,
a new Security or Securities in aggregate principal amount equal to
the unredeemed portion thereof will be issued; and
(7) if fewer than all the Securities are to be redeemed,
the identification of the particular Securities (or portion thereof)
to be redeemed, as well as the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption.
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SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Trustee or Paying
Agent, such Securities called for redemption shall be paid at the Redemption
Price unless prohibited pursuant to Article Four or Article Twelve or otherwise
pursuant to this Indenture. Securities that are redeemed by the Company or
that are purchased by the Company pursuant to a Net Proceeds Offer as described
in Section 5.16 or pursuant to a Change of Control Offer as described in
Section 5.15 or that are otherwise acquired by the Company will be surrendered
to the Trustee for cancellation.
SECTION 3.05. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price
of all Securities to be redeemed on that date (other than Securities or
portions thereof called for redemption on that date which have been delivered
by the Company to the Trustee for cancellation). The Paying Agent shall
promptly return to the Company any U.S. Legal Tender so deposited which is not
required for that purpose upon the written request of the Company, except with
respect to monies owed as obligations to the Trustee pursuant to Article Eight
and Article Twelve hereof.
If the Company complies with the preceding paragraph and
payment of the Securities called for redemption is not prohibited under Article
Four or Article Twelve or otherwise, then, unless the Company defaults in the
payment of such Redemption Price, interest on the Securities to be redeemed
will cease to accrue on and after the applicable Redemption Date, whether or
not such Securities are presented for payment.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part,
the Trustee shall authenticate for the Holder a new Security or Securities
equal in principal amount to the unredeemed portion of the Security
surrendered.
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ARTICLE FOUR
SUBORDINATION
SECTION 4.01. Securities Subordinated to Senior Indebtedness.
Anything herein to the contrary notwithstanding, the Company,
for itself and its successors, and each Holder, by his or her acceptance of
Securities, agrees that the payment of any Obligations under the Securities is
subordinated, to the extent and in the manner provided in this Article Four, to
the prior payment in full in cash or Cash Equivalents of all Senior
Indebtedness.
This Article Four shall constitute a continuing offer to all
Persons who 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 made obligees hereunder and any one or more of them may
enforce such provisions.
SECTION 4.02. Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 4.03 shall be applicable, upon (1) the
occurrence of a Payment Default and (2) receipt by the Trustee and the Company
from a Representative of written notice of such occurrence, then no payment
(other than payments previously made pursuant to Article Nine) or distribution
of any assets of the Company of any kind or character shall be made by the
Company on account of any Obligations under the Securities or on account of the
purchase or redemption or other acquisition of Securities unless and until such
Payment Default shall have been cured or waived or shall have ceased to exist
or such Senior Indebtedness as to which such Payment Default relates shall have
been discharged or paid in full in cash or Cash Equivalents, after which the
Company shall resume making any and all required payments in respect of the
Securities, including any missed payments.
(b) Unless Section 4.03 shall be applicable, upon (1) the
occurrence of a Non-payment Default and (2) the earlier of (i) receipt by the
Trustee and the Company from a Representative of written notice of such
occurrence stating that such notice is a "Payment Blockage Notice" pursuant to
this Section 4.02(b) or (ii) if such Non-payment Default results from the
acceleration of the Securities, the date of such acceleration, no payment
(other than payments previously made pursuant to Article Nine) or distribution
of any assets of the Company of any kind or character
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shall be made by the Company on account of any Obligations under the Securities
or on account of the purchase or redemption or other acquisition of Securities
for a period ("Payment Blockage Period") commencing on the date of receipt by
the Trustee of the written notice of a Non-payment Default from such
Representative or the date of the acceleration referred to in clause (ii)
above, as the case may be, unless and until the earlier to occur of the
following events: (w) 179 days shall have elapsed since receipt of such notice
or the date of the acceleration of the Securities, as the case may be (provided
no Designated Senior Indebtedness shall theretofore have been accelerated),
(x) such Non-payment Default shall have been cured or waived or shall have
ceased to exist, (y) such Designated Senior Indebtedness shall have been
discharged or paid in full in cash or Cash Equivalents or (z) such Payment
Blockage Period shall have been terminated by written notice to the Company or
the Trustee from the Representative initiating such Payment Blockage Period or
the holders of at least a majority in principal amount of such issue of
Designated Senior Indebtedness initiating such Payment Blockage Period, after
which, in the case of clause (w), (x), (y) or (z), the Company shall resume
making any and all required payments in respect of the Securities, including
any missed payments. Notwithstanding any other provision of this Indenture, no
Non-payment Default with respect to Designated Senior Indebtedness which
existed or was continuing on the date of the commencement of any Payment
Blockage Period shall be, or shall be made, the basis for the commencement of a
second Payment Blockage Period, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days. In no event
shall a Payment Blockage Period extend beyond 179 days from the date of the
receipt of the written notice by the Trustee of a Non-payment Default or the
date of the acceleration of the Securities, as the case may be (the "Initial
Blockage Period"). Any number of additional Payment Blockage Periods may be
commenced during the Initial Blockage Period; provided, however, that no such
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment
Blockage Period may be commenced under this Section 4.02(b) and no Guarantor
Payment Blockage Period may be commenced under Section 12.02(b) until at least
180 consecutive days have elapsed from the last day of the Initial Blockage
Period.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Security shall have received any payment
prohibited by the foregoing provisions of this Section 4.02, then and in such
event such payment shall be segregated from other funds and held in trust by
the Trustee or such Holder or Paying Agent for the benefit of, and shall
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immediately be paid over to, the holders of Senior Indebtedness or to the
Representatives or as a court of competent jurisdiction shall direct.
SECTION 4.03. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of
Company.
Upon any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, upon any
dissolution, winding-up, total or partial liquidation or reorganization of the
Company (including, without limitation, in bankruptcy, insolvency or
receivership proceedings or upon any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company and whether
voluntary or involuntary):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full in cash or Cash Equivalents of
all amounts payable under Senior Indebtedness (including, with respect
to Designated Senior Indebtedness, any interest accruing after the
commencement of any such proceeding at the rate specified in the
applicable Designated Senior Indebtedness whether or not interest is
an allowed claim enforceable against the Company in any such
proceeding) before the Holders will be entitled to receive any payment
with respect to the Securities, and until all Obligations with respect
to the Senior Indebtedness are paid in full in cash or Cash
Equivalents, any distribution to which the Holders would be entitled
shall be made to the holders of Senior Indebtedness;
(b) any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to
which the Holders or the Trustee on behalf of the Holders would be
entitled except for the provisions of this Article Four, shall be paid
by the liquidating trustee or agent or other Person making such a
payment or distribution, directly to the holders of Senior
Indebtedness or their Representatives, ratably according to the
respective amounts of Senior Indebtedness remaining unpaid held or
represented by each, until all Senior Indebtedness remaining unpaid
shall have been paid in full in cash or Cash Equivalents after giving
effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any
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kind or character, whether in cash, property or securities, shall be
received by the Trustee or the Holders or any Paying Agent on account
of any Obligations under the Securities before all Senior
Indebtedness is paid in full in cash or Cash Equivalents, such payment
or distribution (subject to the provisions of Sections 4.06 and 4.07)
shall be received, segregated from other funds, and held in trust by
the Trustee or such Holder or Paying Agent for the benefit of, and
shall immediately be paid over to, the holders of Senior Indebtedness
or their Representatives, ratably according to the respective amounts
of Senior Indebtedness held or represented by each, until all Senior
Indebtedness remaining unpaid shall have been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company following the conveyance, transfer or lease of its properties and
assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article Six shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the benefit of
creditors or marshalling of assets and liabilities of the Company for the
purposes of this Article Four if the Person formed by such consolidation or the
surviving entity of such merger or the Person which acquires by conveyance,
transfer or lease such properties and assets substantially as an entirety, as
the case may be, shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions set forth in such Article Six.
The Company shall give prompt notice to the Trustee prior to
any dissolution, winding-up, total or partial liquidation or reorganization
(including, without limitation, in bankruptcy, insolvency, or receivership
proceedings or upon any assignment for the benefit of creditors or any other
marshalling of the Company's assets and liabilities).
SECTION 4.04. Securityholders to Be Subrogated to Rights
of Holders of Senior Indebtedness.
Subject to the payment in full in cash or Cash Equivalents of
all Senior Indebtedness, the Holders of Securities 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 the Securities shall be paid in full in cash, and
for the
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purpose of such subrogation no payments or distributions to the holders of
Senior Indebtedness by or on behalf of the Company, or by or on behalf of the
Holders by virtue of this Article Four, which otherwise would have been made to
the Holders shall, as between the Company and the Holders, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Article Four are and are intended solely
for the purpose of defining the relative rights of the Holders, on the one
hand, and the holders of Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Four shall
have been applied, pursuant to the provisions of this Article Four, to the
payment of all amounts payable under the Senior Indebtedness, then the Holders
shall be entitled to receive from the holders of such Senior Indebtedness any
such payments or distributions received by such holders of Senior Indebtedness
in excess of the amount sufficient to pay all amounts payable under or in
respect of the Senior Indebtedness in full in cash or Cash Equivalents.
SECTION 4.05. Obligations of the Company Unconditional.
Nothing contained in this Article Four or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company and the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Four, of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy. Upon
any payment or distribution of assets or securities of the Company referred to
in this Article Four, the Trustee, subject to the provisions of Sections 8.01
and 8.02, and the Holders shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which any dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee or
agent or other Person making any payment or distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in
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such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Four. Nothing in this Section 4.05 shall apply to the claims
of, or payments to, the Trustee under or pursuant to Section 8.07.
SECTION 4.06. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice.
(a) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities. Notwithstanding the
provisions of this Article Four or any other provision of this Indenture, the
Trustee shall not at any time be charged with knowledge of the existence of any
facts that would prohibit the making of any payment to or by the Trustee unless
and until the Trustee or any Paying Agent shall have received written notice
thereof from the Company or from one or more holders of Senior Indebtedness or
from any Representative therefor and, prior to the receipt of any such notice,
the Trustee, subject to the provisions of Sections 8.01 and 8.02, shall be
entitled in all respects conclusively to assume that no such fact exists.
(b) Subject to the provisions of Section 8.01 hereof, the
Trustee shall be entitled to rely on the delivery to it of a written notice to
the Trustee and the Company by a Person representing itself to be a holder of
Senior Indebtedness (or a trustee, fiduciary or agent therefor or other
representative thereof) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor or
other representative thereof); provided, however, that failure to give such
notice to the Company shall not affect in any way the ability of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Four, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article Four, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
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SECTION 4.07. Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Section 9.02 shall be
for the sole benefit of Securityholders and, to the extent allocated for the
payment of Securities, shall not be subject to the subordination provisions of
this Article Four. Otherwise, any deposit of assets or securities by or on
behalf of the Company with the Trustee or any Paying Agent (whether or not in
trust) for the payment of principal of or interest on any Securities shall be
subject to the provisions of this Article Four; provided that if prior to the
second Business Day preceding the date on which by the terms of this Indenture
any such assets may become distributable for any purpose (including, without
limitation, the payment of either principal of or interest on any Security) the
Trustee or such Paying Agent shall not have received with respect to such
assets the notice provided for in Section 4.06, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary received by it on or after such date; provided,
further, that no payment on any Guarantee shall constitute payment on behalf of
the Company for purposes of this Section 4.07. The foregoing shall not apply
to the Paying Agent if the Company or any Subsidiary or Affiliate of the
Company is acting as Paying Agent. Nothing contained in this Section 4.07
shall limit the right of the holders of Senior Indebtedness to recover payments
as contemplated by this Article Four.
SECTION 4.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder 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 non-compliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.
(b) By accepting the Securities, the Holders agree that
without limiting the generality of subsection (a) of this Section 4.08, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article
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Four or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (1)
change the manner, place, terms or time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (3) release any Person liable in any manner for the
collection or payment of Senior Indebtedness; and (4) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 4.09. Securityholders Authorize Trustee to
Effectuate Subordination of Securities.
Each Holder of the Securities by such Holder's acceptance
thereof authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effect the subordination
provisions contained in this Article Four, and appoints the Trustee such
Holder's attorney-in-fact for such purpose, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of assets and liabilities of
the Company) tending towards liquidation or reorganization of the business and
assets of the Company, the immediate filing of a claim for the unpaid balance
of such Holder's Securities in the form required in said proceedings and cause
said claim to be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in such 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 Representatives is hereby
authorized to file an appropriate claim for and on behalf of the Holders of
said Securities.
SECTION 4.10. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth
in this Article Four in respect of any Senior Indebtedness at any time held by
it to the same extent as any other holder of Senior Indebtedness, and nothing
in this Indenture shall be construed to deprive the Trustee of any of its
rights as such holder.
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SECTION 4.11. No Suspension of Remedies.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article Four
shall not be construed as preventing the occurrence of a Default or an Event of
Default under Section 7.01.
Nothing contained in this Article Four shall limit the right
of the Trustee or the Holders of Securities to take any action to accelerate
the maturity of the Securities pursuant to Article Seven or to pursue any
rights or remedies hereunder or under applicable law, subject to the rights, if
any, under this Article Four of the holders, from time to time, of Senior
Indebtedness.
SECTION 4.12. No Fiduciary Duty of Trustee to Holders of
Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness, and shall not be liable to any such holders
(other than for its willful misconduct or gross negligence) if it shall pay
over or deliver to the Holders of Securities or the Company or any other
Person, money or assets in compliance with the terms of this Indenture.
Nothing in this Section 4.12 shall affect the obligation of any Person other
than the Trustee to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Indebtedness or their Representative.
ARTICLE FIVE
COVENANTS
SECTION 5.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities. An
installment of principal of or interest on the Securities shall be considered
paid on the date it is due if the Trustee or Paying Agent (other than the
Company or a Subsidiary) holds on that date U.S. Legal Tender or PIK Securities
designated for and sufficient to pay the installment; provided, however, that
U.S. Legal Tender held by the Trustee for the benefit of holders of Senior
Indebtedness or Guarantor Senior Indebtedness or the payment of which to the
Holders is prohibited pursuant to the provisions of Article Four or Article
Twelve or otherwise shall not be considered to be designated for the payment
of any
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installment of principal or interest on the Securities within the meaning of
this Section 5.01.
The Company shall pay interest on overdue principal at the
rate borne by the Securities and it shall pay interest on overdue installments
of interest at the same rate, to the extent lawful.
SECTION 5.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, the office or agency required under Section 2.03. The
Company shall give prior notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee set forth in
Section 13.02.
SECTION 5.03. Limitation on Restricted Payments.
The Company shall not, and shall cause each of its
Subsidiaries not to, directly or indirectly, make any Restricted Payment if, at
the time of such proposed Restricted Payment, or after giving effect thereto,
(a) a Default or an Event of Default shall have occurred and be continuing, (b)
the Company could not incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to Section 5.12 or (c) the aggregate amount
expended for all Restricted Payments, including such proposed Restricted
Payment (the amount of any Restricted Payment, if other than cash, to be the
fair market value thereof at the date of payment, as determined in good faith
by the Board of Directors of the Company), subsequent to the Issue Date, shall
exceed the sum of (i) 25% of the aggregate Consolidated Net Income (or if such
Consolidated Net Income is a loss, minus 100% of such loss) of the Company
earned subsequent to the Closing Date and on or prior to the date of the
proposed Restricted Payment (the "Reference Date"), plus (ii) 100% of the
aggregate Net Proceeds received by the Company from any Person (other than a
Subsidiary of the Company) from the issuance and sale (including upon exchange
or conversion for other securities of the Company) subsequent to the Closing
Date and on or prior to the Reference Date of Qualified Capital Stock
(excluding (A) Qualified Capital Stock paid as a dividend on any Capital Stock
or as interest on any Indebtedness and (B) any Net Proceeds from issuances and
sales financed directly or indirectly using funds borrowed from the Company or
any Subsidiary of the Company, until and to the extent such
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borrowing is repaid), plus (iii) 100% of the aggregate net cash proceeds
received by the Company as capital contributions to the Company after the
Closing Date.
Notwithstanding the foregoing, if no Default or Event of
Default shall have occurred and be continuing as a consequence thereof, the
provisions set forth in the immediately preceding paragraph will not prevent
(1) the payment of any dividend within 60 days after the date of its
declaration if the dividend would have been permitted on the date of
declaration, (2) the acquisition of any shares of Capital Stock of the Company
or the repurchase, redemption or other repayment of any Subordinated
Indebtedness of the Company or a Subsidiary Guarantor in exchange for or solely
out of the proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company
and (3) the repurchase, redemption or other repayment of any Subordinated
Indebtedness of the Company or a Subsidiary Guarantor in exchange for or solely
out of the proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of (A) Subordinated Indebtedness of the Company or
(B) solely in the case of Subordinated Indebtedness of a Subsidiary Guarantor,
Subordinated Indebtedness of such Subsidiary Guarantor, in either case with a
Weighted Average Life to Maturity equal to or greater than the then remaining
Weighted Average Life to Maturity of the Subordinated Indebtedness repurchased,
redeemed or repaid; provided, however, that each dividend paid in accordance
with clause (1) above, each acquisition, repurchase, redemption or other
repayment made in accordance with, or of the type set forth in, clause (2)
above, shall each be counted for purposes of computing amounts expended
pursuant to subclause (c) in the immediately preceding paragraph, and no
amounts expended pursuant to clause (3) above shall be so counted.
Prior to making any Restricted Payment under the first
paragraph of this Section 5.03, the Company shall deliver to the Trustee an
Officers' Certificate setting forth the computation by which the amount
available for Restricted Payments pursuant to such paragraph was determined.
The Trustee shall have no duty or responsibility to determine the accuracy or
correctness of this computation and shall be fully protected in relying on such
Officers' Certificate.
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SECTION 5.04. Corporate Existence.
Except as otherwise permitted by Article Six, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate or other existence
of each of its Subsidiaries in accordance with the respective organizational
documents of each such Subsidiary and the rights (charter and statutory) and
franchises of the Company and each such Subsidiary; provided, however, that the
Company shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Subsidiaries, any such existence,
right or franchise, if the Board of Directors of the Company or such
Subsidiary, as the case may be, shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company or any
such Subsidiary.
SECTION 5.05. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes, assessments
and governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon it or any of its
Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might by law become a
Lien upon the property of it or any of its Subsidiaries; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim if either (a) the
amount, applicability or validity thereof is being diligently contested in good
faith and an adequate reserve has been established therefor to the extent
required by GAAP or (b) the failure to make such payment or effect such
discharge (together with all other such failures) would not have a material
adverse effect on the financial condition or results or operations of the
Company and its Subsidiaries taken as a whole.
SECTION 5.06. Maintenance of Properties and Insurance.
(a) The Company shall cause all properties used or useful
to the conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted
<PAGE> 56
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at all times unless the failure to so maintain such properties (together with
all other such failures) would not have a material adverse effect on the
financial condition or results of operations of the Company and its
Subsidiaries taken as a whole; provided, however, that nothing in this Section
5.06 shall prevent the Company or any Subsidiary from discontinuing the
operation or maintenance of any of such properties, or disposing of any of
them, if such discontinuance or disposal is either (i) in the ordinary course
of business, (ii) in the good faith judgment of the Board of Directors of the
Company or the Subsidiary concerned, or of the senior officers of the Company
or such Subsidiary, as the case may be, desirable in the conduct of the
business of the Company or such Subsidiary, as the case may be, or (iii)
otherwise permitted by this Indenture.
(b) The Company shall provide or cause to be provided,
for itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be either (i) consistent with past practices of the
Company or the applicable Subsidiary or (ii) customary, in the reasonable, good
faith opinion of the Company, for corporations similarly situated in the
industry, unless the failure to provide such insurance (together with all other
such failures) would not have a material adverse effect on the financial
condition or results of operations of the Company and its Subsidiaries, taken
as a whole.
SECTION 5.07. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 120
days after the end of the Company's fiscal year an Officers' Certificate
stating that a review of its activities and the activities of its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether it has kept, observed,
performed and fulfilled its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company during such preceding fiscal year has kept,
observed, performed and fulfilled each and every such covenant and no event of
default in respect of any payment obligation under the Senior Credit
Facilities, Default or Event of Default occurred during such year or, if such
signers do know of such an event of default, Default or Event of Default,
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the certificate shall describe the event of default, Default or Event of
Default and its status with particularity. The Officers' Certificate shall
also notify the Trustee should the Company elect to change the manner in which
it fixes its fiscal year end.
(b) So long as it is not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
Company shall deliver to the Trustee within 120 days after the end of each
fiscal year a written statement by the Company's independent certified public
accountants stating (A) that their audit examination has included a review of
the terms of this Indenture and the Securities as they relate to accounting
matters, and (B) whether, in connection with their audit examination, any
Default has come to their attention and if such a Default has come to their
attention, specifying the nature and period of existence thereof.
(c) The Company shall deliver to the Trustee, forthwith
upon becoming aware, and in any event within 10 days after the occurrence, of
(i) any Default or Event of Default in the performance of any covenant,
agreement or condition contained in this Indenture; (ii) any event of default
in respect of any payment obligation under the Senior Credit Facilities or any
event of default under any other bond, debenture, note, or other evidence of
Indebtedness of the Company or any of its Subsidiaries, or under any mortgage,
indenture or other instrument if such event of default related to Indebtedness
at any time in an aggregate principal amount exceeding $10,000,000, an
Officers' Certificate specifying with particularity such event.
SECTION 5.08. Compliance with Laws.
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules, regulations,
orders and restrictions of the United States of America, all states and
municipalities thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in
respect of the conduct of their respective businesses and the ownership of
their respective properties, except such as are being diligently contested in
good faith and except for such noncompliances as would not in the aggregate
have a material adverse effect on the financial condition or results of
operations of the Company and its Subsidiaries taken as a whole.
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SECTION 5.09. Commission Reports.
The Company will deliver to the Trustee within 15 days after
the filing of the same with the Commission, copies of the quarterly and annual
report and of the information documents and other reports, if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Securities Exchange Act. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the Commission, to the extent permitted, and
provide the Trustee and Holders of Securities with such annual reports and such
information, documents and other reports specified in Section 13 and 15(d) of
the Exchange Act. The Company will also comply with the other provisions of
TIA Section 314(a).
SECTION 5.10. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive the Company from
paying all or any portion of the principal of or interest on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture; and (to
the extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.11. Limitation on Transactions with Affiliates.
(a) Neither the Company nor any of its Subsidiaries shall
(i) sell, lease, transfer or otherwise dispose of any of its properties or
assets, or issue securities (other than equity securities which do not
constitute Disqualified Capital Stock) to, (ii) purchase any property, assets
or securities from, (iii) make any Investment in, or (iv) enter into or suffer
to exist any contract or agreement with or for the benefit of, an Affiliate or
a Significant Stockholder (or any Affiliate of such Significant Stockholder) of
the Company or any Subsidiary (an "Affiliate Transaction"), other than (x)
Affiliate Transactions permitted under Section 5.11(b) and (y) Affiliate
Transactions in the ordinary course of business that are fair to the Company or
such Subsidiary, as the case may be, and on terms at least as favorable
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as might reasonably have been obtainable at such time from an unaffiliated
party; provided that (A) with respect to Affiliate Transactions involving
aggregate payments equal to or in excess of $500,000 and less than $1,000,000,
the Company or such Subsidiary, as the case may be, shall have delivered an
Officers' Certificate to the Trustee certifying that such transaction or series
of transactions complies with clause (y) above (other than the requirement set
forth in such clause (y) that such Affiliate Transaction be in the ordinary
course of business), (B) with respect to Affiliate Transactions involving
aggregate payments equal to or in excess of $1,000,000 and less than
$3,000,000, the Company or such Subsidiary, as the case may be, shall have
delivered an Officers' Certificate to the Trustee certifying that such
Affiliate Transaction complies with clause (y) above (other than the
requirement set forth in such clause (y) that such Affiliate Transaction be in
the ordinary course of business) and that such Affiliate Transaction has
received the approval of a majority of the disinterested members of the Board
of Directors of the Company or such Subsidiary, as the case may be, or in the
absence of any such approval by the disinterested members of the Board of
Directors of the Company or such Subsidiary, as the case may be, that an
Independent Financial Advisor has reasonably and in good faith determined that
the financial terms of such Affiliate Transaction are fair to the Company or
such Subsidiary, as the case may be, or that the terms of such Affiliate
Transaction are at least as favorable as might reasonably have been obtained at
such time from an unaffiliated party and that such Independent Financial
Advisor has provided written confirmation of such determination to the Board of
Directors and (C) with respect to Affiliate Transactions involving aggregate
payments equal to or in excess of $3,000,000, the Company or such Subsidiary,
as the case may be, shall have delivered to the Trustee a written opinion from
an Independent Financial Advisor to the effect that the financial terms of such
Affiliate Transaction are fair to the Company or such Subsidiary, as the case
may be, or that the terms of such Affiliate Transaction are at least as
favorable as those that might reasonably have been obtained at the time from an
unaffiliated party.
(b) The provisions of Section 5.11(a) shall not apply to
(i) any Permitted Investment, (ii) any Restricted Payment that is made in
compliance with the provisions of Section 5.03, (iii) reasonable and customary
fees and compensation paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Subsidiary of the
Company, as determined by the Board of Directors of the Company or such
Subsidiary or the senior management thereof in good faith, (iv) transactions
exclusively between or among the Company and any
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of its wholly-owned Subsidiaries or exclusively between or among such
wholly-owned Subsidiaries; provided that such transactions are not otherwise
prohibited by this Indenture, (v) any agreement as in effect as of the Closing
Date or any agreements similar thereto or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment thereto)
so long as any such amendment is not disadvantageous to the Securityholders in
any material respect and (vi) transactions permitted by, and complying with,
the provisions of Section 6.01.
SECTION 5.12. Limitation on Incurrences of Additional Indebtedness.
The Company shall not, and shall not permit any of its
Subsidiaries, directly or indirectly, to incur, assume, guarantee, become
liable, contingently or otherwise, with respect to, or otherwise become
responsible for the payment of (collectively "incur") any Indebtedness other
than Permitted Indebtedness; provided, however, that if no Default with respect
to payment of principal of, or interest on, the Securities or Event of Default
shall have occurred and be continuing at the time of or as a consequence of the
incurrence of any such Indebtedness, the Company or any Subsidiary Guarantor
may incur Indebtedness if the Cash Flow Leverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the time at which such
additional Indebtedness is incurred would have been not greater than (i) 6.0 to
1 if such Indebtedness is to be incurred on or before July 15, 1998, (ii) 5.5
to 1 if such Indebtedness is to be incurred between July 15, 1998 and July 15,
2000 and (iii) 5.0 to 1 if such Indebtedness is to be incurred on or after July
15, 2000 in each case determined on a pro forma basis in accordance with GAAP
to give effect to the incurrence of such additional Indebtedness and (if
applicable) the application of the net proceeds therefrom (including, without
limitation, to refinance other Indebtedness and/or consummate the Company's or
any of a Company's Subsidiaries' acquisition of any Person or operating
assets), as if such additional Indebtedness had been incurred and any such
refinancing and/or acquisition had occurred at the beginning of such
four-quarter period. In addition, a Subsidiary of the Company may incur
Acquired Indebtedness to the extent such Indebtedness could have been incurred
by the Company pursuant to the proviso to the immediately preceding sentence.
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SECTION 5.13. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or suffer to exist, or allow to
become effective any consensual Payment Restriction with respect to any of the
Company's Subsidiaries, except for (a) any such restrictions contained in (i)
the Senior Credit Facilities in effect on the Issue Date, as any such payment
restriction may apply to any present or future Subsidiary of the Company, (ii)
this Indenture and any agreement in effect at or entered into on the Closing
Date, (iii) Indebtedness of a Person existing at the time such Person becomes a
Subsidiary of the Company (provided that (x) such Indebtedness is not incurred
in connection with, or in contemplation of, such Person becoming a Subsidiary
of the Company, (y) such restriction is not applicable to any Person, or the
properties or assets or any Person, other than the Person so acquired and (z)
such Indebtedness is otherwise permitted to be incurred pursuant to Section
5.12), (iv) secured Indebtedness otherwise permitted to be incurred pursuant to
Sections 5.12 and 5.14 that limits the right of the debtor to dispose of the
assets securing such Indebtedness; (b) customary non-assignment provisions
restricting subletting or assignment of any lease or other agreement entered
into by a Subsidiary of the Company; (c) customary net worth provisions
contained in leases and other agreements entered into by a Subsidiary of the
Company in the ordinary course of business; (d) customary restrictions with
respect to a Subsidiary of the Company pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary; (e) restrictions contained in
Indebtedness incurred to refinance, refund, extend or renew Indebtedness
referred to in clause (a) above; provided that the restrictions contained
therein are not materially more restrictive taken as a whole than those
provided for in such Indebtedness being refinanced, refunded, extended or
renewed; and (f) Payment Restrictions contained in any other Indebtedness
permitted to be incurred subsequent to the Closing Date pursuant to the
provisions of Section 5.12; provided that any such Payment Restrictions are
ordinary and customary with respect to the type of Indebtedness being incurred
(under the relevant circumstances) and, in any event, no more restrictive than
the most restrictive Payment Restrictions in effect on the Closing Date.
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SECTION 5.14. Limitation on Liens.
The Company shall not and shall not permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Liens upon any of
their respective assets unless the Securities are equally and ratably secured
by the Liens covering such assets, except for (i) Liens on assets of the
Company securing Senior Indebtedness and Liens on assets of a Subsidiary
Guarantor which, at the time of incurrence, secure Senior Indebtedness or
Guarantor Senior Indebtedness, (ii) existing and future Liens securing (A)
Indebtedness and other obligations of the Company and its Subsidiaries under
the Senior Credit Facilities or any refinancing or replacement thereof in whole
or in part permitted under this Indenture and (B) obligations under Interest
Swap Obligations entered into with the lenders under the Senior Credit
Facilities and their Affiliates, (iii) Permitted Encumbrances, (iv) Liens
securing Acquired Indebtedness; provided that such Liens (x) are not incurred
in connection with, or in contemplation of, the acquisition of the property or
assets acquired and (y) do not extend to or cover any property or assets of the
Company or any Subsidiary other than the property or assets so acquired, (v)
Liens to secure Capitalized Lease Obligations and certain other Indebtedness
that is otherwise permitted under this Indenture; provided that (A) any such
Lien is created solely for the purpose of securing such other Indebtedness
representing, or incurred to finance, refinance or refund, the cost (including
sales and excise taxes, installation and delivery charges and other direct
costs of, and other direct expenses paid or charged in connection with, the
purchase (whether through stock or asset purchase, merger or otherwise) or
construction) or improvement of the property subject thereto (whether real or
personal, including fixtures and other equipment), (B) the principal amount of
the Indebtedness secured by such Lien does not exceed 100% of such costs and
(C) such Lien does not extend to or cover any other property other than such
item of property and any improvements on or attachments to such item, (vi)
Liens existing on the Issue Date, (vii) Liens in favor of the Trustee under
this Indenture and any substantially equivalent Lien granted to any trustee or
similar institution under any indenture for Indebtedness permitted by the terms
of this Indenture, and (viii) any replacement, extension or renewal, in whole
or in part, of any Lien described in the foregoing clauses including in
connection with any Refinancing of the Indebtedness, in whole or in part,
secured by any such Lien; provided that to the extent any such clause limits
the amount secured or the assets subject to such Liens, no extension or renewal
shall increase the amount or the assets subject to such Liens, except to the
extent that the Liens
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associated with such additional assets are otherwise permitted hereunder.
SECTION 5.15. Limitation on Change of Control.
(a) Upon the occurrence of a Change of Control, each
Holder will have the right to require the repurchase of such Holder's
Securities pursuant to the offer described in paragraph (b) below (the "Change
of Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest to the date of repurchase. Prior to
the mailing of the notice of a Change of Control Offer provided for in
paragraph (b) below, within 30 days following any Change of Control the Company
shall either (a) repay in full and terminate all commitments under Indebtedness
under the Senior Credit Facilities to the extent the terms thereof require
repayment upon a Change of Control (or offer to repay in full and terminate all
commitments under all such Indebtedness under the Senior Credit Facilities and
repay the Indebtedness owed to each lender which has accepted such offer), or
(b) obtain the requisite consent under the Senior Credit Facilities, the terms
of which require repayment upon a Change of Control, to permit the repurchase
of the Securities as provided for in this Section 5.15. The Company shall
first comply with the covenant in the immediately preceding sentence before it
shall be required to repurchase Securities pursuant to this Section 5.15. The
Company's failure to comply with the covenants described in this paragraph
shall constitute an Event of Default under this Indenture.
(b) Within 30 days following the date upon which the
Change of Control occurred (the "Change of Control Date"), the Company must
send, by first class mail, a notice to each Holder of Securities, with a copy
to the Trustee, which notice shall govern the terms of the Change of Control
Offer. The notice to the Holders shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Change of
Control Offer. The Company shall give notice of an event giving rise to a
Change of Control on the same date and in the same manner to all Holders of
Securities. Such notice shall state:
(1) that the Change of Control Offer is being made
pursuant to this Section 5.15 and that all Securities tendered will be
accepted for payment;
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier than 30
days nor later than 40 days from the date such notice
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is mailed, other than as may be required by law) (the "Change of
Control Payment Date");
(3) that any Security not tendered will continue to accrue
interest if interest is then accruing;
(4) that, unless (i) the Company defaults in making
payment therefor or (ii) such payment is prohibited pursuant to
Article Four, any Security accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have a Security purchased
pursuant to the Change of Control Offer will be required to surrender
the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the Business Day prior to the Change of Control Payment
Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than two Business
Days prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(7) that Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portions of the Securities surrendered; provided that each
Security purchased and each Security issued shall be in an original
principal amount of $1,000 or integral multiples thereof; provided,
however, that if no Securities other than PIK Securities in
denominations of less than $1,000 (or if greater than $1,000, not in
integral multiples of $1,000) remain outstanding or have not been
called for redemption, such PIK Securities may be purchased;
(8) that each Change of Control Offer is required to
remain open for at least 20 Business Days and until 12:00 Midnight New
York City time on the applicable Change of Control Payment Date; and
(9) the circumstances and relevant facts regarding such
Change of Control.
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On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Securities or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price of all Securities so tendered and
(iii) deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price (and the Trustee
shall promptly authenticate and mail to such Holders new Securities equal in
principal amount to any unpurchased portion of the Securities surrendered)
unless such payment is prohibited pursuant to Article Four or otherwise. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date. For purposes
of this Section 5.15, the Trustee shall act as the Paying Agent.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with the
provisions under this Section 5.15, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 5.15 by virtue thereof.
SECTION 5.16. Offer to Repurchase Securities with
Net Cash Proceeds of Certain Asset Sales.
The Company will not, and will not permit any of its Subsidiaries
to, make any Asset Sale, unless (a) the Company or the applicable
Subsidiary receives consideration at the time of such Asset Sale at least equal
to the fair market value of the assets sold, (b) at least 85% of the
consideration received therefor by the Company or the applicable Subsidiary is
in the form of cash or Cash Equivalents; provided that the Company or the
applicable Subsidiary will not be required to comply with this clause (b) with
respect to a Permitted Asset Swap or a Houston Disposition and (c) upon
consummation of an Asset Sale, the Company will within 270 days of the receipt
of the proceeds therefrom, either: (i) apply or cause its Subsidiary to apply
the Net Cash Proceeds of any Asset Sale to a Related Business Investment; (ii)
apply or cause to be applied such Net Cash Proceeds (A) to the permanent
repayment of Senior Indebtedness or
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Guarantor Senior Indebtedness or (B) in the case of an Asset Sale by a
Subsidiary of the Company, to the permanent repayment of Indebtedness of such
Subsidiary; provided, however, that the repayment of any revolving loan (under
the Senior Credit Facilities or otherwise) shall result in a permanent
reduction in the commitment thereunder; or (iii) after such time as the
accumulated Net Cash Proceeds for asset sales equals or exceeds $10,000,000,
apply or cause to be applied such Net Cash Proceeds in excess of $5,000,000 to
the purchase of Securities tendered to the Company for purchase at a price
equal to 100% of the principal amount thereof plus accrued interest thereon to
the date of purchase pursuant to an offer to purchase made by the Company as
set forth below (a "Net Proceeds Offer"). Notwithstanding the foregoing, the
Company shall not be required to comply with this Section 5.16 with respect to
a Denver Disposition other than clause (a) of the immediately preceding
sentence if any securities received by the Company as consideration for such
Denver Disposition (including the related cash flow) shall be pledged to secure
the Obligations of the Company under the Senior Credit Facilities.
If the Company is required to make a Net Proceeds Offer
pursuant to the preceding paragraph, notice of such Net Proceeds Offer pursuant
to this Section 5.16 will be mailed to record Holders of Securities as shown on
the register of Holders not more than 270 days after the relevant Asset Sale,
with a copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to
Section 5.16 and that all Securities tendered will be accepted for
payment; provided, however, that if the aggregate principal amount of
Securities tendered in a Net Proceeds Offer plus accrued interest at
the expiration of such offer exceeds the aggregate amount of the Net
Proceeds Offer, the Company shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of
$1,000 or multiples thereof shall be purchased; provided that if no
Securities other than PIK Securities in denominations of less than
$1,000 (or if greater than $1,000, not in integral multiples of
$1,000) remain outstanding or have not been called for redemption,
such PIK Securities may be purchased);
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier
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than 30 days nor later than 40 days from the date such notice is
mailed, other than as may be required by law) (the "Proceeds Purchase
Date");
(3) that any Security not tendered will continue to
accrue interest if interest is then accruing;
(4) that, unless (i) the Company defaults in making
payment therefor or (ii) such payment is prohibited pursuant to
Article Four or otherwise, any Security accepted for payment pursuant
to the Net Proceeds Offer shall cease to accrue interest after the
Proceeds Purchase Date;
(5) that Holders electing to have a Security purchased
pursuant to a Net Proceeds Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
Business Day prior to the Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than two Business
Days prior to the Proceeds Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Securities the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have
such Security purchased; and
(7) that Holders whose Securities were purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; provided that each
Security purchased and each new Security issued shall be in an
original principal amount of $1,000 or integral multiples thereof;
provided, however, that if no Securities other than PIK Securities in
denominations of less than $1,000 (or if greater than $1,000, not in
integral multiples of $1,000) remain outstanding or have not been
called for redemption, such PIK Securities may be purchased.
On or before the Proceeds Purchase Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the Net
Proceeds Offer which are to be purchased in accordance with item (b)(1) above,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price of all Securities to be purchased and (iii) deliver to the
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Trustee Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in
an amount equal to the purchase price (and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security equal in
principal amount to any unpurchased portion of the Security surrendered) unless
such payment is prohibited pursuant to Article Four hereof or otherwise. The
Company will publicly announce the results of the Net Proceeds Offer on or as
soon as practicable after the Proceeds Purchase Date. For purposes of this
Section 5.16, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities
pursuant to a Net Proceeds Offer shall be returned by the Trustee to the
Company.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
purchase of Securities pursuant to a Net Proceeds Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 5.16, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 5.16 by virtue thereof.
SECTION 5.17. Guarantees of Certain Indebtedness.
The Company will not permit any of its domestic Subsidiaries
(other than the Subsidiary Guarantors initially signatory to this Indenture) to
(a) incur, guarantee or secure through the granting of Liens the payment of any
Indebtedness under the Senior Credit Facilities or Refinancings thereof or (b)
pledge any intercompany notes representing obligations of any of its
Subsidiaries to secure the payment of any Indebtedness under the Senior Credit
Facilities or Refinancings thereof, in each case unless such Subsidiary, the
Company and the Trustee execute and deliver a supplemental indenture evidencing
such Subsidiary's Guarantee hereunder. Thereafter, such Subsidiary shall be a
Subsidiary Guarantor for all purposes of this Indenture.
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SECTION 5.18. Limitation on Preferred Stock of Subsidiaries.
The Company will not permit any of its Subsidiaries to issue
Preferred Stock (other than to the Company or to a wholly-owned Subsidiary of
the Company) or permit any Person (other than the Company or a wholly-owned
Subsidiary of the Company) to own any Preferred Stock of any Subsidiary of the
Company.
SECTION 5.19. Limitation on Other Senior Subordinated Indebtedness.
Neither the Company nor any Subsidiary Guarantor will,
directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness) that is subordinate in right of payment to any Indebtedness of
the Company or such Subsidiary Guarantor, as the case may be, unless such
Indebtedness is either (a) pari passu in right of payment with the Securities
or the Guarantee of such Subsidiary Guarantor, as the case may be, or (b)
subordinate in right of payment to the Securities or the Guarantee of such
Subsidiary Guarantor, as the case may be, in the same manner and at least to
the same extent as the Securities are subordinate to Senior Indebtedness or as
such Guarantee is subordinated to Guarantor Senior Indebtedness of such
Subsidiary Guarantor, as the case may be.
SECTION 5.20. Offer to Repurchase Securities with Net Cash Proceeds of
Certain Issuances of Debt and Equity Securities.
If no amounts are outstanding under the Senior Credit
Facilities and the Company issues any debt or equity securities in compliance
with the terms of this Indenture for gross proceeds in excess of $10,000,000,
then the Company shall use the net cash proceeds (after deducting reasonable
and customary commissions and expenses) to make an offer to purchase Securities
at a purchase price equal to 100% of the principal amount thereof plus accrued
interest thereon to the date of purchase. The provisions relating to an offer
to purchase pursuant to this Section 5.20 shall be substantially similar to
those relating to a Net Proceeds Offer pursuant to Section 5.16, with
appropriate changes.
SECTION 5.21. Payments for Consent.
Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment
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of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes which so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE SIX
SUCCESSOR CORPORATION
SECTION 6.01. Limitations on Mergers and Certain Other Transactions.
