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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
AMENDMENT NO. 5
WINSLOEW FURNITURE, INC.
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(Name of the Issuer)
TRIVEST FURNITURE CORPORATION
TRIVEST FURNITURE PARTNERS, LTD.
TRIVEST FUND II GROUP, LTD.
EARL W. POWELL
PHILLIP T. GEORGE, M.D.
WILLIAM F. KACZYNSKI, JR.
PETER W. KLEIN
BOBBY TESNEY
STEPHEN C. HESS
VINCENT A. TORTORICI, JR.
R. CRAIG WATTS
RICK J. STEPHENS
JERRY C. CAMP
WINSLOEW FURNITURE, INC.
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(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title of Class of Securities)
975377 10 2
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(CUSIP Number of Class of Securities)
Peter W. Klein, Esq. Vincent A. Tortorici, Jr.
Trivest, Inc. WinsLoew Furniture, Inc.
2665 South Bayshore Drive, Suite 800 160 Village Street
Miami, Florida 33133 Birmingham, Alabama 35242
(305) 858-2200 (205) 408-7600
WITH COPIES TO:
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<S> <C> <C>
Bruce E. Macdonough, Esq. James M. Dubin, Esq. James F. Hughey, Jr.
Greenberg Traurig, P.A. Paul, Weiss, Rifkind, Balch & Bingham LLP
1221 Brickell Avenue Wharton & Garrison 1901 Sixth Avenue North
Miami, Florida 33131 1285 Avenue of the Americas Birmingham, Alabama 35203
(305) 579-0500 New York, New York 10019 (205) 251-8100
(212) 373-3000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
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This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [X]
CALCULATION OF FILING FEE
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TRANSACTION VALUE AMOUNT OF FILING FEE
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$249,571,303.................... $49,915
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* For purposes of calculating the fee only. Assumes purchase of 7,181,908
shares of Common Stock, par value $.01 per share, of WinsLoew Furniture,
Inc. at $34.75 per share.
[X] Check box if any of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by
registration statement number, or the form or schedule and the
date of its filing.
Amount previously paid: $47,401; $2,514
Form or registration no.: Definitive Proxy Statement on Schedule 14A
Filing party: WinsLoew Furniture, Inc.
Dates filed: April 20, 1999; June 4, 1999
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This Rule 13e-3 Transaction Statement Amendment No. 5 (this "Final
Amendment") amends and supplements the Rule 13e-3 Transaction Statement on
Schedule 13E-3 filed by WinsLoew Furniture, Inc. ("WinsLoew" or the "Company"),
Trivest Furniture Corporation (the "Purchaser"), Trivest Furniture Partners,
Ltd., Trivest Fund II Group, Ltd., Earl W. Powell, Phillip T. George, M.D.,
William F. Kaczynski, Jr., Peter W. Klein, Bobby Tesney, Stephen C. Hess, R.
Craig Watts, Vincent A. Tortorici, Jr., Rick J. Stephens and Jerry C. Camp with
the Securities and Exchange Commission (the "Commission") on April 20, 1999, as
amended and supplemented by Amendment No. 1 thereto filed on June 4, 1999, as
amended and supplemented by Amendment No. 2 thereto filed on July 14, 1999, as
amended and supplemented by Amendment No. 3 thereto filed on July 29, 1999, as
amended and supplemented by Amendment No. 4 thereto filed on July 29, 1999 (as
amended and supplemented, this "Schedule 13E-3"), in connection with a proposal
to approve a Second Amended and Restated Agreement and Plan of Merger, dated as
of May 4, 1999 (the "Merger Agreement"), by and among WinsLoew and the
Purchaser, pursuant to which the Purchaser would be merged with and into
WinsLoew (the "Merger").
This Final Amendment is being filed, pursuant to Rule 13e-3(d)(3), to
report the results of the transaction which is the subject of this Statement.
Capitalized terms used herein not otherwise defined shall have the
meanings ascribed to such terms in this Statement. Except as expressly set forth
in this Final Amendment, all information in this Schedule 13E-3 remains
unchanged, pursuant to General Instruction H to Schedule 13E-3.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
At the Special Meeting of Shareholders held on August 27, 1999, the
Merger Agreement was approved by the affirmative vote of the holders of a
majority of the Company's common stock, $.01 par value per share (the "Common
Stock"). The same day, articles of merger with respect to the Merger were filed
with the Secretary of State of the State of Florida, and, as a result, the
Merger became effective as of 3:45 p.m. on August 27, 1999 (the "Effective
Time"). The Merger was consummated as described in the Company's definitive
proxy statement dated July 29, 1999 filed as Exhibit (d)(3) to Amendment No. 4
to this Schedule 13E-3 (the "Proxy Statement").
ITEM 4. TERMS OF THE TRANSACTION.
As a result of the Merger, each share of Common Stock that was issued
and outstanding immediately prior to the Effective Time (other than shares held
by the Purchaser) was converted as of the Effective Time into the right to
receive $34.75 per share in cash, in accordance with the Merger Agreement and as
described in the Proxy Statement. In addition, all options to purchase Common
stock that were outstanding immediately prior to the Effective Time became
vested and exercisable in full, all outstanding options to purchase Common Stock
that were not exercised prior to the Effective Time were canceled and terminated
and expired as of the Effective Time, and in consideration for such
cancellation, each option holder received an amount in cash for each option
determined by multiplying (i) the excess, if any, of $34.75 over the applicable
exercise price per share for each share underlying such option by (ii) the
number of shares such option holder could have purchased had it exercised such
option in full immediately prior to the Effective Time.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
On August 30, 1999, WinsLoew, as the surviving corporation of the
Merger, filed a certification on Form 15 pursuant to Rule 12g-4 and Rule 12h-3
relating to the Common Stock to provide notice of termination of registration
under Section 12(g) of the Securities Exchange Act of 1934, as amended, and to
suspend its duty to file reports under Section 13 thereof.
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ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
EQUITY FINANCING
Immediately prior to the consummation of the Merger, the Trivest
Investors, the members of the Management Group and the Eligible Participants
made aggregate equity contributions to the Purchaser of approximately $78.0
million, consisting of 340,519 shares of WinsLoew common stock (valued at $34.75
per share with an aggregate value of approximately $11.8 million) and cash in
the amount of approximately $66.2 million.
SUBORDINATED DEBT FINANCING
On August 24, 1999, WinsLoew Escrow Corp., a wholly-owned subsidiary of
the Purchaser ("Escrow Corp."), completed the offering of 105,000 Units (the
"Units"), each consisting of $1,000 principal amount at maturity of 12 3/4%
Senior Subordinated Notes due 2007 (the "Notes") and one Warrant to purchase
0.2298 shares of Escrow Corp. common stock (the "Warrants"). Pending completion
of the Merger, the net proceeds from the sale of the Units were held in escrow.
Immediately prior to the consummation of the Merger, Escrow Corp. merged with
and into the Purchaser. As a result, upon the consummation of the Merger, the
net proceeds from the sale of the Units were released from escrow and WinsLoew
assumed all of Escrow Corp.'s obligations under the Notes, the indenture
pursuant to which the Notes were issued and the Warrants.
SENIOR SECURED CREDIT FACILITY
Upon consummation of the Merger, WinsLoew and its U.S. subsidiaries
entered into a Loan and Security Agreement (the "Loan Agreement") among WinsLoew
and its U.S. subsidiaries, as borrowers, the lenders party thereto from time to
time, Heller Financial, Inc. and CIBC Inc., as co-agents, BankBoston, N.A., as
administrative agent, and BancBoston Robertson Stephens Inc., as arranger. The
Loan Agreement provides for a $155.0 million credit facility consisting of $95.0
million of term loans, revolving loans of up to $40.0 million (including letters
of credit) and acquisition loans of up to $20.0 million. Upon the consummation
of the Merger, WinsLoew and its U.S. subsidiaries made borrowings of
approximately $99.9 million, consisting of $95.0 million of term loans and
approximately $4.9 million of revolving loans.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
As a result of the Merger and the transactions consummated in
connection therewith (including, without limitation, the transactions described
in the Proxy Statement under "SPECIAL FACTORS--Purpose and Reasons of the
Affiliates for the Merger"), following the Merger, the Trivest Investors
beneficially own approximately 93.8% of WinsLoew's common stock (including
approximately 88.3% held by the Trivest Partnerships), the members of the
Management Group hold approximately 5.1% of WinsLoew's common stock, and the
Eligible Participants hold approximately 1.1% of WinsLoew's common stock.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES.
Immediately prior to the consummation of the Merger, Trivest Furniture
Corporation entered into an Exchange and Subscription Agreement, dated as of
August 27, 1999 (the "Subscription Agreement"), with the Trivest Investors and
the members of the Management Group (the "Investors") providing for the
acquisition of shares of Purchaser common stock by such Investors in exchange
for cash and/or shares of WinsLoew Common Stock contributed to the Purchaser by
such Investors. Simultaneously therewith, the Purchaser entered into an
Investors' Agreement (the "Investors' Agreement") with the Investors restricting
the Investors' ability to transfer the shares of Purchaser common stock acquired
by them and creating certain other rights and obligations with respect to such
shares. Upon consummation of the Merger, WinsLoew assumed all of the Purchaser's
rights and obligations under the Subscription Agreement and the Investors'
Agreement.
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ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) BankBoston, N.A. commitment letter to Trivest Furniture
Corporation dated March 29, 1999 (filed as Exhibit (c)(2) to
this Schedule 13E-3 as filed on April 19, 1999).
(a)(2) BankBoston, N.A. confirmation letter with respect to $33.00
per share purchase price to Trivest Furniture Corporation
dated March 29, 1999 (filed as Exhibit (c)(3) to this Schedule
13E-3 as filed on April 19, 1999).
(a)(3) Trivest, Inc. commitment letter to Trivest Furniture
Corporation dated March 29, 1999 (filed as Exhibit (c)(4) to
this Schedule 13E-3 as filed on April 19, 1999).
(a)(4) BankBoston, N.A. commitment letter to Trivest Furniture
Corporation dated April 27, 1999 (filed as Exhibit (a)(4) to
Amendment No. 1 to this Schedule 13E-3 as filed on June 4,
1999).
(a)(5) Trivest, Inc. commitment letter to Trivest Furniture
Corporation dated April 30, 1999 (filed as Exhibit (a)(5) to
Amendment No. 1 to this Schedule 13E-3 as filed on June 4,
1999).
(a)(6) Trivest, Inc. commitment letter to Trivest Furniture
Corporation dated May 3, 1999 (filed as Exhibit (a)(6) to
Amendment No. 1 to this Schedule 13E-3 as filed on June 4,
1999).
(a)(7) Purchase Agreement dated as of August 19, 1999 among WinsLoew
Escrow Corp., Trivest Furniture Corporation, Bear, Stearns &
Co. Inc., BancBoston Robertson Stephens Inc. and First Union
Capital Markets Corp.
(a)(8) Registration Rights Agreement dated as of August 19, 1999
among WinsLoew Escrow Corp., Bear, Stearns & Co. Inc.,
BancBoston Robertson Stephens Inc. and First Union Capital
Markets Corp.
(a)(9) Indenture dated as of August 24, 1999 among WinsLoew Escrow
Corp. and American Stock Transfer & Trust Company, as Trustee,
with respect to 12 3/4% Senior Subordinated Notes due 2007 of
WinsLoew Escrow Corp.
(a)(10) Warrant Agreement dated as of August 24, 1999 among WinsLoew
Escrow Corp. and American Stock Transfer & Trust Company, as
Warrant Agent, with respect to Warrants to purchase 24,129
shares of common stock of WinsLoew Escrow Corp.
(a)(11) Supplemental Indenture dated as of August 27, 1999 among
Trivest Furniture Corporation, WinsLoew Furniture, Inc.,
Winston Furniture Company of Alabama, Inc., Loewenstein, Inc.,
Winston Properties, Inc., Texacraft, Inc., Tropic Craft, Inc.,
Pompeii Furniture Co., Inc. and American Stock Transfer &
Trust Company, as Trustee.
(a)(12) Loan and Security Agreement dated as of August 27, 1999 among
WinsLoew Furniture, Inc., Winston Furniture Company of
Alabama, Inc., Loewenstein, Inc., Winston Properties, Inc.,
Texacraft, Inc., Tropic Craft, Inc. and Pompeii Furniture Co.,
Inc., as borrowers, the lenders party thereto from time to
time, Heller Financial, Inc. and CIBC Inc., as co-agents,
BankBoston, N.A. as administrative agent, and BancBoston
Robertson Stephens Inc., as arranger.
(b)(1) Opinion of Mann, Armistead & Epperson, Ltd. dated April 7,
1999 (filed as Exhibit (b)(1) to Amendment No. 1 to this
Schedule 13E-3 as filed on June 4, 1999).
(b)(2) Management's Budget Projections for fiscal years 1999 through
2002 provided to Mann, Armistead & Epperson, Ltd., that are
summarized in the Proxy Statement (filed as Exhibit (b)(2) to
this Schedule 13E-3 as filed on April 19, 1999).
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(b)(3) Financial Analysis Presentation materials prepared by Mann,
Armistead & Epperson, Ltd. in connection with providing its
opinion dated April 7, 1999 to the Special Committee (filed as
Exhibit (b)(3) to Amendment No. 1 to this Schedule 13E-3 as
filed on June 4, 1999).
(b)(4) Opinion of Mann, Armistead & Epperson, Ltd. dated May 4, 1999
(included as Appendix B to the Proxy Statement, which was
filed as Exhibit (d)(3) to Amendment No. 4 to this Schedule
13E-3 as filed on July 29, 1999).
(b)(5) Financial Analysis Presentation materials prepared by Mann,
Armistead & Epperson, Ltd. in connection with providing its
opinion dated May 4, 1999 to the Special Committee (filed as
Exhibit (b)(5) to Amendment No. 1 to this Schedule 13E-3 as
filed on June 4, 1999).
(b)(6) Management's Best Case Projections for fiscal years 1999
through 2002 provided to Mann, Armistead & Epperson, Ltd. that
are summarized in the Proxy Statement (filed as Exhibit (b)(6)
to Amendment No. 2 to this Schedule 13E-3 as filed on July 14,
1999).
(b)(7) Confirmation of Mann, Armistead & Epperson, Ltd. dated July 8,
1999 (included as part of Appendix B to the Proxy Statement,
which was filed as Exhibit (d)(3) to Amendment No. 4 to this
Schedule 13E-3 as filed on July 29, 1999).
(b)(8) Supplemental Financial Analysis Presentation materials
prepared by Mann, Armistead & Epperson, Ltd. in connection
with providing its confirmation dated July 8, 1999 to the
Special Committee (filed as Exhibit (b)(8) to Amendment No. 2
to this Schedule 13E-3 as filed on July 14, 1999).
(c)(1) Second Amended and Restated Agreement and Plan of Merger dated
as of May 4, 1999 among WinsLoew Furniture, Inc. and Trivest
Furniture Corporation (included as Appendix A to the Proxy
Statement, which was filed as Exhibit (d)(3) to Amendment No.
4 to this Schedule 13E-3 as filed on July 29, 1999).
(c)(2) Exchange and Subscription Agreement dated as of August 27,
1999 among Trivest Furniture Corporation and the Investors
named therein (included as Exhibit A to the Investors'
Agreement, which is filed herewith as Exhibit (c)(3)).
(c)(3) Investors Agreement dated as of August 27, 1999 among Trivest
Furniture Corporation and the Investors named therein.
(d)(1) Letter to Shareholders (included in the Proxy Statement, which
was filed as Exhibit (d)(3) to Amendment No. 4 to this
Schedule 13E-3 as filed on July 29, 1999).
(d)(2) Notice of Special Meeting of Shareholders (included in the
Proxy Statement, which was filed as Exhibit (d)(3) to
Amendment No. 4 to this Schedule 13E-3 as filed on July 29,
1999).
(d)(3) Definitive Proxy Statement (filed as Exhibit (d)(3) to
Amendment No. 4 to this Schedule 13E-3 as filed on July 29,
1999).
(d)(4) Form of Proxy (filed as Exhibit (d)(4) to Amendment No. 4 to
this Schedule 13E-3 as filed on July 29, 1999).
(d)(5) Press Release issued by WinsLoew Furniture, Inc. dated January
18, 1999 (filed as Exhibit (d)(5) to this Schedule 13E-3 as
filed on April 19, 1999).
(d)(6) Press Release issued by WinsLoew Furniture, Inc. dated January
25, 1999 (filed as Exhibit (d)(6) to this Schedule 13E-3 as
filed on April 19, 1999).
(d)(7) Press Release issued by WinsLoew Furniture, Inc. dated March
5, 1999 (filed as Exhibit (d)(7) to this Schedule 13E-3 as
filed on April 19, 1999).
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(d)(8) Press Release issued by WinsLoew Furniture, Inc. dated March
31, 1999 (filed as Exhibit (d)(8) to this Schedule 13E-3 as
filed on April 19, 1999).
(d)(9) Press Release issued by WinsLoew Furniture, Inc. dated May 5,
1999 (incorporated by reference to the Current Report on Form
8-K filed by WinsLoew Furniture, Inc. on May 5, 1999).
(d)(10) Press Release issued by WinsLoew Furniture, Inc. dated
August 24, 1999.
(d)(11) Press Release issued by WinsLoew Furniture, Inc. dated
August 27, 1999.
(e) Not applicable.
(f) Not applicable.
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SIGNATURES
After due inquiry and to the best of our knowledge and belief, each of
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
WINSLOEW FURNITURE, INC.
Dated: September 7, 1999 By: /s/ Bobby Tesney
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Name: Bobby Tesney
Title: President and Chief
Executive Officer
TRIVEST FURNITURE CORPORATION
Dated: September 7, 1999 By: /s/ William F. Kaczynski, Jr.
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Name: William F. Kaczynski, Jr.
Title: Vice President
TRIVEST FURNITURE PARTNERS, LTD.
By: TFP, Ltd., its General Partner
By: Trivest II, Inc., Its General Partner
Dated: September 7, 1999 By: /s/ William F. Kaczynski, Jr.
----------------------------------
Name: William F. Kaczynski, Jr.
Title: Managing Director
TRIVEST FUND II GROUP, LTD.
By: Trivest Equities, Inc., its General Partner
Dated: September 7, 1999 By: /s/ William F. Kaczynski, Jr.
----------------------------------
Name: William F. Kaczynski, Jr.
Title: Managing Director
Dated: September 7, 1999 By: /s/ Earl W. Powell
----------------------------------
Earl W. Powell
Dated: September 7, 1999 By: /s/ Phillip T. George, M.D.
----------------------------------
Phillip T. George, M.D.
Dated: September 7, 1999 By: /s/ William F. Kaczynski, Jr.
----------------------------------
William F. Kaczynski, Jr.
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Dated: September 7, 1999 By: /s/ Peter W. Klein
----------------------------------
Peter W. Klein
Dated: September 7, 1999 By: /s/ Bobby Tesney
----------------------------------
Bobby Tesney
Dated: September 7, 1999 By: /s/ Stephen C. Hess
----------------------------------
Stephen C. Hess
Dated: September 7, 1999 By: /s/ Vincent A. Tortorici, Jr.
----------------------------------
Vincent A. Tortorici, Jr.
Dated: September 7, 1999 By: /s/ R. Craig Watts
----------------------------------
R. Craig Watts
Dated: September 7, 1999 By: /s/ Rick J. Stephens
----------------------------------
Rick J. Stephens
Dated: September 7, 1999 By: /s/ Jerry C. Camp
----------------------------------
Jerry C. Camp
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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(a)(7) Purchase Agreement dated as of August 19, 1999 among
WinsLoew Escrow Corp., Trivest Furniture
Corporation, Bear, Stearns & Co. Inc., BancBoston
Robertson Stephens Inc. and First Union Capital
Markets Corp.
(a)(8) Registration Rights Agreement dated as of August 19,
1999 among WinsLoew Escrow Corp., Bear, Stearns &
Co. Inc., BancBoston Robertson Stephens Inc. and
First Union Capital Markets Corp.
(a)(9) Indenture dated as of August 24, 1999 among WinsLoew
Escrow Corp. and American Stock Transfer & Trust
Company, as Trustee, with respect to 12 3/4% Senior
Subordinated Notes due 2007 of WinsLoew Escrow Corp.
(a)(10) Warrant Agreement dated as of August 24, 1999 among
WinsLoew Escrow Corp. and American Stock Transfer &
Trust Company, as Warrant Agent, with respect to
Warrants to purchase 24,129 shares of common stock
of WinsLoew Escrow Corp.
(a)(11) Supplemental Indenture dated as of August 27, 1999
among Trivest Furniture Corporation, WinsLoew
Furniture, Inc., Winston Furniture Company of
Alabama, Inc., Loewenstein, Inc., Winston
Properties, Inc., Texacraft, Inc., Tropic Craft,
Inc., Pompeii Furniture Co., Inc. and American Stock
Transfer & Trust Company, as Trustee.
(a)(12) Loan and Security Agreement dated as of August 27,
1999 among WinsLoew Furniture, Inc., Winston
Furniture Company of Alabama, Inc., Loewenstein,
Inc., Winston Properties, Inc., Texacraft, Inc.,
Tropic Craft, Inc. and Pompeii Furniture Co., Inc.,
as borrowers, the lenders party thereto from time to
time, Heller Financial, Inc. and CIBC Inc., as
co-agents, BankBoston, N.A. as administrative agent,
and BancBoston Robertson Stephens Inc., as arranger.
(c)(3) Investors Agreement dated as of August 27, 1999
among Trivest Furniture Corporation and the
Investors named therein.
(d)(10) Press Release issued by WinsLoew Furniture, Inc.
dated August 24, 1999.
(d)(11) Press Release issued by WinsLoew Furniture, Inc.
dated August 27, 1999.
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Exhibit (a)(7)
EXECUTION COPY
WINSLOEW ESCROW CORP.
TRIVEST FURNITURE CORPORATION
$105,000,000
105,000 UNITS, CONSISTING OF
$105,000,000 12 3/4% SERIES A SENIOR SUBORDINATED NOTES DUE 2007
AND WARRANTS TO PURCHASE 24,129 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
August 19, 1999
BEAR, STEARNS & CO. INC.
BANCBOSTON ROBERTSON STEPHENS INC.
FIRST UNION CAPITAL MARKETS CORP.
================================================================================
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WINSLOEW ESCROW CORP.
TRIVEST FURNITURE CORPORATION
$105,000,000
105,000 UNITS, CONSISTING OF
$105,000,000 12 3/4% SERIES A SENIOR SUBORDINATED
NOTES DUE 2007
AND WARRANTS TO PURCHASE 24,129 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
August 19, 1999
New York, New York
BEAR, STEARNS & CO. INC.
BANCBOSTON ROBERTSON STEPHENS INC.
FIRST UNION CAPITAL MARKETS
c/o 245 Park Avenue
New York, New York 10167
Ladies & Gentlemen:
WinsLoew Escrow Corp., a Florida corporation (the "COMPANY") and wholly
owned subsidiary of Trivest Furniture Corporation, a Florida corporation
("TFC"), proposes to issue and sell (the "OFFERING") to Bear, Stearns & Co. Inc.
("BEAR STEARNS"), BancBoston Robertson Stephens Inc. ("BANCBOSTON") and First
Union Capital Markets ("FIRST UNION") (each, an "INITIAL PURCHASER," and,
collectively, the "INITIAL PURCHASERS") 105,000 Units (the "UNITS"), consisting
of $105,000,000 in aggregate principal amount of 12 3/4% Series A Senior
Subordinated Notes due 2007 (the "SERIES A NOTES") and warrants (the "WARRANTS")
to purchase 24,129 shares of the Company's common stock, par value $0.01 (the
"COMMON STOCK"), subject to the terms and conditions set forth herein. The
Series A Notes will be issued pursuant to an indenture (the "INDENTURE"), to be
dated the Closing Date (as defined), between the Company and American Stock
Transfer & Trust Company, as trustee (the "TRUSTEE"). The Warrants will be
issued pursuant to a Warrant Agreement (the "WARRANT AGREEMENT"), to be dated
the Closing Date, between the Company and American Stock Transfer and Trust
Company, as warrant agent and security intermediary (the "WARRANT AGENT").
The Company intends to use the funds of the Offering to pay a portion
of the merger consideration required under that certain Second Amended and
Restated Agreement and Plan of Merger dated as of May 4, 1999 (the "MERGER
AGREEMENT"), between TFC and WinsLoew Furniture, Inc., a Florida corporation
("WINSLOEW"). Pursuant to the Merger Agreement, TFC will merger with and into
WinsLoew, with WinsLoew being the surviving entity. Prior to or concurrently
with the merger of TFC and WinsLoew, the Company will merge with and into TFC,
with TFC being the surviving entity. Collectively, the contemplated mergers of
the Company,
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TFC and WinsLoew are referred to as the "MERGERS." As a result of the Mergers,
WinsLoew will assume all of the Company's obligations under this Agreement, the
Indenture, the Notes (as defined below), the Registration Rights Agreement (as
defined below) and the Warrant Agreement, as well as all other obligations of
the Company and TFC existing at the time of the Mergers. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Indenture.
1. Issuance of Securities. The Company proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of 105,000 Units, consisting of $105,000,000 in
principal amount of Series A Notes and Warrants to purchase 24,129 shares of
Common Stock at $0.01 per share. The Series A Notes and the Series B Notes (as
defined) issuable in exchange therefor are collectively referred to herein as
the "NOTES."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "ACT"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) and the Warrants shall bear the
following legend:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
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<PAGE> 4
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY BAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) TO
CERTAIN INSTITUTIONAL ACCREDITED INVESTORS WITHIN THE MEANING
OF SUBPARAGRAPH (a) (1), (2), (3) or (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (d) FOLLOWING THE RELEASE OF PROCEEDS FROM THE
ESCROW ACCOUNT, OUTSIDE THE UNITED STATES TO A NON-UNITED
STATES PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT OR (e) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IN THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL
ISSUE DISCOUNT. FOR PURPOSES OF SECTION 1273 OF THE CODE, THE
ISSUE PRICE IS $962.40 AND THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT IS $37.60, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT
OF THIS SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE,
THE YIELD TO MATURITY COMPOUNDED SEMIANNUALLY IS 13.537%."
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<PAGE> 5
Until the Separation Date (as defined in the Indenture), each Global
Note shall bear a legend in substantially the following form:
"UNTIL THE SEPARATION DATE (AS DEFINED), THIS NOTE HAS BEEN
ISSUED AS, AND MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH
THE ASSOCIATED WARRANTS TO PURCHASE COMMON STOCK OF THE
COMPANY. EACH UNIT CONSISTS OF $1,000 PRINCIPAL AMOUNT OF
NOTES AND A WARRANT TO PURCHASE 0.2298 SHARES OF COMMON STOCK,
SUBJECT TO ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. A COPY OF
THE WARRANT AGREEMENT PURSUANT TO WHICH THE WARRANTS HAVE BEEN
ISSUED IS AVAILABLE FROM THE COMPANY UPON REQUEST."
2. Offering. The Units will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared a preliminary offering memorandum, dated August 2,
1999 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final offering memorandum,
dated August 19, 1999 (the "OFFERING MEMORANDUM"), relating to the Company and
its subsidiaries and the Units.
Each Initial Purchaser has advised the Company that such Initial
Purchaser will make offers (the "EXEMPT RESALES") of the Units on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to persons
whom such Initial Purchaser reasonably believes to be "qualified institutional
buyers," as defined in Rule 144A under the Act ("QIBS"). The QIBs are
collectively referred to herein as the "ELIGIBLE PURCHASERS." The Initial
Purchasers will offer the Units to the Eligible Purchasers initially at a price
equal to $975.73. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date, for so long as such Series A Notes constitute "TRANSFER RESTRICTED
SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "COMMISSION"), under the circumstances
set forth therein, (i) a registration statement under the Act (the "EXCHANGE
OFFER REGISTRATION STATEMENT") relating to the Company's 12 3/4% Series B Senior
Subordinated Notes due 2007 (the "SERIES B NOtes") to be offered in exchange for
the Series A Notes (the "EXCHANGE OFFER") and (ii) a shelf registration
statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT"
and, together with the Exchange Offer Registration Statement, the "REGISTRATION
STATEMENTS") relating to the resale by certain holders of the Series A Notes,
and to use their best efforts to cause such Registration Statements to be
declared effective and to consummate the Exchange Offer.
The Warrant Agreement will provide, for the benefit of the Holders of
the Warrants, that the Company will file with the Commission, upon demand by the
holders of at least one-quarter of
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<PAGE> 6
the then outstanding Warrants and Warrant Shares, a registration statement (the
"WARRANT REGISTRATION STATEMENT") on an appropriate form under the Act covering
the issuance by the Company of the shares of Common Stock underlying such
Warrants (the "WARRANT SHARES") to Holders of Warrants upon the exercise of the
Warrants and resales of the Warrants and the Warrant Shares by the holders
thereof. Upon the occurrence of certain events, including an initial public
offering, Holders of Warrants and Warrant Shares will also have rights to be
included in certain registered equity offerings of the Company.
The net proceeds of the offering, after deducting for discounts and
commissions to the Initial Purchasers, along with additional cash to be
deposited by TFC and the Company with the Escrow Agent, will be placed in an
escrow account (the "ESCROW ACCOUNT") in accordance with an Escrow, Control and
Security Agreement dated as of the date of the Indenture, by and between the
Company and American Stock Transfer & Trust Company, as Escrow Agent and
Security Intermediary (the "ESCROW AGREEMENT") and the Company will grant a
first priority security interest in the Escrow Account to the Trustee for the
benefit of the Holders. The funds in the Escrow Account will be released on or
before September 15, 1999 either to finance TFC's acquisition of WinsLoew by
merger or to satisfy the Special Mandatory Redemption. This Agreement, the
Notes, the Indenture, the Registration Rights Agreement, the Warrants, the
Warrant Agreement and the Escrow Agreement are hereinafter referred to
collectively as the "OPERATIVE DOCUMENTS."
3. Purchase, Sale and Delivery. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to the
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, the amount of Units set forth opposite
the name of such Initial Purchaser on Exhibit A. The purchase price for the
Units will be $948.90 per Unit.
(b) Delivery of the Units shall be made, against payment of the
purchase price therefor, at the offices of Weil, Gotshal & Manges LLP, New York,
New York or such other location as may be mutually acceptable. Such delivery and
payment shall be made at 9:30 a.m., New York City time, on August 24, 1999 or at
such other time as shall be agreed upon by the Initial Purchasers and the
Company. The time and date of such delivery and payment are herein called the
"CLOSING DATE."
(c) On the Closing Date, one or more Series A Notes in definitive
global form, registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"), having an aggregate amount corresponding to the aggregate
principal amount of the Series A Notes (the "GLOBAL NOTE") and one or more
Warrants in definitive global form, registered in the name of Cede & Co., as
nominee of DTC, representing 105,000 Warrants (the "GLOBAL WARRANT" and,
together with the Global Note, the "GLOBAL SECURITIES") sold pursuant to Exempt
Resales to Eligible Purchasers shall be delivered by the Company to the Initial
Purchasers (or as the Initial Purchasers direct), against payment by the Initial
Purchasers of the purchase price therefor, by wire transfer of same day funds,
to the Escrow Account. The Global Securities shall be made available to the
Initial Purchasers for inspection not later than 9:30 a.m. on the business day
immediately preceding the Closing Date.
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<PAGE> 7
4. Agreements of the Company and the Initial Purchasers. The Company
covenants and agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing,
(i) of the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of
any Units for offering or sale in any jurisdiction, or the initiation
of any proceeding for such purpose by any state securities commission
or other regulatory authority and (ii) of the happening of any event
that makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires
the making of any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements
therein, in the light of the circumstances under which they are made,
not misleading. The Company shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or
exemption of any Units under any state securities or Blue Sky laws and,
if at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption of any Units under any state securities or Blue Sky laws, the
Company shall use its best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as
many copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request. Subject to the representations and
warranties made by the Initial Purchasers in Section 5(b) hereof, the
Company consents to the use of the Preliminary Offering Memorandum and
the Offering Memorandum, and any amendments and supplements thereto
required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum during such period as in the
opinion of counsel for the Initial Purchasers the Preliminary Offering
Memorandum or the Offering Memorandum is required by law to be
delivered in connection with Exempt Resales and in connection with
market-making activities of the Initial Purchasers for so long as any
Transfer Restricted Securities or Transfer Restricted Warrant
Securities are outstanding unless the Initial Purchasers shall
previously have been advised thereof and shall not have objected
thereto within a reasonable time after being furnished a copy thereof.
The Company shall promptly prepare, upon the Initial Purchasers'
request, any amendment or supplement to the Preliminary Offering
Memorandum or the Offering Memorandum that may be necessary or
advisable in connection with such Exempt Resales or such market making
activities.
(d) If, during the period referred to in 4(c) above, any event
shall occur as a result of which, in the judgment of the Company and
any Guarantors or in the reasonable opinion of counsel for the Company
and any Guarantors or of counsel for the Initial Purchasers, it becomes
necessary or advisable to amend or supplement the Preliminary
6
<PAGE> 8
Offering Memorandum or the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser, not
misleading, or if it is necessary or advisable to amend or supplement
the Preliminary Offering Memorandum or the Offering Memorandum to
comply with applicable law, (i) to notify the Initial Purchasers and
(ii) forthwith to prepare an appropriate amendment or supplement to
such Preliminary Offering Memorandum or the Offering Memorandum so that
the statements therein as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or
so that such Preliminary Offering Memorandum or the Offering Memorandum
will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel for
the Initial Purchasers in connection with the qualification or
registration of the Units under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may reasonably request and to
continue such qualification in effect so long as required for the
Exempt Resales; provided, however, that neither the Company, nor any
future Guarantor, shall be required in connection therewith to register
or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to service of process in suits
or taxation, in each case, other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction where it is not now
so subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay and be responsible for all costs, expenses, fees and
taxes incident to the performance of the obligations of the Company
hereunder, including in connection with: (i) the preparation, printing,
filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial
statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the preparation (including, without limitation,
duplication costs) and delivery of the Operative Documents,
correspondence and all other documents prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the issuance,
transfer and delivery of the Units to the Initial Purchasers, (iv) the
qualification or registration of the Units for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the cost of printing and mailing a preliminary and final
Blue Sky Memorandum and the reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto), (v) furnishing
such copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and all amendments and supplements thereto, as may be
requested for use in connection with Exempt Resales, (vi) the
preparation of certificates for the Notes and Warrants (including,
without limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's and TFC's counsel and
accountants, (viii) all fees and expenses (including fees and expenses
of counsel) of the Company in connection with the approval of the Units
by DTC for "book-entry" transfer, (ix) rating the Notes by rating
agencies, (x) the reasonable fees and expenses of the Trustee and its
counsel, (xi) the performance by the Company and any future Guarantors
of their other obligations under
7
<PAGE> 9
this Agreement and the other Operative Documents and (xii) "roadshow"
travel and other expenses incurred by the Company in connection with
the marketing and sale of the Units. Except as otherwise specifically
provided to the contrary above, and in Sections 6, 7 and 11(d), the
Initial Purchasers shall pay all expenses incurred by them in
connection with the offering of the Units.
(g) To use the proceeds from the sale of the Units in the
manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of
any Units, Notes or Warrants.
(i) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Units in a manner that
would require the registration under the Act of the sale to the Initial
Purchasers or the Eligible Purchasers of the Units or to take any other
action that would result in the Exempt Resales not being exempt from
registration under the Act.
(j) To use its best efforts to do and perform all things
required to be done and performed under this Agreement by it prior to
or after the Closing Date and to satisfy all conditions precedent on
its part to the delivery of the Units.
(k) For so long as any of the Units, Notes or Warrants remain
outstanding and during any period in which the Company and any
Guarantors are not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available to any holder or beneficial owner of Transfer Restricted
Securities or Transfer Restricted Warrant Securities in connection with
any sale thereof and any prospective purchaser of such securities from
such holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate
form to permit registered Series B Notes and any Guarantees thereof to
be offered in exchange for the Series A Notes and the Guarantees
thereof and to comply with all applicable federal and state securities
laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement and the Warrant Agreement and all of its
agreements set forth in the representation letters to DTC relating to
the approval of the Notes by DTC for "book-entry" transfer.
(n) To use its best efforts to effect the inclusion of the
Units, Notes and Warrants in PORTAL and to obtain approval of the
Units, Notes and Warrants by DTC for "book-entry" transfer.
(o) During a period of five years following the Closing Date,
to deliver without charge to the Initial Purchasers, as they may
reasonably request, promptly upon their
8
<PAGE> 10
becoming available, copies of (i) all reports or other publicly
available information that the Company and any future Guarantors shall
mail or otherwise make available to their securityholders and (ii) all
reports, financial statements and proxy or information statements filed
by the Company or any future Guarantor with the Commission or any
national securities exchange and such other publicly available
information concerning the Company, any future Guarantor or any of
their respective subsidiaries, including without limitation, press
releases.
(p) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course
by the Company, copies of any unaudited interim consolidated financial
statements relating to the Company or any unaudited financial
statements relating to Pompeii Furniture Co., Inc. for any period
subsequent to the periods covered by the financial statements appearing
in the Offering Memorandum.
(q) Not to take, directly or indirectly, any action designed
to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Units, Notes or
Warrants. Except as permitted by the Act, neither the Company nor any
future Guarantor will distribute any (i) preliminary offering
memorandum, including, without limitation, the Preliminary Offering
Memorandum, (ii) offering memorandum, including, without limitation,
the Offering Memorandum, or (iii) other offering material in connection
with the offering and sale of the Units, Notes or Warrants.
The Initial Purchasers covenant and agree with the Company to
use their best effort to do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing Date and to
satisfy all conditions precedent on their part to the delivery of the Units.
5. Representations and Warranties. (a) The Company and TFC, jointly and
severally, represent and warrant to the Initial Purchasers that:
(i) The Preliminary Offering Memorandum as of its date does
not, and the Offering Memorandum as of its date and as of the Closing
Date does not and will not, and any supplement or amendment to them
will not, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties contained in this paragraph shall not
apply to statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or amendment
thereto) made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing
by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the
Offering Memorandum, or any amendment or supplement thereto, or any
order asserting that any of the transactions contemplated by this
Agreement are subject to the registration requirements of the Act, has
been issued.
9
<PAGE> 11
(ii) When filed, WinsLoew's annual report on Form 10-K for
the fiscal year ended December 31, 1998 (the "10-K") or quarterly
reports on Form 10-Q for the fiscal quarters ended March 31 and June
30, 1999 (the "FORMS 10-Q") included all contracts, indentures,
mortgages, loan agreements, notes, leases or other agreements or
instruments of TFC, the Company, WinsLoew or any of its subsidiaries
that were required to be described or referred to in or to be filed as
exhibits thereto in accordance with the Exchange Act and the rules and
regulations thereunder. There are no contracts, bonds, indentures,
mortgages, loan agreements, notes, deeds of trust, leases or other
agreements or instruments of WinsLoew or any of its subsidiaries that
are material to TFC, the Company, WinsLoew or any of its subsidiaries
other than those filed as exhibits to the Form 10-K or Forms 10-Q or
described in the Offering Memorandum (collectively, the "MATERIAL
AGREEMENTS").
(iii) Each of TFC, the Company, WinsLoew and its subsidiaries
has been duly incorporated and is validly existing as a corporation or
other business organization, as the case may be, in good standing under
the laws of its jurisdiction of incorporation or organization. Each of
TFC, the Company, WinsLoew and its subsidiaries is duly qualified and
has all requisite corporate power and authority to carry on its
business as it is currently being conducted and as described in the
Offering Memorandum and to own, lease and operate its properties, and
is duly qualified and is in good standing as a foreign corporation,
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to (x) have a material adverse effect on the
properties, business, results of operations, condition (financial or
otherwise), net worth, properties, assets or prospects of TFC, the
Company or WinsLoew and its subsidiaries following the Mergers, taken
as a whole, (y) interfere with or adversely affect the issuance or
marketability of the Units or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the
transactions described in the Offering Memorandum under the caption
"Use of Proceeds" (any of the events set forth in clauses (x), (y) or
(z), a "MATERIAL ADVERSE EFFECT"). The Company is the only subsidiary
of TFC and the Company has no subsidiaries.
(iv) The Company has no subsidiaries. WinsLoew has no
subsidiaries other than the entities listed on Exhibit C attached
hereto.
(v) All the outstanding shares of capital stock of, or other
ownership interests in, TFC, the Company and WinsLoew have been duly
and validly authorized and issued are fully paid and nonassessable, and
were not issued in violation of or subject to any preemptive or similar
rights. All of the outstanding capital stock of each subsidiary of
WinsLoew is owned, directly or indirectly, by WinsLoew, free and clear
of any security interest, mortgage, pledge, claim, lien, limitation on
voting or transferability rights or encumbrance, except for any such
security interest, claim, lien, limitation on voting rights or
encumbrance pursuant to WinsLoew's credit agreement dated as of
February 2, 1995 with Heller Financial, Inc. (the "HELLER CREDIT
AGREEMENT"); and all such securities have been duly authorized, validly
issued, and are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights.
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<PAGE> 12
(vi) Except for the employee benefit plans of WinsLoew set
forth in the Offering Memorandum and the Merger Agreement, there are no
outstanding subscriptions, rights, warrants, calls, commitments of sale
or options to acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with TFC, the Company or WinsLoew
with respect to the sale or issuance of, any shares of capital stock or
other equity interests in TFC, the Company, WinsLoew or its
subsidiaries. Except as reflected in the Registration Rights Agreement,
the Warrants and the Warrant Agreement, immediately following the
Mergers, there will be no outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, or agreements or understandings
with WinsLoew, as the surviving entity, with respect to the sale or
issuance of, any shares of capital stock or other equity interests in
WinsLoew or its subsidiaries
(vii) When the Units are issued and delivered pursuant to
this Agreement, no Unit will be of the same class (within the meaning
of Rule 144A under the Act) as securities of the Company that are
listed on a national securities exchange registered under Section 6 of
the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(viii) Each of TFC and the Company has all requisite corporate
or organizational power and authority necessary to enter into and
perform its obligations under this Agreement and each of the other
Operative Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the corporate power and authority to issue, sell and
deliver the Units in accordance with and upon the terms and conditions
set forth in this Agreement, the Indenture, the Warrant Agreement, the
Registration Rights Agreement and the Offering Memorandum. WinsLoew has
all requisite corporate or organizational power and authority necessary
to enter into and perform its obligations under the Merger Agreement
and, following the Mergers, each of WinsLoew and its subsidiaries will
have all requisite corporate or organizational power and authority to
perform its obligations under this Agreement and each of the other
Operative Documents to which it is a party, including, without
limitation, the corporate power and authority to assume the obligations
under this Agreement, the Indenture, the Warrant Agreement, the
Registration Rights Agreement and the Offering Memorandum and to
execute and deliver requisite supplemental indentures and Guarantees,
as applicable.
(ix) This Agreement has been duly and validly authorized,
executed and delivered by the Company and (assuming the due execution
and delivery hereof by each of the Initial Purchasers) is a legal,
valid and binding agreement of the Company and TFC, enforceable against
each of them in accordance with its terms, except that (i) the
enforceability of the rights to indemnity and/or contribution hereunder
may be limited by federal or state securities laws or principles of
public policy, (ii) the enforceability hereof may be subject to
applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies
11
<PAGE> 13
generally and (iii) the enforceability hereof may be subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Following the Mergers, this Agreement
will be the legal, valid and binding agreement of WinsLoew, enforceable
against WinsLoew in accordance with its terms, except that (i) the
enforceability of the rights to indemnity and/or contribution hereunder
may be limited by federal or state securities laws or principles of
public policy, (ii) the enforceability hereof may be subject to
applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (iii) the enforceability hereof may be
subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(x) The Indenture has been duly and validly authorized by the
Company and, when duly executed and delivered by the Company, will be
the legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that (i) the
enforceability thereof may be subject to applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and (ii) the enforceability thereof may be subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Following the Mergers, the Indenture
will be the legal, valid and binding agreement of WinsLoew and any
future Guarantors, enforceable against each of them in accordance with
its terms, except that (i) the enforceability thereof may be subject to
applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (ii) the enforceability thereof may be
subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). On the
Closing Date, the Indenture will conform in all material respects to
the requirements of the Trust Indenture Act of 1939, as amended (the
"TRUST INDENTURE ACT"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder. The Offering
Memorandum contains a summary of the terms of the Indenture, which is
accurate in all material respects.
(xi) The Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered
by the Company (assuming the due execution and delivery thereof by each
of the Initial Purchasers), will be the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) the enforceability of the
rights to indemnity and/or contribution thereunder may be limited by
federal or state securities laws or principles of public policy, (ii)
the enforceability of the Registration Rights Agreement may be subject
to applicable bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and (iii) the enforceability
of the Registration Rights Agreement may be subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Following the Mergers, the
Registration Rights Agreement will be the legal, valid and binding
agreement of WinsLoew, enforceable against it in accordance with its
terms, except that (i) the enforceability of the rights to
12
<PAGE> 14
indemnity and/or contribution thereunder may be limited by federal or
state securities laws or principles of public policy, (ii) the
enforceability of the Registration Rights Agreement may be subject to
applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (iii) the enforceability of the Registration
Rights Agreement may be subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity). The Offering Memorandum contains a summary of the terms of
the Registration Rights Agreement, which is accurate in all material
respects.
(xii) The Series A Notes have been duly and validly
authorized by the Company for issuance and sale to the Initial
Purchasers pursuant to this Agreement and, when issued and
authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof
and thereof, will be the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture, except that (i) the
enforceability of the Series A Notes may be subject to applicable
bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (ii) the enforceability of the Series A
Notes may be subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
Following the Mergers and assuming the Exchange Offer has not been
consummated, the Series A Notes will be the legal, valid and binding
obligations of WinsLoew, enforceable against it in accordance with
their terms, except that (i) the enforceability hereof may be subject
to applicable bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and (ii) the enforceability
thereof may be subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(xiii) Following the Mergers and assuming that the Exchange
Offer has not been consummated and that the Guarantees of the Series A
Notes have been duly and validly authorized by each of the Guarantors,
when executed and delivered in accordance with the terms of the
Indenture and when the Series A Notes have been issued and
authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms
thereof, the Guarantees of the Series A Notes will be the legal, valid
and binding obligations of each of the Guarantors, enforceable against
each of them in accordance with their terms and entitled to the
benefits of the Indenture, except that (i) the enforceability of the
Guarantees of the Series A Notes may be subject to applicable
bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (ii) the enforceability of the Guarantees
may be subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). The
Offering Memorandum contains a summary of the terms of the Guarantees
of the Series A Notes, which is accurate in all material respects.
13
<PAGE> 15
(xiv) The Series B Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, will
be the legal, valid and binding obligations of the Company, enforceable
against it in accordance with their terms and entitled to the benefits
of the Indenture, except that (i) the enforceability of the Series B
Notes may be subject to applicable bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and (ii) the
enforceability of the Series B Notes may be subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Following the Mergers and assuming the
Series B Notes have been duly and validly authorized for issuance by
WinsLoew, when issued and authenticated in accordance with the terms of
the Exchange Offer and the Indenture, the Series B Notes will be the
legal, valid and binding obligations of WinsLoew, enforceable against
it in accordance with their terms and entitled to the benefits of the
Indenture, except that (i) the enforceability of the Series B Notes may
be subject to applicable bankruptcy, insolvency, fraudulent conveyance
or transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and (ii) the enforceability of
the Series B Notes may be subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity).
(xv) Following the Mergers and assuming that the Guarantees
of the Series B Notes have been duly and validly authorized by each of
the Guarantors, when executed and delivered in accordance with the
terms of the Indenture and when the Series B Notes have been issued and
authenticated in accordance with the terms of the Exchange Offer and
the Indenture, the Guarantees of the Series B Notes will be the legal,
valid and binding obligations of each of the Guarantors, enforceable
against each of them in accordance with their terms and entitled to the
benefits of the Indenture, except that (i) the enforceability of the
Guarantees may be subject to applicable bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
(ii) the enforceability of the Guarantees of the Series B Notes may be
subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(xvi) The Warrant Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
that (i) the enforceability thereof may be subject to applicable
bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (ii) the enforceability thereof may be
subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Following
the Mergers, the Warrant Agreement will be the legal, valid and binding
agreement of WinsLoew, enforceable WinsLoew in accordance with its
terms, except that (i) the enforceability thereof may be subject to
applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (ii) the enforceability thereof may be
subject to general principles
14
<PAGE> 16
of equity (regardless of whether enforcement is sought in a proceeding
at law or in equity). The Offering Memorandum contains a summary of the
terms of the Warrant Agreement, which is accurate in all material
respects.
(xvii) The Escrow Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
that (i) the enforceability thereof may be subject to applicable
bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and (ii) the enforceability thereof may be
subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). The
Offering Memorandum contains a summary of the terms of the Escrow
Agreement, which is accurate in all material respects.
(xviii) Each of TFC, the Company, WinsLoew and its
subsidiaries is not and, after giving effect to the Offering and the
Mergers, will not be, (A) in violation of its charter or bylaws, (B) in
default in the performance of any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument to which it is
a party or by which it is bound or to which any of its properties is
subject, which singly or in the aggregate, could reasonably be expected
to have a Material Adverse Effect or (C) in violation of any local,
state, federal or foreign law, statute, ordinance, rule, regulation,
requirement, judgment or court decree (including, without limitation,
environmental laws, statutes, ordinances, rules, regulations, judgments
or court decrees) applicable to it or any of its assets or properties
(whether owned or leased), which singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. To the best
knowledge of TFC and the Company, there exists no condition that, with
notice, the passage of time or otherwise, would constitute a default
under any such document or instrument, which singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(xix) None of (A) the execution, delivery or performance, as
applicable, by any of TFC, the Company, WinsLoew or its subsidiaries of
this Agreement or any of the other Operative Documents to which it is
or becomes a party, (B) the issuance, sale and assumption, as
applicable, of the Units, Notes and Warrants and the issuance of the
Guarantees and (C) consummation of the transactions described in the
Offering Memorandum under the caption "Use of Proceeds," violates,
conflicts with or constitutes a breach of any of the terms or
provisions of, or will violate, conflict with or constitute a breach of
any of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a default
under), or require consent under, or result in the imposition of a lien
or encumbrance on any properties of TFC, the Company, WinsLoew or any
of its subsidiaries, except for liens under the Escrow Agreement, or an
acceleration of any indebtedness of TFC, the Company, WinsLoew or any
of its subsidiaries pursuant to, (1) the charter or bylaws of TFC, the
Company, WinsLoew or any of its subsidiaries, (2) any bond, debenture,
note, indenture, mortgage,
15
<PAGE> 17
deed of trust or other credit agreement or instrument to which TFC, the
Company, WinsLoew or any of its subsidiaries is a party or by which any
of them or their property is or may be bound, (3) other agreement or
instrument to which TFC, the Company, WinsLoew or any of its
subsidiaries is a party or by which any of them or their property is or
may be bound that would have a Material Adverse Effect, (4) any
statute, rule or regulation applicable to TFC, the Company, WinsLoew or
any of its subsidiaries or any of their assets or properties or (5) any
judgment, order or decree of any court or governmental agency or
authority having jurisdiction over TFC, the Company, WinsLoew or any of
its subsidiaries or any of their assets or properties. No consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or
governmental agency, body or administrative agency or (B) any other
person is required for (1) the execution, delivery and performance, as
applicable, by each of TFC, the Company, WinsLoew and the Guarantors of
this Agreement or any of the other Operative Documents to which it is a
party or (2) the issuance, sale and assumption, as applicable, of the
Units, Notes and Warrants, the issuance of the Guarantees and the
transactions contemplated hereby and thereby, except such as have been
or will be obtained and made on or prior to the Closing Date or the
date the Mergers are consummated, as applicable (or, in the case of the
Registration Rights Agreement, will be obtained and made under the Act,
the Trust Indenture Act, and state securities or Blue Sky laws and
regulations) or such as may be required by the National Association of
Securities Dealers, Inc.
(xx) There is (A) no action, suit, or proceeding or, to the
best knowledge of TFC and the Company, investigation before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the best knowledge of TFC and the Company,
threatened or contemplated to which TFC, the Company, WinsLoew or any
of its subsidiaries is or is reasonably likely to be a party or to
which the business or property of TFC, the Company, WinsLoew or any of
its subsidiaries, is or is reasonably likely to be subject, (B) no
statute, rule, regulation or order that has been enacted, adopted or
issued by any governmental agency or that has been proposed by any
governmental body and (C) no injunction, restraining order or order of
any nature by a federal or state court or foreign court of competent
jurisdiction to which TFC, the Company, WinsLoew or any of its
subsidiaries is or is reasonably likely to be subject or to which the
business, assets or property of TFC, the Company, WinsLoew or any of
its subsidiaries is or is reasonably likely to be subject, that, in the
case of clauses (A), (B) and (C) above, (1) is required to be disclosed
in the Preliminary Offering Memorandum and the Offering Memorandum and
that is not so disclosed or (2) could reasonably be expected to have a
Material Adverse Effect.
(xxi) To the best knowledge of TFC and the Company, no action
has been taken and no statute, rule, regulation or order has been
enacted, adopted or issued by any governmental agency that prevents the
issuance of the Units or prevents or suspends the use of the Offering
Memorandum; no injunction, restraining order or order of any nature by
a federal or state court of competent jurisdiction has been issued that
prevents the issuance of the Units or prevents or suspends the sale of
the Units in any jurisdiction
16
<PAGE> 18
referred to in Section 4(e) hereof; and to the best knowledge of TFC
and the Company every request of any securities authority or agency of
any jurisdiction for additional information has been complied with in
all material respects.
(xxii) There is (A) no significant unfair labor practice
complaint pending against TFC, the Company, WinsLoew or any of its
subsidiaries nor, to the best knowledge of TFC and the Company,
threatened against any of them, before the National Labor Relations
Board, any state or local labor relations board or any foreign labor
relations board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against TFC, the Company, WinsLoew
or any of its subsidiaries or, to the best knowledge of TFC and the
Company, threatened against any of them, (B) no significant strike,
labor dispute, slowdown or stoppage pending against TFC, the Company,
WinsLoew or any of its subsidiaries nor, to the best knowledge of TFC
and the Company, threatened against any of them and (C) to the best
knowledge of TFC and the Company, no union representation question
existing with respect to the employees of TFC, the Company, WinsLoew or
any of its subsidiaries. To the best knowledge of TFC and the Company,
no collective bargaining organizing activities are taking place with
respect to TFC, the Company, WinsLoew or any of its subsidiaries. None
of TFC, the Company, WinsLoew or any of its subsidiaries has violated
(A) any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees, (B) any
applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
rules and regulations thereunder, except those violations in (A), (B)
or (C) that could not reasonably be expected to have a Material Adverse
Effect.
(xxiii) None of TFC, the Company, WinsLoew or any of its
subsidiaries has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, "ENVIRONMENTAL LAWS"), which violation
could reasonably be expected to have a Material Adverse Effect.
(xxiv) To the best knowledge of TFC and the Company, there is
no alleged liability or potential liability (including, without
limitation, alleged or potential liability or investigatory costs,
cleanup costs, governmental response costs, natural resource damages,
property damages, personal injuries or penalties) of TFC, the Company,
WinsLoew or any of its subsidiaries arising out of, based on or
resulting from (A) the presence or release into the environment of any
Hazardous Material (as defined) at any location, whether or not owned
by the Company or such subsidiary, as the case may be, or (B) any
violation or alleged violation of any Environmental Law, which alleged
or potential liability is required to be disclosed in the Offering
Memorandum, other than as disclosed therein, or could reasonably be
expected to have a Material Adverse Effect. The term "HAZARDOUS
MATERIAL" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or
petroleum product, (iv) any
17
<PAGE> 19
polychlorinated biphenyl, and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other law relating to
protection of human health or the environment or imposing liability or
standards of conduct concerning any such chemical material, waste or
substance.
(xxv) Each of TFC, the Company, WinsLoew and its subsidiaries
has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("PERMITS"), including, without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease and operate its respective properties and to conduct its
businesses, except where the failure to have such permits could not
reasonably be expected to have a Material Adverse Effect; each of TFC,
the Company, WinsLoew and its subsidiaries has fulfilled and performed
all of its material obligations with respect to such permits and no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit;
and, except as described in the Offering Memorandum, such permits
contain no restrictions that are materially burdensome to the Company
or such subsidiary, as the case may be.
(xxvi) Each of TFC, the Company, WinsLoew and its subsidiaries
has (A) good and marketable title to all of the properties and assets
described in the Offering Memorandum as owned by it, free and clear of
all liens, charges, encumbrances and restrictions (except for Permitted
Liens and taxes not yet payable, liens under the Escrow Agreement and,
in the case of WinsLoew, liens under the Heller Agreement prior to the
completion of the Mergers), (B) peaceful and undisturbed possession
under all material leases to which any of them is a party as lessee and
each of which lease is valid and binding and no default exists
thereunder, except for defaults that could not reasonably be expected
to have a Material Adverse Effect, (C) all licenses, certificates,
permits, authorizations, approvals, franchises and other rights from,
and has made all declarations and filings with, all federal, state and
local authorities, all self-regulatory authorities and all courts and
other tribunals (each, an "AUTHORIZATION") necessary to engage in the
business conducted by any of them in the manner described in the
Offering Memorandum except as would not have a Material Adverse Effect
and (D) no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such Authorization.
All such Authorizations are valid and in full force and effect and each
of TFC, the Company, WinsLoew and its subsidiaries is in compliance in
all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto, except as would
not have a Material Adverse Effect. All material leases to which TFC,
the Company, WinsLoew or any of its subsidiaries is a party are valid
and binding and no default by the Company or such subsidiary, as the
case may be, has occurred and is continuing thereunder except as would
not have a Material Adverse Effect and, to the best knowledge of TFC
and the Company, no material defaults by the landlord are existing
under any such lease, except those defaults that could not reasonably
be expected to have a Material Adverse Effect.
18
<PAGE> 20
(xxvii) Each of TFC, the Company, WinsLoew and its
subsidiaries owns, possesses or has the right to employ all patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, software, systems or procedures), trademarks,
service marks and trade names, inventions, computer programs, technical
data and information (collectively, the "INTELLECTUAL PROPERTY")
presently employed by it in connection with the businesses now operated
by it or that are proposed to be operated by it, free and clear of and
without violating any right, claimed right, charge, encumbrance,
pledge, security interest, restriction or lien of any kind of any other
person (except for such right, claimed right, charge, encumbrance,
pledge, security interest, restriction or lien pursuant to the Heller
Credit Agreement and except as would not have a Material Adverse
Effect), and none of TFC, the Company, WinsLoew or any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing.
The use of the Intellectual Property in connection with the business
and operations of TFC, the Company, WinsLoew or any of its subsidiaries
does not infringe on the rights of any person, except such
infringements as could not reasonably be expected to have a Material
Adverse Effect.
(xxviii) All material tax returns required to be filed by TFC,
the Company, WinsLoew or any of its subsidiaries in all jurisdictions
have been so filed. All taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to be
due from such entities or that are due and payable have been paid,
other than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without penalty
or interest. To the best knowledge of TFC and the Company, there are no
material proposed additional tax assessments against TFC, the Company,
WinsLoew or any of its subsidiaries, or the assets or property of TFC,
the Company, WinsLoew or any of its subsidiaries, except those tax
assessments for which adequate reserves have been established.
(xxix) WinsLoew and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (A) transactions are executed in accordance with management's
general or specific authorizations; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect thereto.
(xxx) WinsLoew and its subsidiaries maintains insurance
covering its properties, operations, personnel and businesses, insuring
against such losses and risks as are consistent with industry practice
to protect TFC, the Company, WinsLoew and its subsidiaries and their
respective businesses. None of TFC, the Company, WinsLoew or any of its
subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures
will have to be made in order to continue such insurance.
19
<PAGE> 21
(xxxi) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among TFC, the
Company, WinsLoew or any of its subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of TFC, the
Company, WinsLoew or any of its subsidiaries on the other hand, which
would be required by the Act to be described in the Offering Memorandum
if the Offering Memorandum were a prospectus included in a registration
statement on Form S-1 filed with the Commission.