(a) The Company shall not in a single transaction or
through a series of related transactions (i) consolidate with or merge with or
into any other Person, or transfer (by lease, assignment, sale or otherwise)
all or substantially all of its properties and assets as an entirety or
substantially as an entirety to another Person or group of affiliated Persons
or (ii) adopt a Plan of Liquidation, unless, in either case:
(1) either the Company shall be the continuing Person, or
the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or to which all or substantially all
of the properties and assets of the Company as an entirety or
substantially as an entirety are transferred (or, in the case of a
Plan of Liquidation, any Person to which assets are transferred) (the
Company or such other Person being hereinafter referred to as the
"Surviving Person") shall be a corporation organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia, and shall expressly assume, by an
indenture supplement, all the obligations of the Company under the
Securities and this Indenture;
(2) immediately after and giving effect to such
transaction and the assumption contemplated by clause (1) above and
the incurrence or anticipated incurrence of any Indebtedness to be
incurred in connection therewith, (A) the Surviving Person shall have
a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) the
Surviving Person could incur at least $1 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 5.12;
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(3) immediately before and immediately after and giving
effect to such transaction and the assumption of the obligations as
set forth in clause (1) above and the incurrence or anticipated
incurrence of any Indebtedness to be incurred in connection therewith,
no Default or Event of Default shall have occurred and be continuing;
and
(4) each Subsidiary Guarantor, unless it is the other
party to the transaction, shall have by supplemental indenture
confirmed that its Guarantee of the obligations of the Company under
the Securities and this Indenture shall apply, without alteration or
amendment as such Guarantee applies on the date it was granted under
this Indenture to the obligations of the Company under this Indenture
and the Securities to the obligations of the Company or such Person as
the case may be, under this Indenture and the Securities, after
consummation of such transaction.
(b) For purposes of the foregoing, the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one
or more direct or indirect Subsidiaries, the Capital Stock of which constitutes
all or substantially all of the properties and assets of the Company shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 6.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any transfer of assets in
accordance with Section 6.01, the successor Person formed by such consolidation
or into which the Company is merged or to which such transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; provided, however, that solely for
purposes of computing amounts described in subclause (c) of the first paragraph
of Section 5.03, any such successor Person shall only be deemed to have
succeeded to and be substituted for the Company with respect to periods
subsequent to the effective time of such merger, consolidation or transfer of
assets.
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ARTICLE SEVEN
DEFAULT AND REMEDIES
SECTION 7.01. Events of Default.
An "Event of Default" occurs if:
(i) the Company defaults in the payment of interest on
any Securities when the same becomes due and payable and the Default
continues for a period of 30 days, whether or not such payment shall
be prohibited by the provisions of Article Four;
(ii) the Company defaults in the payment of the principal
of, or premium, if any, on the Securities when due whether at
maturity, upon acceleration, redemption, required repurchase or
otherwise, whether or not such payment shall be prohibited by the
provisions of Article Four;
(iii) the Company fails to comply with any of its
agreements contained in the Securities or this Indenture (other than a
default specified in clause (i) or (ii) above), if such failure
continues for the period and after the notice specified below;
(iv) there shall be a default under any Indebtedness of
the Company or any of its Subsidiaries, whether such Indebtedness now
exists or shall hereafter be created, if both (A) such default either
(1) results from the failure to pay any such Indebtedness at its
stated final maturity or (2) relates to an obligation other than the
obligation to pay such Indebtedness at its stated final maturity and
results in the holder or holders of such Indebtedness causing such
Indebtedness to become due prior to its stated final maturity and (B)
the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay
principal at stated final maturity or the maturity of which has been
so accelerated, aggregates $10,000,000 or more at any one time
outstanding;
(v) one or more judgments, orders or decrees of any court
or regulatory or administrative agency of competent jurisdiction for
the payment of money in excess of $10,000,000 (to the extent not
covered by third-party insurance as to which the insurance company has
acknowledged coverage), either individually or in the aggregate, shall
be entered against the Company or any Subsidiary of the Company
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or any of their respective properties and shall not be discharged and
there shall have been a period of 60 days after the date on which any
period for appeal has expired and during which a stay of enforcement
of such judgment, order or decree shall not be in effect;
(vi) either the Company or any Material Subsidiary
pursuant to or within the meaning of any Bankruptcy Law: (a)
commences a voluntary case or proceeding; (b) consents to the entry of
a Bankruptcy Order for relief against it in an involuntary case or
proceeding or the commencement of any case or proceeding against it;
(c) consents to the appointment of a custodian of it or for
substantially all of its property; or (d) makes a general assignment
for the benefit of its creditors;
(vii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (a) is for relief against the
Company or any Material Subsidiary, in an involuntary case or
proceeding; (b) appoints a custodian of the Company or any Material
Subsidiary, or for all or any substantial part of their respective
properties; or (c) orders the liquidation of the Company or any
Material Subsidiary and in each case the order or decree remains
unstayed and in effect for 60 days;
(viii) the lenders under the Senior Credit Facilities shall
commence judicial proceedings to foreclose upon any material portion of
the assets of the Company and its Subsidiaries or shall have exercised any
right under applicable law or applicable security documents to take
ownership of a material portion of such assets in lieu of foreclosure; or
(ix) any of the Guarantees shall be declared or adjudged
invalid in a final judgment or order issued by any court or
governmental authority.
A Default under clause (iii) above (other than in the case of
any Default under Section 5.03, 5.15, 5.16 or 6.01, which Defaults shall be
Events of Default with the notice specified in this paragraph but without the
passage of time specified in this paragraph) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company and the Trustee, of the
Default, and the Company does not cure the Default within 30 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a
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"Notice of Default." Such notice shall be given by the Trustee if so requested
by the Holders of at least 25% in principal amount of the Securities then
outstanding. When a Default is cured, it ceases.
SECTION 7.02. Acceleration.
(a) If an Event of Default (other than an Event of
Default specified in Section 7.01(vi) or (vii) with respect to the Company or a
Subsidiary Guarantor) occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Securities may, and
the Trustee upon the request of the Holders of not less than 25% in aggregate
principal amount of the then outstanding Securities shall, declare due and
payable all unpaid principal and interest accrued and unpaid on the then
outstanding Securities by written notice to the Company and the Trustee
specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), and the same (i) shall become
immediately due and payable or (ii) if there are any amounts outstanding under
the Senior Credit Facilities, shall become due and payable upon the first to
occur of an acceleration under the Senior Credit Facilities, or five business
days after receipt by the Company and the Credit Agent of such Acceleration
Notice. If an Event of Default specified in Section 7.01(vi) or (vii) occurs
with respect to the Company or a Subsidiary Guarantor, all unpaid principal of
and accrued interest on all then outstanding Securities shall be immediately
due and payable without any declaration or other act on the part of the Trustee
or any of the Holders. Upon payment of such principal amount, interest, and
premium, if any, all of the Company's and the Subsidiary Guarantor's
obligations under the Securities and this Indenture, other than obligations
under Section 8.07, shall terminate. After a declaration of acceleration, the
Holders of a majority in principal amount of the Securities then outstanding,
by notice to the Trustee, may rescind an acceleration and its consequences if
(i) all existing Events of Default, other than the non-payment of the principal
of the Securities which has become due solely by such declaration of
acceleration, have been cured or waived, (ii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iii) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction, (iv) the Company has
paid or deposited with the Trustee a sum sufficient to pay all sums paid or
advanced by the Trustee under this Indenture and the compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and (v) in
the event of the cure or waiver of an Event of Default
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of the type described in clauses (vi), (vii), (viii), or (ix) of Section 7.01,
the Trustee shall have received an Officer's Certificate and an Opinion of
Counsel that such Event of Default has been cured or waived.
(b) In the event of a declaration of acceleration under
this Indenture because an Event of Default set forth in Section 7.01(iv) has
occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if either (i) the holders of the
Indebtedness which is the subject of such Event of Default have waived such
failure to pay at maturity or have rescinded the acceleration in respect of
such Indebtedness within 90 days of such maturity or declaration of
acceleration, as the case may be, and no other Event of Default has occurred
during such 90-day period which has not been cured or waived, or (ii) such
Indebtedness shall have been discharged or the maturity thereof shall have been
extended such that it is not then due and payable, or the underlying default
has been cured, within 90 days of such maturity or declaration of acceleration,
as the case may be.
SECTION 7.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
SECTION 7.04. Waiver of Past Defaults.
Subject to Sections 7.07 and 10.02, the Holders of a majority
in principal amount of the outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Security as
specified in clauses (i) and (ii) of Section 7.01. When a Default or Event of
Default is waived, it is cured and ceases.
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SECTION 7.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it, including, without limitation,
any remedies provided for in Section 7.03. Subject to Section 8.01, however,
the Trustee may refuse to follow any direction that conflicts with any law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Securityholder, or that may involve the Trustee in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 7.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holder or Holders of at least 25% in principal
amount of the outstanding Securities make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to
be incurred in compliance with such request;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holder or Holders of a
majority in principal amount of the outstanding Securities do not give
the Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
such other Securityholder.
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SECTION 7.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and interest on a
Security, on or after the respective due dates expressed in such Security, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Holder.
SECTION 7.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in clause (i) or (ii) of Section 7.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Securities for the whole amount
of principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum borne by the Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 7.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relating to the Company or
any other obligor upon the Securities, any of their respective creditors or any
of their respective property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same, and any Custodian in any such judicial proceedings
is hereby authorized by each Securityholder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Securityholders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 8.07. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting
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the Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 7.10. Priorities.
If the Trustee collects any money pursuant to this Article
Seven, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 8.07;
Second: subject to Article Four and Article Twelve, to
Holders for interest accrued on the Securities, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for interest;
Third: subject to Article Four and Article Twelve, to Holders
for principal amounts due and unpaid on the Securities, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Securities for principal; and
Fourth: subject to Article Four and Article Twelve, to the
Company or the Subsidiary Guarantors, as their respective interests
may appear.
The Trustee, upon prior notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to
this Section 7.10.
SECTION 7.11. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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SECTION 7.12. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article Seven or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 7.13. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 7.13 does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 7.07, or a suit by a Holder or Holders of more
than 10% in principal amount of the outstanding Securities.
ARTICLE EIGHT
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
SECTION 8.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and
is continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture and use the same degree of care and skill in its
exercise thereof as a prudent Person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default or an
Event of Default:
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(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to the
Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 8.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.05.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 8.01.
(f) The Trustee shall not be liable for interest on any
assets received by it except as the Trustee may agree with the Company. Assets
held in trust by the Trustee need not be segregated from other assets except to
the extent required by law.
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SECTION 8.02. Rights of Trustee.
Subject to Section 8.01:
(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it
may consult with counsel and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 13.04 and
13.05. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or
opinion.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Trustee shall not be liable for any action that
it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, notice, request,
direction, consent, order, bond, debenture, or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders pursuant to the
provisions of this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
SECTION 8.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However,
the Trustee must comply with Sections 8.10 and 8.11.
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SECTION 8.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 8.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Holder of
Securities notice of the Default or Event of Default within 90 days after such
Default or Event of Default occurs; provided, however, that, except in the case
of a Default or Event of Default in the payment of the principal of or interest
on any Security, including the failure to make payment on a Change of Control
Payment Date pursuant to a Change of Control Offer or payment when due pursuant
to a Net Proceeds Offer the Trustee may withhold such notice if it in good
faith determines that withholding such notice is in the interest of the
Holders.
SECTION 8.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Securityholder a brief report
dated as of such that complies with TIA Section 313(a). The Trustee
also shall comply with TIA Section Section 313(b) and 313(c).
A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with the Commission
and each stock exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become
listed on any stock exchange.
SECTION 8.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses
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and advances incurred or made by it. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability incurred by it except for such actions
to the extent caused by any negligence or bad faith on its part, arising out of
or in connection with the administration of this trust and its rights or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel; provided that the Company will not be required to pay such fees
and expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse
any expense or indemnify against any loss or liability to the extent incurred
by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section
8.07, the Trustee shall have a lien prior to the Securities on all assets held
or collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 7.01(vi) or (vii) occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 8.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the outstanding Securities may
remove the Trustee and appoint a successor trustee with the Company's consent,
by so notifying the Company and the Trustee. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
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(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall notify each Holder of
such event and shall promptly appoint a successor Trustee. Within one year
after the successor Trustee takes office, the Holders of a majority in
principal amount of the Securities may appoint a successor Trustee to replace
the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided in Section 8.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Securityholder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 8.08, the Company's obligations under Section 8.07 shall continue for
the benefit of the retiring Trustee.
SECTION 8.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
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SECTION 8.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Section Section 310(a)(1) and 310(a)(5). The Trustee shall
have a combined capital and surplus of at least $100,000,000 as set forth
in its most recent published annual report of condition. The Trustee shall
comply with TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 8.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 9.01. Termination of the Obligations of
the Company and the Subsidiary Guarantors.
The Company may terminate its obligations under the Securities
and this Indenture, and the obligations of any Subsidiary Guarantor shall
terminate, except those obligations referred to in the penultimate paragraph of
this Section 9.01, if all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been replaced or
paid or Securities for whose payment money has theretofore been deposited with
the Trustee or the Paying Agent in trust or segregated and held in trust by the
Company and thereafter repaid to the Company, as provided in Section 9.04)
have been delivered to the Trustee for cancellation and the Company has paid
all sums payable by it hereunder, or if:
(1) either (i) pursuant to Article Three, the Company
shall have given notice to the Trustee and mailed a notice of
redemption to each Holder of the redemption of all of the Securities
under arrangements satisfactory to the Trustee for the giving of such
notice or (ii) all Securities have otherwise become due and payable
hereunder;
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(2) the Company shall have irrevocably deposited or
caused to be deposited with the Trustee or a trustee satisfactory to
the Trustee, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Holders for that purpose, money in such
amount as is sufficient without consideration of reinvestment of such
interest, to pay principal of, premium, if any, and interest on the
outstanding Securities to maturity or redemption; provided that the
Trustee shall have been irrevocably instructed to apply such money to
the payment of said principal, premium, if any, and interest with
respect to the Securities; and provided, further, that from and after
the time of deposit, the money deposited shall not be subject to the
rights of holders of Senior Indebtedness pursuant to the provisions of
Article Four and Article Twelve;
(3) no Default or Event of Default with respect to this
Indenture or the Securities shall have occurred and be continuing on
the date of such deposit or shall occur as a result of such deposit
and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company
is a party or by which it is bound;
(4) the Company shall have paid all other sums payable by
it thereunder; and
(5) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent providing for the termination of the Company's
and any Subsidiary Guarantor's obligation under the Securities and
this Indenture have been complied with. Such Opinion of Counsel shall
also state that such satisfaction and discharge does not result in a
default under the Senior Credit Facilities (if then in effect) or any
other agreement or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.05, 2.06, 2.07, 2.08, 5.01, 5.02 and 8.07 and any
Subsidiary Guarantor's obligations in respect thereof shall survive until the
Securities are no longer outstanding pursuant to the last paragraph of Section
2.08. After the Securities are no longer outstanding, the Company's
obligations in Sections 8.07, 9.04 and 9.05 and any Subsidiary Guarantor's
obligations in respect thereof shall survive.
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After such delivery or irrevocable deposit the Trustee upon
request shall acknowledge in writing the discharge of the Company's and any
Subsidiary Guarantor's obligations under the Securities and this Indenture
except for those surviving obligations specified above.
SECTION 9.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of
the Board of Directors of the Company, at any time, with respect to the
Securities, elect to have either paragraph (b) or paragraph (c) below be
applied to the outstanding Securities upon compliance with the conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of
the option applicable to this paragraph (b), the Company and any Subsidiary
Guarantor shall be deemed to have been released and discharged from its
obligations with respect to the outstanding Securities on the date the
conditions set forth below are satisfied (hereinafter, "legal defeasance").
For this purpose, such legal defeasance means that the Company shall be deemed
to have paid and discharged the entire indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of paragraph (e) below and the other Sections of and
matters under this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), and
Holders of the Securities and the Guarantees and any amounts deposited under
paragraph (d) below shall cease to be subject to any obligations to, or the
rights of, any holder of Senior Indebtedness or Guarantor Senior Indebtedness
under Article Four, Article Twelve or otherwise, except for the following
which shall survive until otherwise terminated or discharged hereunder: (i)
the rights of Holders of outstanding Securities to receive solely from the
trust fund described in paragraph (d) below and as more fully set forth in such
paragraph, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (ii) the Company's
obligations with respect to such Securities under Sections 2.06, 2.07 and 5.02,
and, with respect to the Trustee, under Section 8.07 and any Subsidiary
Guarantor's obligations in respect thereof, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (iv) this Section 9.02 and
Section 9.05. Subject to compliance with this Section 9.02, the Company may
exercise its option under this paragraph (b) notwithstanding the prior
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exercise of its option under paragraph (c) below with respect to the
Securities.
(c) Upon the Company's exercise under paragraph (a) of
the option applicable to this paragraph (c), the Company shall be released and
discharged from its obligations under any covenant contained in Article Four
and Article Six and in Sections 5.03, 5.05 through 5.09 and 5.11 through 5.19
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "covenant defeasance"), and the
Securities shall thereafter be deemed to be not "outstanding" for the purpose
of any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder and
Holders of the Securities and the Guarantees and any amounts deposited under
paragraph (d) below shall cease to be subject to any obligations to, or the
rights of, any holder of Senior Indebtedness or Guarantor Senior Indebtedness
under Article Four, Article Twelve or otherwise. For this purpose, such
covenant defeasance means that, with respect to the outstanding Securities, the
Company and any Subsidiary Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
7.01(iii), but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application
of either paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 8.10 who shall agree to comply with the
provisions of this Section 9.02 applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (x) money in an amount or (y) direct
non-callable obligations of, or non-callable obligations guaranteed
by, the United States of America for the payment of which guarantee or
obligation the full faith and credit of the United States is pledged
("U.S. Government Obligations")
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maturing as to principal, premium, if any, and interest in such
amounts of money and at such times as are sufficient without
consideration of any reinvestment of such interest, to pay principal
of and interest on the outstanding Securities not later than one day
before the due date of any payment, or (z) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge principal of, premium, if any, and interest on the
outstanding Securities on the Maturity Date or otherwise in accordance
with the terms of this Indenture and of such Securities; provided,
however, that the Trustee (or other qualifying trustee) shall have
received an irrevocable written order from the Company instructing the
Trustee (or other qualifying trustee) to apply such money or the
proceeds of such U.S. Government Obligations to said payments with
respect to the Securities;
(ii) no Default or Event of Default or event which with
notice or lapse of time or both would become a Default or an Event of
Default with respect to the Securities shall have occurred and be
continuing on the date of such deposit or, insofar as Section 7.01(vi)
or (vii) is concerned, at any time during the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period);
(iii) such legal defeasance or covenant defeasance shall
not cause the Trustee to have a conflicting interest with respect to
any Securities of the Company or any Subsidiary Guarantor;
(iv) such legal defeasance or covenant defeasance shall
not result in a breach or violation of, or constitute a Default or
Event of Default under, this Indenture or any other material agreement
or instrument to which the Company or any Subsidiary Guarantor is a
party or by which it is bound (and in that connection, the Trustee
shall have received a certificate from the Credit Agent to that effect
with respect to such Senior Credit Facilities if then in effect);
(v) in the case of an election under paragraph (b) above,
the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received
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from, or there has been published by, the Internal Revenue Service a
ruling or (y) since the Closing Date, there has been a change in the
applicable Federal income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or loss for
Federal income tax purposes as a result of such legal defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred;
(vi) in the case of an election under paragraph (c) above,
the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred;
(vii) in the case of an election under either paragraph (b)
or (c) above, an Opinion of Counsel to the effect that (x) the trust
funds will not be subject to any rights of any other holders of Senior
Indebtedness or Guarantor Senior Indebtedness, including, without
limitation, those arising under this Indenture, and (y) assuming no
intervening bankruptcy or insolvency of the Company between the date
of deposit and the 91st day following the deposit and that no Holder
is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law;
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the legal
defeasance under paragraph (b) above or the covenant defeasance under
paragraph (c) above, as the case may be, have been complied with; and
(ix) the Company shall have delivered to the Trustee an
Officer's Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of the Securities
over other creditors of the Company or any Subsidiary Guarantor or
with the intent of defeating, hindering, delaying or defrauding
creditors of the Company, any Subsidiary Guarantor or others.
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(e) All money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (other than the Company or any Affiliate of the Company) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to paragraph (d) above or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Section 9.02 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request, in writing, by the Company any money or U.S. Government Obligations
held by it as provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent legal defeasance or covenant defeasance.
SECTION 9.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Sections 9.01 and 9.02, and shall
apply the deposited money and the money from U.S. Government Obligations in
accordance with this Indenture to the payment of principal of, premium, if any,
and interest on the Securities.
SECTION 9.04. Repayment to the Company or the Subsidiary Guarantors.
Subject to Sections 8.07, 9.01 and 9.02, the Trustee shall
promptly pay to the Company, or if deposited with the Trustee by any Subsidiary
Guarantor, to such Subsidiary Guarantor,
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upon receipt by the Trustee of an Officers' Certificate, any excess money,
determined in accordance with Section 9.02, held by it at any time. The
Trustee and the Paying Agent shall pay to the Company or any Subsidiary
Guarantor, as the case may be, upon receipt by the Trustee or the Paying Agent,
as the case may be, of an Officers' Certificate, any money held by it for the
payment of principal, premium, if any, or interest that remains unclaimed for
two years after payment to the Holders is required; provided, however, that the
Trustee and the Paying Agent before being required to make any payment may, but
need not, at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after
a date specified therein, which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company or a Subsidiary Guarantor. After payment to the
Company or any Subsidiary Guarantor, as the case may be, Securityholders
entitled to money must look solely to the Company for payment as general
creditors unless an applicable abandoned property law designates another
Person, and all liability of the Trustee or Paying Agent with respect to such
money shall thereupon cease.
SECTION 9.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with this Indenture by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then and only then the Company's and each Subsidiary Guarantor's,
if any, obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had been made pursuant to this Indenture
until such time as the Trustee is permitted to apply all such money or U.S.
Government Obligations in accordance with this Indenture; provided, however,
that if the Company or the Subsidiary Guarantors, as the case may be, have made
any payment of principal of, premium, if any, or interest on any Securities
because of the reinstatement of its obligations, the Company or the Subsidiary
Guarantors, as the case may be, shall be subrogated to the rights of the
holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
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ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Subsidiary Guarantors, when authorized by
a Board Resolution, and the Trustee, together, may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
provided that such amendment or supplement does not adversely affect
the rights of any Holder;
(2) to comply with Article Six and Section 11.06;
(3) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(4) to make any other change that does not adversely
affect the rights of any Securityholder; or
(5) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 7.07, the Company and each Subsidiary
Guarantor, when authorized by a Board Resolution, and the Trustee, together
with the written consent of the Holder or Holders of at least a majority in
aggregate principal amount of the outstanding Securities, may amend or
supplement, or waive compliance with any provision of, this Indenture, the
Securities or any Guarantee without notice to any other Securityholders.
Without the consent of each Securityholder affected, however, no amendment,
supplement or waiver, including a waiver pursuant to Section 7.04, may:
(1) change the principal amount of Securities whose
Holders must consent to an amendment, supplement or waiver of any
provision of this Indenture, the Securities or the Guarantees;
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(2) reduce the rate or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of any Security;
(4) change the Maturity Date of any Security or the
Change of Control Payment Date, or alter the redemption provisions in
this Indenture or the Securities or the purchase price in connection
with any repurchase of Securities pursuant to Section 5.15 in a manner
adverse to any Holder;
(5) make any changes in the provisions concerning waivers
of Defaults or Events of Default by Holders of the Securities or the
rights of Holders to recover the principal of, interest on, or
redemption payment with respect to, any Security;
(6) make any changes in Section 7.04, 7.07 or this
Section 10.02;
(7) make the principal of, or the interest on any
Security payable with anything or in any manner other than as provided
for in this Indenture, the Securities and the Guarantees as in effect
on the date hereof;
(8) waive a Default or Event of Default resulting from
failure to comply with the provisions of Section 5.15; or
(9) modify the subordination provisions of this Indenture
(including the related definitions) so as to adversely affect the
ranking of any Security or Guarantee.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
In connection with any amendment, supplement or waiver under
this Article Ten, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment,
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supplement or waiver, or to all Holders, consideration for such Holder's
consent to such amendment, supplement or waiver. No amendment, supplement or
waiver under this Section 10.02 shall have a material adverse effect on the
rights of the holders of Senior Indebtedness or Guarantor Senior Indebtedness
without their prior written consent.
SECTION 10.03. Compliance with TIA.
From the date on which the Indenture is qualified under the
TIA, every amendment, waiver or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by such Holder and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
is not made on any Security. However, any such Holder or subsequent Holder
may revoke the consent as to his or her Security or portion of his or her
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver, which record date shall be at least 10 days
prior to the first solicitation of such consent. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (9) of Section 10.02, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security;
provided that any such waiver shall not impair or affect the right of any
Holder to receive payment of principal of and interest on a
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Security, on or after the respective due dates expressed in such Security, or
to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
SECTION 10.06. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Ten; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees (such guarantee to be referred to herein as the
"Guarantee"), subject to Article Twelve, to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (i) the principal of and interest on the
Securities will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise and interest on
the overdue principal, if any, and interest on any interest, to the extent
lawful, of the Securities and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (ii) in
case of any extension of
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time of payment or renewal of any Securities or of any such other obligations,
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or otherwise, subject, however, in
the case of clauses (i) and (ii) above, to the limitations set forth in Section
11.05. Each Subsidiary Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice (except any notice expressly required by this
Indenture) and all demands whatsoever and covenants that this Guarantee will
not be discharged except by complete performance of the obligations contained
in the Securities, this Indenture and in this Guarantee. If any Securityholder
or the Trustee is required by any court or otherwise to return to the Company,
any Subsidiary Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or any Subsidiary Guarantor,
any amount paid by the Company or any Subsidiary Guarantor to the Trustee or
such Securityholder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Subsidiary Guarantor
further agrees that, as between each Subsidiary Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Seven
for the purposes of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Seven, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Subsidiary Guarantor for the
purpose of this Guarantee.
SECTION 11.02. Subordination of Guarantee.
The obligations of each Subsidiary Guarantor to the Holders of
Securities and to the Trustee pursuant to the Guarantee of such Subsidiary
Guarantor and this Indenture are expressly subordinate and subject in right of
payment to the prior payment
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in full of all Guarantor Senior Indebtedness of such Subsidiary Guarantor, to
the extent and in the manner provided in Article Twelve.
SECTION 11.03. Severability.
In case any provision of this Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.04. Release of a Subsidiary Guarantor.
Upon (i) the release by the lenders under the Senior Credit
Facilities, related documents and future refinancings thereof of all guarantees
of a Subsidiary Guarantor and all Liens on the property and assets of such
Subsidiary Guarantor relating to such Indebtedness, or (ii) the sale or
disposition (whether by merger, stock purchase, asset sale or otherwise) of a
Subsidiary Guarantor (or all or substantially all its assets) to an entity
which is not a Subsidiary of the Company and which sale or disposition is
otherwise in compliance with the terms of this Indenture, such Subsidiary
Guarantor shall be deemed released from all obligations under this Article
Eleven without any further action required on the part of the Trustee or any
Holder; provided, however, that any such termination shall occur only to the
extent that all obligations of such Subsidiary Guarantor under all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, such Indebtedness of the Company shall also terminate
upon such release, sale or transfer.
The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 11.04.
Any Subsidiary Guarantor not so released remains liable for the full amount of
principal of and interest on the Securities as provided in this Article Eleven.
SECTION 11.05. Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and by its acceptance hereof each
Holder hereby confirms that it is the intention of all such parties that the
guarantee by such Subsidiary Guarantor pursuant to its Guarantee not constitute
a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Subsidiary Guarantor hereby
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irrevocably agree that the obligations of such Subsidiary Guarantor under the
Guarantee shall be limited to the maximum amount as will, after giving effect
to all other contingent and fixed liabilities of such Subsidiary Guarantor
(including, but not limited to, the Guarantor Senior Indebtedness of such
Subsidiary Guarantor) and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Guarantee or
pursuant to Section 11.07, result in the obligations of such Subsidiary
Guarantor under the Guarantee not constituting such fraudulent transfer or
conveyance.
SECTION 11.06. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary Guarantor
with or into the Company or another Subsidiary Guarantor or shall prevent any
sale or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety, to the Company or another Subsidiary Guarantor.
Upon any such consolidation, merger, sale or conveyance, the Guarantee given by
such Subsidiary Guarantor shall no longer have any force or effect.
(b) Except as set forth in Article Five and Article Six
hereof, nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into a
corporation or corporations other than the Company or another Subsidiary
Guarantor (whether or not affiliated with the Subsidiary Guarantor); provided,
however, that, subject to Sections 11.04 and 11.06(a), (i) immediately after
such transaction, and giving effect thereto, no Default or Event of Default
shall have occurred as a result of such transaction and be continuing, and (ii)
upon any such consolidation, merger, sale or conveyance, the Guarantee of such
Subsidiary Guarantor set forth in this Article Eleven, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by such Subsidiary Guarantor, shall be expressly
assumed (in the event that the Subsidiary Guarantor is not the surviving
corporation in the merger), by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee, by the corporation formed
by such consolidation, or into which the Subsidiary Guarantor shall have
merged, or by the corporation that shall have acquired such property. In the
case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor corporation, by supplemental indenture executed and
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delivered to the Trustee and satisfactory in form to the Trustee of the due and
punctual performance of all of the covenants and conditions of this Indenture
to be performed by the Subsidiary Guarantor, such successor corporation shall
succeed to and be substituted for the Subsidiary Guarantor with the same effect
as if it had been named herein as a Subsidiary Guarantor; provided, however,
that solely for purposes of computing amounts described in subclause (c) of the
first paragraph of Section 5.03, any such successor corporation shall only be
deemed to have succeeded to and be substituted for any Subsidiary Guarantor
with respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
SECTION 11.07. Contribution.
In order to provide for just and equitable contribution among
the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under its Guarantee, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by that Funding Subsidiary Guarantor in
discharging the Company's obligations with respect to the Securities.
"Adjusted Net Assets" of such Subsidiary Guarantor at any date shall mean the
lesser of (x) the amount by which the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including,
without limitation, contingent liabilities (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date (other than
liabilities of such Subsidiary Guarantor under Subordinated Indebtedness)), but
excluding liabilities under the Guarantee, of such Subsidiary Guarantor at such
date and (y) the amount by which the present fair salable value of the assets
of such Subsidiary Guarantor at such date exceeds the amount that will be
required to pay the probable liabilities of such Subsidiary Guarantor on its
debts including without limitation, Guarantor Senior Indebtedness (after giving
effect to all other fixed and contingent liabilities incurred or assumed on
such date and after giving effect to any collection from any Subsidiary of such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Guarantee), excluding debt in respect of the Guarantee of such Subsidiary
Guarantor, as they become absolute and matured.
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SECTION 11.08. Waiver of Subrogation.
Each Subsidiary Guarantor hereby irrevocably waives any claim
or other rights which it may now or hereafter acquire against the Company that
arise from the existence, payment, performance or enforcement of such
Subsidiary Guarantor's obligations under its Guarantee and this Indenture,
including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Holder of Securities against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Subsidiary Guarantor in violation of the
preceding sentence and the Securities shall not have been paid in full, such
amount shall be deemed to have been paid to such Subsidiary Guarantor for the
benefit of, and held in trust for the benefit of, the Holders of the
Securities, and shall, subject to the provisions of Section 11.02, Article Four
and Article Twelve, forthwith be paid to the Trustee for the benefit of such
Holders to be credited and applied upon the Securities, whether matured or
unmatured, in accordance with the terms of this Indenture. Each Subsidiary
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the waiver
set forth in this Section 11.08 is knowingly made in contemplation of such
benefits.
SECTION 11.09. Execution of Guarantee.
To evidence their guarantee to the Securityholders set forth
in this Article Eleven, the Subsidiary Guarantors hereby agree to execute the
Guarantee in substantially the form included in Exhibit A, which shall be
endorsed on each Security ordered to be authenticated and delivered by the
Trustee. Each Subsidiary Guarantor hereby agrees that its Guarantee set forth
in this Article Eleven shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of such Guarantee. Each
such Guarantee shall be signed on behalf of each Subsidiary Guarantor by two
Officers, or an Officer and an Assistant Secretary or one Officer shall sign
and one Officer or an Assistant Secretary (each of whom shall, in each case,
have been duly authorized by all requisite corporate actions) shall attest to
such Guarantee prior to the authentication of the Security on which it is
endorsed, and the delivery of such Security by the Trustee, after the
authentication thereof
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hereunder, shall constitute due delivery of such Guarantee on behalf of such
Subsidiary Guarantor. Such signatures upon the Guarantee may be by manual or
facsimile signature of such Officers and may be imprinted or otherwise
reproduced on the Guarantee, and in case any such Officer who shall have signed
the Guarantee shall cease to be such Officer before the Security on which such
Guarantee is endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
Guarantee had not ceased to be such Officer of the Subsidiary Guarantor.
SECTION 11.10. Waiver of Stay, Extension or Usury Laws.
Each Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive each
such Subsidiary Guarantor from performing its Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Indenture; and (to the extent that it
may lawfully do so) each Subsidiary Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01. Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness.
Anything herein to the contrary notwithstanding, each of the
Guarantors, for itself and its successors, and each Holder, by his acceptance
of Guarantees, agrees that any payment of obligations by a Subsidiary Guarantor
in respect of its Guarantee (collectively, as to any Subsidiary Guarantor, its
"Guarantee Obligations") is subordinated, to the extent and in the manner
provided in this Article Twelve, to the prior payment in full in cash or Cash
Equivalents of all Guarantor Senior Indebtedness of such Subsidiary Guarantor.
<PAGE> 103
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This Article Twelve shall constitute a continuing offer to all
Persons who become holders of, or continue to hold, Guarantor Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Guarantor Senior Indebtedness and such holders are made obligees hereunder and
any one or more of them may enforce such provisions.
SECTION 12.02. Suspension of Guarantee Obligations When
Guarantor Senior Indebtedness in Default.
(a) Unless Section 12.03 shall be applicable, upon (1)
the occurrence of a Payment Default with respect to any Designated Senior
Indebtedness of a Subsidiary Guarantor (which Designated Senior Indebtedness
constitutes Guarantor Senior Indebtedness of such Subsidiary Guarantor) and (2)
receipt by the Trustee, the Company and such Subsidiary Guarantor from a
Representative of written notice of such occurrence, then no payment (other
than payments previously made pursuant to Article Nine hereof) or distribution
of any assets of such Subsidiary Guarantor of any kind or character shall be
made by such Subsidiary Guarantor on account of any Obligations under the
Securities or on account of the purchase, redemption or other acquisition of
Securities or any of the obligations of such Subsidiary Guarantor under this
Guarantee unless and until such Payment Default shall have been cured or waived
or shall have ceased to exist or such Guarantor Senior Indebtedness shall have
been discharged or paid in full in cash or Cash Equivalents, after which such
Subsidiary Guarantor shall resume making any and all required payments in
respect of its obligations under this Guarantee.
(b) Unless Section 12.03 shall be applicable upon (1) the
occurrence of a Non-payment Default with respect to any Designated Senior
Indebtedness of a Subsidiary Guarantor and (2) the earlier of (i) receipt by
the Trustee, the Company and such Subsidiary Guarantor from a Representative of
written notice of such occurrence stating that such notice is a "Payment
Blockage Notice" pursuant to Sections 4.02(b) and 12.02(b) of this Indenture or
(ii) if such Non-payment Default results from the acceleration of the
Securities, the date of the acceleration of the Securities, no payment (other
than payments previously made pursuant to Article Nine hereof) or distribution
of any assets of such Subsidiary Guarantor of any kind or character shall be
made by such Subsidiary Guarantor on account of principal, premium, if any, or
interest on the Securities or on account of the purchase, redemption or other
acquisition of Securities or on account of any of the other obligations of such
Subsidiary Guarantor under this Guarantee for a period ("Guarantor Payment
Blockage Period")
<PAGE> 104
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commencing on the date of receipt by the Trustee of such notice or the date of
the acceleration referred to in clause (ii) above, as the case may be, unless
and until the earlier to occur of the following events: (w) 179 days shall
have elapsed since receipt of such written notice by the Trustee or the date of
the acceleration of the Securities, as the case may be (provided no Designated
Senior Indebtedness of a Subsidiary Guarantor shall theretofore have been
accelerated), (x) such Non-payment Default shall have been cured or waived or
shall have ceased to exist, (y) such Designated Senior Indebtedness shall have
been discharged or paid in full or (z) such Guarantor Payment Blockage Period
shall have been terminated by written notice to the Trustee from the
Representative initiating such Guarantor Payment Blockage Period, or the
holders of at least a majority in principal amount of such issue of such
Guarantor Senior Indebtedness, after which, in the case of clause (w), (x), (y)
or (z), such Subsidiary Guarantor shall resume making any and all required
payments in respect of its obligations under this Guarantee. Notwithstanding
any other provisions of this Indenture, no Non-payment Default with respect to
any Designated Senior Indebtedness of a Subsidiary Guarantor which existed or
was continuing on the date of the commencement of any Guarantor Payment
Blockage Period shall be, or be made, the basis for the commencement of a
second Guarantor Payment Blockage Period, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
In no event shall a Guarantor Payment Blockage Period extend beyond 179 days
from the date of the receipt of the notice by the Trustee or the date of the
acceleration of the Securities referred to in clause (2) hereof (the "Initial
Guarantor Blockage Period"). Any number of additional Guarantor Payment
Blockage Periods may be commenced during the Initial Guarantor Blockage Period;
provided, however, that no such additional Guarantor Payment Blockage Period
shall extend beyond the Initial Guarantor Blockage Period. After the
expiration of the Initial Guarantor Blockage Period, no Guarantor Payment
Blockage Period may be commenced under this Section 12.02(b) and no Payment
Blockage Period may be commenced under Section 4.02(b) until at least 180
consecutive days have elapsed from the last day of the Initial Guarantor
Blockage Period.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Security shall have received any payment
prohibited by the foregoing provisions of this Section 12.02, then and in such
event such payment shall be segregated from other funds and held in trust by
the Trustee or such Holder or Paying Agent for the benefit of, and shall
immediately be paid over to, the holders of Senior Indebtedness or to the
Representatives or as a court of competent jurisdiction shall direct.
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SECTION 12.03. Guarantee Obligations Subordinated to Prior
Payment of All Guarantor Senior Indebtedness
on Dissolution, Liquidation or Reorganization
of Such Subsidiary Guarantor.
Upon any payment or distribution of assets of any Subsidiary
Guarantor of any kind or character, whether in cash, property or securities
upon any dissolution, winding up, total or partial liquidation or
reorganization of such Subsidiary Guarantor and whether voluntary or
involuntary (including, without limitation, in bankruptcy, insolvency or
receivership proceedings or upon any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of such Subsidiary Guarantor
and whether voluntary or involuntary, but excluding any liquidation or
dissolution of a Subsidiary Guarantor into the Company or into another
Subsidiary Guarantor):
(a) the holders of all Guarantor Senior Indebtedness of
such Subsidiary Guarantor shall first be entitled to receive payments
in full in cash or Cash Equivalents of all amounts payable under
Guarantor Senior Indebtedness (including, with respect to Designated
Senior Indebtedness, any interest accruing after the commencement of
any such proceeding at the rate specified in the applicable Designated
Senior Indebtedness whether or not interest is an allowed claim
enforceable against the Company in any such proceeding) before the
Holders will be entitled to receive any payment with respect to the
Guarantee of such Subsidiary Guarantor, and until all Obligations with
respect to the Guarantor Senior Indebtedness are paid in full in cash
or Cash Equivalents, any distribution to which the Holders would be
entitled shall be made to the holders of Guarantor Senior Indebtedness
of such Subsidiary Guarantor;
(b) any payment or distribution of assets of such
Subsidiary Guarantor of any kind or character, whether in cash,
property or securities, to which the Holders or the Trustee on behalf
of the Holders would be entitled except for the provisions of this
Article Twelve shall be paid by the liquidating trustee or agent or
other Person making such a payment or distribution, directly to the
holders of Guarantor Senior Indebtedness of such Subsidiary Guarantor
or their Representatives, ratably according to the respective amounts
of such Guarantor Senior Indebtedness remaining unpaid held or
represented by each, until all such Guarantor Senior Indebtedness
remaining unpaid shall have been paid in full in cash or Cash
Equivalents after giving effect to any
<PAGE> 106
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concurrent payment or distribution to the holders of such Guarantor
Senior Indebtedness;
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of such Subsidiary Guarantor of any
kind or character, whether in cash, property or securities, shall be
received by the Trustee or the Holders or any Paying Agent in respect
of payment of the Guarantee before all Guarantor Senior Indebtedness
of such Subsidiary Guarantor is paid in full in cash or Cash
Equivalents, such payment or distribution (subject to the provisions
of Sections 12.06 and 12.07) shall be received, segregated from other
funds, and held in trust by the Trustee or such Holder or Paying Agent
for the benefit of, and shall immediately be paid over to, the holders
of such Guarantor Senior Indebtedness or their Representatives,
ratably according to the respective amounts of such Guarantor Senior
Indebtedness held or represented by each, until all such Guarantor
Senior Indebtedness remaining unpaid shall have been paid in full in
cash or Cash Equivalents, after giving effect to any concurrent
payment or distribution to the holders of Guarantor Senior
Indebtedness.
Each Subsidiary Guarantor shall give prompt notice to the
Trustee prior to any dissolution, winding up, total or partial liquidation or
total or reorganization (including, without limitation, in bankruptcy,
insolvency, or receivership proceedings or upon any assignment for the benefit
of creditors or any other marshalling of such Subsidiary Guarantor's assets and
liabilities).
SECTION 12.04. Holders of Guarantee Obligations to Be
Subrogated to Rights of Holders of
Guarantor Senior Indebtedness.
Subject to the payment in full in cash or Cash Equivalents of
all Guarantor Senior Indebtedness, the Holders of Guarantee Obligations of a
Subsidiary Guarantor shall be subrogated to the rights of the holders of
Guarantor Senior Indebtedness of such Subsidiary Guarantor to receive payments
or distributions of assets of such Subsidiary Guarantor applicable to such
Guarantor Senior Indebtedness until all amounts owing on or in respect of the
Guarantee Obligations shall be paid in full in cash or Cash Equivalents, and
for the purpose of such subrogation no payments or distributions to the holders
of such Guarantor Senior Indebtedness by or on behalf of such Subsidiary
Guarantor, or by or on behalf of the Holders by virtue of this Article Twelve,
which otherwise would have been made to the Holders shall,
<PAGE> 107
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as between such Subsidiary Guarantor and the Holders, be deemed to be payment
by such Subsidiary Guarantor to or on account of such Guarantor Senior
Indebtedness, it being understood that the provisions of this Article Twelve
are and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of such Guarantor Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Twelve
shall have been applied, pursuant to the provisions of this Article Twelve, to
the payment of all amounts payable under such Guarantor Senior Indebtedness,
then the Holders shall be entitled to receive from the holders of such
Guarantor Senior Indebtedness any such payments or distributions received by
such holders of such Guarantor Senior Indebtedness in excess of the amount
sufficient to pay all amounts payable under or in respect of such Guarantor
Senior Indebtedness in full in cash or Cash Equivalents.
SECTION 12.05. Obligations of the Subsidiary Guarantors Unconditional.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Guarantees is intended to or shall impair, as between the
Subsidiary Guarantors and the Holders, the obligation of the Subsidiary
Guarantors, which is absolute and unconditional, to pay to the Holders all
amounts due and payable under the Guarantees as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders and creditors of the Subsidiary
Guarantors other than the holders of the Guarantor Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Twelve,
of the holders of Guarantor Senior Indebtedness in respect of cash, property or
securities of the Subsidiary Guarantors received upon the exercise of any such
remedy. Upon any payment or distribution of assets of any Subsidiary Guarantor
referred to in this Article Twelve, the Trustee, subject to the provisions of
Sections 8.01 and 8.02, and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee or
agent or other Person making any payment or distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in
<PAGE> 108
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such payment or distribution, the holders of Guarantor Senior Indebtedness and
other Indebtedness of any Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Twelve. Nothing in this Section 12.05
shall apply to the claims of, or payments to, the Trustee under or pursuant to
Section 8.07.
SECTION 12.06. Trustee Entitled to Assume Payments
Not Prohibited in Absence of Notice.
The Trustee shall not at any time be charged with knowledge of
the existence of any facts that would prohibit the making of any payment to or
by the Trustee unless and until the Trustee or any Paying Agent shall have
received notice thereof from the Company or any Subsidiary Guarantor or from
one or more holders of Guarantor Senior Indebtedness or from any Representative
therefor and, prior to the receipt of any such notice, the Trustee, subject to
the provisions of Sections 8.01 and 8.02, shall be entitled in all respects
conclusively to assume that no such fact exists.
SECTION 12.07. Application by Trustee of Assets Deposited
with It.
U.S. Legal Tender or U.S. Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Sections 9.01 and
9.02 shall be for the sole benefit of Securityholders and, to the extent
allocated for the payment of Securities, shall not be subject to the
subordination provisions of this Article Twelve. Otherwise, any deposit of
assets or securities by or on behalf of a Subsidiary Guarantor with the Trustee
or any Paying Agent (whether or not in trust) for payment of the Guarantee
shall be subject to the provisions of this Article Twelve; provided that if
prior to the second Business Day preceding the date on which by the terms of
this Indenture any such assets may become distributable for any purpose
(including, without limitation, the payment of either principal of or interest
on any Security) the Trustee or such Paying Agent shall not have received with
respect to such assets the notice provided for in Section 12.06, then the
Trustee or such Paying Agent shall have full power and authority to receive
such assets and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary received by it on or
after such date. The foregoing shall not apply to the Paying Agent if the
Company or any Subsidiary or Affiliate of the Company is acting as Paying
Agent. Nothing contained in this Section 12.07 shall limit the right of the
holders of Guarantor Senior
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Indebtedness to recover payments as contemplated by this Article Twelve.
SECTION 12.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any
Guarantor 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 any Subsidiary Guarantor or by any act or failure to act, by any
such holder, or by any non-compliance by any Subsidiary Guarantor with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(b) By accepting the Securities, the Holders agree that
without limiting the generality of subsection (a) of this Section 12.08, the
holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Twelve or the obligations hereunder of the Holders of the Securities to the
holders of Guarantor Senior Indebtedness, do any one or more of the following:
(1) change the manner, place, terms or time of payment of, or renew or alter,
Guarantor Senior Indebtedness or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding; (2) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Indebtedness; (3) release any Person liable
in any manner for the collection or payment of Guarantor Senior Indebtedness;
and (4) exercise or refrain from exercising any rights against the Company and
any other Person.
SECTION 12.09. Holders Authorize Trustee to Effectuate
Subordination of Guarantee Obligations.
Each Holder of the Guarantee Obligations by his acceptance
thereof authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effect the subordination
provisions contained in this Article Twelve, and appoints the Trustee his
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding up, liquidation or reorganization of any Subsidiary Guarantor (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of assets and liabilities of
any Subsidiary Guarantor) tending
<PAGE> 110
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towards liquidation or reorganization of the business and assets of any
Subsidiary Guarantor, the immediate filing of a claim for the unpaid balance
under its or his Guarantee Obligations in the form required in said proceedings
and cause said claim to be approved. If the Trustee does not file a proper
claim or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or claims, then any of the
holders of the Guarantor Senior Indebtedness or their Representatives is hereby
authorized to file an appropriate claim for and on behalf of the Holders of
said Guarantee Obligations.
SECTION 12.10. Right of Trustee to Hold Guarantor
Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth
in this Article Twelve in respect of any Guarantor Senior Indebtedness at any
time held by it to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
SECTION 12.11. No Suspension of Remedies.
The failure to make a payment in respect of the Guarantees by
reason of any provision of this Article Twelve shall not be construed as
preventing the occurrence of a Default or an Event of Default under Section
7.01.
Nothing contained in this Article Twelve shall limit the right
of the Trustee or the Holders of Securities to take any action to accelerate
the maturity of the Securities pursuant to Article Seven or to pursue any
rights or remedies hereunder or under applicable law, subject to the rights, if
any, under this Article Twelve of the holders, from time to time, of Guarantor
Senior Indebtedness.
SECTION 12.12. No Fiduciary Duty of Trustee to Holders
of Guarantor Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Guarantor Senior Indebtedness, and shall not be liable to any
such holders (other than for its willful misconduct or gross negligence) if it
shall pay over or deliver to the holders of Guarantee Obligations or the
Company or any other Person, money or assets in compliance with the terms of
this Indenture. Nothing in this Section 12.12 shall affect the obligation of
any Person other than the Trustee to hold such
<PAGE> 111
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payment for the benefit of, and to pay such payment over to, the holders of
Guarantor Senior Indebtedness or their Representative.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed by operation of Section 3.18(c) of the TIA,
the imposed duties shall control.
SECTION 13.02. Notices.
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telecopier or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
if to the Company or any Subsidiary Guarantor:
2502 North Black Canyon Highway
Phoenix, Arizona 85009
Attention: Chief Financial Officer
if to the Trustee:
[_____________________________________]
Attention: Corporate Trust Division
if to the Credit Agent:
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: [Matthew Jones]
Each of the Company, the Trustee, the Subsidiary Guarantors
and the Credit Agent by written notice to each other such Person may designate
additional or different addresses for
<PAGE> 112
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notices to such Person. Any notice or communication to the Company, the
Trustee, the Subsidiary Guarantors and the Credit Agent shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and
five (5) calendar days after mailing if sent by registered or certified mail,
postage prepaid (except that a notice of change of address shall not be deemed
to have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall
be mailed to him by first class mail or other equivalent means at his address
as it appears on the registration books of the Registrar and shall be
sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section
312(b) with other Securityholders with respect to their rights under this
Indenture or the Securities. The Company, the Subsidiary Guarantors, the
Trustee, the Registrar and any other Person shall have the protection of TIA
Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
<PAGE> 113
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SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 5.07, shall include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 13.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking institutions in New
York, New York, Los Angeles, California or at such place of payment are not
required to be open. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 13.08. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. Each of the parties hereto agrees to submit to
the jurisdiction of
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the courts of the State of New York in any action or proceeding arising out of
or relating to this Indenture.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as
such, of the Company or a Subsidiary Guarantor shall not have any liability for
any obligations of the Company or a Subsidiary Guarantor under the Securities
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. Such waiver and release are part of
the consideration for the issuance of the Securities.
SECTION 13.11. Successors.
All agreements of the Company and each Subsidiary Guarantor in
this Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 13.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together shall represent
the same agreement.
SECTION 13.13. Severability.
In case any one or more of the provisions in this Indenture or
in the Securities shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
<PAGE> 115
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SECTION 13.14. No Violation.
Notwithstanding the provisions of this Indenture, in no event
shall any transaction, agreement, payment or other event to be consummated,
entered into or made in connection with the Acquisition or any financing
thereof (including without limitation the transaction referred to in Section
6.01(c)) be considered a violation of any provision of this Indenture or
constitute a Change of Control hereunder.
<PAGE> 116
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the date first written above.
Dated: _______ __,
OUTDOOR SYSTEMS, INC.
By:
------------------------------
Name:
Title:
Attest:
-----------------------
[ ]
--------------------------
as Trustee
By:
------------------------------
Name:
Title:
Attest:
-----------------------
<PAGE> 117
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THE GUARANTORS:
OS BASELINE, INC.
By:
------------------------------
Name:
Title:
Attest:
-----------------------
OUTDOOR SYSTEMS PAINTING, INC.
By:
------------------------------
Name:
Title:
Attest:
-----------------------
OS ADVERTISING OF TEXAS PAINTING,
INC.
By:
------------------------------
Name:
Title:
Attest:
-----------------------
NEW YORK SUBWAYS ADVERTISING CO.,
INC.
By:
------------------------------
Name:
Title:
Attest:
-----------------------
DECADE COMMUNICATIONS GROUP, INC.
<PAGE> 118
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By:
------------------------------
Name:
Title:
Attest:
-----------------------
BENCH ADVERTISING COMPANY OF
COLORADO, INC.
By:
------------------------------
Name:
Title:
Attest:
-----------------------
<PAGE> 119
EXHIBIT A
[FORM OF NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY,
IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR SUCH
TRANSFER IS MADE IN ACCORDANCE WITH CLAUSES (D) OR (E) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
A-1
<PAGE> 120
OUTDOOR SYSTEMS, INC.
Senior Subordinated Notes
due 2006
No. $
OUTDOOR SYSTEMS, INC., a Delaware corporation (the "Company",
which term includes any successor corporation), for value received promises to
pay to or registered assigns, the principal sum of Dollars, on
, 2006.
Interest Payment Dates: January 15, April 15, July 15 and
October 15.
Record Dates: January 1, April 1, July 1 and October 1.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
A-2
<PAGE> 121
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
Attest: OUTDOOR SYSTEMS, INC.
By:
- ---------------------------- ----------------------------------
Name: Name:
Title: Title:
A-3
<PAGE> 122
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within- mentioned Indenture.
[ ]
-------------------------
as Trustee
By
---------------------------
Authorized Signatory
A-4
<PAGE> 123
OUTDOOR SYSTEMS, INC.
Senior Subordinated Notes
due 2006
1. Interest.
OUTDOOR SYSTEMS, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the
initial interest rate of [ ]%(1) per annum (the "Initial Interest Rate"). The
Initial Interest Rate will increase on each three-month anniversary of the date
of issuance of this Security by an additional .5% to a maximum interest rate of
20% per annum. The Company will pay interest quarterly on January 15, April
15, July 15 and October 15 of each year (the "Interest Payment Dates"),
commencing on ________ __, ____. Interest on the Securities will accrue from
the most recent date to which interest has been paid on this Security, or if no
interest has been paid on this Security, then from the date of issuance hereof.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months. Interest shall be payable in cash provided that the Company may
pay interest in excess of 15% per annum by issuing additional Securities ("PIK
Securities").
The Company shall pay interest on overdue principal and
interest on overdue installments of interest, to the extent lawful, at a rate
equal to the rate of interest otherwise payable on the Securities.
2. Method of Payment.
The Company shall pay interest on the Securities (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Securities are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company shall
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts ("U.S. Legal
Tender") or in PIK Securities. However, the Company may pay principal and
interest (other than interest paid in PIK Securities) by wire transfer of
Federal funds, or interest by its check payable in such U.S. Legal Tender. The
Company may deliver
- ----------------------------------
1 The interest rate in effect for Loans under the Senior Subordinated
Credit Agreement immediately prior to the issuance date, which
interest rate shall include the .5% increase on the Conversion Date if
not already included in such interest rate.
A-5
<PAGE> 124
any such interest payment to the Paying Agent or to a Holder at the Holder's
registered address. Notwithstanding the foregoing, the Company shall pay or
cause to be paid all amounts payable with respect to non-DTC eligible
Securities by wire transfer of Federal funds to the account of the Holders of
such Securities.
3. Paying Agent and Registrar.
Initially, (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to, or the consent of,
the Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as
of , (the "Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Section Section
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect
on the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are general unsecured obligations of the
Company limited in aggregate principal amount to $240,000,000 plus the amount
of PIK Securities outstanding at such time. Payment on each Security is
guaranteed on a senior subordinated basis, jointly and severally, by the
Guarantors pursuant to Article Eleven of the Indenture.
5. Optional Redemption.
The Securities may be redeemed in whole at any time or in part
from time to time, at the option of the Company, at a redemption price equal to
the applicable percentage of the principal amount thereof set forth below,
together with accrued and unpaid interest to the Redemption Date, if redeemed
during the 12 months commencing on [ ](2) in the years set forth
below:
- ----------------------------------
2 The month and day of the Closing Date of the Bridge Loan.
A-6
<PAGE> 125
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1997 . . . . . . . . . . . . . . . . 101%
1998 . . . . . . . . . . . . . . . . 102%
1999 . . . . . . . . . . . . . . . . 103%
2000 . . . . . . . . . . . . . . . . 104%
2001 . . . . . . . . . . . . . . . . 104%
2002 . . . . . . . . . . . . . . . . 103%
2003 . . . . . . . . . . . . . . . . 102%
2004 . . . . . . . . . . . . . . . . 101%
2005 . . . . . . . . . . . . . . . . 100%
</TABLE>
The documents evidencing Senior Indebtedness will restrict the
Company's ability to optionally redeem the Securities.
6. Notice of Redemption.
Notice of redemption will be mailed at least 20 days but not
more than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations
larger than $1,000 may be redeemed in part in increments of $1,000; provided
that if no Securities other than PIK Securities in denominations of less than
$1,000 (or if greater than $1,000, not in integral multiples of $1,000) remain
outstanding or have not been called for redemption, such PIK Securities may be
redeemed.
Except as set forth in the Indenture, from and after any
Redemption Date, if monies for the redemption of the Securities called for
redemption shall have been deposited with the Paying Agent for redemption on
such Redemption Date and payment of the Securities called for redemption is not
prohibited under Article Four or Article Twelve of the Indenture, then, unless
the Company defaults in the payment of such Redemption Price, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the repurchase of such Holder's Securities pursuant
to a Change of Control Offer at a purchase price equal to 101% of the principal
amount thereof plus accrued interest, if any, to the date of purchase. The
Company shall not be required to repurchase Securities until it has complied
with its covenants to repay in full all Indebtedness of the Company and its
Subsidiaries under the Senior Credit Facilities or offer to repay in full all
such Indebtedness and repay the Indebtedness of each lender who has accepted
its offer to repay such Indebtedness or to obtain the requisite consent under
the Senior Credit
A-7
<PAGE> 126
Facilities to permit the repurchase of the Securities pursuant to a Change of
Control Offer.
8. Offer to Repurchase Securities with Net Cash Proceeds of Certain Asset
Sales.
Under certain circumstances, the Company is required to apply
the Net Cash Proceeds from Asset Sales to the repayment of Pari Passu
Indebtedness or Senior Indebtedness, to make Related Business Investments, or
to purchase in a Net Proceeds Offer (at a price equal to 100% of the aggregate
principal amount thereof, plus accrued interest to the date of purchase) such
aggregate principal amount of Securities which, when added to the accrued
interest thereon, shall be equal to the net proceeds required to be applied
thereto.
9. Offer to Repurchase Securities with Net Cash Proceeds of Certain
Issuances of Debt and Equity Securities.
Upon the repayment of all amounts owing under the Senior
Credit Facilities, the Company will be required to make an offer to purchase
the Securities at a price of 100% of the principal amount thereof plus accrued
interest, if any, to the date of repurchase with the net cash proceeds of a
sale of certain debt or equity securities, in the manner and subject to the
limitations provided in the Indenture.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, and
(except for the PIK Securities) are in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities or portions
thereof selected for redemption.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the
owner of it for all purposes.
12. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agents will pay the money
back to the Company at its request. After
A-8
<PAGE> 127
that, all liability of the Trustee and such Paying Agents with respect to such
money shall cease.
13. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee U.S.
Legal Tender or U.S. Government Obligations sufficient to pay the principal of
and interest on the Securities to redemption or maturity and complies with the
other provisions of the Indenture relating thereto, the Company and the
Subsidiary Guarantors will be discharged from certain provisions of the
Indenture and the Securities (including the financial covenants, but excluding
the Company's obligation to pay the principal of and interest on the Securities
and each Subsidiary Guarantor's obligation with respect to its Guarantee).
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities
and the Guarantees may be amended or supplemented with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of
a majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities, comply with Article Six or
Section 11.06 of the Indenture, or comply with any requirements of the
Commission in connection with the qualification of the Indenture under the
TIA, or make any other change that does not adversely affect the rights of any
Holder of a Security.
15. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of
the Company and its Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other Person and sell, lease, transfer or otherwise
dispose of substantially all of its properties or assets. The limitations are
subject to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such limitations.
16. Subordination.
The Securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness (as defined in the Indenture)
of the Company. The Guarantees are
A-9
<PAGE> 128
subordinated in right of payment, in the manner and to the extent set forth in
the Indenture, to the prior payment in full of Guarantor Senior Indebtedness
(as defined in the Indenture). To the extent and in the manner provided in the
Indenture, Senior Indebtedness, and in the case of payment by a Subsidiary
Guarantor, Guarantor Senior Indebtedness, must be paid before any payment may
be made to any Holder of this Security. Any Securityholder by accepting this
Security agrees to the subordination and authorizes the Trustee to give it
effect.
17. Successors.
When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
18. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may require indemnity satisfactory to it before
it enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Securities notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest, including an Accelerated Payment) if it determines that withholding
notice is in their interest.
19. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries or their respective Affiliates as if it
were not the Trustee.
20. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator,
as such, of the Company or a Subsidiary Guarantor shall have any liability for
any obligation of the Company or any Subsidiary Guarantor under the Securities
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
A-10
<PAGE> 129
21. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent manually signs the certificate of authentication on this
Security.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP
numbers to be printed on the Securities immediately prior to the qualification
of the Indenture under the TIA as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
The Company will furnish to any Holder of a Security upon
written request and without charge a copy of the Indenture. Requests may be
made to: Outdoor Systems, Inc., 2502 North Black Canyon Highway, Phoenix,
Arizona 85009, Attn: Chief Financial Officer.
A-11
<PAGE> 130
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor Person under the Indenture) have unconditionally,
jointly and severally, guaranteed on a senior subordinated basis (such
guarantee by each Subsidiary Guarantor being referred to herein as the
"Guarantee") (i) the due and punctual payment of the principal of and interest
on the Securities, whether at maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal and interest, if any,
on the Securities, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the holders of the Securities or the
Trustee all in accordance with the terms set forth in Article Eleven and
Article Twelve of the Indenture and (ii) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of each Subsidiary Guarantor to the holders of
Securities and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth and are expressly subordinated and subject in right of
payment to the prior payment in full of all Guarantor Senior Indebtedness of
such Subsidiary Guarantor, to the extent and in the manner provided, in Article
Eleven and Article Twelve of the Indenture, and reference is hereby made to
such Indenture for the precise terms of the Guarantee therein made.
No past, present or future stockholder, director, officer,
employee or incorporator, as such, of any of the Subsidiary Guarantors shall
have any liability for any obligation of the Subsidiary Guarantors under the
Guarantee or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Guarantees.
A-12
<PAGE> 131
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
THE GUARANTORS:
OS BASELINE, INC.
By:
---------------------------------
Name:
Title:
Attest:
----------------------------
OUTDOOR SYSTEMS PAINTING, INC.
By:
---------------------------------
Name:
Title:
Attest:
----------------------------
OS ADVERTISING OF TEXAS PAINTING,
INC.
By:
---------------------------------
Name:
Title:
Attest:
----------------------------
NEW YORK SUBWAYS ADVERTISING CO.,
INC.
By:
---------------------------------
Name:
Title:
Attest:
----------------------------
A-13
<PAGE> 132
DECADE COMMUNICATIONS GROUP, INC.
By:
----------------------------
Name:
Title:
Attest:
----------------------------
BENCH ADVERTISING COMPANY OF
COLORADO, INC.
By:
----------------------------
Name:
Title:
Attest:
----------------------------
A-14
<PAGE> 133
[FORM OF ASSIGNMENT]
I or we assign this Security to
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
- -------------------------------------
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
-------------------- --------------------------------
- -----------------------------------------------------------------
(Sign exactly as your name appears on
the front of this Security)
Signature Guarantee:
---------------------------------------------
A-15
<PAGE> 134
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 5.15 or Section 5.16 of the Indenture, check the
appropriate box: Section 5.15 [ ] Section 5.16 [ ] Section 5.20 [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 5.15 or Section 5.16 of the
Indenture, state the amount:
$
Date: Signature:
-----------------------------------------
---------- (Sign exactly as your name
appears on the front of
this Security)
Signature Guarantee:
---------------------------------------------------------
A-16
<PAGE> 1
EXHIBIT 99.6
===============================================================================
SECURITIES PURCHASE AGREEMENT
by and between
OUTDOOR SYSTEMS, INC.
and
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
_________________________________
Dated as of July 9, 1996
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
<S> <C> <C>
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Accounting Terms; Financial State-
ments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
ISSUE OF SECURITIES; PURCHASE AND SALE OF
SECURITIES; RIGHTS OF HOLDERS OF SECURITIES
Section 2.1. Issue of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2. Purchase and Sale of Securities . . . . . . . . . . . . . . . . . . . . 7
Section 2.3. Rights of Holders of Securities . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of
the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.2. Representations and Warranties of
the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations
of the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V
COVENANTS
Section 5.1. Furnishing of Information . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.3. Treatment of Dividends for Income
Tax Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.4. Original Issue Discount . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.5. Issuance of Additional Warrants . . . . . . . . . . . . . . . . . . . . 26
Section 5.6. Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
ARTICLE VI
FEES
<S> <C> <C>
Section 6.1. Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.2. Funding Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.3. Delay Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.2. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.3. Registration Rights Agreements . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Home Office Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.2. Survival of Provisions . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.3. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.4. No Waiver; Modifications in
Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.5. Role of Special Counsel . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.6. Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.7. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.8. Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.9. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.10. Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.11. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.12. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.13. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Exhibit 1 Certificate of Designations
Exhibit 2 Form of Registration Rights Agreement
Exhibit 3 Form of Warrant Agreement
Exhibit 4 Form of Common Stock Registration Rights Agreement
Exhibit 5 Form of Opinion of Company Counsel
Exhibit 6 Form of Opinion of Purchaser's Counsel
</TABLE>
-ii-
<PAGE> 4
SECURITIES PURCHASE AGREEMENT, dated as of July 9, 1996 by and
between Outdoor Systems, Inc., a Delaware corporation (the "Company"), and CIBC
WG Argosy Merchant Fund 2, L.L.C. (the "Purchaser").
In consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, and
unless the context requires a different meaning, the following terms have the
meanings indicated:
"Acquisition" means the acquisition by the Company of certain
assets and capital stock as provided for in the Asset Purchase Agreement.
"Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Additional Warrant Shares" has the meaning provided therefor
in Section 2.1 of this Agreement.
"Additional Warrants" has the meaning provided therefor in
Section 2.1 of this Agreement.
"Affiliate" of any specified Person means any other Person
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement
or otherwise; provided, however, that beneficial ownership of at least 10% of
the voting securities of a Person shall be deemed to be control.
"Agreement" means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof and in effect.
<PAGE> 5
-2-
"Asset Purchase Agreement" means the Asset Purchase Agreement
dated July 9, 1996 by and among Gannett Co., Inc., Combined Communications
Corporation, Gannett Transit, Inc., Gannett Outdoor Co. of Texas, Shelter Media
Communications, Inc., Gannett International Communications, Inc. and the
Company.
"Basic Documents" means, collectively, the Certificate of
Designations, the Registration Rights Agreement, the Common Stock Registration
Rights Agreement, the Warrant Agreement and this Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the City of New
York are authorized or obligated by law to close.
"Certificate of Designations" means the Certificate of
Designations of Preferences and Rights duly adopted by the Board of Directors
of the Company setting forth the rights, preferences and priorities of the
Preferred Stock and filed with, and accepted for filing, so as to be effective,
by the Secretary of State of the State of Delaware prior to the Closing
hereunder and which is in the form of Exhibit 1 hereto.
"Closing" has the meaning provided therefor in Section 2.2 of
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Act.
"Common Stock" means the Common Stock of the Company, $.01 par
value per share.
"Common Stock Registration Rights Agreement" means the Common
Stock Registration Rights Agreement substantially in the form of Exhibit 4
hereto.
"Company" has the meaning provided therefor in the
introductory paragraph of this Agreement.
"Credit Agreement" means the Credit Agreement dated as of July
9, 1996 by and among the Company, the guarantors named therein and Canadian
Imperial Bank of Commerce, as agent,
<PAGE> 6
-3-
and the other financial institutions parties thereto, as lenders, including all
exhibits thereto, as the same may be amended, modified or supplemented from
time to time.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, notices
of responsibility, information requests, liens, notices of noncompliance or
violation, investigations or proceedings relating in any way to any
Environmental Law.
"Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment binding on any
of the Company or the Subsidiaries, relating to pollution or protection of the
environment or health or safety or any chemical, material or substance, that is
subject to regulation thereunder.
"ERISA" has the meaning provided therefor in Section 3.1 of
this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Exchange Act Filings" means the Company's filings on Form
10-K, as amended, for the year ended December 31, 1995, Form 10-Q for the
quarter ended March 31, 1996 and Form 8-K dated May 22, 1996 in each case filed
under the Exchange Act.
"Indemnified Parties" has the meaning provided therefor in
Section 7.1(c) of this Agreement.
"Indemnifying Parties" has the meaning provided therefor in
Section 7.1(c) of this Agreement.
"Information" shall have the meaning set forth in Section 2.1
of this Agreement.
"Lien" means, with respect to any property or assets of any
Person, any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, security interest, lien, charge, easement, encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect
<PAGE> 7
-4-
to such property or assets (including without limitation, any capitalized lease
obligation, conditional sales, or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" means, with respect to the Company
and its Subsidiaries, a material adverse effect on the business, condition
(financial or otherwise), results of operations or prospects of the Company and
its Subsidiaries, taken as a whole; provided that, with respect to the Company,
"Material Adverse Effect" shall also mean a material adverse effect on the
ability of the Company to perform its obligations under this Agreement and the
other Transaction Documents.
"Original Preferred Stock" has the meaning provided therefor
in Section 5.5 hereof.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or other legal entity.
"Preferred Stock" means the Senior Increasing Rate Cumulative
Preferred Stock, Series A, of the Company, $1.00 par value.
"Proceeding" has the meaning provided therefor in Section
7.1(b) of this Agreement.
"Purchaser" has the meaning provided therefor in the
introductory paragraph of this Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement relating to the Preferred Stock, substantially in the form of Exhibit
2 hereto.
"Securities" has the meaning provided therefor in Section 2.1
of this Agreement.
"Senior Notes" means $115,000,000 aggregate principal amount
of the Company's 10.75% Senior Notes due 2003.
"State" means each of the states of the United States, the
District of Columbia and the Commonwealth of Puerto Rico.
"State Commission" means any agency of any State having
jurisdiction to enforce such State's securities laws.
<PAGE> 8
-5-
"Stock Split" means the three-for-two stock split of the
outstanding Common Stock announced by the Company and to be effected as a stock
dividend payable on July 22, 1996 to shareholders of record as of July 8, 1996.
"Subordinated Credit Agreement" means the Senior Subordinated
Credit Agreement dated as of July 9, 1996 by and among the Company, the
guarantors named therein and Canadian Imperial Bank of Commerce, as agent, and
the other financial institutions parties thereto, as lenders, as the same may
be amended, modified or supplemented from time to time.
"Subsidiaries" means of any specified Person, any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the capital stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, officers or trustees thereof is held by such first-named Person
or any of its Subsidiaries; or (ii) in the case of a partnership, joint
venture, association or other business entity, with respect to which such
first-named Person or any of its Subsidiaries has the power to direct or cause
the direction of the management and policies of such entity by contract or
otherwise or if in accordance with generally accepted accounting principles
such entity is consolidated with the first-named Person for financial statement
purposes.
"Taxes" has the meaning provided therefor in Section 3.1 of
this Agreement.
"Tender Offer" means the offer by the Company to purchase its
outstanding Senior Notes.
"Time of Purchase" has the meaning provided therefor in
Section 2.2 of this Agreement.
"Transaction Documents" means the Basic Documents, the Asset
Purchase Agreement, the Credit Agreement, the Subordinated Credit Agreement and
all documents executed by the Company or any of its Subsidiaries in connection
with any of the foregoing and all documents executed by the Company or any of
its Subsidiaries in connection with the Tender Offer.
"Transactions" means the Acquisition, the issuance of the
Securities, the Tender Offer, and the transactions
<PAGE> 9
-6-
contemplated by the Credit Agreement and the Subordinated Credit Agreement.
"Warrant Agent" has the meaning provided therefor in the
Warrant Agreement.
"Warrant Agreement" means the Warrant Agreement under which
the Warrants will be issued, substantially in the form of Exhibit 3 hereto.
"Warrant Shares" has the meaning provided therefor in Section
2.1 of this Agreement.
"Warrants" means the warrants to purchase shares of Common
Stock of the Company to be issued at the Closing pursuant to Section 2.2 of
this Agreement.
Section 1.2. Accounting Terms; Financial Statements. All
accounting terms used herein not expressly defined in this Agreement shall have
the respective meanings given to them in accordance with sound accounting
practice. The term "sound accounting practice" shall mean such accounting
practice as, in the opinion of the independent accountants regularly retained
by the Company, conforms at the time to generally accepted accounting
principles in the United States applied on a consistent basis except for
changes with which such accountants concur. All determinations to which
accounting principles apply shall be made in accordance with sound accounting
practice.
ARTICLE II.
ISSUE OF SECURITIES; PURCHASE AND SALE OF
SECURITIES; RIGHTS OF HOLDERS OF SECURITIES
Section 2.1. Issue of Securities. The Company has authorized
the issuance of up to $165,000,000 aggregate liquidation value of the Preferred
Stock together with Warrants to initially purchase up to 284,000 (subject to
adjustment as provided in Section 2.2(b) hereof) shares of Common Stock (the
shares of Common Stock issuable upon exercise of the Warrants are referred to
herein as the "Warrant Shares"). The Preferred Stock will have the rights and
preferences set forth in the Certificate of Designations. The aggregate
liquidation value of the Preferred Stock will increase to the extent of accrued
dividends paid in additional shares of Preferred Stock. At the Closing (as
defined below) the Company will issue to the Purchaser up to 284,000 Warrants
each initially exercisable into one share of Common Stock. Each Warrant will
be substantially in the form as set out as Exhibit A to the Warrant Agreement.
Additional Warrants ("Additional Warrants") may be issued and exercisable
<PAGE> 10
-7-
for additional Warrant Shares ("Additional Warrant Shares") on the terms and
conditions set forth in Section 5.5 hereof. The Preferred Stock, the Warrants
and the Warrant Shares are referred to herein collectively as the "Securities".
The Securities, the Additional Warrants and the Additional
Warrant Shares will be offered without being registered under the Act, in
reliance on exemptions therefrom, including the exemption provided by Section
4(2) of the Act.
In connection with the sale of the Preferred Stock and
Warrants, the Company has provided the Purchaser with certain information
including the Exchange Act Filings and a summary of the terms of the Preferred
Stock (the "Information").
Section 2.2. Purchase and Sale of Securities. (a) Subject
to the terms and conditions herein set forth, the Company agrees that it will
sell to the Purchaser, and the Purchaser agrees that it will purchase from the
Company at the Time of Purchase, up to $165,000,000 aggregate liquidation value
of the Preferred Stock and up to 284,000 Warrants each initially exercisable
into one share of Common Stock for aggregate consideration of $165,000,000.
(b) Subject to the terms and conditions herein set forth, the
Company has authorized the issuance of and further agrees that it will sell to
the Purchaser, and the Purchaser agrees that it will purchase from the Company
at the Time of Purchase, up to an additional $60,000,000 aggregate liquidation
value of the Preferred Stock solely for the purpose of enabling the Company's
Total Leverage Ratio (as defined in the Credit Agreement) at the Time of
Purchase to be no greater than 6.5 to 1; provided, that, for each additional
dollar in liquidation value of Preferred Stock purchased by the Purchaser
pursuant to this Section 2.2(b) in excess of $165,000,000, there shall be an
equal and permanent reduction in the aggregate commitments and borrowings
pursuant to the term loan facilities under the Credit Agreement; provided,
further, that there shall be a proportionate increase in the aggregate number
of Warrants and Additional Warrants issuable pursuant hereto.
(c) The Company and the Purchaser agree that the number of
shares of Common Stock issuable upon the exercise of
<PAGE> 11
-8-
Warrants and Additional Warrants issuable pursuant to this Agreement shall be
subject to adjustment from time to time from the date of this Agreement up to
and including the date of original issuance of each such Warrant or Additional
Warrant upon the occurrence of any of the events enumerated in Section 12 of
the Warrant Agreement as though such Warrants or Additional Warrants, as the
case may be, were issued immediately prior to any such event and that the
Exercise Price (as defined in the Warrant Agreement) of such Warrants or
Additional Warrants shall be appropriately adjusted to reflect the occurrence
of any such event during the 20 Business Day period used for the determination
of the Exercise Price pursuant to the Warrant Agreement or between the
expiration of such period and the date of original issuance of each such
Warrant or Additional Warrant.
The Preferred Stock and the Warrants shall have the terms set
forth herein, in the Certificate of Designations and the Warrant Agreement,
respectively.
The purchase and sale of the Preferred Stock and Warrants
shall occur pursuant to a written notice delivered by the Company to the
Purchaser no later than 10:00 A.M., New York time at least three Business Days
in advance of the Closing or such later date as shall be agreed to by the
Company and the Purchaser, which notice will state the aggregate liquidation
value of Preferred Stock and the aggregate number of Warrants (which shall be
in the ratio of 1.72121212121 Warrants per share of Preferred Stock to be
purchased) requested to be purchased by the Purchaser. The purchase and sale
of the Preferred Stock and the Warrants pursuant to this Agreement will take
place at a closing (the "Closing") at the offices of Cahill Gordon & Reindel,
80 Pine Street, New York, New York 10005, at 10:00 A.M., New York time, on the
date of Closing. The time at which the Closing is concluded is herein called
the "Time of Purchase."
Delivery of the Preferred Stock and Warrants to be purchased
by the Purchaser pursuant to this Agreement shall be made at the Closing by the
Company (i) delivering global certificates representing the Preferred Stock and
Warrants to The Depository Trust Company ("DTC") or its agent and (ii) causing
the DTC participant account designated by the Purchaser to be credited with the
Preferred Stock and Warrants purchased by such Purchaser against payment
therefor in immediately available same day funds through the facilities of DTC
for the account of the Company. The Company agrees that in connection with the
placement of the Preferred Stock and Warrants, the
<PAGE> 12
-9-
Purchaser may, in its discretion, deduct from the purchase price of the
Preferred Stock and Warrants to be remitted to the Company at the Closing the
amount of the fees and expenses of Cahill Gordon & Reindel, special counsel to
the Purchaser.
The Company will bear all expenses of shipping the Preferred
Stock and Warrants (including, without limitation, insurance expenses) from New
York City to such other places within the United States of America or Canada as
the Purchaser shall specify. Any tax on the issuance of the Preferred Stock
and Warrants will be paid by the Company at the Time of Purchase pursuant to
Section 8.7.
Section 2.3. Rights of Holders of Securities. The holders of
the Securities shall have such rights with respect to the registration thereof
under the Act as are set forth in the Registration Rights Agreement and the
Common Stock Registration Rights Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Company.
The Company represents and warrants as of the date hereof and as of the date of
Closing (after giving effect to the Transactions) to the Purchaser as follows:
(a) The Information provided to the Purchaser at the Time of
Purchase, as of its respective date, the date hereof and as of the Time of
Purchase, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements of the Company and
its Subsidiaries, together with related notes and schedules thereto, included
in the Exchange Act Filings fairly present in all material respects the
financial condition of the Company and its Subsidiaries as of the dates
indicated and the results of operations and cash flows for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
stated therein); and any pro forma financial statements and the related notes
thereto included in the Exchange Act Filings have been prepared using
reasonable
<PAGE> 13
-10-
assumptions and in accordance with the applicable requirements of the Act and
include all adjustments necessary to present fairly in all material respects
the pro forma financial information included in the Exchange Act Filings as at
the respective dates and for the respective periods indicated. Deloitte &
Touche LLP, which are reporting upon the audited financial statements and
schedules included in the Exchange Act Filings, are independent public
accounting firms as required by the Act and the rules and regulations
thereunder.
(c) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Each of the
Company's Subsidiaries is a corporation duly incorporated or organized, validly
existing and in good standing under the laws of its state of incorporation.
Each of the Company and its Subsidiaries is duly qualified and in good standing
as a foreign corporation, and is authorized to do business, in each
jurisdiction in which the ownership or leasing of any property or the nature of
its business makes such qualification necessary and in which the failure so to
qualify would have a Material Adverse Effect.
(d) All of the issued and outstanding shares of capital stock of the
Company and its Subsidiaries are validly issued, fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights. The
Company does not have, and as of the Closing will not have, any Subsidiaries
other than the Subsidiaries listed on Schedule I hereto and those acquired in
the Acquisition. Except as contemplated by the Credit Agreement, all of the
capital stock of the Subsidiaries is owned by the Company, free and clear of
any Liens. Except as described in the Exchange Act Filings, as disclosed in
Schedule II hereto and as contemplated by the Basic Documents and the
Subordinated Credit Agreement, there are no outstanding subscriptions, options,
warrants, rights, convertible securities or other binding agreements or
commitments of any character obligating the Company or its Subsidiaries to
issue any securities. Except as described in the Exchange Act Filings and as
contemplated by the Transaction Documents, no Person other than the Purchaser
has any rights to the registration of capital stock or other securities of the
Company, under the Act or otherwise. Except as disclosed in the Exchange Act
Filings and in the employment agreements summarized therein and in the separate
purchase agreements and
<PAGE> 14
-11-
registration rights agreements referred to therein and as contemplated by the
Common Stock Registration Rights Agreement and the Registration Rights
Agreement, there is no agreement, understanding or arrangement among the
Company or its Subsidiaries and its respective stockholders or any other person
relating to the ownership or disposition of any capital stock in the Company or
any of its Subsidiaries, the election of directors of the Company or any of its
Subsidiaries or the governance of the Company's or any such Subsidiary's
affairs; and no such agreements, arrangements or understandings will be
breached or violated as a result of the execution and delivery of, or the
consummation of the transactions contemplated by, this Agreement or the other
Transaction Documents. The Company has reserved for issuance upon exercise of
the Warrants, shares of Common Stock sufficient in number for exercise of all
of the Warrants at the initial exercise price, and the Warrant Shares will,
upon issuance in accordance with the terms of the Warrant Agreement and upon
payment of the exercise price therefor, be fully paid, nonassessable and free
of preemptive rights and will not be subject to any restrictions on the
transfer thereof except for such restrictions set forth herein and in the
Warrant Agreement and under the Act.
(e) The Certificate of Designations has been duly authorized by the
Company and its board of directors and when executed and delivered by the
Company and filed with the Secretary of State of the State of Delaware will
become part of the Certificate of Incorporation of the Company, and will set
forth the rights, preferences and priorities of the Preferred Stock.
(f) Each of this Agreement and the Registration Rights Agreement has
been duly authorized by the Company and, when executed and delivered by the
Company (assuming the due authorization, execution and delivery by the
Purchaser), will constitute a valid and legally binding agreement of the
Company, enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights and remedies generally and (ii) general
equitable principles, whether asserted in an action at law or in equity, and
that such enforceability may be subject to the discretion
<PAGE> 15
-12-
of the court before which any proceedings therefor may be brought.
(g) The Warrant Agreement has been duly authorized by the Company
and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Warrant Agent), will constitute a
valid and legally binding agreement of the Company, enforceable against it in
accordance with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights and
remedies generally and (ii) general equitable principles, whether asserted in
an action at law or in equity, and that such enforceability may be subject to
the discretion of the court before which any proceedings therefor may be
brought.
(h) The Common Stock Registration Rights Agreement has been duly
authorized by the Company and, when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Purchaser), will
constitute a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (i) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights and remedies generally and (ii) general equitable
principles, whether asserted in an action at law or in equity, and that such
enforceability may be subject to the discretion of the court before which any
proceedings therefor may be brought.
(i) Each of the other Transaction Documents has been duly authorized
by the Company and, when executed and delivered by the Company (assuming the
due authorization, execution and delivery by the other parties thereto), will
constitute a valid and legally binding agreement of the Company, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws now or hereafter in effect relating to creditors'
rights and remedies generally and (ii) general equitable principles, whether
asserted in an action at law or in equity, and that such enforceability may be
subject to the discretion
<PAGE> 16
-13-
of the court before which any proceedings therefor may be brought.
(j) The Preferred Stock has been duly authorized by the Company and,
when certificates for the Preferred Stock have been executed and delivered by
the Company and countersigned by the transfer agent and issued upon payment of
the purchase price therefor or as dividends on outstanding shares of Preferred
Stock, will constitute a valid and legally binding obligation of the Company,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights and remedies generally and (ii) general
equitable principles, whether asserted in an action at law or in equity, and
that such enforceability may be subject to the discretion of the court before
which any proceedings therefor may be brought.
(k) The Warrants and the Additional Warrants, as the case may be,
have each been duly authorized by the Company and, when the Warrants and the
Additional Warrants, as the case may be, are executed by the Company and
countersigned by the Warrant Agent in accordance with the provisions of the
Warrant Agreement and issued by the Company to the Purchaser in accordance with
the terms of this Agreement and the Warrant Agreement, the Warrants and the
Additional Warrants, as the case may be, will be entitled to the benefits of
the Warrant Agreement and will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights and remedies generally and (ii) general
equitable principles, whether asserted in an action at law or in equity, and
that such enforceability may be subject to the discretion of the court before
which any proceedings therefor may be brought.