(xxxii) WinsLoew has (A) initiated a review and assessment of
all areas within its and each of its subsidiaries' business and
operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the "Year 2000 Problem"
(that is, the risk that computer applications used by WinsLoew or any
of its subsidiaries (or suppliers, vendors and customers) may be unable
to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (B)
developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis and (C) to date, has implemented that plan in accordance
with that timetable. Based on the foregoing, TFC and the Company
believe that all computer applications (including those of the
WinsLoew's suppliers, vendors and customers) that are material to its
or any of its subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000
(that is, be "YEAR 2000 Compliant"), except to the extent that a
failure to do so could not reasonably be expected to have Material
Adverse Effect.
(xxxiii) None of TFC, the Company, WinsLoew or any of its
subsidiaries is, or following the Mergers will be, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT").
(xxxiv) There are no holders of securities of TFC, the
Company, WinsLoew or any of its subsidiaries who, by reason of the
execution by the Company or the assumption of the obligations by
WinsLoew and its subsidiaries of this Agreement or any other Operative
Document to which it is or becomes a party or the consummation by TFC,
the Company, WinsLoew or any of its subsidiaries of the transactions
contemplated hereby and thereby, have the right to request or demand
that TFC, the Company, WinsLoew or any of its subsidiaries register
under the Act or analogous foreign laws and regulations securities held
by them other than pursuant to the Registration Right Agreement and the
Warrant Agreement.
(xxxv) None of TFC, the Company, WinsLoew or any of its
subsidiaries has (A) taken, directly or indirectly, any action designed
to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of TFC, the
Company, WinsLoew or any of its subsidiaries to facilitate the sale or
resale of the Units, Notes or Warrants or (B) since the date of the
Preliminary Offering Memorandum (1) sold, bid for, purchased or paid
any person any compensation for soliciting purchases of the Units,
Notes or Warrants or (2) paid or agreed to pay to any person any
compensation
20
<PAGE> 22
for soliciting another to purchase any other securities of TFC, the
Company, WinsLoew or any of its subsidiaries.
(xxxvi) The accountants who have certified or will certify
the financial statements included or to be included as part of the
Offering Memorandum are independent accountants as required by the Act.
The historical financial statements, together with related schedules
and notes thereto, comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under
the Act and present fairly in all material respects the financial
position and results of operations of WinsLoew and its subsidiaries at
the dates and for the periods indicated. Such financial statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
presented. The pro forma financial statements included in the Offering
Memorandum have been prepared on a basis consistent with such
historical statements of WinsLoew, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly in all material respects the historical and
proposed transactions contemplated by this Agreement and the other
Operative Documents; and such pro forma financial statements comply as
to form in all material respects with the requirements applicable to
pro forma financial statements included in registration statements on
Form S-1 under the Act, except as expressly stated therein. The other
financial and statistical information and data included in the Offering
Memorandum derived from the historical and pro forma financial
statements, are accurately presented in all material respects and
prepared on a basis consistent with the financial statements,
historical and pro forma, included in the Offering Memorandum and the
books and records of WinsLoew and its subsidiaries.
(xxxvii) No registration under the Act of the Units, Series A
Notes or Warrants is required for the sale of the Units to the Initial
Purchasers as contemplated hereby or for the Exempt Resales assuming
(A) that the purchasers who buy the Units in the Exempt Resales are
Eligible Purchasers and (B) the accuracy of the Initial Purchasers'
representations regarding the absence of general solicitation in
connection with the sale of Units to the Initial Purchaser and the
Exempt Resales contained herein. No form of general solicitation or
general advertising (as defined in Regulation D under the Act) was used
by TFC, the Company, WinsLoew or any of its subsidiaries or any of
their representatives (other than the Initial Purchasers, as to which
TFC and the Company make no representation or warranty) in connection
with the offer and sale of any of the Units or in connection with
Exempt Resales, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising. No securities of the same class as the Units,
Notes or Warrants have been issued and sold by TFC, the Company,
WinsLoew or any of its subsidiaries within the six-month period
immediately prior to the date hereof.
(xxxviii) The execution and delivery of this Agreement, the
other Operative Documents and the sale of the Units to be purchased by
Eligible Purchasers will not involve any prohibited transaction within
the meaning of Section 406 of ERISA or Section
21
<PAGE> 23
4975 of the Internal Revenue Code of 1986. The representation made by
TFC and the Company in the preceding sentence is made in reliance upon
and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by Eligible
Purchasers as set forth in the Offering Memorandum under the caption
"Notice to Investors."
(xxxix) TFC and the Company believe that the statistical and
market-related data included in the Offering Memorandum is reliable and
accurate in all material respects.
(xl) Since the respective dates as of which information is
given in the Offering Memorandum, (i) there has not been any material
adverse change, or any development that is reasonably likely to result
in a material adverse change, in the capital stock or the long-term
debt, or material increase in the short-term debt, of TFC, the Company,
WinsLoew or any of its subsidiaries from that set forth in the Offering
Memorandum, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by TFC, the Company, WinsLoew or any of its
subsidiaries on any class of its capital stock and (iii) none of TFC,
the Company, WinsLoew or any of its subsidiaries shall have incurred
any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to TFC, the Company,
WinsLoew and its subsidiaries, taken as a whole, and that are required
to be disclosed on a balance sheet or notes thereto in accordance with
generally accepted accounting principles and are not disclosed on the
latest balance sheet or notes thereto included in the Offering
Memorandum. Since the date hereof and since the dates as of which
information is given in the Offering Memorandum, there shall not have
occurred any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in the
business, prospects, financial condition or results of operation of
TFC, the Company, WinsLoew and its subsidiaries, taken as a whole.
(xli) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(xlii) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the
Trust Indenture Act.
(xliii) None of the execution, delivery and performance of
this Agreement, the issuance and sale of the Units, the application of
the proceeds from the issuance and sale of the Units and the
consummation of the transactions contemplated thereby as set forth in
the Offering Memorandum, will violate Regulations T, U or X promulgated
by the Board of Governors of the Federal Reserve System or analogous
foreign laws and regulations.
(xliv) Neither TFC, the Company, WinsLoew nor any Guarantor
intends to, nor believes that it will, incur debts beyond its ability
to pay such debts as they mature. The present fair saleable value of
the assets of TFC, the Company, WinsLoew and each of its subsidiaries
that is required to become a Guarantor exceeds the amount that will be
required to be paid on or in respect of its existing debts and other
liabilities (including
22
<PAGE> 24
contingent liabilities) as they become absolute and matured. The assets
of TFC, the Company, WinsLoew and each of its subsidiaries that is
required to become a Guarantor do not constitute unreasonably small
capital to carry out its business as conducted or as proposed to be
conducted. Upon the issuance or assumption, as applicable, of the
Units, the present fair saleable value of the assets of TFC, the
Company, WinsLoew and each of its subsidiaries that is required to
become a Guarantor will exceed the amount that will be required to be
paid on or in respect of its existing debts and other liabilities
(including contingent liabilities) as they become absolute and matured.
Upon the issuance or assumption, as applicable, of the Units, the
assets of TFC, the Company, WinsLoew and each of its subsidiaries that
is required to become a Guarantor will not constitute unreasonably
small capital to carry out its business as now conducted, including the
capital needs of those entities, taking into account the projected
capital requirements and capital availability.
(xlv) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between TFC, the Company,
WinsLoew and its subsidiaries and any other person that would give rise
to a valid claim against TFC, the Company, WinsLoew or any of its
subsidiaries or the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase
and sale of the Units.
(xlvi) There exist no conditions that would constitute a
default (or an event which with notice or the lapse of time, or both,
would constitute a default) under any of the Operative Documents.
(xlvii) Each certificate signed by any officer of TFC or the
Company and delivered to the Initial Purchasers or counsel for the
Initial Purchasers shall be deemed to be a representation and warranty
by TFC or the Company, as the case may be, to the Initial Purchasers as
to the matters covered thereby.
Each of TFC and the Company acknowledge that the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel for TFC and the Company and counsel for
the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to TFC and the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Units.
(ii) Such Initial Purchaser (A) is not acquiring the Units
with a view to any distribution thereof that would violate the Act or
the securities laws of any state of the United States or any other
applicable jurisdiction and (B) will be reoffering and reselling the
Units only to QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A.
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<PAGE> 25
(iii) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) has been or will be
used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Units, including, but
not limited to, articles, notices or other communications published in
any newspaper, magazine, or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(iv) Such Initial Purchaser agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Units only from,
and will offer to sell the Units only to, Eligible Purchasers and will
deliver a copy of the Offering Memorandum to each purchaser of Units
from it contemporaneously with or prior to such purchase. Such Initial
Purchaser further (A) agrees that it will offer to sell the Units only
to, and will solicit offers to buy the Units only from Eligible
Purchasers that such Initial Purchaser reasonably believes are QIBs
purchasing for their own accounts or for the account of a QIB in a
transaction meeting the requirements of Rule 144A, and (B) acknowledges
and agrees that, in the case of such QIBs, that such Units will not
have been registered under the Act and may be resold, pledged or
otherwise transferred only (x)(I) to a person whom the seller
reasonably believes is a QIB purchasing for its own account or for the
account of a QIB in a transaction meeting the requirements of Rule
144A, (II) in an offshore transaction (as defined in Rule 902 under the
Act) meeting the requirements of Rule 904 under the Act, (III) to a
person whom the seller reasonably believes is an "institutional
accredited investor" within the meaning of subparagraph (a) (1), (2)),
(3) or (7) of Rule 501 under the Act that is purchasing for its own
account or for the account of such an institutional accredited investor
for investment purposes and not with a view to or for offer or sale in
connection with any distribution in violation of the Act, (IV) in a
transaction meeting the requirements of Rule 144 under the Act, or (V)
in accordance with another exemption from the registration requirements
of the Act (and based upon an opinion of counsel if the Company and the
Guarantors so request), (y) to the Company, (z) pursuant to an
effective registration statement under the Act and, in each case, in
accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction and (C) acknowledges
that it will, and each subsequent holder is required to, notify any
purchaser of the security evidenced thereby of the resale restrictions
set forth in (B) above.
The Initial Purchasers acknowledge that the Company and the Guarantors
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel for TFC and the Company and counsel for
the Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification.
(a) TFC and the Company, jointly and severally, agree to
indemnify and hold harmless (i) each of the Initial Purchasers, (ii)
each person, if any, who controls such Initial Purchaser within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
and (iii) the respective officers, directors, partners, employees,
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<PAGE> 26
representatives and agents of each Initial Purchaser or any controlling
person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that neither TFC nor the Company will be
liable in any such case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with information furnished to TFC and the Company in writing
by or on behalf of an Initial Purchaser expressly for use therein;
provided, further, however, that neither TFC nor the Company shall be
liable to any Initial Purchaser under the indemnity provisions of this
paragraph (a) with respect to the Preliminary Offering Memorandum to
the extent that any such loss, claim, damage or liability of such
Initial Purchaser results from the fact that such Initial Purchaser
sold Units, Notes and Warrants to a person as to whom it is established
that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Offering Memorandum, or of the
Offering Memorandum as then amended or supplemented, in any case where
such delivery is required by the Act if the Company has previously
furnished copies thereof in sufficient quantity to such Initial
Purchaser and the loss, liability, claim, damage or expense of such
Initial Purchaser results from an untrue statement or omission of a
material fact contained in the Preliminary Offering Memorandum which
was identified at such time to such Initial Purchaser and corrected in
the Offering Memorandum or in the Offering Memorandum as then amended
or supplemented. This indemnity agreement will be in addition to any
liability which the Company and the Guarantors may otherwise have,
including under this Agreement.
(b) Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless, (i) TFC and the Company, (ii) each
person, if any, who controls TFC or the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, and (iii)
the officers, directors, partners, employees, representatives and
agents of TFC and the Company or any controlling person, against any
losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or
25
<PAGE> 27
otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, in each case to the extent, but
only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with information furnished to TFC and
the Company in writing by or on behalf of an Initial Purchaser
expressly for use therein (and not with respect to the information
provided by any other Initial Purchaser); provided, however, that in no
case shall such Initial Purchaser be liable or responsible for any
amount in excess of the discounts and commissions received by such
Initial Purchaser. This indemnity will be in addition to any liability
which each of the Initial Purchasers may otherwise have, including
under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 6 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge of the defense
of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all
of the indemnifying parties (in which case the indemnifying party or
parties shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events
such fees and expenses of counsel shall be borne by the indemnifying
parties; provided, however, that the indemnifying party under
subsection (a) or (b) above shall only be liable for the legal expenses
of one counsel (in addition to any local counsel) for all indemnified
parties in each jurisdiction in which any claim or action is brought.
Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall
26
<PAGE> 28
not be liable for any settlement of any claim or action effected
without its prior written consent, provided that such consent was not
unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 6 is for any reason held to
be unavailable from an indemnifying party or is insufficient to hold harmless a
party indemnified thereunder, TFC and the Company, on the one hand, and the
Initial Purchasers, severally and not jointly, on the other hand, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, liabilities, claims,
damages and expenses suffered by TFC or the Company, any contribution received
by TFC and the Company from persons, other than an Initial Purchaser, who may
also be liable for contribution, including persons who control TFC or the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) to which TFC, the Company and such Initial Purchaser may be
subject, in such proportion as is appropriate to reflect the relative benefits
received by TFC and the Company, on the one hand, and such Initial Purchaser, on
the other hand, from the offering of the Units or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 6, in
such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of TFC and the Company, on the one
hand, and an Initial Purchaser, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The
relative benefits received by TFC and the Company, on the one hand, and an
Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as (i) the total proceeds from the offering of Units (net of
discounts but before deducting expenses) received by TFC and the Company and
(ii) the discounts and commissions received by the Initial Purchasers,
respectively. The relative fault of TFC and the Company, on the one hand, and of
an Initial Purchaser, 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 TFC, the Company, or any of the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. TFC, the Company and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this Section
7, (i) in no case shall the Initial Purchasers be required to contribute any
amount in excess of the amount by which the discounts and commissions applicable
to the Series A Notes purchased by the Initial Purchasers pursuant to this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, (A) each person,
if any, who controls an Initial Purchaser within the meaning of Section 15 of
the Act or
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<PAGE> 29
Section 20(a) of the Exchange Act and (B) the respective officers, directors,
partners, employees, representatives and agents of such Initial Purchaser or any
controlling person shall have the same rights to contribution as such Initial
Purchaser, and (A) each person, if any, who controls TFC or the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and
(B) the respective officers, directors, partners, employees, representatives and
agents of TFC and the Company shall have the same rights to contribution as TFC
and the Company, subject in each case to clauses (i) and (ii) of this Section 7.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent, provided that such written consent was not unreasonably
withheld.
The Initial Purchasers' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal amount of the
Units purchased by each of the Initial Purchasers hereunder and not joint.
8. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase and pay for the Units, as provided herein,
shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of TFC and the
Company contained in this Agreement shall be true and correct on the
date hereof and on the Closing Date with the same force and effect as
if made on and as of the date hereof and the Closing Date,
respectively. TFC and the Company shall have performed or complied with
all of the agreements herein contained and required to be performed or
complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New
York City time, on the day prior to the Closing Date or at such later
date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of
the Units in any jurisdiction referred to in Section 4(e) shall have
been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Units; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge
of TFC and the Company, threatened against, TFC, the Company, WinsLoew
or any of its subsidiaries before any court or arbitrator or any
governmental body, agency or official that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
and no stop order shall have been issued preventing the use of the
Offering Memorandum, or any amendment or supplement thereto, or which
could reasonably be expected to have a Material Adverse Effect.
28
<PAGE> 30
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material adverse
change, or any development that is reasonably likely to result in a
material adverse change, in the capital stock or the long-term debt, or
material increase in the short-term debt, of TFC, the Company, WinsLoew
or any of its subsidiaries from that set forth in the Offering
Memorandum, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by TFC, the Company, WinsLoew or any of its
subsidiaries on any class of its capital stock and (iii) none of TFC,
the Company, WinsLoew or any of its subsidiaries shall have incurred
any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to TFC, the Company,
WinsLoew and its subsidiaries, taken as a whole, and that are required
to be disclosed on a balance sheet or notes thereto in accordance with
generally accepted accounting principles and are not disclosed on the
latest balance sheet or notes thereto included in the Offering
Memorandum. Since the date hereof and since the dates as of which
information is given in the Offering Memorandum, there shall not have
occurred any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in the
business, prospects, financial condition or results of operation of
TFC, the Company, WinsLoew and its subsidiaries, taken as a whole.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of TFC and the Company, in
form and substance satisfactory to the Initial Purchasers, confirming,
as of the Closing Date, the matters set forth in paragraphs (a), (b),
(c) and (d) of this Section 8 and that, as of the Closing Date, the
obligations of TFC and the Company, as the case may be, to be performed
hereunder on or prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers, of Greenberg Traurig, P.A., counsel for the Company
and the Guarantors, to the effect set forth in Exhibit B hereto.
(g) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from Ernst & Young
LLP, independent public accountants, and Infante Lago & Company,
independent auditors of Pompeii Furniture Co. Inc., dated as of the
date of this Agreement and as of the Closing Date, customary comfort
letters addressed to the Initial Purchasers and in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers with respect to the financial statements and certain
financial information of the Company and its subsidiaries contained in
the Offering Memorandum.
(h) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers, of Weil, Gotshal & Manges LLP, counsel for
the Initial Purchasers, covering such matters as are customarily
covered in such opinions.
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<PAGE> 31
(i) Weil, Gotshal & Manges LLP shall have been furnished with
such documents, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass
upon the matters referred to in this Section 8 and in order to evidence
the accuracy, completeness or satisfaction in all material respects of
any of the representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, TFC and the Company shall have
furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably
request.
(k) The Company and the Trustee shall have entered into the
Indenture and the Initial Purchasers shall have received copies of
executed counterparts thereof.
(l) The Company and the Initial Purchasers shall have entered
into the Registration Rights Agreement and each of the Initial
Purchasers shall have received copies of executed counterparts thereof.
(m) The Company and the Escrow Agent shall have entered into
the Escrow Agreement and each of the Initial Purchasers shall have
received copies of executed counterparts thereof.
(n) The Company and the Warrant Agent shall have entered into
the Warrant Agreement and each of the Initial Purchasers shall have
received copies of executed counterparts thereof.
(o) TFC, the Company or an affiliate thereof shall have
deposited at least $4,622,876 in immediately available funds into the
Escrow Account.
(p) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any
notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of the Company or
WinsLoew or any securities of the Company or WinsLoew (including,
without limitation, the placing of any of the foregoing ratings on
credit watch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical
rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or WinsLoew or any
securities of the Company or WinsLoew by any such rating organization
and (iii) no such rating organization shall have given notice that it
has assigned (or is considering assigning) a lower rating to the Units
or Notes than that on which the Units and Notes were marketed.
(q) The Units shall have been approved for trading on PORTAL.
30
<PAGE> 32
(r) All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by TFC and the Company will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers. TFC and
the Company shall furnish the Initial Purchasers with such conformed
copies of such opinions, certificates, letters and other documents as
they shall reasonably request.
9. Initial Purchasers' Information. TFC and the Company acknowledge
that the statements with respect to the offering of the Units set forth in the
information in the "Plan of Distribution" stating that the Initial Purchasers
have advised the issuer (a) as to whom resales will be made and as to what
consents, approvals or authorizations, if any, required for them to offer or
sell the Units, distribute the Offering Memorandum or any other offering
material relating to the Units under the laws and regulations of any
jurisdiction where they propose to make offers or sales of the Units or
distribute the Offering Memorandum or any other offering material related to the
Units, and (b) as to market making activities in the Offering Memorandum
constitute the only information furnished to TFC and the Company in writing by
or on behalf of each of the Initial Purchasers expressly for use in the Offering
Memorandum.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers, TFC and the
Company contained in this Agreement, including the agreements contained in
Sections 4(f) and 11(d), the indemnity agreements contained in Section 6 and the
contribution agreements contained in Section 7, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Initial Purchasers, any controlling person thereof, or by or on behalf of
TFC, the Company or any controlling person thereof, and shall survive delivery
of and payment for the Series A Notes to and by the Initial Purchasers. The
representations contained in Section 5 and the agreements contained in Sections
4(f), 6, 7 and 11(d) shall survive the termination of this Agreement, including
any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchasers, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchasers' part to TFC or
the Company if, on or prior to such date, (i) TFC or the Company shall
have failed, refused or been unable to perform in any material respect
any agreement on its part to be performed hereunder, (ii) any other
condition to the obligations of the Initial Purchasers hereunder as
provided in Section 8 is not fulfilled when and as required in any
material respect, (iii) in the reasonable judgment of the Initial
Purchasers, any material adverse change shall have occurred since the
respective dates as of which information is given in the Offering
Memorandum in the financial condition, business, properties, assets,
liabilities, prospects, net worth, results of operations or cash flows
of TFC, the Company, WinsLoew and its subsidiaries, taken as a whole,
other than as set forth in the Offering Memorandum, or (iv)(A) any
domestic or international event or act or occurrence has
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<PAGE> 33
materially disrupted, or in the opinion of the Initial Purchasers will
in the immediate future materially disrupt, the market for the
Company's or WinsLoew's securities or for securities in general; or (B)
trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been
suspended or materially limited, or minimum or maximum prices for
trading shall have been established, or maximum ranges for prices for
securities shall have been required, on such exchange or the Nasdaq
National Market, or by such exchange or other regulatory body or
governmental authority having jurisdiction; or (C) a banking moratorium
shall have been declared by federal or state authorities, or a
moratorium in foreign exchange trading by major international banks or
persons shall have been declared; or (D) there is an outbreak or
escalation of armed hostilities involving the United States on or after
the date hereof, or if there has been a declaration by the United
States of a national emergency or war, the effect of which shall be, in
the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Units on
the terms and in the manner contemplated in the Offering Memorandum; or
(E) there shall have been such a material adverse change in general
economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States
shall be such as, in the Initial Purchasers' judgment, makes it
inadvisable or impracticable to proceed with the delivery of the Units
as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or facsimile and, in either case, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to clause (iv) of
Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Units provided for herein is not
consummated because any condition to the obligations of the Initial
Purchasers set forth herein is not satisfied or because of any refusal,
inability or failure on the part of TFC or the Company to perform any
agreement herein or comply with any provision hereof, TFC and the
Company shall reimburse the Initial Purchasers for all out-of-pocket
expenses (including the reasonable fees and expenses of the Initial
Purchasers' counsel), incurred by the Initial Purchasers in connection
herewith.
(e) If on the Closing Date any one or more of the Initial
Purchasers shall fail or refuse to purchase the Units which it or they
have agreed to purchase hereunder on such date and the aggregate
principal amount of the Units which such defaulting Initial Purchaser
or Initial Purchasers, as the case may be, agreed but failed or refused
to purchase is not more than one-tenth of the aggregate amount of the
Units to be purchased on such date by all Initial Purchasers, each
non-defaulting Initial Purchaser shall be obligated severally, in the
proportion which the amount of the Units set forth opposite its name in
Exhibit A bears to the aggregate amount of the Units which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to
purchase, or in such other proportion as Bear Stearns may specify, to
purchase the Units which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to
purchase on such date; provided, however, that in no event shall the
aggregate amount of
32
<PAGE> 34
the Units which any Initial Purchaser has agreed to purchase pursuant
to Section 3 hereof be increased pursuant to this Section 11 by an
amount in excess of one-ninth of such amount of the Units without the
written consent of such Initial Purchaser. If on the Closing Date any
Initial Purchaser or Initial Purchasers shall fail or refuse to
purchase the Units and the aggregate amount of the Units with respect
to which such default occurs is more than one-tenth of the aggregate
principal amount of the Units to be purchased by all Initial Purchasers
and arrangements satisfactory to the Initial Purchasers and the Company
for purchase of such Units are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of
any non-defaulting Initial Purchaser and the Company. In any such case
which does not result in termination of this Agreement, either Bear
Stearns or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from
liability in respect of any default of any such Initial Purchaser under
this Agreement.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to Bear, Stearns & Co. Inc., 245 Park Avenue, New York,
New York 10167, Attention: Corporate Finance Department, telecopy number: (212)
272-3092, with a copy to Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York,
New York 10153, Attention: Jeremy Dickens, Esq., telecopy number: (212)
310-8007; and if sent to TFC and the Company, shall be mailed, delivered,
telecopied and confirmed in writing or sent by a nationally recognized overnight
courier service guaranteeing delivery on the next business day to WinsLoew
Escrow Corp. or Trivest Furniture Corporation, care of Trivest, Inc., 2665 South
Bayshore Drive, Miami, Florida, Attention: General Counsel, telecopy number
(305) 858-1629, with a copy to Greenberg Traurig P.A., 1221 Brickell Avenue,
Miami, Florida, Attention: Bruce Macdonough, telecopy number: (305) 579-0717.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Initial Purchasers, TFC, the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance with
the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
33
<PAGE> 35
[Signature page to follow]
34
<PAGE> 36
If the foregoing correctly sets forth the understanding among the
Initial Purchasers, the Company and the Guarantors please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
TRIVEST FURNITURE CORPORATION.
By: /s/ William F. Kaczynski, Jr.
---------------------------------------
Name: William F. Kaczynski, Jr.
Title: Vice President
WINSLOEW ESCROW CORP.
By: /s/ William F. Kaczynski, Jr.
---------------------------------------
Name: William F. Kaczynski, Jr.
Title: Vice President
S-1
<PAGE> 37
Accepted and agreed to as of
the date first above written:
BEAR, STEARNS & CO. INC.
By: /s/ Sean P. Crawley
--------------------------------------
Name: Sean P. Crawley
Title: Sr. Managing Director
BANCBOSTON ROBERTSON STEPHENS INC.
By: /s/ Theodore J. Davies
--------------------------------------
Name: Theodore J. Davies
Title: Director
FIRST UNION CAPITAL MARKETS
By: /s/ Douglas J. Fink
--------------------------------------
Name: Douglas J. Fink
Title: Managing Director
S-2
<PAGE> 38
EXHIBIT A
<TABLE>
<CAPTION>
Initial Purchaser Number of Units
----------------- ---------------
<S> <C>
Bear, Stearns & Co. Inc................................................... 63,000
First Union Capital Markets Corp. ........................................ 33,075
BancBoston Robertson Stephens Inc. ...................................... 8,925
-------
Total............................................................ 105,000
</TABLE>
A-1
<PAGE> 39
EXHIBIT B
Form of Opinion of Greenberg Traurig P.A.
[TO FOLLOW TO CONFORM TO REVISIONS TO REPRESENTATIONS AND
WARRANTIES IN PURCHASE AGREEMENT]
<PAGE> 40
EXHIBIT C
1. Winston Furniture Company of Alabama, Inc., an Alabama corporation
2. Loewenstein, Inc., a Florida corporation
3. Pompeii Furniture Co., Inc., a Florida corporation
4. Tropic Craft, Inc., a Florida corporation
5. Texacraft, Inc., a Texas corporation
6. Industrial Meublera Pompeii de Mexico, S.A de C.V., a Mexico corporation
<PAGE> 1
Exhibit (a)(8)
EXECUTION COPY
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of August 24, 1999
by and among
WinsLoew Escrow Corp.
and
Bear, Stearns & Co. Inc.,
BancBoston Robertson Stephens Inc.
First Union Capital Markets Corp.
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Section 1 DEFINITIONS...........................................................................................1
Section 2 SECURITIES SUBJECT TO THIS AGREEMENT..................................................................3
a. Transfer Restricted Securities......................................................................3
b. Holders of Transfer Restricted Securities...........................................................3
Section 3 REGISTERED EXCHANGE OFFER.............................................................................3
Section 4 SHELF REGISTRATION....................................................................................5
a. Shelf Registration..................................................................................5
b. Provision by Holders of Certain Information in Connection with the Shelf Registration
Statement...........................................................................................5
Section 5. LIQUIDATED DAMAGES...................................................................................6
Section 6. REGISTRATION PROCEDURES..............................................................................6
a. Exchange Offer Registration Statement...............................................................6
b. Shelf Registration Statement........................................................................8
c. General Provisions..................................................................................8
Section 7. REGISTRATION EXPENSES...............................................................................14
Section 8. INDEMNIFICATION.....................................................................................15
Section 9. RULE 144A...........................................................................................18
Section 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS........................................................18
Section 11. SELECTION OF UNDERWRITERS..........................................................................19
Section 12. MISCELLANEOUS......................................................................................19
a. Remedies...........................................................................................19
b. No Inconsistent Agreements.........................................................................19
c. Adjustments Affecting the Notes....................................................................19
d. Amendments and Waivers.............................................................................19
e. Notices............................................................................................19
f. Successors and Assigns.............................................................................20
g. Counterparts.......................................................................................20
h. Headings...........................................................................................20
i. Governing Law......................................................................................20
j. Severability.......................................................................................21
k. Entire Agreement...................................................................................21
</TABLE>
i
<PAGE> 3
This Registration Rights Agreement (this "Agreement") is made
and entered into as of August 24, 1999 by and among WinsLoew Escrow Corp, a
Florida corporation (the "Company"), and Bear, Stearns & Co. Inc., BancBoston
Robertson Stephens Inc. and First Union Capital Markets Corp. (each an "Initial
Purchaser" and, collectively, the "Initial Purchasers"),subsequent to the
consummation of the transactions contemplated in that certain Purchase
Agreement, dated August 9, 1999, among the Company, Trivest Furniture
Corporation and the Initial Purchasers (the "Purchase Agreement") who have
agreed to purchase $105,000,000 aggregate principal amount at maturity of the
Company's 12 3/4% Series A Senior Subordinated Notes due 2007 (the "Series A
Notes") as Units with Warrants to purchase 24,129 shares of common stock, par
value $0.01 per share, of the Company pursuant to the Purchase Agreement (as
defined below).
This Agreement is made pursuant to the Purchase Agreement. In
order to induce the Initial Purchasers to purchase the Series A Notes, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 8 of the Purchase
Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Broker-Dealer Transfer Restricted Securities: Series B Notes
that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Series A Notes that such Broker-Dealer acquired for its own account as a result
of market making activities or other trading activities (other than Series A
Notes acquired directly from the Company or any of its affiliates).
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement as continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal
<PAGE> 4
amount of the Series A Notes that were tendered by Holders thereof pursuant to
the Exchange Offer.
Damages Payment Date: With respect to the Series A Notes, each
Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act
of the Series B Notes pursuant to the Exchange Offer Registration Statement
pursuant to which the Company offers the Holders of all outstanding Transfer
Restricted Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for Series B Notes in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial
Purchasers propose to sell the Series A Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of August 24, 1999, among
the Company, American Stock Transfer and Trust Company, as trustee (the
"Trustee"), pursuant to which the Notes are to be issued, as such Indenture is
amended or supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the
Notes.
Mergers: The concurrent mergers of the Company with and into
Trivest Furniture Corporation, a Florida corporation and the parent of the
Company ("Parent"), with Parent being the surviving corporation, and of Parent
with and into WinsLoew Furniture, Inc., a Florida corporation ("Target"), with
Target being the surviving corporation, the latter merger being in accordance
with the terms and conditions of that certain Second Amended and Restated
Agreement and Plan of Merger, dated as of May 4, 1999, between Parent and
Target.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series A Notes and the Series B Notes.
Person: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
2
<PAGE> 5
Prospectus: The prospectus included in a Registration
Statement at the time such Registration Statement is declared effective by the
Commission, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date
relating to Notes, each Person who is a Holder of Notes on the record date with
respect to the Interest Payment Date corresponding to such Damages Payment Date.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the
Company relating to (a) an offering of Series B pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer that holds
Broker-Dealer Transfer Restricted Securities.
Series B Notes: The Company's 12 3/4% Series B Senior
Subordinated Notes due 2007 to be issued pursuant to the Indenture (a) in the
Exchange Offer or (b) pursuant to a Shelf Registration Statement, in each case,
in exchange for the Series A Notes.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest
to occur of (a) the date on which such Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Act, (b) the date on which such
Note has been effectively registered under the Act and disposed of in accordance
with a Shelf Registration Statement and (c) the date on which such Note is first
eligible to be distributed to the public pursuant to Rule 144 under the Act or
by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
3
<PAGE> 6
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and any Guarantors shall (i)
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 90 days after the date of the consummation of
the Mergers, the Exchange Offer Registration Statement, (ii) use their best
efforts to cause such Exchange Offer Registration Statement to become effective
at the earliest possible time, but in no event later than 180 days after the
date of the consummation of the Mergers, (iii) in connection with the foregoing,
use their best efforts to file (A) all pre-effective amendments to such Exchange
Offer Registration Statement as may be necessary in order to cause such Exchange
Offer Registration Statement to become effective, (B) if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings in connection
with the registration and qualification of the Series B Notes to be made under
the Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, use their best efforts to commence and Consummate the
Exchange Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the Series B Notes to be offered in exchange for the Transfer
Restricted Securities and to permit resales of Notes held by Broker-Dealers as
contemplated by Section 3(c) below.
(b) The Company shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 business days. The
Company shall cause the Exchange Offer to comply with all applicable federal and
state securities laws. No securities other than the Notes shall be included in
the Exchange Offer Registration Statement. The Company shall use its best
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 60 business days thereafter.
(c) The Company shall include a "Plan of Distribution" section
in the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Broker-Dealer who holds the Series A Notes that are
Transfer Restricted Securities and that were acquired for its own account as a
result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company) may exchange
such Series A Notes pursuant to the Exchange Offer; however, such Broker-Dealer
may be
4
<PAGE> 7
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with any
resales of the Series B Notes received by such Broker-Dealer in the Exchange
Offer, which prospectus delivery requirement may be satisfied by the delivery by
such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section shall also contain
all other information with respect to such resales by Broker-Dealers that the
Commission may require in order to permit such resales pursuant thereto, but
such "Plan of Distribution" shall not name any such Broker-Dealer or disclose
the amount of Notes held by any such Broker-Dealer except to the extent required
by the Commission as a result of a change in policy after the date of this
Agreement.
The Company and any Guarantors shall use their best efforts to
keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c) below to
the extent necessary to ensure that it is available for resales of Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of one year from
the date on which the Exchange Offer Registration Statement is declared
effective (which, subsequent to the Consummation of the Exchange Offer, shall be
subject to Section 6(c)(i) below).
The Company shall provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request at any time
during such one-year period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and any Guarantors
are not required to file an Exchange Offer Registration Statement or permitted
to consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or (ii) if any Holder of Transfer Restricted
Securities notifies the Company on or prior to the 20th business day following
the Consummation of the Exchange Offer (A) that such Holder is prohibited by
applicable law or Commission policy from participating in the Exchange Offer, or
(B) that such Holder may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) that such
Holder is a Broker-Dealer and holds the Series A Notes acquired directly from
the Company or one of its affiliates, then the Company and any Guarantors shall
use their best efforts to:
(x) File a shelf registration statement with the Commission
pursuant to Rule 415 under the Act, which may be an amendment to the
Exchange Offer Registration Statement (in any event, the "Shelf
Registration Statement") on or prior to the 60th day after the date on
which the filing obligation arises (such date being the "Shelf Filing
Deadline"), which Shelf Registration Statement shall provide for
resales of all Transfer
5
<PAGE> 8
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof; and
(y) Cause such Shelf Registration Statement to be declared
effective by the Commission on or prior to the 180th day after the
Shelf Filing Deadline.
The Company and any Guarantors shall use their best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of at least two years following the Closing Date.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 business days after receipt of a
request therefor, such information as the Company may reasonably request for use
in connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder of Notes as to which any Shelf Registration
Statement is being effected, by its participation in the Shelf Registration
Statement, shall be deemed to agree to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (a) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (b) any of such Registration Statements has not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement (the "Effectiveness Target Date"), (c) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (d) subject to the provisions of Section 6(c)(i) below, any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself promptly declared effective (each such event referred to in clauses (a)
through (d), a "Registration Default"), the Company hereby agrees to pay
liquidated damages to each Holder of Transfer Restricted Securities with respect
to the first 90-day period immediately following the occurrence of the first
Registration Default, in an amount equal to one-quarter of one percentage point
(0.25%) per annum of the principal amount of Transfer Restricted Securities held
by such Holder. The amount of the liquidated damages shall increase by an
additional one-quarter of one percent (0.25%) per annum of the principal
6
<PAGE> 9
amount of Transfer Restricted Securities with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of liquidated damages of two percent (2.00%) per annum of the principal amount
of Transfer Restricted Securities. All accrued liquidated damages shall be paid
by the Company on each Damages Payment Date to Record Holders by wire transfer
of immediately available funds or by federal funds check and to Holders of
Certificated Securities by wire transfers to the accounts specified by them or
by mailing checks to their registered addresses if no such accounts have been
specified on each Damages Payment Date, as provided in the Indenture. Following
the cure of all Registration Defaults relating to any particular Transfer
Restricted Securities, the accrual of liquidated damages with respect to such
Transfer Restricted Securities will cease.
All obligations of the Company set forth in the preceding
paragraph that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and any Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If following the date hereof there has been
published a change in Commission policy with respect to exchange offers
such as the Exchange Offer such that in the reasonable opinion of
counsel to the Company there is a substantial question as to whether
the Exchange Offer is permitted by applicable law, the Company hereby
agrees to seek a no-action letter or other favorable decision from the
Commission allowing the Company and any Guarantors to Consummate an
Exchange Offer for such Series A Notes. The Company hereby agrees to
pursue the issuance of such a decision to the Commission staff level
but shall not be required to take commercially unreasonable action to
effect a change of Commission policy. The Company hereby agrees,
however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursue a resolution (which need not be
favorable) by the Commission staff of such submission.
(ii) As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each Holder of
Transfer Restricted Securities shall furnish, upon the request of the
Company, prior to the Consummation thereof, a written representation to
the Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an affiliate of either of the Company or any
Guarantor, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to
7
<PAGE> 10
participate in, a distribution of the Series B Notes to be issued in
the Exchange Offer and (C) it is acquiring the Series B Notes in its
ordinary course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Company's
preparations for the Exchange Offer. Each Holder shall be deemed to
acknowledge and agree that any Broker-Dealer and any such Holder using
the Exchange Offer to participate in a distribution of the securities
to be acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of this Agreement rely on the position
of the Commission enunciated in Morgan Stanley and Co., Inc. (available
June 5, 1991) and Exxon Capital Holdings Corporation (available May 13,
1988), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters (including any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of
the Act in connection with a secondary resale transaction and that such
a secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Series B Notes obtained by such Holder in
exchange for Series A Notes acquired by such Holder directly from the
Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and any Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company and
such Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a
representation that neither the Company nor any Guarantors has entered
into any arrangement or understanding with any Person to distribute the
Series B Notes to be received in the Exchange Offer and that, to the
best of the Company's and any Guarantors' information and belief, each
Holder participating in the Exchange Offer is acquiring the Series B
Notes in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
Series B Notes received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and any Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company will if required by Section 4(a), prepare and file
with the Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes by Broker-Dealers), the Company and any Guarantors shall:
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<PAGE> 11
(i) use their best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Act or any
regulation thereunder, financial statements of any Guarantors) for the
period specified in Section 3 or 4 hereof, as applicable; upon the
occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by
this Agreement, the Company shall file promptly an appropriate
amendment to such Registration Statement, in the case of clause (A),
correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use its best efforts to cause such amendment
to be declared effective and such Registration Statement and the
related Prospectus to become usable for their intended purpose(s) as
soon as practicable thereafter; provided, however, that the Company may
suspend the effectiveness of the Shelf Registration Statement (and,
subsequent to the Consummation of the Exchange Offer, the Exchange
Offer Registration Statement), without becoming obligated to pay
Liquidated Damages for periods of up to a total of 60 days in any 12
month period if the Board of Directors of the Company determines that
compliance with the disclosure obligations necessary to maintain the
effectiveness thereof at such time could reasonably be expected to have
an adverse effect on the Company or a pending corporate transaction.
(ii) prepare and file with the Commission such
amendments and post-effective amendments to the Registration Statement
as may be necessary to keep the Registration Statement effective for
the applicable period set forth in Section 3 or 4 hereof, as
applicable, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been
sold; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Act in a timely manner; and
comply with the provisions of the Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders (in the case of a Shelf Registration Statement) promptly and,
if requested by such Persons, to confirm such advice in writing, (A)
when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to any Registration
Statement or any post-effective amendment thereto, when the same has
become effective, (B) of any request by the Commission for amendments
to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or
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<PAGE> 12
supplement thereto, or any document incorporated by reference therein
untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Company and any Guarantors shall use their best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each
of the underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein
or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders and underwriter(s),
if any, for a period of at least five business days, and the Company
will not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which a selling Holder of Transfer Restricted Securities covered by
such Registration Statement or the underwriter(s), if any, shall
reasonably object within five business days after the receipt thereof.
A selling Holder or underwriter, if any, shall be deemed to have
reasonably objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission or fails to comply
with the applicable requirements of the Act;
(v) promptly prior to the filing of any document that
is to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders and
to the underwriter(s), if any, make the Company's representatives
available (and representatives of any Guarantors) for discussion of
such document and other customary due diligence matters, and include
such information in such document prior to the filing thereof as such
selling Holders or underwriter(s), if any, reasonably may request;
(vi) subject to the execution of customary
confidentiality agreements with respect to the treatment of non-public
information, make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the underwriter(s), all
financial and other records, pertinent corporate documents and
properties of the Company and any Guarantors and cause the Company's
and such Guarantors' officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration Statement
subsequent to the filing thereof and prior to its effectiveness;
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<PAGE> 13
(vii) if requested by any selling Holders or the
underwriter(s), if any, promptly include in any Registration Statement
or Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriter(s),
if any, may reasonably request to have included therein, including,
without limitation, information relating to the "Plan of Distribution"
of the Transfer Restricted Securities, information with respect to the
principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold
in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(viii) cause the Transfer Restricted Securities
covered by the Registration Statement to be rated with the appropriate
rating agencies, if so requested by the Holders of a majority in
aggregate principal amount of Notes covered thereby or if the managing
underwriter, if any is of the opinion that the absence of such a rating
would adversely affect the marketing of the Transfer Restricted
Securities to be sold thereunder;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company
hereby consents to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(xi) enter into such agreements (including an
underwriting agreement), and make such representations and warranties,
and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated by this
Agreement, all to such extent as may be reasonably requested by any
Holder of Transfer Restricted Securities or underwriter in connection
with any sale or resale pursuant to any Registration Statement
contemplated by this Agreement; and whether or not an underwriting
agreement is entered into and whether or not the registration is an
Underwritten Registration, the Company and any Guarantors shall:
(A) furnish (or in the case of paragraphs (2) and
(3), use its best efforts to furnish) to each selling Holder
and each underwriter, if any, in such substance and scope as
they may reasonably request and as are customarily made by
issuers to underwriters in primary underwritten offerings,
upon the effectiveness of the
11
<PAGE> 14
Shelf Registration Statement and to each Restricted
Broker-Dealer upon Consummation of the Exchange Offer:
(1) a certificate, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, signed on behalf of the Company by
(x) the President or any Vice President and (y) a
principal financial or accounting officer of each of
the Company and any Guarantors, confirming, as of the
date thereof, that there has not been any material
adverse change, or any development that is reasonably
likely to result in a material adverse change, in the
capital stock or the long term debt, or material
increase in the short-term debt, of the Company or
any of its subsidiaries from that set forth in the
Prospectus or which could reasonably be expected to
have a material adverse effect on the Company's
business, financial condition, results of operations,
prospects or ability to satisfy the obligations under
the Notes that is not disclosed in the Prospectus and
that no stop order has been issued preventing the use
of the Prospectus or any amendment or supplement
thereto, and such other matters as such parties may
reasonably request;
(2) an opinion, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, of counsel for the Company and any
Guarantors, covering customary matters similar to
those set forth in Exhibit B to the Purchase
Agreement, as applicable, and such other matters as
such parties may reasonably request, and in any event
including a statement to the effect that such counsel
has participated in conferences with officers and
other representatives of the Company and any
Guarantors, representatives of the independent public
accountants for the Company, the Initial Purchasers'
representatives and the Initial Purchasers' counsel
in connection with the preparation of such
Registration Statement and the related Prospectus and
have considered the matters required to be stated
therein and the statements contained therein,
although such counsel has not independently verified
the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on
the basis of the foregoing (relying as to materiality
to the extent such counsel deems appropriate upon
facts provided to such counsel by officers and other
representatives of the Company and any Guarantors and
without independent check or verification), no facts
came to such counsel's attention that caused such
counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or
any post-effective amendment thereto became
effective, and, in the case of the Exchange Offer
Registration Statement, as of the date of
Consummation, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading, or that the
Prospectus contained in such Registration Statement
as of its date and,
12
<PAGE> 15
in the case of the opinion dated the date of
Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a
material fact or omitted to state a material fact
necessary in order to make the statements therein, in
light of the circumstances under which they were
made, not misleading. Without limiting the foregoing,
such counsel may state further that such counsel
assumes no responsibility for, and has not
independently verified, the accuracy, completeness or
fairness of the financial statements, notes and
schedules and other financial data included in any
Registration Statement contemplated by this Agreement
or the related Prospectus; and
(3) a customary comfort letter, dated as of
the date of Consummation of the Exchange Offer or the
date of effectiveness of the Shelf Registration
Statement, as the case may be, from the Company's
independent accountants, in the customary form and
covering matters of the type customarily covered in
comfort letters by underwriters in connection with
primary underwritten offerings, and affirming the
matters set forth in the comfort letters delivered
pursuant to Section 8(g) of the Purchase Agreement,
without exception;
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, in connection with any
sale or resale pursuant to any Shelf Registration Statement
the indemnification provisions and procedures of Section 8
hereof with respect to all parties to be indemnified pursuant
to said Section; and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company pursuant to this clause
(xi), if any.
If at any time the representations and warranties of the
Company and any Guarantors contemplated in clause (A)(1) above cease to
be true and correct, the Company or such Guarantors shall so advise the
Restricted Broker-Dealer or the underwriter(s), if any, and each
selling Holder promptly and, if requested by such Persons, shall
confirm such advice in writing;
(xii) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders, the
underwriter(s), if any, and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities
under the securities or Blue Sky laws of such jurisdictions as the
selling Holders or underwriter(s) may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
Shelf Registration Statement; provided, however, that neither of the
Company nor any Guarantors shall be required to register or qualify as
a foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process in
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<PAGE> 16
suits or to taxation, other than as to matters and transactions
relating to the Registration Statement, in any jurisdiction where it is
not now so subject;
(xiii) issue, upon the request of any Holder of the
Series A Notes covered by the Shelf Registration Statement, Series B
Notes, having an aggregate principal amount equal to the aggregate
principal amount of the Series A Notes surrendered to the Company by
such Holder in exchange therefor or being sold by such Holder; such
Series B Notes to be registered in the name of such Holder or in the
name of the purchaser(s) of such Notes, as the case may be; in return,
the Series A Notes held by such Holder shall be surrendered to the
Company for cancellation;
(xiv) in connection with any sale of Transfer
Restricted Securities that will results in such securities no longer
being Transfer Restricted Securities, cooperate with the selling
Holders and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(xv) use their best efforts to cause the Transfer
Restricted 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 underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xii) above;
(xvi) subject to the provisions of Section 6(c)(i),
if any fact or event contemplated by clause (c)(iii)(D) above shall
exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(xvii) provide a CUSIP number for all Transfer
Restricted Securities not later than the effective date of the
Registration Statement and provide the Trustee under the Indenture with
printed certificates for the Transfer Restricted Securities which are
in a form eligible for deposit with the Depositary Trust Company;
(xviii) cooperate and assist in any filings required
to be made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use their reasonable best
efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may be
necessary to enable the Holders selling
14
<PAGE> 17
Transfer Restricted Securities to consummate the disposition of such
Transfer Restricted Securities;
(xix) otherwise use their best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to their security holders, as soon as practicable,
a consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement;
(xx) cause the Indenture to be qualified under the
TIA not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith,
cooperate with the Trustee and the Holders of Notes to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use
their best efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner;
(xxi) cause all Transfer Restricted Securities
covered by the Registration Statement to be listed on each securities
exchange on which similar securities issued by the Company are then
listed if requested by the Holders of a majority in aggregate principal
amount of the Series A Notes or the managing underwriter(s), if any;
and
(xxii) provide promptly to each Holder upon request
each document filed with the Commission pursuant to the requirements of
Section 13 and Section 15(d) of the Exchange Act.
Each Holder shall be deemed to agree by acquisition of a
Transfer Restricted Security that, upon receipt of any notice referenced in
Section 6(c)(i) or any notice from the Company of the existence of any fact of
the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section 6(c)(i)
or Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such Registration Statement shall have
15
<PAGE> 18
received the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xvi) hereof or shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or any Guarantors'
performance of or compliance with this Agreement will be borne by the Company
and such Guarantors, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by the Initial Purchasers or any Holder
with the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing certificates for the Series B Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all reasonable fees and disbursements of counsel for the
Company, any Guarantors and, subject to Section 7(b) below, the Holders of
Transfer Restricted Securities; (v) all application and filing fees in
connection with listing Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company and any
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company and any Guarantors will, in any event, bear their
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company.
(b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and any Guarantors
will reimburse the Holders of Transfer Restricted Securities being registered
pursuant to the Shelf Registration Statement for the reasonable fees and
disbursements of not more than one counsel, who shall be Weil, Gotshal & Manges
LLP or such other counsel as may be chosen by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to, and to cause any Guarantors to
jointly and severally, indemnify and hold harmless (i) each Holder, (ii) each
person, if any, who controls any Holder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act and (iii) the respective officers,
directors, partners, employees, representatives and agents of each Holder or any
controlling person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever, and any and all
16
<PAGE> 19
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
will not be liable in any such case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of such Holder
expressly for use therein; provided, further, however, that the Company shall
not be liable in any such case under the indemnity provisions of this paragraph
with respect to any preliminary prospectus to the extent that any such loss,
claim, damage or liability of such Holder results from the fact that such Holder
sold Notes to a person as to whom it is established that there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
Prospectus, or of the Prospectus as then amended or supplemented, in any case
where such delivery is required by the Act if the Company has previously
furnished copies thereof in sufficient quantity to such Holder and the loss,
liability, claim, damage or expense of such Holder results from an untrue
statement or omission of a material fact contained in the preliminary prospectus
which was corrected in the Prospectus or in the Prospectus as then amended or
supplemented. This indemnity agreement will be in addition to any liability
which the Company may otherwise have, including, under this Agreement.
(b) Each Holder, by its participation in the Exchange Offer or
Shelf Registration Statement, shall be deemed to acknowledge and agree,
severally and not jointly, to indemnify and hold harmless (i) the Company and
any Guarantors, (ii) each person, if any, who controls the Company and any
Guarantors within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act and (iii) the respective officers, directors, advisors, partners,
employees representatives and agents of each of them or any controlling party,
against any losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim whatsoever
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus or Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with information furnished to the Company in
17
<PAGE> 20
writing by or on behalf of such Holder expressly for use therein; provided,
however, that in no case shall any Holder be liable or responsible for any
amount in excess of the dollar amount of the proceeds received by such Holder
upon the sale of the Notes giving rise to such indemnification obligation. This
indemnity will be in addition to any liability which any Holder may otherwise
have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties; provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the legal expenses of one counsel (in
addition to any local counsel) for all indemnified parties in each jurisdiction
in which any claim or action is brought. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written consent;
provided, however, that such consent was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in
which the indemnification provided for in this Section 8 is for any reason held
to be unavailable from the Company and any Guarantors or is insufficient to hold
harmless a party indemnified hereunder, the Company and such Guarantors, on the
one hand, and each Holder (who shall be deemed to agree to these terms by its
participation in the Exchange Offer or the Shelf Registration Statement), on the
other hand, shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company and any
Guarantors, any contribution received by the Company and any Guarantors from
persons, other than the
18
<PAGE> 21
Holders, who may also be liable for contribution, including persons who control
the Company and such Guarantors within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Company, any Guarantors and such
Holder may be subject, in such proportion as is appropriate to reflect the
relative benefits received by the Company and any Guarantors, on one hand, and
such Holder, on the other hand, or if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in this Section 8, in
such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and any Guarantors,
on the one hand, and such Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and any Guarantors, on one hand,
and each Holder, on the other hand, shall be deemed to be in the same proportion
as (i) the total proceeds from the offering of the Notes (net of discounts but
before deducting expenses) received by the Company and such Guarantors and (ii)
the total proceeds received by such Holder upon the sale of the Notes giving
rise to such indemnification obligation. The relative fault of the Company and
any Guarantors, on the one hand, and of each Holder, 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, any Guarantors
or such Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company agrees, and agrees to cause any Guarantors to agree, and the Holders
shall be deemed to agree by their participation in the Exchange Offer or the
Shelf Registration Statement that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 8(d), (i) in no case shall any Holder be required to contribute
any amount in excess of the dollar amount by which the proceeds received by such
Holder upon the sale of the Notes exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8(d), (A) each
person, if any, who controls any Holder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of each Holder or any
controlling person shall have the same rights to contribution as such Holder,
and (A) each person, if any, who controls the Company and any Guarantors within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and
(B) the respective officers, directors, partners, employees, representatives and
agents of the Company, any Guarantors or any controlling person shall have the
same rights to contribution as the Company and such Guarantors, subject in each
case to clauses (i) and (ii) of this Section 8(d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section
8(d), notify such party or parties from whom contribution may be sought, but the
failure to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have
19
<PAGE> 22
under this Section 8(d) or otherwise. No party shall be liable for contribution
with respect to any action or claim settled without its prior written consent;
provided, however, that such written consent was not unreasonably withheld.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company is not subject to Section 13 or 15(d) of the Exchange Act, to make
available to any Holder or beneficial owner of Transfer Restricted Securities
upon their request in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted 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 Transfer Restricted Securities pursuant to Rule 144A, and
to cause any Guarantors to comply with this Section 9.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in customary underwriting
arrangements entered in connection herewith and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements. In no event, without the Company's prior written
consent, shall the number of such Underwritten Registrations exceed two.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by a
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company agrees that monetary damages
(including the liquidated damages contemplated hereby) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to, and to cause any Guarantors to, waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Company will not, and will
not permit any Guarantor to, on or after the date of this Agreement, enter into
any agreement with respect to
20
<PAGE> 23
their respective securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any of any Guarantors has previously entered into any
agreement granting any registration rights with respect to its securities to any
Person. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. Neither the Company nor
any Guarantor will take any action, or permit any change to occur, with respect
to the Notes that would materially and adversely affect the ability of the
Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company has
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on
the records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company:
WinsLoew Escrow Corp.
c/o Trivest, Inc.
2665 South Bayshore Drive, Suite 800
Miami, Florida 33133
Telecopy No.: (305) 858-1629
Attention: General Counsel
21
<PAGE> 24
With copies to:
WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Telecopy No.: (203) 408-7028
Attention: Chief Financial Officer
and
Greenberg Traurig P.A.
1221 Brickell Avenue, 21st Floor
Miami, Florida 33131
Telecopy No.: (305) 579-0717
Attention: Bruce Macdonough
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(f) 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 Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities from such Holder.
(g) 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) 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
22
<PAGE> 25
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.
(k) Entire Agreement. This Agreement, together with the other
Operative Documents (as defined in the Purchase Agreement), is intended by the
parties as a final expression of their agreement and 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. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
[signature page follows]
23
<PAGE> 26
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
WINSLOEW ESCROW CORP.
By: /s/ William F. Kaczynski, Jr.
-------------------------------------
Name: William F. Kaczynski, Jr.
Title: Vice President
BEAR, STEARNS & CO. INC.
By: /s/ Sean P. Crawley
-----------------------------------
Name: Sean P. Crawley
Title: Sr. Managing Director
BANCBOSTON ROBERTSON STEPHENS INC.
By: /s/ Theodore J. Davies
------------------------------------
Name: Theodore J. Davies
Title: Director
FIRST UNION CAPITAL MARKETS
By: /s/ Douglas J. Fink
-------------------------------------
Name: Douglas J. Fink
Title: Managing Director
<PAGE> 1
Exhibit (a)(9)
WINSLOEW ESCROW CORP.
12 3/4% SENIOR SUBORDINATED NOTES DUE 2007
INDENTURE
DATED AS OF AUGUST 24, 1999
AMERICAN STOCK TRANSFER & TRUST COMPANY,
TRUSTEE
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture Act
Section Indenture
<S> <C>
310 (a)(1)...............................................................................................7.10
(a)(2) ..............................................................................................7.10
(a)(3)...............................................................................................N.A.
(a)(4)...............................................................................................N.A.
(a)(5)...............................................................................................7.10
(b)..................................................................................................7.10
(c)..................................................................................................N.A.
311 (a)..................................................................................................7.11
(b)..................................................................................................7.11
(c)..................................................................................................N.A.
312 (a)..................................................................................................2.05
(b).................................................................................................10.03
(c).................................................................................................10.03
313 (a)..................................................................................................7.06
(b)(2)...............................................................................................7.07
(c)..................................................................................................7.06;
10.02
314 (a)..................................................................................................4.03;
10.02
(c)(1)..............................................................................................10.04
(c)(2)..............................................................................................10.04
(c)(3)...............................................................................................N.A.
(e).................................................................................................10.05
(f)....................................................................................................NA
315 (a)..................................................................................................7.01
(b)..................................................................................................7.05,
10.02
(c)..................................................................................................7.01
(d)..................................................................................................7.01
(e)..................................................................................................6.11
316 (a)(last sentence)...................................................................................2.09
(a)(1)(A)............................................................................................6.05
(a)(1)(B)............................................................................................6.04
(a)(2)...............................................................................................N.A.
(b)..................................................................................................6.07
(c)..................................................................................................2.12
317 (a)(1)...............................................................................................6.08
(a)(2)...............................................................................................6.09
(b)..................................................................................................2.04
318 (a).................................................................................................10.01
(b)..................................................................................................N.A.