(l) Each of the Company and its Subsidiaries (to the extent a party
thereto) has all requisite corporate power and authority to (i) execute,
deliver and perform its obligations under this Agreement and each of the other
Transaction Documents, (ii) execute, deliver and perform its obligations under
all other agreements and instruments
<PAGE> 17
-14-
executed and delivered by the Company or any Subsidiary pursuant to or in
connection with this Agreement and each of the other Transaction Documents and
(iii) issue the Securities, the Additional Warrants and the Additional Warrant
Shares pursuant hereto in the manner and for the purpose contemplated by this
Agreement. The execution and delivery by the Company and its Subsidiaries (to
the extent a party thereto) of this Agreement and each of the other Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by the Company and its
Subsidiaries (to the extent a party thereto). Each of the Transactions has
been duly authorized by the Company and its Subsidiaries (to the extent a party
thereto).
(m) Subsequent to the date as of which information is given in the
Exchange Act Filings and immediately prior to the Time of Purchase there has
not been (i) any event or condition that has had or that would reasonably be
expected to have a Material Adverse Effect, (ii) any transaction entered into
by the Company or any Subsidiary, other than in the ordinary course of
business, that would reasonably be expected to have a Material Adverse Effect
or (iii) any dividend or distribution of any kind declared, paid or made by the
Company on its Common Stock that has not been approved by the Purchaser in
writing (other than the Stock Split).
(n) There is no action, suit, investigation or proceeding,
governmental or otherwise, pending or, to the best knowledge of the Company,
threatened to which the Company or any of its Subsidiaries is or would be a
party or of which the properties of the Company or its Subsidiaries are or may
be subject, that (i) seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance and sale of the Preferred Stock and Warrants
by the Company or any of the other transactions contemplated hereby or the
consummation of any of the other Transactions, (ii) questions the legality or
validity of any such transactions or seeks to recover damages or obtain other
relief in connection with any such transactions or (iii) would have a Material
Adverse Effect.
(o) The execution, delivery and performance by the Company and its
Subsidiaries (to the extent a party thereto) of this Agreement, and the other
Transaction Documents, and the issuance and sale by the Company of the
<PAGE> 18
-15-
Securities, the Additional Warrants and the Additional Warrant Shares, and the
execution, delivery and performance by the Company and each of the Subsidiaries
(to the extent each is a party thereto) of all other agreements and instruments
to be executed and delivered by the Company and the Subsidiaries pursuant
hereto or thereto or in connection herewith or therewith, and compliance by the
Company and its Subsidiaries (to the extent a party thereto) with the terms and
provisions hereof and thereof, do not and will not (i) violate any provision of
any law, rule or regulation (including, without limitation, Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System), order, writ,
judgment, decree, determination or award presently in effect or in effect at
the Time of Purchase having applicability to the Company or any of its
Subsidiaries, (ii) conflict with or result in a breach of or constitute a
default under the certificate of incorporation or by-laws of the Company or any
of its Subsidiaries, or any indenture or loan or credit agreement, or any other
agreement or instrument, to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of their
respective properties may be bound or affected, or (iii) except as contemplated
by this Agreement and the Transaction Documents, result in, or require the
creation or imposition of, any Lien upon or with respect to any of the
properties now owned or hereafter acquired by the Company or any of its
Subsidiaries, except, in the case of (i), (ii) or (iii), where such violation,
conflict, default or creation or imposition of any Lien would not have,
individually or in the aggregate, a Material Adverse Effect.
(p) Neither the Company nor any of its Subsidiaries (i) is in
violation of its respective certificate of incorporation or by-laws, (ii) in
default under or in violation of any indenture or loan or credit agreement or
any other material agreement or instrument to which it is a party or by which
it or any of its properties may be bound or affected, (iii) in violation of any
order of any court, arbitrator or governmental body or subject to or party to
any order of any court or governmental authority arising out of any action,
suit or proceeding under any statute or other law respecting antitrust,
monopoly, restraint of trade, unfair competition or similar matters or (iv) in
violation of any such statute, rule or regulation of any governmental
authority, which default or
<PAGE> 19
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violation would, individually or in the aggregate, have a Material Adverse
Effect.
(q) No authorization, consent, approval, license, qualification or
formal exemption from, nor any filing, declaration or registration with, any
court, governmental agency or regulatory authority or any securities exchange
is required in connection with the execution, delivery or performance by the
Company or any of its Subsidiaries (to the extent they are a party thereto) of
this Agreement or any of the other Transaction Documents or of any of the
transactions contemplated thereby, except to the extent contemplated by the
Asset Purchase Agreement and (i) as may be required under federal and state
securities or "blue sky" laws or the laws of any foreign jurisdiction in
connection with the offer and sale of the Securities, the Additional Warrants
or the Additional Warrant Shares or (ii) as would not, individually or in the
aggregate, have a Material Adverse Effect. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations which are required to have been obtained or made as of the Time
of Purchase have been obtained or made, as the case may be, and are in full
force and effect and not the subject of any pending or, to the knowledge of the
Company, threatened attack by appeal or direct proceeding or otherwise.
(r) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the Company will not be immediately after
the Time of Purchase an "investment company" within the meaning of such Act.
(s) The execution and delivery of this Agreement and the other
Transaction Documents and the sale of the Securities, the Additional Warrants
and the Additional Warrant Shares to the Purchaser will not involve any
non-exempt prohibited transaction within the meaning of Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code on the part of the Company or any of its Subsidiaries.
The preceding representation is made in reliance upon, and subject to the
accuracy of, the representation made in Section 3.2(b) as to the Purchaser.
The Company does not and, at and as of the Time of Purchase, the Company will
not reasonably expect to have any liability for any prohibited transaction or
funding deficiency or any
<PAGE> 20
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complete or partial withdrawal liability with respect to any pension, profit
sharing or other plan which is subject to ERISA and which is required to be
funded, to which the Company makes or ever has made a contribution and in which
any employee of the Company is or has ever been a participant, with such
exceptions as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. With respect to such plans, the
Company is and, at and as of the Time of Purchase, the Company will be in
compliance in all respects with all applicable provisions of ERISA, with such
exceptions as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
(t) The Company and each of its Subsidiaries have good and valid
title to, or valid and enforceable leasehold interests in, all properties and
assets identified in the Exchange Act Filings as owned by each of them which
are material to the business of the Company and its Subsidiaries, taken as a
whole, free and clear of all Liens, except (i) such Liens as are described in
the Exchange Act Filings, (ii) Liens created in the ordinary course of
business, (iii) Liens created in connection with the Credit Agreement and the
Subordinated Credit Agreement or (iv) such Liens as, individually or in the
aggregate, would not have a Material Adverse Effect. All of the leases
material to the business of the Company and the Subsidiaries, taken as a whole,
and under which the Company or any Subsidiary holds properties described in the
Exchange Act Filings, are valid and binding as leased by them, with such
exceptions as will not have a Material Adverse Effect on the Company and its
Subsidiaries.
(u) All tax returns required to be filed by the Company or any of its
Subsidiaries in any jurisdiction (including foreign jurisdictions) have been so
filed and all taxes, assessments, fees and other charges including, without
limitation, withholding taxes, penalties, and interest ("Taxes") due or claimed
to be due have been paid, other than those Taxes being contested in good faith
and those Taxes for which adequate reserves or accruals have been established
in accordance with generally accepted accounting principles, except where the
failure to file such returns or to pay such Taxes would not have, individually
or in the aggregate, a Material Adverse Effect. The Company knows of no actual
or proposed additional tax assessments for any fiscal period against the
Company or any of its Subsidiaries that, individually
<PAGE> 21
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or in the aggregate, would have a Material Adverse Effect.
(v) The Company and its Subsidiaries are the sole and exclusive
owners or licensees of all trade names, unregistered trademarks and service
marks, brand names, patents, registered and unregistered copyrights, registered
trademarks and service marks, and all applications for any of the foregoing,
and all permits, grants and licenses or other rights with respect thereto, the
absence of which would not have a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries has been charged with any material infringement of
any intangible property of the character described above or been notified or
advised of any material claim of any other Person relating to any of the
intangible property which infringements or claims, individually or in the
aggregate, would have a Material Adverse Effect.
(w) Except as set forth in the Exchange Act Filings, the Company and
its Subsidiaries comply with all laws, rules and regulations applicable to the
Company and each such Subsidiary, and the Company and its Subsidiaries own or
possess and are operating in compliance in all material respects with the
terms, provisions, conditions, restrictions and limitations contained in all
licenses, franchises, approvals, certificates and permits from all Federal,
state, territorial, foreign and local governmental and regulatory authorities
which are necessary to own or lease their respective properties and assets and
to the conduct of their respective businesses (other than such laws, rules,
regulations, licenses, franchises, approvals, certificates or permits that are
immaterial in scope or application to the Company and its Subsidiaries, taken
as a whole), except where the failure to comply with any of the foregoing would
not have a Material Adverse Effect. Except as otherwise set forth in the
Exchange Act Filings, there are no citations or notices of forfeiture or other
proceedings pending or, to the best knowledge of the Company, threatened or any
basis therefor, which would lead to the revocation, termination, suspension or
non-renewal of any such license, franchise, approval, certificate or permit the
result of which have a Material Adverse Effect. Except as otherwise set forth
in the Exchange Act Filings, there are no restrictions or limitations contained
in any applicable license, franchise, approval, certificate or permit, or, to
the best knowledge of the Company, threatened or proposed in
<PAGE> 22
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any pending or contemplated hearing, proceeding or procedure, that would have a
Material Adverse Effect.
(x) (i) Immediately after the consummation of the Transactions and
other transactions contemplated by the Transaction Documents, the fair value
and present fair saleable value of the assets of the Company will exceed the
sum of its stated liabilities and identified contingent liabilities; and (ii)
the Company is not, nor will it be, after giving effect to the execution,
delivery and performance of the Transaction Documents and the consummation of
the transactions contemplated thereby, (a) left with unreasonably small capital
with which to carry on its business as it is proposed to be conducted, (b)
unable to pay its debts (contingent or otherwise) as they mature or (c)
insolvent.
(y) (i) The Company has delivered to the Purchaser a true and correct
copy of each of the Transaction Documents that have been executed and delivered
prior to the date of this Agreement and each other Transaction Document in the
form substantially as it will be executed and delivered on or prior to the Time
of Purchase, together with all related agreements and all schedules and
exhibits thereto, and there have been no material amendments, alterations,
modifications or waivers of any of the provisions of any of the Transaction
Documents since their date of execution or from the form in which any such
Transaction Document has been delivered to the Purchaser; and (ii) there exists
as of the date hereof (after giving effect to the transactions contemplated by
each of the Transaction Documents) no event or condition that would constitute
a default or an event of default (in each case as defined in each of the
Transaction Documents) under any of the Transaction Documents that would have,
individually or in the aggregate, a Material Adverse Effect.
(z) Except as set forth in the Exchange Act Filings, and except as
would not individually or in the aggregate have a Material Adverse Effect (A)
each of the Company and its Subsidiaries is in compliance with all applicable
Environmental Laws, (B) each of the Company and its Subsidiaries has made all
filings and provided all notices required under any applicable Environmental
Law, and has all permits, authorizations and approvals required under any
applicable Environmental Laws and is in compliance with their requirements, (C)
there are no pending or, to the best knowledge of the Company, after due
inquiry,
<PAGE> 23
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threatened Environmental Claims against any of the Company or its Subsidiaries
and (D) none of the Company or the Subsidiaries has knowledge of any
circumstances with respect to any of their respective properties or operations
that could reasonably be anticipated to form the basis of an Environmental
Claim against any of them or any of their subsidiaries or any of their
respective properties or operations and the business operations relating
thereto.
(aa) Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D under the Act) has directly, or through any agent,
engaged in any form of general solicitation or general advertising in
connection with the offering of the Preferred Stock or the Warrants (as those
terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.
(ab) Assuming the accuracy of the Purchaser's representations and
warranties set forth in Section 3.2 hereof and the due performance by the
Purchaser of the covenants and agreements set forth in Section 3.2 hereof, the
sale of the Preferred Stock and the Warrants to the Purchaser in the manner
contemplated by this Agreement does not require registration under the Act.
(ac) The Company and its Subsidiaries have complied with all
provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida
Statutes and all regulations promulgated thereunder relating to issuers doing
business with the Government of Cuba or with any person or any affiliate
located in Cuba.
Section 3.2. Representations and Warranties of the Purchaser.
(a) The Purchaser represents and warrants to, and covenants and agrees with,
the Company that: (1) the Securities, any Additional Warrants and any
Additional Warrant Shares to be acquired by it hereunder are being or will be
acquired for its own account or an account with respect to which it exercises
sole investment discretion and it or any such account is a "qualified
institutional buyer" as defined in Rule 144A of the Act ("QIB") and has no
intention of distributing or reselling such Securities, Additional Warrants or
Additional Warrant Shares or any part thereof in any transaction which would be
in violation of the securities laws of the United States of America or any
state thereof; (2) it acknowledges that the Securities, Additional Warrants and
<PAGE> 24
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Additional Warrant Shares have not been or will not be registered under the Act
and that none of the Securities, Additional Warrants or Additional Warrant
Shares may be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except as set forth below; (3) it shall not
resell or otherwise transfer any of such Securities, Additional Warrants or
Additional Warrant Shares within three years after the original issuance of the
Securities, Additional Warrants or Additional Warrant Shares except (A) to the
Company or any of its Subsidiaries, (B) inside the United States to a QIB in
compliance with Rule 144A, (C) inside the United States to an institutional
"Accredited Investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of the
Act) that, prior to such transfer, furnishes (or has furnished on its behalf by
U.S. broker-dealer) to the Company a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
Securities, Additional Warrants or Additional Warrant Shares, (D) outside the
United States in compliance with Rule 904 under the Act, (E) pursuant to any
other exemption from registration provided under the Act (if available)
including Rule 144 thereunder or (F) pursuant to an effective registration
statement under the Act; and (4) it will give to each person to whom it
transfers the Securities, Additional Warrants or Additional Warrant Shares, as
the case may be, notice of any restrictions on transfer of such Securities,
Additional Warrants or Additional Warrant Shares, as the case may be; and
subject, nevertheless, to the disposition of the Purchaser's property being at
all times within its control. If the Purchaser should in the future decide to
dispose of any of the Securities, Additional Warrants or Additional Warrant
Shares, as the case may be, the Purchaser understands and agrees that it may do
so only in compliance with the Act, as then in effect, that the Company
reserves the right prior to any offer, sale or transfer pursuant to clause
(3)(C), (D) or (E) above to require the delivery of an opinion of counsel,
certificates and/or other information reasonably satisfactory to the Company
and that stop-transfer instructions to that effect will be in effect with
respect to the Securities, Additional Warrants and the Additional Warrant
Shares. If the Purchaser should decide to transfer or otherwise dispose of the
Securities, Additional Warrants or Additional Warrant Shares, as the case may
be, the Purchaser shall comply with the requirements set forth herein and in
the Certificate of Designations and the Warrant Agreement. The Purchaser
agrees to the imprinting, so long as required by the terms of the relevant
Transaction Document of the applicable legends contained in the Warrant
Agreement on each certificate
<PAGE> 25
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representing Warrants, Warrant Shares, Additional Warrants or Additional
Warrant Shares.
(b) The Purchaser also represents that no part of the funds
to be used to purchase the Securities to be purchased by the Purchaser
constitutes assets of any employee benefit plan, except as otherwise disclosed
in writing to the Company on or prior to the Closing Date. As used in this
Section 3.2(b), the term "employee benefit plan" shall have the meaning
assigned to such term in Section 3 of ERISA.
(c) The Purchaser also represents and warrants to the Company
that (i) it has received and reviewed the Information; (ii) it has authorized
the purchase of the Securities; and (iii) the purchase of Securities does not
violate its charter, by-laws, other organizational documents or any law or
regulation to which it is subject.
ARTICLE IV.
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the
Purchaser. The obligation of the Purchaser to purchase the Securities to be
purchased by it hereunder is subject, at the Time of Purchase, to the
satisfaction of the following conditions:
(a) The Purchaser shall have received an opinion, addressed
to it in form and substance satisfactory to the Purchaser and dated
the Time of Purchase of Powell, Goldstein, Frazer & Murphy, counsel to
the Company, substantially in the form of Exhibit 5 hereto.
(b) The Purchaser shall have received an opinion, addressed
to it in form and substance satisfactory to the Purchaser and dated
the Time of Purchase of Cahill Gordon & Reindel, special counsel to
the Purchaser (the "Special Counsel"), substantially in the form of
Exhibit 6 hereto.
In rendering such opinions in accordance with Sections 4.1(a)
and (b), each such counsel may rely as to factual matters upon
certificates or other documents furnished by officers and directors of
the Company and representations of the Purchaser and the Company and
by government officials, and upon such other documents as such counsel
deem appropriate as a basis for their opinion. Each such counsel may
specify the jurisdictions
<PAGE> 26
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in which it is admitted to practice and that it is not admitted to
practice in any other jurisdiction and is not an expert in the law of
any other jurisdiction. To the extent such opinion concerns the laws
of any other such jurisdiction such counsel may rely upon the opinion
of counsel (reasonably satisfactory to the Purchaser) admitted to
practice in such jurisdiction. Any opinion relied upon by such
counsel as aforesaid shall be delivered to the Purchaser together with
the opinion of such counsel, which opinion shall state that such
counsel believes that it and the Purchaser's reliance thereon is
justified.
(c) The representations and warranties made by the Company
herein shall be true and correct on and as of the Time of Purchase
with the same effect as though such representations and warranties had
been made on and as of the Time of Purchase, the Company shall have
complied in all material respects with all agreements as set forth in
or contemplated hereunder and in the other Transaction Documents, as
the case may be, required to be performed by it at or prior to the
Time of Purchase.
(d) None of the issuance and sale of the Securities pursuant
to this Agreement, the Transactions or any other transactions
contemplated by any of the Transaction Documents shall be enjoined
(temporarily or permanently) and no restraining order or other
injunctive order shall have been issued, and there shall not have been
any legal action, order, decree or other administrative proceeding
instituted or threatened against the Company or against the Purchaser
relating to the issuance of the Securities, the Transactions or any
other transactions contemplated by any of the Transaction Documents.
(e) (i) There shall not have been any change in the capital
stock of the Company or its Subsidiaries (other than the Stock Split)
nor any material increase in the consolidated short-term or long-term
debt of the Company from that set forth on the Exchange Act Filings or
contemplated by the Transaction Documents and (ii) the Company shall
not have any liabilities or obligations, contingent or otherwise
(other than in the ordinary course of business) that are material to
the Company and its Subsidiaries, taken as a whole, other than those
reflected in the Exchange Act Filings or contemplated by the
Transaction Documents.
<PAGE> 27
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(f) Each of the conditions precedent to the obligations of
lenders under the Senior Subordinated Credit Agreement contained in
Section 3.1 thereof shall have been satisfied in all respects or
waived.
(g) At the Time of Purchase, the Purchaser shall have
received a certificate dated the Time of Purch ase in form
satisfactory to the Purchaser from the President and the Chief
Financial Officer of the Company stating that the conditions specified
in this Section 4.1, have been satisfied or duly waived at the Time of
Purchase.
(h) Each of the Basic Documents shall be substantially in the
form attached hereto and the Basic Documents shall have been executed
and delivered by all the respective parties thereto and shall be in
full force and effect.
(i) All costs and any fees due and owing and expenses
(including, without limitation, legal fees and expenses) required to
be paid to or on behalf of the Purchaser on or prior to the Time of
Purchase pursuant to this Agreement and all fees and expenses payable
to the Special Counsel shall have been paid.
(j) The Certificate of Designations shall have been duly
filed with the Secretary of State of the State of Delaware and shall
be in full force and effect.
(k) On or before the Time of Purchase or the Additional Time
of Purchase, as the case may be, the Purchaser and Special Counsel
shall have received such further documents, opinions, certificates and
schedules or other instruments relating to the business, corporate,
legal and financial affairs of the Company and its Subsidiaries as
they may reasonably request.
ARTICLE V.
COVENANTS
Section 5.1. Furnishing of Information. The Company will
furnish to the Purchaser, as long as the Purchaser owns any Preferred Stock or
Warrants the information required by the Certificate of Designations or the
Warrant Agreement, as the case may be.
<PAGE> 28
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Section 5.2. Use of Proceeds. The proceeds of the issuance
and sale of the Preferred Stock and Warrants shall be applied by the Company,
together with borrowings under the Credit Agreement and the Subordinated Credit
Agreement, to pay fees, costs and expenses payable by the Company pursuant
hereto and in connection with the other Transactions, to pay the consideration
for the Acquisition, to repurchase Senior Notes pursuant to the Tender Offer,
to defease such Senior Notes, in whole or in part, and to repay certain
indebtedness of the Company and its Subsidiaries.
Section 5.3. Treatment of Dividends for Income Tax Purposes.
The Company covenants and agrees for the benefit of the Purchaser of Preferred
Stock and for the benefit of each subsequent holder of Preferred Stock that the
Company, (i) will not claim as an expense reducing taxable income any dividends
paid on the Preferred Stock in any Federal income tax return, claim for refund,
or other statement, report or submission, except to the extent that there may
be no reasonable basis in law to do otherwise; and (ii) will make any election
(or take any other action) which may become necessary to comply with clause
(i). At the reasonable request of the Purchaser or subsequent holder of
Preferred Stock (and at the expense of such Purchaser or subsequent holder),
the Company will join in the submission to the Internal Revenue Service of a
request for a ruling that the dividends paid on the Preferred Stock will be
eligible for the dividends received deduction under Section 242(a)(1) of the
Code. In addition, the Company will cooperate with the Purchaser or subsequent
holder of Preferred Stock in any litigation, appeal, or other proceeding
relating to the eligibility for the dividends received deduction under Section
243(a)(1) of the Code of any dividends (within the meaning of Section 316(a) of
the Code), paid on the Preferred Stock, provided that the Purchaser or
subsequent holder shall reimburse the Company for its reasonable out-of-pocket
expenses in connection with such proceeding. To the extent possible, the
principles of this Section 5.3 shall also apply with respect to state and local
taxes. The Company will use its best efforts to ensure that distributions made
with respect to the Preferred Stock are treated as dividends within the meaning
of Section 316(a) of the Code consistent with the operations of its business in
the ordinary course and with the accounting method and principles then in use.
The obligations of the Company hereunder shall survive the payment, redemption
or exchange of the Preferred Stock, the transfer of the Preferred Stock, and
the termination of this Agreement or any of the other Transaction Documents.
<PAGE> 29
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Section 5.4. Original Issue Discount. The Company may assert
a deduction for additional original issue discount if (i) in the opinion of
Counsel (as defined below) proposed or final Treasury regulations under the
Code or any amendment to the Code provides, or the holding in any Revenue
Ruling or other official announcement from the Department of Treasury including
the Internal Revenue Service or in any case decided by a Federal court
including the Tax Court and the Claims Court, fairly implies, that holders of
the Securities are required to include in income additional original issue
discount on the Securities, or (ii) the Internal Revenue Service asserts in
connection with an audit involving the Company, the Purchaser (or any
subsequent holder) or any other issuer or holder which in the opinion of
Counsel is similarly situated, that the Securities or similar securities have
additional original issue discount within the meaning of Section 1273 of the
Code, or any successor provision. For purposes of this Section 5.4, the term
"Counsel" shall mean such counsel of national standing as may be approved by
the Company and which counsel has no conflict of interest with either the
Company or the Purchaser.
Section 5.5. Issuance of Additional Warrants. If Preferred
Stock continues to be outstanding on and after the 60th day immediately
following the Time of Purchase, the Company will, as long as Preferred Stock
continues to be outstanding, issue Additional Warrants (identical to the
Warrants except that, with respect to the Additional Warrants referred to in
clause (iii) below, the expiration date shall be five years from the date of
issuance thereof and the redemption period shall commence on the date which is
three years from the date of issuance thereof, in each case as provided in the
Warrant Agreement and the Additional Warrants) under the Warrant Agreement
exercisable for Additional Warrant Shares, and subject to adjustment as
provided in Section 2.2(b) hereof, as follows: (i) 4,100 Additional Warrants
on each day commencing on, and including, the 61st day immediately following
the Time of Purchase and ending on, and including, the 90th day immediately
following the Time of Purchase, (ii) 5,235 Additional Warrants on each day
commencing on, and including, the 91st day immediately following the Time of
Purchase and ending on, and including, the 120th day immediately following the
Time of Purchase and (iii) 455,000 Additional Warrants on each quarterly
dividend payment date for the Preferred Stock after the 120th day immediately
following the Time of Purchase, whether or not dividends on the Preferred Stock
are declared on any such date; provided, however, that if (x) the Purchaser
shall purchase less than $165,000,000
<PAGE> 30
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aggregate liquidation value of Preferred Stock (the "Original Preferred Stock")
or (y) the Company shall redeem any of the Original Preferred Stock, the number
of Additional Warrants to be issued on such day or date shall be reduced to a
number equal to the number of Additional Warrants set forth in clause (i), (ii)
or (iii), as applicable, multiplied by a fraction, the numerator which shall be
the number of shares of Original Preferred Stock remaining outstanding on such
day or date and the denominator of which shall be 165,000. All Additional
Warrants will be issued on a pro rata basis to the holders of outstanding
Warrants based on the number of Warrants held by each such holder. The Company
agrees to take all steps necessary to provide for sufficient authorized shares
of Common Stock for issuance upon the exercise of any Additional Warrants.
Section 5.6. Preferred Stock. To the extent permitted by
applicable law the Company will treat the Preferred Stock as "stock" for the
purposes of the Code.
ARTICLE VI.
FEES
Section 6.1. Commitment Fee. The Company agrees to pay to
the Purchaser on the date of execution and delivery of this Agreement in
immediately available funds a commitment fee equal to 2% of the aggregate
liquidation value of the Preferred Stock agreed to be purchased pursuant to
this Agreement.
Section 6.2. Funding Fee. The Company agrees to pay to the
Purchaser at the Time of Purchase in immediately available funds a funding fee
equal to 2% of the aggregate liquidation value of the Preferred Stock
purchased. The Company further agrees that the Purchaser may deduct such
amount from any amounts payable by the Purchaser to the Company at the Time of
Purchase.
Section 6.3. Delay Fees. If the Closing shall not actually
occur on any date on which the Closing is scheduled to occur, and the Company
shall have failed to notify the Purchaser prior to 11:00 A.M., New York time,
on the date of such scheduled Closing that the Company has elected to postpone
the Closing, the Company shall pay to the Purchaser (as compensation for the
Purchaser's loss of funds and administrative costs) an amount of immediately
available funds equal to interest on the purchase price for the Securities to
have been purchased by the Purchaser on such scheduled date at
<PAGE> 31
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such Closing at the rate per annum on the Preferred Stock which the Purchaser
has agreed to purchase as if the Preferred Stock and Warrants had been issued
on the scheduled date of Closing for each day from and including such scheduled
date of Closing to but not including the earlier of the date on which such
Closing actually occurs or the date on which the amount to be paid by the
Purchaser as said purchase price is available to such Purchaser for
reinvestment, but in any case not less than one day's interest; provided,
however, that the Company shall not owe the Purchaser anything under this
Section 6.1 if the Company has fulfilled all of its obligations under this
Agreement and the Purchaser is not willing or able to fulfill its obligations
on the scheduled date of Closing.
ARTICLE VII.
INDEMNITY
Section 7.1. Indemnity.
(a) Indemnification by the Company. The Company agrees and
covenants to hold harmless and indemnify the Purchaser and each person, if any,
who controls the Purchaser within the meaning of Section 15 of the Act and
Section 20 of the Exchange Act from and against any losses, claims, damages,
liabilities and expenses (including expenses of investigation) to which the
Purchaser or such controlling person may become subject (i) arising out of or
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Information and any amendments or supplements thereto or
any documents filed with the Commission or any State Commission or arising out
of or based upon the omission or alleged omission to state in the Information a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) arising out of, based upon or in any way related
or attributed to claims, actions or proceedings relating to this Agreement or
the subject matter of this Agreement or (iii) arising in any manner out of or
in connection with such Person being a Purchaser of the Preferred Stock and
Warrants and relating to any action taken or omitted to be taken by the
Company; provided, however, that the Company shall not be liable under this
paragraph (a) for any amounts paid in settlement of claims without its written
consent, which consent shall not be unreasonably withheld, or to the extent
that it is finally judicially determined that such losses, claims, damages or
liabilities arose primarily out of the gross negligence, willful misconduct or
bad faith of the Purchaser. The Company further agrees to reimburse the
Purchaser for any
<PAGE> 32
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reasonable legal and other expenses as they are incurred by it in connection
with investigating, preparing to defend or defending any lawsuits, claims or
other proceedings or investigations arising in any manner out of or in
connection with such Person being a Purchaser; provided that if the Company
reimburses the Purchaser hereunder for any expenses incurred in connection with
a lawsuit, claim or other proceeding for which indemnification is sought, the
Purchaser hereby agrees to refund such reimbursement of expenses to the extent
it is finally judicially determined that the losses, claims, damages or
liabilities arising out of or in connection with such lawsuit, claim or other
proceedings arose primarily out of the gross negligence, willful misconduct or
bad faith of the Purchaser or from a violation by the Purchaser of legal
requirements applicable to the Purchaser solely because of its character as a
particular type of regulated institution (except that the Company shall not be
entitled to reimbursement under this Section 7.1 if its representation in
Section 3.1(v) hereof applies to the legal requirements violated by the
Purchaser). The Company further agrees that the indemnification, contribution
and reimbursement commitments set forth in this Article VII shall apply whether
or not the Purchaser is a formal party to any such lawsuits, claims or other
proceedings. Notwithstanding the foregoing, the Company shall not be liable to
a party seeking indemnification under the foregoing provisions of this
paragraph (a) to the extent that any such losses, claims, damages, liabilities
or expenses arise out of or are based upon an untrue statement or omission made
in any of the documents referred to in this paragraph (a) in reliance upon and
in conformity with the information relating to the party seeking
indemnification furnished in writing by such party for inclusion therein. The
indemnity, contribution and expense reimbursement obligations of the Company
under this Article VII shall be in addition to any liability the Company may
otherwise have.
(b) Procedure. If any Person shall be entitled to indemnity
hereunder (the "Indemnified Parties"), such Indemnified Party shall give prompt
notice confirmed in writing to the party or parties from which such indemnity
is sought (the "Indemnifying Parties") of the commencement of any proceeding (a
"Proceeding") with respect to which such Indemnified Party seeks
indemnification or contribution pursuant hereto; provided, however, that the
failure so to notify the Indemnifying Parties shall not relieve the
Indemnifying Parties from any obligation or liability except to the extent that
the Indemnifying Parties have been prejudiced materially by such failure. The
Indemnifying Parties shall
<PAGE> 33
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have the right, exercisable by giving written notice to an Indemnified Party
promptly after the receipt of written notice from such Indemnified Party of
such Proceeding, to assume, at the Indemnifying Parties' expense, the defense
of any such Proceeding, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that an Indemnified Party or parties (if
more than one such Indemnified Party is named in any Proceeding) shall have the
right to employ separate counsel in any such Proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or parties unless: (1) the Indemnifying
Parties agree to pay such fees and expenses; or (2) the Indemnifying Parties
fail promptly to assume the defense of such Proceeding or fail to employ
counsel reasonably satisfactory to such Indemnified Party or parties; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party or Parties and the Indemnifying Party or an
Affiliate of the Indemnifying Party and such Indemnified Parties, and the
Indemnifying Parties shall have been advised in writing by counsel that there
may be one or more material defenses available to such Indemnified Party or
parties that are different from or additional to those available to the
Indemnifying Parties, in which case, if such Indemnified Party or parties
notifies the Indemnifying Parties in writing that it elects to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying Parties
shall not have the right to assume the defense thereof and such counsel shall
be at the expense of the Indemnifying Parties, it being understood, however,
that, unless there exists a conflict among Indemnified Parties, the
Indemnifying Parties shall not, in connection with any one such Proceeding or
separate but substantially similar or related Proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel, if any) at any time for such
Indemnified Party or parties, or for fees and expenses that are not reasonable.
No Indemnified Party or parties will settle any Proceedings without the written
consent of the Indemnifying Party or parties (but such consent will not be
unreasonably withheld).
Section 7.2. Contribution. If for any reason the
indemnification provided for in Section 7.1 of this Agreement is unavailable to
an Indemnified Party, or insufficient to hold it harmless, in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then each
applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or
<PAGE> 34
-31-
payable by such Indemnified Party as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnifying Party on the one hand and the
Indemnified Party on the other, but also the relative fault of the Indemnifying
and Indemnified Parties in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Indemnifying and
Indemnified Parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying or Indemnified Parties and each such party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities referred to above shall
be deemed to include any reasonable legal or other fees or expenses incurred by
such party in connection with investigating or defending any such claim.
The Company and the Purchaser agree that it would not be just
and equitable if contribution pursuant to the immediately preceding paragraph
were determined by any method of allocation which does not take into account
the equitable considerations referred to in such paragraph. No person guilty
of fraudulent misrepresentation shall be entitled to contribution from any
Person.
Section 7.3. Registration Rights Agreements. Notwithstanding
anything to the contrary in this Article VII, the indemnification and
contribution provisions of the Registration Rights Agreement or the Common
Stock Registration Rights Agreement shall govern any claim with respect
thereto.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Home Office Payment. Subject to the provisions
of the Basic Documents, the Company agrees that, so long as the original
Purchaser hereunder shall own Securities purchased by it hereunder, the Company
will make any payments to the Purchaser of liquidation preference, premium or
dividends due on any Security not represented by a Global Certificate (and any
liquidated damages payments relating thereto pursuant to the Preferred Stock
Registration Rights
<PAGE> 35
-32-
Agreement) by wire transfer in immediately available funds by 11:00 p.m., local
time at the location in the United States of the Purchaser's account, on the
date of payment to such account as shall have been specified by separate
written notice to the Company by the Purchaser (providing sufficient
information with such wire transfer to identify the source and application of
the funds and requesting the bank to send a credit advice thereof to the
Purchaser), or to such other account or in such other similar manner as the
Purchaser may designate to the Company in writing.
Section 8.2. Survival of Provisions. The representations,
warranties and covenants of the Company and the Purchaser made herein, the
indemnity and contribution agreements contained herein and each of the
provisions of Articles V, VII and VIII shall remain operative and in full force
and effect regardless of (a) any investigation made by or on behalf of the
Company, the Purchaser or any Indemnified Party, (b) acceptance of any of the
Securities and payment therefor or (c) disposition of the Securities by the
Purchaser whether by redemption, exchange, sale or otherwise. The respective
agreements, covenants, indemnities and other statements set forth in Article
VII and Section 8.8 shall remain in full force and effect regardless of any
termination or cancellation of this Agreement.
Section 8.3. Termination. This Agreement may be terminated
(as to the party electing to so terminate it) at any time prior to the Time of
Purchase by the Purchaser if any of the conditions specified in Section 4.1 of
this Agreement have not been met or waived pursuant to the terms of this
Agreement. In addition, the obligation of the Purchaser to purchase the
Preferred Stock and Warrants shall terminate on the earlier of (i) the date on
which the Asset Purchase Agreement is terminated in accordance with its terms,
(ii) the date on which the Company informs the Purchaser that it has decided
not to proceed with the Acquisition if such Asset Purchase Agreement has not
been executed and (iii) September 30, 1996 if the Closing does not occur on or
before such date.
Section 8.4. No Waiver; Modifications in Writing. (a) No
failure or delay on the part of the Company or the Purchaser in exercising any
right, power or remedy hereunder 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 are cumulative and are not exclusive
of any remedies that may
<PAGE> 36
-33-
be available to the Company or the Purchaser at law or in equity or otherwise.
No waiver of or consent to any departure by the Company from any provision of
this Agreement shall be effective unless signed in writing by the party
entitled to the benefit thereof, provided that notice of any such waiver shall
be given to each party hereto as set forth below. Except as otherwise provided
herein, no amendment, modification or termination of any provision of this
Agreement shall be effective unless signed in writing by or on behalf of the
Purchaser. Any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement, and any consent
to any departure by the Company from the terms of any provision of this
Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar
or other circumstances.
(b) Except pursuant to Article VI hereof, the Company has not
paid or shall not pay, or has not caused or shall not cause to be paid,
directly or indirectly, any remuneration, whether by way of interest, fee or
otherwise, to any holder of any Securities as consideration for or as an
inducement to the purchase by any holder of the Securities.
Section 8.5. Role of Special Counsel. The role of Cahill
Gordon & Reindel, special counsel to the Purchaser, has been limited to
functioning on this Agreement and such firm has not performed a due diligence
investigation with respect to the Company or any of its Subsidiaries (after
giving effect to the Acquisition) or their respective affairs.
Section 8.6. Communications. All notices, demands and other
communications provided for hereunder shall be in writing and, (a) if to the
Purchaser, shall be given by registered or certified mail, return receipt
requested, telex, telegram, telecopy, courier service or personal delivery,
addressed to CIBC WG Argosy Merchant Fund 2, L.L.C. c/o CIBC Wood Gundy
Securities Corp., 425 Lexington Avenue, 3rd Floor, New York, New York 10017 or
to such other address as the Purchaser may designate to the Company in writing,
(b) if to the Company, shall be given by similar means to Outdoor Services,
Inc., 2502 North Black Canyon Highway, Phoenix, Arizona 85009, Attention:
President, or at such other address as the Company may designate in writing.
In each case notices,
<PAGE> 37
-34-
demands and other communications shall be deemed given when received.
Section 8.7. Costs, Expenses and Taxes. The Company agrees
to pay all costs and expenses (including, without limitation, the reasonable
fees and expenses of Purchaser's counsel) in connection with the negotiation,
preparation, printing, typing, reproduction, execution and delivery of this
Agreement and each of the other Transaction Documents, any amendment or
supplement to or modification of any of the foregoing and any and all other
documents furnished pursuant hereto or thereto or in connection herewith or
therewith, and, except as limited by Article VII, all costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses of
Company counsel), if any, in connection with the enforcement of this Agreement,
the Securities, the Additional Warrants or the Additional Warrant Shares or any
other agreement furnished pursuant hereto or thereto or in connection herewith
or therewith. In addition, the Company shall pay any and all stamp, transfer
and other similar taxes payable or determined to be payable in connection with
the execution and delivery of this Agreement, any other Transaction Document or
the issuance of the Securities, the Additional Warrants or the Additional
Warrant Shares, and shall save and hold the Purchaser harmless from and against
any and all liabilities with respect to or resulting from any delay in paying,
or omission to pay, such taxes.
Section 8.8. Determinations. All determinations to be made
by the Company or the Purchaser hereunder in its opinion or judgment or with
its approval or otherwise shall be made by it in its sole discretion.
Section 8.9. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 8.10. Binding Effect; Assignment. The rights and
obligations of the Purchaser under this Agreement may not be assigned to any
other Person except with the prior consent of the Company. Except as expressly
provided in this Agreement, this Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement, and their respective successors and assigns.
<PAGE> 38
-35-
This Agreement shall be binding upon the Company and the Purchaser, and their
successors and assigns.
SECTION 8.11. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 8.12. Severability of Provisions. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.13. Headings. The Article and Section headings and
Table of Contents used or contained in this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement.
<PAGE> 39
-36-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
OUTDOOR SYSTEMS, INC.
By:/s/William S. Levine
------------------------------
Name: William S. Levine
Title: Chairman
CIBC WG ARGOSY MERCHANT
FUND 2, L.L.C.
By:/s/Andrew R. Heyer
------------------------------
Name: Andrew R. Heyer
Title: Managing Director
<PAGE> 40
Schedule I
----------
SUBSIDIARIES
------------
Name Jurisdiction of Name
- ---- Incorporation
--------------------
Outdoor Systems Painting, Inc. Arizona
OS Advertising of Texas Painting, Inc. Texas
OS Baseline, Inc. Arizona
Decode Communications Group, Inc. Colorado
Bench Advertising Company of Colorado, Inc. Colorado
New York Subways Advertising Co., Inc. Arizona
Mediacom Inc. Canada
<PAGE> 41
Schedule II
-----------
OUTSTANDING SUBSCRIPTIONS,
OPTIONS, WARRANTS, RIGHTS, ETC.
-------------------------------
None.
<PAGE> 1
EXHIBIT 99.7
CERTIFICATE OF DESIGNATIONS OF
PREFERENCES AND RIGHTS OF
SENIOR INCREASING RATE CUMULATIVE PREFERRED STOCK, SERIES A
(PAR VALUE $1.00 PER SHARE)
OF
OUTDOOR SYSTEMS, INC.
_______________
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
________________
OUTDOOR SYSTEMS, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify that, pursuant to authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, and pursuant
to the provisions of Section 151 of the Delaware General Corporation Law, said
Board of Directors duly adopted a resolution on [ ], 1996, which
approved the filing of this Certificate of Designations and which resolution
remains in full force and effect as of the date hereof.
Pursuant to such resolution and the authority conferred upon
the Board of Directors by the Certificate of Incorporation of the Corporation,
there is hereby created a series of preferred stock of the Corporation, which
series shall have the following powers, designations, preferences, and
relative, participating, optional or other special rights, and the
qualifications or restrictions thereof, in addition to those set forth in the
Certificate of Incorporation of the Corporation:
1. Certain Definitions. As used herein, the following
terms shall have the following meanings (with terms defined in the singular
having comparable meanings when used in the plural and vice versa), unless the
context otherwise requires:
"Advertising Displays" mean all posters, signs, billboards and
other outdoor advertising displays and related sites therefor owned or leased
(as lessee) by the Corporation and its Subsidiaries.
<PAGE> 2
-2-
"Affiliate" of any specified Person means any other Person
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by," and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement
or otherwise; provided, however, that beneficial ownership of at least 10% of
the voting securities of a Person shall be deemed to be control.
"Agent Member" has the meaning specified in Section 16.
"Asset Sale" means the sale, transfer or other disposition
(other than to the Corporation or any of its wholly owned Subsidiaries) in any
single transaction or series of related transactions of (a) any Capital Stock
of or other equity interest in any Subsidiary of the Corporation, (b) all or
substantially all of the assets of the Corporation or of any Subsidiary
thereof, (c) real property having a fair market value in excess of $100,000 or
(d) all or substantially all of the assets of any business, or part thereof,
owned by the Corporation or any Subsidiary thereof, or a division, line of
business or comparable business segment of the Corporation or any Subsidiary
thereof; provided that Asset Sales shall not include sales, leases,
conveyances, transfers or other dispositions to the Corporation or to a wholly
owned Subsidiary or to any other Person if after giving effect to such sale,
lease, conveyance, transfer or other disposition such other Person becomes a
wholly owned Subsidiary.
"Asset Sale Proceeds" means, with respect to any Asset Sale,
(i) cash received by the Corporation or any Subsidiary from such Asset Sale,
after (a) provision for all income or other taxes measured by or resulting from
such Asset Sale, (b) payment of all brokerage commissions, underwriting and
other fees and expenses related to such Asset Sale, (c) provision for minority
interest holders in any Subsidiary as a result of such Asset Sale and (d)
deduction of appropriate amounts to be provided by the Corporation or a
Subsidiary as a reserve, in accordance with GAAP, against any liabilities
associated with the assets sold or disposed of in such Asset Sale and retained
by the Corporation or a Subsidiary after such Asset Sale, including, without
limitation, pension and other postemployment benefit liabilities and
liabilities related to environmental matters or against any
<PAGE> 3
-3-
indemnification obligations associated with the assets sold or disposed of in
such Asset Sale, and (ii) promissory notes and other non-cash consideration
received by the Corporation or any Subsidiary from such Asset Sale or other
disposition upon the liquidation or conversion of such notes or non-cash
consideration into cash.
"Available Asset Sale Proceeds" means, with respect to any
Asset Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have
not been applied in accordance with clause (iii)(a) or (iii)(b) of Section
7(A)(a) and which have not been the basis for an Excess Proceeds Offer in
accordance with clause (iii)(c) of such Section 7(A)(a).
"Board of Directors" means the board of directors of the
Corporation or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified
pursuant to an officers' certificate to have been duly adopted by the Board of
Directors of the Corporation and to be in full force and effect, and delivered
to the Holder.
"Business Day" means a day that is not a Saturday, a Sunday or
a day on which banking institutions in the State of New York are not required
to be open.
"Capital Stock" means, with respect to any Person, any and all
shares or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Corporation to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group"), together with any
Affiliates thereof; (ii) the approval by the holders of Capital Stock of the
Corporation of any plan or proposal for the liquidation or dissolution of the
Corporation; (iii) the Permitted Holders, individually or in the aggregate,
shall cease to beneficially own (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, voting Capital Stock representing at
least 40% (or at any time that the Corporation's Cash Flow Leverage Ratio (as
defined in the Senior Subordinated Credit Agreement) for the Corporation's most
recently ended two
<PAGE> 4
-4-
full fiscal quarters for which internal financial statements are available
determined on a pro forma basis in accordance with the last paragraph of
Section 6.1 of the Senior Subordinated Credit Agreement is less than 3.5 to 1,
25%) of the total voting power of all voting Capital Stock of the Corporation;
(iv) any Person or Group (other than the Permitted Holders) shall become the
owner, directly or indirectly, beneficially or of record, of voting Capital
Stock representing more than 20% of the total voting power of all voting
Capital Stock of the Corporation; (v) the replacement of a majority of the
Board of Directors of the Corporation over a two-year period from the directors
who constituted the Board of Directors of the Corporation at the beginning of
such period, and such replacement shall not have been approved by a vote of at
least two-thirds of the Board of Directors of the Corporation then still in
office who either were members of such Board of Directors at the beginning of
such period or whose election as a member of such Board of Directors was
previously so approved; or (vi) the occurrence of any "Change of Control" as
defined in the Senior Subordinated Credit Agreement.
"Change of Control Offer" has the meaning specified in Section
7(B).
"Change of Control Payment Date" has the meaning specified in
Section 7(B).
"Change of Control Purchase Price" has the meaning specified
in Section 7(B).
"Common Stock" of any Person means all Capital Stock of such
Person that is generally entitled to (i) vote in the election of directors of
such Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or
others that will control the management and policies of such Person.
"Corporation" means Outdoor Services, Inc., a Delaware
corporation.
"Denver Disposition" means the sale by the Corporation of any
or all of the outdoor advertising assets of the Corporation that, prior to the
date hereof, service the Denver, Colorado market.
"Depositary" has the meaning specified in Section 16.
<PAGE> 5
-5-
"Dividend Payment Date" means November 15, February 15, May 15
and August 15, commencing November 15, 1996, unless such day is not a Business
Day, in which case the Dividend Payment Date shall be the immediately
succeeding Business Day.
"Dividend Rate" has the meaning specified in Section 3 hereof.
"Dividend Record Date" means a day fifteen (15) days preceding
the Dividend Payment Date.
"Excess Proceeds Offer" has the meaning specified in Section
7(A) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
"GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.
"Global Series A Preferred Stock" has the meaning specified in
Section 16 hereof.
"Holder" means a registered holder of shares of Series A
Preferred Stock.
"Houston Disposition" means the sale by the Corporation of any
or all of the assets representing outdoor advertising assets serving the
Houston, Texas market prior or subsequent to the date hereof.
"Issue Date" means the date the Series A Preferred Stock was
first issued by the Corporation.
"Liquidation Preference" means $1000 per share of Series A
Preferred Stock plus, for purposes of Section 8 hereof, whether such share is
issued or accrued, in each case, accrued and unpaid dividends, whether or not
declared, if any, thereon through the date such Liquidation Preference is paid.
"Offer Period" has the meaning specified in Section 7(A).
"Permitted Asset Swap" means the exchange, in the ordinary
course of the outdoor advertising business, of any interest of the Corporation
or any of its Subsidiaries in any Advertising Display or Displays for a similar
interest in an
<PAGE> 6
-6-
Advertising Display or Displays of a Person other than the Corporation or such
Subsidiary; provided that (i) the aggregate fair market value (as determined in
good faith by the Board of Directors of the Corporation) of the Advertising
Display or Displays being transferred by the Corporation or such Subsidiary is
not greater than the aggregate fair market value (as determined in good faith
by the Board of Directors of the Corporation) of the Advertising Display or
Displays received by the Corporation or such Subsidiary in such exchange and
(ii) the aggregate fair market value (as determined in good faith by the Board
of Directors of the Corporation) of all Advertising Displays transferred by the
Corporation and its Subsidiaries in connection with exchanges in any period of
twelve consecutive months shall not exceed $500,000.
"Permitted Holders" means William S. Levine, Arthur R. Moreno,
any trust solely for the benefit of Messrs. Levine and Moreno or their
respective immediate family members, or any partnership all the ownership
interests in which are beneficially owned or controlled by any of the
foregoing; provided that with respect to any such trust or partnership either
Mr. Levine or Mr. Moreno shall at all times have the exclusive power to direct
the voting of the shares of voting Capital Stock of the Company held by such
trust or partnership.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or other legal entity.
"Physical Series A Preferred Stock" has the meaning specified
in Section 16 hereof.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the
holders of other Capital Stock issued by such Person.
"Purchase Date" has the meaning specified in Section 7(A)
hereof.
"Redemption Date" when used with respect to any shares of
Series A Preferred Stock means the date fixed for such redemption of such
shares of Series A Preferred Stock pursuant to Section 6 hereof.
<PAGE> 7
-7-
"Redemption Notice" has the meaning specified in Section 6(C)
hereof.
"Reinvestment Date" has the meaning specified in Section 7(A)
hereof.
"Senior Subordinated Credit Agreement" means the Credit
Agreement dated as of July 9, 1996 by and among the Company, the guarantors
named therein and Canadian Imperial Bank of Commerce, as agent, and the
financial institutions parties thereto, as lenders.
"Series A Preferred Stock" means the Senior Increasing Rate
Cumulative Preferred Stock, Series A, par value $1.00 per share, of the
Corporation.
"Series A Preferred Stock Certificate" has the meaning
specified in Section 6(C) hereof.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, officers or trustees thereof is held by such first-named Person
or any of its Subsidiaries; or (ii) in the case of a partnership, joint
venture, association or other business entity, with respect to which such
first-named Person or any of its Subsidiaries has the power to direct or cause
the direction of the management and policies of such entity by contract or
otherwise or if in accordance with GAAP such entity is consolidated with the
first-named Person for financial statement purposes.
"Temporary Cash Investments" means (i) Investments in U.S.
Government Obligations maturing within 365 days of the date of purchase; (ii)
Investments in certificates of deposit issued by a bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia, in each case having capital, surplus and undivided profits totaling
more than $500,000,000 and rated at least A by Standard & Poor's Corporation
and A-2 by Moody's Investors Service, Inc. maturing within 365 days of
purchase; or (iii) Investments not exceeding 365 days in duration in money
market funds that invest substantially all of such funds' assets in the
Investments described in the preceding clauses (i) and (ii).
"U.S. Government Obligations" means (a) securities that are
direct obligations of the United States of America for the payment of which its
full faith and credit are pledged or (b)
<PAGE> 8
-8-
obligations of a Person controlled or supervised by and action as an agency or
instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof.
2. Designation. The series of preferred stock
established hereby shall be designated the "Senior Increasing Rate Cumulative
Preferred Stock, Series A" (and shall be referred to herein as the "Series A
Preferred Stock") and the authorized number of shares of Series A Preferred
Stock shall be [ ] shares.
3. Dividends. (a) Holders will be entitled to receive,
when, as and if declared by the Board of Directors, out of funds legally
available therefor, dividends payable in shares of Series A Preferred Stock at
a rate per annum of [ ](1) share of Series A Preferred Stock per share
of Series A Preferred Stock (the "Dividend Rate") on any Dividend Payment Date.
If the Series A Preferred Stock remains outstanding on the date which is 180
days after the Issue Date, the Dividend Rate on each share of Series A
Preferred Stock will increase for the first 90-day period following such
180-day period by 1/100 (one one-hundredth) share of Series A Preferred Stock
in excess of the rate otherwise payable, and thereafter, the Dividend Rate on
each share of Series A Preferred Stock will further increase, for each 90-day
period that the Series A Preferred Stock remains outstanding, by an additional
5/1000 (five one- thousandths) share of Series A Preferred Stock, in each case,
in excess of the rate otherwise payable, each such increase payable on each
subsequent Dividend Payment Date; provided, however, that at no time will the
dividend rate per annum on the Series A Preferred Stock exceed 20/100 (twenty
one-hundredths) share of Series A Preferred Stock on each share of Series A
Preferred Stock. Dividends will be cumulative and will accrue from the date of
issuance of the Series A Preferred Stock to which they relate and be payable
quarterly in arrears as provided in the immediately preceding sentence on each
Dividend Payment Date, commencing on November 15, 1996. Dividends, whether or
not declared, will cumulate until declared and paid, when declaration and
payment may be for all or part of the then-accumulated dividends. Each
dividend shall be payable to Holders of record as they appear on the stock
books of the Corporation on each Dividend Record Date. Accrued and unpaid
dividends, if any, shall accumulate dividends
____________________
1 Three month LIBOR plus 700 basis points.
<PAGE> 9
-9-
to the same extent as issued shares of Series A Preferred Stock. Dividends
shall cease to accrue in respect of the Series A Preferred Stock on any
Redemption Date with respect to Series A Preferred Stock redeemed on any such
date. The amount of dividends payable pursuant hereto shall be determined on
the basis of a 360-day year comprised of twelve 30- day months.
Notwithstanding anything to the contrary herein, the
Corporation shall not issue fractional shares of Series A Preferred Stock as
dividends on shares of Series A Preferred Stock. If any fraction of a share of
Series A Preferred Stock would otherwise be required to be paid to the Holders
pursuant to this Section 3, the Corporation shall pay in lieu of such
fractional share an amount in cash for such fractional share at a rate equal to
$1000 per whole share.
(b) As long as any Bridge Notes (as defined in the Senior
Subordinated Credit Agreement) are outstanding under the Senior Subordinated
Credit Agreement, the Company shall not pay any dividend or make any
distribution, in each case other than in shares of Common Stock of the Company,
under or in respect of the Company's Common Stock.
4. Ranking. The Series A Preferred Stock shall, with
respect to dividend rights and rights on liquidation, winding-up and
dissolution, rank senior to all classes of Common Stock of the Corporation and
to any other class or series of any class of Preferred Stock of the
Corporation, whether now outstanding or issued hereafter. The Corporation
shall not create any class or series of Preferred Stock ranking pari passu with
or senior to the Series A Preferred Stock with respect to dividend rights and
rights on liquidation, winding-up and dissolution without the approval of
Holders of a majority of the outstanding shares of Series A Preferred Stock.
5. Voting Rights. Except as required by the General
Corporation Law of the State of Delaware, and except as provided in Section 4
hereof, the Holders shall not be entitled to vote on any matter submitted to a
vote of stockholders of the Corporation.
6. Redemption.
(A) Optional Redemption. The Series A Preferred Stock
may be redeemed at the option of the Corporation in whole or, from time to
time, in part, in the manner provided in Section 6(C) hereof at any time at
100% of the Liquidation Preference of the Series A Preferred Stock so redeemed,
payable in cash, plus
<PAGE> 10
-10-
accrued and unpaid dividends (whether or not declared), which shall also be
paid in cash (whether or not otherwise payable in cash) to the Redemption Date.
(B) Mandatory Redemption. The Corporation shall be
obligated to redeem all outstanding shares of Series A Preferred Stock on [
], 2008 at a redemption price equal to the Liquidation Preference thereof,
payable in cash, plus accrued and unpaid dividends (whether or not declared),
which shall also be paid in cash (whether or not otherwise payable in cash) to
the Redemption Date.
(C) Procedure for Redemption.
(i) In the event of a redemption of less than all of the
Series A Preferred Stock, the shares so redeemed will be determined by the
Corporation pro rata according to the number of shares held by each Holder.
(ii) The Corporation shall send a written notice of
redemption (the "Redemption Notice") by first-class mail, postage prepaid, not
fewer than 30 days nor more than 60 days prior to the applicable Redemption
Date to each Holder as of the record date fixed for such redemption of Series A
Preferred Stock at such Holder's address as the same appears on the stock books
of the Corporation; provided, however, that no failure to give such notice to
any Holder or Holders nor any deficiency therein shall affect the validity of
the procedure for the redemption of any shares of Series A Preferred Stock to
be redeemed except as to the Holder or Holders to whom the Corporation has
failed to give said notice or except as to the Holder or Holders whose notice
was defective. The Redemption Notice shall state:
(A) whether all or less than all the outstanding shares
of Series A Preferred Stock are to be redeemed and the total number
of shares of Series A Preferred Stock being redeemed;
(B) the number of shares of Series A Preferred Stock held of
record by that specific Holder that the Corporation intends to redeem;
(C) the applicable Redemption Date;
(D) the manner and place or places at which payment for the
shares called for redemption will, upon presentation and surrender to
the Corporation of the certificates representing the Series A
Preferred Stock (the "Series A
<PAGE> 11
-11-
Preferred Stock Certificates") evidencing the shares being redeemed,
be made; and
(E) that dividends on the shares of Series A Preferred Stock
being redeemed shall cease to accrue on the applicable Redemption
Date.
(iii) On the applicable Redemption Date, the full
applicable redemption price shall become payable for the shares of Series A
Preferred Stock being redeemed on the applicable Redemption Date. As a
condition of payment of the applicable redemption price, each Holder of Series
A Preferred Stock must surrender a Series A Preferred Stock Certificate or
Certificates representing the shares of Series A Preferred Stock being redeemed
by the Corporation in the manner and at the place designated in the applicable
Redemption Notice. The full applicable redemption price for such shares
properly tendered for payment shall be paid to the person whose name appears on
such Series A Preferred Stock Certificate or Certificates as the owner thereof,
on and after the applicable Redemption Date when and as Series A Preferred
Stock Certificates for the shares being redeemed are properly tendered for
payment. Each surrendered Series A Preferred Stock Certificate shall be
cancelled and retired. In the event that less than all of the shares
represented by any such Series A Preferred Stock Certificate are redeemed, a
new Series A Preferred Stock Certificate shall be issued representing the
unredeemed shares.
(iv) On the applicable Redemption Date, unless the
Corporation defaults in the payment of the applicable redemption price,
dividends will cease to accrue with respect to the shares of Series A Preferred
Stock called for redemption. All rights of Holders of such redeemed shares
will terminate except for the right to receive the applicable redemption price.
7. Covenants.
(A) Limitation on Certain Asset Sales.
(a) The Corporation will not, and will not permit any of
its Subsidiaries to, consummate an Asset Sale unless (i) the Corporation or any
of its Subsidiaries, as the case may be, receives consideration at the time of
such sale or other disposition at least equal to the fair market value thereof
(as determined in good faith by the Corporation's Board of Directors, and
evidenced by a Board Resolution); (ii) not less than 85% of the consideration
received by the Corporation or any of its Subsidiaries, as the case may be, is
in the form of cash or
<PAGE> 12
-12-
Temporary Cash Investments and is received at the time of such disposition;
provided that the Corporation or the applicable Subsidiary will not be required
to comply with this clause (ii) with respect to a Permitted Asset Swap or a
Houston Disposition; and (iii) the Asset Sale Proceeds received by the
Corporation or such Subsidiary are applied (a) first, to the extent the
Corporation elects, or is required, to prepay, repay or purchase debt under any
then existing indebtedness of the Corporation or any Subsidiary within 270 days
following the receipt of the Asset Sale Proceeds from any Asset Sale, provided
that any such repayment shall result in a permanent reduction of the
commitments thereunder in an amount equal to the principal amount so repaid;
(b) second, to the extent of the balance of Asset Sale Proceeds after
application as described above, to the extent the Corporation elects, to an
investment in assets (including Capital Stock or other securities purchased in
connection with the acquisition of Capital Stock or property of another Person)
used or useful in a business similar or ancillary to the business of the
Corporation or Subsidiary as conducted on the Issue Date, provided that such
investment is consummated within 270 days following the receipt of such Asset
Sale Proceeds (the "Reinvestment Date"); and (c) third, if on the Reinvestment
Date with respect to any Asset Sale, the Available Asset Sale Proceeds exceed
$10,000,000, the Corporation shall apply an amount equal to such Available
Asset Sale Proceeds in excess of $5,000,000 to an offer to repurchase shares of
Series A Preferred Stock, at a purchase price in cash equal to 100% of the
Liquidation Preference thereof plus accrued and unpaid dividends (whether or
not declared) which shall also be paid in cash (whether or not otherwise
payable in cash), if any, to the date of repurchase (an "Excess Proceeds
Offer"). Notwithstanding the foregoing, the Corporation shall not be required
to comply with this Section 7(A) with respect to a Denver Disposition other
than clause (i) of the immediately preceding sentence if any securities
received by the Corporation as consideration for such Denver Disposition
(including the related cash flow) shall be pledged to secure the obligations of
the Corporation under the Senior Credit Facilities (as defined in the Senior
Subordinated Credit Agreement).
(b) If the Corporation is required to make an Excess
Proceeds Offer, the Corporation shall mail, within 30 days following the
Reinvestment Date, a notice to the holders of Series A Preferred Stock stating,
among other things: (1) that such holders of Series A Preferred Stock have the
right to require the Corporation to apply such Available Asset Sale Proceeds to
repurchase shares of Series A Preferred Stock at a purchase price in cash equal
to 100% of the Liquidation Preference thereof plus accrued and unpaid dividends
(whether or
<PAGE> 13
-13-
not declared) which shall also be paid in cash (whether or not otherwise
payable in cash) to the date of purchase; (2) the purchase date (the "Purchase
Date"), which shall be no earlier than 30 days and not later than 60 days from
the date such notice is mailed; (3) the instructions, determined by the
Corporation, that each holder of Series A Preferred Stock must follow in order
to have such Series A Preferred Stock repurchased; and (4) the calculations
used in determining the amount of Available Asset Sale Proceeds to be applied
to the repurchase of such Series A Preferred Stock. The Excess Proceeds Offer
shall remain open for a period of 20 Business Days following its commencement
(the "Offer Period"). The notice, which shall govern the terms of the Excess
Proceeds Offer, shall also state:
(1) that the Excess Proceeds Offer is being made pursuant
to this Section 7(A) and the length of time the Excess Proceeds Offer
will remain open;
(2) the purchase price and the Purchase Date;
(3) that any shares of Series A Preferred Stock not
tendered or accepted for payment will continue to accrue dividends;
(4) that any shares of Series A Preferred Stock accepted
for payment pursuant to the Excess Proceeds Offer shall cease to
accrue dividends on and after the Purchase Date;
(5) that holders electing to have shares of Series A
Preferred Stock purchased pursuant to any Excess Proceeds Offer will
be required to surrender such shares of Series A Preferred Stock to
the Corporation, a depositary, if appointed by the Corporation, or a
paying agent at the address specified in the notice at least three
Business Days before the Purchase Date;
(6) that holders will be entitled to withdraw their
election if the Corporation, depositary or paying agent, as the case
may be, receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the aggregate Liquidation Preference of the Series
A Preferred Stock the holder delivered for purchase and a statement
that such holder is withdrawing his election to have the Series A
Preferred Stock purchased;
<PAGE> 14
-14-
(7) that, if the aggregate Liquidation Preference of
Series A Preferred Stock surrendered by holders exceeds the Available
Asset Sale Proceeds, the Corporation shall select the Series A
Preferred Stock to be purchased on a pro rata basis based on the
number of shares surrendered by holders not otherwise withdrawn by
the expiration of the Offer Period (with such adjustments as may be
deemed appropriate by the Corporation so that only Series A Preferred
Stock indenominations of $1000, or integral multiples thereof, shall be
purchased); and
(8) that holders whose Series A Preferred Stock were
purchased only in part will be issued new Series A Preferred Stock
Certificates equal in Liquidation Preference to the unpurchased
portion of the Series A Preferred Stock surrendered.
On or before the Purchase Date, the Corporation shall, to the
extent lawful, accept for payment, on a pro rata basis as set forth in Section
7(A)(b)(7) above to the extent necessary, Series A Preferred Stock or portions
thereof tendered pursuant to the Excess Proceeds Offer. The Corporation,
depositary or paying agent, as the case may be, shall promptly (but in any case
not later than 5 days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Series A
Preferred Stock tendered by such Holder and accepted by the Corporation for
purchase, and the Corporation shall promptly issue a new Series A Preferred
Stock Certificate, mail or deliver such new Series A Preferred Stock
Certificate to such Holder equal in Liquidation Preference to any unpurchased
portion of the Series A Preferred Stock Certificate surrendered. Any Series A
Preferred Stock not so accepted shall be promptly mailed or delivered by the
Corporation to the Holder thereof. The Corporation will publicly announce the
results of the Excess Proceeds Offer on the Purchase Date. If an Excess
Proceeds Offer is not fully subscribed, the Corporation may retain that portion
of the Available Asset Sale Proceeds not required to repurchase Series A
Preferred Stock.
(B) Change of Control.
(a) Within 30 days of the occurrence of a Change of
Control, the Corporation shall notify the holders of Series A Preferred Stock
in writing of such occurrence and shall make an offer to purchase (the "Change
of Control Offer") the outstanding Series A Preferred Stock, at a purchase
price equal to the Liquidation Preference plus any accrued and unpaid dividends
thereon to the Change of Control Payment Date (such applicable
<PAGE> 15
-15-
purchase price being hereinafter referred to as the "Change of Control Purchase
Price") in accordance with the procedures set forth in this Section 7(B).
(b) Within 30 days of the occurrence of a Change of
Control, the Corporation also shall (i) cause a notice of the Change of Control
Offer to be sent at least once to the Dow Jones News Service or similar
business news service in the United States and (ii) send by first-class mail,
postage prepaid, to each holder of Series A Preferred Stock, at the address
appearing in the register maintained by the Corporation, a notice stating:
(1) that the Change of Control Offer is being
made pursuant to this Section 7(B) and that all Series A Preferred
Stock tendered will be accepted for payment, and otherwise subject to
the terms and conditions set forth herein;
(2) the Change of Control Purchase Price and the
purchase date (which shall be a Business Day no earlier than 20
Business Days from the date such notice is mailed (the "Change of
Control Payment Date"));
(3) that any share of Series A Preferred Stock
not tendered will continue to accrue dividends;
(4) that, unless the Corporation defaults in the
payment of the Change of Control Purchase Price, any Series A
Preferred Stock accepted for payment pursuant to the Change of Control
Offer shall cease to accrue dividends on and after the Change of
Control Payment Date;
(5) that Holders accepting the offer to have
their Series A Preferred Stock purchased pursuant to a Change of
Control Offer will be required to surrender the Series A Preferred
Stock to the paying agent, depositary or the Corporation, as the case
may be, at the address specified in the notice prior to the close of
business on the Business Day preceding the Change of Control Payment
Date;
(6) that Holders will be entitled to withdraw
their acceptance if the paying agent, depositary or the Corporation,
as the case may be, receives, not later than the close of business on
the third Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the number of shares of Series A Preferred Stock
<PAGE> 16
-16-
delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Series A Preferred Stock
purchased;
(7) that holders whose Series A Preferred Stock
is being purchased only in part will be issued new Series A Preferred
Stock equal in Liquidation Preference to the unpurchased portion of
the Series A Preferred Stock surrendered, provided that each share of
Series A Preferred Stock purchased and each such new share of Series A
Preferred Stock issued shall be in a Liquidation Preference in
denominations of $1000 and integral multiples thereof;
(8) any other procedures that a holder must
follow to accept a Change of Control Offer or effect withdrawal of
such acceptance; and
(9) the name and address of the paying agent.
On the Change of Control Payment Date, the Corporation shall,
to the extent lawful, (i) accept for payment, shares of Series A Preferred
Stock or portions thereof tendered pursuant to the Change of Control Offer,
(ii) deposit with the paying agent money sufficient to pay the purchase price
of shares of Series A Preferred Stock or portions thereof so tendered and
(iii) cause to be delivered to the Corporation shares of Series A Preferred
Stock so accepted. The paying agent shall promptly mail to each holder of
Series A Preferred Stock so accepted payment in an amount equal to the purchase
price for such shares of Series A Preferred Stock, and the Corporation shall
execute and issue shares of Series A Preferred Stock equal in Liquidation
Preference to any unpurchased portion of the Series A Preferred Stock
surrendered; provided that each such share of Series A Preferred Stock shall be
issued with a Liquidation Preference of $1000 and in integral multiples
thereof.
8. Payment on Liquidation.
(A) Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, Holders of Series A Preferred
Stock will be entitled to receive an amount in cash equal to the Liquidation
Preference, before any distribution is made on any Common Stock or other
Preferred Stock of the Corporation. After payment of the full amount of the
Liquidation Preferences to which they are entitled, Holders of Series A
Preferred Stock will not be entitled to any further participation in any
distribution of assets of the Corporation.
<PAGE> 17
-17-
(B) For the purposes of this Section 8, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the property or
assets of the Corporation nor the consolidation or merger of the Corporation
with one or more corporations shall be deemed a voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, unless such sale,
conveyance, exchange or transfer shall be in connection with a dissolution or
winding-up of the business of the Corporation.
9. Exclusion of Other Rights. Except as may otherwise
be required by the General Corporation Law of the State of Delaware, shares of
the Series A Preferred Stock shall not have any preferences or relative,
participating, optional or other special rights, other than those specifically
set forth in this Certificate of Designations (as such Certificate may be
amended from time to time) and in the Corporation's Certificate of
Incorporation, as amended. No shares of Series A Preferred Stock shall have
any preemptive or subscription rights whatsoever as to any securities of the
Corporation.
10. Reissuance of Preferred Stock. Shares of Series A
Preferred Stock that have been issued and reacquired by the Corporation in any
manner, including shares purchased or redeemed, shall (upon compliance with any
applicable provisions of the General Corporation Law of the State of Delaware)
have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of preferred stock.
11. Business Day. If any payment or redemption shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately
succeeding Business Day.
12. Headings of Subdivisions. The headings of the
various subdivisions hereof are for convenience of reference only and shall not
affect the interpretation of any of the provisions hereof.
13. Severability of Provisions. If any right, preference
or limitation of the Series A Preferred Stock set forth in this Certificate of
Designations (as may be amended from time to time) is invalid, unlawful or
incapable of being enforced by reason of any rule or law or public policy, all
other rights, preferences and limitations set forth in this Certificate of
Designations (as so amended) which can be given effect without
<PAGE> 18
-18-
the invalid, unlawful or unenforceable right, preference or limitation shall,
nevertheless, remain in full force and effect, and no right, preference or
limitation herein set forth shall be deemed dependent upon any other such
right, preference or limitation unless so expressed herein.
14. Notice. All notices and other communications
provided for or permitted to be given to the Corporation hereunder shall be
made by hand delivery, next day air courier or certified first-class mail to
the Corporation at its principal executive offices (currently located at 2502
North Black Canyon Highway, Phoenix, Arizona 85009).
15. Amendments. This Certificate of Designations may be
amended without notice to or the consent of any Holder to cure any ambiguity,
defect or inconsistency provided that such amendment does not materially
adversely affect the rights of any Holder. Any provisions of this Certificate
of Designations may be amended by the Corporation with the written consent of
Holders representing a majority of the outstanding shares of Series A Preferred
Stock.
16. Book-Entry Provisions for Series A Preferred Stock.
(a) Series A Preferred Stock registered in global form ("Global Series A
Preferred Stock") will (i) be registered in the name of The Depository Trust
Company (the "Depositary") or the nominee of such Depositary, (ii) be delivered
to the transfer agent as custodian for such Depositary and (iii) bear customary
legends as required by the Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights hereunder with respect to any Global Series A
Preferred Stock held on their behalf by the Depositary or its custodian, or
under the Global Series A Preferred Stock, and the Depositary may be treated by
the Corporation and any agent of the Corporation as the absolute owner of the
Global Series A Preferred Stock for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Corporation or any agent of the
Corporation from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Series A Preferred Stock.
(b) Transfers of Global Series A Preferred Stock shall be
limited to transfer in whole, but not in part, to the Depositary, its
successors or their respective nominees.
<PAGE> 19
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Interests of beneficial owners in the Global Series A Preferred Stock may be
transferred or exchanged for physical Series A Preferred Stock (the "Physical
Series A Preferred Stock") in accordance with the rules and procedures of the
Depositary. In addition, Physical Series A Preferred Stock shall be
transferred to all beneficial owners in exchange for their beneficial interests
in Global Series A Preferred Stock if the Depositary notifies the Corporation
that it is unwilling or unable to continue as Depositary for any Global Series
A Preferred Stock and a successor depositary is not appointed by the
Corporation within 90 days of such notice.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Series A Preferred Stock to
beneficial owners pursuant to paragraph (b), the Corporation shall (if one or
more Physical Series A Preferred Stock Certificates are to be issued) reflect
on its books and records the date and a decrease in the amount of shares of the
Global Series A Preferred Stock in an amount equal to the amount of shares of
the beneficial interest in the Global Series A Preferred Stock to be
transferred, and the Corporation shall execute one or more Physical Series A
Preferred Stock Certificates of like tenor and amount.
(d) In connection with the transfer of Global Series A
Preferred Stock as an entirety to beneficial owners pursuant to paragraph (b),
the Global Series A Preferred Stock shall be deemed to be surrendered to the
Corporation for cancellation, and the Corporation shall execute and deliver to
each beneficial owner identified by the Depositary in writing in exchange for
its beneficial interest in the Global Series A Preferred Stock an equal
aggregate amount of shares of Physical Series A Preferred Stock of authorized
denominations.
(e) Any Physical Series A Preferred Stock delivered in
exchange for an interest in Global Series A Preferred Stock pursuant to
paragraph (b), (c) or (d) shall, except as otherwise provided herein, bear an
appropriate legend, if required.
(f) The Holder of any Global Series A Preferred Stock may
grant proxies and otherwise authorize any person, including Agent Members and
persons that may hold interests through Agent Members, to take any action which
a Holder is entitled to take hereunder.
(g) Notwithstanding anything to the contrary herein, all
transfers of interests in Global Series A Preferred Stock
<PAGE> 20
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must be made to a "qualified institutional buyer" as such term is defined in
Rule 144A promulgated under the Securities Act.
The Corporation shall, so long as any shares of Series A
Preferred Stock are outstanding, maintain an office or agency where such shares
may be presented for registration or transfer and where such shares may be
presented for conversion and redemption.
<PAGE> 21
-21-
IN WITNESS WHEREOF, Outdoor Systems, Inc. has caused this
Certificate of Designations of Preferences and Rights of its Series A Preferred
Stock to be signed and attested by its duly authorized officers, this [ ] day
of [ ], 1996.
OUTDOOR SYSTEMS, INC.
By:____________________________
Name:
Title:
ATTEST:
By: _____________________________
Name:
Title:
<PAGE> 1
EXHIBIT 99.8
_________________________________________________________________
WARRANT AGREEMENT
BETWEEN
OUTDOOR SYSTEMS, INC.
AND
[ ]
AS
WARRANT AGENT
_________________________
DATED AS OF [ ], 1996
_________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Appointment of Warrant Agent . . . . . . . . . . . . 2
2. Warrant Certificates . . . . . . . . . . . . . . . . 2
3. Execution of Warrant Certificates . . . . . . . . . 2
4. Registration and Countersignature . . . . . . . . . 3
5. Transfer and Exchange of Warrants . . . . . . . . . 4
6. Registration of Transfers and Exchanges . . . . . . 4
7. Terms of Warrants; Exercise of Warrants;
Redemption of Warrants . . . . . . . . . . . . . . 10
8. Payment of Taxes . . . . . . . . . . . . . . . . . . 13
9. Mutilated or Missing Warrant Certificates . . . . . 13
10. Reservation of Warrant Shares . . . . . . . . . . . 14
11. Redemption . . . . . . . . . . . . . . . . . . . . . 15
12. Adjustment of Number of Warrant Shares Issuable . . 15
13. Fractional Interests . . . . . . . . . . . . . . . . 24
14. Notices to Warrant Holders . . . . . . . . . . . . . 24
15. Notices to the Company and Warrant Agent . . . . . . 26
16. Supplements and Amendments . . . . . . . . . . . . . 27
17. Concerning the Warrant Agent . . . . . . . . . . . . 28
18. Change of Warrant Agent . . . . . . . . . . . . . . 31
19. Identity of Transfer Agent . . . . . . . . . . . . . 32
20. Registration Rights . . . . . . . . . . . . . . . . 32
21. Successors . . . . . . . . . . . . . . . . . . . . . 32
22. Termination . . . . . . . . . . . . . . . . . . . . 32
23. Governing Law . . . . . . . . . . . . . . . . . . . 32
24. Benefits of This Agreement . . . . . . . . . . . . . 32
25. Counterparts . . . . . . . . . . . . . . . . . . . . 32
26. Headings . . . . . . . . . . . . . . . . . . . . . . 33
Exhibit A. Form of Warrant Certificate . . . . . . . A-1
Exhibit B. Certificate . . . . . . . . . . . . . . . B-1
Exhibit C. Legends . . . . . . . . . . . . . . . . . C-1
Exhibit D. Transferee Letter . . . . . . . . . . . . D-1
</TABLE>
-i-
<PAGE> 3
WARRANT AGREEMENT (the "Agreement"), dated as of
[ ], 1996, between Outdoor Systems, Inc., a Delaware
corporation (together with any successors and assigns, the
"Company"), and [ ], a [ ], as Warrant Agent
(the "Warrant Agent").
WHEREAS, the Company proposes to issue and sell pursuant to
a Securities Purchase Agreement (the "Purchase Agreement"), dated as
of July 9, 1996, between the Company and CIBC WG Argosy Merchant Fund
2, L.L.C., a Delaware limited liability company (the "Purchaser"), up
to $165,000,000 in aggregate liquidation value of its Senior
Increasing Rate Cumulative Preferred Stock, Series A, par value $1.00
per share (the "Preferred Stock"), along with warrants (collectively,
the "Initial Warrants"), for the purchase of up to 284,000 shares
(subject to adjustment as provided in Section 2.2(b) of the Purchase
Agreement) of its Common Stock, par value $.01 per share (the "Common
Stock," and the shares of Common Stock issuable upon exercise of the
Warrants being referred to herein as the "Warrant Shares");
WHEREAS, Section 5.5 of the Purchase Agreement provides for
the issuance of additional warrants to purchase shares of Common
Stock under certain circumstances commencing on the 61st day
following the issuance of the Initial Warrants and ending on the
120th day following the issuance of the Initial Warrants
(collectively, the "Additional Warrants");
WHEREAS, Section 5.5 of the Purchase Agreement provides for
the further issuance of additional warrants to purchase shares of
Common Stock under certain circumstances on each quarterly dividend
payment date for the Preferred Stock after the 120th day following
the issuance of the Initial Warrants (collectively, the "Quarterly
Warrants" and, together with the Initial Warrants and the Additional
Warrants, the "Warrants");
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company and the Warrant Agent is willing to act in
connection with the issuance, transfer, exchange and exercise of
Warrants as provided herein; and
WHEREAS, the holders of Warrants and Warrant Shares shall,
from time to time, have certain rights and obligations with respect
thereto as set forth in the Common Stock Registration Rights
Agreement, dated as of [ ], 1996, between the Company and the
Purchaser;
<PAGE> 4
-2-
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein, the Company and the Warrant Agent hereby agree as
follows:
SECTION 1. Appointment of Warrant Agent. The Company
hereby appoints the Warrant Agent to act as agent for the Company in
accordance with the instructions hereinafter set forth in this
Agreement, and the Warrant Agent hereby accepts such appointment.
SECTION 2. Warrant Certificates. The Warrants will
initially be issued either in global form (the "Global Warrants"),
substantially in the form of Exhibit A hereto (including the
footnotes thereto), or in registered form as definitive Warrant
certificates (the "Definitive Warrants"). Any certificates (the
"Warrant Certificates") evidencing the Global Warrants or the
Definitive Warrants to be delivered pursuant to this Agreement shall
be substantially in the form set forth in Exhibit A hereto. Such
Global Warrants shall represent such of the outstanding Warrants as
shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Warrants from time to
time endorsed thereon and that the aggregate amount of outstanding
Warrants represented thereby may from time to time be reduced or
increased, as appropriate. Any endorsement of a Global Warrant to
reflect the amount of any increase or decrease in the amount of
outstanding Warrants represented thereby shall be made by the Warrant
Agent and Depositary (as defined below) in accordance with
instructions given by the holder thereof. The Depository Trust
Company shall act as the Depositary with respect to the Global
Warrants until a successor shall be appointed by the Company. Upon
written request, a Warrant holder may receive from the Depositary and
Warrant Agent Definitive Warrants as set forth in Section 6 below.
SECTION 3. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its Chairman
of the Board or its President, Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer or a Vice President and by
its Secretary or an Assistant Secretary under its corporate seal.
Each such signature upon the Warrant Certificates may be in the form
of a facsimile signature of the present or any future Chairman of the
Board, President, Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, a Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the
facsimile signature of any person who shall have been
<PAGE> 5
-3-
Chairman of the Board, President, Vice President, Secretary or
Assistant Secretary, notwithstanding the fact that at the time the
Warrant Certificates shall be countersigned and delivered or disposed
of such person shall have ceased to hold such office. The seal of
the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
In case any officer of the Company who shall have signed
any of the Warrant Certificates shall cease to be such officer before
the Warrant Certificates so signed shall have been countersigned by
the Warrant Agent, or disposed of by the Company, such Warrant
Certificates nevertheless may be countersigned and delivered or
disposed of as though such person had not ceased to be such officer
of the Company; and any Warrant Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution
of such Warrant Certificate, shall be a proper officer of the Company
to sign such Warrant Certificate, although at the date of the
execution of this Warrant Agreement any such person was not such
officer.
Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent.
SECTION 4. Registration and Countersignature. The
Warrants shall be numbered and shall be registered on the books of
the Company maintained at the principal office of the Warrant Agent
in the Borough of Manhattan, city of New York (the "Warrant
Register") as they are issued.
Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent shall, upon written instructions of
the Chairman of the Board, the President, Chief Executive Officer,
Chief Operating Officer, Chief Financial Officer, a Vice President,
the Secretary or an Assistant Secretary of the Company, initially
countersign and deliver Warrants entitling the holders thereof to
purchase not more than the number of Warrant Shares referred to above
in the first recital hereof and shall thereafter countersign and
deliver Warrants as otherwise provided in this Agreement.
The Company and the Warrant Agent may deem and treat the
registered holders (the "Holders") of the Warrant Certificates as the
absolute owners thereof (notwithstanding any notation of ownership or
other writing thereon made by anyone) for all purposes, and neither
the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
<PAGE> 6
-4-
SECTION 5. Transfer and Exchange of Warrants. The Warrant
Agent shall from time to time, subject to the limitations of Section
6, register the transfer of any outstanding Warrants upon the records
to be maintained by it for that purpose, upon surrender thereof duly
endorsed or accompanied (if so required by it) by a written
instrument or instruments of transfer in form satisfactory to the
Warrant Agent, duly executed by the registered Holder or Holders
thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney. Subject to the terms of this Agreement,
each Warrant Certificate may be exchanged for another certificate or
certificates entitling the Holder thereof to purchase a like
aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitle each Holder to purchase. Any Holder
desiring to exchange a Warrant Certificate or Warrant Certificates
shall make such request in writing delivered to the Warrant Agent,
and shall surrender, duly endorsed or accompanied (if so required by
the Warrant Agent) by a written instrument or instruments of transfer
in form satisfactory to the Warrant Agent, the Warrant Certificate or
Warrant Certificates to be so exchanged.
Upon registration of transfer, the Warrant Agent shall
countersign and deliver by certified or first class mail a new
Warrant Certificate or Warrant Certificates to the persons entitled
thereto. The Warrant Certificates may be exchanged at the option of
the Holder thereof, when surrendered at the office or agency of the
Company maintained for such purpose, which initially will be the
corporate trust office of the Warrant Agent in New York, New York for
another Warrant Certificate, or other Warrant Certificates of
different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares.
No service charge shall be made for any exchange or
registration of transfer of Warrant Certificates, but the Company may
require payment of a sum sufficient to cover any stamp or other tax
or other governmental charge that is imposed in connection with any
such exchange or registration of transfer.