(c).................................................................................................10.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE............................................................1
SECTION 1.01. DEFINITIONS....................................................................................1
SECTION 1.02. OTHER DEFINITIONS.............................................................................17
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.............................................17
SECTION 1.04. RULES OF CONSTRUCTION.........................................................................18
ARTICLE 2. THE NOTES............................................................................................18
SECTION 2.01. FORM AND DATING...............................................................................18
SECTION 2.02. EXECUTION AND AUTHENTICATION..................................................................19
SECTION 2.03. REGISTRAR AND PAYING AGENT....................................................................19
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST...........................................................20
SECTION 2.05. HOLDER LISTS..................................................................................20
SECTION 2.06. TRANSFER AND EXCHANGE.........................................................................20
SECTION 2.07. REPLACEMENT NOTES.............................................................................31
SECTION 2.08. OUTSTANDING NOTES.............................................................................31
SECTION 2.09. TREASURY NOTES................................................................................32
SECTION 2.10. TEMPORARY NOTES...............................................................................32
SECTION 2.11. CANCELLATION..................................................................................32
SECTION 2.12. DEFAULTED INTEREST............................................................................32
SECTION 2.13. CUSIP NUMBERS.................................................................................33
ARTICLE 3. REDEMPTION AND PREPAYMENT............................................................................33
SECTION 3.01. NOTICES TO TRUSTEE............................................................................33
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.............................................................33
SECTION 3.03. NOTICE OF REDEMPTION..........................................................................34
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION................................................................34
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE...................................................................34
SECTION 3.06. NOTES REDEEMED IN PART........................................................................35
SECTION 3.07. OPTIONAL REDEMPTION...........................................................................35
SECTION 3.08. MANDATORY REDEMPTION..........................................................................35
SECTION 3.09. OFFER TO PURCHASE.............................................................................36
ARTICLE 4. COVENANTS............................................................................................37
SECTION 4.01. PAYMENT OF NOTES..............................................................................37
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY...............................................................38
SECTION 4.03. REPORTS.......................................................................................38
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
SECTION 4.04. COMPLIANCE CERTIFICATE........................................................................39
SECTION 4.05. TAXES.........................................................................................39
SECTION 4.06. STAY, EXTENSION AND USURY LAWS................................................................39
SECTION 4.07. RESTRICTED PAYMENTS...........................................................................40
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES................................42
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK....................................43
SECTION 4.10. ASSET SALES...................................................................................45
SECTION 4.11. TRANSACTIONS WITH AFFILIATES..................................................................46
SECTION 4.12. LIENS.........................................................................................47
SECTION 4.13. CORPORATE EXISTENCE...........................................................................47
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL....................................................47
SECTION 4.15. PAYMENTS FOR CONSENT..........................................................................48
SECTION 4.16. SALE AND LEASEBACK TRANSACTIONS...............................................................48
ARTICLE 5. SUCCESSORS...........................................................................................49
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS......................................................49
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.............................................................49
ARTICLE 6. DEFAULTS AND REMEDIES................................................................................49
SECTION 6.01. EVENTS OF DEFAULT.............................................................................49
SECTION 6.02. ACCELERATION..................................................................................51
SECTION 6.03. OTHER REMEDIES................................................................................51
SECTION 6.04. WAIVER OF PAST DEFAULTS.......................................................................51
SECTION 6.05. CONTROL BY MAJORITY...........................................................................52
SECTION 6.06. LIMITATION ON SUITS...........................................................................52
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.................................................52
SECTION 6.08. COLLECTION SUIT BY TRUSTEE....................................................................52
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM..............................................................53
SECTION 6.10. PRIORITIES....................................................................................53
SECTION 6.11. UNDERTAKING FOR COSTS.........................................................................53
ARTICLE 7. TRUSTEE..............................................................................................54
SECTION 7.01. DUTIES OF TRUSTEE.............................................................................54
SECTION 7.02. RIGHTS OF TRUSTEE.............................................................................55
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE..................................................................55
SECTION 7.04. TRUSTEE'S DISCLAIMER..........................................................................55
SECTION 7.05. NOTICE OF DEFAULTS............................................................................56
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES....................................................56
SECTION 7.07. COMPENSATION AND INDEMNITY....................................................................56
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 7.08. REPLACEMENT OF TRUSTEE........................................................................57
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC..............................................................58
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.................................................................58
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.............................................58
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.............................................................58
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE......................................58
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE................................................................58
SECTION 8.03. COVENANT DEFEASANCE...........................................................................59
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE....................................................59
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS......................................................................60
SECTION 8.06. REPAYMENT TO COMPANY..........................................................................61
SECTION 8.07. REINSTATEMENT.................................................................................61
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.....................................................................61
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES...........................................................61
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES..............................................................62
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT...........................................................63
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.............................................................63
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES..............................................................64
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC...............................................................64
ARTICLE 10. MISCELLANEOUS.......................................................................................64
SECTION 10.01. TRUST INDENTURE ACT CONTROLS..................................................................64
SECTION 10.02. NOTICES.......................................................................................64
SECTION 10.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.................................66
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT............................................66
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.................................................66
SECTION 10.06. RULES BY TRUSTEE AND AGENTS...................................................................66
SECTION 10.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS......................67
SECTION 10.08. GOVERNING LAW.................................................................................67
SECTION 10.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.................................................67
SECTION 10.10. SUCCESSORS....................................................................................67
SECTION 10.11. SEVERABILITY..................................................................................67
SECTION 10.12. COUNTERPART ORIGINALS.........................................................................67
SECTION 10.13. TABLE OF CONTENTS, HEADINGS, ETC..............................................................67
ARTICLE 11. SUBORDINATION.......................................................................................68
SECTION 11. 01. AGREEMENT TO SUBORDINATE......................................................................68
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C>
SECTION 11.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY..........................................................68
SECTION 11.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.....................................................68
SECTION 11.04. ACCELERATION OF NOTES.........................................................................69
SECTION 11.05. WHEN DISTRIBUTION MUST BE PAID OVER...........................................................69
SECTION 11.06. NOTICE BY THE COMPANY.........................................................................70
SECTION 11.07. SUBROGATION...................................................................................70
SECTION 11.08. RELATIVE RIGHTS...............................................................................70
SECTION 11.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY..............................................70
SECTION 11.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE......................................................71
SECTION 11.11. RIGHTS OF TRUSTEE AND PAYING AGENT............................................................71
SECTION 11.12. AUTHORIZATION TO EFFECT SUBORDINATION.........................................................71
SECTION 11.13. PAYMENT.......................................................................................71
ARTICLE 12. NOTE GUARANTEES.....................................................................................72
SECTION 12.01. GUARANTEE.....................................................................................72
SECTION 12.02. ADDITIONAL NOTE GUARANTEES....................................................................73
SECTION 12.03. LIMITATION ON GUARANTOR LIABILITY.............................................................74
SECTION 12.04. EXECUTION AND DELIVERY OF NOTE GUARANTEE......................................................74
SECTION 12.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS............................................74
SECTION 12.06. RELEASES FOLLOWING SALE OF ASSETS.............................................................75
</TABLE>
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY GUARANTORS
Exhibit F FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
iv
<PAGE> 7
INDENTURE dated as of August 24, 1999 between WinsLoew Escrow
Corp., a Delaware corporation (the "Company"), and American Stock Transfer &
Trust Company, a New York corporation, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the 12
3/4% Senior Subordinated Notes due 2007 (the "Initial Notes") and the 12 3/4%
Senior Subordinated Notes due 2007 to be used in exchange for such Initial
Notes in the Exchange Offer (the "Exchange Notes" and, together with the
Initial Notes and any notes that may be issued in the future in accordance with
Section 2.01(d), the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in substantially the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee that shall be issued in a denomination equal
to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Accredited Investor Global Note" means a global note in
substantially the form of Exhibit A hereto bearing the Global Note Legend and
the Private Placement Legend and deposited with or on behalf of, and registered
in the name of, the Depositary or its nominee that shall be initially issued in
a denomination equal to $0, but shall thereafter be revised to represent the
outstanding principal amount of the Notes transferred to Institutional
Accredited Investors.
"Acquired Debt" means, with respect to any specified Person,
(1) Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, including
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person; and (2) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Additional Notes" means any additional notes that the
Company may issue pursuant to Section 2.01(d) of this Indenture.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean 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 10% or more of the voting
securities of a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer
or exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary that apply to such transfer or exchange.
<PAGE> 8
"Asset Sale" means (a) the sale, lease, conveyance or other
disposition of any assets or rights including, without limitation, by way of a
sale and leaseback, excluding sales of services and products in the ordinary
course of business consistent with past practices, provided that the sale,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole shall be
governed by Section 4.14 and/or Section 5.01 hereof and not by Section 4.10
hereof, and (b) the issue or sale by the Company or any of its Subsidiaries of
Equity Interests of any of the Subsidiaries. Notwithstanding the foregoing,
none of the following shall be deemed an Asset Sale: (A) a single transaction
or a series of related transactions that (i) involve assets having a fair
market of less than $2.0 million, (ii) results in net proceeds to the Company
and its Restricted Subsidiaries of less than $2.0 million, or (iii) involves a
transfer of assets by the Company to a Wholly Owned Restricted Subsidiary or by
a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary, (B) an issuance of Equity Interests by a Wholly Owned
Restricted Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary, (C) the transfer of obsolete equipment in the ordinary course of
business and (D) a Restricted Payment that is permitted under Section 4.07.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in that transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in the sale and leaseback transaction
(including any period for which the lease has been extended or may, at the
option of the lessor, be extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of all
such payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means (1) in respect of a limited
liability company, the board of advisors of the Company; (2) in respect of a
corporation, the board of directors of the corporation, or any authorized
committee thereof; and (3) in respect of any other Person, the board or
committee of that Person serving a similar function.
"Board Resolution" means
"Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of
a capital lease that would at such time be required to be capitalized on a
balance sheet in accordance with GAAP.
"Capital Stock" means (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (c) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (d) any other interest or participation
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that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b)
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 one year from the date of acquisition, (c) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any domestic commercial
bank or U.S. branch of a foreign commercial bank having capital and surplus in
excess of $200-250 million and a Thompson Bank Watch Rating of "B" or better,
(d) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications
specified in clause (c) above, and (e) commercial paper having the highest
rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's
Rating Service and in each case maturing within 270 days after the date of
acquisition.
"Cedel" means Cedel Bank, S.A.
"Change of Control" means the occurrence of any of the
following: (a) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" or "group" (as such terms are
used in Section 13(d)(3) of the Exchange Act) (whether or not otherwise in
compliance with this Indenture) other than to a Permitted Holder; (b) the
adoption of a plan relating to the liquidation or dissolution of the Company;
(c) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" or "group"
(as such terms are used in Section 13(d)(3) of the Exchange Act), other than a
Permitted Holder or any underwriters in connection with an underwritten public
offering, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), except that a person or group shall be
deemed to have "beneficial ownership" of all securities that the person or
group has the right to acquire, whether the right is currently exercisable or
is exercisable only upon the occurrence of a subsequent condition, directly or
indirectly, of more than 35% of the Voting Equity Interests of the Company
(measured by voting power rather than the number of shares); (d) the first day
on which more than a majority of the members of the Board of Directors of the
Company are not Continuing Directors; or (e) the Company consolidates with, or
merges with or into, any Person, or any Person consolidates with, or merges
with or into, the Company, in any such event pursuant to a transaction in which
any of the outstanding Voting Equity Interests of the Company is converted into
or exchanged for cash, securities or other property, other than any such
transaction where the Voting Equity Interests of the Company outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Equity Interests (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such Voting Equity
Interests of such surviving or transferee Person immediately after giving
effect to such issuance.
"Company" means WinsLoew Escrow Corp., a Florida corporation,
and any and all successors thereto.
"Consolidated EBITDA" means, with respect to any Person for
any period, the sum of Consolidated Net Income of such Person for such period
plus, to the extent deducted in calculating Consolidated Net Income for such
period, (a) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, plus (b) provision for taxes based
on income or profits of such Person and its Restricted Subsidiaries for such
period, plus (c) consolidated interest expense whether paid
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<PAGE> 10
or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations), plus (d) depreciation and
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) other non-cash charges (including non-cash equity based compensation
charges but excluding any non-cash charge to the extent that it represents an
accrual of or reserve for cash charges in any future period or amortization of
a prepaid cash expense that was paid in a prior period), minus (e)
non-recurring non-cash items increasing such Consolidated Net Income for such
period. Notwithstanding the foregoing, (i) the provision for taxes based on the
income or profits of, and the depreciation and amortization of, a Restricted
Subsidiary of a Person shall be added to Consolidated Net Income to compute
Consolidated EBITDA only to the extent (and in the same proportion) that the
Net Income of the Restricted Subsidiary was included in calculating the
Consolidated Net Income of the Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to the Company by
the Restricted Subsidiary without prior approval (that has not been obtained)
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to the Restricted Subsidiary or its stockholders and (ii) the Net
Income (but not loss) of any Unrestricted Subsidiary shall be excluded from
Consolidated Net Income, whether or not distributed to the Company or one of
its Restricted Subsidiaries.
"Consolidated Net Assets" means the total assets of the
Company determined on a consolidated basis in accordance with GAAP, less
current liabilities except for notes payable and current maturities of
long-term Indebtedness, including current portions payable of Capital Lease
Obligations.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, however, that (a) the Net Income (but not loss)
of any Person (other than the referent Person) that is not a Restricted
Subsidiary (including Unrestricted Subsidiaries) or that is accounted for by
the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash in the relevant period to the
referent Person or a Wholly Owned Restricted Subsidiary thereof, (b) the Net
Income of any Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, (c)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded and (d) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as
of any date, the sum of (a) the consolidated equity of the common stockholders
or members, as applicable, of the Person and its consolidated Subsidiaries as
of that date; plus (b) the respective amounts reported on the balance sheet of
the Person as of that date with respect to any series of Preferred Stock (other
than Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless the dividends may be declared and paid only out of net
earnings in respect of the year of the declaration and payment, but only to the
extent of any cash received by that Person upon issuance of the Preferred
Stock; less the sum of: (c) all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of tangible assets of a going
concern business made within 12 months after the acquisition of the business)
subsequent to the date
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<PAGE> 11
hereof in the book value of any asset owned by that Person by its consolidated
Subsidiaries; (d) all investments as of that date in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries; and (e) all unamortized
debt discount and expense and unamortized deferred charges as of that date, in
each case, determined in accordance with GAAP.
"Continuing Directors" means, as of any date of
determination, any member of the Board of Directors who (a) was a member of the
Board of Directors on the date of this Indenture or (b) was nominated for
election to the Board of Directors with the approval of a majority of the
Continuing Directors who were members of the Board of Directors at the time of
such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 10.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof,
in substantially the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.
"Designated Senior Debt" means any Indebtedness outstanding
under the Senior Credit Facility and any other Senior Indebtedness or Guarantor
Senior Indebtedness permitted to be incurred under this Indenture the original
principal amount of which is $25.0 million or more and that has been designated
by the Company as "Designated Senior Debt" for purposes of this Indenture.
"Disqualified Stock" means any Capital Stock that, 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 as a
result of an optional call for recapitalization by the Company), matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the Holder thereof (other than as a result of a
"change of control" or asset sale), in whole or in part, on or prior to the
date that is 91 days after the stated maturity date of the Notes.
Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require
the Company to repurchase such Capital Stock upon the occurrence of a change of
control or with the proceeds of an asset sale shall not constitute Disqualified
Stock if the terms of such Capital Stock provide that the Company may not
repurchase or redeem any such Capital Stock pursuant to such provisions unless
such repurchase or redemption complies with Section 4.07.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
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<PAGE> 12
"Escrow Agreement" means the Escrow, Control and Security
Agreement, dated as of the date hereof between the Trustee and the Company with
respect to the Escrowed Funds.
"Escrowed Funds" means the $99,634,229 of the net proceeds
from the sale of the Notes, together with an additional $4,622,876 deposited
into escrow by the Company and its Affiliates, deposited into escrow with the
Trustee under the Escrow Agreement.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear systems.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Notes to be issued in the Exchange
Offer pursuant to Section 2.06(e) hereof.
"Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Existing Indebtedness" means up to $24,000 in aggregate
principal amount of Indebtedness (other than Indebtedness under the Senior
Credit Facility) in existence on the date of this Indenture, until that
Indebtedness is repaid.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (a) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period (including
amortization of debt issuance costs or write-off of debt issuance costs),
whether paid or accrued and whether or not capitalized, including, without
limitation, original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), (b) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, (c) any
interest expense on Indebtedness of another Person that is guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such
guarantee or Lien is called upon) and (d) the product of (i) all dividend
payments, whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividend payments on
Equity Interests (other than Disqualified Stock) payable solely in Equity
Interests (other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary, times (ii) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any
Person for any period, the ratio of the Consolidated EBITDA of such Person and
its Restricted Subsidiaries for that period to the Fixed Charges of such Person
and its Restricted Subsidiaries for the same period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues
Preferred Stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated but prior to the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"),
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<PAGE> 13
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect to the incurrence, assumption, guarantee or redemption of such
Indebtedness, or the issuance or redemption of such Preferred Stock and the
application of the proceeds therefrom, as if the same had occurred at the
beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio, (a) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to that reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the first day of the
four-quarter reference period and Consolidated EBITDA for that reference period
shall be calculated without giving effect to clause (c) of the proviso set
forth in the definition of Consolidated Net Income; (b) the Consolidated EBITDA
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall
be excluded, as though such operations had been discontinued or such operations
or businesses had been disposed of on the first day of the four-quarter
reference period; and (c) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only to the
extent that the obligations giving rise to the Fixed Charges shall not be
obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this
Indenture.
"Global Note Legend" means the legend set forth in Section
2.06(f)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect thereof), of
all or any part of any Indebtedness.
"Guarantors" means each Restricted Subsidiary formed or
organized under the laws of any state of the United States or District of
Columbia, that executes a Note Guarantee pursuant to Article 12 of this
Indenture.
"Guarantor Senior Debt" means with respect to any Guarantor
(1) all Indebtedness of the Guarantor outstanding under the Senior Credit
Facility and all Hedging Obligations with respect thereto; (2) any other
Indebtedness of the Guarantor permitted to be incurred under the terms of this
Indenture, unless the instrument under which the Indebtedness is incurred
expressly provides that it is subordinated or ranks equally in right of payment
to the Note Guarantee of the Guarantor; and (3) all
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<PAGE> 14
Obligations of the Guarantor with respect to the foregoing Indebtedness.
Notwithstanding anything to the contrary in the foregoing, Guarantor Senior
Debt shall not include (1) any liability for federal, state, local or other
taxes owed or owing by the Guarantor; (2) any Indebtedness of the Guarantor to
any of its Subsidiaries or other Affiliates; (3) any trade payables; or (4) any
Indebtedness that is incurred in violation of this Indenture.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (b) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Incur" means create, incur, issue, assume, guarantee or
otherwise become liable, directly or indirectly, contingently or otherwise, for
any Indebtedness. The term "Incurrence" when used as a noun shall have a
correlative meaning. The accretion of principal of a non-interest bearing or
other discount security shall not be deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of (a)
borrowed money or (b) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or (c) banker's acceptances or (d) representing Capital Lease
Obligations or (e) the deferred and unpaid balance of the purchase price of any
property, except any such balance that constitutes an accrued expense or trade
payable, or (f) representing any Hedging Obligations if and to the extent any
of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness of others secured
by a Lien on any asset of such Person (whether or not such Indebtedness is
assumed by such Person) and, to the extent not otherwise included, the
guarantee by such Person of any Indebtedness of any other Person. The amount of
Indebtedness outstanding as of any date shall be (a) the accreted value
thereof, to the extent any Indebtedness that does not require current payments
of interest, and (b) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness. Except as required by the prior sentence, Indebtedness shall not
include any interest or similar obligations.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with Article 9 hereof.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" means $105.0 million in aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means Bear, Stearns & Co. Inc., First
Union Capital Markets Corp. and BancBoston Robertson Stephens Inc.
"Institutional Accredited Investor" means an "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
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<PAGE> 15
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the form
of direct or indirect loans (including Guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 4.07.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that
place on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"Management Agreement" means that certain Investment Services
Agreement, to be dated on or about the date of the closing of the Transaction.
"Net Income" means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of changes related to preferred stock, excluding, however,
(a) any gain (but not loss), together with any related provision for taxes on
such gain (but not loss), realized in connection with (i) any Asset Sale
(including dispositions pursuant to sale and leaseback transactions) or (ii)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(i) the direct costs relating to such Asset Sale (including legal, accounting
and investment banking fees, and sales commissions and all title and recording
taxes) and any relocation expenses incurred as a result thereof, taxes paid or
payable as a result thereof, in each case after taking into account any
available tax
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<PAGE> 16
credits or deductions and any tax sharing arrangements, and (ii) amounts
required to be applied to the repayment of Indebtedness other than Senior
Indebtedness, Indebtedness secured by a Lien on the asset or assets that were
the subject of such Asset Sale, provided, however, if the instrument or
agreement governing such Asset Sale requires the transferor to maintain a
portion of the purchase price in escrow (whether as a reserve for adjustment of
the purchase price or otherwise) or to indemnify the transferee for specified
liabilities in a maximum specified amount, the portion of the cash or Cash
Equivalents that is actually placed in escrow or segregated and set aside by
the transferor for such indemnification obligation shall not be deemed to be
Net Proceeds until the escrow terminates or the transferor ceases to segregate
and set aside such funds, in whole or in part, and then only to the extent of
the proceeds released from escrow to the transferor or that are no longer
segregated and set aside by the transferor.
"Non-Recourse Debt" means Indebtedness (i) as to which
neither the Company nor any of its Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (b) is directly or indirectly liable (as a
Guarantor or otherwise), or (c) constitutes the lender; and (ii) no default
with respect to which (including any rights that the holders thereof may have
to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
(other than the Notes) of the Company or any of its Restricted Subsidiaries to
declare a default on such Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (3) as to which the
lenders have been notified in writing that they shall not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of Article 12 of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company
pursuant to the Offering Memorandum.
"Offering Memorandum" means the offering memorandum of the
Company, dated August 19, 1999, relating to the Initial Notes.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, any Assistant Secretary or any Vice-President of
such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by at least one Officer of the Company, who must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
Sections 10.04 and 10.05 hereof.
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<PAGE> 17
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of
Sections 10.04 and 10.05 hereof. The counsel may be an employee of or counsel
to the Company, any Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary,
Euroclear or Cedel, a Person who has an account with the Depositary, Euroclear
or Cedel, respectively, and, with respect to the Depository Trust Company,
shall include Euroclear and Cedel.
"Permitted Business" shall mean and include the manufacture,
sale or distribution of products furnished in the furniture manufacturing
industry. Without limiting the foregoing, "Permitted Business" shall include
lines of businesses which are related or complementary to any of the above,
including the acquisition and ownership of firms which are principally but not
exclusively engaged in one or more of the above lines, and any businesses which
are, in the reasonable judgment of the Board of Directors as set forth in a
resolution of the Board of Directors, logical extensions of any of the above.
"Permitted Holder" means Trivest, Inc. and any Affiliate of
Trivest, Inc.
"Permitted Investments" means (a) any Investment in the
Company or in a Wholly Owned Restricted Subsidiary of the Company; (b) any
Investment in Cash Equivalents; (c) any Investment by the Company or any
Restricted Subsidiary in a Person if as a result of such Investment (i) such
Person becomes a Wholly Owned Restricted Subsidiary or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Restricted Subsidiary, (d) any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10, (e) any acquisition of assets solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company, (f) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause since the date hereof of not
more than $12.5 million; (g) loans and advances to employees and officers of
the Company and its Restricted Subsidiaries in the ordinary course of business
(including loans to be used to purchase the Company's Capital Stock where such
loans are secured by such Capital Stock); and (h) Investments in securities of
trade creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of trade creditors or
customers or in good faith settlement of delinquent obligations of trade
creditors or customers.
"Permitted Junior Securities" means Equity Interests in the
Company or any Guarantor or debt securities of the Company or the relevant
Guarantor that are subordinated to all Senior Indebtedness and any debt
securities issued in exchange for Senior Indebtedness or to Guarantor Senior
Debt and any debt securities issued in exchange for Guarantor Senior Debt, as
applicable, to substantially the same extent as, or to a greater extent than,
the Notes and the guarantees shall be subordinated, respectively, to Senior
Indebtedness and Guarantor Senior Debt, as applicable.
"Permitted Liens" means (1) Liens securing Senior
Indebtedness or Guarantor Senior Indebtedness of the Company and its Restricted
Subsidiaries that was permitted by the terms of this Indenture to be incurred;
(2) Liens in favor of the Company or any of its Restricted Subsidiaries; (3)
Liens on property of a Person existing at the time the Person is merged into or
consolidated with the Company or any Restricted Subsidiary of the Company;
provided, however, that the Liens were in existence prior to the contemplation
of the merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company or the Restricted
Subsidiary; (4) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company;
11
<PAGE> 18
provided, however, that such Liens were in existence prior to the contemplation
of the acquisition and do not extend by any assets other than the property so
acquired; (5) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds, bids, leases, government contracts or other
obligations of a like nature incurred in the ordinary course of business; (6)
Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen
and other Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith; (7) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (8)
Liens to secure Indebtedness (including Capital Lease Obligations) incurred in
connection with the acquisition of assets by the Company or its Restricted
Subsidiaries permitted by Section 4.09; provided, however, that for purposes of
this sub-clause (8), (a) the Indebtedness was incurred by the prior owner of
the assets prior to the acquisition and was not incurred in connection with, or
in contemplation of, the acquisition; and (b) each such Lien occurs only the
assets acquired with that Indebtedness; (9) Liens existing on the date hereof;
(10) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided, however,
that for purposes of this sub-clause (10), any reserve or other appropriate
provision required in conformity with GAAP has been made; (11) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances that do not interfere in any material respect
with the business of the Company or any of its Restricted Subsidiaries; (12)
judgment or attachment Liens not giving rise to an Event of Default; (13) any
interest or title of a lessor in property subject to any Capital Lease
Obligation or other lease; (14) Liens incurred in the ordinary course of
business of the Company or any Restricted Subsidiary with respect to
obligations that do not exceed $5.0 million at any one time outstanding and
that (a) are not incurred in connection with borrowing money or obtaining
advances or credit (other than trade credit in the ordinary course of business)
and (b) do not in the aggregate materially detract from the value of the
affected property or materially impair its use in the Company's or such
Restricted Subsidiary's business; and (15) liens under the Escrow Agreement.
"Permitted Refinancing Indebtedness" means any Indebtedness
of the Company or any of its Restricted Subsidiaries issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided, however, that
(1) the principal amount (or accreted value, if applicable) of the Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses, costs, fees and reasonable prepayment premiums and
penalties incurred in connection therewith); (2) the Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (3) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, the Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes on terms at least
as favorable to the holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (4) the Indebtedness is incurred either by the
Company or by the Restricted Subsidiary that is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any natural person, company, corporation,
partnership, government, agency or instrumentality of a government, or any
other entity.
"Preferred Stock" means the preferred stock of the Company.
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<PAGE> 19
"Private Placement Legend" means the legend set forth in
Section 2.06(f)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" or "Refinancing" shall have correlative meanings.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 24, 1999, by and among the Company and the
Initial Purchasers, as such agreement may be amended, modified or supplemented
from time to time and, with respect to any Additional Notes, one or more
registration rights agreements between the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from
time to time, relating to rights given by the Company to the purchasers of
Additional Notes to register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a Global Note in
substantially the form of Exhibit A hereto bearing the Global Note Legend and
the Private Placement Legend and deposited with or on behalf of and registered
in the name of the Depositary or its nominee, issued in a denomination equal to
the outstanding principal amount of the Notes initially sold in reliance on
Rule 903 of Regulation S.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the
Private Placement Legend.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Period" means the 40-day restricted period as
defined in Regulation S.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
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<PAGE> 20
"Rule 904" means Rule 904 promulgated the Securities Act.
"Sale and Leaseback Transaction"of any Person means an
arrangement with any lender or investor or to which such lender or investor is
a party providing for the leasing by such Person of any property or asset of
such Person which has been or is being sold or transferred by such Person more
than 365 days after the acquisition thereof or the completion of construction
or commencement of operation thereof to such lender or investor or to any
Person to whom funds have been or are to be advanced by such lender or investor
on the security of such property or asset. The stated maturity of such
arrangement is the date of the last payment of rent or any other amount due
under such arrangement prior to the first date on which such arrangement may be
terminated by the lessee without payment of a penalty.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means that certain Loan and Security
Agreement, to be dated on or about the date of the closing of the merger of
Trivest Furniture and WinsLoew Furniture, by and among the Company, the lenders
party thereto, Heller Financial, Inc. and Canadian Imperial Bank of Commerce as
co-agents, and BancBoston, N.A., as administrative agent, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, in each case as amended, restated, modified,
supplemented, extended, renewed, replaced, refinanced or restructured from time
to time, whether represented by one or more agreements and whether one or more
Restricted Subsidiaries are added or added or removed as borrowers or
Guarantors thereunder or as parties thereto.
"Senior Indebtedness" means, with respect to the Company, (a)
all Indebtedness of the Company outstanding under the Senior Credit Facility
and all Hedging Obligations with respect thereto; (b) any other Indebtedness of
the Company permitted to be incurred under the terms of this Indenture, unless
the instrument under which that Indebtedness is incurred expressly provides
that it is subordinated or ranks equally in right of payment to the Notes; and
(c) all Obligations of the Company with respect to the items listed in the
preceding clauses (a) and (b). Notwithstanding anything to the contrary in the
foregoing list, Senior Indebtedness shall not include: (1) any liability for
federal, state, local or other taxes owed or owing by the Company; (2) any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates; (3)
any trade payables; or (4) any Indebtedness that is incurred in violation of
this Indenture.
"Senior Subordinated Indebtedness" means the Notes and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is
not subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.
"Separability Legend" has the meaning specified in Section
2.06(f).
"Separation Date" means the earliest to occur of (i) February
21, 2000, (ii) the occurrence of an Event of Default, (iii) the occurrence of
an Exercise Event, as defined in the Warrant Agreement, (iv) the date the
Exchange Offer Registration Statement or the Shelf Registration Statement is
declared effective, and (v) such other date as Bear, Stearns & Co.
Inc. shall determine in its sole discretion.
14
<PAGE> 21
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary of
the Company that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as
such Regulation is in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the
Company (whether outstanding on the date of this Indenture or thereafter
Incurred) which is subordinate or junior in right or payment to the Notes
pursuant to a written agreement.
"Subsidiary" means, with respect to a Person, (a) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (b) any partnership (i) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (ii) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transaction" means the proposed merger of Trivest Furniture
with and into WinsLoew Furniture, to be effected pursuant to that certain
Second Amended and Restated Agreement and Plan of Merger, dated as of May 4,
1999, between such parties.
"Trivest Furniture" means Trivest Furniture Corporation, a
Florida corporation, and any and all successors thereto.
"Trivest II" means Trivest II, Inc., a Florida corporation,
and any and all successors thereto.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note in
substantially the form of Exhibit A attached hereto that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing a series of Notes that do not bear the
Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
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<PAGE> 22
"Unrestricted Subsidiary" means (i) any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to
a Board Resolution; but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company; (c) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (x) to subscribe for additional Equity Interests or (y)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; (d) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries; and (e) has
at least one director on its board of directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries. Any
such designation by the Board of Directors shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and was permitted by Section
4.07. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be Incurred as of such date under Section 4.09, the Company shall
be in default of such Section 4.09). The Board of Directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under Section
4.09, calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period, and (ii) no Default would
be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Voting Equity Interest" of any Person as of any date means
the Equity Interests of such Person that is at the time entitled to vote in the
election of the Board of Directors or other governing body of such Person.
"Warrant Agreement" means the Warrant Agreement, dated as of
August 24, 1999, by and among the Company and American Stock Transfer & Trust
Company, in its capacity as warrant agent, relating to the Warrants.
"Warrants" means warrants to purchase 24,129 shares of the
Company's common stock, par value $0.01 per share.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person, 99% or more of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned by that Person or by one or more Wholly
Owned Restricted Subsidiaries of that Person and one or more Wholly Owned
Restricted Subsidiaries of that Person.
"WinsLoew Furniture" means WinsLoew Furniture, Inc., a
Florida corporation, and any and all successors thereto.
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<PAGE> 23
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"Affiliate Transaction"......................................................4.11
"Asset Sale Offer"...........................................................4.10
"Authentication Order".......................................................2.02
"Benefited Party"...........................................................12.01
"Blockage Notice"...........................................................11.03
"Change of Control Offer"....................................................4.14
"Change of Control Payment"..................................................4.14
"Change of Control Payment Date".............................................4.14
"Covenant Defeasance"........................................................8.03
"DTC"........................................................................2.03
"EBITDA".....................................................................4.03
"Event of Default"...........................................................6.01
"Excess Proceeds"............................................................4.10
"Legal Defeasance" ..........................................................8.02
"Offer Amount"...............................................................3.09
"Offer Period"...............................................................3.09
"pari passu Indebtedness".....................................................410
"Paying Agent"...............................................................2.03
"Payment Blockage Period"...................................................11.03
"Payment Default"............................................................6.01
"pay the Notes".............................................................11.03
"Permitted Indebtedness".....................................................4.09
"Purchase Date"..............................................................3.09
"Registrar"..................................................................2.03
"Regulation S Global Note Legend"............................................2.06
"Representative"............................................................11.03
"Repurchase Offer"...........................................................3.09
"Restricted Payments"........................................................4.07
"Special Mandatory Redemption Date"..........................................3.08
"Successor Company"..........................................................5.01
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
(a) Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.
(b) The following TIA terms used in this Indenture have
the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee; and
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<PAGE> 24
"obligor" on the Notes means the Company and any
successor obligor upon the Notes.
(c) All other terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
(a) 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 in the plural include the singular;
(5) "including" means "including without
limitation";
(6) provisions apply to successive events and
transactions; and
(7) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof. The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and 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. However,
to the extent any provision of any Note conflicts with the express provisions
of this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Form of Notes. Notes issued in global form shall be
substantially in the form of Exhibits A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A-1 attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
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<PAGE> 25
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Cedel Bank" and "Customer Handbook" of Cedel Bank shall be applicable to
transfers of beneficial interests in Global Notes that are held by Participants
through Euroclear or Cedel Bank.
(d) Subject to compliance with the provisions of Section
4.09, the Company may issue Additional Notes under this Indenture.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
(a) One Officer shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal may be reproduced on the
Notes and may be in facsimile form.
(b) If an Officer whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid.
(c) A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
(d) The Trustee shall, upon a written order of the
Company signed by at least one Officer (an "Authentication Order"),
authenticate Notes for original issue up to the aggregate principal amount
stated in paragraph 4 of the Notes. The aggregate principal amount of Notes
outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
(e) The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. An authenticating agent may
authenticate Notes 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
Holders or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
(a) The Company shall maintain an office or agency where
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any
co-registrar and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
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<PAGE> 26
(b) The Company initially appoints The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global Notes.
(c) The Company initially appoints the Trustee to act as
the Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and shall notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company
or a Subsidiary) shall have no further liability for the money. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.
Upon any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER 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 all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days 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
or such shorter time as the Trustee may allow, as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Company
shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Notes shall be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary or (ii) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee. Upon the occurrence of either of the preceding events in (i) or (ii)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or
any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10
hereof, shall be authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.06(a), although beneficial interests in a Global
Note may be transferred and exchanged as provided in Section 2.06(b), (c) or
(f) hereof.
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(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Regulation S Global
Note may not be made to a U.S. Person or for the account or benefit of
a U.S. Person (other than the Initial Purchasers). Beneficial
interests in any Unrestricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note. No written orders or instructions
shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to
be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and
(2) instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in
(1) above. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.06(e) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter
of Transmittal delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(g) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee shall take delivery in the form of
a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
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(B) if the transferee shall take delivery in the form of
a beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee shall take delivery in the form of
a beneficial interest in the Accredited Investor Global Note, then
the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications in item (3) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note.
A beneficial interest in any Restricted Global Note may be exchanged
by any holder thereof for a beneficial interest in an Unrestricted
Global Note or transferred to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note if
the exchange or transfer complies with the requirements of Section
2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the
Registrar or the Company, if applicable to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
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Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. Restricted Global Notes and beneficial
interests therein shall be exchangeable for Definitive Notes if (i) the
Depositary (x) notifies the Company that it is unwilling or unable to
continue as depositary for the Restricted Global Notes and the Company
thereupon fails to appoint a successor depositary or (y) has ceased to be
a clearing agency registered under the Exchange Act and the Company fails
to appoint a successor, (ii) the Company, at its option, notifies the
Trustee in writing that it elects to cause the issuance of the Definitive
Notes or (iii) there shall have occurred and be continuing a Default with
respect to the Notes. In all cases, Definitive Notes delivered in exchange
for any Restricted Global Note or beneficial interests therein shall be
registered in the names, and issued in any approved denominations,
requested by or on behalf of the Depositary (in accordance with the
Applicable Procedures).
In such event, the Trustee shall cause the Restricted Global
Notes to be canceled accordingly pursuant to Section 2.11 hereof, and the
Company shall execute and upon receipt of an Authentication Order the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global
Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained
therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
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(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the
Registrar or the Company, if applicable to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. Unrestricted Global Notes and
beneficial interests therein shall be exchangeable for Definitive
Notes if (i) the Depositary (x) notifies the Company that it is
unwilling or unable to continue as depositary for the Unrestricted
Global Notes and the Company thereupon fails to appoint a successor
depositary or (y) has ceased to be a clearing agency registered under
the Exchange Act and the Company fails to appoint a successor, (ii)
the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of the Definitive Notes or (iii) there
shall have occurred and be continuing a Default with respect to the
Notes. In all cases, Definitive Notes delivered in exchange for any
Unrestricted Global Note or beneficial interests therein shall be
registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with the
Applicable Procedures). In such event, the Trustee shall cause the
Unrestricted Global Notes to be canceled accordingly pursuant to
Section 2.11 hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount.
Any Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iv) shall be registered in such name
or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(iv) shall not bear the Private Placement
Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery
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thereof in the form of a beneficial interest in a Restricted Global
Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance on
an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to
be increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B) above,
the 144A Global Note, in the case of clause (C) above, the Regulation S Global
Note, and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the
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distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act. Upon
satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or
cause to be increased the aggregate principal amount of the Unrestricted Global
Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for
Definitive Notes. Upon request by a Holder of Definitive Notes and such
Holder's compliance with the provisions of this Section 2.06(d), the Registrar
shall register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing. In
addition, the requesting
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Holder shall provide any additional certifications, documents and information,
as applicable, required pursuant to the following provisions of this Section
2.06(d).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer shall be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transfer shall be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(2) thereof; and
(C) if the transfer shall be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in 9 the form
of Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof
for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
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and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests, an Opinion of Counsel in form
reasonably acceptable to the Registrar and the Company, if applicable,
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Notes tendered for acceptance by
Persons that certify in the applicable Letters of Transmittal that (x) they are
not broker-dealers, (y) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the
Company, and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends.The following legends shall appear on the
face of all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of this
Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend
in substantially the following form
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
SECTION 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE
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SECURITIES ACT, (c) TO CERTAIN INSTITUTIONAL ACCREDITED INVESTORS
WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
(d) FOLLOWING THE RELEASE OF PROCEEDS FROM THE ESCROW ACCOUNT, OUTSIDE
THE UNITED STATES TO A NON-UNITED STATES PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (e)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT (AND BASED ON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(iii), (c)(iv), (d)(ii), (d)(iii) or (e) to this Section 2.06
(and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07
OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY."
(iii) Separability Legend. Until the Separation Date, each Global
Note shall bear a legend in substantially the following form (the "Separability
Legend"):
"UNTIL THE SEPARATION DATE (AS DEFINED), THIS NOTE HAS BEEN ISSUED AS,
AND MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED
WARRANTS TO PURCHASE COMMON STOCK OF THE COMPANY. EACH UNIT CONSISTS
OF $1,000 PRINCIPAL AMOUNT OF NOTES AND A WARRANT TO PURCHASE 0.2298
SHARES OF COMMON STOCK, SUBJECT TO ADJUSTMENT UNDER CERTAIN
CIRCUMSTANCES. A COPY OF THE WARRANT AGREEMENT PURSUANT TO WHICH THE
WARRANTS HAVE BEEN ISSUED IS AVAILABLE FROM THE COMPANY UPON REQUEST."
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(iv) Original Issue Discount Legend. Each Global Note shall bear a
legend in substantially the following form:
"FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR
PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $962.40 AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $37.60, IN EACH CASE PER
$1,000 PRINCIPAL AMOUNT OF THIS SECURITY. FOR PURPOSES OF SECTION 1275
OF THE CODE, THE YIELD TO MATURITY COMPOUNDED SEMIANNUALLY IS
13.537%."
(h) Cancellation or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Note shall
be returned to or retained and cancelled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for or transferred to a Person who shall
take delivery thereof in the form of a beneficial interest in another Global
Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who shall take delivery thereof in the
form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such increase.
(i) General Provisions Relating to Transfers and
Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note 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
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer
of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at the close
of business on the day of selection, (B) to register the transfer of
or to exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part
or (c) to register
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the transfer of or to exchange a Note between a record date and the
next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of principal of and
interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section
2.06 to effect a registration of transfer or exchange may be submitted
by facsimile.
(j) Separation of Notes and Warrants
(i) Prior to the Separation Date, no Notes may be sold, assigned
or otherwise transferred to any Person unless, simultaneously with
such transfer, the Trustee receives confirmation from the Warrant
Agent for the Warrants that the Holder of the Notes has requested a
transfer of the related Warrants to the same transferee.
(ii) On or after the Separation Date, the Holder of a Note
containing a Separability Legend may surrender such Note accompanied
by a written application to the Trustee, duly executed by the Holder,
for a new Note or Notes not containing a Separability Legend. Whether
or not the Holder obtains a new Note, from and after the Separation
Date, the Separability Legend shall have no further force and effect.
SECTION 2.07. REPLACEMENT NOTES
(a) If any mutilated Note is surrendered to the Trustee
or the Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
(b) Every replacement Note is an additional obligation of
the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
(a) The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note; however, Notes held by
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<PAGE> 38
the Company or a Subsidiary of the Company shall not be deemed to be
outstanding for purposes of Section 3.07(b) hereof.
(b) If a Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide purchaser.
(c) If the principal amount of any Note is considered
paid under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
(d) If the Paying Agent (other than the Company, a
Subsidiary or an Affiliate of any thereof) holds, on a redemption date or
maturity date, money sufficient to pay Notes payable on that date, then on and
after that date such Notes shall be deemed to be no longer outstanding and
shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company,
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Notes shall be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee upon direction by the Company and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall destroy cancelled Notes (subject to the record
retention requirements of the Exchange Act). Certification of the destruction
of all cancelled Notes shall be delivered to the Company. The Company may not
issue new Notes to replace Notes that it has paid or that have been delivered
to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in
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Section 4.01 hereof. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; provided, however, that no such special
record date shall be less than 5 days prior to the related payment date for
such defaulted interest. At least 10 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders
a notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP" numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii)
the principal amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed or purchased
in an offer to purchase at any time, the Trustee shall select the Notes to be
redeemed or purchased among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, on a pro rata basis,
by lot or in accordance with any other method the Trustee considers fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
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<PAGE> 40
SECTION 3.03. NOTICE OF REDEMPTION
Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion shall be issued upon cancellation of the original
Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days, or such
shorter period allowed by the Trustee, prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with
Section 3.03 hereof, Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE
On or one Business Day prior to the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date. The Trustee or the Paying Agent shall promptly return
to the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed.
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If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the
Company shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) On or after August 15, 2003, the Company may redeem the Notes
at any time, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Liquidated Damages, if
any, thereon to the date fixed for redemption, if redeemed during the
twelve-month period beginning on August 15 of the year indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003 106.375%
2004 104.250%
2005 102.125%
2006 and thereafter 100.000%
</TABLE>
(c) Notwithstanding the provisions of clauses (a) and (b) of this
Section 3.07, on or prior to August 15, 2002, the Company shall be permitted to
redeem up to 25% of the aggregate principal amount of the Notes originally
issued at a redemption price of 112.75% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the date
fixed for redemption, with the net cash proceeds of one or more underwritten
public offerings of Capital Stock of the Company, other than Disqualified
Stock; provided, however, that (1) at least 75% of the aggregate principal
amount of the Notes originally issued remains outstanding immediately after the
occurrence of the redemption; and (2) each redemption occurs within 90 days
after the date of the closing of such an offering of Capital Stock of the
Company.
(d) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
(a) Except as set forth in clause (b) below of this Section
3.08, the Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
(b) Special Mandatory Redemption. In accordance with the
terms and conditions of the Escrow Agreement and using the Escrowed Funds, the
Company shall redeem all of the Notes if and upon
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<PAGE> 42
the earlier to occur of (a) five Business Days following termination of the
Merger Agreement in accordance with its terms and (b) September 15, 1999 (if
the Transaction has not closed on or prior to such date) (such earlier date,
the "Special Mandatory Redemption Date") at a redemption price in cash equal to
$972.024 per $1,000 principal amount at maturity, plus accrued and unpaid
interest to, but excluding, the Special Mandatory Redemption Date. Upon the
closing of the Transaction, the foregoing provisions regarding Special
Mandatory Redemption shall be null and void. The Company shall promptly give
notice to the Trustee of any termination of the Merger Agreement.
SECTION 3.09. OFFER TO PURCHASE.
In the event that, pursuant to Section 4.10 or 4.14 hereof,
the Company shall be required to commence an offer to all Holders to purchase
Notes (a "Repurchase Offer"), it shall follow the procedures specified below.
The Repurchase Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of an Repurchase Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Repurchase Offer. The Repurchase Offer shall be made to all Holders. The
notice, which shall govern the terms of the Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this
Section 3.09 and Section 4.10 or 4.14 hereof and the length of time the
Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest and Liquidated Damages, if any;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Repurchase Offer shall cease to
accrue interest and Liquidated Damages, if any, after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Repurchase Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Holders electing to have a Note purchased pursuant to any
Repurchase Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect
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Purchase" on the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the Depositary or the 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 principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating
that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Company for purchase, and the Company shall promptly
issue a new Note, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale
Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
(a) The Company shall pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Company shall pay all Liquidated Damages, if any, in the
same manner on the dates and in the amounts set forth in the Registration
Rights Agreement.
(b) The Company shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess
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<PAGE> 44
of the then applicable interest rate on the Notes to the extent lawful; it
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company shall maintain in the Borough of
Manhattan, the City of New York, an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written 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 Corporate Trust Office of the Trustee.
(b) The Company may also from time to time designate one
or more other offices or agencies where the Notes 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 shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
(c) The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in accordance
with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not the Company is required to do so by the rules
and regulations of the Commission, so long as any Notes are outstanding, the
Company shall furnish to the Holders of the Notes (a) all quarterly and annual
financial and other information with respect to the Company and its
consolidated Subsidiaries that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Company were required to file
such forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial condition and
results of operations of the Company and its consolidated Subsidiaries, showing
in reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial information and results of operations of the Unrestricted
Subsidiaries of the Company and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants, and (b) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports.
(b) After the Exchange Offer or the effectiveness of the Shelf
Registration Statement, whether or not required by the rules and regulations of
the Commission, the Company shall file a copy of all of the information and
reports required to be delivered pursuant to clause (a) of this Section 4.03
with the Commission for public availability, unless the Commission shall not
accept such a filing, and from and after the date hereof shall make this
information available to securities analysts and prospective investors upon
request. In addition, for so long as any Notes
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remain outstanding, the Company shall file with the Trustee and the Commission
(unless the Commission shall not accept such filing) the information required
to be delivered pursuant to clause (a) of this Section 4.03 within the time
periods specified in the Commission's rules and regulations and furnish that
information to Holders of the Notes, securities analysts and prospective
investors upon their request.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company 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
has kept, observed, performed and fulfilled each and every covenant contained
in this Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by
a written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the
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covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (a) declare or pay any
dividend or make any other payment or distribution on account of the Company's
or any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving the Company or any Restricted Subsidiary) or similar payment to the
direct or indirect holders of the Company's Equity Interests in their capacity
as such other than (i) dividends, payments or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company, or (ii) to the
Company or any Wholly Owned Restricted Subsidiary; (b) purchase, redeem or
otherwise acquire or retire for value (including, without limitation, in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the Company (other
than any such Equity Interests owned by the Company or any Wholly Owned
Restricted Subsidiary of the Company); (c) make any payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Company or any Restricted Subsidiary that is subordinated
to the Notes, except a payment of interest, customary fees and charges or
principal at Stated Maturity; or (d) make any Restricted Investment (all such
payments and other actions set forth in clauses (a) through (d) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09 hereof; and
(iii) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted by
clauses (2) and (3) of the next succeeding paragraph), is less than the sum of
(A) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter
commencing after the date hereof to the end of the Company's most recently
ended fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus (B) 100% of the
aggregate net cash proceeds received by the Company from the issue or sale
since the date hereof of Equity Interests of the Company (other than
Disqualified Stock) or of Disqualified Stock or debt securities of the Company
that have been converted into such Equity Interests (other than any such Equity
Interests, Disqualified Stock or convertible debt securities sold to a
Restricted Subsidiary of the Company and other than Disqualified Stock or
convertible debt securities that have been converted into Disqualified Stock),
plus (C) to the extent that any Restricted Investment that was made after the
date hereof is (i) sold for cash or otherwise liquidated or repaid for cash or
(ii) in the case of Restricted Investments arising from guarantees by the
Company or any Restricted Subsidiary, terminated, the lesser of (x) the cash
return of capital or the amount of the terminated guarantee with respect to
such Restricted Investment (less the cost of disposition, if any) and (y) the
initial amount of such Restricted Investment, plus (D) the amount equal to the
net reduction in Investments (other than
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Permitted Investments) made by the Company or any of its Restricted
Subsidiaries in any Person resulting from the redesignation of Unrestricted
Subsidiaries as Restricted Subsidiaries not to exceed the lesser of (i) the
amount of Investments (valued in each case as provided in the definition of
"Unrestricted Subsidiary") previously made by the Company or its Restricted
Subsidiaries in that Unrestricted Subsidiary, which amount was included in the
calculation of the amount of Restricted Payments, and (ii) the fair market
value of the Investments in the Subsidiary as of the date that it is
redesignated an Unrestricted Subsidiary; provided, however, that no amount
shall be included under this clause (D) to the extent it is already included in
Consolidated Net Income; plus (E) $5.0 million.
So long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, the foregoing provisions shall not
prohibit: (1) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration the payment would have
complied with the provisions of this Indenture; (2) the redemption, repurchase,
retirement, defeasance or other acquisition of any Equity Interests of the
Company or Indebtedness of the Company or any Guarantor that is subordinated to
the Notes or the guarantee, as the case may be, in exchange for, or out of the
net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, other Equity Interests of the Company (other
than any Disqualified Stock); provided, however, that the amount of any of
these net cash proceeds that are utilized for any redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(iii)(B) of the preceding paragraph; (3) the redemption, repurchase,
retirement, defeasance or other acquisition of Indebtedness of the Company or
any Guarantor that is subordinated to the Notes or the guarantees, as the case
may be, with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness; and (4) other than the cash consideration to be paid in
connection with any exercise of dissenters' rights in connection with the
Transaction, the redemption, repurchase or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary of
the Company held by any member of the Company's or any of its Restricted
Subsidiaries' management or board of directors pursuant to any management
equity subscription agreement, stock option agreement or other similar
agreement or any successor arrangement entered into in connection with the
reorganization of the Company as a corporation; provided, however, that the
successor arrangement is on terms substantially similar to the arrangement so
replaced; provided, further, that the aggregate price paid for all redeemed,
repurchased, acquired or retired Equity Interests shall not exceed $1.0 million
in any twelve month period.
The amount of all Restricted Payments, other than cash, shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or the
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined in
good faith by the Board of Directors whose resolution with respect to that
determination shall be delivered to the Trustee, who shall certify that the
valuation was approved by a majority of disinterested directors, if any. Not
later than the date of making any Restricted Payment, the Company shall be
required to deliver to the Trustee an Officers' Certificate stating that the
Restricted Payment was permitted and setting forth the basis upon which the
calculations required under this Section 4.07 were computed.
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SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (1)(A) pay dividends or
make any other distributions to the Company or any of its Restricted
Subsidiaries on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, or (B) pay any indebtedness owed
to the Company or any of its Restricted Subsidiaries, (2) make loans or
advances to the Company or any of its Restricted Subsidiaries or (3) transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries.
(b) The provisions of clause (a) above shall not apply to encumbrances
or restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date hereof and
any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof;
provided, however, that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or
refinancings are no more restrictive, taken as a whole, with respect
to such dividend and other payment restrictions than those contained
in such Existing Indebtedness, as in effect on the date of this
Indenture;
(2) the Senior Credit Facility as in effect as of the date of
this Indenture, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings thereof; provided, however, that the amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive with
respect to dividend and other payment restrictions than those
contained in the Senior Credit Facility as in effect on the date of
this Indenture;
(3) this Indenture, the Notes and the guarantees;
(4) applicable law;
(5) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of the acquisition (except to the extent the
Indebtedness was incurred or the Capital Stock authorized and issued
in connection with or in contemplation of the acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided, however,
that, in the case of Indebtedness or Disqualified Stock, such
Indebtedness or Disqualified Stock would have been permitted under
Section 4.09 to be incurred or issued by the Company or one of its
Restricted Subsidiaries;
(6) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past
practices;
(7) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature
described in sub-clause (3) of clause (a);
(8) Permitted Refinancing Indebtedness; provided, however,
that the restrictions contained in the agreements governing the
Permitted Refinancing Indebtedness are no more restrictive than those
contained in the agreements governing the Indebtedness being
refinanced;
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(9) any agreement for the sale or disposition of a Restricted
Subsidiary that restricts distributions by such Restricted Subsidiary
pending its sale or other disposition;
(10) Permitted Liens that limit the right of the Company or
any of its Restricted Subsidiaries to dispose of the assets subject to
such Liens;
(11) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business; and
(12) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company shall not issue any
shares of Disqualified Stock and the Company shall not permit any of its
Restricted Subsidiaries to issue any Disqualified Stock or preferred stock;
provided, however, that, so long as no Default or Event of Default has occurred
and is continuing, the Company shall be permitted to incur Indebtedness
(including Acquired Debt) or issue shares of Disqualified Stock, and any
Guarantor may incur Indebtedness, if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which the
additional Indebtedness is incurred or the Disqualified Stock is issued would
have been at least 2.0 to 1 through September 30, 2001 and at least 2.25 to 1
thereafter, in each case determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom, as if the additional Indebtedness
had been incurred or the Disqualified Stock had been issued at the beginning of
that four-quarter period.
(b) The provisions of clause (a) above shall not apply to the
incurrence of any of the following (collectively, "Permitted Indebtedness"):
(1) the incurrence by the Company and the Guarantors of
Indebtedness at any time outstanding (with letters of credit being
deemed to have a principal amount equal to the maximum potential
liability of the Company and the Guarantors thereunder) under the
Senior Credit Facility in an aggregate amount not to exceed the
greater of: (a) $155.0 million; or (b) the sum of (i) $125.0 million,
plus (ii) 60% of inventory of the Company and its Restricted
Subsidiaries, plus 85% of accounts receivable of the Company and its
Restricted Subsidiaries, in each case determined in accordance with
GAAP as of the most recent balance sheet, less the aggregate amount of
all Net Proceeds of Asset Sales applied to permanently repay any of
this Indebtedness pursuant to Section 4.10;
(2) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes (but not to exceed $105.0
million aggregate principal amount for purposes of this clause (2))
and any Note Guarantee issued pursuant to Article 12;
(3) any Existing Indebtedness of the Company and its
Restricted Subsidiaries and any Guarantees of the Existing
Indebtedness;
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(4) the incurrence of Indebtedness between or among the
Company and any of its Wholly Owned Restricted Subsidiaries; provided,
however, that (a) if the Company is the obligor on that Indebtedness,
the Indebtedness is expressly subordinated to the prior payment in
full of all Obligations with respect to the Notes and (b) any
subsequent issuance or transfer of Equity Interests that results in
any of this Indebtedness being held by a Person other than the Company
or a Wholly Owned Restricted Subsidiary, and any sale or other
transfer of that Indebtedness to a Person that is not either the
Company or a Wholly Owned Restricted Subsidiary, shall be deemed, in
each case, to constitute an incurrence of that Indebtedness by the
Company or the Restricted Subsidiary, as the case may be;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of (a) Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this
Section 4.09 to be outstanding, (b) foreign exchange contracts or (c)
currency swap agreements or other similar agreements or arrangements;
provided, however, that the notional amount of any currency swap
agreement does not exceed the principal amount of debt to which such
currency swap agreement relates;
(6) the guarantee by the Company or any of the Guarantors of
Indebtedness that was permitted to be incurred by another provision of
this Section 4.09;
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted amount, as applicable) at any time outstanding
under this clause (7), including all Permitted Refinancing
Indebtedness incurred pursuant to clause (8) below to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(7), not to exceed $15.0 million;
(8) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
to be incurred by clause (a) of this Section 4.09, or by clauses (2),
(3), (5), (6), (7) and (12) of this clause (b);
(9) the incurrence by the Company's Unrestricted Subsidiaries
of Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, the
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (9);
(10) the accrual of interest, accretion or amortization of
original issue discount, the payment of interest on any Indebtedness
in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional
shares of the same class of Disqualified Stock; provided, however,
that in each such case, the amount thereof is included in Fixed
Charges of the Company as accrued;
(11) the incurrence of Indebtedness represented by
Capitalized Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing
capital expenditures of the Company or any of its Restricted
Subsidiaries not to exceed $10.0 million at any one time outstanding;
and
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(12) the incurrence by the Company or any of the Guarantors
of additional Indebtedness in an aggregate principal amount (or
accreted amount, as applicable) at any time outstanding under this
clause, including all Permitted Refinancing Indebtedness incurred
pursuant to clause (8) above to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (12), not to exceed
$15.0 million, solely for the purpose of financing acquisitions of
Permitted Businesses; provided, however, that the Fixed Charge
Coverage Ratio on a pro forma basis after giving effect to such
acquisitions is at least 2.0 to 1..
(c) For purposes of determining compliance with this Section 4.09,
in the event that an item of Indebtedness meets the criteria of more than one
of the categories of Permitted Indebtedness described in clause (b) above or is
entitled to be incurred pursuant to the clause (a) above, the Company shall, in
its sole discretion, classify that item of Indebtedness in any manner that
complies with this covenant and the item of Indebtedness shall be treated as
having been incurred pursuant to only one of those clauses or pursuant to
clause (a) above.
(d) Notwithstanding any other provisions of this Section 4.09, the
Company shall not be permitted to incur, directly or indirectly, any
Indebtedness that is subordinate in right of payment to any Senior Indebtedness
and senior in any respect in right of payment to the Notes and no Guarantor
shall be permitted to incur any Indebtedness that is subordinate or junior in
right of payment to its Guarantor Senior Indebtedness and senior in any respect
in right of payment to that Guarantor's guarantee of the Notes.
SECTION 4.10. ASSET SALES
(a) The Company shall not be permitted to, and shall not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (1) the
Company or the Restricted Subsidiary, as the case may be, receives
consideration at the time of the Asset Sale at least equal to the fair market
value, evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee, of the assets or Equity
Interests issued or sold or otherwise disposed of; and (2) at least 75% of the
consideration therefor received by the Company or the Restricted Subsidiary is
in the form of cash or Cash Equivalents; provided, however, that the amount of
(a) any liabilities, as shown on the Company's or the Restricted Subsidiary's
most recent balance sheet of the Company or the Restricted Subsidiary, other
than contingent liabilities and liabilities that are by their terms
subordinated to the Notes or any guarantee, that are assumed by the transferee
of any of those assets pursuant to a customary novation agreement that releases
the Company or the Restricted Subsidiary from further liability and (b) any
securities, notes or other obligations received by the Company or the
Restricted Subsidiary from the transferee that are substantially concurrently
converted by the Company or the Restricted Subsidiary into cash, to the extent
of the cash received, shall be deemed to be cash for purposes of this
provision.
(b) Within 365 days following the receipt of any Net Proceeds from
an Asset Sale, the Company shall be permitted to apply the Net Proceeds, at its
option, (1) to repay Senior Indebtedness and to correspondingly reduce
commitments with respect to repaid Senior Indebtedness in the case of revolving
borrowings; or (2) to acquire a controlling interest in a Permitted Business;
or (3) to make a capital expenditure; or (4) to acquire other long-term assets
that are used or useful in a Permitted Business; provided, however, that prior
to December 31, 2001, amounts repaid pursuant to clause (1) above with the Net
Proceeds from an Asset Sale involving assets acquired with borrowings under the
revolving acquisition line of the Senior Credit Facility shall not constitute a
permanent reduction of such commitment; provided further, however, only to the
extent that such repayment does not otherwise
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constitute a permanent reduction of the commitment under the Senior Credit
Facility as in effect on the date hereof.
(c) Pending the final application of any Net Proceeds, the Company
shall be permitted temporarily to reduce Indebtedness under a revolving credit
facility, if any, or otherwise invest the Net Proceeds in any manner that is
not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are
not applied or invested as provided in the first sentence of this paragraph
shall be deemed to constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $10.0 million, the Company shall be required to make an
offer to all holders of Notes and all holders of other Indebtedness that ranks
equally with the Notes ("pari passu Indebtedness") containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem the Indebtedness with the proceeds of sales of assets (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer shall be equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date fixed for purchase, and shall be payable in cash. If any
Excess Proceeds remain after completion of an Asset Sale Offer, the Company
shall be permitted to use any remaining Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and other pari passu Indebtedness surrendered by holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased pursuant to Section 3.09. Upon completion of an Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Company (each of the foregoing, an "Affiliate
Transaction"), unless (i) the Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or
such Restricted Subsidiary with an unrelated Person, (ii) if such Affiliate
Transaction or series of related Affiliate Transactions involve aggregate
consideration in excess of $2.0 million, such Affiliate Transaction shall be
approved by a majority of the disinterested members of the Board of Directors
and evidenced in a resolution of such members of the Board of Directors
certifying that that the terms of such Affiliate Transaction are at least as
favorable to the Company or the relevant Restricted Subsidiary as might
reasonably have been obtained in a comparable arm's length transaction with an
unaffiliated third party and (iii) if such Affiliate Transaction or series of
related Affiliate Transactions involves aggregate consideration in excess of
$5.0 million, the Company obtains an opinion from an accounting, appraisal or
investment banking firm of national standing to the effect that such Affiliate
Transaction is fair to the Company or the relevant Restricted Subsidiary from a
financial point of view or as the valuation.