SECTION 6. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Warrants. When
Definitive Warrants are presented to the Warrant Agent with a
request:
(i) to register the transfer of the Definitive Warrants; or
<PAGE> 7
-5-
(ii) to exchange such Definitive Warrants for an equal number
of Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as
requested if its requirements under this Agreement are met; provided,
however, that the Definitive Warrants presented or surrendered for
registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Warrant Agent, duly
executed by the Holder thereof or by such Holder's attorney,
duly authorized in writing; and
(y) in the case of Warrants (the "Restricted Warrants") which
constitute Restricted Securities (as such term is defined in
Rule 144(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act")), such Warrants shall be accompanied, in the
reasonable discretion of the Company, by the following
additional information and documents, as applicable, however, it
being understood that the Warrant Agent need not determine which
clause (A) through (C) below is applicable:
(A) if such Restricted Warrant is being delivered to the
Warrant Agent by a Holder for registration in the name
of such Holder, without transfer, a certification from
such holder to that effect (in substantially the form of
Exhibit B hereto); or
(B) if such Restricted Warrant is being transferred to a
qualified institutional buyer (as defined in Rule 144A
under the Act, a "QIB") in accordance with Rule 144A under
the Act or pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or
Regulation S under the Securities Act or pursuant to an
effective registration statement under the Securities Act,
a certification to that effect (in substantially the form
of Exhibit B hereto) and, with respect to transfers
pursuant to Rule 144 or Regulation S, an opinion of
counsel reasonably acceptable to the Company and the
Warrant Agent to the effect that such
<PAGE> 8
-6-
transfer does not require registration under the
Securities Act; or
(C) if such Restricted Warrant is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (in substantially the form of Exhibit B
hereto) and an opinion of counsel reasonably acceptable to
the Company and to the Warrant Agent to the effect that
such transfer does not require registration under the
Securities Act.
(b) Restrictions on Transfer of a Definitive Warrant for a
Beneficial Interest in a Global Warrant. A Definitive Warrant
may not be exchanged for a beneficial interest in a Global Warrant
except upon satisfaction of the requirements set forth below. Upon
receipt by the Warrant Agent of a Definitive Warrant, duly endorsed
or accompanied by appropriate instruments of transfer, in form
satisfactory to the Warrant Agent, together with:
(A) if such Definitive Warrant constitutes a Restricted
Warrant, certification, substantially in the form of
Exhibit B hereto, that such Definitive Warrant is being
transferred to a QIB in accordance with Rule 144A under
the Securities Act; and
(B) written instructions directing the Warrant Agent to make,
or to direct the Depositary to make, an endorsement on the
Global Warrant to reflect an increase in the aggregate
amount of the Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and
cause, or direct the Depositary to cause, in accordance with the
standing instructions and procedures existing between the Depositary
and the Warrant Agent, the number of Warrant Shares represented by
the Global Warrant to be increased accordingly. If no Global Warrant
is then outstanding, the Company shall issue and the Warrant Agent
shall countersign a new Global Warrant in the appropriate amount.
(c) Transfer and Exchange of Global Warrants and Beneficial
Interests Therein. The transfer and exchange of Global
Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this
<PAGE> 9
-7-
Warrant Agreement (including the restrictions on transfer set forth
herein) and the procedures of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Warrant
for a Definitive Warrant.
(i) Any person having a beneficial interest in a Global
Warrant may upon request exchange such beneficial interest
for a Definitive Warrant. Upon receipt by the Warrant
Agent of written instructions or such other form of
instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a
beneficial interest in a Global Warrant and upon receipt
by the Warrant Agent of a written order or such other form
of instructions as is customary for the Depositary or the
person designated by the Depositary as having such a
beneficial interest containing registration instructions
and, in the case of a beneficial interest in Restricted
Warrants, the following additional information and
documents, however, it being understood that the Warrant
Agent need not determine which clause (A) through (C)
below is applicable:
(A) If such beneficial interest is being transferred to
the person designated by the Depositary as being the
beneficial owner, a certification from such person to
that effect (in substantially the form of Exhibit B
hereto); or
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the
Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from the transferee or
transferor (in substantially the form of Exhibit B
hereto) and, with respect to transfers pursuant to
Rule 144 or Regulation S, an opinion of counsel
reasonably acceptable to the Company and the Warrant
Agent to the effect that such transfer does not
require registration under the Securities Act; or
<PAGE> 10
-8-
(C) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect from the transferee or transferor (in
substantially the form of Exhibit B hereto) and an
opinion of counsel from the transferee or transferor
reasonably acceptable to the Company and to the
Warrant Agent to the effect that such transfer does
not require registration under the Securities Act,
then the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the
Depositary and the Warrant Agent, the aggregate amount of
the Global Warrant to be reduced and, following such
reduction, the Company will execute and, upon receipt of
an authentication order in the form of an officers'
certificate signed by the Chief Executive Officer, the
President or any Vice President and the Chief Financial
Officer, the Treasurer, the Secretary or any Assistant
Secretary of the Company (an "Officers' Certificate"), the
Warrant Agent will countersign and deliver to the
transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 6(d)
shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise,
shall instruct the Warrant Agent in writing, provided such
designation is in accordance with this Section 6(d). The
Warrant Agent shall deliver such Definitive Warrants to
the persons in whose names such Definitive Warrants are
registered.
(e) Restrictions on Transfer and Exchange of Global
Warrants. Notwithstanding any other provisions of this Warrant
Agreement (other than the provisions set forth in subsection (f) of
this Section 6), a Global Warrant may not be transferred as a whole
except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
<PAGE> 11
-9-
(f) Authentication of Definitive Warrants in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Warrants notifies the
Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Warrant and a
successor Depositary for the Global Warrant is not
appointed by the Company within 90 days after delivery of
such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Definitive Warrants under this Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of
an Officers' Certificate requesting the countersignature and delivery
of Definitive Warrants, will countersign and deliver Definitive
Warrants, in an aggregate number equal to the aggregate number of
Warrants represented by the Global Warrant, in exchange for such
Global Warrant.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each
Warrant Certificate evidencing the Global Warrants and the
Definitive Warrants (and all Warrants issued in exchange
therefor or substitution thereof) shall bear a legend
substantially as set forth in Exhibit C.
(ii) Upon any sale or transfer of a Warrant pursuant to Rule
144 under the Securities Act or an effective registration
statement under the Securities Act:
(A) in the case of any Warrant that is a Definitive
Warrant, the Warrant Agent shall permit the
Holder thereof to exchange such Restricted Warrant for
a Definitive Warrant that does not bear the legend set
forth in Exhibit C and rescind any related restriction
on the transfer of such Warrant; and
(B) any such Warrant represented by a Global Warrant
shall not be subject to the provisions set
forth in (i) above (such sales or transfers being
subject only to the provisions of Section 6(c)
hereof); provided, however, that with respect to any
request for an exchange of a Warrant that is
<PAGE> 12
-10-
represented by a Global Warrant for a Definitive
Warrant that does not bear the legend set forth in
Exhibit C, which request is made in reliance upon Rule
144, the Holder thereof shall certify in writing to
the Warrant Agent that such request is being made
pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit B hereto) and
shall obtain an opinion of counsel, reasonably
acceptable to the Company and the Warrant Agent, to
the effect that such transfer does not require
registration under the Securities Act.
(h) Cancellation and/or Adjustment of a Global Warrant.
At such time as all beneficial interests in a Global Warrant have
either been exchanged for Definitive Warrants, redeemed, repurchased
or cancelled, such Global Warrant shall be returned to or retained
and cancelled by the Warrant Agent. At any time prior to such
cancellation, if any beneficial interest in a Global Warrant is
exchanged for Definitive Warrants, or is redeemed, repurchased or
cancelled, the number of Warrants represented by such Global Warrant
shall be reduced and an endorsement shall be made on such Global
Warrant by the Warrant Agent to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Definitive Warrants.
(i) To permit registrations of transfers and exchanges in
accordance with the terms of this Agreement, the Company
shall execute, and the Warrant Agent shall countersign,
Definitive Warrants and Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon
any registration, transfer or exchange of Definitive
Warrants or Global Warrants shall be the valid obligations
of the Company, entitled to the same benefits under this
Warrant Agreement as the Definitive Warrants or Global
Warrants surrendered upon the registration of transfer or
exchange.
(iii) Prior to due presentment for registration of transfer of
any Warrant, the Warrant Agent and the Company may deem
and treat the person in whose name any Warrant is
registered as the absolute owner of such Warrant, and
neither the Warrant Agent nor the Company shall be
affected by notice to the contrary.
<PAGE> 13
-11-
SECTION 7. Terms of Warrants; Exercise of Warrants;
Redemption of Warrants. Subject to the terms of this Agreement, each
(i) Holder of Initial Warrants or Additional Warrants shall have the
right, which may be exercised commencing on or after the date of
original issuance of such Initial Warrants or Additional Warrants, as
the case may be, and until 5:00 p.m., New York City time, on [ ],
2001 (the "Initial Expiration Date") and (ii) Holder of Quarterly
Warrants shall have the right, which may be exercised commencing on
or after the date of original issuance of each such Quarterly
Warrants and until 5:00 p.m. New York City time on the date which is
five years from the date of original issuance of each such Quarterly
Warrant (the "Staggered Expiration Date"), in each case to receive
from the Company the number of fully paid and nonassessable Warrant
Shares which such Holder may at the time be entitled to receive on
exercise of such Warrants and payment of the Exercise Price (as
defined below) then in effect for such Warrant Shares. Each Warrant
not exercised prior to the Expiration Date or the Staggered
Expiration Date, as the case may be, shall become void and all rights
thereunder and all rights in respect thereof under this Agreement
shall cease as of such time. No adjustments as to dividends will be
made upon exercise of the Warrants.
The initial price per share at which Warrant Shares shall
be purchasable upon exercise of Warrants (the "Exercise Price") shall
be (a) in the case of the Initial Warrants and the Additional
Warrants the sum of (i) the average of the daily "closing bid price"
(as defined in Section 12 of this Agreement) for each Business Day
during the period commencing 20 Business Days prior to the public
announcement of the Acquisition (as defined in the Purchase
Agreement) and (ii) 10% of the amount in (a)(i), and (b) in the case
of each Quarterly Warrant the sum of (i) the average of the daily
"closing bid price" (as defined in Section 12 of this Agreement) for
each Business Day commencing 20 Business Days prior to the incurrence
of the obligation by the Company to issue each such Quarterly Warrant
plus (ii) 10% of the amount in (b)(i), in each case subject to
adjustment as provided herein. A Warrant may be exercised upon
surrender at the office or agency of the Company maintained for such
purpose, which initially will be the corporate trust office of the
Warrant Agent in New York, New York, of the certificate or
certificates evidencing the Warrants to be exercised with the form of
election to purchase on the reverse thereof duly filled in and
signed, which signature shall be guaranteed by a participant in a
recognized Signature Guarantee Medallion Program, and upon payment to
the Warrant Agent for the account of the Company of the Exercise
Price, as adjusted as herein provided, for the number of
<PAGE> 14
-12-
Warrant Shares in respect of which such Warrants are then exercised.
Payment of the aggregate Exercise Price shall be made (a) in cash or
by certified or official bank check to the order of the Company in
New York Clearing House Funds and/or (b) by the surrender of
securities of the Company having a fair market value on the date of
surrender (which in the case of the Preferred Stock shall be the
liquidation value thereof and in the case of any securities
representing indebtedness shall be the principal amount thereof)
equal to all or a portion of the Exercise Price.
Subject to the provisions of Section 6 hereof, upon such
surrender of Warrants and payment of the Exercise Price, the Company
shall issue and cause to be delivered with all reasonable dispatch to
or upon the written order of the Holder and in such name or names as
the Warrant Holder may designate a certificate or certificates for
the number of full Warrant Shares issuable upon the exercise of such
Warrants together with cash as provided in Section 12; provided,
however, that if any consolidation, merger or lease or sale of assets
is proposed to be effected by the Company as described in subsection
(j) of Section 12 hereof, or a tender offer or an exchange offer for
shares of Common Stock of the Company shall be made, upon such
surrender of Warrants and payment of the Exercise Price as aforesaid,
the Company shall, as soon as possible, but in any event not later
than three days, other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are not open for
business ("Business Day") thereafter, issue and cause to be delivered
the full number of Warrant Shares issuable upon the exercise of such
Warrants in the manner described in this sentence together with cash
as provided in Section 13. Such certificate or certificates shall be
deemed to have been issued and any person so named therein shall be
deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the
Exercise Price.
The Warrants shall be exercisable, at the election of the
Holders thereof, either in full or from time to time in part and, in
the event that a certificate evidencing Warrants is exercised in
respect of fewer than all of the Warrant Shares issuable on such
exercise at any time prior to the date of expiration of the Warrants,
a new certificate evidencing the remaining Warrant or Warrants will
be issued, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrant Certificate or
Warrant Certificates pursuant to the provisions of this Section 7 and
of Section 3 hereof, and the Company, whenever required by the
Warrant Agent, will promptly supply the Warrant Agent with
<PAGE> 15
-13-
Warrant Certificates duly executed on behalf of the Company for such
purpose.
All Warrant Certificates surrendered upon exercise of
Warrants shall be cancelled by the Warrant Agent. Such cancelled
Warrant Certificates shall then be disposed of by the Warrant Agent
in a manner consistent with the Warrant Agent's customary procedure
for such disposal and in a manner reasonably satisfactory to the
Company. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the
Company all monies received by the Warrant Agent for the purchase of
the Warrant Shares through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement
available for inspection by the Holders during normal business hours
at its office. The Company shall supply the Warrant Agent from time
to time with such numbers of copies of this Agreement as the Warrant
Agent may request.
SECTION 8. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of
Warrant Shares upon the exercise of Warrants; provided, however, that
the Company shall not be required to pay any tax or taxes which may
be payable in respect of any transfer involved in the issue of any
Warrant Certificates or any certificates for Warrant Shares in a name
other than that of the registered Holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not
be required to issue or deliver such Warrant Certificates unless or
until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been
paid.
SECTION 9. Mutilated or Missing Warrant Certificates. In
case any of the Warrant Certificates shall be mutilated, lost, stolen
or destroyed, the Company may in its discretion issue and the Warrant
Agent may countersign, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent
number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction
of such Warrant Certificate and indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with
<PAGE> 16
-14-
such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
SECTION 10. Reservation of Warrant Shares. The Company
will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Common
Stock or its authorized and issued Common Stock held in its treasury,
for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of
shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
The Company or, if appointed, the transfer agent for the
Common Stock (the "Transfer Agent") and every subsequent transfer
agent for any shares of the Company's capital stock issuable upon the
exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such
number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of
the rights of purchase represented by the Warrants. The Warrant
Agent is hereby irrevocably authorized to requisition from time to
time from such Transfer Agent the stock certificates required to
honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer
Agent with duly executed certificates for such purposes and will
provide or otherwise make available any cash which may be payable as
provided in Section 13. The Company will furnish such Transfer Agent
a copy of all notices of adjustments and certificates related thereto
transmitted to each Holder pursuant to Section 14 hereof.
The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will, upon payment of the Exercise
Price therefor and issue, be validly authorized and issued, fully
paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the
issuance thereof. The Company will take no action to increase the
par value of the Common Stock to an amount in excess of the Exercise
Price, and the Company will not enter into any agreements
inconsistent in any material respect with the rights of Holders
hereunder. The Company will use its reasonable best efforts to
obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be
necessary
<PAGE> 17
-15-
to enable the Company to perform its obligations under this
Agreement.
SECTION 11. Redemption. The Company shall have the right
to redeem (the "Redemption") any outstanding Warrants, in whole or in
part and from time to time, upon not less than 60 days prior written
notice to the Warrant Holders, at a price equal to $.01 per Warrant.
The Redemption right may be exercised by the Company with respect to
the Initial Warrants and the Additional Warrants, on and after [ ],
1999 and, with respect to each Quarterly Warrant, that date which
is three years from the date of original issuance of such Quarterly
Warrant. In the event of a redemption of less than all the
outstanding Warrants, the Warrants to be redeemed will be determined
by the Company pro rata according to the number of unexercised
Warrants held by each Holder. This Section 11 shall not in any way
be construed to limit the ability of a Warrant Holder to exercise
Warrants held by such Warrant Holder following the receipt of notice
as provided in the first sentence of this Section 11 but prior to the
Redemption of such Warrants by the Company.
SECTION 12. Adjustment of Number of Warrant Shares
Issuable. The number of shares of Common Stock issuable upon the
exercise of each Warrant (the "Exercise Rate") and the Exercise Price
for each Warrant Share is subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 12.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common Stock
in shares of its Common Stock or other capital stock of the Company;
or
(2) subdivides, combines or reclassifies its outstanding shares
of Common Stock;
then the Exercise Rate in effect immediately prior to such action
shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised may receive (for the same aggregate Exercise
Price) the aggregate number and kind of shares of capital stock of
the Company which such Holder would have owned immediately following
such action if such Warrant had been exercised immediately prior to
such action.
<PAGE> 18
-16-
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution (the "Time of
Determination") and immediately after the effective date in the case
of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Warrant upon exercise
of it may receive shares of two or more classes of capital stock of
the Company, the board of directors of the Company shall determine
the allocation of the adjusted Exercise Price between the classes of
capital stock. After such allocation, the exercise privilege and the
Exercise Price of each class of capital stock shall thereafter be
subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 12.
Such adjustment shall be made successively whenever any
event listed above shall occur.
(b) Adjustment for Certain Issuances of Common Stock.
If the Company issues or sells shares of its Common Stock
or distributes any rights, options or warrants to any Persons
entitling them to purchase shares of Common Stock, or securities
convertible into or exchangeable for Common Stock, at a price per
share less than the Current Market Value at the Time of
Determination, the Exercise Rate shall be adjusted in accordance with
the formula:
E' = E x O + N
---------
O + N x P
-----
M
where:
E' = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time of
Determination for any such issuance, sale or distribution.
O = the number of Fully Diluted Shares (as defined below)
outstanding immediately prior to the Time of Determination
for any such issuance, sale or distribution.
N = the number of additional shares of Common Stock issued,
sold or issuable upon exercise of such rights, options or
warrants.
<PAGE> 19
-17-
P = the price received in the case of any issuance or sale of
Common Stock or rights, options or warrants inclusive of
the exercise price per share of Common Stock upon exercise
of such rights, options or warrants.
M = the Current Market Value per share of Common Stock on the
Time of Determination for any such issuance, sale or
distribution.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive the rights, options or warrants.
Notwithstanding the foregoing, the Exercise Rate shall not be subject
to adjustment in connection with (i) the issuance of any shares of
Common Stock upon exercise of any such rights, options or warrants
which have previously been the subject of an adjustment under this
Agreement for which the required adjustment has been made or any
rights, options or warrants which are outstanding on the date hereof,
(ii) the exercise of the Warrants, (iii) the issuance of any
Additional Warrants or Quarterly Warrants, (iv) the issuance of any
options to purchase Common Stock to any officer, director or employee
of the Company pursuant to an employee stock option plan maintained
by the Company and (v) the issuance of any securities of the Company
or any of its subsidiaries in a private placement or public offering
if the proceeds of such placement or offering are used to redeem or
repurchase the Preferred Stock. If at the end of the period during
which any such rights, options or warrants are exercisable, not all
rights, options or warrants shall have been exercised, the Warrant
shall be immediately readjusted to what it would have been if "N" in
the above formula had been the number of shares actually issued.
(c) Adjustment for Other Distribution.
If the Company distributes to all holders of its Common
Stock (i) any evidences of indebtedness of the Company or any of its
subsidiaries, (ii) any assets of the Company or any of its
subsidiaries (other than cash dividends or other cash distributions
or distributions from current or retained earnings other than any
Extraordinary Cash Dividend), or (iii) any rights, options or
warrants to acquire any of the foregoing or to acquire any other
securities of the Company, the Exercise Rate shall be adjusted in
accordance with the formula:
<PAGE> 20
-18-
E' = E x M
-----
M - F
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate on the record date mentioned
below.
M = the Current Market Value per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date mentioned below of
the indebtedness, assets, rights, options or warrants
distributable in respect of one share of Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive
the distribution. If an adjustment is made pursuant to clause (iii)
above of this subsection (c) as a result of the issuance of rights,
options or warrants and at the end of the period during which any
such rights, options or warrants are exercisable, not all such
rights, options or warrants shall have been exercised, the Warrant
shall be immediately readjusted as if "F" in the above formula was
the fair market value on the record date of the indebtedness or
assets actually distributed upon exercise of such rights, options or
warrants divided by the number of shares of Common Stock outstanding
on the record date.
This subsection does not apply to rights, options or
warrants referred to in subsection (b) of this Section 12.
(d) Current Market Value.
"Current Market Value" per share of Common Stock or of any
other security (herein collectively referred to as a "Security") at
any date shall be:
(1) if the Security is not registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (i) the value
of the Security determined in good faith by the board of directors of
the Company and certified in a board resolution, based on the most
recently completed arm's length transaction between the Company and a
person other than an Affiliate of the Company and the closing of
which occurs on such date or
<PAGE> 21
-19-
shall have occurred within the six months preceding such date or (ii)
if no such transaction shall have occurred on such date or within
such six-month period, the value of the Security most recently
determined as of a date within the six months preceding such date by
the board of directors of the Company if the transaction is for less
than $500,000 and is not with an Affiliate and by an Independent
Financial Expert in all other instances, or
(2) if the Security is registered under the Exchange Act, the
average of the daily closing bid prices (as defined below) for each
Business Day during the period commencing 15 Business Days before
such date and ending on the date one day prior to such date or, if
the Security has been registered under the Exchange Act for less than
15 consecutive Business Days before such date, then the average of
the daily closing bid prices for all of the Business Days before such
date for which daily closing bid prices are available. If the
closing bid price is not determinable for at least 10 Business Days
in such period, the Current Market Value of the Security shall be
determined as if the Security was not registered under the Exchange
Act.
The "closing bid price" for any Security on each Business
Day means: (A) if such Security is listed or admitted to trading on
any securities exchange, the closing price, regular way, on such day
on the principal exchange on which such Security is traded, or if no
sale takes place on such day, the average of the closing bid and
asked prices on such day, (B) if such Security is not then listed or
admitted to trading on any securities exchange, the last reported
sale price on such day, or if there is no such last reported sale
price on such day, the average of the closing bid and the asked
prices on such day, as reported by a reputable quotation source
designated by the Company or (C) if neither clause (A) nor (B) is
applicable, the average of the reported high bid and low asked prices
on such day, as reported by a reputable quotation service, or a
newspaper of general circulation in the Borough of Manhattan, City of
New York, customarily published on each Business Day, designated by
the Company. If there are no such prices on a Business Day, then the
market price shall not be determinable for such Business Day.
"Independent Financial Expert" shall mean (a) CIBC Wood
Gundy Securities Corp. (or any successor) or (b) another nationally
recognized investment banking firm reasonably acceptable to the
Warrant Agent (i) that does not (and whose directors, officers,
employees and Affiliates do not) have a
<PAGE> 22
-20-
direct or indirect material financial interest in the Company, (ii)
that has not been, and, at the time it is called upon to serve as an
Independent Financial Expert under this Agreement is not (and none of
whose directors, officers, employees or Affiliates is) a promoter,
director or officer of the Company, (iii) that has not been retained
by the Company for any purpose, other than to perform an equity
valuation, within the preceding twelve months and (iv) that, in the
reasonable judgment of the board of directors of the Company
(certified by a board resolution), is otherwise qualified to serve as
an independent financial advisor. Any such person may receive
customary compensation and indemnification by the Company for
opinions or services it provides as an Independent Financial Expert.
"Affiliate" of any specified person means any other person
which directly or indirectly through one or more intermediaries
controls or is controlled by, or is under common control with, such
specified person. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with") as used with respect
to any person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of such person, whether through the ownership of voting securities,
by agreement or otherwise; provided, however, that beneficial
ownership of at least 10% of the voting securities of a person shall
be deemed to be control.
"Extraordinary Cash Dividend" means any cash dividends with
respect to the Common Stock the aggregate amount of which in any
fiscal year exceeds the greater of (i) 10% of the net income of the
Company and its subsidiaries for the fiscal year immediately
preceding the payment of such dividend or (ii) $5,000,000.
(e) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Rate need be made unless the
adjustment would require an increase or decrease of at least 1% in
the Exercise Rate. Notwithstanding the foregoing, any adjustments
that are not made shall be carried forward and taken into account in
any subsequent adjustment, provided that no such adjustment shall be
deferred beyond the date on which a Warrant is exercised.
All calculations under this Section 12 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may
be.
<PAGE> 23
-21-
(f) When No Adjustment Required.
If an adjustment is made upon the establishment of a record
date for a distribution subject to subsections (a), (b) or (c) hereof
and such distribution is subsequently cancelled, the Exercise Rate
then in effect shall be readjusted, effective as of the date when the
board of directors determines to cancel such distribution, to that
which would have been in effect if such record date had not been
fixed. If an adjustment would be required under two or more of
paragraphs (a), (b) and (c), such adjustments will be determined
without duplication.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the amount of cash into
which such Warrants are exercisable. Interest will not accrue on the
cash.
(g) Notice of Adjustment.
Whenever the Exercise Rate is adjusted, the Company shall
provide the notices required by Section 14 hereof.
(h) Voluntary Reduction.
The Company from time to time may increase the Exercise
Rate by any amount for any period of time (including, without
limitation, permanently) if the period is at least 20 Business Days.
An increase of the Exercise Rate under this Subsection (h)
(other than a permanent increase) does not change or adjust the
Exercise Rate otherwise in effect for purposes of subsections (a),
(b) or (c) of this Section 12.
(i) When Issuance or Payment May Be Deferred.
In any case in which this Section 12 shall require that an
adjustment in the Exercise Rate be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event (i) issuing to the Holder of any Warrant
exercised after such record date the Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and
above the Warrant Shares and other capital stock of the Company, if
any, issuable upon such exercise on the basis of the Exercise Rate
prior to such adjustment, and (ii) paying to such Holder any amount
in cash in lieu of a fractional share pursuant to Section 13;
provided, however, that the Company shall deliver to the Warrant
Agent and shall cause the Warrant Agent, on behalf of and at the
<PAGE> 24
-22-
expense of the Company, to deliver to such Holder a due bill or other
appropriate instrument evidencing such Holder's right to receive such
additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(j) Reorganizations.
In case of any capital reorganization, other than in the
cases referred to in Sections 12(a), (b) or (c) hereof, or the
consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the
Company is the continuing corporation and which does not result in
any reclassification of the outstanding shares of Common Stock into
shares of other stock or other securities or property), or the sale
of the property of the Company as an entirety or substantially as an
entirety (collectively such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon
exercise of any Warrant (in lieu of the number of shares of Common
Stock theretofore deliverable) the number of shares of stock or other
securities or property to which a holder of the number of shares of
Common Stock that would otherwise have been deliverable upon the
exercise of such Warrant would have been entitled upon such
Reorganization if such Warrant had been exercised in full immediately
prior to such Reorganization. In case of any Reorganization,
appropriate adjustment, as determined in good faith by the board of
directors of the Company, whose determination shall be described in a
duly adopted resolution certified by the Company's Secretary or
Assistant Secretary, shall be made in the application of the
provisions herein set forth with respect to the rights and interests
of Holders so that the provisions set forth herein shall thereafter
be applicable, as nearly as possible, in relation to any such shares
or other securities or property thereafter deliverable upon exercise
of Warrants.
The Company shall not effect any such Reorganization unless
prior to or simultaneously with the consummation thereof the
successor corporation (if other than the Company) resulting from such
Reorganization or the corporation purchasing or leasing such assets
or other appropriate corporation or entity shall (i) expressly
assume, by a supplemental warrant agreement or other acknowledgment
executed and delivered to the Warrant Agent the obligation to deliver
to the Warrant Agent and to cause the Warrant Agent to deliver to
each such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled
to purchase, and the due and punctual performance and observance
<PAGE> 25
-23-
of each and every covenant, condition, obligation and liability under
this Agreement to be performed and observed by the Company in the
manner prescribed herein and (ii) enter into an agreement providing
to the Holders rights and benefits substantially similar to those
enjoyed by the Holders under the Common Stock Registration Rights and
Stockholders Agreement of even date herewith.
The foregoing provisions of this Section 12(j) shall apply
to successive Reorganization transactions.
(k) Form of Warrants.
Irrespective of any adjustments in the number or kind of
shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
(l) Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an
adjustment under this Section 12 should be made, how it should be
made or what it should be. The Warrant Agent has no duty to
determine whether any provisions of a supplemental warrant agreement
under subsection (j) of this Section 12 are correct. The Warrant
Agent makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant
Agent shall not be responsible for the Company's failure to comply
with this Section 12.
(m) Miscellaneous.
For purpose of this Section 12 the term "shares of Common
Stock" shall mean (i) shares of the classes of stock designated as
the Common Stock as of the date of this Agreement, and (ii) shares of
any other class of stock resulting from successive changes or
reclassification of such shares consisting solely of changes in par
value, or from par value to no par value, or from no par value to par
value. For purposes of this Section 12 the term "Fully Diluted
Shares" shall mean (i) the shares of Common Stock outstanding as of a
specified date, and (ii) the shares of Common Stock into or for which
rights, options, warrants or other securities outstanding as of such
date are exercisable or convertible (other than the Warrants). In
the event that at any time, as a result of an adjustment made
pursuant to this Section 12, the Holders of Warrants shall become
entitled to purchase any securities of
<PAGE> 26
-24-
the Company other than, or in addition to, shares of Common Stock,
thereafter the number or amount of such other securities so
purchasable upon exercise of each Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Warrant Shares contained in subsections (a) through (m) of this
Section 12, inclusive, and the provisions of Sections 7, 8, 10 and 13
with respect to the Warrant Shares or the Common Stock shall apply on
like terms to any such other securities.
SECTION 13. Fractional Interests. The Company shall not
be required to issue fractional Warrant Shares on the exercise of
Warrants. If more than one Warrant shall be presented for exercise
in full at the same time by the same Holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this
Section 13, be issuable on the exercise of any Warrants (or specified
portion thereof), the Company shall pay an amount in cash equal to
the excess of the value (as determined by the board of directors in
good faith) of a Warrant Share over the Exercise Price on the day
immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
SECTION 14. Notices to Warrant Holders. Upon any
adjustment pursuant to Section 12 hereof, the Company shall give
prompt written notice of such adjustment to the Warrant Agent and
shall cause the Warrant Agent, on behalf of and at the expense of the
Company, within 10 days after notification is received by the Warrant
Agent of such adjustment, to mail by first class mail, postage
prepaid, to each Holder a notice of such adjustment(s) and shall
deliver to the Warrant Agent a certificate of the Chief Financial
Officer of the Company, accompanied by the report thereon by a firm
of independent public accountants selected by the board of directors
of the Company (who may be the regular accountants for the Company),
setting forth in reasonable detail (i) the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Exercise Price
of such Warrant after such adjustment(s), (ii) a brief statement of
the facts requiring such adjustment(s) and (iii) the computation by
which such adjustment(s) was made. Where appropriate, such notice
may be given in advance and included as a part of the notice required
under the other provisions of this Section 14.
In case:
<PAGE> 27
-25-
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe
for or purchase shares of Common Stock or of any other subscription
rights or warrants; or
(b) the Company shall authorize the distribution to all holders
of shares of Common Stock of evidences of its indebtedness or assets;
or
(c) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of
the Warrants (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a
subdivision or combination); or
(d) a tender offer or exchange offer for shares of Common
Stock; or
(e) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(f) the Company proposes to take any action that would require
an adjustment to the Exercise Rate pursuant to Section 12;
then the Company shall give prompt written notice to the Warrant
Agent and shall cause the Warrant Agent, on behalf of and at the
expense of the Company to give to each of the registered holders of
the Warrant Certificates at his or its address appearing on the
Warrant Register, at least 30 days (20 days in any case specified in
clauses (a), (b) or (d) above) prior to the applicable record date
hereinafter specified, or the date of the event in the case of events
for which there is no record date (which, in the case of a tender
offer or exchange offer, shall be deemed to be the initial expiration
date thereof), by first-class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such rights, options,
warrants or distribution are to be determined, or (ii) the initial
expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective or consummated, and the
date as of
<PAGE> 28
-26-
which it is expected that holders of record of shares of Common Stock
shall be entitled to exchange such shares for securities or other
property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up. The failure by the Company or the Warrant Agent to
give such notice or any defect therein shall not affect the legality
or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up, or the vote upon any action.
The Company shall give prompt written notice to the Warrant
Agent and shall cause the Warrant Agent, on behalf of and at the
expense of the Company, to give to each Holder written notice of any
determination to make a distribution or dividend to the holders of
its Common Stock of any assets (including cash), debt securities,
preferred stock, or any rights or warrants to purchase debt
securities, preferred stock, assets or other securities (other than
Common Stock, or rights, options, or warrants to purchase Common
Stock) of the Company, which notice shall state the nature and amount
of such planned dividend or distribution and the record date
therefor, and shall be received by the Holders at least 30 days prior
to such record date therefor.
Nothing contained in this Agreement or in any Warrant
Certificate shall be construed as conferring upon the Holders the
right to vote or to consent or to receive notice as shareholders in
respect of the meetings of shareholders or the election of directors
of the Company or any other matter, or any rights whatsoever as
shareholders of the Company.
SECTION 15. Notices to the Company and Warrant Agent. Any
notice or demand authorized by this Agreement to be given or made by
the Warrant Agent or by any Holder to or on the Company shall be
sufficiently given or made when received at the office of the Company
expressly designated by the Company as its office for purposes of
this Agreement (until the Warrant Agent is otherwise notified in
accordance with this Section 15 by the Company), as follows:
Outdoor Systems, Inc.
2502 North Black Canyon Highway
Phoenix, Arizona 85009
Attention: President
with a copy to:
Powell, Goldstein, Frazer & Murphy
<PAGE> 29
-27-
191 Peachtree Street NE
16th Floor
Atlanta, Georgia 30303
Attention: William B. Shearer, Esq.
Any notice pursuant to this Agreement to be given by the
Company or by any Holder(s) to the Warrant Agent shall be
sufficiently given when received by the Warrant Agent at the address
appearing below (until the Company is otherwise notified in
accordance with this Section by the Warrant Agent).
Attention:
Fax Number:
SECTION 16. Supplements and Amendments. The Company and
the Warrant Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Warrants in order to
cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not in
any way materially adversely affect the interests of any holder of
Warrants. Any amendment or supplement to this Agreement that has a
material adverse effect on the interests of holders shall require the
written consent of registered holders of a majority of the then
outstanding Warrants. The consent of each holder of a Warrant
affected shall be required for any amendment pursuant to which the
Exercise Price would be increased or the number of Warrant Shares
purchasable upon exercise of Warrants would be decreased (not
including adjustments contemplated hereunder). The Warrant Agent
shall be entitled to receive and shall be fully protected in relying
upon an officers' certificate and opinion of counsel as conclusive
evidence that any such amendment or supplement is authorized or
permitted hereunder, that it is not inconsistent herewith, and that
it will be valid and binding upon the Company in accordance with its
terms.
SECTION 17. Concerning the Warrant Agent. The Warrant
Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all
<PAGE> 30
-28-
of which the Company and the Holders, by their acceptance of
Warrants, shall be bound:
(a) The statements contained herein and in the Warrant
Certificate shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of
any of the same except such as describe the Warrant Agent or any
action taken by it. The Warrant Agent assumes no responsibility
with respect to the distribution of the Warrants except as
herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any
failure of the Company to comply with the covenants contained in
this Agreement or in the Warrants to be complied with by the
Company.
(c) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself (through its employees) or by or through
its attorneys or agents (which shall not include its employees)
and shall not be responsible for the misconduct of any agent
appointed with due care.
(d) The Warrant Agent may consult at any time with legal
counsel satisfactory to it (who may be counsel for the Company),
and the Warrant Agent shall incur no liability or responsibility
to the Company or to any Holder in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel.
(e) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless such evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President, Chief Financial Officer, one of the Vice
Presidents, the Treasurer or the Secretary of the Company and
delivered to the Warrant Agent; and such certificate shall be
full authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate. Without limiting
the foregoing, the Company shall notify the Warrant Agent of the
occurrence of the Exercisability Date on the date it occurs, and
<PAGE> 31
-29-
until receipt of such notice the Warrant Agent may be entitled
to assume that any such date has not occurred.
(f) The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in
the performance of its duties under this Agreement, to reimburse
the Warrant Agent for all expenses, taxes and governmental
charges and other charges of any kind and nature incurred by the
Warrant Agent (including reasonable fees and expenses of the
Warrant Agent's counsel and agents) in the performance of its
duties under this Agreement, and to indemnify the Warrant Agent
and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted
by the Warrant Agent in the performance of its duties under this
Agreement, except as a result of the Warrant Agent's negligence
or bad faith.
(g) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one
or more Holders shall furnish the Warrant Agent with reasonable
security and indemnity satisfactory to the Warrant Agent for any
costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or
without any such security or indemnity. All rights of action
under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in
its name as Warrant Agent, and any recovery of judgment shall be
for the ratable benefit of the Holders, as their respective
rights or interests may appear.
(h) The Warrant Agent and any stockholder, director,
officer or employee of the Warrant Agent may buy, sell or deal
in any of the Warrants or other securities of the Company or
become pecuniarily interested in any transactions in which the
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were
not Warrant Agent under this Agreement or such director, officer
or employee. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any
other legal entity including, without limitation,
<PAGE> 32
-30-
acting as Transfer Agent or as a lender to the Company or an
affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as agent,
and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything
which it may do or refrain from doing in connection with this
Agreement except for its own negligence or bad faith.
(j) The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder for any action
taken in reliance on any notice, resolution, waiver, consent,
order, certificate, or other paper, document or instrument
reasonably believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(k) The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Warrant Agent) or in respect of the validity or
execution of any Warrant (except its countersignature thereof);
nor shall the Warrant Agent by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any Warrant Shares (or other stock) to be issued
pursuant to this Agreement or any Warrant, or as to whether any
Warrant Shares (or other stock) will, when issued, be validly
issued, fully paid and nonassessable, or as to the Exercise
Price or the number or amount of Warrant Shares or other
securities or other property issuable upon exercise of any
Warrant.
(l) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President,
any Vice President or the Secretary of the Company, and to apply
to such officers for advice or instructions in connection with
its duties, and shall not be liable for any action taken or
suffered to be taken by it in good faith and without negligence
in accordance with instructions of any such officer or officers.
SECTION 18. Change of Warrant Agent. The Warrant Agent
may resign at any time and be discharged from its duties under this
Agreement by giving to the Company 30 days' notice in writing. The
Warrant Agent may be removed by like notice to
<PAGE> 33
-31-
the Warrant Agent from the Company. If the Warrant Agent shall
resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Warrant Agent. If the
Company shall fail to make such appointment within a period of 30
days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by any Holder (who shall with such notice submit his
Warrant for inspection by the Company), then any Holder may apply to
any court of competent jurisdiction for the appointment of a
successor to the Warrant Agent. Pending appointment of a successor
warrant agent, either by the Company or by such court, the duties of
the Warrant Agent shall be carried out by the Company. Any successor
warrant agent, whether appointed by the Company or such a court,
shall be a bank or trust company in good standing, incorporated under
the laws of the United States of America or any State thereof or the
District of Columbia and having at the time of its appointment as
warrant agent a combined capital and surplus of at least $10,000,000.
After appointment, the successor warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the
successor warrant agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for such purpose. Failure to file any notice
provided for in this Section 18, however, or any defect therein,
shall not affect the legality or validity of the resignation or
removal of the Warrant Agent or the appointment of the successor
warrant agent, as the case may be. In the event of such resignation
or removal, the Company or the successor warrant agent shall mail by
first class mail, postage prepaid, to each Holder, written notice of
such removal or resignation and the name and address of such
successor warrant agent.
SECTION 19. Identity of Transfer Agent. Forthwith upon
the appointment of any Transfer Agent for the Common Stock, or any
other shares of the Company's capital stock issuable upon the
exercise of the Warrants, the Company shall promptly file with the
Warrant Agent a statement setting forth the name and address of such
Transfer Agent.
SECTION 20. Registration Rights. The Holders shall be
entitled to all of the benefits of that certain Common Stock
Registration Rights Agreement among the Company and the Purchaser
dated as of [ ], 1996, in connection with the Common Stock to
be issued in connection with the exercise of the Warrants.
<PAGE> 34
-32-
SECTION 21. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company, the Warrant
Agent, the Purchaser or any holder of Warrants shall bind and inure
to the benefit of their respective successors and assigns hereunder.
SECTION 22. Termination. This Agreement shall terminate
at 5:00 p.m. New York City time on the last date of the expiration of
the Quarterly Warrants. Notwithstanding the foregoing, this
Agreement will terminate on any earlier date if all Warrants have
been exercised or redeemed pursuant to this Agreement.
SECTION 23. GOVERNING LAW. THIS AGREEMENT AND EACH
WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
SECTION 24. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, the Warrant Agent and the registered Holders
of the Warrant Certificates any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Warrant Agent and the
registered Holders of the Warrant Certificates.
SECTION 25. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
SECTION 26. Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above
written.
OUTDOOR SYSTEMS, INC.
By:
-------------------------------------------
Name:
Title:
[ ],
as Warrant Agent
By:
------------------------------------
Name:
Title:
<PAGE> 36
EXHIBIT A
[Form of Warrant Certificate]
[Face]
[THIS SECURITY IS A GLOBAL CERTIFICATE AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR
DEPOSITARY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT
AGREEMENT DATED AS OF [ ], 1996 BETWEEN THE COMPANY AND THE
WARRANT AGENT (THE "WARRANT AGREEMENT"), AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY)
MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE WARRANT AGREEMENT. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (A NEW YORK
CORPORATION) ("DTC") TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.](1)
____________________
(1) This paragraph is to be included only if the Warrant is in
global form.
A-1
<PAGE> 37
EXERCISABLE ON OR AFTER THE DATE OF ISSUANCE
AND ON OR BEFORE [ ]
No. _______ _______ Warrants
Warrant Certificate
OUTDOOR SYSTEMS, INC.
This Warrant Certificate certifies that ______, or
registered assigns, is the registered holder of Warrants expiring [
] (the "Warrants") to purchase shares of Common Stock (the "Common
Stock") of Outdoor Systems, Inc., a Delaware corporation (the
"Company"). Each Warrant entitles the holder upon exercise to
receive from the Company on or after the Exercisability Date and on
or before 5:00 p.m. New York City Time on [ ], one fully
paid and nonassessable share of Common Stock (a "Warrant Share") at
the initial exercise price (the "Exercise Price") equal to $[ ],
payable in lawful money of the United States of America or other
method as set forth in the Warrant Agreement upon surrender of this
Warrant Certificate and payment of the Exercise Price at the office
or agency of the Warrant Agent, subject only to the conditions set
forth herein and in the Warrant Agreement referred to on the reverse
hereof. The Exercise Price and number of Warrant Shares issuable
upon exercise of the Warrants are subject to adjustment upon the
occurrence of certain events as set forth in the Warrant Agreement.
No Warrant may be exercised before the date of issuance
thereof or after 5:00 p.m., New York City Time, on [ ], and to
the extent not exercised by such time such Warrants shall become
void.
The Company may redeem outstanding Warrants, in whole or in
part and from time to time, commencing on and after [ ]
upon 30 days prior written notice to the Holders thereof at a price
equal to $.01 per Warrant.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the
Warrant Agreement.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
Capitalized terms used herein and not otherwise
A-2
<PAGE> 38
defined shall have the meaning set forth in the Warrant
Agreement.
A-3
<PAGE> 39
IN WITNESS WHEREOF, Outdoor Systems, Inc. has caused this
Warrant Certificate to be signed by its President and by its
Secretary, each by a facsimile of his signature, and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.
Dated: OUTDOOR SYSTEMS, INC.
By: ___________________________
President
By: _________________________
Secretary
Countersigned:
[ ]
as Warrant Agent
By: _________________________
Authorized Signature
A-4
<PAGE> 40
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part
of a duly authorized issue of Warrants expiring [ ], entitling
the holder on exercise to receive shares of Common Stock, of the
Company (the "Common Stock"), $.01 par value, and are issued or to be
issued pursuant to a Warrant Agreement dated as of [ ], 1996
(the "Warrant Agreement"), duly executed and delivered by the Company
to [ ], a [ ] corporation, as
warrant agent (the "Warrant Agent"), which Warrant Agreement is
hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder
of the Warrant Agent, the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered
holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or after the date
of issuance thereof and on or before [ ]. The holder of
Warrants evidenced by this Warrant Certificate may exercise them by
surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in cash or as otherwise set forth
in the Warrant Agreement at the office of the Warrant Agent. In the
event that upon any exercise of Warrants evidenced hereby the number
of Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued to the holder hereof or his
assignee a new Warrant Certificate evidencing the number of Warrants
not exercised. No adjustment shall be made for any dividends on any
Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the number of Warrants set forth on the face hereof
may, subject to certain conditions, be adjusted. No fractions of a
share of Common Stock will be issued upon the exercise of any
Warrant, but the Company will pay the cash value thereof determined
as provided in the Warrant Agreement.
The holders of the Warrants are entitled to certain
registration rights with respect to the Common Stock purchasable upon
exercise thereof. Such registration rights
A-5
<PAGE> 41
are set forth in the Common Stock Registration Rights Agreement,
dated as of [ ], 1996, among the Company and the Purchaser.
Warrant Certificates, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be
exchanged, in the manner and subject to the limitations provided in
the Warrant Agreement, but without payment of any service charge, for
another Warrant Certificate or Warrant Certificates of like tenor
evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in
the aggregate a like number of Warrants shall be issued to the
transferee(s) in exchange for this Warrant Certificate, subject to
the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection
therewith.
The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other
writing hereon made by anyone), for the purpose of any exercise
hereof, of any distribution to the holder(s) hereof, and for all
other purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary. Neither the Warrants nor
this Warrant Certificate entitles any holder hereof to any rights of
a stockholder of the Company.
A-6
<PAGE> 42
[Form of Election to Purchase]
(To Be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive _____
shares of Common Stock and herewith tenders payment for such shares
to the order of Outdoor Systems, Inc. in the amount of $_____ or the
surrender of [ ] in accordance with the terms hereof. The
undersigned requests that a certificate for such shares be registered
in the name of ______________, whose address is __________ and that
such shares be delivered to _________ whose address is
______________. If said number of shares is less than all of the
shares of Common Stock purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining
balance of such shares be registered in the name of _____________,
whose address is ________, and that such Warrant Certificate be
delivered to ___________, whose address is ________________.
Signature:
Date:
Signature Guaranteed:
A-7
<PAGE> 43
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(2)
The following exchanges of a part of this Global Warrant for
certificated Warrants have been made:
<TABLE>
<CAPTION>
Number of
Warrants of
Amount of Amount of this Global
decrease in increase in Warrant Signature of
number of number of following authorized
Date of Warrants of this Warrants of this such decrease officer of
Exchange Global Warrant Global Warrant (or increase) Warrant Agent
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
____________________
(2) This is to be included only if the Warrant is in global form.
A-8
<PAGE> 44
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of Outdoor
Systems, Inc.
This Certificate relates to ____ Warrants held in*
book-entry or* _____ certificated form by ______ (the "Transferor").
The Transferor*:
/ / has requested the Warrant Agent by written order to deliver
in exchange for its beneficial interest in the Global Warrant held by
the Depositary a Warrant or Warrants in definitive registered form
equal to its beneficial interest in Warrants represented by such
Global Warrant (or the portion thereof indicated above); or
/ / has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants.
In connection with such request, the Transferor does hereby
certify that Transferor is familiar with the Warrant Agreement (the
"Agreement") relating to the Warrants and the restrictions on
transfers thereof as provided in Section 6 of such Agreement, and
that the transfer of this Warrant requested hereby does not require
registration under the Securities Act (as defined below) because:
/ / Such Warrant is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 6(a)(y)(A) of
the Agreement).
/ / Such Warrant is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act
of 1933, as amended (the "Securities Act")), in reliance on Rule 144A
or in accordance with Regulation S under the 1933 Act. If such
transfer is in accordance with Regulation S, an opinion of counsel to
the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate.
B-1
<PAGE> 45
/ / Such Warrant is being transferred in accordance with Rule
144 under the Securities Act. An opinion of counsel to the effect
that such transfer does not require registration under the Securities
Act accompanies this Certificate.
/ / Such Warrant is being transferred in reliance on and in
compliance with an exemption from the registration requirements of
the Securities Act, other than Rule 144A or Rule 144 or Regulation S
under the Securities Act. An opinion of counsel to the effect that
such transfer does not require registration under the Securities Act
accompanies this Certificate.
______________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________
Date: _____________
*Check applicable box.
B-2
<PAGE> 46
EXHIBIT C
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR")
OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE OR TRANSFER AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE WARRANT AGENT FOR THIS
SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND, IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR SUCH
TRANSFER IS MADE IN ACCORDANCE WITH CLAUSES (D) OR (E) ABOVE, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE WARRANT AGENT AND
THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY
C-1
<PAGE> 47
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE ACT.
C-2
<PAGE> 48
EXHIBIT D
Transferee Letter of Representation
Outdoor Systems, Inc.
2502 North Black Canyon Highway
Phoenix, Arizona 85009
Ladies and Gentlemen:
In connection with our proposed purchase of Warrants to
purchase Common Stock (the "Securities") of Outdoor Systems, Inc.
(the "Company"), we confirm that:
1. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set
forth in the Warrant Agreement dated as of [ ], 1996 relating
to the Securities and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Securities except in
compliance with, such restrictions and conditions and the Securities
Act of 1933, as amended (the "Securities Act").
2. We understand that the Securities have not been registered
under the Securities Act, and that the Securities may not be offered
or sold except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell any Securities within
three years after the original issuance of the Securities, we will do
so only (A) to the Company or any subsidiary thereof, (B) inside the
United States to a "qualified institutional buyer" in compliance with
Rule 144A under the Securities Act, (C) inside the United States to
an "institutional accredited investor" (as defined below) that, prior
to such transfer, furnishes to you a signed letter substantially in
the form of this letter, (D) outside the United States to a foreign
person in compliance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if available), or (F)
pursuant to an effective registration statement under the Securities
Act, and we further agree to provide to any person purchasing any of
the Securities from us a notice advising such purchaser
D-1
<PAGE> 49
that resales of the Securities are restricted as stated herein.
3. We understand that, on any proposed resale of any
Securities, we will be required to furnish to the Company such
certifications, legal opinions and other information as the Company
may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the
Securities purchased by us will bear a legend to the foregoing
effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have
such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in
the Securities, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.
5. We are acquiring the Securities purchased by us for our own
account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise
sole investment discretion.
The Company is entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
___________________________________
(Name of Purchaser)
By:________________________________
Date:______________________________
D-2
<PAGE> 50
Upon transfer the Securities would be registered in the
name of the new beneficial owner as follows:
Name:______________________________
Address:___________________________
Taxpayer ID Number:________________
D-3
<PAGE> 1
EXHIBIT 99.9
REGISTRATION RIGHTS AGREEMENT
Dated as of [ ], 1996
by and among
OUTDOOR SYSTEMS, INC.
and
THE GUARANTORS
named herein
and
THE HOLDERS
named herein
______________________________
$240,000,000
SENIOR SUBORDINATED NOTES DUE 2006
$165,000,000
SENIOR INCREASING RATE CUMULATIVE PREFERRED STOCK, SERIES A
<PAGE> 2
TABLE OF CONTENTS
Page
<TABLE>
<CAPTION>
<S> <C>
1. Definitions ................................. 1
2. Shelf Registration .......................... 5
3. Demand Notice ............................... 7
4. Exchange Offer Registration ................. 8
5. Piggy-Back Registration ..................... 10
6. Additional Interest ......................... 12
7. Underwritten Registrations .................. 13
8. Registration Procedures ..................... 14
9. Registration Expenses ....................... 22
10. Indemnification ............................. 23
11. Rule 144 and 144A ........................... 27
12. Miscellaneous ............................... 28
(a) No Inconsistent Agreements ........... 28
(b) Adjustments Affecting Registrable
Securities ........................... 28
(c) Amendments and Waivers ............... 28
(d) Notices .............................. 29
(e) Successors and Assigns ............... 30
(f) Counterparts ......................... 30
(g) Headings ............................. 30
(h) Governing Law ........................ 30
(i) Severability ......................... 30
(j) Joint and Several Obligations ........ 31
(k) Securities Held by the Company or
Its Affiliates........................ 31
</TABLE>
-i-
<PAGE> 3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of [ ], 1996, by and among Outdoor Systems, Inc. (the
"Company"), a Delaware corporation, and OS Baseline, Inc., an Arizona
corporation, Outdoor Systems Painting, Inc., an Arizona corporation, OS
Advertising of Texas Painting, Inc., a Texas corporation, New York Subways
Advertising Co., Inc., an Arizona corporation, Decade Communications Group,
Inc., a Colorado corporation, and Bench Advertising Company of Colorado, Inc.,
a Colorado corporation (collectively, the "Guarantors"); and the Noteholders
(defined below) and the Stockholders (as defined below), in each case, whose
signatures appear on the execution pages of this Agreement (collectively with
any other Noteholders or Stockholders who become parties to this Agreement, the
"Holders"). The Company and the Guarantors are hereinafter collectively
referred to as the "Issuers." This Agreement is for the benefit of the Holders
executing this Agreement and for the benefit of their direct and indirect
transferees.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Appropriate Registrant: The Issuers in the case of the Registrable Notes
or the Company in the case of the Registrable Preferred Stock.
Additional Interest: See Section 6.
Advice: See the last paragraph of Section 8.
Agreement: See the first introductory paragraph to this Agreement.
Business Day: Any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of New York, New York or is a day on which banking
institutions therein located are authorized or required by law or other
governmental action to close.
Certificate of Designations: The Certificate of Designations of
Preferences and Rights pursuant to which the
<PAGE> 4
-2-
Preferred Stock is issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Company: See the first introductory paragraph to this Agreement.
Credit Agreement: The Senior Subordinated Credit Agreement, dated as of
July 9, 1996, by and among the Company, the Guarantors, Canadian Imperial Bank
of Commerce, as agent and the financial institutions parties thereto, as
lenders.
Demand Notice: See Section 3(a).
DTC: See Section 8(i).
Event Date: See Section 6(b).
Exchange Effectiveness Date: 90 days after the Exchange Filing Date.
Exchange Effectiveness Period: See Section 4.
Exchange Filing Date: 30 days after the date of the Demand Notice.
Exchange Offer Registration: See Section 4.
Exchange Notes: See Section 4.
Exchange Registration Statement: See Section 4.
Guarantors: See the first introductory paragraph to this Agreement.
Holders: See the first introductory paragraph to this Agreement.
Indemnified Person: See Section 10(c).
Indemnifying Person: See Section 10(c).
Indenture: The Indenture to be entered into by and among the Company, the
Guarantors and an indenture trustee, pursuant to which the Notes will be
issued, as amended or supplemented from time to time in accordance with the
terms thereof.
Inspectors: See Section 8(p).
<PAGE> 5
-3-
Issuers: See the first introductory paragraph to this Agreement.
Losses: See Section 10.
NASD: See Section 8(n).
Notes: The $240,000,000 aggregate principal amount of Senior Subordinated
Notes due 2006 of the Company being issued pursuant to the Credit Agreement and
the Indenture.
Noteholders: The holders of Notes.
Participant: See Section 10(a).
Piggy-Back Registration: See Section 5(a).
Preferred Stock: Up to $225,000,000 aggregate liquidation value of Senior
Increasing Rate Cumulative Preferred Stock, Series A, par value $1.00 per share
of the Company issued pursuant to the Purchase Agreement and the Certificate of
Designations.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement, and all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: The Securities Purchase Agreement, dated as of July
9, 1996, by and between the Company and CIBC WG Argosy Merchant Fund 2, L.L.C.,
relating to the Preferred Stock.
Registrable Notes: The Notes upon original issuance thereof and at all
times subsequent thereto, until in the case of any such Note (i) a Registration
Statement covering such Note has been declared effective and such Note has been
disposed of in accordance with such effective Registration Statement, (ii) it
is sold in compliance with Rule 144, (iii) it shall have been otherwise
transferred and a new
<PAGE> 6
-4-
certificate for any such Note not bearing a legend restricting further
transfer shall have been delivered by the Company, or (iv) it ceases to be
outstanding.
Registrable Preferred Stock: The Preferred Stock upon original issuance
thereof and at all times subsequent thereto, until in the case of any such
Preferred Stock (i) a Registration Statement covering such Preferred Stock has
been declared effective and such Preferred Stock has been disposed of in
accordance with such effective Registration Statement, (ii) it is sold in
compliance with Rule 144, (iii) its shares have been otherwise transferred and
a new certificate for any such Preferred Stock not bearing a legend restricting
further transfer shall have been delivered by the Company, or (iv) it ceases to
be outstanding.
Registrable Securities: The Registrable Notes and/or the Registrable
Preferred Stock.
Registration Statement: Any registration statement of the Issuers filed
or required to be filed with the SEC pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule (other than Rule 144A) or regulation
hereafter adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
Rule 415: Rule 415 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933 as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shelf Effectiveness Date: 90 days after a Shelf Filing Date.
<PAGE> 7
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Shelf Filing Date: 30 days after a Shelf Notice.
Shelf Notice: See Section 2(a).
Shelf Registration: See Section 2(b).
Shelf Termination Date: See Section 2(b).
Stockholders: The holders of Preferred Stock.
Subsequent Shelf Registration: See Section 2(c).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture.
underwritten registration or underwritten offering: A registration in
which securities of any of the Issuers are sold to an underwriter for
reoffering to the public.
Withdrawal Election: See Section 5(c).
2. Shelf Registration
(a) Shelf Notice. At any time commencing 365 days after the date of this
Agreement, the Noteholders of at least 25% of the outstanding aggregate
principal amount of Registrable Notes and the Stockholders of at least 25% of
the outstanding aggregate liquidation value of Registrable Preferred Stock,
each may make a written request (a "Shelf Notice") to the Appropriate
Registrant for registration of Registrable Securities to be made pursuant to a
Registration Statement in accordance with Section 2(b) below. Within ten days
after receipt of any Shelf Notice, the Appropriate Registrant will send written
notice of such Shelf Notice to all Holders of the Registrable Notes or
Registrable Preferred Stock, as the case may be, and the Appropriate Registrant
will include in such Shelf Registration all Registrable Securities of such
Holders with respect to which the Appropriate Registrant has received written
requests for inclusion therein within 15 Business Days after the receipt by the
applicable Holder of the Appropriate Registrant's written notice. Requests
made by Holders for inclusion in such Shelf Registration, including requests by
Holders in the Shelf Notice, shall contain appropriate representations
regarding such Holders' intentions to sell the Securities in order to allow the
Appropriate Registrant to effect such Shelf Registration. If a Holder does not
make such appropriate representations, such Holder will be excluded from such
Shelf
<PAGE> 8
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Registration. Notwithstanding the foregoing and subject to subsection 2(c)
below, the Appropriate Registrant shall not be required to undertake more than
one Shelf Registration for each of the Registrable Notes and the Registrable
Preferred Stock.
(b) Shelf Registration. If a Shelf Notice is delivered as contemplated by
Section 2(a), then the Appropriate Registrant agrees to file with the SEC no
later than its Shelf Filing Date, a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Securities of such Holders with respect to which the Appropriate
Registrant has received written requests for inclusion therein in accordance
with Section 2(a) above (a "Shelf Registration"). Such Shelf Registration
shall be on Form S-1 or another appropriate form permitting registration of
such Registrable Securities for resale by Holders in the manner or manners
designated by them (including, without limitation, one or more underwritten
offerings). The Appropriate Registrant shall not permit any securities other
than the Registrable Securities to be included in a Shelf Registration
or any Subsequent Shelf Registration. The Appropriate Registrant shall use its
best efforts to cause each Shelf Registration to be declared effective under
the Securities Act on or prior to its Shelf Effectiveness Date and to keep such
Shelf Registration continuously effective under the Securities Act until the
date which is 36 months from the Shelf Effectiveness Date of the first Shelf
Registration filed by the Appropriate Registrant with respect to Registrable
Notes or Registrable Preferred Stock, as the case may be (subject to extension
pursuant to the last paragraph of Section 8) (the "Shelf Termination Date"), or
such shorter period ending when all Registrable Securities covered by such
Shelf Registration have been sold in the manner set forth and as contemplated
in such Shelf Registration.
(c) Subsequent Shelf Registrations. If a Shelf Registration or any
Subsequent Shelf Registration ceases to be effective for any reason at any time
prior to its Shelf Termination Date (other than because of the sale of all
Registrable Securities covered by such Shelf Registration in the manner set
forth and as contemplated in such Shelf Registration) the Appropriate
Registrant shall use its reasonable best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within 45 days of such cessation of effectiveness amend such Shelf
Registration in a manner reasonably expected to obtain the withdrawal of the
order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable
Securities
<PAGE> 9
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which were covered by such Shelf Registration that have not been sold in the
manner set forth and as contemplated in such Shelf Registration (a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
the Appropriate Registrant shall use its reasonable best efforts to cause such
Subsequent Shelf Registration to be declared effective as soon as practicable
after such filing and to keep such Registration Statement continuously
effective until the Shelf Termination Date. As used herein the term "Shelf
Registration" means the Shelf Registrations and any Subsequent Shelf
Registrations.
(d) Supplements and Amendments. The Appropriate Registrant shall promptly
supplement and amend a Shelf Registration if required by the rules, regulations
or instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount or aggregate
liquidation preference, as the case may be, of the Registrable Securities
covered by such Registration Statement or by any underwriter of such
Registrable Securities.
3. Demand Notice
(a) Right to Demand. At any time after the Shelf Termination Date, the
holders of at least $25 million in aggregate principal amount of Registrable
Notes may make a written request (a "Demand Notice") to the Issuers for
registration under and in accordance with the provisions of the Securities Act
of all or part of such Registrable Notes in accordance with Section 4. Within
ten days after receipt of the Demand Notice, the Issuers will send written
notice of such registration request to all Noteholders, and the Issuers will
include in such registration all Registrable Notes of such Noteholders with
respect to which the Issuers have received written requests for inclusion
therein within 15 business days after the receipt by a Noteholder of the
Issuers' written notice. All requests made pursuant to this Section 3(a) will
specify the aggregate amount of the Registrable Notes to be registered.
(b) Number of Exchange Offer Registrations. The holders of Registrable
Notes shall be entitled to deliver no more than one Demand Notice hereunder.
<PAGE> 10
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4. Exchange Offer Registration
If a Demand Notice is delivered as contemplated by Section 3(a), the
Issuers shall file with the SEC no later than the Exchange Filing Date, an
offer to exchange (the "Exchange Offer Registration") for any and all of the
Registrable Notes covered by such Exchange Offer Registration pursuant to
Section 3(a) a like aggregate principal amount of debt securities of the
Company, guaranteed by the Guarantors, which are identical in all material
respects to the Notes (the "Exchange Notes") (and which are entitled to the
benefits of the Indenture or a trust indenture which is identical in all
material respects to the Indenture (other than such changes to the Indenture or
any such identical trust indenture as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification thereof under
the TIA) and which, in either case, has been qualified under the TIA), except
that the Exchange Notes shall have been registered pursuant to an effective
Registration Statement under the Securities Act and shall contain no
restrictive legend thereon. The Exchange Offer Registration shall be
registered under the Securities Act on the appropriate form (the "Exchange
Registration Statement") and shall comply with all applicable tender offer
rules and regulations under the Exchange Act.
Each of the Issuers agrees to use its best efforts to (x) cause the
Exchange Registration Statement to be declared effective under the Securities
Act on or before the Exchange Effectiveness Date; (y) keep the Exchange Offer
Registration open for at least 30 days (or longer if required by applicable
law) after the date that notice of the Exchange Offer Registration is mailed to
holders of Registrable Notes (the "Exchange Effectiveness Period"); and (z)
consummate the Exchange Offer Registration on or prior to the 45th day
following the date on which the Exchange Registration Statement is declared
effective. If after such Exchange Registration Statement is initially declared
effective by the SEC, the Exchange Offer Registration or the issuance of the
Exchange Notes thereunder is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or
court, such Exchange Registration Statement shall be deemed not to have become
effective for purposes of this Agreement. Each holder of Registrable Notes who
participates in the Exchange Offer Registration will be required to represent
that any Exchange Notes received by it will be acquired in the ordinary course
of its business, that at the time of the consummation of the Exchange Offer
Registration such holder of Registrable Notes will have no arrangement or
understanding with any Person to participate in
<PAGE> 11
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the distribution of the Exchange Notes, and that such holder of Registrable
Notes is not an affiliate of any of the Issuers within the meaning of the
Securities Act.
In connection with the Exchange Offer Registration, the Issuers shall:
(1) mail to each holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer
Registration with an address in the Borough of Manhattan, The City of New
York;
(3) permit holders of Registrable Notes to withdraw tendered Notes
at any time prior to the close of business, New York time, on the last
business day on which the Exchange Offer Registration shall remain open;
and
(4) otherwise comply in all material respects with all applicable
laws.
As soon as practicable after the close of the Exchange Offer Registration,
the Issuers shall:
(1) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Exchange Offer Registration;
(2) deliver to the Trustee for cancellation all Notes so accepted
for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
holder of Notes, Exchange Notes, equal in principal amount to the Notes
of such holder so accepted for exchange.
The Exchange Notes may be issued under (i) the Indenture or (ii) an
indenture identical in all material respects to the Indenture, which in either
event will provide that the holders of the Notes and the Exchange Notes will
vote and consent together on all matters as one class and that neither the
Exchange Notes nor the Notes will have the right to vote or consent as a
separate class on any matter.
<PAGE> 12
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5. Piggy-Back Registration
(a) If at any time commencing 120 days after the date of this Agreement
the Company proposes to file a Registration Statement under the Securities Act
with respect to an offering by the Company for its own account or for the
account of any of its respective securityholders of any class of its debt or
preferred equity securities (other than (i) a Registration Statement on Form
S-4 or S-8 (or any substitute form that may be adopted by the SEC) or (ii) a
Registration Statement filed in connection with an offer or offering of
securities solely to the Company's existing securityholders), then the Company
shall give written notice of such proposed filing to the holders of Registrable
Preferred Stock as soon as practicable (but in no event less than 20 days
before the anticipated filing date), and such notice shall offer such
Stockholders the opportunity to register such number of shares of Registrable
Preferred Stock as each such Stockholder may request (which request shall
specify the Registrable Preferred Stock intended to be disposed of by such
Selling Stockholder and the intended method of distribution thereof) (a
"Piggy-Back Registration"). The Company shall use its best efforts to cause
the managing underwriter or underwriters of such proposed underwritten offering
to permit the Registrable Preferred Stock requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company or any other securityholder included therein
and to permit the sale or other disposition of such Registrable Preferred Stock
in accordance with the intended method of distribution thereof except as
otherwise provided in Section 5(b). Any Selling Stockholder shall have the
right to withdraw its request for inclusion of its Registrable Preferred Stock
in any Registration Statement pursuant to this Section 5(a) by giving written
notice to the Company of its request to withdraw no later than 5 days before
such Registration Statement becomes effective. The Company may withdraw a
Piggy-Back Registration at any time prior to the time it becomes effective;
provided that the Company shall give prompt notice thereof to participating
selling Stockholders. The Company will pay all registration expenses in
connection with each registration of Registrable Preferred Stock requested
pursuant to this Section 5, and each Stockholder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Stockholder's Registrable Preferred Stock pursuant to a
registration statement effected pursuant to this Section 5(a).
No registration effected under this Section 5(a), and no failure to effect
a registration under this Section 5(a),
<PAGE> 13
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shall relieve the Company of its obligation to effect a registration upon the
request of Stockholders pursuant to Section 2, and no failure to effect
a registration under this Section 5(a) and to complete the sale of shares of
Registrable Preferred Stock in connection therewith shall relieve the Company
of any other obligation under this Agreement.
(b) Reduction of Offering. (i) If the managing underwriter(s) of any
underwritten offering described in Section 5(a) have informed, in writing, the
selling Stockholders of the Registrable Preferred Stock requesting inclusion in
such offering that it is their opinion that the total number of shares which
the Company, the selling Stockholders and any other persons desiring to
participate in such registration intend to include in such offering is such as
to adversely affect the success of such offering, including the price at which
such securities can be sold, then the number of shares to be offered for the
account of the selling Stockholders and all such other persons (other than the
Company) participating in such registration shall be reduced or limited pro
rata in proportion to the respective number of shares requested to be
registered to the extent necessary to reduce the total number of shares
requested to be included in such offering to the number of shares, if any,
recommended by such managing underwriters; provided, however, that if such
offering is effected for the account of any securityholder of the Company other
than the selling Stockholders, pursuant to the demand registration rights of
any such securityholder, then the number of shares to be offered for the
account of the selling Stockholders and all other persons (other than the
Company) participating in such registration (but not such securityholders who
have exercised their demand registration rights) shall be reduced or limited
pro rata in proportion to the respective number of shares requested to be
registered to the extent necessary to reduce the total number of shares
requested to be included in such offering to the number of shares, if any,
recommended by such managing underwriters.
(ii) If the managing underwriter or underwriters of any underwritten
offering described in Section 5(a) notify the selling Stockholders requesting
inclusion of Registrable Preferred Stock in such offering, that the kind of
securities that the selling Stockholders, the Company and any other persons
desiring to participate in such registration intend to include in such offering
is such as to adversely affect the success of such offering, (x) the
Registrable Preferred Stock to be included in such offering shall be reduced as
described in clause (i) above or (y) if a reduction in the Registrable
Preferred Stock pursuant to clause (i) above would, in the
<PAGE> 14
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judgment of the managing underwriter(s) or underwriters, be insufficient
to substantially eliminate such adverse effect that inclusion of the
Registrable Preferred Stock requested to be included would have on such
offering, such Registrable Preferred Stock will be excluded from such offering.
(c) If, as a result of the proration provisions of this Section 2.3, any
selling Stockholder shall not be entitled to include all Registrable Preferred
Stock in a Piggy-Back Registration that such selling Stockholder has requested
to be included, such selling Stockholder may elect to withdraw his request to
include Registrable Preferred Stock in such registration (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
and, after making a Withdrawal Election, a selling Stockholder shall no longer
have any right to include Registrable Preferred Stock in the registration as to
which such Withdrawal Election was made.
6. Additional Interest
(a) The Issuers agree that the holders of Registrable Notes will suffer
damages if the Issuers fail to fulfill their obligations to holders of
Registrable Notes under Section 2 hereof and that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, the Issuers,
jointly and severally, agree to pay, as liquidated damages, additional interest
on Notes ("Additional Interest") under the circumstances and to the extent set
forth below (each of which shall be given independent effect):
(i) if the Shelf Notice is delivered as contemplated by Section
2(a) and the Shelf Registration has not been filed on or prior to the
Shelf Filing Date, then commencing on the day after such Shelf Filing
Date, Additional Interest shall be accrued on the Notes covered by such
Shelf Registration over and above the accrued interest at a rate of .50%
per annum for the first 90 days immediately following such Shelf Filing
Date, such Additional Interest rate increasing by an additional .25% per
annum at the beginning of each subsequent 90-day period;
(ii) if such Shelf Registration has not been declared effective on
or prior to such Shelf Effectiveness Date, then commencing on the day
after such Shelf Effectiveness Date, Additional Interest shall be
accrued on the Notes included in such Registration Statement over and
above the accrued interest at a rate of .50% per annum for the first 90
days immediately following the day after
<PAGE> 15
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such Shelf Effectiveness Date, such Additional Interest rate
increasing by an additional .25% per annum at the beginning of each
subsequent 90-day period; and
(iii) if a Shelf Registration or any Subsequent Shelf Registration
has been declared effective and such Shelf Registration ceases to be
effective at any time prior to the Shelf Termination Date, then
Additional Interest shall be accrued on the Notes affected thereby over
and above the accrued interest at a rate of .50% per annum for the first
90 days commencing on the day such Shelf Registration ceases to be
effective, such Additional Interest rate increasing by an additional .25%
per annum at the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on any Note may not exceed
at any one time in the aggregate 1.0% per annum; and provided, further, that
(1) upon the filing of a Shelf Registration (in the case of (i) above), (2)
upon the effectiveness of a Shelf Registration (in the case of (ii) above), (3)
upon the effectiveness of a Subsequent Shelf Registration (in the case of (iii)
above), Additional Interest on the Notes as a result of such clause, as the
case may be, shall cease to accrue.
(b) The Issuers shall notify the Trustee within one Business Day after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Any amounts of Additional
Interest due pursuant to Section 6(a) will be payable in cash semi-annually on
each interest payment date for the Registrable Notes (to the Noteholders of
record entitled to such interest payment), commencing with the first such date
occurring after any such Additional Interest commences to accrue. The amount
of Additional Interest will be determined on the basis of a 360-day year
comprised of twelve 30-day months.
7. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration or
the Exchange Offer Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the holders of a majority in aggregate
principal amount of the Registrable Notes or the holders of a majority in
aggregate liquidation value of the Registrable Preferred Stock, as the case may
be, included in such offering and reasonably acceptable to the Appropriate
Registrant.
<PAGE> 16
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8. Registration Procedures
In connection with the filing of any Registration Statement, the
Appropriate Registrant shall as expeditiously as possible:
(a) Prepare and file with the SEC (i) as soon as practicable after the
Shelf Notice but in any event prior to the Shelf Filing Date, a Registration
Statement as prescribed by Section 2, and (ii) within the time limit prescribed
herein the Exchange Registration Statement prescribed pursuant to Section 4,
and in each such case and in the case of a Piggy-Back Registration pursuant to
Section 5(a) use every reasonable effort to cause each such Registration
Statement or Registration Statements to become effective and remain effective
as provided herein; provided, however, before filing any Registration Statement
or Prospectus or any amendments or supplements thereto (not including documents
that would be incorporated or deemed to be incorporated therein by reference),
the Appropriate Registrant shall afford the Holders covered by such
Registration Statement, their counsel and the managing underwriters, if any, an
opportunity to review, promptly, copies of all such documents proposed to be
filed; provided, however, that the Issuers shall not be required to afford such
persons an opportunity to review a copy of (i) any such document that has not
been materially changed from a copy of such document that such person was
previously afforded an opportunity to review and (ii) any amendments or
supplements to a Registration Statement or Prospectus which are made solely as
a result of any filing by the Appropriate Registrant of reports required to be
filed pursuant to the Exchange Act. The Appropriate Registrant shall not file
any Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must be afforded an opportunity to
review prior to the filing of such document, if the Holders of a majority in
aggregate principal amount or liquidation value, as the case may be, of the
Registrable Securities covered by such Registration Statement, their counsel,
or the managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods prescribed
hereby; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the
<PAGE> 17
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Securities Act, the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to it with respect to the disposition of all
securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) Notify the selling Holders of Registrable Securities, their counsel
and the managing underwriters, if any, promptly (but in any event within two
business days after becoming aware thereof), and confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective (including in such
notice a written statement that any holder may, upon request, obtain, without
charge, one conformed copy of such Registration Statement or post-effective
amendment including financial statements and schedules but excluding documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Securities covered by
such Registration Statement the representations and warranties of the
Appropriate Registrant contained in any agreement (including any underwriting
agreement) contemplated by Section 7(o) cease to be true and correct, (iv) of
the receipt by the Appropriate Registrant of any notification with respect to
the suspension of the qualification or exemption from qualification of such
Registration Statement or any of the Registrable Securities for offer or sale
in any jurisdiction, or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event, the existence of any condition
or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of such Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in
<PAGE> 18
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light of the circumstances under which they were made, not misleading,
and (vi) of the Appropriate Registrant's reasonable determination that a
post-effective amendment to such Registration Statement would be appropriate.
(d) Use its best efforts to prevent the issuance of any order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of a Prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, and, if any such order is issued, to obtain the withdrawal of
any such order at the earliest possible moment.
(e) If requested by the managing underwriters, if any, or the holders of a
majority in aggregate principal amount or liquidation value, as the case may
be, of the Registrable Securities being sold in connection with an underwritten
offering, (i) promptly incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriters, if any, or such
Holders reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after the Appropriate Registrant received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such Registration
Statement.
(f) Furnish to each selling holder of Registrable Securities who so
requests and to counsel and each managing underwriter, if any, without charge,
one conformed copy of the Registration Statement and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) Deliver to each selling holder of Registrable Securities, their
counsel and the underwriters, if any, without charge, as many copies of each
Prospectus (including each form of preliminary prospectus) and each amendment
or supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of this
Section 8, each Appropriate Registrant hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders of Registrable Securities and the underwriters or agents, if
any, in connection with the offering and sale of the Registrable
<PAGE> 19
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Securities covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to register or
qualify, and to cooperate with the selling Holders of Registrable Securities,
the underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling holder, or the managing underwriters reasonably request in writing;
provided that where Registrable Securities are offered other than through an
underwritten offering, the Appropriate Registrant agrees to cause its counsel
to perform Blue Sky investigations and file registrations and qualifications
required to be filed pursuant to this Section 8(h); keep each such registration
or qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
applicable Registration Statement; provided, however, that no Appropriate
Registrant shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) become subject to taxation in any such jurisdiction
where it is not then so subject.
(i) Cooperate with the selling holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company ("DTC"); and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters, if any, or selling holders of Registrable
Securities may reasonably request at least two business days prior to any sale
of Registrable Securities.
(j) Use its best efforts to cause the Registrable Securities covered by
the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Securities, except as may be
<PAGE> 20
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required solely as a consequence of the nature of such selling holder's
business, in which case the Appropriate Registrant will cooperate in all
reasonable respects with the filing of such registration and the granting of
such approvals.
(k) Upon the occurrence of any event contemplated by paragraph 8(c)(v) or
8(c)(vi), as promptly as practicable prepare and file with the SEC, at the
joint and several expense of each of the Issuers, a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(l) Use its best efforts to cause the Registrable Securities covered by a
Registration Statement to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate principal amount or
liquidation value, as the case may be, of Registrable Securities covered by
such Registration Statement or the managing underwriters, if any.
(m) Prior to the effective date of any Registration Statement relating to
the Registrable Securities, (i) provide the Trustee with printed certificates
for the Registrable Securities covered by such Registration Statement in a form
eligible for deposit with DTC and (ii) provide a CUSIP number(s) for the
Registrable Securities.
(n) Cooperate with each selling holder of Registrable Securities covered
by any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc. (the "NASD").
(o) In the event a Shelf Registration is filed, and if requested by
Holders of a majority in aggregate principal amount or liquidation value, as
the case may be, of Registrable Securities covered by such Registration
Statement, enter into an underwriting agreement in form, scope and substance as
is customary in underwritten offerings and take all such other actions as are
reasonably requested by the managing
<PAGE> 21
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underwriters in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection, (i) make
such representations and warranties to the underwriters, with respect to the
business of the Appropriate Registrant and its subsidiaries, and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings of securities similar to the applicable Registrable
Security, and confirm the same if and when requested; (ii) obtain opinions of
counsel to the Appropriate Registrant and updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriters, addressed to
the underwriters covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably requested
by underwriters; (iii) obtain "cold comfort" letters and updates thereof in
form and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the
Appropriate Registrant (and, if necessary, any other independent certified
public accountants of any subsidiary of the Appropriate Registrant or business
acquired by the Appropriate Registrant for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each of the underwriters such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings of securities
similar to the applicable Registrable Security; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions
and procedures no less favorable than those set forth in Section 10 (or such
other less favorable provisions and procedures acceptable to Holders of a
majority in aggregate principal amount or liquidation value, as the case may
be, of Registrable Securities covered by such Registration Statement and the
managing underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder.
(p) Make available for inspection by a representative of the selling
holders of Registrable Securities, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney or accountant
or other agent retained by any such representative of such selling holders or
underwriter (collectively, the "Inspectors"), at the offices where normally
<PAGE> 22
-20-
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Appropriate Registrant and
its subsidiaries, and cause the officers, directors and employees of the
Appropriate Registrant and its subsidiaries to supply all information, in each
case reasonably requested by any such Inspector in connection with such
Registration Statement; provided, however, that any information that is
designated in writing by the Appropriate Registrant, in good faith, as
confidential at the time of delivery of such information, shall be kept
confidential by such Inspector unless (i) disclosure of such information is
required by court or administrative order, (ii) disclosure of such information,
in the opinion of counsel to such Inspector, is necessary to avoid or correct a
misstatement or omission of a material fact in the Registration Statement,
Prospectus or any supplement or post-effective amendment thereto or disclosure
is otherwise required by law, (iii) disclosure of such information is, in the
opinion of counsel for any Inspector, necessary or advisable in connection with
any action, claim, suit or proceeding, directly or indirectly, involving or
potentially involving such Inspector and arising out of, based upon, relating
to, or involving this Agreement, or any transactions contemplated hereby or
arising hereunder, or (iv) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by such
Inspector. Each selling holder of such Registrable Securities will be required
to agree that information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Appropriate Registrant unless and until
such is made generally available to the public. Each selling holder of such
Registrable Securities will be required to further agree that it will, upon
learning that disclosure of any such information is sought in a court of
competent jurisdiction, give notice to the Appropriate Registrant and allow the
Appropriate Registrant to undertake appropriate action to prevent disclosure of
the information deemed confidential at its expense.
(q) Provide an indenture trustee for the Registrable Notes, and cause the
Indenture to be qualified under the TIA not later than the effective date of
the first Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such indenture and
the selling holders of the Registrable Notes, to effect such changes to such
indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its best efforts to
cause such trustee to execute, all documents as may be required to effect
<PAGE> 23
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such changes, and all other forms and documents required to be filed with the
SEC to enable such indenture to be so qualified in a timely manner.
(r) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(s) If an Exchange Offer Registration is to be consummated, upon delivery
of the Registrable Notes by such selling holders to the Issuers (or to such
other Person as directed by the Issuers) in exchange for the Exchange Notes,
the Issuers shall mark, or caused to be marked, on such Registrable Notes that
such Registrable Notes are being cancelled in exchange for the Exchange Notes;
in no event shall such Registrable Notes be marked as paid or otherwise
satisfied.
(t) Use its best efforts to take all other steps reasonably necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby.
The Appropriate Registrant may require each selling holder of Registrable
Securities as to which any registration is being effected to furnish to the
Appropriate Registrant such information regarding such seller and the
distribution of such Registrable Securities as the Appropriate Registrant may,
from time to time, reasonably request in writing. The Appropriate
Registrant may exclude from such registration the Registrable Securities of any
seller who unreasonably fails to furnish such information within a reasonable
time after receiving such request. If the identity of a seller of Registrable
Securities is to be disclosed in a registration statement, such selling holder
shall be permitted to include all information regarding such seller as it shall
reasonably request.
<PAGE> 24
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Each Holder, upon receipt of any notice from the Appropriate Registrant of
the happening of any event of the kind described in Section 8(c), will
forthwith discontinue disposition of such Registrable Securities covered by
such Registration Statement or Prospectus, until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 8(c),
or until it is advised in writing (the "Advice") by the Appropriate Registrant
that the use of the applicable Prospectus may be resumed. In the event the
Appropriate Registrant shall give any such notice, the Shelf Termination Date
and the Exchange Effectiveness Period shall be extended by the number of days
during such periods from and including the date of the giving of such notice to
and including the date when each seller of Registrable Securities covered by
such Registration Statement shall have received the copies of the supplemented
or amended Prospectus contemplated by Section 8(c) or the Advice.
9. Registration Expenses
(a) All fees and expenses, other than underwriting discounts and
commissions, incident to the performance of or compliance with this Agreement
by the Appropriate Registrant shall be borne by the Appropriate Registrant,
jointly and severally in the case of the Issuers and with respect to
Registrable Notes, whether or not a Registration Statement is filed or becomes
effective, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Securities or Exchange Notes
and determination of the eligibility of the Registrable Securities or Exchange
Notes for investment under the laws of such jurisdictions (x) where the Holders
of Registrable Securities are located, in the case of the Preferred Stock and
Exchange Notes, or (y) as provided in Section 8(h), in the case of Registrable
Notes)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities or Exchange Notes in a form
eligible for deposit with DTC and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriters, if any, or, in respect
of Registrable Securities, by the Holders of a majority in aggregate principal
amount or liquidation value, as the case may be, of the Registrable Securities
included in the Registration Statement), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of
<PAGE> 25
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counsel for the Appropriate Registrant and reasonable fees and
disbursements of counsel for the sellers of Registrable Securities (subject to
the provisions of Section 9(b)), (v) fees and disbursements of all independent
certified public accountants referred to in Section 8(o)(iii) (including,
without limitation, the expenses of any special audit and "cold comfort"
letters required by or incident to such performance), (vi) the fees and
expenses of any "qualified independent underwriter" or other independent
appraiser participating in an offering pursuant to Rule 2720 of the Conduct
Rules of the NASD, (vii) rating agency fees, (vii) Securities Act liability
insurance, if the Appropriate Registrant desires such insurance, (viii) fees
and expenses of all other Persons retained by the Appropriate Registrant, (ix)
internal expenses of the Appropriate Registrant (including, without limitation,
all salaries and expenses of officers and employees of the Appropriate
Registrant performing legal or accounting duties), (x) the expense of any
annual audit, (xi) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange and (xii)
the fees and expenses of any person, including special experts, retained by the
Appropriate Registrant.