The provisions of the foregoing paragraph shall not prohibit
(1) any employment agreement or employment arrangement, non-competition
agreement, confidentiality agreement, stock option agreement or plan, stock
ownership agreement or plan or indemnification agreement entered into by the
Company or any of its Restricted Subsidiaries with any employee or director in
the ordinary course of business and consistent with the past practice of the
Company or the Restricted Subsidiary (including the issuance of any securities
or other payments, awards or grants in securities pursuant thereto) that is
approved by a majority of disinterested directors, if any, or otherwise by a
majority of the Board of Directors of the Company; (2) transactions between or
among the Company and/or its Restricted
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Subsidiaries; (3) payment of reasonable directors' fees to persons who are not
otherwise Affiliates of the Company; (4) any obligations of the Company
pursuant to the Management Agreement; (5) any Restricted Payment that is
permitted by the provisions of Section 4.07; (6) loans and advances to
employees of the Company or any of its Restricted Subsidiaries in the ordinary
course of business and consistent with past practice; and (7) the mergers or
any payments made in connection with the Transaction.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or on
any income or profits therefrom nor to assign or convey any right to receive
income therefrom, in each case to secure Indebtedness or trade payables, except
for Permitted Liens.
SECTION 4.13. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Restricted Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) If a Change of Control occurs, the Company shall make an offer
(a "Change of Control Offer") to each Holder to repurchase all or any part,
equal to $1,000 or an integral multiple of $1,000, of the Holder's Notes at an
offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date fixed for repurchase (the "Change of Control Payment").
(b) Within 30 business days following a Change of Control, the
Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
the Notes on the date specified in the notice, which date shall be no earlier
than 30 days and no later than 60 days from the date the notice is mailed (the
"Change of Control Payment Date") pursuant to the procedures set forth in
Section 3.09 and described in the notice. 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 those laws and regulations are
applicable to the repurchase of the Notes as a result of a Change of Control.
(c) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (1) accept for payment all Notes or portions of Notes
properly tendered under the Change of Control Offer; (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions of the Notes so tendered; and (3) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions of the
Notes being purchased by the Company.
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(d) The Paying Agent shall mail promptly to each holder of Notes
so tendered the Change of Control Payment for the Notes, and the Trustee shall
promptly authenticate and mail, or cause to be transferred by book entry, to
each holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, provided, however, that each new Note shall be in a
principal amount of $1,000 or an integral multiple of $1,000.
(e) Prior to complying with the provisions of this Section 4.14,
but in any event within 60 days following a Change of Control, the Company
shall either repay all outstanding Senior Indebtedness or obtain the requisite
consents, if any, under all agreements governing outstanding Senior
Indebtedness to permit the repurchase of Notes required by this Section 4.14.
The Company shall publicly announce the results of the Change of Control Offer
on or as soon as practicable after the Change of Control Payment Date.
(f) The Change of Control provisions described in this Section
4.14 shall be applicable notwithstanding any other provisions of this
Indenture.
(g) The Company shall not be required to make a Change of Control
Offer following a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.14 and purchases all Notes validly
tendered and not withdrawn under the Change of Control Offer.
SECTION 4.15. 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 for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
SECTION 4.16. SALE AND LEASEBACK TRANSACTIONS
The Company shall not and shall not permit any of its
Restricted Subsidiaries to enter into any Sale and Leaseback Transaction;
provided, however, that the Company and any Guarantor may enter a Sale and
Leaseback Transaction if, at the time of entering into such Sale and Leaseback
Transaction, (a) the Company or such Guarantor could have (i) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such Sale
and Leaseback Transaction pursuant to the Fixed Charge Coverage Ratio under
Section 4.09 hereof; and (ii) incurred a Lien to secure such Indebtedness
pursuant to Section 4.12 hereof; (b) the gross cash proceeds of the Sale and
Leaseback Transaction are at least equal to the fair market value, as
determined in good faith by the Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee, such Officers' Certificate
certifying that such valuation has been approved by a majority of the
disinterested members, if any, of the Board of Directors, of the property that
is subject of such Sale and Leaseback Transaction; and (c) the Sale and
Leaseback Transaction is permitted by, and the net proceeds of such Sale and
Leaseback Transaction are applied in compliance with Section 4.10 hereof.
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ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into
another Person (whether or not the Company is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person unless (a) the Company is the surviving
corporation or Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (the "Successor Company")
is a corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia, (b) the entity or Person formed by
or surviving any such consolidation or merger (if other than the Company) or
the Successor Company assumes all the obligations of the Company under the
Notes and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, (c) immediately after such transaction,
no Default or Event of Default exists and (d) except in the case of a merger of
the Company with or into a Wholly Owned Restricted Subsidiary of the Company,
the Company or the Successor Company (A) shall have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) shall, at
the time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to Incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09(a) hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), 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 the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.01 hereof. Notwithstanding any of the foregoing provisions in this Article 5,
nothing herein shall prohibit the mergers of the Company with and into Trivest
Furniture Corporation, with the latter being the surviving entity, or the
merger of Trivest Furniture Corporation with and into WinsLoew Furniture, Inc.,
with the latter being the surviving entity.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on,
or Liquidated Damages with respect to, the Notes, whether or not prohibited by
Section 4.01, and such default continues for a period of 30 days;
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(b) the Company defaults in the payment when due of principal of
or premium, if any, on the Notes, whether or not prohibited by Section 4.01;
(c) the Company or any of its Restricted Subsidiaries fails to
comply for 30 days with any of the provisions of Section 4.07, 4.09, 4.10 or
4.14 hereof;
(d) the Company or any of its Restricted Subsidiaries, for 30 days
after notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes fails to comply with
any of its other agreements in this Indenture or the Notes;
(e) the default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries, or the payment of which is guaranteed by the Company or any of
its Restricted Subsidiaries, whether the Indebtedness or guarantee now exists
or is created after the date hereof, which default; (i) is caused by a failure
to pay principal of or premium, if any, or interest on such Indebtedness prior
to the expiration of any grace period provided for on the date of the default
(a "Payment Default") or (ii) results in the acceleration of the Indebtedness
prior to its scheduled maturity and, in each case, the principal amount of such
Indebtedness, together with the principal amount of any other Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5.0 million or more;
(f) failure by the Company or any of its Significant Subsidiaries,
or a group of Restricted Subsidiaries that taken together would constitute a
Significant Subsidiary, to pay final judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed for a period of 60
consecutive days;
(g) any Guarantee of the Notes is held in any judicial proceeding
to be unenforceable or invalid or ceases for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor,
denies or disaffirms its obligations under its guarantee; provided, however,
that this clause (g) shall apply only to a Guarantor that is a Significant
Subsidiary or a group of Guarantors that, taken together, would constitute a
Significant Subsidiary;
(h) the Company or any of its Significant Subsidiaries or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become
due; and
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
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(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an
involuntary case; or
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or
any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default
specified in clause (h) or (i) of Section 6.01 hereof with respect to the
Company), occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes may declare all the Notes to
be due and payable immediately. Notwithstanding the foregoing, if an Event of
Default specified in clause (h) or (i) of Section 6.01 hereof occurs with
respect to the Company, all outstanding Notes shall be due and payable
immediately without further action or notice. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium,
if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note 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.
All remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may, on behalf of
the Holders of all of the Notes, waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed
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to have been cured for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice
the rights of another Holder of a Note or to obtain a preference or priority
over another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest 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.
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SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to 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 Holders of the Notes allowed in any judicial proceedings relative to
the Company (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder
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 Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article,
it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. 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 a 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 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to
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Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If 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, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) 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 liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) 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 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c), (e) and (f) of this Section and Section 7.02.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability
or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon 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
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(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 it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(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 or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes,
it shall not be accountable for the Company's use of the proceeds from the
Notes or any money paid to the Company or upon the Company's direction under
any provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
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SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of
the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 1 beginning with May 1, 2000,
and for so long as Notes remain outstanding, the Trustee shall mail to the
Holders of the Notes a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA ss.313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. 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 promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the
Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability or expense
or a portion thereof may be attributable to its negligence or bad faith. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. 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. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss liability or expense
incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
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To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA
ss. 313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding
Notes may remove the Trustee by so notifying the Trustee and the Company in
writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) 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 promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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 Notes of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, 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. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. Subject to
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the Lien provided for in Section 7.07 hereof, the retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee;
provided, however, that all sums owing to the Trustee hereunder shall have been
paid. Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $10 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to
TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article
Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness represented by
the outstanding Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Notes to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments in
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respect of the principal of, premium, if any, and interest and Liquidated
Damages, if any, on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 and Section 4.02 hereof,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith and (d) this Article
Eight. Subject to compliance with this Article Eight, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.03, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.15, hereof, and the operation of
Section 5.01(d) hereof, with respect to the outstanding Notes on and after the
date the conditions set forth in Section 8.04 are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes 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 (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the outstanding Notes, the Company 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 6.01 hereof, but, except as specified above, the remainder of
this Indenture and such Notes shall be unaffected thereby. In addition, upon
the Company's exercise under Section 8.01 hereof of the option applicable to
this Section 8.03 hereof, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(f) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes. In order to
exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts
as shall be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest and Liquidated Damages, if any, on the outstanding Notes on the stated
date for payment thereof or on the applicable redemption date, as the case may
be, and the Company must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and shall be subject to
federal income tax on the same amounts, in
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the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and shall 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;
(d) no Default or Event of Default shall occur under Sections 6.01
(g) or 6.01(h) hereof at any time in the period ending on the 91st day after
the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that on
the 123rd day following the deposit, the trust funds shall not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, 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 cash or
non-callable Government Securities deposited pursuant to Section 8.04 hereof or
the principal 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 Notes.
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Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of,
premium, if any, or interest on any Note and remaining unclaimed for two years
after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in The New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if
the Company makes any payment of principal of, premium, if any, or interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 2 hereof (including
the related definitions) in a manner that does not materially adversely affect
any Holder;
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(c) to provide for the assumption of the Company's or any
Guarantor's obligations to the Holders of the Notes by a successor to the
Company pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution
of its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company in
the execution of any amended or supplemental Indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company
and the Trustee may amend or supplement this Indenture (including Section 3.09,
4.10 and 4.14 hereof) and the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the Notes
including Additional Notes, if any, then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on
the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes, including Additional Notes, if any, voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes).
Upon the request of the Company accompanied by a resolution
of its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company in the execution
of such amended or supplemental Indenture unless such amended or supplemental
Indenture directly affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such amended or supplemental
Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment 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 of Notes 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 amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class may waive
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compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected,
an amendment or waiver under this Section 9.02 may not (with respect to any
Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the redemption of
the Notes except as provided above with respect to Sections 3.09, 4.10 and 4.14
hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest or Liquidated Damages, if any, on
the Notes (except a rescission of acceleration of the Notes by the Holders of
at least a majority in aggregate principal amount of the then outstanding Notes
(including Additional Notes, if any) and a waiver of the payment default that
resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest or Liquidated Damages, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 and 4.14 hereof);
(h) release any Guarantor from its Guarantee; or
(i) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with
the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
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SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental Indenture until
the Board of Directors approves it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section
7.01 hereof) shall be fully protected in relying upon, in addition to the
documents required by Section 10.04 hereof, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
ARTICLE 10.
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss. 318(c), the imposed duties shall
control.
SECTION 10.02. NOTICES.
Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next-day delivery, to the
others' address:
If to the Company:
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WinsLoew Escrow Corp.
c/o Trivest, Inc.
2665 South Bayshore Drive
Suite 800
Miami, Florida 31333
Attention: General Counsel
Telecopy No.: (305) 858-1629
With copies to:
WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Attention: Chief Financial Officer
Telecopy No.: (205) 408-7028
and
Greenberg & Traurig, P.A.
1221 Brickell Avenue
21st Floor
Miami, Florida 33131
Telecopier No.: (305) 579-0717
Attention: Bruce E. Macdonough, Esq.
If to the Trustee:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Telecopier No.: (718) 331-1852
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in TIA ss.313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it.
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If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 10.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss.312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA ss.312(c).
SECTION 10.04 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:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 10.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 10.05 hereof) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.
SECTION 10.05 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 a certificate
provided pursuant to TIA ss.314(a)(4)) shall comply with the provisions of TIA
ss.314(e) and shall include:
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he
or she 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 satisfied; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
SECTION 10.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
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SECTION 10.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, shall
have any liability for any obligations of the Company or any Guarantor under
the Notes, the Guarantees, this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes and the Guarantees.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.
SECTION 10.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 10.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 10.10 SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 10.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes 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 10.12 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 10.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
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ARTICLE 11.
SUBORDINATION
SECTION 11.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by, and the payment of principal, premium, interest
and Liquidated Damages, if any, on, the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 11, to the
prior payment in full of all Senior Indebtedness (whether outstanding on the
date hereof or hereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of Senior Indebtedness.
SECTION 11.02 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities, the holders of Senior Indebtedness shall be entitled to
receive payment in full of all Obligations due in respect of such Senior
Indebtedness (including interest after the commencement of any such proceeding
at the rate specified in the applicable Senior Indebtedness) before the Holders
of Notes shall be entitled to receive any payment with respect to the Notes,
and until all Obligations with respect to Senior Indebtedness are paid in full
in cash or Cash Equivalents, any distribution to which the Holders of Notes
would be entitled shall be made to the holders of Senior Indebtedness (except
that Holders of Notes may receive and retain Permitted Junior Securities and
payments made from the trust described under Article 8).
SECTION 11.03 DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
The Company may not pay principal, premium, interest or Liquidated
Damages, if any, with respect to the Notes or make any deposit pursuant to the
provisions described under Article 8 and may not repurchase, redeem or
otherwise retire any Notes (collectively, "pay the Notes") if (i) any
Designated Senior Indebtedness is not paid when due or (ii) any other default
on Designated Senior Indebtedness occurs and the maturity of such Designated
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, the default has been cured or waived and any such acceleration has
been rescinded or such Designated Senior Indebtedness has been paid in full.
However, the Company may and shall pay the Notes without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of the Designated Senior Indebtedness with
respect to which either of the events set forth in clause (i) or (ii) of the
immediately preceding sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) or
(ii) of the second preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Company may not pay the Notes for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a "Blockage Notice") of such default from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because such Designated Senior Indebtedness has been repaid in full).
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Notwithstanding the provisions described in the immediately preceding
sentence (but subject to the provisions described in the first sentence of this
paragraph), unless the holders of such Designated Senior Indebtedness or the
representative of such holders (any such representative, a "Representative")
have accelerated the maturity of such Designated Senior Indebtedness, the
Company may resume payments on the Notes after the end of such Payment Blockage
Period. The Notes shall not be subject to more than one Payment Blockage Period
in any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness during such period. No nonpayment
default that existed or was continuing on the date of delivery of any Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Blockage
Notice unless such default shall have been waived for a period of not less than
90 days. Following the expiration of any period during which the Company is
prohibited from making payments on the Notes pursuant to a Payment Blockage
Notice, the Company shall be obligated to resume making any and all required
payments in respect of the Notes, including any missed payments, unless the
maturity of any Designated Senior Indebtedness has been accelerated, and such
acceleration remains in full force and effect.
The Company shall give prompt written notice to the Trustee of any
default in the payment of any Senior Indebtedness or any acceleration under any
Senior Indebtedness or under any agreement pursuant to which Senior
Indebtedness may have been issued. Failure to give such notice shall not affect
the subordination of the Notes to the Senior Indebtedness or the application of
the other provisions provided in this Article 11.
SECTION 11.04 ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of a Default, the
Company shall promptly notify holders of Senior Indebtedness of the
acceleration.
SECTION 11.05 WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee receives or is holding, or any Holder
receives, any payment of any principal, premium, interest and Liquidated
Damages, if any, with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge (in the case of the Trustee as
described in Section 11.11 hereof), that such payment is prohibited by Section
11.02 or 11.03 hereof, such payment shall be held by the Trustee or such
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered to, the holders of Senior Indebtedness as their interests may appear
or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to the Senior Indebtedness remaining unpaid to the extent necessary to
pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. 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 if the Trustee shall mistakenly pay over or
distribute to or on behalf of Holders or the Company or any other Person money
or assets to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article 11, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
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SECTION 11.06 NOTICE BY THE COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 11, but failure to give such
notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article 11.
SECTION 11.07 SUBROGATION.
After all Senior Indebtedness is paid in full and until the Notes are
paid in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the Holders have been applied to
the payment of Senior Indebtedness. A distribution made under this Article to
holders of Senior Indebtedness that otherwise would have been made to Holders
is not, as between the Company and Holders, a payment by the Company on the
Notes.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 11 shall have been
applied, pursuant to the provisions of this Article 11, to the payment of all
amounts payable under the Senior Indebtedness, then and in such case the
Holders shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of such Senior Indebtedness in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Indebtedness in
full; provided, however, that such payments or distributions shall be paid
first pro rata to Holders that previously paid amounts then pro rata to all
Holders.
SECTION 11.08 RELATIVE RIGHTS.
This Article 11 defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the
obligation of the Company, which is absolute and unconditional, to pay
principal, premium, interest and Liquidated Damages, if any, on the Notes in
accordance with their terms;
(2) affect the relative rights of Holders and creditors
of the Company other than their rights in relation to holders of Senior
Indebtedness; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default, subject to the rights of holders and owners
of Senior Indebtedness to receive distributions and payments otherwise payable
to Holders.
If the Company fails because of this Article 11 to pay
principal, premium, interest and Liquidated Damages, if any, on a Note on the
due date, the failure is still a Default.
SECTION 11.09 SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
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SECTION 11.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
11.
SECTION 11.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless an authorized Officer of the Trustee
shall have received at its office at least two Business Days prior to the due
date of such payment written notice of facts that would cause the payment of
any principal, premium, interest and Liquidated Damages, if any, with respect
to the Notes to violate this Article 11. Only the Company or a Representative
may give the notice. Nothing in this Article 11 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 11.12 AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, a Representative of Designated Senior Indebtedness is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes and the Trustee shall have no liability therefor.
SECTION 11.13 PAYMENT.
A payment with respect to a Note or with respect to principal of or
interest on a Note shall include payment of principal, premium, interest and
Liquidated Damages, if any, on any Note, any payment on account of any
mandatory or optional repurchase or redemption of any Note (including payments
pursuant to Article 3 or Section 4.10 or Section 4.14 hereof) and any payment
or recovery on any claim (whether for rescission or damages and whether based
on contract, tort, duty imposed by law, or any other theory of liability)
relating to or arising out of the offer, sale or purchase of any Note provided
that any such payment, other payment or recovery (i) not prohibited pursuant to
this Article 11 at the time actually made shall not be subject to any recovery
by any holder of Senior Indebtedness or Representative therefor or other Person
pursuant to this Article 11 at any time thereafter (unless such payment is a
voluntary prepayment on the Notes made at the time a Default exists under this
Indenture)
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and (ii) made by or from any Person other than the Company shall not be subject
to any recovery by any holder of Senior Indebtedness or Representative therefor
or other Person pursuant to this Article 11 at any time thereafter except to
the extent such Person recovers any such amount paid from the Company, whether
pursuant to rights of indemnity, rescission or otherwise.
ARTICLE 12
NOTE GUARANTEES
SECTION 12.01 GUARANTEE.
Subject to this Article 12, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes, the Collateral Documents or the obligations of the
Company hereunder or thereunder, that: (a) the principal of premium and
Liquidated Damages, if any, and interest on the Notes shall be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder shall be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations,
that same shall 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 pursuant to Section 6.02 hereof or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantors shall be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not
a guarantee of collection. Notwithstanding anything herein to the contrary, all
obligations of the Guarantors hereunder shall be subordinated to the prior
payment of Senior Indebtedness to the same extent that the Notes are
subordinated pursuant to Article 11.
Each Guarantor hereby agrees that its obligations with regard to
this Note Guarantee shall be joint and several, unconditional, irrespective of
the validity or enforceability of the Notes or the obligations of the Company
under this Indenture, the absence of any action to enforce the same, the
recovery of any judgment against the Company or any other obligor with respect
to this Indenture, the Notes or the Obligations of the Company under this
Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each
Guarantor further, to the extent permitted by law, waives and relinquishes all
claims, rights and remedies accorded by applicable law to guarantors and agrees
not to assert or take advantage of any such claims, rights or remedies,
including but not limited to: (a) any right to require any of the Trustee, the
Holders or the Company (each a "Benefited Party"), as a condition of payment or
performance by such Guarantor, to (1) proceed against the Company, any other
guarantor (including any other Guarantor) of the Obligations under the Note
Guarantees or any other Person, (2) proceed against or exhaust any security
held from the Company, any such other guarantor or any other Person, (3)
proceed against or have resort to any balance of any deposit account or credit
on the books of any Benefited Party in favor of the Company or any other
Person, or (4) pursue any other remedy in the power of any Benefited Party
whatsoever; (b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Company including any
defense based on or arising out of the lack of validity or the unenforceability
of the Obligations under the Note Guarantees or any agreement or instrument
relating thereto or by reason of the cessation of the liability of the Company
from any cause other than payment in full of the Obligations under the Note
Guarantees; (c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal; (d) any defense
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based upon any Benefited Party's errors or omissions in the administration of
the Obligations under the Note Guarantees, except behavior which amounts to bad
faith; (e)(1) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of the Note Guarantees and any
legal or equitable discharge of such Guarantor's obligations hereunder, (2) the
benefit of any statute of limitations affecting such Guarantor's liability
hereunder or the enforcement hereof, (3) any rights to set-offs, recoupments
and counterclaims and (4) promptness, diligence and any requirement that any
Benefited Party protect, secure, perfect or insure any security interest or
lien or any property subject thereto; (f) notices, demands, presentations,
protests, notices of protest, notices of dishonor and notices of any action or
inaction, including acceptance of the Note Guarantees, notices of default under
the Notes or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Obligations under the Note Guarantees
or any agreement related thereto, and notices of any extension of credit to the
Company and any right to consent to any thereof; (g) to the extent permitted
under applicable law, the benefits of any "One Action" rule and (h) any
defenses or benefits that may be derived from or afforded by law which limit
the liability of or exonerate guarantors or sureties, or which may conflict
with the terms of the Note Guarantees. Each Guarantor hereby covenants that its
Note Guarantee shall not be discharged except by complete performance of the
obligations contained in its Note Guarantee and this Indenture.
If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, 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 Section 6.02
hereof for the purposes of this Note 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 declaration of
acceleration of such obligations as provided in Section 6.02 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Note Guarantee.
SECTION 12.02. ADDITIONAL NOTE GUARANTEES.
If the Company or any of its Restricted Subsidiaries, acquires or
creates another domestic Restricted Subsidiary after the date hereof, or if any
Unrestricted Subsidiary ceases to be an Unrestricted Subsidiary, any such
Subsidiary shall execute and deliver to the Trustee (a) a supplemental
indenture, in form and substance substantially in the form of Exhibit E
attached hereto, which subjects such Person to the provisions of this Indenture
as a Guarantor, and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such customary exceptions concerning fraudulent conveyance laws,
creditors' rights and equitable principles as may be reasonably acceptable to
the Trustee).
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SECTION 12.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee
of such Guarantor not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Note Guarantee. To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor under this Article 12 shall be limited to the
maximum amount as shall, after giving effect to such maximum amount and all
other contingent and fixed liabilities of such Guarantor that are relevant
under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article 12, result in the obligations of such Guarantor under its Note
Guarantee not constituting a fraudulent transfer or conveyance.
SECTION 12.04. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 12.01 hereof,
each Guarantor hereby agrees that a notation of such Note Guarantee in
substantially the form included in Exhibit D shall be endorsed by an Officer of
such Guarantor on each Note authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of such Guarantor by its President
or one of its Vice Presidents.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 12.01 hereof shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set
forth in this Indenture on behalf of the Guarantors.
SECTION 12.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 12.06 hereof, no Guarantor
may consolidate with or merge with or into (whether or not such Guarantor is
the surviving Person) another Person whether or not affiliated with such
Guarantor unless:
(a) subject to Section 12.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such Guarantor,
pursuant to a supplemental indenture and supplemental Collateral Documents in
form and substance reasonably satisfactory to the Trustee, under the Notes,
this Indenture, the Collateral Documents and the Note Guarantee on the terms
set forth herein or therein; and
(b) the Guarantor complies with the requirements of Article 5
hereof.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor,
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such successor Person shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor. Such
successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes 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.
SECTION 12.06. RELEASES FOLLOWING SALE OF ASSETS.
In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all to the capital stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transactions)
a Restricted Subsidiary of the Company, then such Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or otherwise, of all
of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) shall be released and relieved of any
obligations under its Note Guarantee; provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.10 hereof.
Upon delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made
by the Company in accordance with the provisions of this Indenture, including
without limitation Section 4.10 hereof, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note Guarantee shall
remain liable for the full amount of principal of and interest on the Notes and
for the other obligations of any Guarantor under this Indenture and the
Collateral Documents as provided in this Article 12.
[Signatures on following page]
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SIGNATURES
Dated as of August 24, 1999
WINSLOEW ESCROW CORP.
By: /s/ William F. Kaczynski, Jr.
-----------------------------------
Name: William F. Kaczynski, Jr.
Title: Vice President
AMERICAN STOCK TRANSFER & TRUST
COMPANY,
as Trustee
By: /s/ Joseph F. Wolf
------------------------------------
Name: Joseph F. Wolf
Title: Vice President
<PAGE> 83
EXHIBIT A
(Face of Note)
12 3/4% SENIOR SUBORDINATED NOTES DUE 2007
CUSIP _____________
NO. $
----- -------------
WINSLOEW ESCROW CORP.
promises to pay to Cede & Co. or registered assigns, the principal sum of
_________________ Dollars ($______________) on August 15, 2007.
Interest Payment Dates: February 15 and August 15, commencing February 15,
2000.
Record Dates: February 1 and August 1.
Dated: August 24, 1999
WINSLOEW ESCROW CORP.
By:
-----------------------------------
Name:
Title:
This is one of the Global Notes
referred to in the
within-mentioned Indenture:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Trustee
By:
-----------------------------------
Authorized Signatory
A-1-1
<PAGE> 84
(Back of Note)
12 3/4% Senior Subordinated Notes due 2007
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07
OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT 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 OR
BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("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 SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
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.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY SECTION 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) TO CERTAIN INSTITUTIONAL ACCREDITED INVESTORS
WITHIN THE MEANING OF
A-1-2
<PAGE> 85
SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (d) FOLLOWING THE
RELEASE OF PROCEEDS FROM THE ESCROW ACCOUNT, OUTSIDE THE UNITED STATES
TO A NON-UNITED STATES PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
UNTIL THE SEPARATION DATE (AS DEFINED), THIS NOTE HAS BEEN ISSUED AS,
AND MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED
WARRANTS TO PURCHASE COMMON STOCK OF THE COMPANY. EACH UNIT CONSISTS
OF $1,000 PRINCIPAL AMOUNT OF NOTES AND A WARRANT TO PURCHASE 0.2298
SHARES OF COMMON STOCK, SUBJECT TO ADJUSTMENT UNDER CERTAIN
CIRCUMSTANCES. A COPY OF THE WARRANT AGREEMENT PURSUANT TO WHICH THE
WARRANTS HAVE BEEN ISSUED IS AVAILABLE FROM THE COMPANY UPON REQUEST.
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR
PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $962.40 AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $37.60, IN EACH CASE PER
$1,000 PRINCIPAL AMOUNT OF THIS SECURITY. FOR PURPOSES OF SECTION 1275
OF THE CODE, THE YIELD TO MATURITY COMPOUNDED SEMIANNUALLY IS 13.537%.
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. WinsLoew Escrow Corp., a Florida
corporation (the "Company"), promises to pay interest on the principal amount
of this Note at 12 3/4% per annum until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually on February 15 and August 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Notes shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided, however, that if there is no existing
Default in the payment of interest, and if this Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be February
15, 2000. The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of
the rate then in effect; it shall pay
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<PAGE> 86
interest (including post-petition interest in any, proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on
the Notes (except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Notes at the close of business on the
August 1 or February 1 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes shall be payable as to principal, premium and
Liquidated Damages, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and Liquidated Damages,
if any, may be made by check mailed to the Holders at their addresses set forth
in the register of Holders; provided, however, that payment by wire transfer of
immediately available funds shall be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, American
Transfer and Trust Company, the Trustee under the Indenture, shall act as
Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an
Indenture dated as of August 24, 1999 ("Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement
of such terms. To the extent any provision of this Note conflicts with the
express provisions of the Indenture, the provisions of the indenture shall
govern and be controlling. The Notes are obligations of the Company limited to
$105,000,000 in aggregate principal amount, plus amounts, if any, issued to pay
Liquidated Damages on outstanding Notes as set forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
(a) On or after August 15, 2003, the Company may redeem the Notes at
any time, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Liquidated Damages, if
any, thereon to the date fixed for redemption, if redeemed during the
twelve-month period beginning on August 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003 106.375%
2004 104.250%
2005 102.125%
2006 and thereafter 100.000%
</TABLE>
A-1-4
<PAGE> 87
(c) Notwithstanding the provisions of clauses (a) and (b) of this
Section 3.07, on or prior to August 15, 2002, the Company shall be permitted to
redeem up to 25% of the aggregate principal amount of the Notes originally
issued at a redemption price of 112.75% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the date
fixed for redemption, with the net cash proceeds of one or more underwritten
public offerings of Capital Stock of the Company, other than Disqualified
Stock; provided, however, that (1) at least 75% of the aggregate principal
amount of the Notes originally issued remains outstanding immediately after the
occurrence of the redemption; and (2) each redemption occurs within 90 days
after the date of the closing of such an offering of Capital Stock of the
Company.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption payments with respect to the
Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, thereon, if
any, to the date of purchase (the "Change of Control Payment"). Within 30 days
following any Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates
any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $5.0
million in any calendar year, the Company shall commence an offer to all
Holders of Notes and all holders of other Indebtedness containing provisions
similar to those set forth in the Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets (an "Asset Sale Offer") pursuant
to Section 3.09 of the Indenture and such other Indebtedness to purchase the
maximum principal amount of Notes and such other Indebtedness that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the date fixed for the closing of
such offer in accordance with the procedures set forth in Section 3.09 and such
other Indebtedness.
8. NOTICE OF REDEMPTION. Notice of redemption shall be
mailed at least 30 days but not more than 60 days before the redemption date to
each Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes
or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a
A-1-5
<PAGE> 88
selection of Notes to be redeemed or during the period between a record date
and the corresponding interest payment date.
10. PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes voting as a single class, and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes voting as a single class. Without the consent of any Holder
of a Note, the Indenture or the Notes may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's obligations to Holders of the Notes in case of a merger or
consolidation, or sale of substantially all of the Company's assets to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the Commission
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (a)
default for 30 days in the payment when due of interest or Liquidated Damages,
if any, on the Notes; (b) default in payment when due of the principal of or
premium, if any, on the Notes; (c) failure by the Company to comply with the
provisions of Sections 4.07, 4.09, 4.10 or 4.14 of the Indenture, which failure
remains uncured for 30 days after notice; (d) failure by the Company or any of
its Restricted Subsidiaries for 30 days after notice to comply with any of its
other agreements in the Indenture or the Notes; (e) the nonpayment within any
applicable grace period after the final maturity, or the acceleration by the
holders because of a default, of Indebtedness of the Company or any Significant
Subsidiary, or group of Restricted Subsidiaries that taken together would
constitute a Significant Subsidiary, and the total amount of such Indebtedness
unpaid or accelerated exceeds $5.0 million; (f) failure by the Company or any
of its Significant Subsidiaries, or a group of Restricted Subsidiaries that
taken together would constitute a Significant Subsidiary, to pay final
judgments aggregating in excess of $5.0 million, which judgments are not paid,
discharged or stayed for a period of 60 consecutive days; and (g) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes shall become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default and
its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
A-1-6
<PAGE> 89
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder, of the Company, as such, shall have any
liability for any obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a
waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
16. ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder 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).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of August 24, 1999, between the Company
and the parties named on the signature pages thereof (the "Registration Rights
Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
WinsLoew Escrow Corp.
2665 South Bayshore Drive, Suite 800
Miami, Florida 33133
Attention: Chief Financial Officer
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<PAGE> 90
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
----------------
Your Signature:
---------------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:
---------------------
A-1-8
<PAGE> 91
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state
the amount you elect to have purchased: $________
Date: Your Signature:
------------- -----------------------------
(Sign exactly as your name appears on the
Note)
Signature Guarantee:
------------------------
Tax Identification No:
----------------------
A-1-9
<PAGE> 92
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a
part of another Global Note or Definitive Note for an interest in this Global
Note, have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of decrease Amount of increase of this
in in Principal Global Note Signature of
Principal Amount Amount following such authorized officer
of this of this decrease (or of Trustee or Note
Date of Exchange Global Note Global Note increase) Custodian
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
A-1-10
<PAGE> 93
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
WinsLoew Escrow Corp.
2665 South Bayshore Drive, Suite 800
Miami, Florida 33133
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Re: 12 3/4% Senior Subordinated Notes due 2007 of WinsLoew
Escrow Corp.
Reference is hereby made to the Indenture, dated as of August
24, 1999 (the "Indenture"), between WinsLoew Escrow Corp., as issuer (the
"Company"), and American Stock Transfer & Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
______________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto,
in the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933 (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is
a "qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note shall be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note or the Definitive Note and in
the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 904 under
the Securities Act and, accordingly, the Transferor hereby further certifies
that (i) the Transfer is not being made to a person in the United States and
(x) at the time the buy order was originated, the Transferee was outside the
United States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in contravention
of the requirements of Rule 904(b) of Regulation S under the Securities Act,
(iii) the
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<PAGE> 94
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not
being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note shall be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act; or
(d) [ ] such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D under
the Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit F to the Indenture and (2) if such Transfer is in respect
of a principal amount of Notes at the time of transfer of less than $250,000,
an Opinion of Counsel provided by the Transferor or the Transferee (a copy of
which the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the IAI Global Note and/or the Definitive Notes and in the Indenture and the
Securities Act.
4. [ ] CHECK AND COMPLETE IF TRANSFEREE SHALL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
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<PAGE> 95
or
(b) such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance
with the prospectus delivery requirements of the Securities Act;
or
(d) such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities
Act and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act. Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note shall be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Definitive Notes and in the Indenture and the Securities Act.
5. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i)
The Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note shall no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S.
(i) The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note shall no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes and in
the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the
B-3
<PAGE> 96
Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with
the transfer restrictions contained in the Indenture and any applicable blue
sky securities laws of any State of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall not be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive Notes
and in the Indenture.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
----------------------------------------
Name:
Title:
Dated: ___________, _______
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<PAGE> 97
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ___), or
(ii) [ ] Regulation S Global Note (CUSIP ___), or
(iii) [ ] IAI Global Note (CUSIP ___), or
(iv) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee shall hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ___), or
(ii) [ ] Regulation S Global Note (CUSIP ___), or
(iii) [ ] IAI Global Note (CUSIP ___), or
(iv) [ ] Unrestricted Global Note (CUSIP ___); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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<PAGE> 98
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
WinsLoew Escrow Corp.
2665 South Bayshore Drive, Suite 800
Miami, Florida 33133
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Re: 12 3/4% Senior Subordinated Notes due 2007 of WinsLoew
Escrow Corp.
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of August
24, 1999 (the "Indenture"), between WinsLoew Escrow Corp., as issuer (the
"Company"), and American Stock Transfer & Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount
of $____________ in such Note[s] or interests (the "Exchange"). In connection
with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global Note
in an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the
United States Securities Act of 1933 (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note for
an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive
Note is being acquired for the Owner's own account without
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<PAGE> 99
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Definitive
Note is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Owner's Exchange of a Restricted Definitive Note for a beneficial interest
in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued shall continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] "144A Global Note, Regulation S Global Note, with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, and in
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<PAGE> 100
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the beneficial interest issued shall be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the relevant Restricted Global Note and in the Indenture and the Securities
Act.
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<PAGE> 101
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
-----------------------------------
[Insert Name of Owner]
By:
- -------------------------------
Name:
Title:
Dated: ________________, ____
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<PAGE> 102
EXHIBIT D
FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE
Each Guarantor, as defined in the Indenture (the
"Indenture"), referred to in the Note upon which this notation is endorsed),
(i) has jointly and severally unconditionally guaranteed (a) the due and
punctual payment of the principal of, premium and interest and Liquidated
Damages, if any, on the Notes, whether at maturity or an interest payment date,
by acceleration, call for redemption or otherwise, (b) the due and punctual
payment of interest on the overdue principal and premium of, and interest and
Liquidated Damages, if any, on the Notes, and (c) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, the
same shall be promptly paid in full when due in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise and (ii) has agreed to pay any and all costs and expenses (including
reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing
any rights under this Note Guarantee.
Notwithstanding the foregoing, in the event that the Note
Guarantor would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the
liability of such Guarantor under its Note Guarantee shall be reduced to the
maximum amount permissible under such fraudulent conveyance or similar law.
No past, present or future director, officer, employee,
agent, incorporator, stockholder or agent of any Guarantor, as such, shall have
any liability for any obligations of the Company or any Guarantor under the
Notes, any Note Guarantee, Indenture, any supplemental indenture delivered
pursuant to the Indenture by such Guarantor or any Note Guarantees, or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability.
This Note Guarantee shall be binding upon each Guarantor and
its successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by the Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This Note Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Note Guarantee is noted have been executed by the Trustee under the Indenture b
the manual signature of one of its authorized officers. Capitalized terms used
herein have the meaning assigned to them in the Indenture.
GUARANTOR
By:
---------------------------
Name:
Title:
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<PAGE> 103
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of _____________, among ______________ (the "Guarantor"), a subsidiary of
WinsLoew Escrow Corp. (or its permitted successor), a Florida corporation (the
"Company") and American Stock Transfer & Trust Company, as trustee under the
indenture referred to below (the "Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of August 24, 1999
providing for the issuance of an aggregate principal amount of up to $105.0
million of 12 3/4% Senior Subordinated Notes due 2007 (the "Notes");
WHEREAS, the Indenture provides that under certain
circumstances the Guarantor shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guarantor shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 10.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized Terms used herein
without definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guarantor hereby agrees
as follows:
a. Along with all Guarantors, to jointly and
severally Guarantee to each Holder of a
Note authenticated and delivered by the
Trustee and to the Trustee and its
successors and assigns, irrespective of the
validity and enforceability of the
Indenture, the Notes or the Obligations of
the Company hereunder or thereunder, that:
(i) the principal of, premium, if any,
and interest and Liquidated
Damages, if any, on the Notes shall
be promptly paid in full when due,
whether at maturity, by
acceleration, redemption or
otherwise, and interest on the
overdue principal of to the extent
and interest and
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<PAGE> 104
Liquidation Damages, if any, on the
Notes to the extent lawful, and all
other Obligations of the Company to
the Holders or the Trustee hereunder
or under the Indenture shall be
promptly paid in full or performed,
all in accordance with the terms
hereof and under the Indenture;
(ii) in case of any extension of time of
payment or renewal of any Notes or
any of such other Obligations, that
same shall 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. Failing payment when due
of any amount so guaranteed or any
performance so guaranteed for
whatever reason, the Guarantors
shall be jointly and severally
obligated to pay the same
immediately.
b. The obligations hereunder shall be
unconditional, irrespective of the
validity, regularity or enforceability of
the Notes or the Indenture, the absence of
any action to enforce the same, any waiver
or consent by any Holder of the Notes 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.
c. The following is hereby waived: 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.
d. This Note Guarantee shall not be discharged
except by complete performance of the
obligations contained in the Notes and the
Indenture.
e. If any Holder or the Trustee is required by
any court or otherwise to return to the
Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar
official acting in relation to either the
Company or the Guarantors, any amount paid
by either to the Trustee or such Holder,
this Note Guarantee, to the extent
theretofore discharged, shall be reinstated
in full force and effect.
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<PAGE> 105
f. The Guarantor shall not be entitled to any
right of subrogation in relation to the
Holders in respect of any obligations
guaranteed hereby until payment in full of
all obligations guaranteed hereby.
g. As between the Guarantors, on the one hand,
the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for
the purposes of this Note 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 declaration of acceleration of such
obligations as provided in Article 6 of the
Indenture, such obligations (whether or not
due and payable) shall forthwith become due
and payable by the Guarantors for the
purpose of this Note Guarantee.
h. The Guarantors shall have the right to seek
contribution from non-paying Guarantor so
long as the exercise of such right does not
impair the rights of the Holders under the
Note Guarantee.
i. Notwithstanding the foregoing, in the event
that this Note Guarantee would constitute
or result in a violation of any applicable
fraudulent conveyance or similar law of any
relevant jurisdiction, the liability of the
Guarantor under this Supplemental Indenture
and its Note Guarantee shall be reduced to
the maximum amount permissible under such
fraudulent conveyance or similar law.
j. Notwithstanding anything herein to the
contrary, all obligations of the Guarantor
hereunder shall be subordinated to the
prior payment of Senior Indebtedness to the
same extent that the Notes are subordinated
pursuant to Article 11 of the Indenture.
3. Execution and Delivery. Each Subsidiary Guarantor
agrees that the Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.
4. Guarantor May Consolidate, Etc. on Certain Terms.
a. Subject to Section 5 hereof, the Guarantor
may not consolidate with or merge with or
into (whether or not such Guarantor is
E-3
<PAGE> 106
the surviving Person) another corporation,
Person or entity whether or not affiliated
with such Subsidiary Guarantor unless:
(i) subject to Section 5 hereof, the
Person formed by or surviving any
such consolidation or merger (if
other than a Guarantor or the
Company) unconditionally assumes
all the obligations of such
Guarantor, pursuant to a
supplemental indenture in form and
substance reasonably satisfactory
to the Trustee, under the Notes,
the Indenture and the Note
Guarantee on the terms set forth
herein or therein; and
(ii) immediately after giving effect to
such transaction, no Default or
Event of Default exists.
b. In 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 Trustee and satisfactory
in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the
due and punctual performance of all of the
covenants and conditions of the Indenture
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. Such successor corporation
thereupon may cause to be signed any or all
of the Note Guarantees to be endorsed upon
all of the Notes issuable hereunder which
theretofore shall not have been signed by
the Company and delivered to the Trustee.
All the Note Guarantees so issued shall in
all respects have the same legal rank and
benefit under the Indenture as the Note
Guarantees theretofore and thereafter
issued in accordance with the terms of the
Indenture as though all of such Note
Guarantees had been issued at the date of
the execution hereof.
c. Except as set forth in Articles 4 and 5 of
the Indenture, and notwithstanding clauses
(i) and (ii) of Section 4(a) hereof,
nothing contained in the Indenture or in
any of the Notes 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.
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<PAGE> 107
5. Releases.
a. In the event of a sale or other disposition
of all of the assets of any Guarantor, by
way of merger, consolidation or otherwise,
or a sale or other disposition of all to
the capital stock of any Guarantor, then
such Guarantor (in the event of a sale or
other disposition, by way of merger,
consolidation or otherwise, of all of the
capital stock of such Guarantor) or the
corporation acquiring the property (in the
event of a sale or other disposition of all
or substantially all of the assets of such
Guarantor) shall be released and relieved
of any obligations under the Supplemental
Indenture and its Note Guarantee; provided
that the Net Proceeds of such sale or other
disposition are applied in accordance with
the applicable provisions of the Indenture,
including without limitation Section 4.10
of the Indenture. Upon delivery by the
Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to
the effect that such sale or other
disposition was made by the Company in
accordance with the provisions of the
Indenture, including without limitation
Section 4.10 of the Indenture, the Trustee
shall execute any documents reasonably
required in order to evidence the release
of any Guarantor from its obligations under
its Note Guarantee.
b. Any Guarantor not released from its
obligations under its Note Guarantee shall
remain liable for the full amount of
principal of and interest on the Notes and
for the other obligations of any Guarantor
under the Indenture as provided in the
Indenture.
6. No Recourse Against Others. No past, present or
future director, officer, employee, incorporator, stockholder or agent of the
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Notes, any Note Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of
the Commission that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE
OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
E-5
<PAGE> 108
8. Counterparts . The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
9. Effect of Headings. The Section headings herein are
for convenience only and shall not affect the construction hereof.
10. The Trustee. The Trustee shall not be responsible in
any manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guarantor and the Company.
E-6
<PAGE> 109
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated:
[Guaranteeing Subsidiary]
By:
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By:
Name:
Title:
E-7
<PAGE> 110
EXHIBIT F
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
WinsLoew Escrow Corp.
160 Village Street
Birmingham, Alabama 35242
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Re: 12 3/4% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of August
24, 1999 (the "Indenture"), WinsLoew Escrow Corp., as issuer (the "Company"),
and American Stock Transfer & Trust Company, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the
Notes or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Notes or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes
have not been registered under the Securities Act, and that the Notes and any
interest therein 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 the Notes
or any interest therein, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act
to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you and to the Company a signed letter substantially in the form of this letter
and, if such transfer is in respect of a principal amount of Notes, at the time
of transfer of less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such transfer is in compliance
with the Securities Act, (D) outside the United States in accordance with Rule
904 of Regulation S under the Securities Act, (E) pursuant to the provisions of
Rule 144(k) under the Securities Act or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing the Definitive Note or beneficial interest in
a Global Note from us in a
F-1
<PAGE> 111
transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.
3. We understand that, on any proposed resale of the
Notes or beneficial interest therein, we will be required to furnish to you and
the Company such certifications, legal opinions and other information as you
and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the Notes
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) of Regulation D 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
Notes, 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 Notes or beneficial interest
therein 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.
You and the Company are 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.
-------------------------------------------------
[Insert Name of Accredited Investor]
By:
----------------------------------------------
Name:
Title:
Dated:
----------------------
F-2
<PAGE> 1
Exhibit (a)(10)
===============================================================================
WARRANT AGREEMENT
Dated August 24, 1999
by and between
WINSLOEW ESCROW CORP.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 1. Certain Definitions.....................................................................1
Section 6. Appointment of Warrant Agent............................................................5
Section 3. Issuance of Warrants....................................................................5
3.1 Warrant Certificates...........................................................5
3.2 Temporary Global Warrants......................................................5
Section 4. Execution of Warrant Certificates.......................................................6
Section 5. Separation of Warrants..................................................................6
Section 6. Registration Rights.....................................................................6
6.1 Demand Registration After Public Equity Offering...............................6
6.2 Effective Registration.........................................................7
6.3 Restrictions on Sale by Holders................................................8
6.4 Underwritten Registrations.....................................................8
6.5 Expenses.......................................................................9
6.6 Priority in Demand Registration................................................9
6.7 Piggy-Back Registration........................................................9
6.8 Priority in Piggy-Back Registration...........................................10
6.9 Limitations, Conditions and Qualifications to Obligations Under Registration
Covenants.....................................................................11
6.10 Restrictions on Sale by the Company and Others................................12
6.11 Rule 144 and Rule 144A........................................................13
6.12 "Market Stand-Off" Agreement..................................................13
6.13 Registration Procedures.......................................................14
Section 7. Registration of Transfers and Exchanges................................................18
(a) Transfer and Exchange of Global Warrants......................................18
(b) Exchange of a Beneficial Interest in a Global Warrant for a Definitive
Warrant.......................................................................18
(c) Transfer and Exchange of Definitive Warrants..................................20
(d) Restrictions on Exchange or Transfer of a Definitive Warrant for a Beneficial
Interest in a Global Warrant..................................................21
(e) Restrictions on Transfer and Exchange of Global Warrants......................21
(f) Countersigning of Definitive Warrants in Absence of Depositary................21
(g) Legends.......................................................................22
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C> <C> <C>
(h) Cancellation of Global Warrant................................................23
(i) Obligations with Respect to Transfers and Exchanges of Warrants...............23
Section 8. Terms of Warrants; Exercise of Warrants................................................24
Section 9. Payment of Taxes.......................................................................26
Section 10. Mutilated or Missing Warrant Certificates..............................................26
Section 11. Reservation of Warrant Shares..........................................................26
Section 12. Obtaining Stock Exchange Listings......................................................27
Section 13. Adjustment of Exercise Price and Number of Warrant Shares Issuable.....................27
13.1 Stock Splits, Combinations, etc...............................................27
13.2 Reclassification, Combinations, Mergers, etc..................................27
(a) Issuance of Options or Convertible Securities.................................28
(b) Dividends and Distributions...................................................29
(c) Adjustment for Sale of Common Stock Below Current Market Price................29
(d) Current Market Price..........................................................30
(e) Certain Distributions.........................................................31
(f) Consideration Received........................................................31
(g) Deferral of Certain Adjustments...............................................31
(h) Changes in Options and Convertible Securities.................................32
(i) Expiration of Options and Convertible Securities..............................32
(j) Other Adjustments.............................................................32
(k) No Adjustment Required........................................................32
Section 14. Statement on Warrants..................................................................33
Section 15. Fractional Interest....................................................................33
Section 16. Notices to Warrant Holders.............................................................33
Section 17. Merger, Consolidation or Chance of Name of Warrant Agent...............................35
Section 18. Warrant Agent..........................................................................35
Section 19. Resignation and Removal of Warrant Agent; Appointment of Successor.....................37
Section 20. Registration...........................................................................37
Section 21. Reports................................................................................37
Section 22. Rule 144A..............................................................................38
Section 23. Notices to Company and Warrant Agent...................................................38
</TABLE>
ii
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 24. Supplements and Amendments.............................................................39
Section 25. Successors.............................................................................39
Section 26. Termination............................................................................39
Section 27. Governing Law..........................................................................39
Section 28. Benefits of This Agreement.............................................................39
Section 29. Counterparts...........................................................................40
</TABLE>
iii
<PAGE> 5
WARRANT AGREEMENT dated as of August 24, 1999 (this
"AGREEMENT") between WINSLOEW ESCROW CORP., a Florida corporation (together with
any and all successors thereto, the "COMPANY"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY, a New York corporation, as warrant agent (together with any and
all successors appointed in accordance with this Agreement, the "WARRANT
AGENT"). Unless otherwise noted, capitalized terms have the meanings set forth
in Section 1 below.
WHEREAS, the Company proposes to issue 105,000 common stock
warrants, as hereinafter described (the "WARRANTS"), initially exercisable to
purchase an aggregate of 24,129 shares of Common Stock, in connection with an
offering of units (the "UNITS"), each Unit consisting of $1,000 principal amount
at maturity of the Company's 12 3/4% Senior Subordinated Notes due 2007 (thE
"NOtes") and one Warrant, each such Warrant entitling thE holder thereof to
purchase initially 0.2298 shares of Common Stock.
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance of Warrant Certificates and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, and for the purpose of defining the
respective rights and obligations of the Company, the Warrant Agent and the
Holders, the parties hereto agree as follows:
Section 1. Certain Definitions. (a) As used in this Agreement,
the following terms shall have the following respective meanings:
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"CONTROL" (including, with correlative meanings, the terms "CONTROLLING,"
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; provided,
however, that beneficial ownership of 10% or more of the Voting Equity Investors
(as defined in the Indenture) of a Person shall be deemed to be control.
"Board of Directors" means (1) in respect of a limited
liability company, the board of advisors of the Company; (2) in respect of a
corporation, the board of directors of the corporation, or any authorized
committee thereof; and (3) in respect of any other Person, the board or
committee of that Person serving a similar function.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (c) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (d) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cedel" means Cedel Bank, S.A.
<PAGE> 6
"Change of Control" means the occurrence of any of the
following: (a) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" or "group" (as such terms are used
in Section 13(d)(3) of the Exchange Act) (whether or not otherwise in compliance
with this Indenture) other than to a Permitted Holder; (b) the adoption of a
plan relating to the liquidation or dissolution of the Company; (c) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are used in Section 13(d)(3) of the Exchange Act), other than a Permitted
Holder or any underwriters in connection with an underwritten public offering,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), except that a person or group shall be deemed to
have "beneficial ownership" of all securities that the person or group has the
right to acquire, whether the right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition, directly or indirectly, of
more than 35% of the Voting Equity Interests of the Company (measured by voting
power rather than the number of shares); (d) the first day on which more than a
majority of the members of the Board of Directors of the Company are not
Continuing Directors; or (e) the Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Equity Interests of such surviving or transferee Person
immediately after giving effect to such issuance.
"Common Stock" means the common stock, par value $.01 per
share, of the Company or its successors and any other class of series of common
equity equivalent shares of the Company or its successors.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors who (a) was a member of the Board of
Directors on the date of this Indenture or (b) was nominated for election to the
Board of Directors with the approval of a majority of the Continuing Directors
who were members of the Board of Directors at the time of such nomination or
election.
"Current Market Price" means the current price per share of
the Common Stock or the Warrant Shares, as applicable, as determined under
Section 15.6 hereof.
"Demand Registration" shall have the meaning ascribed in
Section 6.1(a).
"Drag Along Rights" shall have the meaning ascribed in Section
8.
"Drag Sale" shall have the meaning ascribed in Section 8.
"Effectiveness Date" means, with respect to any Registration
Statement, the 60th day after the filing date thereof.
2
<PAGE> 7
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Escrow Agreement" means that certain Escrow, Control and
Security Agreement, dated as of August 24, 1999, by and among the Company and
American Stock Transfer & Trust Company, as Trustee, Escrow Agent and Securities
Intermediary.
"Escrowed Funds" means the $99,634,229 of net proceeds from
the sale of the Units and the $4,622,876 of additional proceeds from the Company
and its affiliates deposited into escrow with the Trustee under the Escrow
Agreement.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended (or any successor act), and the rules and regulations thereunder.
"Excluded Securities" means shares of Common Stock or other
securities convertible or exchangeable into Common Stock issued (i) pursuant to
employee stock option ownership and/or other equity incentive plans, (ii) in
connection with mergers and acquisitions with non-affiliated third parties or
(iii) as compensation to directors in lieu of cash.
"Exercisability Date" means the date that is the earliest to
occur of (i) the Separation Date, (ii) the consummation of an underwritten
public offering of Capital Stock of the Company and (iii) the date that any
class of Capital Stock of the Company is listed on a national securities
exchange or authorized for quotation on the Nasdaq National Market or is
otherwise subject to registration under the Exchange Act.
"Exercise Event" means the earliest to occur of (i) the
completion of an underwritten public offering of Capital Stock of the Company,
(ii) a class of equity securities of the Company is listed on a national
securities exchange or authorized for quotation on the Nasdaq National Market or
is otherwise subject to registration under the Exchange Act, or (iii) the
Separation Date.
"Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall initially be $.01 per share, subject to adjustment
from time to time pursuant to Section 15 hereof.
"Expiration Date" means August 15, 2007, unless extended
pursuant to Section 8 hereof.
"Holder" means a registered holder of Registrable Securities.
"Included Securities" has the meaning ascribed to such term in
Section 6.1(a) hereof.
"Indenture" means the indenture, dated as of August 24, 1999,
between the Company and American Stock Transfer & Trust Company, as trustee,
relating to the Notes.
3
<PAGE> 8
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If any action
is required to be taken on a date that is a Legal Holiday, such action may be
taken on the next succeeding day that is not a Legal Holiday.
"Merger Agreement" means that certain Second Amended and
Restated Agreement and Plan of Merger, dated as of May 4, 1999, between Trivest
Furniture Corporation and WinsLoew Furniture, Inc.
"Notes" means the 12 3/4 Senior Subordinated Notes due 2007,
issued pursuant to the Indenture.
"Permitted Holder" means Trivest, Inc. and any Affiliate of
Trivest, Inc.
"Person" means any natural person, company, corporation,
partnership, government, agency or instrumentality of a government, or any other
entity.
"Piggy Back Registration" shall have the meaning ascribed in
Section 6.7.
"Prospectus" means 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, 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.
"Registrable Securities" means any of (i) the Warrant Shares
and (ii) any other securities issued or issuable with respect to any Registrable
Securities by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise, unless, in each case, such Warrant Shares have been
offered and sold to the Holder pursuant to an effective Registration Statement
under the Securities Act declared effective prior to the exercisability of the
Warrants and such securities may be sold to the public pursuant to Rule 144
without any restriction on the amount of securities which may be sold by such
Holder. As to any particular Registrable Securities held by a Holder, such
securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the offering of such securities by the Holder thereof
shall have been declared effective under the Securities Act and such securities
shall have been disposed of by such Holder pursuant to such Registration
Statement, (ii) such securities may at the time of determination be sold to the
public pursuant to Rule 144 without any restriction on the amount of securities
which may be sold by such Holder or Rule 144(k) (or any similar provision then
in force, but not Rule 144A) promulgated under the Securities Act without the
lapse of any further time or the satisfaction of any condition, (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.
4
<PAGE> 9
"Registration Expenses" means 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), printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of counsel
for the Company and all independent certified public accountants and the fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities (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 Expenses shall not include
the fees and expenses of counsel for the Holders.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 24, 1999, by and among the Company and Bear,
Stearns & Co. Inc., First Union Capital Markets Corp. and BancBoston Robertson
Stephens Inc., as such agreement may be amended, modified or supplemented from
time to time.
"Regulation S" means Regulation S under the Securities Act, as
such rules may be from time to time amended, revised or supplemented by the
Commission.
"Requisite Securities" means a number of Registrable
Securities equal to not less than 25% of the Registrable Securities then
outstanding held in the aggregate by all Holders; provided, however, that with
respect to any action to be taken at the request of the Holders of the
Registrable Securities prior to such time as the Warrants have expired pursuant
to the terms thereof and of the Warrant Agreement, each Warrant outstanding
shall be deemed to represent that number of Registrable Securities for which
such Warrant would be then exercisable.
"Regulation S Global Warrant" means a permanent global Warrant
in substantially the form of Exhibit A hereto, appropriately completed, and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in replacement for the Regulation S Global Warrant upon
expiration of the Restricted Period.
"Restricted Period" means the one year period after the date
of issuance of the Units.
"SEC" means the Securities and Exchange Commission, or any
successor agency or body performing substantially similar functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holder" means a Holder who is selling Registrable
Securities in accordance with the provisions of Section 6.1 or 6.7.
"Separation Date" means earliest to occur of (i) February 21,
1999, (ii) the occurrence of an "Event of Default" under the Notes; (iii) an
Exercise Event, (iv) the date the Exchange Offer Registration Statement or the
Shelf Registration Statement is declared effective by the Commission (as
defined) or (v) such other date as Bear, Stearns & Co. Inc. shall determine in
its sole discretion.
5
<PAGE> 10
"Shelf Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Subsidiary" means, with respect to a Person, (a) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (b) any partnership (i) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such Person
or (ii) the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Tag Along Notice" shall have the meaning ascribed in Section
7.
"Tag Along Rights" shall have the meaning ascribed in Section
7.
"Trivest, Inc." means Trivest, Inc., a Florida corporation.
"Trustee" means the trustee under the Indenture.
"Voting Equity Interest" of any Person as of any date means
the Equity Interests of such Person that is at the time entitled to vote in the
election of the Board of Directors or other governing body of such Person.
"Warrant Agent" means American Stock Transfer & Trust Company
or the successor or successors of such Warrant Agent appointed in accordance
with the terms hereof.
"Warrant Certificates" mean the registered certificates
(including without limitation, the global certificates) issued by the Company
under this Agreement representing the Warrants.
"Warrant Registration Statement" means any appropriate
registration statement of the Company filed with the SEC pursuant to the
Securities Act which covers any of the Registrable Securities pursuant to the
provisions of this Agreement and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Warrant Shares" means the shares of Common Stock issued or
issuable upon the exercise of the Warrants.
(b) Other terms are defined in the respective sections set
forth below.