(b) In connection with any Registration Statement hereunder or any
amendment thereto, the Appropriate Registrant shall reimburse the Holders of
the Registrable Securities being registered in such registration for the
reasonable fees and disbursements of not more than one counsel (together with
appropriate local counsel) chosen by the Holders of a majority in aggregate
principal amount or liquidation value, as the case may be, of the Registrable
Securities to be included in such Registration Statement and other reasonable
out-of-pocket expenses of the Holders of Registrable Securities incurred in
connection with the registration of the Registrable Securities.
10. Indemnification
(a) The Appropriate Registrant, jointly and severally in the case of the
Issuers and with respect to Registrable Notes, agrees to indemnify and hold
harmless each Holder of Registrable Securities covered by a Registration
Statement, the officers and directors of each such person, and each person, if
any, who controls any such person within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, a "Participant"),
from and against any and all losses, claims, damages and liabilities
(including, without limitation, the reasonable legal fees and other expenses
actually incurred in connection with any suit, action or proceeding or any
claim asserted) caused by, arising
<PAGE> 26
-24-
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in such Registration Statement or any related
Prospectus (as amended or supplemented if the Appropriate Registrant shall have
furnished any amendments or supplements thereto) or any related preliminary
prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Participant furnished to the Appropriate
Registrant in writing by such Participant expressly for use therein; provided
that the Appropriate Registrant will not be liable to any Participant with
respect to any such untrue statement or omission in any preliminary prospectus
that is corrected in the related Prospectus (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage or liability
purchased Registrable Securities or Exchange Notes which are the subject
thereof from such Participant in reliance upon such preliminary prospectus but
was not sent or given a copy of the related Prospectus (as amended or
supplemented) at or prior to the written confirmation of the sale of such
Registrable Securities or Exchange Notes, as the case may be, to such person,
unless such failure to deliver such Prospectus (as amended or supplemented) was
a result of noncompliance by the Appropriate Registrant with Section 8 of this
Agreement.
(b) Each Participant will be required to agree, severally and not jointly,
to indemnify and hold harmless the Appropriate Registrant, its respective
directors and officers and each person who controls the Appropriate Registrant
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Appropriate
Registrant to each Participant, but only (i) with reference to information
relating to such Participant furnished to the Appropriate Registrant in writing
by or on behalf of such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any
preliminary prospectus or (ii) with respect to any untrue statement or
representation made by such Participant in writing to the Appropriate
Registrant. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of
Registrable Securities or Exchange Notes giving rise to such obligations.
<PAGE> 27
-25-
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of
the two preceding paragraphs, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which
it may have hereunder or otherwise (unless and only to the extent that such
failure directly results in the loss or compromise of any material rights or
defenses by the Appropriate Registrant and the Appropriate Registrant was not
otherwise aware of such action or claim). In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the
Participants and such control persons of Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable
Securities sold by all such Participants in the related registration and any
such separate firm for the Appropriate Registrant, its directors, its officers
and such control persons of the Appropriate Registrant shall be designated in
writing by the Appropriate Registrant. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final non-appealable
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
<PAGE> 28
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Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for reasonable fees and expenses actually incurred by
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of
such settlement; provided, however, that the Indemnifying Person shall not be
liable for any settlement effected without its consent pursuant to this
sentence if the Indemnifying Person is contesting, in good faith, the request
for reimbursement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject
matter of such proceeding.
(d) If the indemnification provided for in the first and second paragraphs
of this Section 10 is unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Person or Persons on the one hand and the Indemnified
Person or Persons on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof). The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Appropriate Registrant on
the one hand or by the Participants or such other Indemnified Person, as the
case may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to
<PAGE> 29
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correct or prevent such statement or omission and any other equitable
considerations appropriate under the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such Indemnified Person
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable
Securities or Exchange Notes, as the case may be, exceeds the amount of any
damages that such Participant has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section 10
will be in addition to any
liability which the Indemnifying Persons may otherwise have to the Indemnified
Persons referred to above.
11. Rule 144 and 144A
The Appropriate Registrant covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the SEC thereunder in a timely manner and,
if at any time the Appropriate Registrant is not required to file such reports,
such Appropriate Registrant will, upon the request of any Holder of Registrable
Securities, make publicly available annual reports and such information,
documents and other reports of the type specified in Sections 13 and 15(d) of
the Exchange Act. The Appropriate Registrant further covenants that, for so
long as any Registrable Securities remain outstanding, to make available to any
Holder or beneficial owner of Registrable Securities in connection with any
sale thereof and any prospective purchaser of such
<PAGE> 30
-28-
Registrable Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Registrable Securities pursuant to Rule 144A.
12. Miscellaneous
(a) No Inconsistent Agreements. No Appropriate Registrant has entered, as
of the date hereof, and no Appropriate Registrant shall enter, after the date
of this Agreement, into any agreement with respect to any of its securities
that is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
No Appropriate Registrant has entered and no Appropriate Registrant will enter
into any agreement with respect to any of its securities which will grant to
any person piggy-back rights with respect to a Registration Statement.
(b) Adjustments Affecting Registrable Securities. Neither the Company nor
the Guarantors shall, directly or indirectly, take any action with respect to
the Registrable Securities as a class that would adversely affect the ability
of the Holders of Registrable Securities to include such Registrable Securities
in a registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Appropriate Registrant has obtained the written
consent of (i) holders of at least a majority of the then outstanding aggregate
principal amount of Registrable Notes in the case of provisions affecting
holders of Registrable Notes and (ii) holders of at least a majority of the
then outstanding aggregate liquidation value of Registrable Preferred Stock in
the case of provision affecting holders of Registrable Preferred Stock.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority in aggregate
principal amount or liquidation value, as the case may be, of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement;
provided that the provisions of this
<PAGE> 31
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sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
(i) if to a Holder of the Registrable Securities, at the most
current address given by such Holder to the Company in accordance with
the provisions of this Section 12(d), with a copy in like manner to the
Holders as follows:
Canadian Imperial Bank of Commerce
CIBC WG Argosy Merchant Fund 2, L.L.C.
c/o CIBC Wood Gundy Securities Corp.
425 Lexington Avenue
New York, New York 10017
Facsimile No.: (212) 885-4998
Attention: Corporate Finance Department
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No.: (212) 269-5420
Attention: Roger Meltzer, Esq.
(ii) if to the Company or the Guarantors as follows:
Outdoor Systems, Inc.
2502 North Black Canyon Highway
Phoenix, Arizona 85009
Facsimile No.: (602) 248-0884
Attention: President
with a copy to:
Powell, Goldstein, Frazer & Murphy
191 Peachtree Street NE
16th Floor
Atlanta, Georgia 30303
Facsimile No.: (404) 572-6999
Attention: William B. Shearer, Esq.
<PAGE> 32
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All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the person giving the same to the trustee under the
Indenture at the address specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders of Registrable Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate 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 agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties hereto shall
use their best efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions,
<PAGE> 33
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covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.
(j) Joint and Several Obligations. Each of the obligations of the Issuers
under this Agreement shall be joint and several obligations of each of them.
(k) Securities Held by the Company or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its affiliates (as such term is defined in Rule 405 under the Securities Act)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
<PAGE> 34
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OUTDOOR SYSTEMS, INC.
By:___________________________________
Name:
Title:
THE GUARANTORS:
OS BASELINE, INC.
By:___________________________________
Name:
Title:
OUTDOOR SYSTEMS PAINTING, INC.
BY:___________________________________
Name:
Title:
OS ADVERTISING OF TEXAS PAINTING,
INC.
By:___________________________________
Name:
Title:
NEW YORK SUBWAYS ADVERTISING
CO., INC.
By:___________________________________
Name:
Title:
<PAGE> 35
-33-
DECADE COMMUNICATIONS GROUP, INC.
By:___________________________________
Name:
Title:
BENCH ADVERTISING COMPANY OF
COLORADO, INC.
By:___________________________________
Name:
Title:
HOLDERS of NOTES:
CANADIAN IMPERIAL BANK OF
COMMERCE
By:___________________________________
Name:
Title:
HOLDERS of PREFERRED STOCK:
CIBC WG ARGOSY MERCHANT FUND
2, L.L.C.
By:___________________________________
Name:
Title:
<PAGE> 1
EXHIBIT 99.10
_________________________________________________________________________
COMMON STOCK REGISTRATION RIGHTS AGREEMENT
DATED AS OF [ ], 1996
BETWEEN
OUTDOOR SYSTEMS, INC.
AND
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
_________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
1. Definitions ................................... 1
2. Registration Rights ........................... 6
3. Transfers of Warrant Shares ................... 10
4. Registration Procedures ....................... 18
5. Indemnification and Contribution .............. 22
6. Miscellaneous ................................. 25
a. No Inconsistent Agreements .. 25
b. Amendments and Waivers ...... 26
c. Notices ..................... 26
d. Successors and Assigns ...... 26
e. Rules 144 and 144A .......... 27
f. Counterparts ................ 27
g. Headings .................... 27
h. Governing Law ............... 27
i. Severability ................ 28
j. Entire Agreement ............ 28
</TABLE>
Exhibit A
-i-
<PAGE> 3
THIS COMMON STOCK REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of [ ], 1996, between Outdoor Systems, Inc., a
Delaware corporation (the "Company"), and CIBC WG Argosy Merchant Fund 2,
L.L.C., a Delaware limited liability company (the "Purchaser").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of July 9, 1996, between the Company and the Purchaser (the "Purchase
Agreement"), relating to the sale by the Company to the Purchaser of up to
$165,000,000 in aggregate liquidation value of its Senior Increasing Rate
Redeemable Preferred Stock, Series A, par value $1.00 per share (the "Preferred
Stock"), along with warrants, including certain additional warrants as provided
for in Section 5.5 of the Purchase Agreement (collectively, the "Warrants"),
for the purchase of shares of its Common Stock, par value $.01 per share
("Common Stock"). In order to induce the Purchaser to enter into the Purchase
Agreement, the Company has agreed to provide to the Purchaser and its direct
and indirect transferees (the "Holders"), among other things, the registration
rights for the Common Stock set forth in this Agreement. The execution of this
Agreement is a condition to the obligations of the Purchaser to purchase the
Preferred Stock and Warrants under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person.
For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by," and
"under common control with"), as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise;
provided, however, that beneficial ownership of at least 10% of the
voting securities of a Person shall be deemed to be control. Neither the
Purchaser nor any of its Affiliates shall be deemed to be an Affiliate
of the Company or of any of its Subsidiaries or Affiliates.
<PAGE> 4
-2-
"Agreement" shall have the meaning set forth in the preamble.
"Business Day" shall mean a day that is not a Legal Holiday.
"Capital Stock" shall mean, with respect to any Person, any and all
shares or other equivalents (however designated) of capital stock,
partnership interests or any other participation, right or other interest
in the nature of an equity interest in such Person or any option, warrant
or other security convertible into any of the foregoing.
"Closing Date" shall mean the date of Closing as defined in the
Purchase Agreement.
"Common Stock" shall have the meaning set forth in the preamble.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Current Market Value" shall have the meaning provided therefor in
the Warrant Agreement, dated as of [ ], 1996, between the Company
and [ ], as warrant agent.
"Definitive Certificate" shall mean a certificate representing
Warrant Shares in definitive registered form, other than a Global
Certificate.
"Demand Registration" shall have the meaning set forth in Section
2.1.
"Depositary" shall mean, with respect to Shares represented by one
or more Global Certificates, The Depository Trust Company or another
person designated as Depositary by the Company, which must be a clearing
agency registered under the Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Global Certificate" shall mean a certificate representing all or
part of the Warrant Shares issued to the Depositary and bearing the
legend set forth in Section 3.2(g)(iii).
<PAGE> 5
-3-
"Holder" shall have the meaning set forth in the preamble.
"Included Shares" shall have the meaning set forth in Section
2.1(a).
"indemnified party" shall have the meaning set forth in Section
5(c).
"indemnifying party" shall have the meaning set forth in Section
5(c).
"Legal Holiday" shall mean a Saturday, a Sunday or a day on which
banking institutions in New York, New York are required by law,
regulation or executive order to remain closed. If a payment date is a
Legal Holiday, payment may be made on the next succeeding day that is not
a Legal Holiday.
"Person" shall mean an individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated
organization, or other legal entity.
"Piggy-Back Registration" shall have the meaning set forth in
Section 2.2.
"Preferred Stock" shall have the meaning set forth in the preamble.
"proposed purchaser" shall have the meaning set forth in Section
3.3(a).
"Prospectus" means a prospectus which meets the requirements of
Section 10 of the Securities Act.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Purchaser" shall have the meaning set forth in the preamble.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Registrable Securities" shall mean the shares of Common Stock
issuable upon exercise of the Warrants. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when
(i) a Registration
<PAGE> 6
-4-
Statement with respect to such securities shall have
been declared effective under the Securities Act and such securities
shall have been disposed of pursuant to such Registration Statement, (ii)
such securities have been sold to the public pursuant to Rule 144(k) (or
any similar provision then in force, but not Rule 144A) under the
Securities Act, (iii) such securities shall have been otherwise
transferred by such Holder and new certificates for such securities not
bearing a legend restricting further transfer shall have been delivered
by the Company or its transfer agent and subsequent disposition of such
securities shall not require registration or qualification under the
Securities Act or any similar state law then in force or (iv) such
securities shall have ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including,
without limitation, all SEC and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees and expenses, fees
and expenses of compliance with securities or blue sky laws (including,
without limitation, reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the
Registrable Securities), rating agency fees, printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company and all independent certified public accountants
(but not including any underwriting discounts or commissions or transfer
taxes, if any, attributable to the sale of Registrable Securities by
Holders of such Registrable Securities).
"Registration Statement" shall mean any registration statement of
the Company which covers any of the Warrant Shares pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference or
deemed to be incorporated by reference in such Registration Statement.
"Regulation S" shall mean Regulation S under the Securities Act.
"Requisite Shares" shall mean a number of Registrable Securities
then outstanding equal to not less than 25% of the Registrable Securities
held in the aggregate by all Holders.
<PAGE> 7
-5-
"Restricted Security" shall have the meaning set forth in Rule
144(a)(3) under the Securities Act.
"Rule 144" shall mean Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the SEC providing for
offers and sales of securities made in compliance therewith resulting in
offers and sales by subsequent holders that are not affiliates of an
issuer of such securities being free of the registration and prospectus
delivery requirements of the Securities Act.
"Rule 144A" shall mean Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the SEC providing for offers
and sales of securities made in compliance therewith resulting in offers
and sales by subsequent holders that are not affiliates of an issuer of
such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
"Rule 415" shall mean Rule 415 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Holder" shall mean a Holder who is selling Warrant Shares
in accordance with the provisions of Section 2.1 or 2.2 hereof.
"Stockholder" means each Holder.
"Transfer Agent" means any transfer agent or registrar appointed by
the Company for the Common Stock.
"Warrant Shares" means the shares of Common Stock issued and
issuable upon exercise of the Warrants.
"Warrants" shall have the meaning set forth in the preamble.
"Withdrawal Election" shall have the meaning set forth in Section
2.3.
<PAGE> 8
-6-
2. Registration Rights.
1 Demand Registration.
(a) Request for Registration. If, at any time commencing
365 days from the date of this Agreement, there are any Registrable
Securities remaining outstanding, Holders owning, individually or in the
aggregate, at least the Requisite Shares may make a written request for
registration under the Securities Act of their Registrable Securities (a
"Demand Registration"). Any such request will specify the number of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. Upon a demand, the Company will prepare, file
and use its best efforts to cause to be effective within 180 days of such
demand a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 under the Securities Act in respect of all the
Registrable Securities so requested to be registered, as well as all
Registrable Securities issuable upon the exercise of Warrants which may be
issued pursuant to the Purchase Agreement, and shall use its best efforts to
keep such Registration Statement continuously effective for a period of 36
months from its effectiveness date or such shorter period ending when all
Registrable Securities covered by such Registration Statement, including any
Registrable Securities issuable upon the exercise of Warrants as provided in
this sentence, have been sold in the manner set forth and as contemplated in
such Registration Statement. The Company shall give written notice of such
registration request within 10 days after the receipt thereof to all other
Holders. Within 20 days after receipt of such notice by any Holder, such
Holder may request in writing that Registrable Securities be included in such
registration and the Company shall include in the Demand Registration the
Registrable Securities of any such Selling Holder requested to be so included
(the "Included Shares"). Each such request by such other Selling Holders shall
specify the number of Included Shares proposed to be sold and the intended
method of disposition thereof. Subject to Section 2.1(b), in no event shall
the Company be required to register Registrable Securities pursuant to this
Section 2.1 on more than one occasion.
(b) Effective Registration. A registration will not be deemed to have
been effected as a Demand Registration unless it has been declared effective by
the SEC and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto; provided that if, after
it has become effective, the offering of Registrable Securities pursuant to
such registration is or becomes the subject of any stop order,
<PAGE> 9
-7-
injunction or other order or requirement of the SEC or any other
governmental or administrative agency, or if any court prevents or otherwise
limits the sale of Registrable Securities pursuant to the registration (for any
reason other than the act or omissions of the Selling Holders), such
registration will be deemed not to have been effected. If (i) a registration
requested pursuant to this Section 2.1 is deemed not to have been effected or
(ii) the registration requested pursuant to this Section 2.1 does not remain
effective for a period of at least 36 months beyond the effective date thereof
or such shorter period as provided for in Section 2.1(a), then the Company
shall continue to be obligated to effect an additional registration pursuant to
this Section 2.1. The Selling Holders of Registrable Securities shall be
permitted to withdraw all or any part of the Included Shares from a Demand
Registration at any time prior to the effective date of such Demand
Registration.
(c) Expenses. The Company will pay all Registration Expenses in
connection with the registrations requested pursuant to Section 2.1(a). Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to a registration statement requested pursuant to this
Section 2.1.
2.2 Piggy-Back Registration. If at any time the Company proposes to file a
Registration Statement under the Securities Act with respect to an offering by
the Company for its own account or for the account of any of its respective
securityholders of any class of its common equity securities (other than (i) a
Registration Statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the SEC) or (ii) a Registration Statement filed in connection with
an offer or offering of securities solely to the Company's existing
securityholders), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event less than 20 Business Days before the anticipated filing date), and
such notice shall offer such Holders the opportunity to register such number of
shares of Registrable Securities as each such Holder may request (which request
shall specify the Registrable Securities intended to be disposed of by such
Selling Holder and the intended method of distribution thereof) (a "Piggy-Back
Registration"). The Company shall use its best efforts to cause the managing
underwriter or underwriters of such proposed underwritten offering to permit
the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company or any other securityholder
<PAGE> 10
-8-
included therein and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method of
distribution thereof except as otherwise provided in Section 2.3. Any Selling
Holder shall have the right to withdraw its request for inclusion of its
Registrable Securities in any Registration Statement pursuant to this Section
2.2 by giving written notice to the Company of its request to withdraw no later
than 5 Business Days before such Registration Statement becomes effective. The
Company may withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective; provided that the Company shall give prompt notice thereof
to participating Selling Holders. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this Section 2.2, and each Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to a
registration statement effected pursuant to this Section 2.2.
No registration effected under this Section 2.2, and no failure to effect
a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration upon the request of Holders pursuant to
Section 2.1, and no failure to effect a registration under this Section 2.2 and
to complete the sale of shares of Common Stock in connection therewith shall
relieve the Company of any other obligation under this Agreement.
2.3 Reduction of Offering.
(a) Piggy-Back Registration. (i) If the managing underwriter(s) of any
underwritten offering described in Section 2.2 have informed, in writing, the
Selling Holders of the Registrable Securities requesting inclusion in such
offering that it is their opinion that the total number of shares which the
Company, the Selling Holders and any other Persons desiring to participate in
such registration intend to include in such offering is such as to adversely
affect the success of such offering, including the price at which such
securities can be sold, then the number of shares to be offered for the account
of the Selling Holders and all such other Persons (other than the
Company) participating in such registration shall be reduced or limited pro
rata in proportion to the respective number of shares requested to be
registered to the extent necessary to reduce the total number of shares
requested to be included in such offering to the number of shares, if any,
recommended by such managing underwriters; provided, however, that if such
offering is effected for the account of any securityholder of the Company
<PAGE> 11
-9-
other than the Selling Holders, pursuant to the demand registration
rights of any such securityholder, then the number of shares to be offered for
the account of the Selling Holders and all other Persons (other than the
Company) participating in such registration (but not such securityholders who
have exercised their demand registration rights) shall be reduced or limited
pro rata in proportion to the respective number of shares requested to be
registered to the extent necessary to reduce the total number of shares
requested to be included in such offering to the number of shares, if any,
recommended by such managing underwriters.
(ii) If the managing underwriter or underwriters of any underwritten
offering described in Section 2.2 notify the Selling Holders requesting
inclusion of Registrable Securities in such offering, that the kind of
securities that the Selling Holders, the Company and any other Persons desiring
to participate in such registration intend to include in such offering is such
as to adversely affect the success of such offering, (x) the Registrable
Securities to be included in such offering shall be reduced as described in
clause (i) above or (y) if a reduction in the Registrable Securities pursuant
to clause (i) above would, in the judgment of the managing underwriter(s) or
underwriters, be insufficient to substantially eliminate such adverse effect
that inclusion of the Registrable Securities requested to be included would
have on such offering, such Registrable Securities will be excluded from such
offering.
(b) If, as a result of the proration provisions of this Section 2.3, any
Selling Holder shall not be entitled to include all Registrable Securities in a
Piggy-Back Registration that such Selling Holder has requested to be included,
such Selling Holder may elect to withdraw his request to include Registrable
Securities in such registration (a "Withdrawal Election"); provided, however,
that a Withdrawal Election shall be irrevocable and, after making a Withdrawal
Election, a Selling Holder shall no longer have any right to include
Registrable Securities in the registration as to which such Withdrawal Election
was made.
3.1 Transfers of Warrant Shares.
1 Generally.
(a) All Warrant Shares at any time and from time to time outstanding that
are Registrable Securities shall be held subject to the conditions and
restrictions set forth in this Section 3. All shares of Common Stock now or
hereafter held by a
<PAGE> 12
-10-
Control Stockholder shall be held subject to the conditions
and restrictions set forth in this Section 3. Each Holder of Warrant Shares by
executing this Agreement or by accepting a certificate representing Common
Stock or other indicia of ownership therefor from the Company agrees with the
Company to such conditions and restrictions.
(b) Each Holder of Registrable Securities agrees that it will not Transfer
any Warrant Shares or any interest therein except in compliance with Sections
3.2 and 3.3 hereof.
3.2 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Certificates. The Company and the
Transfer Agent shall not be obligated to register the transfer or exchange of
any Definitive Certificate that is a Restricted Security unless such Warrants
or Warrant Shares are delivered to the Transfer Agent duly endorsed or
accompanied by written instruments of transfer and are accompanied by the
following additional information and documents, as applicable:
(A) if such Restricted Security is being delivered to
the Transfer Agent by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form of Exhibit A
hereto); or
(B) if such Restricted Security is being transferred
to a Qualified Institutional Buyer in accordance with Rule
144A or pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect (in substantially the form of
Exhibit A hereto) and, with respect to transfers pursuant to
Rule 144 or Regulation S, an opinion of counsel reasonably
acceptable to the Company and the Transfer Agent to the
effect that such transfer does not require registration under
Securities Act; or
(C) if such Restricted Security is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form of Exhibit A hereto) and an
opinion of counsel reasonably acceptable to the Company and
<PAGE> 13
-11-
to the Transfer Agent to the effect that such transfer does not
require registration under the Securities Act.
(b) Restrictions on Transfer of a Definitive Certificate for a
Beneficial Interest in a Global Certificate. A Definitive Certificate
may not be exchanged for a beneficial interest in a Global Certificate except
upon satisfaction of the requirements set forth below. Upon receipt by the
Transfer Agent of a Definitive Certificate, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Transfer
Agent, together with:
(A) if such Definitive Certificate represents
Restricted Securities, certification, substantially in the
form of Exhibit A hereto, that such Definitive Certificate is
being transferred to a Qualified Institutional Buyer (as
defined in Rule 144A) in accordance with Rule 144A; and
(B) whether or not such Definitive Certificate
represents Restricted Securities, written instructions
directing the Transfer Agent to make, or to direct the
Depositary to make, an endorsement on the Global Certificate
to reflect an increase in the aggregate number of shares of
Common Stock represented by the Global Certificate,
then the Transfer Agent shall cancel such Definitive Certificate and cause, or
direct the Depositary to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Transfer Agent, the
number of shares of Common Stock represented by the Global Certificate to be
increased accordingly. If no Global Certificate is then outstanding, the
Company shall issue and the Transfer Agent shall authenticate a new Global
Certificate in the appropriate amount.
(c) Transfer and Exchange of Global Certificate and
Beneficial Interests Therein. The transfer and exchange of a Global
Certificate or beneficial interests therein shall be effected through the
Depositary, in accordance with this Agreement (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Certificate
for a Definitive Certificate.
<PAGE> 14
-12-
(i) Any person having a beneficial interest in a Global
Certificate may upon request exchange such beneficial interest for a
Definitive Certificate. Upon receipt by the Transfer Agent of
written instructions or such other form of instructions as is
customary for the Depositary from the Depositary or its nominee on
behalf of any person having a beneficial interest in a Global
Certificate and upon receipt by the Transfer Agent of a written
order or such other form of instructions as is customary for the
Depositary or the person designated by the Depositary as having such
a beneficial interest containing registration instructions and, in
the case of a beneficial interest in shares that are Restricted
Securities only, the following additional information and documents:
(A) If such beneficial interest is being transferred
to the person designated by the Depositary as being the
beneficial owner, a certification from such person to that
effect (in substantially the form of Exhibit A hereto); or
(B) if such beneficial interest is being transferred
to a Qualified Institutional Buyer in accordance with Rule
144A or pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from the transferee or transferor
(in substantially the form of Exhibit A hereto) and, with
respect to transfers pursuant to Rule 144 or Regulation S, an
opinion of counsel reasonably acceptable to the Company and
the Transfer Agent to the effect that such transfer does not
require registration under the Securities Act; or
(C) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect from the transferee or transferor (in substantially the
form of Exhibit A hereto) and an opinion of counsel from the
transferee or transferor reasonably acceptable to the Company
and to the Transfer Agent to the effect that such transfer
does not require registration under the Securities Act,
<PAGE> 15
-13-
then the Transfer Agent will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Transfer Agent, the aggregate amount of the Global Certificate to
be reduced and, following such reduction, the Company will execute
and, upon receipt of an authentication order in the form of an
officers' certificate signed by the Chief Executive Officer, the
President, any Vice President and the Chief Financial Officer, the
Treasurer, the Secretary or any Assistant Secretary of the Company
(an "Officers' Certificate"), the Transfer Agent will authenticate
and deliver to the transferee a Definitive Certificate.
(ii) Definitive Certificates issued in exchange for a beneficial
interest in a Global Certificate pursuant to this Section 3.2(d) shall
be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Transfer Agent in
writing. The Transfer Agent shall deliver such Definitive
Certificates to the persons in whose names such Definitive
Certificates are registered.
(e) Restrictions on Transfer and Exchange of Global Certificates.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 3.2), a Global
Certificate may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
(f) Issuance of Definitive Certificates in Absence of Depositary. If at
any time:
(i) the Depositary for the Global Certificates notifies the
Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Certificates and a successor Depositary
for the Global Certificates is not appointed by the Company within
90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Transfer Agent
in writing that it elects to cause the issuance of Definitive
Certificates under this Agreement and such action would not cause the
Common Stock
<PAGE> 16
-14-
to be ineligible for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market,
Laureen Ransome
American International Group
99 John Street 18th Floor
New York, N.Y. 10005
then the Company will execute, and the Transfer Agent, upon receipt of an
Officers' Certificate requesting the authentication and delivery of Definitive
Certificates, will authenticate and deliver Definitive Certificates, in an
aggregate number equal to the aggregate number of shares represented by the
Global Certificate, in exchange for such Global Certificate.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each
Definitive Certificate (and all certificates for shares of Common
Stock issued in exchange therefor or substitution thereof) shall
bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1),
(2), (3) or (7) UNDER THE ACT (AN "ACCREDITED INVESTOR") OR (C) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED
ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRANSFER AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
<PAGE> 17
-15-
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR OR SUCH TRANSFER IS MADE IN
ACCORDANCE WITH CLAUSES (D) OR (E) ABOVE, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE TRANSFER AGENT AND THE COMPANY
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER
OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER
THE ACT.
(ii) Upon any sale or transfer of any share of Common Stock that is a
Restricted Security (including any Restricted Security represented by
a Global Certificate) pursuant to Rule 144 under the Securities Act or
an effective registration statement under the Securities Act:
(A) in the case of any Restricted Security
represented by a Definitive Certificate, the Transfer Agent
shall permit the holder thereof to exchange
such Restricted Security for a Definitive Certificate that
does not bear the legend set forth above and rescind any
related restriction on the transfer of such Restricted
Security; and
(B) any Restricted Security represented by a Global
Certificate shall not be subject to the provisions set forth
in (i) above (such sales or transfers being subject only to
the provisions of Section 3.2(c) through (f); provided,
however, that with respect to any request for an exchange of a
Restricted Security that is represented by a Global
Certificate for a Definitive Certificate
<PAGE> 18
-16-
that does not bear the legend set forth above, which
request is made in reliance upon Rule 144, the holder thereof
shall certify in writing to the Transfer Agent that such
request is being made pursuant to Rule 144 (such certification
to be substantially in the form of Exhibit A hereto) and shall
provide an opinion of counsel reasonably acceptable to the
Company to the effect that such transfer does not require
registration under the Securities Act.
(iii) Any Global Certificate shall bear a legend (which would be in
addition to any other legends required in the case of a Restricted
Security) in substantially the following form:
THIS SECURITY IS A GLOBAL CERTIFICATE AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A
SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE COMMON STOCK REGISTRATION RIGHTS AGREEMENT DATED
AS OF [ ], 1996 AMONG THE COMPANY AND THE STOCKHOLDERS
PARTY THERETO (THE "REGISTRATION RIGHTS AGREEMENT") AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE
OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE REGISTRATION RIGHTS AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
<PAGE> 19
-17-
(h) Cancellation and/or Adjustment of a Global Certificate. At such time
as all beneficial interests in a Global Certificate have either been exchanged
for Definitive Certificates, redeemed, repurchased or cancelled, such Global
Certificate shall be returned to or retained and cancelled by the Transfer
Agent. At any time prior to such cancellation, if any beneficial interest in a
Global Certificate is exchanged for Definitive Certificates, redeemed,
repurchased or cancelled, the number of shares of Common Stock represented by
such Global Certificate shall be reduced and an endorsement shall be made on
such Global Certificate, by the Transfer Agent to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of Definitive
Certificates.
(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Transfer Agent's request, and the
Transfer Agent shall countersign and register Definitive
Certificates and Global Certificates.
(ii) All shares issued in the form of Definitive
Certificates and Global Certificates upon any
registration, transfer or exchange of Definitive
Certificates or Global Certificates shall be validly
issued, fully paid and nonassessable.
4. Registration Procedures. In connection with the obligations of the
Company with respect to any Registration Statement pursuant to Sections 2.1 and
2.2 hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company and (ii) shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and the
Company shall use its best efforts to cause such Registration Statement
to become effective and remain effective in accordance with Section 2
hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep
such Registration Statement effective for the applicable period, cause
each Prospectus to be supplemented by any required prospectus supplement
<PAGE> 20
-18-
and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act;
(c) furnish to each Holder of Registrable Securities and to each
underwriter of an underwritten offering of Registrable Securities, if
any, without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and such
other documents as such Holder or underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the
Registrable Securities;
(d) use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of
such jurisdictions as any Holder thereof covered by a Registration
Statement shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC, and do any and
all other acts and things which may be reasonably necessary or advisable
to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then so
qualified, (ii) take any action that would subject it to general service
of process in any jurisdiction in which it is not then so subject or
(iii) subject itself to taxation in excess of a nominal dollar amount in
any such jurisdiction;
(e) notify each Holder of Registrable Securities promptly and, if
requested by such Holder, confirm such advice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request
by the SEC or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii)
of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating
to the offering cease to be true and correct in all material
<PAGE> 21
-19-
respects or if the Company receives any notification with respect to
the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation of any proceeding for such
purpose and (v) of the happening of any event during the period a
Registration Statement is effective which makes any statement made in
such Registration Statement or the related Prospectus untrue in any
material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements
therein not misleading;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) furnish to each Holder of Registrable Securities and to the
Purchasers, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (with
documents incorporated therein by reference or exhibits thereto);
(h) cooperate with the Selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends and registered in such names as the Selling Holders
may reasonably request at least two business days prior to the closing of
any sale of Registrable Securities;
(i) upon the occurrence of any event contemplated by Section 4(e)(v)
hereof, use reasonable efforts to prepare a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any
document incor porated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the Company shall
not be required to amend or supplement a Registration Statement, any
related Prospectus or any document incorporated therein by reference in
the event that, and for so long as, an event occurs and is continuing as
a result of which the Registration Statement, any related Prospectus or
any document incorporated therein by reference as then amended or
supplemented would, in the Company's good faith judgment, contain an
untrue statement of a material fact or
<PAGE> 22
-20-
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Company agrees to notify each Holder to suspend use of
the Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission. At such time as such public disclosure is
otherwise made or the Company determines in good faith that such
disclosure is not necessary, the Company agrees promptly to notify each
Holder of such determination, to amend or supplement the Prospectus if
necessary to correct any untrue statement or omission therein and to
furnish each Holder such numbers of copies of the Prospectus as so
amended or supplemented as each Holder may reasonably request;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to the Holders and make available for discussion of such
document the representatives of the Company as shall be reasonably
requested by the Holders of Registrable Securities;
(k) obtain a CUSIP number for the Common Stock;
(l) (i) make reasonably available for inspection by a representative
of, and counsel for, any managing underwriter participating in any
disposition pursuant to a Registration
Statement, all relevant financial and other records, pertinent corporate
documents and properties of the Company and (ii) cause the Company's
officers, directors and employees to supply all relevant information
reasonably requested by such representative, counsel or any such managing
underwriter in connection with any such Registration Statement;
(m) take all action necessary so that the Warrant Shares will be
listed on the principal securities exchanges and markets within the
United States of America (including the NASDAQ National Market System),
if any, on which other shares of Common Stock are then listed; and
<PAGE> 23
-21-
(n) if requested by the Holders in connection with any Registration
Statement, shall use its best efforts to cause (w) counsel for the
Company to deliver an opinion relating to the Registration Statement and
the Common Stock, in customary form, (x) its officers to execute and
deliver all customary documents and certificates requested by a
representative of the Holders or any managing underwriter, as applicable
and (y) its independent public accountants to provide a comfort letter in
customary form.
The Company may, as a condition to such Holder's participation in any
Registration Statement, require each Holder of Registrable Securities to (i)
furnish to the Company such information regarding the Holder and the proposed
distribution by such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing and (ii) agree in writing to be
bound by this Agreement.
5. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Holder and each person, if any, who controls such Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against all losses, claims, damages and liabilities
(including, without limitation, any reasonable legal fees or other expenses
actually incurred by any Holder or any such controlling or affiliated person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the Securities Act, or caused by
any omission or alleged omission to state therein a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or caused by any untrue statement
or alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Holder furnished to the
Company in writing by such Holder expressly for use in any such Registration
Statement or Prospectus; provided that the foregoing indemnity with respect to
any preliminary prospectus shall not inure to the benefit of any Holder (or to
the benefit of any
<PAGE> 24
-22-
person controlling such Holder) from whom the person asserting any such
losses, claims, damages or liabilities purchased Registrable Securities if such
untrue statement or omission or alleged untrue statement or omission made in
such preliminary prospectus is eliminated or remedied in the related Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) and a copy of the related Prospectus (as so amended or
supplemented) shall have been furnished to such Holder at or prior to the sale
of such Registrable Securities, as the case may be, to such person; and
provided, further, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if (i) such Holder failed
to send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registrable Securities and (ii) the
Prospectus would have completely corrected such untrue statement or omission.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Holder, but only with reference to
information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in any Registration Statement (or any amendment
thereto), any Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus. The liability of any Holder under this paragraph (b)
shall in no event exceed the proceeds received by such Holder from sales of
Registrable Securities giving rise to such obligations.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against which such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the reasonable fees and disbursements of such counsel relating to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and
<PAGE> 25
-23-
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed in writing to the retention of such counsel or (ii) the
indemnifying party fails promptly to assume the defense of such proceeding or
fails to employ counsel reasonably satisfactory to such indemnified party or
parties or (iii) the named parties to any such proceeding (including any
impleaded parties) include both such indemnified party or parties and the
indemnifying parties or an affiliate of the indemnifying parties or such
indemnified parties, and there may be one or more defenses available to such
indemnified party or parties that are different from or additional to those
available to the indemnifying parties, in which case, if such indemnified party
or parties notifies the indemnifying parties in writing that it elects to
employ separate counsel of its choice at the expense of the indemnifying
parties, the indemnifying parties shall not have the right to assume the
defense thereof and such counsel shall be at the expense of the indemnifying
parties, it being understood, however, that unless there exists a conflict
among indemnified parties, the indemnifying parties shall not, in connection
with any one such proceeding or separate but substantially similar or related
proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such indemnified party or parties. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent but, if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened pro
ceeding in respect of which any indemnified party is a party, and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or (b)
of this Section 5 is unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative
<PAGE> 26
-24-
fault of the Company on the one hand and the Holders on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and the
Holders on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Holders and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred (and not otherwise reimbursed) by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, in no event shall a Selling
Holder be required to contribute any amount in excess of the amount by which
proceeds received by such Selling Holder from sales of Registrable Securities
exceeds the amount of damages that such Selling Holder has otherwise been
required to pay by reason of such untrue or allegedly untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered into nor will
the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to
<PAGE> 27
-25-
the holders of the Company's other issued and outstanding securities,
if any, under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at
least a majority in aggregate number of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or consent;
provided, however, a waiver or consent to departure from the provisions hereof
that relates exclusively to the rights of Holders of Registrable Securities
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by the Holders of a majority of the
Registrable Securities proposed to be sold.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 6(c), which address initially is, with respect to the Purchaser,
the address set forth in the Purchase Agreement, with a copy to: Cahill Gordon
& Reindel, 80 Pine Street, New York, New York 10005, Attention: Roger Meltzer,
Esq.; and (ii) if to the Company, initially at the Company's address set forth
in the Purchase Agreement and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 6(c), with a copy
to: Powell, Goldstein, Frazer & Murphy, 191 Peachtree Street NE, 16th Floor,
Atlanta, Georgia 30303, Attention: William B. Shearer, Esq.
All such notices and communications shall be deemed to have been duly
given: (i) at the time delivered by hand, if personally delivered, five
business days after being deposited in the mail, postage prepaid, if mailed;
(ii) when answered back, if telexed; (iii) when receipt is acknowledged, if
telecopied; and (iv) on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein
<PAGE> 28
-26-
shall be deemed to permit any assignment, transfer or other disposition
of Registrable Securities in violation of the terms of this Agreement or the
Purchase Agreement. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such person shall be entitled
to receive the benefits hereof.
(e) Rules 144 and 144A. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder in a timely
manner and, if at any time the Company is not required to file such reports, it
will, upon the request of any Holder of Registrable Securities, make publicly
available other information of a like nature so long as necessary to permit
sales pursuant to Rule 144 or Rule 144A under the Securities Act. The Company
further covenants that so long as any Registrable Securities remain outstanding
to make available to any Holder of Registrable Securities in connection with
any sale thereof, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Securities
pursuant to (a) such Rule 144A, or (b) any similar rule or regulation hereafter
adopted by the SEC.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate 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 agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
<PAGE> 29
-27-
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties as a final expression of their agreement,
and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.
<PAGE> 30
-28-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OUTDOOR SYSTEMS, INC.
By: _____________________________
Name:
Title:
CIBC WG ARGOSY MERCHANT
FUND 2, L.L.C.
By: _____________________________
Name:
Title:
<PAGE> 31
EXHIBIT A
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF RESTRICTED SECURITIES
Re: Common Stock, par value $.01 per share ("Common Stock"), of Outdoor
Systems, Inc.
This Certificate relates to shares of Common Stock held in* ___ book-entry
or* _______ definitive form by ______ (the "Transferor").
The Transferor:*
/ / has requested the Transfer Agent by written order to deliver in exchange
for its beneficial interest in the Global Certificate held by the Depositary
shares of Common Stock in definitive, registered form equal to its beneficial
interest in the shares of Common Stock represented by such Global Certificate
(or the portion thereof indicated above); or
/ / has requested the Transfer Agent by written order to exchange or
register the transfer of shares of Common Stock.
In connection with such request, the Transferor does hereby certify that
Transferor is familiar with the Common Stock Registration Rights Agreement (the
"Agreement") relating to the shares of Common Stock and the restrictions on
transfers thereof as provided in Section 3.2 of such Agreement, and that the
transfer of shares of Common Stock requested hereby does not require
registration under the Securities Act (as defined below) because:
/ / Such shares of Common Stock are being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 3.2(a)(A) or Section
3.2(d)(i)(A) of the Agreement).
/ / Such shares of Common Stock are being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")), in reliance on Rule 144A or in accordance
with Regulation S under the Securities Act. If such transfer is in accordance
with Regulation S, an opinion of counsel to the effect that such transfer does
not
<PAGE> 32
-2-
require registration under the Securities Act accompanies this Certificate.
/ / Such shares of Common Stock are being transferred in accordance with
Rule 144 under the Securities Act. An opinion of counsel to the effect that
such transfer does not require registration under the Securities Act
accompanies this Certificate.
/ / Such shares of Common Stock are being transferred pursuant to an
effective registration statement under the Securities Act.
/ / Such shares of Common Stock are being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A or Rule 144 or Regulation S under the
Securities Act. An opinion of counsel to the effect that such transfer does
not require registration under the Securities Act accompanies this Certificate.
______________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________
Date: _____________
________________________________
* Check applicable box.