6
<PAGE> 11
<TABLE>
<CAPTION>
Term Defined in Section
- ---- ------------------
<S> <C>
Advice.......................................................................................6.13
Blackout Period...............................................................................6.2
Convertible Securities.......................................................................15.3
Definitive Warrants...........................................................................3.1
Depository....................................................................................3.1
Distribution.................................................................................15.3
DTC..........................................................................................6.13
Effectiveness Period..........................................................................6.2
Global Warrants...............................................................................3.1
Options..................................................................................... 15.3
SEC Reports....................................................................................22
Time of Determination....................................................................... 15.6
Transfer Agent.................................................................................13
</TABLE>
Section 2. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
Section 3. Issuance of Warrants.
3.1 Warrant Certificates. The Warrants will be issued in the form
of one or more global certificates (the "GLOBAL WARRANTS"), substantially in the
form of Exhibit A (including footnotes 1, 2 and 3 thereto). The Global Warrants
shall be deposited on the Issue Date with, or with the Warrant Agent as
custodian for, The Depository Trust Company (the "DEPOSITARY") and registered in
the name of Cede & Co., as the Depositary's nominee. Each Global Warrant 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. Upon request, except as otherwise provided in Section
7(b)(iii) hereof, a Holder may receive from the Depositary and the Warrant Agent
Warrants in definitive form (the "DEFINITIVE WARRANTS"), substantially in the
form of Exhibit A (not including footnotes 1 and 2 thereto) as set forth in
Section 7 below.
3.2 Regulation S Global Warrant. Warrants offered and sold in
reliance on Regulation S shall be issued in the form of the Regulation S Global
Warrant, which shall be deposited on behalf of the purchasers of the Warrants
represented thereby with the Warrant Agent, at its New York office, as custodian
for the Depositary, and registered in the name of the Depositary or the nominee
of the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate number of Warrants evidenced by
the Regulation S Global Warrant may from time to time be increased or decreased
by adjustments made on the records of the Warrant Agent and the Depositary or
its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
3.3 Registration and Countersignature. The Warrant Agent, on
behalf of the Company, shall number and register the Warrant Certificates in a
register as they are issued by the Company.
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
7
<PAGE> 12
instructions of the Chairman of the Board, the President. a Vice President, the
Treasurer or the Controller of the Company, initially countersign, issue and
deliver Warrants entitling the Holders thereof to purchase not more than the
aggregate number of Warrant Shares referred to above in the first recital hereof
and shall countersign and deliver Warrants as otherwise provided in this
Agreement.
The Company and the Warrant Agent may deem and treat the Holder(s) of
the Warrant Certificates as the absolute owner(s) 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. Prior to the Separation Date, the registered holder of a
Unit shall be deemed the registered Holder of the related Warrants for all
purposes hereunder.
Section 4. Execution of Warrant Certificates. Certificates
(the "WARRANT CERTIFICATES") evidencing Global Warrants or Definitive Warrants
to be delivered pursuant hereto shall be signed on behalf of the Company by its
Chairman of the Board, President, Chief Executive Officer, Chief Financial
Officer, a Vice President, Secretary, an Assistant Secretary, Treasurer or an
Assistant Treasurer. 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 Financial Officer, a Vice
President, Secretary, an Assistant Secretary, Treasurer or an Assistant
Treasurer 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 Chairman of the Board, President,
Chief Executive Officer, Chief Financial Officer, a Vice President, Secretary,
an Assistant Secretary, Treasurer or an Assistant Treasurer, 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.
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 Agreement any
such person was not such officer.
Warrant Certificates shall be dated the date of
countersignature.
Section 5. Separation of Warrants. The Notes and Warrants
shall not be separately transferable prior to the Separation Date and shall be
automatically separated on the Separation Date.
Section 6. Registration Rights.
6.1 Demand Registration After Underwritten Public Equity Offering
Subject to the other provisions of this Section 6, commencing 180 days after an
initial underwritten public offering of the Company's Capital Stock, Holders
owning, individually or in the aggregate, not less than the Requisite Securities
may make a written request for one registration under the Securities Act of
their Registrable Securities (a "DEMAND REGISTRATION"). Within 120 days of the
receipt of
8
<PAGE> 13
such written request for a Demand Registration, the Company shall file with the
SEC and use its best efforts to cause to become effective under the Securities
Act a Registration Statement with respect to such Registrable Securities. Any
such request will specify the number of Registrable Securities proposed to be
sold and will also specify the intended method of disposition thereof. The
Company shall give written notice of such registration request to all other
Holders of Registrable Securities within 20 days after the receipt thereof.
Within 30 days after the date of such notice from the Company, any Holder may
request in writing that such Holder's Registrable Securities be included in such
Registration Statement and the Company shall include in such Registration
Statement the Registrable Securities of any such Holder requested to be so
included (the "INCLUDED SECURITIES"). Each such request by such other Holders
shall specify the number of Included Securities proposed to be sold and the
intended method of disposition thereof. Subject to Sections 6.2 and 6.6 hereof,
the Company shall be required to register Registrable Securities pursuant to
this Section 6.1 only once.
Subject to Section 6.6 hereof, no other securities of the
Company except (i) Registrable Securities held by any Holder, (ii) equity
securities to be offered and sold for the account of the Company and (iii) any
equity securities of the Company held by any Person having "piggy-back"
registration rights pursuant to any contractual obligation of the Company shall
be included in a Demand Registration; provided, however, that no such securities
for the account of the Company or any other Person (other than the parties to
the Stockholder Rights Agreement) shall be so included unless, in connection
with any underwritten offering, the managing underwriter or underwriters confirm
to the Holders of Registrable Securities to be included in such Demand
Registration that the inclusion of such other securities will not be likely to
affect the price at which the Registrable Securities may be sold. The inclusion
of any such securities for the account of the Company or any other Person shall
be on the same terms as that of the Registrable Securities.
6.2 Effective Registration. A Registration Statement 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 a timely manner
and in all material respects with all of its obligations under this Agreement
with respect thereto; provided, however, that if, after such Registration
Statement has become effective, the offering of Registrable Securities pursuant
to such Registration Statement is or becomes the subject of any stop order,
injunction or other order or requirement of the SEC or any other governmental or
administrative agency or court that prevents, restrains or otherwise limits the
sale of Registrable Securities pursuant to such Registration Statement for any
reason not attributable to any Holder participating in such registration and
such Registration Statement has not become effective within a reasonable time
period thereafter (not to exceed 45 days), such Registration Statement will be
deemed not to have been effected. The Company shall keep any Demand Registration
continuously effective under the Securities Act for the shorter of (A) an
aggregate of 180 days after the effective date thereof (such 180 day period
being referred to herein as the "EFFECTIVENESS PERIOD") or (B) such period of
time as all of the Warrant Shares included in such registration statement shall
have been sold thereunder, provided, however, that the Company may postpone the
filing period, suspend the effectiveness of any registration statement, suspend
the use of any prospectus and shall not be required to amend or supplement the
registration statement any related prospectus or any document incorporated
therein by reference (other than an effective registration statement being used
for an underwritten offering) in the event that, and for a period (a "BLACK OUT
PERIOD") not to exceed an aggregate of 45 days with respect to a Demand
Registration:
9
<PAGE> 14
(i) an event or circumstance occurs and is continuing as 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 omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and
(ii) either
(A) the Company determines in its good faith judgment
that the disclosure of such an event at such time would have a material adverse
effect on the business, operations or prospects of the Company, or
(B) the disclosure otherwise relates to a material
business transaction which has not yet been publicly disclosed; provided,
further, that the Effectiveness Period shall be extended by the number of days
in any Black Out Period.
In the event of any "lock up" or "black out" period in any underwriting or
purchase agreement, the Company will so notify the holders of Warrants and
Warrant Shares.
If (i) a registration requested pursuant to this Section 6.2
is deemed not to have been effected or (ii) a Demand Registration does not
remain effective under the Securities Act in accordance with the immediately
preceding sentence, then such registration shall not count towards determining
if the Company has satisfied its obligation to effect one Demand Registration
pursuant to this Section 6.2.
6.3 Restrictions on Sale by Holders. Each Holder of Registrable
Securities whose Registrable Securities are covered by a Registration Statement
filed pursuant to this Section 6 and are to be sold thereunder agrees, if and to
the extent reasonably requested by the managing underwriter or underwriters in
an underwritten offering, not to effect any public sale or distribution of
Registrable Securities or of securities of the Company of the same class as any
securities included in such Registration Statement, including a sale pursuant to
Rule 144 (except as part of such underwritten offering), during the 180 day
period beginning on the closing date of each underwritten offering made pursuant
to such Registration Statement, to the extent timely notified in writing by the
Company or such managing underwriter or underwriters.
The foregoing provisions of this Section 6.3 shall not apply
to any Holder of Registrable Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
provided, however, that any such Holder shall undertake, in its request to
participate in any such underwritten offering, not to effect any public sale or
distribution of any Registrable Securities commencing on the date of sale of
such Registrable Securities unless it has provided 45 days' prior written notice
of such sale or distribution to the underwriter or underwriters.
6.4 Underwritten Registrations. If any of the Registrable
Securities covered by a Demand 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 Company.
10
<PAGE> 15
No Holder of Registrable Securities may participate in any
underwritten registration pursuant to a Registration Statement filed under this
Agreement unless such Holder (a) agrees to (i) sell such Holder's Registrable
Securities on the basis provided in and in compliance with any underwriting
arrangements approved by the Holders of not less than a majority of the
Registrable Securities to be sold thereunder and (ii) comply with Regulation M
under the Exchange Act and (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
6.5 Expenses. The Company will pay all Registration Expenses in
connection with the registrations requested pursuant to Section 6.1 hereof. Each
Holder of Registrable Securities 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 6.
6.6 Priority in Demand Registration. In a registration pursuant to
Section 6.1 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders who have requested such Demand
Registration or who have sought inclusion therein that in such underwriter's or
underwriters' opinion the total number of securities which the Selling Holders
and any other Person desiring to participate in such registration intend to
include in such offering is such as to affect adversely the success of such
offering, including the price at which such securities can be sold, then the
Company will be required to include in such registration only the amount of
securities which it is so advised should be included in such registration. In
such event, securities shall be registered in such registration in the following
order of priority: (i) first, the securities which have been requested to be
included in such registration by the Holders of Registrable Securities pursuant
to this Agreement, (ii) second. provided that no securities sought to be
included by the Holders of Registrable Securities have been excluded from such
registration, the securities to be offered and sold for the account of the
Company, and (iii) third, provided that no securities sought to be included by
the Company have been excluded from such registration, the securities of other
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Company (pro rata based on the amount of
securities sought to be registered by such Persons).
If any securities of a Holder have been excluded from a
registration statement pursuant to the provisions of the foregoing paragraph,
then such registration shall not count towards determining whether the Company
has satisfied its obligation to effect one Demand Registration pursuant to
Section 6.1 hereof.
6.7 Piggy-Back Registration. Subject to the other provisions of
this Section 6.7 and to the provisions of Sections 6.8 and 6.9, 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 security holders of Common Stock (other than (i) a
Registration Statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the SEC), (ii) a Registration Statement filed in connection with an
offering of securities solely to the Company's existing security holders or any
offer of debt securities or convertible debt securities or (iii) a Demand
Registration), 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 fewer than 5 days after the filing date or 10 days if the Company is
subject to filing reports under the Exchange Act and able
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to use Form S-3 under the Securities Act), and such notice shall offer such
Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request in writing not later than 20 days
prior to the anticipated effective date of the Registration Statement (or eight
days after the notice of the proposed filing if the Company is subject to filing
reports under the Exchange Act and able to use Form S-3 under the Securities
Act) after receipt of such written notice from the Company (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 keep such Piggy-Back
Registration continuously effective under the Securities Act until at least the
earlier of (A) 90 days after the effective date thereof or (B) the consummation
of the distribution by the Holders of all of the Registrable Securities covered
thereby. The Company shall use its best efforts to cause the managing
underwriter or underwriters, if any, of such proposed 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 security holder included therein and to permit the sale or
other disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. 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 6.7 by giving written notice to
the Company of its request to withdraw at any time prior to the time it becomes
effective. The Company may withdraw a Piggy-Back Registration at any time prior
to the time it becomes effective or the Company may elect to delay the
registration; provided, however, that the Company shall give prompt written
notice thereof to participating Selling Holders. The Piggy-Back Registration
right of holders of Warrants and Warrant Shares shall not apply to any
underwritten public offering of Capital Stock of the Company that is the initial
underwritten public offering of the Capital Stock of the Company unless the
securities of other Selling Holders are to be included therein. The Company will
pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 6.7, and each Holder
of Registrable Securities 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 6.7.
No registration effected under this Section 6.7, and no
failure to effect a registration under this Section 6.7, shall relieve the
Company of its obligation to effect a registration upon the request of Holders
of Registrable Securities pursuant to Section 6.1 hereof, and no failure to
effect a registration under this Section 6.7 and to complete the sale of
securities registered thereunder in connection therewith shall relieve the
Company of any other obligation under this Agreement.
6.8 Priority in Piggy-Back Registration. In a registration
pursuant to Section 6.2 hereof involving an underwritten offering, if the
managing underwriter or underwriters of such underwritten offering have
informed, in writing, the Company and the Selling Holders requesting inclusion
in such offering that in such underwriter's or underwriters' opinion the total
number of securities 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 materially and adversely affect the success of such
offering, including the price at which such securities can be sold, then the
Company will be required to include in such registration only the amount of
securities which it is so advised should be included in such registration. In
such event: (x) in cases only involving the registration for sale of securities
for the Company's own account (other than pursuant to the exercise of
"piggy-back" rights herein and in other contractual commitments of the Company),
securities shall be registered in such offering in the following order of
priority: (i) first, the
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securities which the Company proposes to register, (ii) second, provided that no
securities sought to be included by the Company have been excluded from such
registration, the securities of other Persons entitled to exercise "piggy-back"
registration rights pursuant to contractual commitments of the Company existing
as of the date hereof (the "Investors") (pro rata based on the amount of
securities sought to be registered by such Investors); and (iii) third, provided
that no securities sought to be included by the Company or the Investors have
been excluded from such registration, the securities that have been requested to
be included in such registration by the Holders of the Registrable Securities
pursuant to this Agreement and the securities of other Persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments of
the Company (pro rata based on the amount of securities sought to be registered
by such Persons), and (y) in cases involving the registration for sale of
securities for the account of any Investors or any other Person (other than the
Holders pursuant to Section 6.1 hereof), securities shall be registered in such
offering in the following order of priority: (i) first, the securities of any
Investor shall be included pro rata based on the amount of securities sought to
be registered by such Persons, (ii) provided that no securities of such Investor
referred to in the immediately preceding clause (i) have been excluded from such
registration, the securities which have been requested to be included in such
registration by the Holders of Registrable Securities pursuant to this Agreement
pro rata based upon the aggregate amount of securities held and (iii) third,
provided that no securities of the Investors or of the Holders have been
excluded from such registrations, securities of other Persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments
(pro rata based on the amount of securities sought to be registered by such
Persons) and (iv) fifth, provided that no securities of any other Person have
been excluded from such registration, the securities which the Company proposes
to register.
If, as a result of the provisions of this Section 6.8, 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 at any time prior to the effectiveness thereof.
6.9 Limitations, Conditions and Qualifications to Obligations
Under Registration Covenants. The obligations of the Company set forth in
Section 6 hereof are subject to each of the following limitations, conditions
and qualifications:
(i) Subject to the next sentence of this paragraph, the
Company shall be entitled to postpone, for a reasonable period of time, the
filing or effectiveness of, or suspend the rights of any Holders to make sales
pursuant to, any Registration Statement otherwise required to be prepared, filed
and made and kept effective by it hereunder; provided, however, that the
duration of such postponement or suspension may not exceed the earlier to occur
of (A) 15 days after the cessation of the circumstances described in the next
sentence of this paragraph on which such postponement or suspension is based or
(B) 90 days after the date of the determination of the Board of Directors
referred to in the next sentence, and the duration of such postponement or
suspension shall be excluded from the calculation of the 180-day period
described in Section 6.2 hereof. Such postponement or suspension may be effected
only if the Board of Directors of the Company determines reasonably and in good
faith that the filing or effectiveness of, or sales pursuant to, such
Registration Statement would materially impede, delay or interfere with any
financing, offer or sale of securities, acquisition, corporate reorganization or
other significant transaction involving the Company or any of its Affiliates or
require disclosure of material information which the Company has a bona fide
business purpose for preserving as confidential, which financing, offer or sale
of securities, acquisition, corporate reorganization or other
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<PAGE> 18
significant transaction had been initiated at the time of the filing of such
Registration Statement; provided, however, that the Company shall not be
entitled to such postponement or suspension more than twice in any twelve-month
period. If the Company shall so postpone the filing of a Registration Statement
it shall, as promptly as possible, deliver a certificate signed by the Chief
Executive Officer of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (y) have the right, in the case of
a postponement of the filing or effectiveness of a Registration Statement, upon
the affirmative vote of the Holders of not less than a majority of the
Registrable Securities to be included in such Registration Statement, to
withdraw the request for registration by giving written notice to the Company
within 10 days after receipt of such notice or (z) in the case of a suspension
of the right to make sales, receive an extension of the registration period
equal to the number of days of the suspension. Any Demand Registration as to
which the withdrawal election referred to in the preceding sentence has been
effected shall not be counted for purposes of the single Demand Registration the
Company may be required to effect pursuant to Section 6.1 hereof.
(ii) The Company shall not be required by this Agreement to
effect a Demand Registration within 90 days immediately following the effective
date of any registration statement pertaining to a firmly underwritten offering
of equity securities of the Company for its own account; provided, however, that
this clause (ii) shall not apply if the underwriter of such offering consents to
the request for such Demand Registration pursuant to Section 6.1.
(iii) The Company shall not be required by this Agreement to
effect a Demand Registration within 60 days immediately following the effective
date of any registration statement pertaining to a firmly underwritten offering
of equity securities of the Company for the account of any security holder of
the Company; provided, however, that this clause (ii) shall not apply if the
underwriter of such offering consents to the request for such Demand
Registration pursuant to Section 6.1.
(iv) The Company's obligations shall be subject to the
obligations of the Selling Holders, which the Selling Holders acknowledge, to
furnish all information and materials and to take any and all actions as may be
required under applicable federal and state securities laws and regulations to
permit the Company to comply with all applicable requirements of the SEC and to
obtain any acceleration of the effective date of such Registration Statement.
(v) The Company shall not be obligated to cause any special
audit to be undertaken in connection with any registration pursuant to this
Agreement unless such audit is required by the SEC or requested by the
underwriters with respect to such registration.
6.10 Restrictions on Sale by the Company and Others. The Company
will not, and the Company will not cause or permit any subsidiary of the Company
to, after the date hereof, enter into any agreement or contract that conflicts
with or limits or prohibits the full and timely exercise by the Holders of
Registrable Securities of the rights herein to request a Demand Registration or
to join in any Piggy-Back Registration subject to the other terms and provisions
hereof.
6.11 Rule 144 and Rule 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 or beneficial owner of
Registrable Securities, make available such information necessary to permit
sales pursuant to Rule
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<PAGE> 19
144A under the Securities Act. The Company further covenants that it will take
such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144(k) and Rule 144A under
the Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC (it being expressly
understood that the foregoing shall not create any obligation on the part of the
Company to file periodic reports or other reports under the Exchange Act at any
time that it is not then required to file such reports pursuant to the Exchange
Act). Upon the request of any Holder of Registrable Securities, the Company will
in a timely manner deliver to such Holder a written statement as to whether it
has complied with such information requirements.
6.12 "Market Stand-Off" Agreement.
(a) If the Company has complied with all its obligations with
respect to a Demand Registration or a Piggy-Back Registration relating to an
underwritten public offering, all holders of Warrants and Warrant Shares, upon
request of the lead managing underwriter with respect to such underwritten
public offering, will be required to not sell or otherwise dispose of any
Warrants and Warrant Shares owned by them for a period not to exceed 180 days
from the consummation of such underwritten public offering; provided, however,
that except for the initial underwritten public offering of Capital Stock of the
Company, such requirement shall apply to Warrant Shares not sold in a Demand
Registration or Piggy-Back Registration due to a reduction pursuant to Section
6.6 or 6.8 hereof for a period not to exceed 90 days from such date of
consummation.
(b) In order to enforce the foregoing covenant, the Company
shall have the right to place restrictive legends on the certificates
representing the shares subject to this Section 6 and to impose stop transfer
instructions with respect to the Registrable Securities and such other shares of
stock of each Holder (and the shares or securities of every other Person subject
to the foregoing restriction) until the end of such period. The provisions of
this Section 6.12 shall be binding upon any transferee of any Registrable
Securities.
6.13 Registration Procedures. In connection with the obligations of
the Company with respect to any Registration Statement pursuant to Section 6
hereof, the Company shall, except as otherwise provided:
(a) Prepare and file with the SEC as soon as practicable each
such Registration Statement (but in any event on or prior to the date of filing
thereof required under this Agreement) and cause such Registration Statement to
become effective and remain effective as provided herein; provided, however,
that before filing any such Registration Statement or any Prospectus pursuant to
Section 6.1 hereof or any amendments or supplements thereto (including documents
that would be incorporated or deemed to be incorporated therein by reference,
including such documents filed under the Exchange Act that would be incorporated
therein by reference), the Company shall, upon request, afford promptly to the
Holders of the Registrable Securities covered by such Registration Statement,
their counsel and the managing underwriter or underwriters, if any, an
opportunity to review copies of all such documents proposed to be filed a
reasonable time prior to the proposed filing thereof. The Company shall not file
any Registration Statement or Prospectus pursuant to Section 6.1 or any
amendments or supplements thereto if the Holders of a majority of the
Registrable Securities covered by such Registration Statement, their counsel, or
the managing
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<PAGE> 20
underwriter or underwriters, if any, shall reasonably object in writing unless
failure to file any such amendment or supplement would involve a violation of
the Securities Act or other applicable law.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to the 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) promulgated under the
Securities Act; and comply with the provisions of the 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 Holders of Registrable Securities, their
counsel and the managing underwriter or underwriters, if any, promptly (but in
any event within two (2) Business Days), 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 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 or threatening 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 the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 6.13(1) below, to
the knowledge of the Company, cease to be true and correct in any material
respect, (iv) of the receipt by the Company of any notification with respect to
(A) the suspension of the qualification or exemption from qualification of the
Registration Statement or any of the Registrable Securities covered thereby for
offer or sale in any jurisdiction, or (B) the initiation of any proceeding for
such purpose, (v) of the happening of any event, the existence of any condition
or information becoming known 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 conform in all material respects with the
requirements of the Securities Act and 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 conform in all material respects with the
requirements of the Securities Act and 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 light of the
circumstances under which they were made, not misleading, and (vi) of the
Company's reasonable determination that a post-effective amendment to such
Registration Statement would be appropriate.
(d) Use every reasonable effort to prevent the issuance of any
order suspending the effectiveness of the 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 covered
thereby for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order as soon as practicable.
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(e) Subject to Sections 6.2 and 6.9 hereof, if requested by
the managing underwriter or underwriters, if any, or the Holders of a majority
of the Registrable Securities being sold in connection with an underwriting
offering (only for registrations pursuant to Section 6.1 hereof), (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters, if any, or such Holders
reasonably request to be included therein to comply with applicable law, (ii)
make all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has 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 if required in connection therewith.
(f) Furnish to each Holder of Registrable Securities who so
requests and to counsel for the Holders of Registrable Securities and each
managing underwriter, if any, without charge, upon request, one conformed copy
of the Registration Statement and each post-effective amendment thereto,
including financial statements and schedules, and of all documents incorporated
or deemed to be incorporated therein by reference and all exhibits (including
exhibits incorporated by reference).
(g) Deliver to each Holder of Registrable Securities, their
counsel and each underwriter, if any, without charge, as many copies of each
Prospectus (including each form of prospectus) and each amendment or supplement
thereto as such Persons may reasonably request; and, subject to Sections 6.2 and
6.9 and the last paragraph of this Section 6.13, the Company hereby consents to
the use of such prospectus and each amendment or supplement thereto by each of
the Holders of Registrable Securities and the underwriter or underwriters or
agents, if any, in connection with the offering and sale of the registrable
Securities covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, to
register or qualify, and cooperate with the Holders of Registrable Securities,
the underwriter or 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 the managing underwriter or underwriters reasonably request in
writing, or, in the event of a non-underwritten offering, as the Holders of a
majority of the Registrable Securities may reasonably request; provided,
however, that where Registrable Securities are offered other than through an
underwritten offering, the Company agrees to cause its counsel to perform blue
sky investigations and file registrations and qualifications required to be
filed pursuant to this Section 6.13 (h); keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the securities covered thereby; provided,
however, that the Company will not 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 jurisdiction where it is not then so subject.
(i) Cooperate with the Holders of Registrable Securities and
the managing underwriter or 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 whatsoever
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
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such names as the managing underwriter or underwriters, if any, or Holders may
reasonably request at least two Business Days prior to any sale of Registrable
Securities in a firm commitment underwritten public offering.
(j) Subject to Sections 6.2 and 6.9 hereof, upon the
occurrence of any event contemplated by Section 6.13(c)(v) or 6.13(c)(vi) above,
as promptly as practicable prepare 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, and,
subject to Section 6.13(a) hereof, file such with the SEC so that, as thereafter
delivered to the purchasers of 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.
(k) Prior to the effective date of a Registration Statement,
(i) provide the registrar for the Registrable Securities with certificates for
such securities in a form eligible for deposit with DTC and (ii) provide a CUSIP
number for such securities.
(l) In connection with any registration hereunder that may be
an underwritten offering 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 underwriter or underwriters
in order to expedite or facilitate the registration or disposition of such
Registrable Securities in any underwritten offering to be made of the
Registrable Securities in accordance with this Agreement, and in such
connection, (i) make such representations and warranties to the underwriter or
underwriters, with respect to the business of the Company and the subsidiaries
of the Company, 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, and confirm the same if and when
requested; (ii) use reasonable efforts to obtain opinions of counsel to the
Company and updates thereof, addressed to the underwriter or underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by underwriters;
(iii) use reasonable efforts to obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the Company (and,
if applicable, the subsidiaries of the Company) and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company 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 and such other
matters as reasonably requested by the managing underwriter or underwriters and
as permitted by the Statement of Auditing Standards No. 72; and (iv) if an
underwriting agreement is entered into, the same shall contain customary
indemnification provisions and procedures (or such other provisions and
procedures reasonably acceptable to Holders of a majority of Registrable
Securities covered by such Registration Statement and the managing underwriter
or underwriters or agents) with respect to all parties to be indemnified
pursuant to such agreement. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder.
(m) Make available for inspection by a representative of the
Holders of Registrable Securities being sold, any underwriter participating in
any such disposition of
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Registrable Securities, if any, and any attorney or accountant retained by such
representative of the Holders or underwriter, at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and the subsidiaries
of the Company, and cause the officers, directors and employees of the Company
and the subsidiaries of the Company to supply all information in each case
reasonably requested by any such Person in connection with such Registration
Statement; provided, however, that all material non-public information shall be
kept confidential by such Person, except to the extent that (i) subject to
Sections 6.2 and 6.9 hereof, the disclosure of such information is necessary or
advisable to avoid or correct a misstatement or omission in the Registration
Statement or in any Prospectus; provided, however, that prior notice is given to
the Company, and the Company's legal counsel and such Holder's legal counsel
concur that disclosure is required, (ii) the release of such information is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is necessary in connection
with any action, claim, suit or proceeding, directly or indirectly, involving or
potentially involving such Person and arising out of, based upon, relating to or
involving this Agreement or any of the transactions contemplated hereby or
arising hereunder; provided, however, that prior notice shall be provided as
soon as practicable to the Company of the potential disclosure of any
information by such Person pursuant to clauses (ii) or (iii) of this sentence to
permit the Company to obtain a protective order (or waive the provisions of this
paragraph (m)) and that such Person shall take all actions as are reasonably
necessary to protect the confidentiality of such information (if practicable) to
the extent such action is otherwise not inconsistent with, an impairment of or
in derogation of the rights and interests of the Holder or any such Person, or
(iv) such information has been made generally available to the public.
(n) Comply with all applicable rules and regulations of the
SEC and make generally available to its security holders 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 forty-five (45) days after the end of any 12-month period (or ninety (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 an underwriter or to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to an underwriter or to underwriters
in such an offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of the relevant Registration Statement,
which statements shall cover such 12-month periods.
(o) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed.
(p) 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.
Each seller of Registrable Securities as to which any
registration is being effected agrees, as a condition to the registration
obligations with respect to such Holder provided herein, to furnish to the
Company such information regarding such seller and the distribution of such
Registrable Securities as the Company may, from time to time, reasonably request
in writing to comply with the Securities Act and other applicable law. The
Company may exclude from such
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registration the Registrable Securities of any seller for so long as suchseller
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 the Registration Statement, such seller shall be permitted to
include all information regarding such seller as it shall reasonably request.
Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 6.13(c)(ii),
6.13(c)(iv), 6.13(c)(v), or 6.13(c)(vi) hereof, such Holder will forthwith
discontinue disposition of such Registrable Securities covered by the
Registration Statement or Prospectus until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6.13(j)
hereof), or until it is advised in writing (the "ADVICE") by the Company that
the use of the applicable prospectus may be resumed, and has received copies of
any amendments or supplements thereto, and, if so directed by the Company, such
Holder will, at the Company's expense, deliver to the Company all copies, other
than permanent file copies, then in such Holder's actual possession of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice; provided, however, that nothing herein shall create any
obligation on the part of any Holder to undertake to retrieve or return any such
Prospectus not within the actual possession of such Holder. In the event the
Company shall give any such notice, the period of time for which a Registration
Statement is required hereunder to be effective 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 (x) the copies of the
supplemented or amended Prospectus contemplated by Section 6.13(j) hereof or (y)
the Advice.
Section 7. Tag-Along Rights. Prior to the consummation of an
underwritten public offering or the listing of the Company's Common Stock on a
national securities exchange or the authorization for quotation of such Common
Stock on the Nasdaq National Market, in the event that a Permitted Holder or
Permitted Holders propose to sell or otherwise transfer, directly or indirectly,
in a single transaction or a series of related transactions, shares of the
Company's Common Stock representing 25% or more of the aggregate number of
shares of such Common Stock owned by such Permitted Holders on the date the
transactions contemplated by the Merger Agreement are consummated (other than
(i) sales in an bona fide public offering pursuant to an effective registration
statement under the Securities Act, (ii) sales to the public pursuant to Rule
144 or any similar rule or rules then in effect, (c) transfers to the Company or
one or more of its stockholders pursuant to a right of first refusal and (d)
transfers to Affiliates of such Permitted Holders), such Permitted Holders shall
give each holder of Warrants or Warrant Shares notice (the "TAG-ALONG NOTICE")
of the number of shares of Common Stock to be transferred and the price and
other terms on which such shares of Common Stock are to be transferred. Any
Holder may elect to participate in such transfer (a "TAG-ALONG RIGHT") by giving
notice of the decision to exercise the Tag-Along Right to the selling Permitted
Holders within 10 Business Days of receipt of the Tag-Along Notice. The number
of Warrants or Warrant Shares that any Holder electing to participate in a
transfer shall be eligible to sell pursuant to the Tag-Along Right shall be that
percentage of the aggregate number of shares of Common Stock to be transferred
equal to a fraction, expressed as a percentage, the numerator of which is the
total number of shares of Common Stock held by such Holder assuming the exercise
of all Warrants held by such Holder and the denominator of which is the total
number of shares of Common Stock held by all stockholders participating in such
transfer, including the Permitted Holder or Permitted Holders and other Holders,
assuming the exercise of all Warrants held by Holders participating in the
transfer.
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Any Warrants or Warrant Shares purchased from the
Holders thereof pursuant to the exercise of Tag-Along Rights shall be paid for
at the same price per share of Common Stock and on the same terms and conditions
as such proposed transfer of Common Stock by the selling Permitted Holders. If
the securities to be purchased include securities other than Common Stock, the
price to be paid for the Warrants and Warrant Shares shall be the same price per
share or other denomination paid by the proposed purchaser for like securities
purchased from the Permitted Holders or, if like securities are not purchased
from the Permitted Holders, the fair market value of such securities as
determined by a nationally recognized investment banking firm selected by the
Company.
In the event that the proposed purchaser does not purchase
Warrants or Warrant Shares entitled to be transferred pursuant to this Section
7, then the selling Permitted Holder or Permitted Holders shall purchase such
Warrants or Warrant Shares if the transfer is consummated.
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Section 8. Drag Along Rights. Subject to the limitations set
forth below, if at any time prior to an underwritten public offering of Common
Stock of the Company, any Permitted Holder or Permitted Holders propose to sell
or otherwise transfer, including by way of merger, consolidation or otherwise,
all of the Capital Stock of the Company held by such Permitted Holder or
Permitted Holders to a Person that is not a Permitted Holder in a transaction
resulting in a Change of Control of the Company (a "DRAG SALE"), the
transferring Permitted Holder or Permitted Holders (whether directly or
indirectly through an Affiliate) shall have the right to require the Holders of
Warrants or Warrant Shares, as the case may be, to sell such Warrants or
Warrants Shares to the proposed transferee (the "DRAG-ALONG RIGHTS"). The
exercise of Drag-Along Rights are subject to the conditions that (i) the
consideration to be received by the Holders shall be the same type of
consideration received by the Permitted Holder or Permitted Holders in the Drag
Sale and, in any event, shall be cash or freely transferable marketable
securities and (b) after giving effect to such Drag Sale, the Permitted Holders
shall not own, directly or indirectly, any Capital Stock of the Company or the
surviving entity or rights to purchase such Capital Stock.
Any Warrants or Warrant Shares purchased from the
holders thereof pursuant to the exercise of such Drag-Along Rights shall be paid
for at the same price per share of Common Stock and on the same terms and
conditions as such proposed transfer of Common Stock by the Permitted Holders
pursuant to the Drag Sale. If the securities to be purchased include securities
other than Common Stock, the price to be paid for the Warrants and Warrant
Shares shall be the same price per share or other denomination paid by the
proposed purchaser in the Drag Sale for like securities purchased from the
Permitted Holders or, if like securities are not purchased from the Permitted
Holders, the fair market value of such securities as determined by a nationally
recognized investment banking firm selected by the Company.
If at any time a Permitted Holder or Permitted
Holders intend to exercise Drag-Along Rights pursuant to this Section 8, such
Permitted Holder or Permitted Holders, as the case may be, shall give written
notice thereof to the Holders at least 10 Business Days prior to the
consummation of the proposed transaction. The notice shall set out, in
reasonable detail, (i) information concerning the identity of the proposed
transferee and (ii) a description of the material terms and conditions of the
proposed Drag Sale.
Section 9. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Global Warrants. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Agreement and the procedures of
the Depositary therefor.
(b) Exchange of a Beneficial Interest in a Global Warrant for
a Definitive Warrant.
(i) Any Holder of 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, in the case of a Registrable Security, the following additional information
and documents (all of which may be submitted by facsimile):
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(A) if such beneficial interest is being delivered to
the Person designated by the Depositary as being the beneficial owner, a
certification to that effect (in substantially the form of Exhibit B hereto);
(B) if such beneficial interest is being transferred
(1) to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in accordance with Rule 144 under the
Securities Act (based on an opinion of counsel if the Company so requests) or
(3) pursuant to an effective registration statement under the Securities Act, a
certification to that effect (in substantially the form of Exhibit B hereto);
(C) if such beneficial interest is being transferred
to any institutional "accredited investor," within the meaning of Rule
50l(a)(l), (2), (3) or (7) under the Securities Act pursuant to a private
placement exemption from the registration requirements of the Securities Act
(based on an opinion of counsel if the Company so requests), a certification to
that effect (in substantially the form of Exhibit B hereto) and a certification
from the applicable transferee;
(D) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B);
provided, however, that no such exchange shall be made during the Restricted
Period; or
(E) if such beneficial interest is being transferred
in reliance on another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B hereto);
then the Warrant Agent shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and Warrant
Agent, the number of Warrants and Warrant Shares represented by the
Global Warrant to be reduced by the number of Warrants and Warrant
Shares to be represented by the Definitive Warrants to be issued in
exchange for the interest of such Person in the Global Warrant and,
following such reduction, the Company shall execute and the Warrant
Agent shall countersign and deliver to the transferee, as the case may
be, a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 9(b) shall be registered
in such names as the Depositary pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Warrant Agent. The
Warrant Agent shall deliver such Definitive Warrants to the Persons in whose
names such Warrants are so registered.
(iii) Notwithstanding the foregoing, a beneficial interest in
the Regulation S Global Warrant may not be exchanged for a Definitive Warrant or
transferred to a Person who takes delivery thereof in the form of a Definitive
Warrant prior to (x) the expiration of the Restricted Period and (y) the receipt
by the Warrant Agent of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.
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(c) 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
(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 for such transactions 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 his attorney, duly
authorized in writing; and
(y) in the case of Registrable Securities, such
request shall be accompanied by the following additional information
and documents, as applicable:
(iii) if such Registrable Security 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);
(iv) if such Registrable Security is being transferred (1)
to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in accordance with Rule 144 under the
Securities Act (and based on an opinion of counsel if the Company so requests)
or (3) pursuant to an effective registration statement under the Securities Act,
a certification to that effect (in substantially the form of Exhibit B hereto);
(v) if such Registrable Security is being transferred to an
institutional "accredited investor," within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act pursuant to a private placement exemption
from the registration requirements of the Securities Act (and based on an
opinion of counsel if the Company so requests), a certification to that effect
(in substantially the form of Exhibit B hereto) and a certification from the
applicable transferee:
(vi) if such Registrable Security is being transferred
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B hereto);
or
(vii) if such Registrable Security is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests),
a certification to that effect (in substantially the form of Exhibit B hereto).
(d) Restrictions on Exchange or 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
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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:
(i) if such Definitive Warrant is a Registrable Security,
certification from the Holder thereof (in substantially the form of Exhibit B
hereto) to the effect that such Definitive Warrant is being transferred by such
Holder either (A) to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the Securities Act,
(B) outside the United States to a foreign Person in a transaction meeting the
requirements of Rule 904 under the Securities Act (and based on an opinion of
counsel if the Company so requests) or (C) to an "institutional accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, pursuant to a private placement exemption from the registration
requirements of the Securities Act, who has provided a certification to that
effect (and based on an opinion of counsel if the Company so requests) and who
wishes to take delivery thereof in the form of a beneficial interest in a Global
Warrant; and
(ii) whether or not such Definitive Warrant is a Registrable
Security, 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 number of Warrants and Warrant Shares represented by the Global
Warrant equal to the number of Warrants and Warrant Shares represented by such
Definitive 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
Warrants and Warrant Shares represented by the Global Warrant to be increased
accordingly. If no Global Warrants are then outstanding, the Company shall issue
and the Warrant Agent shall countersign a new Global Warrant representing the
appropriate number of Warrants and Warrant Shares.
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 9), 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.
(f) Countersigning 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 Warrants and a successor Depositary for the Global Warrants is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of Definitive Warrants
under this Agreement,
then the Company shall execute, and the Warrant Agent, upon written instructions
signed by an officer of the Company, shall countersign and deliver Definitive
Warrants, in an aggregate number
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equal to the number of Warrants represented by the Global Warrants, in exchange
for such Global Warrants.
(g) Legends.
(i) Except for any Registrable Security sold or transferred
(including any Registrable Security represented by a Global Warrant) as
discussed in clause (ii) below, each Warrant Certificate evidencing the Global
Warrants and the Definitive Warrants (and all Warrants issued in exchange
therefor or substitution thereof) and each certificate representing the Warrant
Shares shall be substantially in the form of Exhibit A hereto and shall bear a
legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) TO CERTAIN INSTITUTIONAL ACCREDITED INVESTORS
WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (d) FOLLOWING THE
RELEASE OF PROCEEDS FROM THE ESCROW ACCOUNT, OUTSIDE THE UNITED STATES
TO A NON-UNITED STATES PERSON IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 904 UNDER THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO
THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
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(ii) Separability Legend. Until the Separation Date, each
Warrant Certificate shall bear a legend in substantially the following form (the
"Separability Legend"):
"UNTIL THE SEPARATION DATE (AS DEFINED), THIS WARRANT HAS BEEN ISSUED
AS, AND MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED 12
3/4% SENIOR SUBORDINATED NOTES DUE 2007. EACH UNIT CONSISTS OF $1,000
PRINCIPAL AMOUNT OF NOTES AND A WARRANT TO PURCHASE 0.2298 SHARES OF
COMMON STOCK, SUBJECT TO ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. A COPY
OF THE INDENTURE PURSUANT TO WHICH THE NOTES HAVE BEEN ISSUED IS
AVAILABLE FROM THE COMPANY UPON REQUEST."
(iii) Upon any sale or transfer of a Registrable Security
(including any Registrable Security represented by a Global Warrant) pursuant to
an effective registration statement under the Securities Act, pursuant to Rule
144 under the Securities Act or pursuant to an opinion of counsel reasonably
satisfactory to the Company that no legend is required:
(A) in the case of any Registrable Security that is a
Definitive Warrant, the Warrant Agent shall permit the Holder thereof to
exchange such Registrable Security for a Definitive Warrant that does not bear
the legend set forth in clause (i) above and rescind any restriction on the
transfer of such Registrable Security; and
(B) in the case of any Registrable Security
represented by a Global Warrant, such Registrable Security shall not be required
to bear the legend set forth in clause (i) above but shall continue to be
subject to the provisions of Section 7(e) hereof; provided, however, that with
respect to any request for an exchange of a Registrable Security that is
represented by a Global Warrant for a Definitive Warrant that does not bear the
legend set forth in clause (i) above, which request is made in reliance upon
Rule 144 (and based upon an opinion of counsel if the Company so requests), 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).
(h) Cancellation of Global Warrant. At such time as all
beneficial interests in Global Warrants have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, all Global Warrants
shall be returned to or retained and cancelled by the Warrant Agent.
(i) Obligations with Respect to Transfers and Exchanges of
Warrants.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent is hereby authorized to countersign,
in accordance with the provisions of Section 3 and this Section 9, Definitive
Warrants and Global Warrants as required pursuant to the provisions of this
Section 9.
(ii) All Definitive Warrants and Global Warrants issued upon
any registration of transfer or exchange of Definitive Warrants or Global
Warrants shall be the valid obligations of the Company, entitled to the same
benefits under this Agreement as the Definitive Warrants or Global Warrants
surrendered upon such registration of transfer or exchange.
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(iii) Prior to due presentment for registration of transfer or
exchange of any Warrant, the Warrant Agent and the Company may deem and treat
the Person in whose name any Warrant is registered (the "HOLDER" of such
Warrant) as the absolute owner of such Warrant and neither the Warrant Agent,
nor the Company shall be affected by notice to the contrary.
(iv) No service charge shall be made to a Holder for any
registration, transfer or exchange.
Section 10. Terms of Warrants; Exercise of Warrants.
Subject to the terms of this Agreement, each Warrant Holder
shall have the right, which may be exercised commencing at the opening of
business on the Exercisability Date and until 5:00 p.m., New York City time, on
the Expiration Date to receive from the Company the number of fully paid and
nonassessable Warrant Shares which the Holder may at the time be entitled to
receive on exercise of such Warrants and payment of the Exercise Price then in
effect for such Warrant Shares; provided, however, that no Holder shall be
entitled to exercise such Holder's Warrants at any time, unless, at the time of
exercise, (i) a registration statement under the Securities Act relating to the
Warrant Shares has been filed with, and declared effective by, the Commission,
and no stop order suspending the effectiveness of such registration statement
has been issued by the Commission or (ii) the issuance of the Warrant Shares is
permitted pursuant to an exemption from the registration requirements of the
Securities Act. Subject to the provisions of the following paragraph of this
Section 10, each Warrant not exercised prior to 5:00 p.m., New York City time,
on the Expiration Date 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 Company shall give notice not less than 90, and not more
than 120, days prior to the Expiration Date to the Holders of all then
outstanding Warrants to the effect that the Warrants will terminate and become
void as of 5:00 p.m., New York City time, on the Expiration Date. If the Company
fails to give such notice, the Warrants will not expire until 90 days after the
Company gives such notice; provided, however, in no event will Holders be
entitled to any damages or other remedy for the Company's failure to give such
notice other than any such extension.
A Warrant may be exercised upon surrender to the Company at
the principal office of the Warrant Agent of the certificate or certificates
evidencing the Warrant to be exercised with the form of election to purchase on
the reverse thereof duly completed and signed, which signature shall be
guaranteed by a bank or trust company having an office or correspondent in the
United States or a broker or dealer which is a member of a registered securities
exchange or the National Association of Securities Dealers, Inc., and upon
payment to the Warrant Agent for the account of the Company of the Exercise
Price as adjusted as herein provided for each of the Warrant Shares in respect
of which such Warrant is then exercised. Payment of the aggregate Exercise Price
shall be made by Federal wire transfer to the account designated by the Company
or by certified or official bank check, payable to the order of the Company. In
the alternative, each Holder may exercise its right to receive Warrant Shares on
a net basis, such that without the exchange of any funds, the Holder receives
that number of Warrant Shares otherwise issuable upon exercise of its Warrants
less that number of Warrant Shares having a fair market value equal to the
aggregate Exercise Price that would otherwise have been paid by the Holder for
the Warrant Shares being issued. For purposes of the foregoing sentence, "fair
market value" of the Warrant
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Shares shall be the Current Market Price of the Warrant Shares on the date
immediately preceding the date of payment of the Exercise Price as determined by
the procedures set forth in Section 15.6. The exercise of Warrants by Holders of
beneficial interests in Global Warrants shall be effected in accordance with
this Agreement and the procedures of the Depositary therefor.
Subject to the provisions of Section 11 hereof, upon surrender
of Warrants and payment of the Exercise Price as provided above by any Holder,
the Warrant Agent shall promptly notify the Company. and the Company shall
promptly transfer to such Holder a certificate or certificates for the
appropriate number of Warrant Shares or other securities or property (including
any money) to which such Holder is entitled, registered or otherwise placed in,
or payable to the order of, such name or names as may be directed in writing by
such Holder, and shall deliver such certificate or certificates representing the
Warrant Shares and any other securities or property (including any money) to
such Holder or any other Person or Persons entitled to receive the same,
together with an amount in cash in lieu of any fraction of a share as provided
in Section 17. Any such certificate or certificates representing the Warrant
Shares shall be deemed to have been issued and any Person so designated to be
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 commencing on the
Exercisability Date, 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 Expiration Date, 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 Certificates pursuant to the provisions of
this Section 10 and of Section 4 hereof, and the Company, whenever required by
the Warrant Agent, will supply the Warrant Agent with 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, upon the Company's written request, then be returned by the Warrant Agent
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 and any
notices given or received hereunder by or from the Company 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 11. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants or to any separation of the Warrants from the
Notes; 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 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
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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 12. 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 reasonably
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
reasonably satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company or the Warrant Agent may prescribe.
Section 13. 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 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 17. The Company will furnish such Transfer Agent
a copy of all notices of adjustments and certificates related thereto,
transmitted to each Holder of the Warrants pursuant to Section 18 hereof. Prior
to the initial underwritten public offering of Capital Stock of the Company, the
Company may act as Transfer Agent for the Common Stock. The Warrant Agent hereby
agrees that it will not issue any stock certificates delivered hereunder other
than upon the exercise of Warrants in accordance with the terms of this
Agreement and, promptly after the issuance of any such stock certificates, to
notify the Transfer Agent of such issuance.
Before taking any action which would cause an adjustment
pursuant to Section 15 hereof that would reduce the Exercise Price below the
then par value (if any) of the Warrant Shares, the Company will take any
corporate action which may, in the opinion of its counsel (which may be counsel
employed by the Company), be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants in accordance with the terms of this Agreement
(including the payment of the
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Exercise Price) will, upon issue, be duly and validly issued, fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issue thereof.
Section 14. Obtaining Stock Exchange Listings. The Company
will from time to time use its best efforts to take all action which may be
necessary so that the Warrant Shares, immediately upon their issuance upon the
exercise of Warrants, will be listed on the principal securities exchanges and
markets (including, without limitation, the Nasdaq National Market) within the
United States of America, if any, on which other shares of Common Stock are then
listed. Upon the listing of such Warrant Shares, the Company shall notify the
Warrant Agent in writing. The Company will obtain and keep all required permits
and records in connection with such listing.
Section 15. Adjustment of Exercise Price and Number of Warrant
Shares Issuable. The number and kind of shares issuable upon exercise of a
Warrant and the Exercise Price shall be subject to adjustment from time to time
as follows:
15.1 Stock Splits, Combinations, etc. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of Common Stock, (C)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (D) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the Exercise Price in effect and the number of
Warrant Shares issuable upon exercise of each Warrant immediately prior to such
action shall be adjusted so that the Holder of any Warrant thereafter exercised
shall be entitled to receive the number of shares of capital stock of the
Company which such Holder would have owned immediately following such action had
such Warrant been exercised immediately prior thereto. An adjustment made
pursuant to this Section 15.1 shall become effective immediately after the
record date in the case of a dividend and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this Section
15.1, the Holder of any Warrant thereafter exercised shall become entitled to
receive shares of two or more classes of capital stock of the Company, the Board
of Directors of the Company (whose determination shall be conclusive) shall
determine the allocation of the adjusted Exercise Price between or among shares
of such classes of capital stock.
15.2 Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in Section 15.1 and 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 in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger or acquisition in which the Company is the continuing corporation
and which does not result in any reclassification or change of the then
outstanding shares of Common Stock or other capital stock issuable upon exercise
of the Warrants) or in case of any sale or conveyance to another corporation of
the property of the Company as an entirety or substantially as an entirety,
then, as a condition of such reclassification, change, consolidation, merger,
sale or conveyance, the Company or such a successor or purchasing corporation,
as the case may be, shall forthwith make lawful and adequate provision whereby
the Holder of each Warrant then outstanding shall have the right thereafter to
receive on exercise of such Warrant the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance
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equivalent in value to the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance and enter into a supplemental warrant
agreement so providing. Such provisions shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 15. If the issuer of securities deliverable upon
exercise of Warrants under the supplemental warrant agreement is an affiliate of
the formed, surviving or transferee corporation, that issuer shall join in the
supplemental warrant agreement. The above provisions of this Section 15.2 shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
15.3 Issuance of Options or Convertible Securities. In the event
the Company shall, at any time or from time to time after the date hereof,
issue, sell, distribute or otherwise grant in any manner (including by
assumption) to all holders of the Common Stock any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, Common Stock (any such
rights, warrants or options being referred to herein as "OPTIONS") or any stock
or securities convertible into or exchangeable for Common Stock (any such
convertible or exchangeable stock being referred to herein as "CONVERTIBLE
SECURITIES") or any Convertible Securities (other than upon exercise of any
Option), whether or not such Options or the rights to convert or exchange such
Convertible Securities are immediately exercisable, and the price per share at
which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the aggregate amount, if any, received or receivable by the Company as
consideration for the issuance, sale, distribution or granting of such Options
or any such Convertible Security, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise of
all such Options or upon conversion or exchange of all such Convertible
Securities, plus, in the case of Options to acquire Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable upon the
conversion or exchange of all such Convertible Securities, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of all such
Options or upon the conversion or exchange of all such Convertible Securities or
upon the conversion or exchange of all Convertible Securities issuable upon the
exercise of all such Options) shall be less than the Current Market Price per
share of Common Stock on the record date for the issuance, sale, distribution or
granting of such Options or Convertible Securities (any such event being herein
called a "DISTRIBUTION"), then, effective upon such Distribution, (I) the
Exercise Price shall be reduced to the price (calculated to the nearest 1/1,000
of one cent) determined by multiplying the Exercise Price in effect immediately
prior to such Distribution by a fraction, the numerator of which shall be the
sum of (i) the number of shares of Common Stock outstanding (exclusive of any
treasury shares) immediately prior to such Distribution multiplied by the
Current Market Price per share of Common Stock on the date of such Distribution
plus (ii) the consideration, if any, received by the Company upon such
Distribution, and the denominator of which shall be the product of (A) the total
number of shares of Common Stock outstanding (exclusive of any treasury shares)
immediately after such Distribution multiplied by (B) the Current Market Price
per share of Common Stock on the record date for such Distribution and (II) the
number of shares of Common Stock purchasable upon the exercise of each Warrant
shall be increased to a number determined by multiplying the number of shares of
Common Stock so purchasable immediately prior to the record date for such
Distribution by a fraction, the numerator of which shall be the Exercise Price
in effect immediately prior to the adjustment required by clause (i) of this
sentence and the denominator of which shall be the Exercise Price in effect
immediately after such adjustment. For purposes of the foregoing, the total
maximum number of shares of Common Stock issuable upon exercise of all such
Options or upon conversion or exchange of all such Convertible Securities or
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upon the conversion or exchange of the total maximum amount of the Convertible
Securities issuable upon the exercise of all such Options shall be deemed to
have been issued as of the date of such Distribution and thereafter shall be
deemed to be outstanding and the Company shall be deemed to have received as
consideration therefor such price per share, determined as provided above.
Except as provided in Sections 15.10 and 15.11 below, no additional adjustment
of the Exercise Price shall be made upon the actual exercise of such Options or
upon conversion or exchange of the Convertible Securities or upon the conversion
or exchange of the Convertible Securities issuable upon the exercise of such
Options.
15.4 Dividends and Distributions. In the event the Company shall,
at any time or from time to time after the date hereof, distribute to all the
holders of Common Stock any dividend or other distribution of cash, evidences of
its indebtedness, other securities or other properties or assets (in each case
other than (i) dividends payable in Common Stock, Options or Convertible
Securities and (ii) any cash dividend or other cash distributions from current
or retained earnings), or any options, warrants or other rights to subscribe for
or purchase any of the foregoing, then (A) the Exercise Price shall be decreased
to a price determined by multiplying the Exercise Price then in effect by a
fraction, the numerator of which shall be the Current Market Price per share of
Common Stock on the record date for such distribution less the sum of (X) the
cash portion, if any, of such distribution per share of Common Stock outstanding
(exclusive of any treasury shares) on the record date for such distribution plus
(Y) the then fair market value (as determined in good faith by the Board of
Directors of the Company) per share of Common Stock outstanding (exclusive of
any treasury shares) on the record date for such distribution of that portion,
if any, of such distribution consisting of evidences of indebtedness, other
securities, properties, assets, options, warrants or subscription or purchase
rights, and the denominator of which shall be such Current Market Price per
share of Common Stock and (B) the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock so purchasable immediately
prior to the record date for such distribution by a fraction, the numerator of
which shall be the Exercise Price in effect immediately prior to the adjustment
required by clause (A) of this sentence and the denominator of which shall be
the Exercise Price in effect immediately after such adjustment. The adjustments
required by this Section 15.4 shall be made whenever any such distribution
occurs retroactive to the record date for the determination of stockholders
entitled to receive such distribution.
15.5 Adjustment for Sale of Common Stock Below Current Market
Price. If, after the date hereof, the Company sells any Common Stock or any
securities convertible into or exchangeable or exercisable for the Common Stock
(other than (i) pursuant to the exercise of the Warrants, (ii) any security
convertible into, or exchangeable or exercisable for, the Common Stock as to
which the issuance thereof has previously been the subject of any required
adjustment pursuant to this Section 15, (iii) the issuance of Common Stock upon
the conversion, exchange or exercise of convertible, exchangeable or exercisable
securities of the Company outstanding on the date of this Agreement (to the
extent in accordance with the terms of such securities as in effect on the date
of this Agreement) or (iv) Excluded Securities) at a price per share less than
the Current Market Price, the Exercise Price shall be adjusted in accordance
with the formula:
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E5 = E x (O + N)
--------------------
(O+(N x P/M))
where:
E' = the adjusted Exercise Price;
E = the current Exercise Price;
O = the number of shares of Common Stock outstanding on the date of
sale of Common Stock at a price per share less than the Current
Market Price to which this Section 15.5 applies;
N = the number of shares of Common Stock so sold or the maximum
stated number of shares of Common Stock issuable upon the
conversion, exchange, or exercise of any such convertible,
exchangeable or exercisable securities, as the case may be;
P = the offering price per share pursuant to any such convertible,
exchangeable or exercisable securities so sold or the sale price
of the shares so sold, as the case may be; and
M = the Current Market Price as of the Time of Determination or at
the time of sale, as the case may be.
The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, warrants or options to which this Section 15.5 applies or upon
consummation of the sale of Common Stock, as the case may be. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Exercise Price shall be readjusted to the Exercise Price which
would otherwise be in effect had the adjustment made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Exercise Price shall again be adjusted to be the
Exercise Price which would then be in effect if such date fixed for
determination of stockholders entitled to receive such rights or warrants had
not been so fixed.
No adjustment shall be made under this Section 15.5 if (I) the
application of the formula stated above in this Section 15.5 would result in a
value of E' that is lower than the value of E or (II) such adjustment would
require an increase or decrease of less than 1% to the Exercise Price; provided,
that any adjustment not made as a result of this clause (II) shall be carried
forward and included in the next adjustment required to be made hereunder.
Except as provided in Sections 15.10 and 15.11 below, no adjustment of the
Exercise Price shall be made upon the actual conversion or exchange of the
Convertible Securities.
15.6 Current Market Price. For the purpose of any computation of
Current Market Price under this Section 15 and Section 17, the Current Market
Price per share of Common Stock at any date shall be (x) for purposes of Section
17, the closing price on the business day immediately prior to the exercise of
the applicable Warrant pursuant to Section 10 and (y) in all other cases, the
average of the daily closing prices for the shorter of (i) the 20 consecutive
trading days ending on the last full trading day on the exchange or market
specified in the second succeeding sentence prior to the Time of Determination
(as defined below) and (ii) the period
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commencing on the date next succeeding the first public announcement of the
issuance, sale, distribution or granting in question through such last full
trading day prior to the Time of Determination. The term "TIME OF DETERMINATION"
as used herein shall be the time and date of the earlier to occur of (A) the
date as of which the Current Market Price is to be computed and (B) the last
full trading day on such exchange or market before the commencement of
"ex-dividend" trading in the Common Stock relating to the event giving rise to
the adjustment required by Sections 15.1, 15.2, 15.3 or 15.4. The closing price
for any day shall be the last reported sale price regular way or, in case no
such reported sale takes place on such day, the average of the closing bid and
asked prices regular way for such day, in each case (1) on the principal
national securities exchange on which the shares of Common Stock are listed or
to which such shares are admitted to trading or (2) if the Common Stock is not
listed or admitted to trading on a national securities exchange, in the
over-the-counter market as reported by Nasdaq National Market or any comparable
system or (3) if the Common Stock is not listed on Nasdaq National Market or a
comparable system, as furnished by two members of the NASD selected from time to
time in good faith by the Board of Directors of the Company for that purpose. In
the absence of all of the foregoing, or if for any other reason the Current
Market Price per share cannot be determined pursuant to the foregoing provisions
of this Section 15.6, the Current Market Price per share shall be the fair
market value thereof as determined in good faith by the Board of Directors of
the Company.
15.7 Certain Distributions. If the Company shall pay a dividend or
make any other distribution payable in Options or Convertible Securities, then,
for purposes of Section 15.4 above, such Options or Convertible Securities shall
be deemed to have been issued or sold without consideration.
15.8 Consideration Received. If any shares of Common Stock, Options
or Convertible Securities shall be issued, sold or distributed for a
consideration other than cash, the amount of the consideration other than cash
received by the Company in respect thereof shall be deemed to be the then fair
market value of such consideration (as determined in good faith by the Board of
Directors of the Company). If any Options shall be issued in connection with the
issuance and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
without consideration; provided, however, that if such Options have an exercise
price equal to or greater than the Current Market Price of the Common Stock on
the date of issuance of such Options, then such Options shall be deemed to have
been issued for consideration equal to such exercise price.
15.9 Deferral of Certain Adjustments. No adjustment to the Exercise
Price (including the related adjustment to the number of shares of Common Stock
purchasable upon the exercise of each Warrant) shall be required hereunder
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least one percent
of the Exercise Price; provided that any adjustments which by reason of this
Section 15.9 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. No adjustment need be made for a change in
the par value of the Common Stock. All calculations under this Section 15 shall
be made to the nearest 1/1,000 of one cent or to the nearest 1/1000 of a share,
as the case may be.
15.10 Changes in Options and Convertible Securities. If the exercise
price provided for in any Options referred to in Section 15.5 above, the
additional consideration, if any, payable upon
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the conversion or exchange of any Convertible Securities referred to in Sections
15.3 or 15.5 above, or the rate at which any Convertible Securities referred to
in Sections 15.3 or 15.5 above are convertible into or exchangeable for Common
Stock shall change at any time (other than under or by reason of provisions
designed to protect against dilution upon an event which results in a related
adjustment pursuant to this Section 15), the Exercise Price then in effect and
the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall forthwith be readjusted (effective only with respect to any
exercise of any Warrant after such readjustment) to the Exercise Price and
number of shares of Common Stock so purchasable that would then be in effect had
the adjustment made upon the issuance, sale, distribution or granting of such
Options or Convertible Securities been made based upon such changed purchase
price, additional consideration or conversion rate, as the case may be, but only
with respect to such Options and Convertible Securities as then remain
outstanding.
15.11 Expiration of Options and Convertible Securities. If, at any
time after any adjustment to the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall have been made pursuant to Sections
15.3, 15.5 or 15.10 above or this Section 15.11, any Options or Convertible
Securities shall have expired unexercised, the number of such shares so
purchasable shall, upon such expiration, be readjusted and shall thereafter be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
shares of Common Stock deemed to have been issued in connection with such
Options or Convertible Securities were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or Convertible
Securities and (ii) such shares of Common Stock, if any, were issued or sold for
the consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale, distribution or granting of all such Options or Convertible
Securities, whether or not exercised; provided that no such readjustment shall
have the effect of decreasing the number of such shares so purchasable by an
amount (calculated by adjusting such decrease to account for all other
adjustments made pursuant to this Section 15 following the date of the original
adjustment referred to above) in excess of the amount of the adjustment
initially made in respect of the issuance, sale, distribution or granting of
such Options or Convertible Securities.
15.12 Other Adjustments. In the event that at any time, as a result
of an adjustment made pursuant to this Section 15, the Holders shall become
entitled to receive any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants and the Exercise Price applicable to such exercise
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 shares of
Common Stock contained in this Section 15.
15.13 No Adjustment Required. Without limiting any other exception
contained in this Section 15, and in addition thereto, no adjustment will be
made for:
(i) exercises or conversions of any Options or Convertible
Securities outstanding on the date hereof;
(ii) issuances of Options, Convertible Securities or Common
Stock to employees, directors or consultants of the Company or any of its
subsidiaries pursuant to a plan approved by the Board of Directors of the
Company;
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<PAGE> 41
(iii) rights to purchase Common Stock pursuant to a Company
plan for reinvestment of dividends or interest;
(iv) issuances of Options, Convertible Securities or Common
Stock in bona fide public offerings or private placements pursuant to Section
4(2) of the Securities Act, Regulation D thereunder or Regulation S, involving
at least one investment bank of national reputation;
(v) issuances of Options, Convertible Securities or Common
Stock in connection with the establishment of commercial bank facilities,
capital lease obligations or other issuances of primarily debt obligations or
securities; or
(vi) issuances of Excluded Securities.
No adjustment in the Exercise Price will be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the
Exercise Price, provided, however, that any adjustment which is not made will be
carried forward and taken into account in any subsequent adjustment. The
Exercise Price will in no event be less than the par value of the Common Stock;
provided, however, the foregoing minimum Exercise Price shall not be applicable
for purposes of determining adjustments to the number of shares issuable upon
exercise of a Warrant.
Section 16. Statement on Warrants. Irrespective of any
adjustment in the number or kind of shares issuable upon the exercise of the
Warrants or the Exercise Price, Warrants theretofore or thereafter issued may
continue to express the same number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 17. Fractional Interest. The Company shall not be
required to issue fractional shares of Common Stock 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 shares of Common Stock which shall
be issuable upon such exercise shall be computed on the basis of the aggregate
number of shares of Common Stock acquirable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section 17, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall direct the Transfer Agent to pay
an amount in cash calculated by it to equal the then Current Market Price per
share multiplied by such fraction computed to the nearest whole cent. The
Holders, by their acceptance of the Warrant Certificates, expressly waive any
and all rights to receive any fraction of a share of Common Stock or a stock
certificate representing a fraction of a share of Common Stock.
Section 18. Notices to Warrant Holders. Upon any adjustment of
the Exercise Price pursuant to Section 15, the Company shall promptly thereafter
(i) cause to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing selected by the Board of
Directors of the Company (who may be the regular auditors of the Company)
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered Holders of
the Warrant Certificates at his address appearing on the Warrant register
written notice of such adjustments by first-class mail, postage
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prepaid. The Warrant Agent shall be entitled to rely on the above-referenced
accountant's certificate and shall be under no duty or responsibility with
respect to any such certificate, except to exhibit the same from time to time to
any Holder desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist that may require any adjustment of
the number of shares of Common Stock or other stock or property issuable on
exercise of the Warrants or the Exercise Price, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making such adjustment or the validity or value (or the kind or amount) of
any shares of Common Stock or other stock or property which may be issuable on
exercise of the Warrants. The Warrant Agent shall not be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver
any shares of Common Stock or stock certificates or other common stock or
property upon the exercise of any Warrant.
In case:
(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
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock or
distributions referred to in Section 15 hereof); 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 a tender offer or exchange offer for
shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) a Change of Control occurs; then the Company shall cause
to be filed with the Warrant Agent and shall cause to be given to each of the
registered Holders of the Warrant Certificates at such Holder's address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (a) or (b) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, 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 or Change of Control is expected to become effective or consummated, and the
date as of 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 or Change of Control. The
failure to give the notice required by this Section 18 or any defect therein
shall not affect the legality or validity of any distribution,
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right, option, warrant, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, or Change of Control or the vote upon
any action. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof 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 19. Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation into which the Warrant Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent under
the provisions of Section 21. Any such successor Warrant Agent shall promptly
cause notice of its succession as Warrant Agent to be mailed (by first class
mail, postage prepaid) to each Holder at such Holder's last address as shown on
the register maintained by the Warrant Agent pursuant to this Agreement. In case
at the time such successor to the Warrant Agent shall succeed to the agency
created by this Agreement, and in case at that time any of the Warrant
Certificates shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent; and in case at that time any of the Warrant Certificates shall not have
been countersigned, any successor to the Warrant Agent may countersign such
Warrant Certificates either in the name of the predecessor Warrant Agent or in
the name of the successor to the Warrant Agent; and in all such cases such
Warrant Certificates shall have the full force and effect provided in the
Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
Section 20. Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant
Certificates 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 action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.
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<PAGE> 44
The Warrant Agent may consult at any time with 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 of
any Warrant Certificate 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.
The Warrant Agent shall incur no liability or responsibility
to the Company or to any Holder of any Warrant Certificate for any action taken
in reliance on any Warrant Certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper parry or parties.
The Company agrees to pay to the Warrant Agent such
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement as the parties shall agree from time to time, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges and other charges
of any kind and nature reasonably incurred by the Warrant Agent in the execution
of 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 execution of this
Agreement except as a result of its negligence or willful misconduct.
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 of Warrant
Certificates shall furnish the Warrant Agent with 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 it 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 Warrant Certificates 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 of the
Warrants, as their respective rights or interests may appear. No provision of
this Agreement shall require the Warrant Agent to expend or risk its own funds.
The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction 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. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
The Warrant Agent shall act hereunder solely as agent for the
Company, 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 willful
misconduct.
The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in
40
<PAGE> 45
this Agreement, or to determine whether any facts exist which may require any of
such adjustments, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in making the
same. The Warrant Agent shall not be accountable with respect to the validity or
value or the kind or amount of any Warrant Shares or of any securities or
property which may at any time be issued or delivered upon the exercise of any
Warrant or with respect to whether any such Warrant Shares or other securities
will when issued be validly issued and fully paid and nonassessable. and makes
no representation with respect thereto.
Section 21. Resignation and Removal of Warrant Agent;
Appointment of Successor. No resignation or removal of the Warrant Agent and no
appointment of a successor warrant agent shall become effective until the
acceptance of appointment by the successor warrant agent as provided herein. The
Warrant Agent may resign its duties and be discharged from all further duties
and liability hereunder (except liability arising as a result of the Warrant
Agent's own negligence or willful misconduct) after giving written notice to the
Company. The Company may remove the Warrant Agent upon written notice, and the
Warrant Agent shall thereupon in like manner be discharged from all further
duties and liabilities hereunder, except as aforesaid. The Warrant Agent shall,
at the Company's expense, cause to be mailed (by first class mail, postage
prepaid) to each Holder of a Warrant at such Holder's last address as shown on
the register of the Company maintained by the Warrant Agent a copy of said
notice of resignation or notice of removal, as the case may be. Upon such
resignation or removal, the Company shall appoint in writing a new warrant
agent. If the Company shall fail to make such appointment within a period of 30
days after it has been notified in writing of such resignation by the resigning
Warrant Agent or after such removal, then the resigning Warrant Agent or the
Holder of any Warrant may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court, shall be a corporation doing business under the
laws of the United States or any state thereof, in good standing and having a
combined capital and surplus of not less than $50,000,000. The combined capital
and surplus of any such new warrant agent shall be deemed to be the combined
capital and surplus as set forth in the most recent annual report of its
condition published by such warrant agent prior to its appointment, provided
that such reports are published at least annually pursuant to law or to the
requirements of a federal or state supervising or examining authority. After
acceptance in writing of such appointment by the new warrant agent, it shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be necessary
or expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the resigning or removed Warrant Agent.
Not later than the effective date of any such appointment, the Company shall
give notice thereof to the resigning or removed Warrant Agent. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation of the Warrant
Agent or the appointment of a new warrant agent, as the case may be.
Section 22. Reports.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Warrants are outstanding, the Company will
furnish to the holders of Warrants upon request (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms l0-Q and 10-K if the Company were required to file such
41
<PAGE> 46
forms and (ii) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports, in
each case within the time periods specified in the Commissions rules and
regulations (the information and reports in clauses (i) and (ii), collectively,
"SEC REPORTS").
(b) The Company shall provide the Warrant Agent with a
sufficient number of copies of all SEC Reports that the Warrant Agent may be
required to deliver to the Holders of the Warrants under this Section 22.
Section 23. Special Mandatory Redemption. The Company shall
redeem (and each of the Holders hereby agrees to sell) all of the Warrants if
and upon the earlier to occur of (i) five Business Days following termination of
the Merger Agreement in accordance with its terms and (ii) September 15, 1999,
if the transactions contemplated by the Merger Agreement have not been
consummated by such date at a redemption price in cash equal to $13.4633 per
Warrant. Upon consummation of the transactions contemplated by the Merger
Agreement, the provisions of this Section 23 shall be null and void.
Section 24. Notices to Company and Warrant Agent. Any notice
or demand authorized by this Agreement to be given or made by the Warrant Agent
or by the Holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
WinsLoew Escrow Corp.
160 Village Street
Birmingham, Alabama 35242
Telecopy: (205) 408-7600
Telephone: (205) 408-7028
Attention: Chief Financial Officer
with copies to:
Greenberg & Traurig, P.A.
1221 Brickell Avenue, 21st Floor
Miami, Florida 33131
Telecopy: (305) 579-0500
Telephone: (305) 579-0717
Attention: Michael W. Hein, Esq.
In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the
Company or by the Holder(s) of any Warrant Certificate to the Warrant Agent
shall be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
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<PAGE> 47
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Telecopy: (718) 331-1852
Attention: Corporate Trust Trustee Administration
Section 25. 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 Warrant Certificates 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 adversely affect the interests of the Holders of Warrant
Certificates. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of Holders shall require the written consent of
Holders representing 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 (other than pursuant to
adjustments provided for in Section 15 hereof or amendments to Section 15 which
can be made by the written consent of Holders representing a majority of the
then outstanding Warrants). The Warrant Agent shall be entitled to receive and,
subject to Section 20, 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 26. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 27. Termination. This Agreement (other than any
party's obligations with respect to Warrants previously exercised and with
respect to indemnification under Section 20) shall terminate at 5:00 p.m., New
York City time on the Expiration Date.
Section 28. 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 FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PROVISIONS THEREOF
Section 29. Benefits of This Agreement.
(a) Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Warrant Agent and the 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 Holders of the Warrant Certificates.
(b) Prior to the exercise of the Warrants, no Holder of a
Warrant Certificate, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any
43
<PAGE> 48
preemptive right, to receive any notice of meetings of stockholders for the
election of directors of the Company or any other matter or to receive any
notice of any proceedings of the Company, except as may be specifically provided
for herein. The Holders of the Warrants are not entitled to share in the assets
of the Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
(c) All rights of action in respect of this Agreement are
vested in the Holders of the Warrants, and any Holder of any Warrant, without
the consent of the Warrant Agent or the Holder of any other Warrant, may, on
such Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's rights hereunder,
including the right to exercise, exchange or surrender for purchase such
Holder's Warrants in the manner provided in this Agreement.
Section 30. 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.
[Signature Page Follows]
44
<PAGE> 49
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
WINSLOEW ESCROW CORP.
By: /s/ William F. Kaczynski, Jr.
--------------------------------
Name: William F. Kaczynski, Jr.
-------------------------
Title: Vice President
------------------------
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Joseph F. Wolf
--------------------------------
Name: Joseph F. Wolf
-------------------------
Title: Vice President
------------------------
45
<PAGE> 50
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE WARRANT
AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 12 OF THE WARRANT AGREEMENT, (II) THIS
GLOBAL WARRANT MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
9(a) OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE
WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 9(h) OF THE WARRANT AGREEMENT
AND (IV) THIS GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY.(1)
UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR THE WARRANT AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 9 OF THE WARRANT AGREEMENT.(1)
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
- --------------------------
(1) These paragraphs are to be included only if the Warrant is in global form.
A-1
<PAGE> 51
OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
TO CERTAIN INSTITUTIONAL ACCREDITED INVESTORS WITHIN THE MEANING OF
SUBPARAGRAPHS (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
(d) FOLLOWING THE RELEASE OF PROCEEDS FROM THE ESCROW ACCOUNT, OUTSIDE THE
UNITED STATES TO A NON-UNITED STATES PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (e) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
UNTIL THE SEPARATION DATE (AS DEFINED), THIS WARRANT HAS BEEN ISSUED AS, AND
MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED 12 3/4% SENIOR
SUBORDINATED NOTES DUE 2007. EACH UNIT CONSISTS OF $1,000 PRINCIPAL AMOUNT OF
NOTES AND A WARRANT TO PURCHASE 0.2298 SHARES OF COMMON STOCK, SUBJECT TO
ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. A COPY OF THE INDENTURE PURSUANT TO
WHICH THE NOTES HAVE BEEN ISSUED IS AVAILABLE FROM THE COMPANY UPON REQUEST.(2)
- -----------------------------
(2) This paragraph to be included only until the Separation Date, as defined in
the Warrant Agreement.
A-2
<PAGE> 52
WINSLOEW ESCROW CORP.
[CUSIP] [CINS] [ISIN) No. ________
No. ____________
WARRANTS TO PURCHASE COMMON SHARES
This certifies that Cede & Co., or its registered assigns, is
the owner of up to ________(3) Warrants, each of which initially represents the
right to purchase, after the earliest to occur (the "EXERCISABILITY DATE") of
(i) the Separation Date, (ii) the consummation of an underwritten public
offering of Capital Stock of the Company and (iii) the date that any class of
Capital Stock of WinsLoew Escrow Corp. (the "COMPANY") is listed on a national
securities exchange or authorized for quotation on the Nasdaq National Market or
is otherwise subject to registration under the Exchange Act , for 0.2298 shares
of the Common Stock, par value $.01 per share, of the Company (the "WARRANT
SHARES") at an exercise price (the "EXERCISE PRICE") of $.0l per Common Share
(subject to adjustment as provided in the Warrant Agreement referred to below),
upon surrender hereof at the office of American Stock Transfer & Trust Company,
or to its successor, as the warrant agent under the Warrant Agreement (any such
warrant agent being herein called the "WARRANT AGENT"), or such other location
contemplated by Section 24 of the Warrant Agreement, with the Subscription Form
on the reverse hereof duly executed, with signature guaranteed as therein
specified and simultaneous payment in full by Federal wire transfer to the
account designated by the Company or by certified or official bank or bank
cashier's check payable to the order of the Company. Notwithstanding the
foregoing, each Holder (as defined in the Warrant Agreement) may exercise its
right to receive Warrant Shares on a net basis, such that without the exchange
of any funds, the Holder receives that number of Warrant Shares otherwise
issuable upon exercise of its Warrants less that number of Warrant Shares having
a fair market value equal to the aggregate Exercise Price that would otherwise
have been paid by the Holder for the Warrant Shares being issued. At any time
after the Exercisability Date and on or before the Expiration Date, any
outstanding Warrants may be exercised on any Business Day; provided, however,
that a Registration Statement relating to the Warrants is, at the time of
exercise, effective and available for the exercise of Warrants or the exercise
of such Warrants is exempt from the registration requirements of the Securities
Act.
This Warrant Certificate is issued under and in accordance
with a Warrant Agreement dated August 24, 1999 (the "WARRANT AGREEMENT"),
between the Company and American Stock Transfer & Trust Company, as Warrant
Agent, and is subject to the Articles of Incorporation and Bylaws of the Company
and to the terms and provisions contained therein, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance hereof.
The terms of the Warrant Agreement are hereby incorporated herein by reference
and made a part hereof. Reference is hereby made to the Warrant Agreement for a
full description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Company and the Holders of the Warrants. The
summary of the terms of the Warrant Agreement contained in this
- ------------------------------------
(3) To evidence initially ___________ Warrants, subject to increase and decrease
in accordance with the Schedule of Exchanges related hereto maintained by the
Warrant Agent, and, in combination with the ________ Warrant number ______
identified by CUSIP No. ________, to equal 105,000 Warrants.
A-3
<PAGE> 53
Warrant Certificate is qualified in its entirety by express reference to the
Warrant Agreement. All terms used in this Warrant Certificate that are defined
in the Warrant Agreement shall have the meanings assigned to them in such
agreements.
The number of Warrant Shares purchasable upon the exercise of
each Warrant and the price per share are subject to adjustment as provided in
the Warrant Agreement. Except as stated in the Warrant Agreement, in the event
the Company merges or consolidates with, or sells all or substantially all of
its assets to, another Person, each Warrant will, upon exercise, entitle the
Holder thereof to receive the number of shares of Capital Stock or other
securities or the amount of money and other property which the Holder of the
number of Warrant Shares (or other securities or property issuable upon exercise
of a Warrant) purchasable upon the exercise of the Warrant is entitled to
receive upon completion of such merger, consolidation or sale.
As to any final fraction of a share which the same Holder of
one or more Warrant Certificates would otherwise be entitled to purchase upon
exercise thereof in the same transaction, the Company may pay the cash value
thereof determined as provided in the Warrant Agreement.
All Warrant Shares issuable by the Company upon the exercise
of Warrants shall be validly issued, fully paid and not subject to any calls for
funds, and the Company shall pay any taxes and other governmental charges that
may be imposed under the laws of the United States of America or any political
subdivision or taxing authority thereof or therein in respect of the issue or
delivery thereof upon exercise of Warrants (other than income taxes imposed on
the Holder). The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issue of any
certificate for Warrant Shares (including other securities or property issuable
upon the exercise of the Warrants) or payment of cash to any Person other than
the Holder of a Warrant Certificate surrendered upon the exercise of a Warrant
and in case of such transfer or payment, the Warrant Agent and the Company shall
not be required to issue any share certificate or pay any cash until such tax or
charge has been paid or it has been established to the Warrant Agent's and the
Company's satisfaction that no such tax or charge is due.
Subject to the restrictions on and conditions to transfer set
forth in Section 7 of the Warrant Agreement, this Warrant Certificate and all
rights hereunder are transferable by the registered Holder hereof, in whole or
in part, on the register of the Company maintained by the Warrant Agent for such
purpose at the Warrant Agent's office in New York, New York, upon surrender of
this Warrant Certificate duly endorsed, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Warrant Agent duly
executed, with signatures guaranteed as specified in the attached Form of
Assignment, by the registered Holder hereof or such Holder's attorney duly
authorized in writing and by such other documentation required pursuant to the
Warrant Agreement and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. Upon any partial transfer, the
Company will sign and issue and the Warrant Agent will countersign and deliver
to such Holder a new Warrant Certificate or Certificates with respect to any
portion not so transferred. Each taker and Holder of this Warrant Certificate,
by taking and holding the same, consents and agrees that prior to the
registration of transfer as provided in the Warrant Agreement, the Company and
the Warrant Agent may treat the Person in whose name the Warrants are registered
as the absolute owner hereof for any purpose and as the Person entitled to
exercise the rights represented hereby, any notice to the contrary
notwithstanding. Accordingly, the Company and/or the Warrant Agent shall not,
except as ordered by a court of competent jurisdiction as required by law, be
bound to
A-4
<PAGE> 54
recognize any equitable or other claim to or interest in the Warrants on the
part of any Person other than such registered Holder, whether or not it shall
have express or other notice thereof.
This Warrant Certificate may be exchanged at the office of the
Warrant Agent maintained for such purpose in New York, New York, for Warrant
Certificates representing the same aggregate number of Warrants, each new
Warrant Certificate to represent such number of Warrants as the Holder hereof
shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the
Holder of this Warrant Certificate, as such, shall not be entitled to any rights
of a shareholder of the Company, including, without limitation, the right to
vote or to consent to any action of the shareholders, to receive any
distributions, to exercise any pre-emptive right or to receive any notice of
meetings of shareholders, and shall not be entitled to receive any notice of any
proceedings of the Company except as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights
evidenced hereby shall cease on August 15, 2007, unless sooner terminated by the
liquidation, dissolution or winding-up of the Company or as otherwise provided
in the Warrant Agreement upon the consolidation or merger of the Company with,
or sale of the Company to, another Person or unless such date is extended as
provided in the Warrant Agreement.
This Warrant Certificate shall not be valid for any purpose
until it shall have been countersigned by the Warrant Agent.
WINSLOEW ESCROW CORP.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent
By:
--------------------------------
Authorized Signatory
A-5
<PAGE> 55
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To: American Stock Transfer & Trust Company,
as Warrant Agent
40 Wall Street, 46th floor
New York, New York 10005
Attention: Corporate Trust Administration
The undersigned irrevocably exercises _________ of the
Warrants represented by this Warrant Certificate and herewith makes payment of $
_________ (such payment being by Federal wire transfer to the account designated
by WinsLoew Escrow Corp. or by certified or official bank or bank cashier's
check payable to the order or at the direction of WinsLoew Escrow Corp.), or
each Holder may exercise its right to receive Warrant Shares on a net basis,
such that without the exchange of any funds, the Holder receives that number of
Warrant Shares otherwise issuable upon exercise of its Warrants less that number
of Warrant Shares having a fair market value equal to the aggregate Exercise
Price that would otherwise have been paid by the Holder for the Warrant Shares
being issued, all at the exercise price and on the terms and conditions
specified in this Warrant Certificate and in the Warrant Agreement and the
Warrant Registration Rights Agreement referred to herein and surrenders this
Warrant Certificate and all right, title and interest therein to and directs
that the Common Stock, par value $0.01 per share, of WinsLoew Escrow Corp.
deliverable upon the exercise of such Warrants be registered or placed in the
name and at the address specified below and delivered thereto.
Dated:
--------------
-----------------------------------------------
(Signature of Owner)
-----------------------------------------------
(Street Address)
-----------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
-----------------------------------------------
A-6
<PAGE> 56
--------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the Warrant
Agent, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Warrant Agent in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
Securities and/or check or other property to be issued or delivered to:
Please insert social security or identifying number:
-----------------------
Name:
---------------------------------------------
Street Address:
------------------------------------
City, State and Zip Code:
--------------------------
A-7
<PAGE> 57
FORM OF ASSIGNMENT
In consideration of monies or other valuable consideration
received from the Assignee(s) named below, the undersigned registered Holder of
this Warrant Certificate hereby sells, assigns, and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by this Warrant Certificate not
being assigned hereby) all of the right of the undersigned under this Warrant
Certificate, with respect to the number of Warrants set forth below:
Name(s) of Assignee(s):
---------------------------------------------------
Address:
------------------------------------------------------------------
No. of Warrants:
----------------------------------------------------------
Please insert social security or other identifying number of assignee(s):
and does hereby irrevocably constitute and appoint _________________________ the
undersigned's attorney to make such transfer on the books of___________________
maintained for the purposes, with full power of substitution in the premises.
In connection with any transfer of Warrants, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[ ] (a) these Warrants are being transferred in compliance with the
exemption from registration under the United States Securities
Act of 1933, as amended, provided by Rule 144A thereunder.
or
[ ] (b) these Warrants are being transferred other than in accordance
with (a) above and documents are being furnished which comply
with the conditions of transfer set forth in this Warrant
Certificate and the Warrant Agreement.
or
[ ] (c) these Warrants are being transferred pursuant to an effective
registration statement under the United States Securities Act
of 1933, as amended.
If none of the foregoing boxes is checked, the Warrant Agent
shall not be obligated to register the Warrants in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 9 of the Warrant Agreement shall
have been satisfied.
Dated:
---------------------
A-8
<PAGE> 58
----------------------------------------------
(Signature of Owner)
----------------------------------------------
(Street Address)
----------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
----------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Warrant Agent, which requirements
include membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee
program" as may be determined by the Warrant
Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A-9
<PAGE> 59
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
the Warrant(s) for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the United
States Securities Act of 1933, as amended, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such
information regarding WinsLoew Escrow Corp. as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
--------------------
--------------------------------------------------
[NOTE: To be executed by an executive officer]
A-10
<PAGE> 60
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(4)
The following exchanges of a part of this Global Warrant for
certificated Warrants have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Exchange Amount of decrease Amount of increase Number of Warrants Signature of
in Number of in Number of of this Global authorized
Warrants of this Warrants of this Warrant following signatory of
Global Warrant Global Warrant such decrease Warrant Agent
(or increase)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------
(4) This is to be included only if the Warrant is in global form.
A-11
<PAGE> 61
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "WARRANTS") of WINSLOEW ESCROW
CORP.
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 of
authorized denominations and an aggregate number equal to its beneficial
interest in 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 and in respect of each such
Warrant, the Transferor does hereby certify that Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and the restrictions
on transfers thereof as provided in Section 9 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "SECURITIES ACT") because:
[ ] Such Warrant is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 9(b)(i)(A) or Section
9(c)(y)(i) of the Warrant Agreement).
[ ] Such Warrant is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act), in
accordance with Rule 144A.
[ ] Such Warrant is being transferred pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act.
[ ] Such Warrant is being transferred to an institutional
"accredited investor," within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act.
[ ] Such Warrant is being transferred in accordance with Rule
904 under the Securities Act.
B-1
<PAGE> 62
[ ]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, Rule 144 or Rule 904 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:
-------------
B-2
<PAGE> 1
Exhibit (a)(11)
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of August 27, 1999, among Trivest Furniture Corporation, a Florida
corporation (the "Temporary Survivor"), WinsLoew Furniture, Inc., a Florida
corporation (the "Company"), Winston Furniture Company of Alabama, Inc., an
Alabama corporation ("Winston"), Loewenstein Furniture Company, a Florida
corporation ("Loewenstein"), Winston Properties, Inc., an Alabama corporation
("WPI"), Texacraft, Inc., a Texas corporation ("Texacraft"), Tropic Craft, Inc.,
a Florida corporation ("Tropic Craft"), and Pompeii Furniture Co., Inc., a
Florida corporation ("Pompeii" and together with Winston, Loewenstein, WPI,
Texacraft and Tropic Craft, the "Guarantors"), all of which are direct or
indirect, wholly-owned subsidiaries of the Company, and American Stock Transfer
& Trust Company, as trustee under the indenture referred to below (the
"Trustee").
WITNESSETH:
WHEREAS, WinsLoew Escrow Corp., a Florida corporation (the
"Predecessor") has heretofore executed and delivered to the Trustee an indenture
(the "Indenture"), dated as of August 24, 1999 providing for the issuance of an
aggregate principal amount at maturity of $105.0 million of 12 3/4% Senior
Subordinated Notes due 2007 (the "Notes"); and
WHEREAS, Article 5 of the Indenture provides that upon the
occurrence of certain mergers, consolidations and sales of all or substantially
all of the assets of the Predecessor, the surviving entity or purchasers may
assume the obligations under the Indenture and the Notes by executing and
delivering to the Trustee a supplemental indenture pursuant to which the
surviving entity shall assume all of the Predecessor's Obligations under the
Notes and the Indenture; and
WHEREAS, pursuant to that certain Agreement and Plan of
Merger, adopted by Predecessor and Temporary Survivor, Predecessor has merged
with and into Temporary Survivor, with Temporary Survivor being the surviving
corporation (the "Short Form Merger"); and
WHEREAS, pursuant to that certain Second Amended and Restated
Agreement and Plan of Merger, dated as of May 4, 1999, by and between Temporary
Survivor and the Company, Temporary Survivor has merged with and into the
Company, with the Company being the surviving corporation (the "Merger"); and
WHEREAS, all of the conditions of Section 5.01 under the
Indenture have been satisfied; and
WHEREAS, the Indenture provides that under certain
circumstances the Guarantors shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guarantors shall unconditionally
guarantee all of the Company's Obligations
<PAGE> 2
under the Notes and the Indenture on the terms and conditions set forth herein
(the "Note Guarantee"); and
WHEREAS, pursuant to Section 10.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, Temporary Survivor, the Company, the Guarantors and the Trustee
mutually covenant and agree for the equal and ratable benefit of the Holders of
the Notes as follows:
1. Capitalized Terms. Capitalized Terms used herein without definition shall
have the meanings assigned to them in the Indenture.
2. Assumption of Obligations. Each of Temporary Survivor, as a result and in
contemplation of the consummation of the Short Form Merger, and the
Company, as a result and in contemplation of the Merger, hereby agrees to
assume all of the Obligations of the Predecessor and Temporary Survivor,
respectively, under the Notes and the Indenture in accordance with the
provisions of Section 5.01 of the Indenture and agree to be substituted as
the successor corporation to each of the Predecessor and Temporary
Survivor, respectively, in accordance with the provisions of Section 5.02
of the Indenture.
3. Agreement to Guarantee. Each Guarantor hereby agrees as follows:
3.1. Along with all Guarantors, to jointly and severally Guarantee to each
Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity
and enforceability of the Indenture, the Notes or the Obligations of
the Company hereunder or thereunder, that:
3.1.1. the principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes shall be promptly paid in full
when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of to the
extent and interest and Liquidation Damages, if any, on the
Notes to the extent lawful, and all other Obligations of the
Company to the Holders or the Trustee hereunder or under the
Indenture shall be promptly paid in full or performed, all in
accordance with the terms hereof and under the Indenture;
3.1.2. in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, that same shall be
promptly paid in full when
2
<PAGE> 3
due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever
reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately.
3.2. The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture,
the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes 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.
3.3. The following is hereby waived: 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.
3.4. This Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the
Indenture.
3.5. If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any Custodian, Trustee,
liquidator or other similar official acting in relation to either the
Company or the Guarantors, any amount paid by either to the Trustee or
such Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
3.6. Such Guarantor shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.
3.7. As between the Guarantors, on the one hand, the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 of the
Indenture for the purposes of this Note 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 declaration of acceleration of such obligations as provided in
Article
3
<PAGE> 4
6 of the Indenture, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the
purpose of this Note Guarantee.
3.8. The Guarantors shall have the right to seek contribution from
non-paying Guarantors so long as the exercise of such right does not
impair the rights of the Holders under the Note Guarantee.
3.9. Notwithstanding the foregoing, in the event that this Note Guarantee
would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability
of such Guarantor under this Supplemental Indenture and its Note
Guarantee shall be reduced to the maximum amount permissible under
such fraudulent conveyance or similar law.
3.10. Notwithstanding anything to the contrary herein, all obligations of
each Guarantor hereunder shall be subordinated to the prior payment of
Senior Indebtedness to the same extant that the Notes are subordinated
pursuant to Article 11 of the Indenture.
4. Execution and Delivery. Each Guarantor agrees that the Guarantees shall
remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Note Guarantee.
5. Guarantors May Consolidate, Etc. on Certain Terms.
5.1. Except as provided in Section 6.1 hereof, each Guarantor may not
consolidate with or merge with or into (whether or not such Guarantor
is the surviving Person) another corporation, Person or entity whether
or not affiliated with such Guarantor unless:
5.1.1. subject to Section 6.1 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a
Guarantor or the Company) unconditionally assumes all the
obligations of such Guarantor, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, the Indenture and the Note Guarantee
on the terms set forth herein or therein; and
5.1.2. immediately after giving effect to such transaction, no
Default or Event of Default exists.
4
<PAGE> 5
5.2. In 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 Trustee and satisfactory in
form to the Trustee, of the Note Guarantee endorsed upon the Notes and
the due and punctual performance of all of the covenants and
conditions of the Indenture 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. Such successor corporation thereupon may cause to be signed
any or all of the Note Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the Note Guarantees so
issued shall in all respects have the same legal rank and benefit
under the Indenture as the Note Guarantees theretofore and thereafter
issued in accordance with the terms of the Indenture as though all of
such Note Guarantees had been issued at the date of the execution
hereof.
5.3. Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding subparagraphs 5.1.1 and 5.1.2 above, nothing contained
in the Indenture or in any of the Notes 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.
6. Releases.
6.1. In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all to the capital stock of any Guarantor,
then such Guarantor (in the event of a sale or other disposition, by
way of merger, consolidation or otherwise, of all of the capital stock
of such Guarantor) or the corporation acquiring the property (in the
event of a sale or other disposition of all or substantially all of
the assets of such Guarantor) shall be released and relieved of any
obligations under this Supplemental Indenture and its Note Guarantee;
provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture,
including without limitation Section 4.10 of the Indenture. Upon
delivery by the Company to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions
of the Indenture, including without limitation Section 4.10 of the
Indenture, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Guarantor from its obligations
under its Note Guarantee.
5
<PAGE> 6
6.2. Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor
under the Indenture as provided in the Indenture.
7. No Recourse Against Others. No past, present or future director, officer,
employee, incorporator, stockholder or agent of the Guarantor, as such,
shall have any liability for any obligations of the Company or any
Guarantor under the Notes, any Note Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such
waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
8. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
9. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
10. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
11. The Trustee. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of
which recitals are made solely by the Guarantor and the Company.
[SIGNATURE PAGES FOLLOW]
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated: August 27, 1999
TRIVEST FURNITURE CORPORATION
By: /s/ Vincent A. Tortorici, Jr.
--------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Vice President and Chief Financial Officer
WINSLOEW FURNITURE, INC.
By: /s/ Vincent A. Tortorici, Jr.
--------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Vice President, Treasurer and Chief Financial
Officer
WINSTON FURNITURE COMPANY OF ALABAMA, INC.
By: /s/ Vincent A. Tortorici, Jr.
--------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Vice President-Finance & Administration,
Treasurer and Chief Financial Officer
LOEWENSTEIN, INC.
By: /s/ Vincent A. Tortorici, Jr.
-------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Vice President and Treasurer
S-1
<PAGE> 8
WINSTON PROPERTIES, INC.
By: /s/ Vincent A. Tortorici, Jr.
-------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Vice President and Treasurer
TEXACRAFT, INC.
By: /s/ Vincent A. Tortorici, Jr.
-------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Vice President and Treasurer
TROPIC CRAFT, INC.
By: /s/ Vincent A. Tortorici, Jr.
-------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Vice President-Finance and Treasurer
POMPEII FURNITURE CO., INC.
By: /s/ Vincent A. Tortorici, Jr.
-------------------------------------------------
Name: Vincent A. Tortorici, Jr.
Title: Treasurer and Chief Financial Officer
S-2
<PAGE> 9
AMERICAN STOCK TRANSFER & TRUST COMPANY, as Trustee
By: /s/ Herbert J. Lemmer
-------------------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
S-3
<PAGE> 1
Exhibit (a)(12)
================================================================================
$155,000,000
LOAN AND SECURITY AGREEMENT
Dated as of August 27, 1999
Between
WINSLOEW FURNITURE, INC.
WINSTON FURNITURE COMPANY OF ALABAMA, INC.
LOEWENSTEIN, INC.
TEXACRAFT, INC.
TROPIC CRAFT, INC.
WINSTON PROPERTIES, INC.
POMPEII FURNITURE CO., INC.
(the Borrowers)
and
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME
(the Lenders)
and
HELLER FINANCIAL, INC.
CIBC INC.
(the Co-Agents)
and
BANKBOSTON, N.A.
(the Administrative Agent)
BANCBOSTON ROBERTSON STEPHENS INC.
(the Arranger)
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1 DEFINITIONS
SECTION 1.1 Definitions..........................................................................................1
SECTION 1.2 General Interpretive Rules..........................................................................41
SECTION 1.3 Exhibits, Annexes and Schedules.....................................................................43
ARTICLE 2 REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans..............................................................................44
SECTION 2.2 Borrowing...........................................................................................44
SECTION 2.3 Repayment of Revolving Credit Loans.................................................................45
SECTION 2.4 Revolving Credit Note...............................................................................45
SECTION 2.5 Extension of Revolving Credit Facility..............................................................45
ARTICLE 2A SWINGLINE FACILITY
SECTION 2A.1 Swingline Loans....................................................................................46
SECTION 2A.2 Making Swingline Loans.............................................................................46
SECTION 2A.3 Repayment of Swingline Loans.......................................................................47
SECTION 2A.4 Prepayment.........................................................................................47
SECTION 2A.5 Swingline Note.....................................................................................47
SECTION 2A.6 Settlement with Other Lenders......................................................................47
ARTICLE 3 LETTER OF CREDIT FACILITY
SECTION 3.1 Agreement to Issue..................................................................................48
SECTION 3.2 Amounts.............................................................................................48
SECTION 3.3 Conditions..........................................................................................48
SECTION 3.4 Issuance of Letters of Credit.......................................................................49
SECTION 3.5 Duties of BankBoston................................................................................49
SECTION 3.6 Payment of Reimbursement Obligations................................................................50
SECTION 3.7 Participations......................................................................................50
SECTION 3.8 Indemnification, Exoneration........................................................................52
SECTION 3.9 Supporting Letter of Credit; Cash Collateral Account................................................53
</TABLE>
- --------
(1) This Table of Contents is included for reference purposes only and does not
constitute part of the Loan and Security Agreement.
(i)
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE 4 TERM LOAN FACILITIES
SECTION 4.1 Term Loans..........................................................................................55
SECTION 4.2 Manner of Borrowing Term Loans......................................................................55
SECTION 4.3 Repayment of Term Loans.............................................................................55
SECTION 4.4 Term Notes..........................................................................................56
ARTICLE 4A ACQUISITION FACILITY
SECTION 4A.1 Acquisition Loans..................................................................................57
SECTION 4A.2 Borrowing..........................................................................................57
SECTION 4A.3 Repayment of Acquisition Loans.....................................................................58
SECTION 4A.4 Acquisition Note...................................................................................58
ARTICLE 5 GENERAL LOAN PROVISIONS
SECTION 5.1 Interest............................................................................................59
SECTION 5.2 Certain Fees........................................................................................60
SECTION 5.3 Borrowing and Conversion or Continuation of Loans...................................................62
SECTION 5.4 Conversion or Continuation..........................................................................63
SECTION 5.5 Manner of Payment...................................................................................63
SECTION 5.6 General.............................................................................................63
SECTION 5.7 Loan Accounts; Statements of Account................................................................64
SECTION 5.8 Reduction of Revolving Credit Facility and Acquisition Facility; Termination of Agreement............64
SECTION 5.9 Making of Loans.....................................................................................66
SECTION 5.10 Settlement Among Lenders...........................................................................68
SECTION 5.11 Prepayments of Loans...............................................................................71
SECTION 5.12 Payments Not at End of Interest Period; Failure to Borrow..........................................74
SECTION 5.13 Assumptions Concerning Funding of Eurodollar Rate Loans............................................75
SECTION 5.14 Duration of Interest Periods; Maximum Number of Eurodollar Rate Loans; Minimum Increments..........75
SECTION 5.15 Changed Circumstances..............................................................................75
SECTION 5.16 Cash Collateral Account; Investment Accounts.......................................................78
SECTION 5.17 Borrowers' Representative..........................................................................79
SECTION 5.18 Joint and Several Liability, No Modification or Release of Obligations.............................80
SECTION 5.19 Obligations Absolute...............................................................................80
SECTION 5.20 Waiver of Suretyship Defenses......................................................................81
SECTION 5.21 Defaulting Lender's Status.........................................................................82
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 6 CONDITIONS PRECEDENT
SECTION 6.1 Conditions Precedent to Initial Loans...............................................................83
SECTION 6.2 Additional Conditions to Acquisition Loans..........................................................88
SECTION 6.3 All Loans and Letters of Credit.....................................................................90
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 7.1 Representations and Warranties......................................................................91
SECTION 7.2 Survival of Representations and Warranties, Etc....................................................102
ARTICLE 8 SECURITY INTEREST
SECTION 8.1 Security Interest..................................................................................104
SECTION 8.2 Continued Priority of Security Interest............................................................105
ARTICLE 9 COLLATERAL COVENANTS
SECTION 9.1 Verification and Notification......................................................................107
SECTION 9.2 Disputes, Returns and Adjustments..................................................................107
SECTION 9.3 Invoices...........................................................................................108
SECTION 9.4 Delivery of Instruments............................................................................108
SECTION 9.5 Sales of Inventory.................................................................................108
SECTION 9.6 Ownership and Defense of Title.....................................................................108
SECTION 9.7 Insurance..........................................................................................109
SECTION 9.8 Location of Offices and Collateral.................................................................110
SECTION 9.9 Records Relating to Collateral.....................................................................110
SECTION 9.10 Inspection........................................................................................110
SECTION 9.11 Information and Reports...........................................................................111
SECTION 9.12 Power of Attorney.................................................................................112
SECTION 9.13 Additional Real Estate and Leases.................................................................112
SECTION 9.14 Assignment of Claims Act..........................................................................113
ARTICLE 10 AFFIRMATIVE COVENANTS
SECTION 10.1 Preservation of Corporate Existence and Similar Matters...........................................114
SECTION 10.2 Compliance with Applicable Law....................................................................114
SECTION 10.3 Maintenance of Property...........................................................................114
SECTION 10.4 Conduct of Business...............................................................................114
SECTION 10.5 Insurance.........................................................................................114
SECTION 10.6 Payment of Taxes and Claims.......................................................................115
SECTION 10.7 Accounting Methods and Financial Records..........................................................115
SECTION 10.8 Use of Proceeds...................................................................................115
SECTION 10.9 Hazardous Waste and Substances; Environmental Requirements........................................116
SECTION 10.10 Year 2000........................................................................................116
SECTION 10.11 Execution of Subsidiary Guaranties; Additional Borrowers.........................................116
</TABLE>
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ARTICLE 11 INFORMATION
SECTION 11.1 Financial Statements..............................................................................118
SECTION 11.2 [RESERVED]........................................................................................119
SECTION 11.3 Officer's Certificate.............................................................................119
SECTION 11.4 Copies of Other Reports...........................................................................119
SECTION 11.5 Notice of Litigation and Other Matters............................................................120
SECTION 11.6 ERISA.............................................................................................120
SECTION 11.7 Revisions or Updates to Schedules.................................................................121
ARTICLE 12 NEGATIVE COVENANTS
SECTION 12.1 Financial Ratios..................................................................................122
SECTION 12.2 Debt..............................................................................................123
SECTION 12.3 Guaranties........................................................................................123
SECTION 12.4 Investments.......................................................................................124
SECTION 12.5 Capital Expenditures..............................................................................124
SECTION 12.6 Restricted Distributions and Payments, Etc........................................................124
SECTION 12.7 Merger, Consolidation and Sale of Assets..........................................................124
SECTION 12.8 Transactions with Affiliates......................................................................125
SECTION 12.9 Liens.............................................................................................125
SECTION 12.10 Real Estate Leases...............................................................................125
SECTION 12.11 Benefit Plans....................................................................................125
SECTION 12.12 Sales and Leasebacks.............................................................................125
SECTION 12.13 Amendments of Other Agreements...................................................................125
ARTICLE 13 DEFAULT
SECTION 13.1 Events of Default.................................................................................127
SECTION 13.2 Remedies..........................................................................................130
SECTION 13.3 Application of Proceeds...........................................................................132
SECTION 13.4 Power of Attorney.................................................................................133
SECTION 13.5 Miscellaneous Provisions Concerning Remedies......................................................134
SECTION 13.6 Trademark License.................................................................................134
ARTICLE 14 ASSIGNMENTS
SECTION 14.1 Successors and Assigns; Participations............................................................136
SECTION 14.2 Representation of Lenders.........................................................................139
</TABLE>
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<TABLE>
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ARTICLE 15 ADMINISTRATIVE AGENT
SECTION 15.1 Appointment of Administrative Agent...............................................................140
SECTION 15.2 Delegation of Duties..............................................................................140
SECTION 15.3 Exculpatory Provisions............................................................................140
SECTION 15.4 Reliance by Administrative Agent..................................................................141
SECTION 15.5 Notice of Default.................................................................................141
SECTION 15.6 Non-Reliance on Administrative Agent and Other Lenders............................................141
SECTION 15.7 Indemnification...................................................................................142
SECTION 15.8 Administrative Agent in Its Individual Capacity...................................................142
SECTION 15.9 Successor Administrative Agent....................................................................143
SECTION 15.10 Co-Agents........................................................................................144
SECTION 15.11 Documents to be Forwarded........................................................................144
ARTICLE 16 MISCELLANEOUS
SECTION 16.1 Notices...........................................................................................145
SECTION 16.2 Expenses..........................................................................................146
SECTION 16.3 Stamp and Other Taxes.............................................................................148
SECTION 16.4 Setoff............................................................................................148
SECTION 16.5 Litigation........................................................................................148
SECTION 16.6 Waiver of Rights..................................................................................149
SECTION 16.7 Consent to Advertising and Publicity..............................................................150
SECTION 16.8 Reversal of Payments..............................................................................150
SECTION 16.9 Injunctive Relief.................................................................................150
SECTION 16.10 Accounting Matters...............................................................................151
SECTION 16.11 Amendments.......................................................................................151
SECTION 16.12 Assignment.......................................................................................152
SECTION 16.13 Performance of Borrowers' Duties.................................................................153
SECTION 16.14 Indemnification..................................................................................153
SECTION 16.15 All Powers Coupled with Interest.................................................................153
SECTION 16.16 Survival.........................................................................................153
SECTION 16.17 Titles and Captions..............................................................................154
SECTION 16.18 Severability of Provisions.......................................................................154
SECTION 16.19 Governing Law....................................................................................154
SECTION 16.20 Counterparts.....................................................................................154
SECTION 16.21 Reproduction of Documents........................................................................154
SECTION 16.22 Term of Agreement................................................................................155
SECTION 16.23 Pro-Rata Participation...........................................................................155
</TABLE>
(v)
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ANNEXES, EXHIBITS AND SCHEDULES
<TABLE>
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ANNEX A COMMITMENTS
ANNEX B PRICING MATRIX
EXHIBIT A-1 FORM OF REVOLVING CREDIT NOTE
EXHIBIT A-2 FORM OF SWINGLINE NOTE
EXHIBIT B-1 FORM OF TERM NOTE A
EXHIBIT B-2 FORM OF TERM NOTE B
EXHIBIT B-3 FORM OF TERM NOTE C
EXHIBIT B-4 FORM OF ACQUISITION NOTE
EXHIBIT C FORM OF BORROWING BASE CERTIFICATE
EXHIBIT D FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E-1 FORM OF CONFIRMATION OF NOTICE OF BORROWING (REVOLVING CREDIT LOAN)
EXHIBIT E-2 FORM OF CONFIRMATION OF NOTICE OF BORROWING (SWINGLINE LOAN)
EXHIBIT E-3 FORM OF CONFIRMATION OF NOTICE OF BORROWING (ACQUISITION LOAN)
EXHIBIT F FORM OF NOTICE OF CONVERSION OR CONTINUATION
EXHIBIT G FORM OF COVENANT COMPLIANCE CERTIFICATE
EXHIBIT H FORM OF SUBSIDIARIES GUARANTY
EXHIBIT I FORM OF GUARANTOR SECURITY AGREEMENT
Schedule 1.1A WinsLoew Merger Documents
Schedule 1.1B Permitted Investments
Schedule 1.1C Permitted Liens
Schedule 1.1D Trivest Investors
Schedule 6.1(c)(12) Environmental Reports
Schedule 6.1(c)(27) Sources and Uses of Funds
Schedule 7.1(a) Organization
Schedule 7.1(b) Capitalization
Schedule 7.1(c) Subsidiaries; Ownership of Stock
Schedule 7.1(e) Compliance with Laws
Schedule 7.1(g) Governmental Approvals
Schedule 7.1(h) Title to Properties
Schedule 7.1(i) Liens
Schedule 7.1(j) Indebtedness and Guaranties
Schedule 7.1(k) Litigation
Schedule 7.1(l) Tax Matters
</TABLE>
(vi)
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<TABLE>
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Schedule 7.1(p) ERISA
Schedule 7.1(t) Location of Offices and Receivables
Schedule 7.1(u) Location of Inventory
Schedule 7.1(v) Equipment
Schedule 7.1(w) Bank Accounts
Schedule 7.1(x) Intellectual Property
Schedule 7.1(y) Real Estate
Schedule 7.1(z) Corporate and Fictitious Names
Schedule 7.1(cc) Employee Relations
Schedule 7.1(dd) Trade Names
Schedule 10.8 Use of Proceeds
</TABLE>
(vii)
<PAGE> 9
LOAN AND SECURITY AGREEMENT
Dated as of August 27, 1999
WINSLOEW FURNITURE, INC. a Florida corporation, WINSTON FURNITURE
COMPANY OF ALABAMA, INC., an Alabama corporation, LOEWENSTEIN, INC., a Florida
corporation, TEXACRAFT, INC., a Texas corporation, TROPIC CRAFT, INC., a Florida
corporation, WINSTON PROPERTIES, INC., an Alabama corporation, POMPEII FURNITURE
CO., INC., a Florida corporation, the financial institutions party to this
Agreement from time to time (the "Lenders"), HELLER FINANCIAL, INC. and CIBC
INC. as co-agents (each a "Co-Agent" and collectively, "Co-Agents"), and
BANKBOSTON, N.A., a national banking association, as administrative agent for
the Lenders, agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. For the purposes of this Agreement:
"Account Debtor" means a Person who is obligated on a Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquisition of such Business Unit or Investment by
purchase, exchange, issuance of stock or other securities, or by merger,
reorganization or any other method.
"Acquisition Facility" means the credit facility described in SECTION
4A.1 in an aggregate principal amount at any one time outstanding not to exceed
$20,000,000.
"Acquisition Facility Lender" means each Lender that has a Commitment
under the Acquisition Facility or if the Commitments are terminated, that has
outstanding Acquisition Loans.
"Acquisition Facility Termination Date" means December 31, 2001.
"Acquisition Loan" means each Loan made to the Borrowers pursuant to
SECTION 4A.1 (and all of such Loans collectively) and refers to both Eurodollar
Rate Acquisition Loans and Base Rate Acquisition Loans.
"Acquisition Note" means each Acquisition Note made by the Borrowers
payable to the order of a Lender evidencing the joint and several obligation of
the Borrowers to pay the aggregate unpaid principal amount of the Loans made to
them by such Lender under the Acquisition Facility (and any promissory note or
notes that may be issued from time to time in substitution, renewal extension,
replacement or exchange therefor whether payable to such Lender or to a
different Lender in connection with a Person becoming a Lender after the
Effective Date or otherwise) substantially in the form of EXHIBIT B-4 hereto,
with all blanks properly completed
<PAGE> 10
either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or refinanced.
"Acquisition Target" means a Person or business proposed to be Acquired
by a Borrower for consideration that includes proceeds of a Borrowing under the
Acquisition Facility.
"Administrative Agent" means BankBoston and any successor agent
appointed pursuant to SECTION 15.9 hereof.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of SECTION
16.1.
"Affected Lender" has the meaning set forth in SECTION 5.7(D).
"Affiliate" means, with respect to a Person, (a) any partner, officer,
shareholder or member (if holding more than 10% of the outstanding equity
interests of such Person), director, manager, employee or managing agent of such
Person, (b) any spouse, parents, siblings, children or grandchildren of such
Person, (c) any corporation, limited liability company, association,
partnership, trust, entity or enterprise in which such Person is a director,
officer, manager or general partner, and (d) any other Person (other than a
Subsidiary) that, (i) directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such given
Person, (ii) directly or indirectly beneficially owns or holds 10% or more of
any class of voting stock or partnership or membership or other voting interest
of such Person or any Subsidiary of such Person, or (iii) 10% or more of the
voting stock or partnership or membership or other voting interest of which is
directly or indirectly beneficially owned or held by such Person or a Subsidiary
of such Person. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting securities or partnership or other
voting interest, by contract or otherwise. Each Subsidiary of a Lender shall be
deemed an Affiliate of such Lender.
"Agreement" means and includes this Agreement, including all Schedules,
Exhibits and other attachments hereto, and all amendments, modifications and
supplements hereto and thereto.
"Agreement Date" means the date as of which this Agreement is dated.
"Anniversary" means each anniversary of the Effective Date.
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and of all
orders and decrees of all courts and arbitrators, including, without limitation,
Environmental Laws.
"Applicable Margin" means as to each Type of Loan under each Facility,
the Tier V rate per annum set forth under the appropriate caption on the pricing
matrix attached hereto as ANNEX B, subject to quarterly adjustment as follows:
From and after the delivery of the consolidated
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quarterly financial statements of WinsLoew and its Consolidated Subsidiaries for
the Fiscal Quarter ending December 31, 1999 and the related officer's
certificate in accordance with the respective provisions of SECTIONS 11.1(B) and
11.3, such percentages will be adjusted, effective the third Business Day after
delivery of such financial statements and the equivalent financial statements
for each succeeding Fiscal Quarter, to the Tier for each Facility and Type of
Loan set forth in ANNEX B that corresponds to the Total Funded Debt to EBITDA
Ratio reflected in such financial statements and the related certificate,
PROVIDED, that if a Default or Event of Default exists at the time, no downward
adjustment in the Applicable Margin shall be effected.
"Arranger" means BancBoston Robertson Stephens Inc.
"Asset Disposition" means the disposition of any asset of a Borrower or
any of its Subsidiaries, other than sales of Inventory in the ordinary course of
business, disposition of worn-out and obsolete Equipment and Inventory, not
longer useful in the Borrowers' business, consistent with past practices of
Winston and Loewenstein.
"Assignment and Acceptance" means an assignment and acceptance in the
form attached hereto as EXHIBIT D assigning all or a portion of a Lender's
interests, rights and obligations under this Agreement pursuant to SECTION 14.1.
"Availability" means at any time (a) the Borrowing Base at such time
minus (b) the aggregate outstanding principal amount of Revolving Credit Loans
and Swingline Loans at such time.
"BankBoston" means BankBoston, N.A., a national banking association
and, following its announced merger with Fleet Financial Group, Inc., the
survivor of such combination, in its individual capacity and not as
Administrative Agent hereunder.
"Base Rate" means at any time an interest rate per annum equal to the
greater of (i) the rate of interest publicly announced from time to time by
BankBoston at its head office in Boston, Massachusetts as its "base" rate as in
effect at such time, and (ii) the Federal Funds Effective Rate plus 1/2 of 1%
per annum (rounded upward, if necessary, to the next 1/8 of 1%).
"Base Rate Acquisition Loan" means each Base Rate Loan outstanding
under the Acquisition Facility.
"Base Rate Loan" means each Borrowing of Loans bearing interest
determined with reference to the Base Rate and a specified principal amount of
such Loans outstanding.
"Base Rate Revolving Credit Loans" means each Base Rate Loan
outstanding under the Revolving Credit Facility.
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<PAGE> 12
"Base Rate Term Loan" means each Base Rate Loan outstanding under the
Term Loan A Facility, the Term Loan B Facility or the Term Loan C Facility.
"Base Rate Term Loan A" means the Base Rate Loan outstanding under the
Term Loan A Facility.
"Base Rate Term Loan B" means the Base Rate Loan outstanding under the
Term Loan B Facility.
"Base Rate Term Loan C" means the Base Rate Loan outstanding under the
Term Loan C Facility.
"Benefit Plan" means, whether established before or after the Agreement
Date and excluding any Multiemployer Plan,
(a) a "welfare plan" as defined in SECTION 3(1) of ERISA as to which
the Borrower is an "employer" as defined in SECTION 3(5) of ERISA, and
(b) an "employee pension benefit plan" as defined in SECTION 3(2) of
ERISA as to which the Borrower or (if such plan is subject to Title IV of ERISA)
any Related Company is or within the past six years has been such an "employer."
"Borrower" means each of WinsLoew, Winston, Loewenstein, Texacraft,
Tropic Craft, WPI, Pompeii and each other Person a party to this Agreement as a
"Borrower," whether as of the Effective Date or as of a later date, pursuant to
SECTION 6.2 or otherwise.
"Borrowers' Representative" means WinsLoew and each successor in such
capacity appointed pursuant to SECTION 5.17.
"Borrowing" means the borrowing of Loans under a single Facility and of
a single Type, made by all Lenders on a single date and, in the case of
Eurodollar Rate Loans, having a single Interest Period.
"Borrowing Base" means at any time an amount equal to the lesser of:
(a) the Revolving Credit Facility, minus the Letter of Credit Reserve,
and
(b) an amount equal to
(i) 85% of the face value of Eligible Receivables due and
owing at such time, plus
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<PAGE> 13
(ii) 60% of the lesser of cost determined on a FIFO (or
first-in-first-out) accounting basis and fair market value of Eligible
Inventory at such time, minus
(iii) the Letter of Credit Reserve.
"Borrowing Base Certificate" means a certificate in the form attached
hereto as EXHIBIT C or in such other form as may be acceptable to the Borrowers
and the Administrative Agent.
"Business Day" means any day other than a Saturday, Sunday or other day
on which banks in Boston, Massachusetts or Birmingham, Alabama are authorized to
close and, when used with respect to Eurodollar Rate Loans, means any such day
on which dealings are also carried on in the applicable interbank eurodollar
market.
"Business Unit" means the assets constituting the business or a
division or operating unit thereof of any Person.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets (other
than assets which constitute a Business Unit or Inventory) which are not, in
accordance with GAAP, treated as expense items for such Person in the year made
or incurred or as a prepaid expense applicable to a future year or years.
"Capitalized Lease" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such Indebtedness shall
be the capitalized amount of such obligations determined in accordance with
GAAP.
"Cash Collateral" means collateral consisting of cash or Cash
Equivalents on which the Administrative Agent, for the benefit of itself as
Administrative Agent and the Lenders, has a first priority Lien.
"Cash Collateral Account" means a special interest-bearing Deposit
Account consisting of cash maintained at the principal office of the
Administrative Agent and under the sole dominion and control of the
Administrative Agent, for its benefit and for the benefit of the Lenders,
established pursuant to the provisions of SECTION 5.16(A) for purposes set forth
therein.
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<PAGE> 14
"Cash Equivalents" means
(a) Dollars;
(b) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof or any
state having maturities of not more than one year after the date of acquisition;
(c) certificates of deposit and Eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case with any Lender or any domestic commercial bank or U.S. branch of a
foreign commercial bank having capital and surplus in excess of $250 million and
a Thompson Bank Watch Rating of "B" or better;
(d) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications specified
in said clause (c); and
(e) commercial paper having the highest rating obtainable from Moody's
or S&P and in each case maturing within 270 days after the date of acquisition.
"Class" as applied to any Loans, means all Loans outstanding at the
time under the same Facility.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means and includes all of each Borrower's right, title and
interest in and to each of the following, wherever located and whether now or
hereafter existing or now owned or hereafter acquired or arising:
(a) (i) all rights to the payment of money or other forms of
consideration of any kind (whether classified under the UCC as accounts,
contract rights, chattel paper, general intangibles or otherwise) including, but
not limited to, accounts receivable, letters of credit and the right to receive
payment thereunder, chattel paper, tax refunds, insurance proceeds, any rights
under contracts not yet earned by performance and not evidenced by an instrument
or chattel paper, notes, drafts, instruments, documents, acceptances and all
other debts, obligations and liabilities in whatever form from any Person, (ii)
all guaranties, security and Liens securing payment thereof, (iii) all goods,
whether now owned or hereafter acquired, and whether sold, delivered,
undelivered, in transit or returned, which may be represented by, or the sale or
lease of which may have given rise to, any such right to payment or other debt,
obligation or liability, and (iv) all proceeds of any of the foregoing (the
foregoing, collectively, "Receivables"),
(b) (i) all inventory, (ii) all goods intended for sale or lease or for
display or demonstration, (iii) all work-in-process, (iv) all raw materials and
other materials and supplies of every nature and description used or which might
be used in connection with the manufacture, packing, shipping, advertising,
selling, leasing or furnishing of goods or services or otherwise used
6
<PAGE> 15
or consumed in the conduct of business, and (v) all documents evidencing and
general intangibles relating to any of the foregoing (the foregoing,
collectively, "Inventory"),
(c) (i) all machinery, apparatus, equipment, motor vehicles, tractors,
trailers, rolling stock, fittings, fixtures and other tangible personal property
(other than Inventory) of every kind and description, (ii) all tangible personal
property (other than Inventory) and fixtures used in such Borrower's business
operations or owned by such Borrower or in which such Borrower has an interest,
and (iii) all parts, accessories and special tools and all increases and
accessions thereto and substitutions and replacements therefor, excluding,
however, any such property that is subject to a lease or Lien permitted to exist
by this Agreement, the terms of which prohibit the creation of the Security
Interest therein, for so long as such prohibition remains in effect (the
foregoing, collectively, "Equipment"),
(d) all general intangibles, choses in action and causes of action and
all other intangible personal property of every kind and nature (other than
Receivables), including, without limitation, Intellectual Property, partnership
and joint venture interests, membership interests and other interests in limited
liability companies, corporate or other business records, inventions, designs,
blueprints, plans, specifications, trade secrets, goodwill, computer software,
customer lists, registrations, licenses, franchises, tax refund claims,
reversions or any rights thereto and any other amounts payable to such Person
from any Benefit Plan, Multiemployer Plan or other employee benefit plan, rights
and claims against carriers and shippers, rights to indemnification, business
interruption insurance and proceeds thereof, property, casualty or any similar
type of insurance and any proceeds thereof, the beneficiary's interest in
proceeds of insurance covering the lives of key employees and any letter of
credit, guarantee, claims, security interest or other security for the payment
by an Account Debtor of any of the Receivables (the foregoing, collectively,
"General Intangibles"),
(e) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization, other than an
account evidenced by a certificate of deposit that is an instrument under the
UCC (the foregoing, collectively, "Deposit Accounts"),
(f) all certificated and uncertificated securities, all security
entitlements, all securities accounts, all commodity contracts, all commodity
accounts and all other investment property (the foregoing, collectively,
"Investment Property"),
(g) (i) any investment account maintained by or on behalf of such
Borrower with the Administrative Agent or any Lender or any Affiliate of the
Administrative Agent or any Lender, (ii) any agreement governing such account,
(iii) all cash, money, notes, securities, instruments, goods, accounts,
documents, chattel paper, general intangibles and other property now or
hereafter held by the Administrative Agent or any Lender or any Affiliate of the
Administrative Agent or any Lender on behalf of such Borrower in connection with
such investment account or deposited by such Borrower or on such Borrower's
behalf to such investment account or
7
<PAGE> 16
otherwise credited thereto for such Borrower's benefit, or distributable to such
Borrower from such investment account, together with all contracts for the sale
or purchase of the foregoing, (iv) all of such Borrower's right, title and
interest with respect to the deposit, investment, allocation, disposition,
distribution or withdrawal of the foregoing, (v) all of such Borrower's right,
title and interest with respect to the making of amendments, modifications or
additions of or to the terms and conditions under which the investment account
or investments maintained therein is to be maintained by such Borrower, the
Administrative Agent, any Lender or any Affiliate of the Administrative Agent or
any Lender on such Borrower's behalf, and (vi) all of such Borrower's books,
records and receipts pertaining to or confirming any of the foregoing (the
foregoing, collectively, "Investment Accounts"),
(h) all cash or other property deposited with the Administrative Agent
or any Lender or any Affiliate of the Administrative Agent or any Lender or
which the Administrative Agent, for its benefit and for the benefit of the
Lenders, or any Lender or such Affiliate is entitled to retain or otherwise
possess as collateral pursuant to the provisions of this Agreement or any of the
Loan Documents or any agreement relating to any Letter of Credit, including,
without limitation, amounts on deposit in the Cash Collateral Account,
(i) all goods and other property, whether or not delivered, (i) the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including, without
limitation, all rights as an unpaid vendor or lienor (including, without
limitation, stoppage in transit, replevin and reclamation) with respect to such
goods and other properties,
(j) all mortgages, deeds to secure debt and deeds of trust on real or
personal property, guaranties, leases, security agreements and other agreements
and property which secure or relate to any Receivable or other Collateral or are
acquired for the purpose of securing and enforcing any item thereof,
(k) all documents of title, including bills of lading and warehouse
receipts, policies and certificates of insurance, securities, chattel paper and
other documents and instruments,
(l) all files, correspondence, computer programs, tapes, disks and
related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the amounts
thereof or payments thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof, and
(m) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including,
8
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but not limited to, cash, negotiable instruments and other instruments for the
payment of money, chattel paper, security agreements and other documents.
Notwithstanding anything herein to the contrary, the Collateral shall
not include (i) any agreement with a third party existing on the Effective Date
that prohibits the grant of a Lien on (but not merely the assignment of or of
any interest in) such agreement or any Borrower's rights thereunder without the
consent of such third party or under which a consent to such grant is otherwise
required, which consent has not been obtained, except to the extent rights under
such agreement are covered by Section 9-318 of the UCC, or (ii) any license,
permit or other Governmental Approval that, under the terms and conditions of
such Governmental Approval or under Applicable Law, cannot be subjected to a
Lien in favor of the Administrative Agent without consent which consent has not
been obtained; provided, however, that the Collateral shall include all items
excluded pursuant to clauses (i) or (ii) from and after the date on which the
requisite consent is obtained.
"Commitment" means, as to each Lender, the amount set forth opposite
such Lender's name on ANNEX A hereto, representing such Lender's aggregate
obligation, upon and subject to the terms and conditions of this Agreement
(including the applicable provisions of SECTION 14.1), to make its Proportionate
Share of Loans under the Revolving Credit Facility (including to repay Swingline
Loans), the Term Loan Facilities and the Acquisition Facility and to purchase
participations in Letters of Credit or, from and after the date hereof, as set
forth in the Register representing such Lender's obligation to make its
Proportionate Share of Loans under the Revolving Credit Facility (including to
repay Swingline Loans) and the Acquisition Facility and to purchase
participations in Letters of Credit, and its corresponding interest in Term
Loans and any Acquisition Loans outstanding.
"Commitment Percentage" means, as to any Lender at the time of
determination, the percentage obtained by dividing such Lender's Commitment at
such time by the aggregate Commitments at such time.
"Consolidated Subsidiaries" means, each Borrower (other than WinsLoew)
and any other Subsidiary of WinsLoew, whose accounts are at the time in
question, in accordance with GAAP and pursuant to the written consent of the
Required Lenders consolidated with those of WinsLoew. Such consent may be
withheld in the Lenders' absolute discretion conditioned upon, inter alia, the
execution and delivery of Guaranties, security agreements, mortgages and other
documents required by the Required Lenders in their absolute discretion.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste.
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"Copyrights" means and includes, in each case whether now existing or
hereafter arising, all of each Borrower's right, title and interest in and to
(a) all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations and copyright applications;
(b) all renewals of any of the foregoing;
(c) all income, royalties, damages and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements of any of the foregoing;
(d) the right to sue for past, present and future infringements of any
of the foregoing; and
(e) all rights corresponding to any of the foregoing throughout the
world.
"Debt" means
(a) Indebtedness for money borrowed,
(b) Indebtedness, whether or not in any such case the same was for
money borrowed,
(i) represented by notes payable, drafts accepted and
reimbursement obligations under letters of credit and similar
instruments that represent extensions of credit,
(ii) constituting obligations evidenced by bonds, debentures,
notes or similar instruments, or
(iii) upon which interest charges are customarily paid or that
was issued or assumed as full or partial payment for property (other
than trade credit that is incurred in the ordinary course of business),
(c) Indebtedness that constitutes a Capitalized Lease Obligation,
(d) obligations in respect of any mandatorily redeemable preferred
capital stock of any Borrower, and
(e) any obligation under a Guarantee of any of the foregoing.
"Default" means any of the events specified in SECTION 13.1 which with
the passage of time or giving of notice or both would constitute an Event of
Default.
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"Default Margin" means 2.0% per annum.
"Deposit Accounts" has the meaning set forth in the definition
"Collateral".
"Dollar" and "$" means freely transferable United States dollars.
"EBIT" means consolidated Net Income of WinsLoew and its Consolidated
Subsidiaries before provision for interest expense and income taxes.
"EBITDA" means EBIT before provision for depreciation and amortization
expense.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA Event" means (a) a "reportable event" as defined in Section
4043(c) of ERISA, but excluding any such event as to which the provision for 30
days' notice to the PBGC is waived under applicable regulations, (b) the filing
of a notice of intent to terminate a Benefit Plan subject to Title IV of ERISA
under a distress termination under Section 4041(c) of ERISA or the treatment of
an amendment to such a Benefit Plan as a termination under Section 4041(c) of
ERISA, (c) the institution of proceedings by the PBGC to terminate a Benefit
Plan subject to Title IV of ERISA or the appointment of a trustee to administer
any such Benefit Plan or an event or condition that might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan subject to Section
4042, (d) the imposition of any liability under Title IV of ERISA other than for
PBGC premiums due but not yet payable, (e) the filing of an application for a
minimum funding waiver under Section 412 of the Code, (f) a withdrawal by the
Borrower or any Related Company from a Benefit Plan subject to Section 4063 of
ERISA during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (g) a Benefit Plan intending to qualify under
Section 401(a) of the Code losing such qualified status, (h) the failure to make
a material required contribution to a Benefit Plan, (i) the Borrower or any
Related Company being in "default" (as defined in Section 4219(c)(5) of ERISA)
with respect to payments to a Multiemployer Plan because of its complete or
partial withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan, or (j) the occurrence of a non-exempt prohibited transaction
within the meaning of Section 4975 of the Code or Section 406 of ERISA with
respect to any Benefit Plan.
"Effective Date" means the later of:
(a) the Agreement Date, and
(b) the first date on which all of the conditions set forth in ARTICLE
6 shall have been fulfilled.
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"Effective Interest Rate" means each rate of interest per annum on the
Revolving Credit Loans, the Swingline Loans, the Term Loans and the Acquisition
Loans in effect from time to time pursuant to the provisions of SECTIONS 5.1(A),
(B), (C) and (D).
"Eligible Assignee" means any Lender and any financial institution,
fund, insurance company, trust or other Person that has as one of its
businesses, making or investing in commercial loans.
"Eligible Inventory" means items of Inventory of a Borrower held for
sale in the ordinary course of business of such Borrower which the
Administrative Agent in its reasonable credit judgment determines to meet all of
the following requirements:
(a) such Inventory is owned by a Borrower, is subject to the Security
Interest, which is perfected as to such Inventory, and is subject to no other
Lien whatsoever other than Permitted Liens arising by operation of law;
(b) such Inventory consists of raw materials, finished goods or
work-in-process;
(c) such Inventory is in good condition and meets all standards
applicable to such goods, their use or sale imposed by any governmental agency,
or department or division thereof, having regulatory authority over such
matters;
(d) such Inventory is currently either usable or saleable, at prices
approximating at least cost, in the normal course of the relevant Borrower's
business;
(e) such Inventory is not obsolete, slow moving or repossessed or used
goods taken in trade or returned goods which when added to the aggregate value
of returned goods included in Eligible Inventory at such time would exceed
$500,000;
(f) such Inventory is located within the United States at one of the
locations listed in SCHEDULE 7.1(U) or is in transit to such a location;
(g) such Inventory was not produced in violation of the Fair Labor
Standards Act and subject to the so called "hot goods" provisions contained in
Title 29, Chapter 8, U.S.C. ss. 215(a); and
(h) such Inventory is in the possession and control of a Borrower
(including a common carrier under a bill of lading in a Borrower's name) and not
any other third party and if located in a warehouse or other facility leased by
a Borrower, the warehouseman or lessor has delivered to the Administrative Agent
a lien waiver or subordination in such form, if any, as may be requested by the
Administrative Agent.
"Eligible Receivable" means a Receivable of a Borrower that consists of
the unpaid portion of the obligation stated on the invoice issued to an Account
Debtor with respect to
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Inventory sold and shipped to or services performed for such Account Debtor in
the ordinary course of business, net of any credits or rebates owed by such
Borrower to the Account Debtor and that the Administrative Agent, in its
reasonable credit judgment determines to meet all of the following requirements:
(a) such Receivable is owned by a Borrower and represents a complete
bona fide transaction which requires no further act under any circumstances on
the part of such Borrower to make such Receivable payable by the Account Debtor;
(b) such Receivable was invoiced in accordance with the applicable
Sales Terms and is not past due more than 60 days after its original due date;
(c) such Receivable does not arise out of any transaction with any
Subsidiary, Affiliate, director, officer, agent, stockholder or employee of such
Subsidiary or Affiliate of a Borrower or with any creditor, lessor or supplier
of a Borrower;
(d) such Receivable is not owing by an Account Debtor more than 20% of
whose then-existing accounts owing to the Borrowers do not meet the requirements
set forth in CLAUSE (B) above;
(e) if the Account Debtor with respect thereto is located outside of
the United States of America, the goods which gave rise to such Receivable were
shipped after receipt by a Borrower from the Account Debtor of an irrevocable
letter of credit that has been confirmed by a financial institution that meets
the requirements set forth in Subsection (c) of the definition "Cash
Equivalents" or is otherwise acceptable to the Administrative Agent in its
reasonable credit judgment and is in form and substance acceptable to the
Administrative Agent, payable in the full face amount of the face value of the
Receivable in Dollars at a place of payment located within the United States;
(f) the Account Debtor with respect to such Receivable is not located
in a state which imposes conditions on the enforceability of Receivables with
which such Borrower has not complied;
(g) such Receivable is not subject to the Assignment of Claims Act of
1940, as amended from time to time, or any Applicable Law now or hereafter
existing similar in effect thereto, as determined in the sole discretion of the
Administrative Agent, or to any provision prohibiting its assignment or
requiring notice of or consent to such assignment, unless all such required
notices have been given and such consents received such that such Receivable has
been validly assigned to the Administrative Agent;
(h) a Borrower is not in breach of any express or implied
representation or warranty with respect to the goods the sale of which gave rise
to such Receivable;
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(i) the Account Debtor with respect to such Receivable is not insolvent
or the subject of any bankruptcy or insolvency proceedings of any kind or of any
other proceeding or action, threatened or pending, which might, in the
Administrative Agent's sole judgment, have a materially adverse effect on such
Account Debtor;
(j) the goods, the sale of which gave rise to such Receivable, were
shipped or delivered to the Account Debtor on an absolute sale basis and not on
a bill-and-hold sale basis, a consignment sale basis, a guaranteed sale basis, a
sale or return basis or on the basis of any other similar understanding, and
such goods have not been returned or rejected;
(k) such Receivable is not owing by an Account Debtor or a group of
Account Debtors who are Affiliates whose then-existing accounts owing to the
Borrowers exceed in face amount 20% of the Borrowers' total Eligible
Receivables;
(l) such Receivable is evidenced by an invoice or other documentation
that conforms to the applicable Sales Terms;
(m) such Receivable is a valid, legally enforceable obligation of the
Account Debtor with respect thereto and is not subject to any present, or
contingent (and no facts exist which are the basis for any future), offset,
deduction or counterclaim, dispute or other defense on the part of such Account
Debtor, provided only an amount equal to the amount of such offset, deduction,
counterclaim dispute or other defense shall be ineligible by reason thereof;
(n) such Receivable is not evidenced by chattel paper or an instrument
of any kind unless such chattel paper or instrument is in the possession of the
Administrative Agent;
(o) such Receivable does not arise from the performance of warranty
services or out of account service charges by a Borrower or other fees for the
time value of money; and
(p) such Receivable is subject to the Security Interest, which is
perfected as to such Receivable, and is subject to no other Lien whatsoever
other than Permitted Liens arising by operation of law and the goods giving rise
to such Receivable were not, at the time of the sale thereof, subject to any
Lien other than the Security Interest or other Permitted Liens arising by
operation of law.
"Environmental Compliance Reserve" means any reserve for the cost of
Remedial Action by a Borrower determined by the Administrative Agent from time
to time in its reasonable discretion based upon the reports delivered pursuant
to SECTION 10.9(B) and such other advice, analysis and engineering studies as it
deems appropriate.
"Environmental Laws" means all federal, state, local and foreign laws
from time to time in effect relating to pollution or protection of the
environment, including laws relating to emissions, discharges, Releases or
threatened Releases of pollutants, Contaminants, chemicals, or industrial,
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<PAGE> 23
toxic or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and any and
all regulations, notices or demand letters issued, entered, promulgated or
approved thereunder; such laws and regulations include but are not limited to
the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., as
amended; the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., as amended; the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq., as amended; the Clean Air Act, 46 U.S.C. ss. 7401 et
seq., as amended; and state and federal lien and environmental cleanup programs.
"Environmental Lien" means a Lien in favor of any governmental entity
for (a) any liability under Environmental Laws or (b) damages arising from, or
costs incurred by such governmental entity in response to, a Release or
threatened Release of Contaminant into the environment.
"Equipment" has the meaning set forth in the definition "Collateral".
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan for
the Interest Period applicable thereto, a simple per annum interest rate
determined pursuant to the following formula, rounded upwards, if necessary to
the next higher 1/16 of 1%:
Eurodollar Rate = Interbank Offered Rate
--------------------------------------
1 - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Eurodollar Rate Acquisition Loan" means a Eurodollar Rate Loan
outstanding under the Acquisition Facility.
"Eurodollar Rate Loan" means any Loan (other than a Swingline Loan)
bearing interest at a rate determined with reference to the Eurodollar Rate,
including any such Loans continued as or converted into a Eurodollar Rate Loan
on the same day by the Lenders for the same Interest Period.
"Eurodollar Rate Revolving Credit Loan" means a Eurodollar Rate Loan
outstanding under the Revolving Credit Facility.
"Eurodollar Rate Term Loan" means a Eurodollar Rate Loan outstanding
under a Term Loan Facility.
"Eurodollar Rate Term Loan A" means a Eurodollar Rate Loan outstanding
under the Term Loan A Facility.
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<PAGE> 24
"Eurodollar Rate Term Loan B" means a Eurodollar Rate Loan outstanding
under the Term Loan B Facility.
"Eurodollar Rate Term Loan C" means a Eurodollar Rate Loan outstanding
under the Term Loan C Facility.
"Eurodollar Reserve Percentage" applicable to any Interest Period means
the rate (expressed as a decimal) applicable to United States commercial banks
during such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining the maximum
reserve requirement (including, without limitation, any basic, supplemental,
emergency or marginal reserve requirement) of such banks with respect to
"Eurocurrency liabilities" as that term is defined under such regulations.
Without limiting the effect of the foregoing, the Eurodollar Reserve Percentage
shall include any other reserves required to be maintained by such banks by
reason of any regulatory change with respect to (i) any category of liabilities
that includes deposits by reference to which the "Interbank Offered Rate" is to
be determined as provided in the definition "Interbank Offered Rate" or (ii) any
category of extensions of credit or other assets that includes Eurodollar Rate
Loans.
"Event of Default" means any of the events specified in SECTION 13.1,
PROVIDED that any requirement for notice or lapse of time or any other condition
has been satisfied.
"Excess Cash Flow" means, for any Fiscal Year, EBITDA, minus increases
(or plus decreases) in working capital, minus cash taxes paid, minus Capital
Expenditures (other than Financed Capex), minus scheduled and any additional
actual principal repayments of Debt and payments of interest on all Debt, in
each case for such Fiscal Year, determined in accordance with GAAP on a
consolidated basis for WinsLoew and its Consolidated Subsidiaries.
"Facility" means each of the Acquisition Facility, the Revolving Credit
Facility, the Swingline Facility, and each Term Loan Facility.
"Facility Percentage" means as to any Lender at the time of
determination, the percentage obtained by dividing such Lender's Commitment with
respect to a specified Facility or Class of Loans or, if the Commitments under
such Facility have terminated, such Lender's Loans outstanding under a specified
Facility by the aggregate Commitment or Loans under the same Facility at such
time.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum 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
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received by BankBoston from three federal funds brokers of recognized standing
selected by BankBoston.
"Financed Capex" means Capital Expenditures funded with the proceeds of
Permitted Purchase Money Debt (excluding Loans) and those represented by
Capitalized Lease Obligations.
"Financial Officer" means the chief financial officer, Treasurer or
Controller of WinsLoew.
"Financing Statements" means any and all Uniform Commercial Code
financing statements, in form and substance satisfactory to the Administrative
Agent, executed and delivered by a Borrower or a Guarantor to the Administrative
Agent, naming the Administrative Agent, for the benefit of the Lenders, as
secured party and such Borrower or such Guarantor as debtor, in connection with
this Agreement or a Guarantor Security Agreement.
"Fiscal Quarter" means each approximately three-month accounting period
of WinsLoew ending as to the first such periods of each Fiscal Year, on the last
Friday of each March, June, and September and as to the fourth such period of
each Fiscal Year, ending on December 31.
"Fiscal Year" means the fiscal year of WinsLoew, commencing on January
1 of each calendar year and ending on December 31 of the same calendar year and
when preceded or followed by the designation of a calendar year means the fiscal
year of WinsLoew ending on December 31 of such designated calendar year.
"Fixed Charge Coverage Ratio" means, as of the last day of any Fiscal
Quarter, the result obtained by dividing (a) (i) EBITDA minus (ii) the sum of
cash income taxes paid, Capital Expenditures (other than Financed Capex and the
WPI Purchases) and Restricted Distributions other than those deducted in
computing EBITDA, in each case of WinsLoew and its Consolidated Subsidiaries
determined on a consolidated basis for the period of four consecutive Fiscal
Quarters or other specified measurement period ending on such day, by (b) the
sum of interest expense (other than deferred debt issuance costs, bond discount
or original issue discount attributable to the Senior Subordinated Notes and the
related warrants, generally included as interest expense under GAAP) plus
scheduled principal repayments of Debt (including scheduled payments of
Capitalized Lease Obligations), in each case of WinsLoew and its Consolidated
Subsidiaries determined on a consolidated basis for the same period.
"Funded Debt" means, at any time, the aggregate outstanding principal
amount of all Debt of WinsLoew and its Consolidated Subsidiaries, on a
consolidated basis, at such time.
"GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and, when used with
reference to WinsLoew, the Borrowers or any Subsidiary, consistent with the
prior financial practice of WinsLoew, as reflected in the financial statements
referred to in SECTION 7.1(N); PROVIDED, HOWEVER, that, in the event that
changes shall be mandated by the Financial Accounting Standards Board or any
similar
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<PAGE> 26
accounting authority of comparable standing, or shall be recommended by the
Borrowers' independent public accountants, such changes shall be included in
GAAP as applicable to the Borrowers only from and after such date as the
Borrowers, the Required Lenders and the Administrative Agent shall have amended
this Agreement to the extent necessary to reflect any such changes in the
financial covenants set forth in ARTICLE 12.
"General Intangibles" has the meaning set forth in the definition
"Collateral".
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
governmental bodies, whether federal, state, local or foreign national or
provincial and all agencies thereof.
"Government Acts" has the meaning set forth in SECTION 3.8(A)(II).
"Guarantor" means any Person that guarantees the Secured Obligations,
including any Subsidiary that becomes a Guarantor in accordance with SECTION 6.2
or 10.11.
"Guarantor Security Agreement" means a security agreement in
substantially the form of EXHIBIT I hereto or in such other form as may be
satisfactory to the Administrative Agent, executed by a Guarantor in favor of
the Administrative Agent.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any obligation
of another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), directly or indirectly, in any
manner, of any part or all of such obligation of such other Person, and
(b) an agreement, direct or indirect, contingent or otherwise, and
whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation of such other Person
whether by
(i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or lessor) of
property or the purchase or sale of services primarily for the purpose
of enabling the obligor with respect to such obligation to make any
payment or performance (or payment of damages in the event of
nonperformance) of or on account of any part or all of such obligation,
or to assure the owner of such obligation against loss,
(iii) the supplying of funds to or in any other manner
investing in the obligor with respect to such obligation,
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<PAGE> 27
(iv) repayment of amounts drawn down by beneficiaries of
letters of credit, or
(v) the supplying of funds to or investing in a Person on
account of all or any part of such Person's obligation under a Guaranty
of any obligation or indemnifying or holding harmless, in any way, such
Person against any part or all of such obligation.
"Guaranty Agreement" means an agreement of Guaranty, substantially in
the form of EXHIBIT H hereto or in such other form as may be satisfactory to the
Administrative Agent, executed by a Guarantor in favor of the Administrative
Agent.
"Guaranty Collateral" means "Collateral" as such term is defined in any
Guarantor Security Agreement in effect.
"IPO" means the initial public offering of voting common stock of
WinsLoew, underwritten by a reputable securities underwriter in compliance with
Applicable Law, the net proceeds of which to WinsLoew are equal to or greater
than $15,000,000.
"Indebtedness" of any Person means, without duplication, all
Liabilities of such Person, and to the extent not otherwise included in
Liabilities, the following:
(a) all obligations for money borrowed or for the deferred purchase
price of property or services or in respect of drafts accepted or similar
instruments or reimbursement obligations under letters of credit,
(b) all obligations (including, during the noncancellable term of any
lease in the nature of a title retention agreement, all future payment
obligations under such lease discounted to their present value in accordance
with GAAP) secured by any Lien to which any property or asset owned or held by
such Person is subject, whether or not the obligation secured thereby shall have
been assumed by such Person,
(c) all obligations of other Persons which such Person has Guaranteed,
including, but not limited to, all obligations of such Person consisting of
recourse liability with respect to accounts receivable sold or otherwise
disposed of by such Person, and
(d) in the case of the Borrowers (without duplication) all Secured
Obligations and all obligations in respect of the Senior Subordinated Notes and
the Subordinated Debt.
"Initial Loans" means the Revolving Credit Loans and the Term Loans
made to the Borrowers on the Effective Date pursuant to the Initial Notice of
Borrowing.
"Initial Notice of Borrowing" means the Notice of Borrowing given by
the Borrowers pursuant to SECTION 6.1(C)(19), which shall also specify the
method of disbursement.
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"Installment Payment Date" means (i) as applied to the Term Loans the
last day of each March, June, September and December, commencing on March 31,
2000, (ii) as applied to the Acquisition Loans, the last day of each March,
June, September and December, commencing on March 31, 2002 and (iii) as applied
to any other payment hereunder, the last day of each March, June, September and
December, commencing on September 30, 1999.
"Intellectual Property" means all of the Borrowers' now owned and
hereafter arising or acquired: Patents, Copyrights and Trademarks, including,
without limitation, the Intellectual Property set forth on SCHEDULE 7.1(X)
hereto.
"Interbank Offered Rate" applicable to any Eurodollar Rate Loan for any
Interest Period means the rate of interest determined by the Administrative
Agent to be the prevailing rate per annum at which deposits in U.S. dollars are
offered to the Administrative Agent by first-class banks in the interbank
Eurodollar market in which it regularly participates at or about 10:00 a.m. two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Eurodollar Rate Loan to which
such Interest Period is to apply for a period of time approximately equal to
such Interest Period.
"Interest Coverage Ratio" means for any specified measurement period,
the ratio of (i) EBITDA for such period minus consolidated Capital Expenditures
(other than Financed Capex and the WPI Purchases) of WinsLoew and its
Consolidated Subsidiaries during such period to (ii) consolidated interest
expense of WinsLoew and its Consolidated Subsidiaries for such period (other
than deferred debt issuance costs, bond discount or original issue discount
attributable to the Senior Subordinated Notes and the related warrants,
generally included as interest expense under GAAP).
"Interest Payment Date" means, as to Base Rate Loans, the first day of
each calendar month commencing on September 1, 1999 and continuing thereafter
until the Secured Obligations have been irrevocably paid in full and, as to
Eurodollar Rate Loans, the last day of the applicable Interest Period and, if
such Interest Period is longer than the three months, at intervals of three
months after the first day thereof and, as to all Loans, the date such Loan is
due (whether at maturity, by reason of acceleration or otherwise).
"Interest Period" means with respect to each Eurodollar Rate Loan, the
period commencing on the date of the making or continuation of or conversion to
such Eurodollar Rate Loan and ending one, two, three or six months thereafter,
as the Borrowers may elect in the applicable Notice of Borrowing or Notice of
Conversion or Continuation; PROVIDED, that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall, subject to the provisions of CLAUSE (III)
below, be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day;
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(ii) any Interest Period 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, subject to CLAUSE (III) below, end on the last Business
Day of a calendar month;
(iii) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date;
(iv) no Interest Period applicable to a Eurodollar Rate Term
Loan or Eurodollar Rate Acquisition Loan may end after the next
applicable Installment Payment Date, unless the aggregate principal
amount of Base Rate Term Loans (or Base Rate Acquisition Loans) and
Eurodollar Rate Term Loans (or Eurodollar Rate Acquisition Loans)
having Interest Periods ending prior to such applicable Installment
Payment Date is at least equal to the amount of the principal repayment
due hereunder on such Installment Payment Date; and
(v) notwithstanding CLAUSE (III) above, no Interest Period
shall have a duration of less than one month and if any applicable
Interest Period would be for a shorter period, such Interest Period
shall not be available hereunder.
"Interest Rate Protection Agreement" shall mean an interest rate swap,
cap or collar agreement or similar arrangement between any Borrower and a Lender
providing for the transfer or mitigation of interest risks either generally or
under specific contingencies.
"Inventory" has the meaning set forth in the definition "Collateral".
"Investment" means, with respect to any Person:
(a) the acquisition or ownership by such Person of any share of capital
stock, membership interest, partnership interest, evidence of Indebtedness or
other security or equity interest issued by any other Person,
(b) any loan, advance or extension of credit to, or contribution to the
capital of, any other Person, excluding advances to employees in the ordinary
course of business for business expenses,
(c) any Guaranty of the obligations of any other Person,
(d) any other investment (other than the Acquisition of a Business
Unit) in any other Person, and
(e) any commitment or option to make any of the investments listed in
CLAUSES (A) through (D) above if, in the case of an option, the consideration
therefor exceeds $100.
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"Investment Account" has the meaning set forth in the definition
"Collateral".
"Investment Property" has the meaning set forth in the definition
"Collateral".
"IRS" means the Internal Revenue Service.
"Lender" means at any time any Person party to this Agreement at such
time as a "Lender", including any such Person becoming a party hereto pursuant
to the provisions of ARTICLE 14, and "Lenders" means at any time all of the
Persons party to this Agreement at such time as "Lenders", including any such
Persons becoming parties hereto pursuant to the provisions of ARTICLE 14.
"Letter of Credit" means any Letter of Credit issued by BankBoston for
the account of a Borrower pursuant to ARTICLE 3.
"Letter of Credit Amount" means, with respect to any Letter of Credit,
the aggregate maximum amount at any time available for drawing (assuming all
conditions to drawing are satisfied) under such Letter of Credit.
"Letter of Credit Facility" means a subfacility of the Revolving Credit
Facility providing for the issuance of Letters of Credit described in ARTICLE 3
up to an aggregate amount of Letter of Credit Obligations at any one time
outstanding not to exceed the amount of $10,000,000.
"Letter of Credit Obligations" means, at any time, the sum of (a) the
Reimbursement Obligations of the Borrowers at such time, plus (b) the aggregate
Letter of Credit Amount of Letters of Credit outstanding at such time, plus (c)
the aggregate Letter of Credit Amount of Letters of Credit the issuance of which
has been authorized by the Administrative Agent and BankBoston pursuant to
SECTION 3.4(B) but that have not yet been issued, in each case as determined by
the Administrative Agent.
"Letter of Credit Reserve" means, at any time, the aggregate Letter of
Credit Obligations at such time, other than Letter of Credit Obligations that
are fully secured by Cash Collateral.
"Liabilities" of any Person means all items (except for items of
capital stock, additional paid-in capital or retained earnings, or of general
contingency or deferred tax reserves) which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date as of which liabilities are to be
determined.
"Lien" as applied to the property of any Person means:
(a) any mortgage, deed to secure debt, deed of trust, lien, pledge,
charge, lease constituting a Capitalized Lease Obligation, conditional sale or
other title retention agreement, or
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other security interest, security title or encumbrance of any kind in respect of
any property of such Person, or upon the income or profits therefrom,
(b) any arrangement, express or implied, under which any property of
such Person is transferred, sequestered or otherwise identified for the purpose
of subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to the payment of the general, unsecured creditors
of such Person,
(c) any Indebtedness which is unpaid more than 30 days after the same
shall have become due and payable and which if unpaid might by law (including,
but not limited to, bankruptcy and insolvency laws), or otherwise, be given any
priority whatsoever over the claims of general unsecured creditors of such
Person,
(d) the filing of, or any agreement to give, any financing statement
under the Uniform Commercial Code or its equivalent in any jurisdiction,
excluding informational financing statements relating to property leased by
WinsLoew or any Subsidiary, and
(e) in the case of Real Estate, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances.
"Loan" means any Revolving Credit Loan, Swingline Loan, Term Loan or
Acquisition Loan, as well as all such loans collectively, as the context
requires.
"Loan Account" and "Loan Accounts" have the meanings set forth in
SECTION 5.5.
"Loan Documents" means collectively this Agreement, the Notes, the
Security Documents and each other instrument, agreement or document executed by
a Borrower, a Guarantor or any Affiliate or Subsidiary of a Borrower or a
Guarantor in connection with this Agreement whether prior to, on or after the
Effective Date and each other instrument, agreement or document referred to
herein or contemplated hereby.
"Loan Party" means each of the Borrowers and each Guarantor.
"Loan Year" means each period of 12 consecutive months commencing on
the Effective Date and on each Anniversary thereof.
"Loewenstein" means Loewenstein, Inc., a Florida corporation and a
Wholly Owned Subsidiary of WinsLoew.
"Make-Whole Amount" has the meaning set forth in SECTION 5.9(B).
"Margin Stock" means "margin stock" as defined in Section 221.1(h) of
Regulation U.
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"Materially Adverse Effect" means any act, omission, situation,
circumstance, event or undertaking which could reasonably be expected to have,
singly or in any combination with one or more other acts, omissions, situations,
circumstances, events or undertakings, a materially adverse effect upon (a) the
business, assets, properties, liabilities, condition (financial or otherwise),
results of operations or business prospects of WinsLoew and its Subsidiaries
taken as a whole, (b) the value of the whole or any material part of the
Collateral, or the enforceability or priority of the Security Interest, (c) the
respective ability of any Borrower or any of its Subsidiaries to perform any
obligations under this Agreement or any other Loan Document to which it is a
party, or (d) the legality, validity, binding effect, enforceability or
admissibility into evidence of any Loan Document or the rights or remedies of
the Administrative Agent, the Co-Agents or the Lenders under or in connection
with any Loan Document.
"Maximum Rate" has the meaning set forth in SECTION 5.1(F).
"Moody's" means Moody's Investors Service, Inc.
"Mortgages" means and includes any and all of the mortgages, deeds of
trust, deeds to secure debt, assignments and other instruments executed and
delivered by a Borrower to or for the benefit of the Administrative Agent by
which the Administrative Agent, on behalf of the Lenders, acquires a Lien on
Real Estate owned by a Borrower.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which a Borrower or a Related Company is required to
contribute or has contributed within the immediately preceding six years.
"Net Amount" means, with respect to any Investments made by any Person,
the gross amount of all such Investments minus the aggregate amount of all cash
received and the fair value, at the time of receipt by such Person, of all
property received as payments of principal or premiums, returns of capital,
liquidating dividends or distributions, proceeds of sale or other dispositions
with respect to such Investments.
"Net Income" or "Net Loss" means, as applied to any Person for any
accounting period, the net income or net loss, as the case may be, of such
Person for the period in question after giving effect to deduction of or
provision for all operating expenses, all taxes and reserves (including reserves
for deferred taxes) and all other proper deductions, all determined in
accordance with GAAP, provided that there shall be excluded:
(a) the net income or net loss of any Person accrued prior to the date
it becomes a Subsidiary of, or is merged into or consolidated with, the Person
whose Net Income is being determined or a Subsidiary of such Person,
(b) the net income or net loss of any Person in which the Person whose
Net Income is being determined or any Subsidiary of such Person has an ownership
interest, except, in the case
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of net income, to the extent that any such income has actually been received by
such Person or such Subsidiary in the form of cash dividends or similar
distributions,
(c) any restoration of any contingency reserve other than in the
ordinary course of such Person's business, except to the extent that provision
for such reserve was made out of income during such period,
(d) any net gains or losses on the sale or other disposition, not in
the ordinary course of business, of Investments, Business Units and other
capital assets, provided that there shall also be excluded any related charges
for taxes thereon,
(e) any net gain arising from the collection of the proceeds of any
insurance policy,
(f) any write-up of any asset, and
(g) any other extraordinary item.
"Net Outstandings" of any Lender means, at any time, the sum of (a) all
amounts paid by such Lender (other than pursuant to SECTION 15.7) to the
Administrative Agent in respect of Loans by such Lender under the Revolving
Credit Facility, minus (b) all amounts received by the Administrative Agent and
paid by the Administrative Agent to such Lender for application, pursuant to
this Agreement, to reduction of the outstanding principal balance of the Loans
of such Lender outstanding under the Revolving Credit Facility.
"Net Proceeds" means proceeds received by a Borrower or any of its
Subsidiaries in cash from any Asset Disposition (including, without limitation,
payments under notes or other debt securities received in connection with any
Asset Disposition), net of: (a) the transaction costs of such sale, lease,
transfer or other disposition; (b) any tax liability arising from such
transaction; and (c) amounts applied to repayment of Indebtedness (other than
the Secured Obligations) secured by a Lien on the asset or property disposed of.
"Note" means any of the Revolving Credit Notes, the Swingline Note, the
Term Notes and Acquisition Notes and "Notes" means more than one such Note.
"Notice of Borrowing" means a written notice, or telephonic notice
followed by a confirming written notice in the form attached hereto as EXHIBIT
E-1, E-2 or E-3, requesting a Borrowing of, respectively, (i) either a Base Rate
Revolving Credit Loan or a Eurodollar Rate Revolving Credit Loan, (ii) a
Swingline Eurodollar Rate Loan or a Base Rate Swingline Loan or (iii) on or
before the Acquisition Facility Termination Date, an Acquisition Loan, which is
given by telex or facsimile transmission in accordance with the applicable
provisions of SECTION 2.2, SECTION 2A.2 or SECTION 4A.2, as the case may be, and
which specifies (x) the amount of the requested Borrowing, (y) the date of the
requested Borrowing, and (z) if the requested Borrowing is of a Eurodollar Rate
Loan, the duration of the applicable Interest Period.
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"Notice of Conversion or Continuation" has the meaning specified in
SECTION 5.13.
"Old WinsLoew" means WinsLoew Furniture, Inc., a Florida corporation,
prior to the WinsLoew Merger.
"Operating Lease" means any lease (other than a lease constituting a
Capitalized Lease Obligation) of real or personal property.
"Overadvance" means at any time the amount by which the principal
amount of Revolving Credit Loans outstanding at such time exceeds the amount
determined pursuant to clause (b) of the definition "Borrowing Base".
"Overadvance Condition" means and is deemed to exist any time the
principal amount of Revolving Credit Loans outstanding exceeds the amount
determined pursuant to clause (b) of the definition "Borrowing Base" at such
time.
"Overadvance Loan" means a Revolving Credit Loan made at the time an
Overadvance Condition exists or which results in an Overadvance Condition.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"Patent Security Agreement" means each Security Agreement (Patents)
made by a Borrower to the Administrative Agent.
"Patents" means and includes, in each case whether now existing or
hereafter arising, all of the Borrowers' right, title and interest in and to
(i) any and all patents and patent applications,
(ii) inventions and improvements described and claimed
therein,
(iii) reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof,
(iv) income, royalties, damages, claims and payments now or
hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for past and future
infringements thereof,
(v) rights to sue for past, present and future infringements
thereof, and
(vi) all rights corresponding to any of the foregoing
throughout the world.
"Pending Loan" has the meaning specified in SECTION 5.15(B).
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"Permitted Acquisition" means an Acquisition by a Borrower of
substantially all of the capital stock or the assets of another Person, in an
arm's length transaction and in accordance with the provisions of SECTION 6.2
(without regard to whether a related Acquisition Loan is made).
"Permitted Investments" means Investments of any Borrower in:
(a) Cash Equivalents,
(b) sales of inventory on credit in the ordinary course of business,
(c) in any other Loan Party and of any Subsidiary in any Loan Party,
(d) any Subsidiary that is not a Loan Party in an aggregate amount for
all Borrowers not to exceed $500,000,
(e) shares of capital stock, evidence of Indebtedness or other security
acquired by such Borrower in consideration for or as evidence of past-due or
restructured Receivables in an aggregate face amount of such Receivables at any
time not to exceed $300,000,
(f) non-cash consideration received in connection with any Asset
Disposition otherwise permitted hereby,
(g) Guaranties permitted pursuant to SECTION 12.3,
(h) those items described on SCHEDULE 1.1B - PERMITTED INVESTMENTS,
(i) loans and advances (i) to employees of any Borrower or their
respective Subsidiaries for moving, entertainment, travel and other similar
expenses in the ordinary course of business not to exceed $250,000 in the
aggregate at any time outstanding or (ii) to such employees and to independent
sales representatives of any Borrower or its Subsidiaries secured by the pledge
of shares of WinsLoew capital stock made to finance the purchase by such
employees (or representatives) of such stock, not to exceed $1,000,000 in the
aggregate at any time outstanding, and
(j) Permitted Acquisitions.
"Permitted Liens" means:
(a) Liens securing taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA)
or the claims of materialmen, repairmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business, but in all cases only if payment shall not at the time be
required to be made in accordance with SECTION 10.6,
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(b) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or under
payment or performance bonds,
(c) Liens to which the priority of any Mortgage is subject as evidenced
by the related mortgagee title insurance policy accepted by the Administrative
Agent or constituting encumbrances in the nature of zoning restrictions,
condemnations, easements, and rights or restrictions of record on the use of
real property, which do not materially detract from the value of such property
or materially impair the use thereof in the business of a Borrower,
(d) Liens consisting of deposits to secure liability to insurance
carriers and 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 of a Borrower (and not in connection with incurring Debt), PROVIDED,
that in each case the obligation secured by such deposit is not overdue or is
being contested in good faith by appropriate proceedings during the pendency of
which the execution of the applicable Lien is effectively stayed and that the
aggregate amount of such deposits does not exceed at any time $500,000,
(e) Liens of or resulting from any judgment or award that would not
result in an Event of Default under SECTION 13.1(K), the time for appeal or
petition for rehearing of which shall not have expired, or in respect of which a
Borrower or the affected Subsidiary shall at any time in good faith be
prosecuting an appeal or proceeding for review and in respect of which a stay of
execution pending such appeal or proceeding for review is in effect,
(f) Purchase Money Liens securing Permitted Purchase Money Debt,
(g) short term leases of Real Estate to third parties that (i) are
subordinate to the Mortgage (if any) encumbering such Real Estate and (ii) do
not interfere with the lessor's conduct of business on such Real Estate,
(h) Liens shown on SCHEDULE 1.1C - PERMITTED LIENS,
(i) Liens of the Administrative Agent, for the benefit of the Lenders,
arising under this Agreement and the other Loan Documents, and
(j) Liens in existence immediately prior to the Effective Date that are
satisfied in full and released (or assigned to and accepted by the
Administrative Agent) on the Effective Date or promptly thereafter as a result
of the application of the proceeds of the Initial Loans or cash on hand.
"Permitted Purchase Money Debt" means Purchase Money Debt of a Borrower
incurred after the Agreement Date
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(a) which is secured by a Purchase Money Lien,
(b) the aggregate principal amount of which does not exceed an amount
equal to 100% of the lesser of
(i) the cost (including the principal amount of such Debt,
whether or not assumed) of the tangible personal property (other than
Inventory) subject to such Lien, and
(ii) the fair value of such tangible personal property (other
than Inventory) at the time of its acquisition, and
(c) which, when aggregated with the principal amount of all other such
Debt and Capitalized Lease Obligations of the Borrower at the time outstanding,
does not exceed $3,000,000.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or unincorporated organization, or a government
or any agency or political subdivision thereof.
"Pompeii" means Pompeii Furniture Co., Inc., a Florida corporation and
a Wholly Owned Subsidiary of Winston.
"Pompeii-Mexico" means Industrial Mueblera Pompeii de Mexico, S.A. de
C.V., a corporation organized under the laws of Mexico and a Wholly Owned
Subsidiary of Winston.
"Pro Forma" means the pro forma consolidated balance sheet of WinsLoew
and its Consolidated Subsidiaries as at the Effective Date, immediately after
giving effect to the transactions contemplated by this Agreement, the WinsLoew
Merger Documents, the Senior Note Indenture and the Acquisition of Pompeii.
"Projections" means the forecasted (a) consolidated balance sheets, (b)
consolidated income statements and (c) consolidated cash flow statements of
WinsLoew and its Consolidated Subsidiaries for the period beginning January 1,
1999 through December 31, 2003, prepared on a monthly basis for Fiscal Year 1999
and on an annual basis for each Fiscal Year thereafter, delivered to the
Administrative Agent and dated June 25, 1999, together with appropriate
supporting detail and a statement of underlying assumptions.
"Proportionate Share" or "Ratable Share" or "Ratable" (and with
corollary meaning, "Ratably") means, as to a Lender, such Lender's share of an
amount in Dollars or other property at the time of determination equal to (i)
such Lender's Facility Percentage in respect of a specified Facility, or (ii) if
no Facility is specified (x) the percentage obtained by dividing the sum of such
Lender's Revolving Credit and unused Acquisition Facility Commitments plus the
principal amount of Term Loans and Acquisition Loans owing to such Lender by the
sum of the total
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Revolving Credit and unused Acquisition Facility Commitments of all Lenders plus
the total principal amount of all Term Loans and Acquisition Loans then owing to
all Lenders, (y) if the Commitments are terminated, the percentage of the total
principal amount of Loans outstanding at such time obtained by dividing the
principal amount of the Loans then owing to such Lender by the total principal
amount of all Loans then owing to all Lenders, or (z) if the Commitments are
terminated and no Loans are outstanding, the percentage of the total Letter of
Credit Obligations then outstanding obtained by dividing such Lender's
participation, if any, in such Letter of Credit Obligations by the total Letter
of Credit Obligations then outstanding.
"Purchase Money Debt" means Debt created to finance the payment of all
or any part of the purchase price (not in excess of the fair market value
thereof) of any tangible personal property (other than Inventory) and incurred
at the time of or within 30 days prior to or after the acquisition of such
tangible asset.
"Purchase Money Lien" means any Lien securing Purchase Money Debt, but
only if such Lien shall at all times be confined solely to the property (other
than Inventory) the purchase price of which was financed through the incurrence
of the Purchase Money Debt secured by such Lien.
"Quoted Rate" has the meaning set forth in SECTION 2A.2.
"Real Estate" means all of the Borrowers' now or hereafter owned or
leased estates in real property, including, without limitation, all fees,
leaseholds and future interests, together with all of the Borrowers' now or
hereafter owned or leased interests in the improvements and emblements thereon,
the fixtures attached thereto and the easements appurtenant thereto, including,
without limitation the real property described on SCHEDULE 7.1(Y).
"Receivables" has the meaning set forth in the definition "Collateral".
"Register" has the meaning specified in SECTION 14.1(D).
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of August 27, 1999 to which WinsLoew and the initial purchasers of the
Senior Subordinated Notes are parties.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Reimbursement Agreement" means, with respect to a Letter of Credit,
such form of application therefor and form of reimbursement agreement therefor
(whether in a single document or several documents) as BankBoston may employ in
the ordinary course of business for its own account, with such modifications
thereto as may be agreed upon by BankBoston and the relevant Borrower, provided
that such application and agreement and any modifications thereto are not
inconsistent with the terms of this Agreement.
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"Reimbursement Obligations" means the reimbursement or repayment
obligations of the relevant Borrower to BankBoston pursuant to SECTION 3.6 or
pursuant to a Reimbursement Agreement with respect to amounts that have been
drawn under Letters of Credit.
"Related Company" means any (i) corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as any Borrower; (ii) partnership or other trade or business (whether
or not incorporated) under common control (within the meaning of Section 414(c)
of the Code) with any Borrower; or (iii) member of the same affiliated service
group (within the meaning of Section 414(m) of the Code) as any Borrower, any
corporation described in CLAUSE (I) above or any partnership, trade or business
described in CLAUSE (II) above.
"Release" means release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any property, including the movement of
Contaminants through or in the air, soil, surface water or groundwater.
"Remedial Action" means actions required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(ii) prevent the Release or threat of Release or minimize the further Release of
Contaminants so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; or (iii) perform
pre-remedial studies and investigations and post-remedial monitoring and care.
"Required Lenders" means, at any time, any combination of Lenders
whose combined Proportionate Shares at such time are greater than 51%.
"Reserves" means any Letter of Credit Reserve or Environmental
Compliance Reserve.
"Restricted Distribution" by any Person means (i) the retirement,
redemption, purchase, or other acquisition or retirement for value of any
capital stock or other equity securities (except equity securities acquired on
the conversion thereof into other equity securities of such Person) or equity
interests or partnership or membership interests issued by such Person, (ii) the
declaration or payment of any dividend or distribution in cash or property on or
with respect to any such securities (other than dividends payable solely in
shares of its capital stock), equity interests or partnership or membership
interests, excluding, however, any such dividend, distribution or payment to any
Borrower by any Subsidiary of such Borrower, (iii) any loan or advance by such
Person to, or other investment by such Person in, the holder of any of such
securities, equity interests or partnership or membership interests and any
forgiveness or cancellation of such loan or advance, and (iv) any other payment
by such Person in respect of such securities, equity interests or partnership or
membership interests.
"Restricted Payment" means (i) any redemption or prepayment or other
retirement, prior to the stated maturity thereof or prior to the due date of any
regularly scheduled installment or
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amortization payment with respect thereto, of any Debt (other than the Loans) or
of any Subordinated Debt, (ii) the payment by any Person of the principal amount
of or interest on any Indebtedness (other than trade debt) owing to an Affiliate
of such Person or to any Affiliate of any such Affiliate and (iii) the payment
of any management, consulting or similar fee by any Person to any Affiliate of
such Person.
"Revolving Credit Facility" means the credit facility providing for
Revolving Credit Loans based upon the Borrowing Base and described in SECTION
2.1 up to an aggregate principal amount at any one time outstanding not to
exceed $40,000,000 or such lesser or greater amount as shall be agreed upon from
time to time in writing by the Administrative Agent, the Lenders and the
Borrowers.
"Revolving Credit Lender" means each Lender having a Commitment under
the Revolving Credit Facility or, if the Commitments are terminated, having
outstanding Revolving Credit Loans.
"Revolving Credit Loans" means Loans made to the Borrowers pursuant to
SECTION 2.1.
"Revolving Credit Note" means each Revolving Credit Note made by the
Borrowers payable to the order of a Lender evidencing the joint and several
obligation of the Borrowers to pay the aggregate unpaid principal amount of the
Loans made to them by such Lender under the Revolving Credit Facility (and any
promissory note or notes that may be issued from time to time in substitution,
renewal, extension, replacement or exchange therefor whether payable to such
Lender or to a different Lender in connection with a Person becoming a Lender
after the Effective Date or otherwise) substantially in the form of EXHIBIT A-1
hereto, with all blanks properly completed, either as originally executed or as
the same may from time to time be supplemented, modified, amended, renewed,
extended or refinanced.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies.
"Sales Terms" means as to each Borrower, the terms and conditions on
which Inventory is sold by such Borrower in the ordinary course of its business
(including the terms and conditions of any recurring seasonal or other
promotional sales programs and other sales terms regularly offered by such
Borrower to any of its customers), as set forth in such Borrower's sales manuals
or otherwise in writing delivered to and accepted by the Administrative Agent
prior to the Agreement Date or, if applicable, prior to the date on which such
Borrower becomes a party to this Agreement as a "Borrower."
"Schedule of Inventory" means a schedule delivered by the Borrowers to
the Administrative Agent pursuant to the provisions of SECTION 9.11(B).
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"Schedule of Receivables" means a schedule delivered by the Borrowers
to the Administrative Agent pursuant to the provisions of SECTION 9.11(A).
"Secured Obligations" means, in each case whether now in existence or
hereafter arising,
(a) the principal of, and interest and premium, if any, on, the Loans,
(b) the Reimbursement Obligations and all other obligations of the
Borrowers to BankBoston, the Administrative Agent or any Lender arising in
connection with the issuance of Letters of Credit,
(c) all obligations of the Borrowers (or any of them) to any Lender or
any Affiliate of a Lender under any Interest Rate Protection Agreement, and
(d) all indebtedness, liabilities, obligations, covenants and duties of
the Borrowers to BankBoston, as the issuer of a Letter of Credit, or the
Administrative Agent, the Co-Agents or to the Lenders or to any Affiliate of the
Administrative Agent or any Lender of every kind, nature and description arising
under or in respect of this Agreement, the Notes or any of the other Loan
Documents, whether direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note, and whether or not for the payment of money, including
without limitation, fees required to be paid pursuant to ARTICLE 5 and expenses
required to be paid or reimbursed pursuant to SECTION 16.2.
"Security Documents" means each of the following:
(a) the Mortgages,
(b) the Financing Statements,
(c) the WinsLoew Pledge Agreement,
(d) the Winston Pledge Agreement,
(e) the Trademark Security Agreement,
(f) the Patent Security Agreement,
(g) the Guaranty Agreement,
(h) each Guarantor Security Agreement, and
(i) each other writing executed and delivered by a Borrower or any
other Person securing the Secured Obligations,
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"Security Interest" means the Liens of the Administrative Agent, for
the benefit of itself as Administrative Agent and the Lenders, on and in the
Collateral and the Real Estate effected hereby or by any of the Security
Documents or pursuant to the terms hereof or thereof.
"Senior Subordinated Notes" means up to $105,000,000 aggregate
principal amount at maturity of 12 3/4% per annum unsecured Senior Subordinated
Notes due 2007 outstanding under the Senior Note Indenture (including any
"Exchange Notes" as defined in said Indenture).
"Senior Note Indenture " means the Indenture dated as of August 24,
1999 entered into by WinsLoew Escrow Corp., a Florida corporation and prior to
its merger with and into TFC, a Wholly Owned Subsidiary of TFC, and American
Stock Transfer & Trust Company, Trustee, the obligations of the Company under
and as defined in which Indenture will be assumed by WinsLoew in the WinsLoew
Merger.
"Senior Subordinated Note Documents" means the Senior Subordinated
Notes, the Senior Note Indenture and the Registration Rights Agreement.
"Subordinated Debt" means the Senior Subordinated Notes and any other
Debt of a Borrower in an amount, and that is subordinated to the Secured
Obligations on terms and conditions, acceptable to Required Lenders.
"Subsidiary" when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of the stock
of any class or classes or 50% or more of other ownership interests is owned of
record or beneficially by such other Person, or by one or more Subsidiaries of
such other Person, or by such other Person and one or more Subsidiaries of such
Person, (i) if the holders of such stock, or other ownership interests, (A) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or other individuals performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency, or (B) are entitled, as such holders, to
vote for the election of a majority of the directors (or individuals performing
similar functions) of such Person, whether or not the right so to vote exists by
reason of the happening of a contingency, or (ii) in the case of such other
ownership interests, if such ownership interests constitute a majority voting
interest. When used without other designation of ownership, "Subsidiary" means a
Subsidiary of WinsLoew.
"Supporting Letter of Credit" has the meaning set forth in SECTION 3.9.
"Swingline Eurodollar Rate" has the meaning set forth in SECTION 2A.2.
"Swingline Facility" means an amount equal to $5,000,000.
"Swingline Lender" means BankBoston and each Lender that succeeds to
such capacity with the consent of the Administrative Agent.
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"Swingline Loan" means each advance by the Swingline Lender to the
Borrowers pursuant to SECTION 2A.1.
"Swingline Loan Maturity" means as to each Swingline Loan, the date
such Loan is due as specified by the Borrowers in the related Swingline Loan
Request, which shall be a Business Day not more than seven days after the
borrowing date of such Swingline Loan.
"Swingline Loan Request" has the meaning set forth in SECTION 2A.2.
"Swingline Note" means the Swingline Note made by the Borrowers payable
to the order of the Swingline Lender evidencing the joint and several obligation
of the Borrowers to pay the aggregate unpaid principal amount of the Swingline
Loans made to them by the Swingline Lender under the Swingline Facility (and any
promissory note that may be issued from time to time in substitution, renewal,
extension, replacement or exchange therefor) substantially in the form of
EXHIBIT A-2 hereto, with all blanks properly completed, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or refinanced.
"TFC" means Trivest Furniture Corporation, a Florida corporation.
"Target EBITDA" has the meaning set forth in SECTION 6.2(E).
"Term Loan" means, as the context requires, one or all of the Term Loan
A, Term Loan B, and Term Loan C, as well as the aggregate Loans outstanding
under the Term Loan Facilities and refers to both Eurodollar Rate Term Loans and
the Base Rate Term Loans.
"Term Loan A" means the aggregate Loans outstanding under the Term Loan
A Facility and refers to both Eurodollar Rate Term Loan A and the Base Rate Term
Loan A.
"Term Loan A Facility" means the credit facility described in SECTION
4.1(A) providing for Term Loan A in the principal amount of $25,000,000.
"Term Loan B" means the aggregate Loans outstanding under the Term Loan
B Facility and refers to both Eurodollar Rate Term Loan B and the Base Rate Term
Loan B.
"Term Loan B Facility" means the credit facility described in SECTION
4.1(B) providing for Term Loan B in the principal amount of $62,500,000.
"Term Loan C" means the aggregate Loans outstanding under the Term Loan
C Facility and refers to both Eurodollar Rate Term Loan C and Base Rate Term
Loan C.
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"Term Loan C Facility" means the credit facility described in SECTION
4.1(C) providing for Term Loan C in the principal amount of $7,500,000.
"Term Loan Facility" means the Term Loan A Facility, the Term Loan B
Facility or the Term Loan C Facility, and "Term Loan Facilities" means all such
facilities.
"Term Loan Lender" means each Lender holding any outstanding Term Loan
and "Term Loan A Lender," "Term Loan B Lender," and "Term Loan C Lender" each
means a Term Loan Lender under the designated Term Loan Facility.
"Term Note" means any of the Term Notes A, the Term Notes B and the
Term Notes C, and "Term Notes" means more than one such Note.
"Term Note A" means each Term Note A made by the Borrowers payable to
the order of a Lender evidencing the joint and several obligation of the
Borrowers to pay the aggregate unpaid principal amount of the Loans made to them
by such Lender under the Term Loan A Facility (and any promissory note or notes
that may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor whether payable to such Lender or to a
different Lender in connection with a Person becoming a Lender after the
Effective Date or otherwise) substantially in the form of EXHIBIT B-1 hereto,
with all blanks properly completed, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended or
refinanced.
"Term Note B" means each Term Note B made by the Borrowers payable to
the order of a Lender evidencing the joint and several obligation of the
Borrowers to pay the aggregate unpaid principal amount of the Loans made to them
by such Lender under the Term Loan B Facility (and any promissory note or notes
that may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor whether payable to such Lender or to a
different Lender in connection with a Person becoming a Lender after the
Effective Date or otherwise) substantially in the form of EXHIBIT B-2 hereto,
with all blanks properly completed, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended or
refinanced.
"Term Note C" means each Term Note C made by the Borrowers payable to
the order of a Lender evidencing the joint and several obligation of the
Borrowers to pay the aggregate unpaid principal amount of the Loans made to them
by such Lender under the Term Loan C Facility (and any promissory note or notes
that may be issued from time to time in substitution, renewal, extension,
replacement or exchange therefor whether payable to such Lender or to a
different Lender in connection with a Person becoming a Lender after the
Effective Date or otherwise) substantially in the form of EXHIBIT B-3 hereto,
with all blanks properly completed, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended or
refinanced.
"Termination Date" means December 31, 2004, or such earlier date as all
Secured Obligations shall have been irrevocably paid in full and the Revolving
Credit Facility and the
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Acquisition Facility shall have been terminated, or such later date as to which
the same may be extended pursuant to the provisions of SECTION 2.5.
"Texacraft" means Texacraft, Inc., a Texas corporation and a Wholly
Owned Subsidiary of Winston.
"Total Facilities" means the aggregate of the Revolving Credit
Facility, the Term Loan Facilities and the Acquisition Facility.
"Total Funded Debt to EBITDA Ratio" means as of the last day of a
Fiscal Quarter, the ratio of (i) the outstanding principal amount of Funded Debt
on such last day to (ii) EBITDA, for the period of four consecutive Fiscal
Quarters ended on such day. For purposes of computing the Total Funded Debt to
EBITDA Ratio, the WinsLoew Merger and the Acquisition by Winston of Pompeii and
Pompeii-Mexico (which was completed on July 30, 1999), and the related capital
contributions and borrowings shall be deemed to have occurred on the first day
of the fourth Fiscal Quarter preceding the Effective Date, and, subject to the
Administrative Agent's consent, any other subsequent Permitted Acquisition by
any Borrower and the capital contributions and the borrowings in connection with
consummation thereof shall be deemed to have occurred on the first day of the
fourth Fiscal Quarter preceding the date of such Permitted Acquisition or such
later date as the Administrative Agent and WinsLoew may agree.
"Trademark Security Agreement" means each Security Agreement
(Trademarks), dated on or about the Effective Date, made by a Borrower to the
Administrative Agent.
"Trademarks" means and includes in each case whether now existing or
hereafter arising, all of the Borrowers' right, title and interest in and to
(a) trademarks (including service marks), trade names and trade styles
and the registrations and applications for registration thereof and the goodwill
of the business symbolized by the trademarks,
(b) licenses of the foregoing, whether as licensee or licensor,
(c) renewals thereof,
(d) income, royalties, damages and payments now or hereafter due and/or
payable with respect thereto, including, without limitation, damages, claims and
payments for past and future infringements thereof,
(e) rights to sue for past, present and future infringements thereof,
including the right to settle suits involving claims and demands for royalties
owing, and
(f) all rights corresponding to any of the foregoing throughout the
world.
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"Trivest Investors" means those investors set forth on SCHEDULE 1.1D.
"Trivest Management Agreement" means the Management Agreement dated as
of a date on or about the Effective Date between WinsLoew and Trivest II, Inc.,
a Florida corporation, as the same may hereafter be amended, extended, renewed,
restated and replaced in accordance with the terms thereof and the applicable
provisions of this Agreement.
"Trivest Management Fees" means all compensation and expense
reimbursement amounts payable from time to time by WinsLoew to Trivest II, Inc.,
a Florida corporation, pursuant to the Trivest Management Agreement.
"Tropic Craft" means Tropic Craft, Inc., a Florida corporation and a
Wholly Owned Subsidiary of Winston.
"Type" when used in respect of any Loan or Borrowing, shall refer to
the rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined.
"Unfunded Vested Accrued Benefits" means with respect to any Benefit
Plan subject to Title IV of the ERISA , amount at any time by which
(a) the present value of all vested nonforfeitable benefits under such
Benefit Plan exceeds
(b) the fair market value of all Benefit Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Benefit Plan.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as
in effect in the relevant jurisdiction.
"WPI" means Winston Properties, Inc., an Alabama corporation and a
Wholly Owned Subsidiary of Winston.
"WPI Purchases" has the meaning set forth in SECTION 12.5.
"Wholly Owned Subsidiary" when used to determine the relationship of a
Subsidiary to a Person means a Subsidiary all of the issued and outstanding
shares (other than directors' qualifying shares) of the capital stock of which
shall at the time be owned by such Person or one or more of such Person's Wholly
Owned Subsidiaries or by such Person and one or more of such Person's Wholly
Owned Subsidiaries.
"WinsLoew" means WinsLoew Furniture, Inc., a Florida corporation and
the surviving corporation of the WinsLoew Merger.
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"WinsLoew Merger" means the merger of TFC with and into Old WinsLoew as
contemplated by the WinsLoew Merger Agreement and the other WinsLoew Merger
Documents.
"WinsLoew Merger Agreement" means the Second Amended and Restated
Agreement and Plan of Merger dated as of May 4, 1999 between TFC and Old
WinsLoew, as the same may be amended up to and through the Effective Date with
the consent of the Administrative Agent.
"WinsLoew Merger Contribution" means total equity contributions of at
least $78,000,000, including, without limitation, equity contributions up to
$12,000,000 in the form of "rollover" of shares of WinsLoew, the proceeds of
which are applied to acquire shares of Old WinsLoew, made by Persons who are
shareholders of Old WinsLoew on the Effective Date.
"WinsLoew Merger Documents" means, collectively, the WinsLoew Merger
Agreement and all other documents, agreements and certificates executed in
connection with the consummation of the transactions contemplated by the
WinsLoew Merger Agreement, including, without limitation, those listed on
SCHEDULE 1.1A - WINSLOEW MERGER DOCUMENTS attached hereto.
"WinsLoew Pledge Agreement" means the Stock Pledge Agreement in form
and substance satisfactory to the Administrative Agent executed by WinsLoew as
of the Effective Date in favor of the Administrative Agent, pursuant to which
WinsLoew pledges all of the issued and outstanding shares of the capital stock
of Loewenstein and Winston as security for the Secured Obligations.
"Winston" means Winston Furniture Company of Alabama, Inc., an Alabama
corporation and a Wholly Owned Subsidiary of WinsLoew.
"Winston Pledge Agreement" means the Stock Pledge Agreement in form and
substance satisfactory to the Administrative Agent executed by Winston as of the
Effective Date in favor of the Administrative Agent, pursuant to which Winston
pledges all of the issued and outstanding shares of the capital stock of Tropic
Craft, Texacraft, WPI and Pompeii and 65% of the issued and outstanding shares
of the capital stock of Pompeii-Mexico as security for the Secured Obligations.
"Year 2000 Compliant" means, as to any computer application used by
WinsLoew or any Subsidiary of WinsLoew, or any supplier, vendor or customer of
WinsLoew or any of its Subsidiaries, that such computer application will not be
negatively impacted by the Year 2000 Problem and that such computer application
is reasonably expected on a timely basis to be able to properly recognize and
perform date-sensitive functions for all dates prior to, on and after January 1,
2000.
"Year 2000 Problem" means the risk that computer applications used by
WinsLoew or any of its Subsidiaries, or any supplier, vendor or customer of
WinsLoew or any of its Subsidiaries
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with which WinsLoew's or such Subsidiaries' data processing systems communicate
electronically may be unable to properly recognize and perform date-sensitive
functions involving dates prior to, on or after January 1, 2000.
SECTION 1.2 General Interpretive Rules.
(a) All terms of an accounting nature not specifically defined herein
shall have the meaning ascribed thereto by GAAP.
(b) The terms accounts, chattel paper, contract rights, documents,
equipment, instruments, general intangibles and inventory, as and when used in
this Agreement or the Security Documents, shall have the meanings given those
terms in the Uniform Commercial Code.
(c) Unless otherwise specified, the words "hereof," "herein,"
"hereunder" and words of similar import, when used in this Agreement, refer to
this Agreement as a whole and not to any particular provision, section or
subsection of this Agreement.
(d) Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Words denoting individuals include
corporations and vice versa.
(e) References to any legislation or statute or code, or to any
provisions of any legislation or statute or code, shall include any modification
or reenactment of, or any legislative, statutory or code provision substituted
for, such legislation, statute or code or provision thereof.
(f) References to any document or agreement (including this Agreement)
shall include references to such document or agreement as amended, novated,
supplemented, modified or replaced from time to time, so long as and to the
extent that such amendment, novation, supplement, modification or replacement is
either not prohibited by the terms of this Agreement or is consented to by the
Required Lenders and the Administrative Agent or otherwise as required by any
Loan Document.
(g) Except where specifically restricted in a Loan Document, references
to any Person include its successor or permitted substitutes and assigns
permitted or not prohibited under such Loan Document.
(h) References to the time of day are to the time of day in the city in
which the Administrative Agent's Office is located.
(i) The terms "payment", "prepayment", "distribution" and similar terms
used in the definitions of "Restricted Distribution" and "Restricted Payment"
and in SECTION 12.6, shall include payment by means of the transfer of funds or
of property and, in the event of a transfer of
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property, the payment shall be deemed to be in an amount equal to the greater of
the fair market value and the book value of the property at the time of the
transfer.
(j) Titles of Articles and Sections in this Agreement are for
convenience only, do not constitute part of this Agreement and neither limit nor
amplify the provisions of this Agreement, and all references in this Agreement
to Articles, Sections, subsections, paragraphs, clauses, subclauses, Schedules,
Annexes or Exhibits shall refer to the corresponding Article, Section,
subsection, paragraph, clause or subclause of, or Schedule, Annex or Exhibit
attached to, this Agreement, unless specific reference is made to the articles,
sections or other subdivisions or divisions of, or to schedules or exhibits to,
another document or instrument.
(k) Whenever from the context it appears appropriate, the term "Loan",
including such terms as used as part of a defined term including the term
"Loan", shall mean and include a Loan made by all Lenders to the Borrowers as
well as a Lender's Proportionate Share of any Loan.
(l) All references to defined terms, unless otherwise specified herein,
shall mean such terms as defined in this Agreement.
(m) Whenever the phrase "to the knowledge of the Borrower(s)" or words
of similar import relating to the knowledge of a Borrower are used herein, such
phrase shall mean and refer to (i) the actual knowledge of the President or
chief financial officer of WinsLoew or (ii) the knowledge that such officers
would have obtained if they had engaged in good faith in the diligent
performance of their duties, including the making of such reasonable specific
inquiries as may be necessary of the appropriate persons in a good faith attempt
to ascertain the accuracy of the matter to which such phrase relates.
(n) The Security Interest, any other Lien referred to in this Agreement
or in any other Loan Document as having been created in favor of the Agent, any
agreement entered into by the Agent pursuant to this Agreement or any other Loan
Document, any payments made by or to or funds received by the Agent pursuant to
or as contemplated by this Agreement or any other Loan Document, and any other
act taken or omitted by the Agent shall, unless expressly provided otherwise,
exist, be created, be entered into, be made or received, taken or omitted, for
the benefit or account of the Agent and the Lenders.
SECTION 1.3 Exhibits, Annexes and Schedules. All Exhibits, Annexes and
Schedules attached hereto are by reference made a part hereof.
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ARTICLE 2
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each Revolving Credit Lender agrees, severally, but not
jointly, to make Revolving Credit Loans under the Revolving Credit Facility to
the Borrowers from time to time from the Effective Date to but not including the
Termination Date, as requested or deemed requested by the Borrowers'
Representative in accordance with the terms of SECTION 2.2, in amounts equal to
such Lender's Proportionate Share of each Revolving Credit Loan requested or
deemed requested hereunder up to an aggregate amount at any one time outstanding
equal to such Lender's Proportionate Share of the Borrowing Base; PROVIDED,
HOWEVER, that the aggregate principal amount of all outstanding Revolving Credit
Loans (after giving effect to the Loans requested) shall not exceed the
Revolving Credit Facility minus the Letter of Credit Reserve minus the aggregate
outstanding principal amount of any Swingline Loans. It is expressly understood
and agreed that the Lenders may and at present intend to use the Borrowing Base
as a maximum ceiling on Loans made to the Borrowers under the Revolving Credit
Facility; PROVIDED, HOWEVER, that it is agreed that should the aggregate
outstanding amount of such Loans exceed the ceiling so determined or any other
limitation set forth in this Agreement, such Loans shall nevertheless constitute
Secured Obligations and, as such, shall be entitled to all benefits thereof and
security therefor. The principal amount of any Loans made under the Revolving
Credit Facility which is repaid may be reborrowed by the Borrowers, subject to
the terms and conditions of this Agreement, in accordance with the terms of this
SECTION 2.1. The Administrative Agent's and each Revolving Credit Lender's books
and records reflecting the date and the amount of each Loan made under the
Revolving Credit Facility and each repayment of principal thereof shall
constitute prima facie evidence of the accuracy of the information contained
therein, subject to the provisions of SECTION 5.7.
SECTION 2.2 Borrowing. (a) Requests for Borrowings under the Revolving
Credit Facility (other than the Initial Loans which shall be the subject of the
Initial Notice of Borrowing referred to in SECTION 6.1(c)) shall be made by
delivery or deemed delivery of a Notice of Borrowing, given or deemed given, by
the Borrowers' Representative, in the manner specified in SECTION 5.3.
(b) Disbursement of Loans. The Administrative Agent shall notify the
Revolving Credit Lenders promptly (and in any event not later than the Business
Day prior to the proposed Borrowing date) of each Notice of Borrowing given or
deemed given. Not later than 1:30 p.m. on the proposed Borrowing date, each
Revolving Credit Lender will make available to the Administrative Agent, for the
account of the Borrowers, at the Administrative Agent's Office in funds
immediately available to the Administrative Agent, such Lender's Proportionate
Share of such Revolving Credit Loan. The Borrowers hereby irrevocably authorize
the Administrative
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Agent to disburse the proceeds of each Borrowing requested, or deemed to be
requested, pursuant to this SECTION 2.2 by wire transfer or other appropriate
means to such account of a Borrower as may be agreed upon by the Borrowers'
Representative and the Administrative Agent from time to time or, in the case of
the proceeds of each Borrowing deemed requested under SECTION 5.8(A), by way of
direct payment of the relevant Secured Obligation.
SECTION 2.3 Repayment of Revolving Credit Loans. The Revolving Credit
Loans will be repaid as follows:
(a) The outstanding principal amount of all the Revolving Credit Loans
is due and payable, and shall be repaid by the Borrowers in full, as their joint
and several obligation, not later than the Termination Date; and
(b) Subject to the provisions of SECTION 5.8, if at any time the
aggregate outstanding unpaid principal amount of the Revolving Credit Loans
exceeds the Borrowing Base in effect at such time minus the aggregate
outstanding principal amount of all Swingline Loans, the Borrowers shall (unless
a payment is made by the Borrowers pursuant to SECTION 2A.3 or SECTION 2A.4 that
eliminates such excess) immediately repay the Revolving Credit Loans in an
amount sufficient to reduce the aggregate unpaid principal amount of such
Revolving Credit Loans by an amount equal to such excess, together with accrued
and unpaid interest on the amount so repaid to the date of repayment.
Repayments pursuant to SECTION 2.3(B) shall be applied first to the Base Rate
Revolving Credit Loans and then to Eurodollar Rate Revolving Credit Loans.
SECTION 2.4 Revolving Credit Note. Each Revolving Credit Lender's
Revolving Credit Loans and the joint and several obligation of the Borrowers to
repay such Revolving Credit Loans shall also be evidenced by a Revolving Credit
Note payable to the order of such Lender. Each Revolving Credit Note shall be
dated the Effective Date (or later "effective date" under any Assignment and
Acceptance) and be duly and validly executed and delivered by the Borrowers.
SECTION 2.5 Extension of Revolving Credit Facility. Upon the request of
the Borrowers, the Lenders may, in their sole discretion, agree to extend the
Termination Date by an instrument in writing signed by the Administrative Agent
and all Lenders.
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ARTICLE 2A
SWINGLINE FACILITY
SECTION 2A.1 Swingline Loans. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, the Swingline Lender shall make Swingline Loans to the
Borrowers from time to time, from and after the Effective Date until the
Termination Date, as requested by the Borrowers in accordance with the terms of
SECTION 2A.2, up to an aggregate principal amount of Swingline Loans at any time
outstanding not to exceed the lesser of (i) the Swingline Facility and (ii) the
Borrowing Base MINUS the aggregate principal amount of outstanding Revolving
Credit Loans. The Swingline Loans will be deemed to be usage of the Revolving
Credit Facility for the purpose of calculating availability pursuant to SECTION
2.1, but will not reduce the Swingline Lender's obligation to lend its
Proportionate Share of the remaining unused Revolving Credit Facility.
SECTION 2A.2 Making Swingline Loans. Upon request of the Borrowers'
Representative, the Swingline Lender shall promptly notify the Borrowers'
Representative and the Administrative Agent of the quoted rate of interest
applicable on any Business Day to a proposed Swingline Loan (such rate of
interest, a "Quoted Rate") and of the rate that would be applicable to a
Eurodollar Rate Revolving Credit Loan made on the same day for an Interest
Period of one month (the "Swingline Eurodollar Rate"). Requests for Swingline
Loans shall be made not later than 4:00 p.m. on the Business Day of the proposed
Swingline Loan by delivery by telex, telegraph, telecopy or telephone of a
request therefor by Borrowers' Representative to the Administrative Agent. Each
such notice (a "Swingline Loan Request") shall specify (i) the proposed
borrowing date, (ii) the amount of Swingline Loan requested, (iii) the
applicable Quoted Rate or Eurodollar Rate, as selected by the Borrowers, and
(iv) the applicable Swingline Loan Maturity, and shall be immediately followed
by a written confirmation thereof by the Borrowers' Representative in
substantially the form of EXHIBIT E-2 hereto, PROVIDED, that if such written
confirmation differs in any material respect from the action taken by the
Administrative Agent, the records of the Administrative Agent shall control
absent manifest error. Not later than 6:00 p.m. on the date specified for any
Swingline Loan, the Swingline Lender shall make available such Swingline Loan in
immediately available funds to the Administrative Agent at the Administrative
Agent's Office. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in ARTICLE 6, the
Administrative Agent will, and the Borrowers hereby irrevocably authorize the
Administrative Agent to, disburse the proceeds of each Swingline Loan by making
such funds available to the Borrowers by wire transfer to such account of a
Borrower as the Borrowers and the Administrative Agent may agree from time to
time.
SECTION 2A.3 Repayment of Swingline Loans. The principal amount of each
Swingline Loan shall be repaid by the Borrowers in full on the applicable
Swingline Loan Maturity, together with accrued and unpaid interest thereto such
date.
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SECTION 2A.4 Prepayment. If at any time the aggregate unpaid principal
amount of Swingline Loans outstanding to the Borrowers from the Swingline Lender
exceeds the amount set forth in the first sentence of SECTION 2A.1, the
Borrowers shall pay to the Administrative Agent for the account of the Swingline
Lender on demand by the Administrative Agent, an amount equal to such excess,
together with accrued and unpaid interest on the principal amount prepaid to the
date of prepayment. Notwithstanding the foregoing, no such prepayment shall be
required if the Borrowers shall have made an appropriate prepayment in
accordance with the provisions of SECTION 2.3(B).
SECTION 2A.5 Swingline Note. The Swingline Loans made by the Swingline
Lender and the obligation of the Borrowers to repay such Loans shall be
evidenced by, and be repayable in accordance with the terms of, a single
Swingline Note, made by the Borrowers payable to the order of the Swingline
Lender. The Swingline Note shall be dated the Effective Date and be duly and
validly executed and delivered by the Borrowers.
SECTION 2A.6 Settlement with Other Lenders. All payments of principal,
interest and any other amount with respect to such Swingline Loan shall be
payable to and received by the Administrative Agent for the account of the
Swingline Lender. Upon demand by the Swingline Lender, with notice thereof to
the Administrative Agent, and notwithstanding the occurrence and continuation at
the time of such demand of any Default or Event of Default, each Revolving
Credit Lender shall make a Base Rate Revolving Credit Loan in the amount of its
Revolving Credit Facility Percentage of the outstanding Swingline Loans for the
account of the Borrowers, the proceeds of which shall be paid over to the
Swingline Lender and applied to the repayment of such Swingline Loans. Any
payments received by the Administrative Agent prior to such repayment by the
Revolving Credit Lenders which in accordance with the terms of this Agreement
are to be applied to the reduction of the outstanding principal balance of
Swingline Loans shall be paid over to the Swingline Lender and so applied.
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ARTICLE 3
LETTER OF CREDIT FACILITY
SECTION 3.1 Agreement to Issue. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, BankBoston agrees to issue for the account of any
Borrower one or more Letters of Credit in accordance with this ARTICLE 3, from
time to time during the period commencing on the Effective Date and ending on
the Termination Date.
SECTION 3.2 Amounts. BankBoston shall not have any obligation to issue
any Letter of Credit at any time:
(a) if, after giving effect to the issuance of the requested Letter of
Credit, (i) the aggregate Letter of Credit Obligations of the Borrowers would
exceed the Letter of Credit Facility then in effect or (ii) the aggregate
principal amount of the Revolving Credit Loans and Swingline Loans outstanding
would exceed the Borrowing Base (after reduction for the Letter of Credit
Reserve in respect of such Letter of Credit) or (iii) if no Revolving Credit
Loans or Swingline Loans are outstanding, the aggregate Letter of Credit
Obligations would exceed the Borrowing Base; or
(b) which has a term longer than one calendar year or an expiration
date after the last Business Day that is more than 10 days prior to the
Termination Date.
SECTION 3.3 Conditions. The obligation of BankBoston to issue any
Letter of Credit is subject to the satisfaction of (a) the applicable conditions
precedent contained in ARTICLE 6 and (b) the following additional conditions
precedent in a manner satisfactory to the Administrative Agent and BankBoston:
(i) the Borrowers, through the Borrowers' Representative,
shall have delivered to BankBoston and the Administrative Agent at such
times and in such manner as BankBoston or the Administrative Agent may
prescribe an application in form and substance satisfactory to
BankBoston and the Administrative Agent for the issuance of the Letter
of Credit, a Reimbursement Agreement and such other documents as may be
required pursuant to the terms thereof, and the form and terms of the
proposed Letter of Credit shall be satisfactory to BankBoston and the
Administrative Agent; and
(ii) as of the date of issuance, no order of any court,
arbitrator or governmental authority having jurisdiction or authority
over BankBoston shall purport by its terms to enjoin or restrain banks
generally from issuing letters of credit of the type and in the amount
of the proposed Letter of Credit, and no law, rule or regulation
applicable to
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banks generally and no request or directive (whether or not having the
force of law) from any governmental authority with jurisdiction over
banks generally shall prohibit, or request that BankBoston refrain
from, the issuance of letters of credit generally or the issuance of
such Letter of Credit.
SECTION 3.4 Issuance of Letters of Credit.
(a) Request for Issuance. A Borrower, through the Borrowers'
Representative, shall give BankBoston and the Administrative Agent written
notice of such Borrower's request for the issuance of a Letter of Credit no
later than two Business Days prior to the proposed date of issuance of the
Letter of Credit. Such notice shall be irrevocable and shall specify the
original face amount of the Letter of Credit requested, the effective date
(which date shall be a Business Day) of issuance of such requested Letter of
Credit, whether such Letter of Credit may be drawn in a single or in multiple
draws, the date on which such requested Letter of Credit is to expire (which
date shall be a Business Day earlier than the tenth day prior to the Termination
Date), the purpose for which such Letter of Credit is to be issued and the
beneficiary of the requested Letter of Credit. The Borrowers' Representative
shall attach to such notice the form of the Letter of Credit that it requests to
be issued.
(b) Responsibilities of the Administrative Agent; Issuance. The
Administrative Agent shall determine, as of the Business Day immediately
preceding the requested effective date of issuance of the Letter of Credit set
forth in the notice from the Borrower's Representative pursuant to SECTION
3.4(A), the amount of the unused Letter of Credit Facility. If (i) the form of
the Letter of Credit delivered by a Borrower to the Administrative Agent is
acceptable to BankBoston and the Administrative Agent in their sole, reasonable
discretion, (ii) the undrawn face amount of the requested Letter of Credit is
less than or equal to the unused Letter of Credit Facility and (iii) the
Administrative Agent has received a certificate from the Borrowers'
Representative stating that the applicable conditions set forth in ARTICLE 6 and
SECTION 3.3 have been satisfied, then BankBoston will cause the Letter of Credit
to be issued.
(c) Notice of Issuance. Promptly after the issuance of any Letter of
Credit, BankBoston shall give the Administrative Agent written or facsimile
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of such Letter of Credit, and the Administrative Agent shall give each
Lender written or facsimile notice, or telephonic notice confirmed promptly
thereafter in writing, of the issuance of such Letter of Credit.
(d) No Extension or Amendment. No Letter of Credit shall be extended or
amended unless the requirements of this SECTION 3.4 are met as though a new
Letter of Credit were being requested and issued.
SECTION 3.5 Duties of BankBoston. Any action taken or omitted to be
taken by BankBoston under or in connection with any Letter of Credit, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
result in any liability of BankBoston to any
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Lender or relieve any Lender of its obligations hereunder to BankBoston. In
determining whether to pay under any Letter of Credit, BankBoston shall have no
obligation to any Lender other than to confirm that any documents required to be
delivered under such Letter of Credit in connection with such drawing have been
presented and appear on their face to comply with the requirements of such
Letter of Credit.
SECTION 3.6 Payment of Reimbursement Obligations.
(a) Payment to Issuer. Notwithstanding any provisions to the contrary
in any Reimbursement Agreement, the Borrowers agree, jointly and severally, to
reimburse BankBoston for any drawings (whether partial or full) under each
Letter of Credit issued by BankBoston and agree to pay to BankBoston the amount
of all other Reimbursement Obligations and other amounts payable to BankBoston
under or in connection with such Letter of Credit immediately when due,
irrespective of any claim, set-off, defense or other right which any Borrower
may have at any time against BankBoston or any other Person.
(b) Recovery or Avoidance of Payments. In the event any payment by or
on behalf of the Borrowers with respect to any Letter of Credit (or any
Reimbursement Obligation relating thereto) received by BankBoston, or by the
Administrative Agent and distributed by the Administrative Agent to the Lenders
on account of their respective participations therein, is thereafter set aside,
avoided or recovered from BankBoston or the Administrative Agent in connection
with any receivership, liquidation or bankruptcy proceeding, the Lenders shall,
upon demand by the Administrative Agent, pay to the Administrative Agent, for
the account of the Administrative Agent or BankBoston, their respective
Proportionate Shares of such amount set aside, avoided or recovered together
with interest at the rate required to be paid by the Administrative Agent upon
the amount required to be repaid by it.
SECTION 3.7 Participations.
(a) Purchase of Participations. Immediately upon issuance by BankBoston
of a Letter of Credit, each Revolving Credit Lender shall be deemed to have
irrevocably and unconditionally purchased and received without recourse or
warranty, an undivided interest and participation in such Letter of Credit,
equal to such Lender's Revolving Credit Facility Percentage of the face amount
thereof (including, without limitation, all obligations of the Borrowers with
respect thereto other than amounts owing to BankBoston under SECTION 5.2(D)),
and any security therefor or guaranty pertaining thereto).
(b) Sharing of Letter of Credit Payments. In the event that BankBoston
makes a payment under any Letter of Credit and BankBoston shall not have been
repaid such amount pursuant to SECTION 3.6, then the Borrowers shall be deemed
to have requested a Base Rate Revolving Credit Loan in the amount of such
payment, and notwithstanding the occurrence or continuance of a Default or Event
of Default at the time of such payment, each Revolving Credit
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Lender shall be absolutely obligated to make its Proportionate Share of such
Revolving Credit Loan available to the Administrative Agent for disbursement as
provided in SECTION 2.2(B).
(c) Sharing of Reimbursement Obligation Payments. Whenever BankBoston
receives a payment from or on behalf of the Borrowers on account of a
Reimbursement Obligation as to which the Administrative Agent has previously
received for the account of BankBoston payment from a Lender pursuant to this
SECTION 3.7, BankBoston shall promptly pay to the Administrative Agent, for the
benefit of such Lender, such Lender's Proportionate Share of the amount of such
payment from the Borrowers in Dollars. Each such payment shall be made by
BankBoston on the Business Day on which BankBoston receives immediately
available funds from the Administrative Agent pursuant to the immediately
preceding sentence, if received prior to 11:00 a.m. on such Business Day, and
otherwise on the next succeeding Business Day.
(d) Documentation. Upon the request of any Lender, the Administrative
Agent shall furnish to such Lender copies of any Letter of Credit, Reimbursement
Agreement or application for any Letter of Credit and such other documentation
as may reasonably be requested by such Lender.
(e) Obligations Irrevocable. The obligations of each Revolving Credit
Lender to make payments to the Administrative Agent with respect to any Letter
of Credit and its participation therein pursuant to the provisions of SECTION
5.10 hereof or otherwise and the obligations of the Borrowers to make payments
to BankBoston or to the Administrative Agent, for the account of the Revolving
Credit Lenders, shall be irrevocable, shall not be subject to any qualification
or exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement (assuming, in the case of the obligations of the
Revolving Credit Lenders to make such payments, that the Letter of Credit has
been issued in accordance with SECTION 3.4), including, without limitation, any
of the following circumstances:
(i) Any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) The existence of any claim, set-off, defense or other
right which any Borrower may have at any time against a beneficiary
named in a Letter of Credit or any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), any Lender,
BankBoston or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transactions
between any Borrower or any other Person and the beneficiary named in
any Letter of Credit);
(iii) Any draft, certificate or any other document presented
under the Letter of Credit upon which payment has been made in good
faith and according to its terms
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proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) The surrender or impairment of any Collateral or any
other security for the Secured Obligations or the performance or
observance of any of the terms of any of the Loan Documents;
(v) The occurrence of any Default or Event of Default; or
(vi) BankBoston's or the Administrative Agent's failure to
deliver the notice provided for in SECTION 3.4(C).
SECTION 3.8 Indemnification, Exoneration.
(a) Indemnification. In addition to amounts payable as elsewhere
provided in this ARTICLE 3, the Borrowers agree, jointly and severally, to
protect, indemnify, pay and save the Lenders and the Administrative Agent
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) which
any Lender or the Administrative Agent may incur or be subject to as a
consequence, directly or indirectly, of
(i) the issuance of any Letter of Credit, other than as a
result of its gross negligence or willful misconduct, as determined by
a court of competent jurisdiction, or
(ii) the failure of BankBoston to honor a drawing under any
Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto governmental
authority (all such acts or omissions being hereinafter referred to
collectively as "Government Acts").
(b) Assumption of Risk by the Borrower. As among the Borrowers, the
Lenders and the Administrative Agent, the Borrowers assume all risks of the acts
and omissions of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, subject to the provisions of the applications for the issuance of
Letters of Credit, the Lenders and the Administrative Agent shall not be
responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any Person in connection with
the application for and issuance of and presentation of drafts with
respect to any of the Letters of Credit, even if it should prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged;
(ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or
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proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of Credit
to comply duly with conditions required in order to draw upon such
Letter of Credit;
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit
or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control
of the Lenders or the Administrative Agent, including, without
limitation, any Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of any of the
Administrative Agent's rights or powers under this SECTION 3.8.
(c) Exoneration. In furtherance and extension, and not in limitation,
of the specific provisions set forth above, any action taken or omitted by the
Administrative Agent, BankBoston or any Lender under or in connection with any
of the Letters of Credit or any related certificates, if taken or omitted in
good faith, absent gross negligence or willful misconduct, shall not result in
any liability of any Lender or the Administrative Agent to any Borrower or
relieve any Borrower of any of its obligations hereunder to any such Person.
SECTION 3.9 Supporting Letter of Credit; Cash Collateral Account. Upon
the occurrence of an Event of Default or, if, notwithstanding the provisions of
SECTION 3.2(B), any Letter of Credit is outstanding on the Termination Date,
then on or prior to the Termination Date, the Borrowers shall, promptly on
demand by the Administrative Agent, deposit with the Administrative Agent, for
the Ratable benefit of the Lenders, with respect to each Letter of Credit then
outstanding, as the Administrative Agent shall specify, either (a) a standby
letter of credit (a "Supporting Letter of Credit") in form and substance
satisfactory to the Administrative Agent, issued by an issuer satisfactory to
the Administrative Agent in its reasonable judgment in an amount equal to the
greatest amount for which such Letter of Credit may be drawn and expiring not
earlier than 10 days after the expiration date of such Letter of Credit, under
which Supporting Letter of Credit the Administrative Agent shall be entitled to
draw amounts necessary to reimburse the Administrative Agent and the Revolving
Credit Lenders for payments made by the Administrative Agent and the Revolving
Credit Lenders under such Letter of Credit or under any
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reimbursement or guaranty agreement with respect thereto, or (b) Cash Collateral
in an amount necessary to reimburse the Administrative Agent and the Revolving
Credit Lenders for payments made by the Administrative Agent and the Lenders
under such Letter of Credit or under any reimbursement or guaranty agreement
with respect thereto. Such Supporting Letter of Credit or Cash Collateral shall
be held by the Administrative Agent first, for the Ratable benefit of the
Revolving Credit Lenders, as security for, and to provide for the payment of,
the Reimbursement Obligations, and after any Reimbursement Obligations have been
paid in full, for the Ratable benefit of all Lenders; PROVIDED that, the
Administrative Agent may at any time after the Termination Date or if an Event
of Default exists, apply any or all of such Cash Collateral to the payment of
any or all of the Secured Obligations then due and payable. The Cash Collateral
shall be deposited in the Cash Collateral Account or an Investment Account and
shall be administered in accordance with the provisions of SECTION 5.16.
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ARTICLE 4
TERM LOAN FACILITIES
SECTION 4.1 Term Loans.
(a) Term Loan A. Upon the terms and subject to the conditions of,
and in reliance upon the representations and warranties made under, this
Agreement, each Term Loan A Lender agrees severally, but not jointly, to make a
Base Rate Loan to the Borrowers on the Effective Date, in a principal amount
equal to such Lender's Proportionate Share of the Term Loan A Facility.
(b) Term Loan B. Upon the terms and subject to the conditions of,
and in reliance upon the representations and warranties made under, this
Agreement, each Term Loan B Lender agrees severally, but not jointly, to make a
Base Rate Loan to the Borrowers on the Effective Date in a principal amount
equal to such Lender's Proportionate Share of the Term Loan B Facility.
(c) Term Loan C. Upon the terms and subject to the conditions of,
and in reliance upon the representations and warranties made under, this
Agreement, each Term Loan C Lender agrees severally, but not jointly, to make a
Base Rate Loan to the Borrowers on the Effective Date in a principal amount
equal to such Lender's Proportionate Share of the Term Loan C Facility.
SECTION 4.2 Manner of Borrowing Term Loans. The Borrowers, through the
Borrowers' Representative, shall give the Administrative Agent an Initial
Notice of Borrowing at least two Business Days' prior to the occurrence of the
Effective Date. Upon receipt of such notice from the Borrowers' Representative,
the Administrative Agent shall promptly notify each Term Loan Lender thereof.
Each Term Loan Lender will make a Base Rate Loan in an amount equal to its
Proportionate Share of the aggregate principal amount of the Term Loans
properly requested in the Initial Notice of Borrowing available to the
Administrative Agent, for the account of the Borrowers, at the Administrative
Agent's Office, prior to 12:00 noon on the Effective Date (assuming
satisfaction of the applicable conditions set forth in Article 6) in funds
immediately available to the Administrative Agent. On the Effective Date, upon
satisfaction of the applicable conditions set forth in ARTICLE 6, as
applicable, the Administrative Agent will disburse the Term Loans on the
Effective Date, in same day funds in accordance with the terms of the Initial
Notice of Borrowing.
SECTION 4.3 Repayment of Term Loans.
(a) Term Loan A. The principal amount of Term Loan A is due and
payable, and shall be repaid in full by the Borrowers, as their joint and
several obligation, in twenty consecutive installments on successive
Installment Payment Dates as follows: eight installments on successive
Installment Payment Dates commencing on March 31, 2000, each in the amount of
$750,000; eight installments on successive
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Installment Payment Dates commencing on March 31, 2002, each in the amount of
$1,500,000; and four installments on successive Installment Payment Dates
commencing March 31, 2004, each in the amount of $1,750,000; PROVIDED that the
payment due on December 31, 2004 shall be in the full amount of the then
outstanding and unpaid principal balance of Term Loan A.
(b) Term Loan B. The principal amount of Term Loan B is due and
payable, and shall be repaid in full by the Borrowers, as their joint and
several obligation, in twenty-six consecutive installments on successive
Installment Payment Dates as follows: twenty installments on successive
Installment Payment Dates commencing on March 31, 2000, each in the amount of
$175,000; four installments on successive Installment Payment Dates commencing
on March 31, 2005, each in the amount of $8,312,500; one installment on March
31, 2006, in the amount of $16,625,000; and one installment on June 30, 2006,
in the amount of $9,125,000; PROVIDED that the payment due on June 30, 2006
shall be in the full amount of the then outstanding and unpaid principal of
Term Loan B.
(c) Term Loan C. The principal amount of Term Loan C is due and
payable, and shall be repaid in full by the Borrowers, as their joint and
several obligation, on June 30, 2006.
SECTION 4.4 Term Notes. The Loans made by each Lender as part of Term
Loan A and the joint and several obligation of the Borrowers to repay such
Loans shall also be evidenced by a Term Note A payable to the order of such
Lender. The Loans made by each Lender as part of Term Loan B and the joint and
several obligation of the Borrowers to repay such Loans shall also be evidenced
by a Term Note B payable to the order of such Lender. The Loans made by each
Lender as part of Term Loan C and the joint and several obligation of the
Borrowers to repay such Loans shall also be evidenced by a Term Note C. Each
such Term Note A, Term Note B and Term Note C shall be dated the Effective Date
(or the later "effective date" under any Assignment and Acceptance) and be duly
and validly executed and delivered by the Borrowers.
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ARTICLE 4A
ACQUISITION FACILITY
SECTION 4A.1 Acquisition Loans. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each Acquisition Facility Lender agrees, severally, but
not jointly, to make Acquisition Loans under the Acquisition Facility to the
Borrowers from time to time from the Effective Date to and including the
Acquisition Facility Termination Date, as requested or deemed requested by the
Borrowers' Representative in accordance with the terms of SECTION 4A.2, in
amounts equal to such Lender's Proportionate Share of each Acquisition Loan
requested hereunder up to an aggregate amount at any one time outstanding equal
to such Lender's Proportionate Share of $20,000,000. The principal amount of
any Loans made under the Acquisition Facility which is repaid prior to the
Acquisition Facility Termination Date may be reborrowed by the Borrowers prior
to the Acquisition Facility Termination Date, subject to the terms and
conditions of this Agreement, in accordance with the terms of this ARTICLE 4A.
The Administrative Agent's and each Acquisition Facility Lender's books and
records reflecting the date and the amount of each Loan made under the
Acquisition Facility and each repayment of principal thereof shall constitute
prima facie evidence of the accuracy of the information contained therein,
subject to the provisions of SECTION 5.3.
SECTION 4A.2 (a) Borrowing. Requests for Borrowings under the
Acquisition Facility shall be made by delivery of a Notice of Borrowing, given
by the Borrowers' Representative, in the manner specified in SECTION 6.2.
(a) Disbursement of Loans. The Administrative Agent shall
promptly (and in any event not later than the Business Day prior to the
proposed Borrowing date) notify the Lenders of any Notice of Borrowing given in
respect of a Borrowing requested under the Acquisition Facility. Not later than
1:30 p.m. on the proposed Borrowing date, each Acquisition Facility Lender will
make available to the Administrative Agent, for the account of the Borrowers,
at the Administrative Agent's Office in funds immediately available to the
Administrative Agent, such Lender's Proportionate Share of such Acquisition
Loan. The Borrowers hereby irrevocably authorize the Administrative Agent to
disburse the proceeds of each Acquisition Loan in Dollars in immediately
available funds by wire transfer or other appropriate means to such account or
accounts as may be agreed upon by the Borrowers' Representative and the
Administrative Agent from time to time.
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SECTION 4A.3 Repayment of Acquisition Loans. Amounts borrowed under
the Acquisition Facility may be repaid and, subject to compliance with the
applicable provisions of ARTICLE 6 and this ARTICLE 4A, be reborrowed at any
time prior to the Acquisition Facility Termination Date. The aggregate
principal amount of Acquisition Loans outstanding on the Acquisition Facility
Termination Date shall be repaid in twelve consecutive installments on
successive Installment Payment Dates commencing on March 31, 2002 in such
substantially equal installments during each calendar year as will result in
20% of such outstanding principal amount being repaid in year one, 30% of such
outstanding principal amount being repaid in year two and 50% of such
outstanding principal amount being repaid in year three; PROVIDED that the
payment due on December 31, 2004 shall be in the full amount of the then unpaid
principal of Acquisition Loans. Repayments pursuant to this SECTION 4A.3 shall
be applied first to Base Rate Acquisition Loans and then to Eurodollar Rate
Acquisition Loans.
SECTION 4A.4 Acquisition Note. Each Lender's Acquisition Loans and the
joint and several obligation of the Borrowers to repay such Acquisition Loans
shall also be evidenced by an Acquisition Note payable to the order of such
Lender. Each Acquisition Note shall be dated the Effective Date (or later
"effective date" under any Assignment and Acceptance) and be duly and validly
executed and delivered by the Borrowers.
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ARTICLE 5
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
(a) (i) Base Rate Loans. Subject to the provisions of SECTION
5.1(D), the Borrowers will pay interest on the unpaid principal amount of each
Base Rate Loan, for each day from the day such Loan is made until such Loan is
paid (whether at maturity, by reason of acceleration, or otherwise) or is
converted to a Loan of a different Type, at a rate per annum equal to the sum
of (i) the Applicable Margin and (ii) the Base Rate, payable monthly in arrears
as it accrues on each Interest Payment Date, and upon any prepayment thereof on
the amount prepaid.
(ii) Eurodollar Rate Loans. Subject to the provisions of SECTION
5.1(D), the Borrowers will pay interest on the unpaid principal amount of each
Eurodollar Rate Loan for the applicable Interest Period at a rate per annum
equal to the sum of (i) the Applicable Margin and (ii) the Eurodollar Rate,
payable on each Interest Payment Date, and upon any prepayment thereof on the
amount prepaid.
(b) Swingline Loans. Subject to the provisions of SECTION 5.1(D),
the Borrowers will pay interest on the unpaid principal amount of each
Swingline Loan for each day from the day such Loan is made, until such Loan is
paid (whether at maturity, by reason of acceleration, or otherwise), at the
Quoted Rate or the Eurodollar Swingline Rate, as selected by the Borrowers'
Representative, payable on the Swingline Loan Maturity or upon any earlier
repayment thereof.
(c) Other Secured Obligations. The Borrowers will, to the extent
permitted by Applicable Law, pay interest on the unpaid principal amount of any
Secured Obligation that is due and payable (other than the Loans in accordance
with SECTION 5.1(A), (B) or (C), as applicable), on demand, as if such Secured
Obligation were a Base Rate Revolving Credit Loan. Interest that is due and
payable shall be deemed to be a liquidated amount and obligation of the
Borrowers and shall, to the extent permitted by Applicable Law, bear interest
in accordance with this SECTION 5.1(C).
(d) Default Rate. If there shall occur and be continuing an Event
of Default, the unpaid principal amount of the Loans and other Secured
Obligations shall, at the election of the Required Lenders, no longer bear
interest in accordance with the terms of SECTION 5.1(A), 5.1(B) or 5.1(C), but
shall bear interest for each day from the date of such Event of Default until
such Event of Default shall have been cured or waived at a rate per annum equal
to the sum of (i) the Default Margin and (ii) the rate otherwise applicable to
such Loan, payable on demand. The interest rate provided for in the preceding
sentence shall, to the extent permitted by Applicable Law, apply to and accrue
on the amount of any judgment entered with respect to any Secured
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Obligation and shall continue to accrue at such rate during any proceeding
described in SECTION 13.1(G) or (H).
(e) Calculation of Interest. The interest rates provided for in
SECTIONS 5.1(A), (B), (C) and (D) shall be computed on the basis of a year of
360 days and the actual number of days elapsed. Each interest rate determined
with reference to the Base Rate shall be adjusted automatically as of the
opening of business on the effective date of each change in the Base Rate.
(f) Maximum Rate. It is not intended by the Lenders, and nothing
contained in this Agreement or the Notes shall be deemed, to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by Applicable Law (the "Maximum Rate"). If, in any month, the
Effective Interest Rate, absent such limitation, would have exceeded the
Maximum Rate, then the Effective Interest Rate for that month shall be the
Maximum Rate, and, if in future months, the Effective Interest Rate would
otherwise be less than the Maximum Rate, then the Effective Interest Rate shall
remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that, upon payment in
full of the Secured Obligations, the total amount of interest paid or accrued
under the terms of this Agreement is less than the total amount of interest
which would have been paid or accrued if the Effective Interest Rate had at all
times been in effect, then the Borrowers shall, to the extent permitted by
Applicable Law, pay to the Lenders an amount equal to the excess, if any, of
(i) the lesser of (A) the amount of interest which would have been charged if
the Maximum Rate had, at all times, been in effect and (B) the amount of
interest which would have accrued had the Effective Interest Rate, at all
times, been in effect and (ii) the amount of interest actually paid or accrued
under this Agreement. In the event the Lenders receive, collect or apply as
interest any sum in excess of the Maximum Rate, such excess amount shall be
applied to the reduction of the principal balance of the Secured Obligations,
and if no such principal is then outstanding, such excess or part thereof
remaining, shall be paid to the Borrowers. For the purposes of computing the
Maximum Rate, to the extent permitted by Applicable Law, all interest and
charges, discounts, amounts, premiums or fees deemed to constitute interest
under Applicable Law, shall be amortized, prorated, allocated and spread in
substantially equal parts throughout the full term of this Agreement. The
provisions of this SECTION 5.1(F) shall be deemed to be incorporated into every
Loan Document (whether or not any provision of this SECTION 5.1(F) is
specifically referred to therein).
SECTION 5.2 Certain Fees.
(a) Origination Fee. On the Effective Date, the Borrowers shall
pay to BankBoston, solely for its own account, an origination fee in accordance
with the provisions of a separate agreement between the Borrowers and
BankBoston.
(b) Administrative Agent Fee. For administration and other
services performed by the Administrative Agent in connection with its
continuing administration of this Agreement, the Borrowers shall pay to the
Administrative Agent, for its own account, and not for the account of
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the Lenders, an annual fee in accordance with the provisions of a separate
agreement between the Borrowers and the Administrative Agent.
(c) Commitment Fee. In connection with and as consideration for
the holding available for the use of the Borrowers hereunder the full amount of
the Revolving Credit Facility and, prior to the Acquisition Facility
Termination Date, the Acquisition Facility, the Borrowers will pay to the
Administrative Agent, for the Ratable benefit of the Lenders, (i) for each day
from the Effective Date until the Termination Date, a fee at a rate equal to
1/2 of 1% per annum on an amount equal to the unused portion of the Revolving
Credit Facility for such day, subject, however, to quarterly adjustment in
accordance with the pricing matrix attached hereto as ANNEX B, and (ii) for
each day from the Effective Date until the first date on which Acquisition
Loans in an aggregate principal amount greater than $10,000,000 are outstanding
(or, if earlier, the Acquisition Facility Termination Date), a fee at the rate
of 3/4 of 1% per annum and thereafter, at anytime prior to the Acquisition
Facility Termination Date, a fee at a rate equal to 1/2 of 1% per annum
subject, however, to quarterly adjustment in accordance with the pricing matrix
attached hereto as ANNEX B, on an amount equal to the unused portion of the
Acquisition Facility for such day. Such fees shall be payable quarterly in
arrears on each Installment Payment Date beginning September 30, 1999 and on
the date of any permanent reduction in the Revolving Credit Facility or the
Acquisition Facility.
(d) Letter of Credit Fees.
(i) The Borrowers agree to pay to the Administrative
Agent, for the Ratable benefit of the Lenders, Letter of Credit fees
equal to a rate per annum equal to the Applicable Margin on the
Eurodollar Rate Revolving Credit Loans based on the average daily
aggregate Letter of Credit Amount of all standby Letters of Credit
from time to time outstanding during the term of this Agreement. Such
fees shall be payable to the Administrative Agent for the Ratable
benefit of the Lenders in advance on the date of issuance of each
Letter of Credit, shall be calculated according to the anticipated
average daily Letter of Credit Amount based on the stated term of each
Letter of Credit and shall be calculated based on a year of 360 days
and the actual number of days elapsed. In the event any Letter of
Credit is canceled or terminated prior to the expiration of its stated
term, the Lenders will make appropriate adjustments in such fees based
on the actual average daily face amount of outstanding Letters of
Credit and will refund to the Borrowers the amount of any excess fee
paid pursuant to this SECTION 5.2(D).
(ii) The Borrowers agree to pay to Administrative Agent,
for the account of BankBoston, the standard fees and charges of
BankBoston for issuing, administering, amending, renewing, paying and
canceling letters of credit, as and when assessed including, without
limitation, a fronting fee at a rate equal to 1/8 of 1% per annum
based on the aggregate Letter of Credit Amount of all standby Letters
of Credit the issuance of which has been authorized by the
Administrative Agent pursuant to SECTION 3.4.
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(e) General. All fees shall be computed on the basis of a year of
360 days and the actual number of days elapsed, and shall be fully earned by
the Administrative Agent, BankBoston and the Lenders when due and payable and,
except as otherwise set forth herein or required by Applicable Law, shall not
be subject to refund or rebate. All fees are compensation for services and are
not, and shall not be deemed to be, interest or a charge for the use of money.
SECTION 5.3 Borrowing and Conversion or Continuation of Loans. (a)
When the Borrowers desire a Borrowing under the Revolving Credit Facility, the
Borrowers' Representative shall notify the Agent (which notice shall be
irrevocable) by telecopy, telex or telephone not later than 11:00 a.m. on the
date one Business Day before the day on which the requested Loan is to be made
as a Base Rate Loan, and not later than 11:00 a.m. on the date three Business
Days before the day on which the requested Loan is to be made as a Eurodollar
Rate Loan. Each such Notice of Borrowing shall specify (i) the effective date
and amount of each Loan requested, (ii) the Type of such Loan, and (iii) if
such Loan is a Eurodollar Rate Loan, the duration of the applicable Interest
Period, and shall be immediately followed by a written confirmation thereof by
the Borrowers' Representative in substantially the form of EXHIBIT E-1 hereto,
PROVIDED that if such written confirmation differs in any material respect from
the action taken by the Administrative Agent, the records of the Administrative
Agent shall control absent manifest error. Notwithstanding the foregoing, if
the Borrowers' Representative has not submitted a Swingline Loan Request for a
borrowing in an amount sufficient to satisfy such Secured Obligation, the
Borrowers' Representative shall be deemed to have given to the Administrative
Agent a Notice of Borrowing of a Base Rate Revolving Credit Loan on the
Business Day immediately preceding the day on which is due (i) any payment with
respect to a Swingline Loan pursuant to SECTION 2A.3 or 2A.4, (ii) any payment
or reimbursement with respect to a Letter of Credit pursuant to SECTION 3.6(A),
(iii) any payment of interest pursuant to SECTION 5.1, (iv) any payment of fees
pursuant to SECTIONS 5.2(A), (B) or (C), (v) any payment under SECTION 5.16, or
(vi) any payment of any other Secured Obligation, such Loan to be made on the
next succeeding Business Day in the amount of the Secured Obligation(s) due on
such next succeeding Business Day.
(b) Whenever the Borrowers desire, subject to the provisions of
SECTION 5.4, to convert an outstanding Loan into a Loan of a different Type
provided for in this Agreement or to continue an outstanding Loan for a
subsequent Interest Period, the Borrowers' Representative shall notify the
Administrative Agent (which notice shall be irrevocable) by telex, telegraph,
telecopy or telephone not later than 10:00 a.m. on the date one Business Day
before the day on which a proposed conversion of a Loan into, or a continuation
of a Loan as a Base Rate Loan, and three Business Days before the day on which
a proposed conversion of a Loan into, or continuation of a Loan as a Eurodollar
Rate Loan is to be effective (and if the Loan to be converted or continued is a
Eurodollar Rate Loan such effective date shall be the last day of the Interest
Period therefor). Each such notice (a "Notice of Conversion or Continuation")
shall (i) identify the Loan to be converted or continued, including the Type of
such Loan, the aggregate outstanding principal balance thereof and, in the case
of a Eurodollar Rate Loan, the last day of the Interest Period therefor, (ii)
specify the effective date of such conversion or continuation, (iii)
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specify the principal amount of such Loan to be converted or continued and, if
converted, the Type or Types of Loan into which conversion of such principal
amount is to be made, and (iv) in the case of any conversion into or
continuation as Eurodollar Loans, the Interest Period to be applicable to such
converted or continued Loan, and shall be immediately followed by a written
confirmation thereof by the Borrowers' Representative in substantially the from
of EXHIBIT F hereto, PROVIDED that is such written confirmation differs in any
material respect from the action taken by the Administrative Agent, the record
of the Administrative Agent shall control absent manifest error.
SECTION 5.4 Conversion or Continuation. Provided that no Default or
Event of Default shall have occurred and be continuing (but subject to the
provisions of SECTIONS 5.3 and 5.15), the Borrowers may request that all or any
part of any outstanding Loan be converted into a Loan or Loans of a different
Type or be continued as a Loan or Loans of the same Type, in the same aggregate
principal amount, on any Business Day (which, in the case of continuation of a
Eurodollar Rate Loan, shall be the last day of the Interest Period applicable
to such Loan), upon notice (which notice shall be irrevocable) given in
accordance with SECTION 5.3, PROVIDED that nothing in this ARTICLE 5 shall be
construed to permit the conversion of a Loan under one Facility into a Loan
outstanding under another Facility.
SECTION 5.5 Manner of Payment. (a) Except as otherwise expressly
provided in SECTION 9.1(B), each payment (including prepayments) by the
Borrowers on account of the principal of or interest on the Loans or of any
other amounts payable to the Lenders under this Agreement or any Note shall be
made not later than 4:30 p.m. on the date specified for payment under this
Agreement to the Administrative Agent, for the account of the Lenders, at the
Administrative Agent's Office, in Dollars, in immediately available funds and
shall be made without any setoff, counterclaim or deduction whatsoever.
(b) The Borrowers hereby irrevocably authorize each Lender and
each Affiliate of such Lender and each participant herein to charge any account
of the Borrowers maintained with such Lender or such Affiliate or participant
with such amounts as may be necessary from time to time to pay any Secured
Obligations (whether or not owed to such Lender, Affiliate or participant)
which are not paid when due.
SECTION 5.6 General. If any payment under this Agreement or any Note
shall be specified to be made on a day which is not a Business Day, it shall be
made on the next succeeding day which is a Business Day and such extension of
time shall in such case be included in computing interest, if any, in
connection with such payment.
SECTION 5.7 Loan Accounts; Statements of Account.
(a) Each Lender shall open and maintain on its books a loan
account in the Borrowers' name (each, a "Loan Account" and collectively, the
"Loan Accounts"). Each such Loan Account shall show as debits thereto each Loan
made under this Agreement by such Lender to the
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Borrowers and as credits thereto all payments received by such Lender and
applied to principal of such Loans, so that the balance of the Loan Account at
all times reflects the principal amount due such Lender from the Borrowers.
(b) The Administrative Agent shall maintain on its books a
control account for the Borrowers in which shall be recorded (i) the amount of
each disbursement made hereunder, (ii) the amount of any principal or interest
due or to become due from the Borrowers hereunder, and (iii) the amount of any
sum received by the Administrative Agent hereunder from the Borrowers and each
Lender's share therein.
(c) The entries made in the accounts pursuant to SUBSECTIONS (a)
and (B) shall be prima facie evidence, in the absence of manifest error, of the
existence and amounts of the obligations of the Borrowers therein recorded and
in case of discrepancy between such accounts, in the absence of manifest error,
the accounts maintained pursuant to SUBSECTION (B) shall be controlling.
(d) The Administrative Agent will account separately to the
Borrowers monthly with a statement of Loans, charges and payments made to and
by the Borrowers pursuant to this Agreement, and such accounts rendered by the
Administrative Agent shall be deemed final, binding and conclusive, save for
manifest error, unless the Administrative Agent is notified by the Borrowers in
writing to the contrary within 30 days of the date the account to the Borrowers
was so rendered or items reflected in such statements are modified pursuant to
the Administrative Agent's ability to reverse and reapply credits or otherwise,
in which case the Borrowers shall again have the same opportunity to examine
and object to any such modified or restated account before it is deemed final,
binding and conclusive. Such notice by the Borrowers shall be deemed an
objection to only those items specifically objected to therein. Failure of the
Administrative Agent to render such account shall in no way affect the rights
of the Administrative Agent or of the Lenders hereunder.
SECTION 5.8 Reduction of Revolving Credit Facility and Acquisition
Facility; Termination of Agreement.
(a) Reduction of Revolving Credit Facility.
(i) The Borrowers shall have the right, at any time and
from time to time, upon at least 30 days' prior irrevocable, written
notice to the Administrative Agent, to terminate or reduce permanently
all or a portion of the Revolving Credit Facility, without premium or
penalty; PROVIDED, HOWEVER, that any such partial reduction of such
facility shall be not less than $200,000 and shall not reduce the
Revolving Credit Facility below the amount of the aggregate Letter of
Credit Obligations. As of the date of termination or reduction set
forth in such notice, the Revolving Credit Facility shall be
permanently reduced to the amount stated in the Borrowers' notice for
all purposes herein, and the Borrowers shall pay the amount necessary
to reduce the amount of the outstanding
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Revolving Credit Loans to an amount not greater than the Revolving
Credit Facility as so reduced, together with accrued interest on the
amounts so prepaid.
(ii) The amount of the Revolving Credit Facility shall be
automatically reduced to zero on the Termination Date.
(iii) The Revolving Credit Facility or any portion thereof
terminated or reduced pursuant to this SECTION 5.8 may not be
reinstated.
(b) Reduction of Acquisition Facility.
(i) The Borrowers shall have the right, at any time and
from time to time, upon at least 30 days' prior irrevocable, written
notice to the Administrative Agent, to terminate or reduce permanently
all or any part of the unused Acquisition Facility, without premium or
penalty; PROVIDED, HOWEVER, that any such partial reduction shall be
not less than $200,000. As of the date of termination or reduction set
forth in such notice, the Acquisition Facility shall be permanently
reduced to the amount stated in the Borrowers' notice for all purposes
herein.
(ii) The Acquisition Facility or any portion thereof
terminated or reduced pursuant to this SECTION 5.8 may not be
reinstated.
(c) Termination of Agreement. The Borrowers shall have the right,
at any time, to terminate this Agreement upon not less than 30 Business Days'
prior written notice, which notice shall specify the effective date of such
termination. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender thereof. On the date specified in such notice, such
termination shall be effected, PROVIDED, that the Borrowers shall, on or prior
to such date, pay to the Administrative Agent, for its account and the account
of the Lenders, in same day funds, an amount equal to all Secured Obligations
(other than with respect to Letter of Credit Obligations) outstanding on such
date, including, without limitation, all (i) accrued interest thereon, (ii) all
accrued fees provided for hereunder, and (iii) any amounts payable to the
Lender pursuant to SECTIONS 5.12, 5.15, 16.2, 16.3, 16.14 and 16.23, and, in
addition thereto, shall deliver to the Administrative Agent, in respect of each
outstanding Letter of Credit, either a Supporting Letter of Credit or Cash
Collateral as provided in SECTION 3.9. Additionally, the Borrowers shall
provide the Administrative Agent and the Lenders with indemnification in form
and substance satisfactory to the Administrative Agent with respect to such
customary matters as the Administrative Agent and the Lenders shall require.
Following a notice of termination as provided for in this SECTION 5.8(C) and
upon payment in full of the amounts specified in this SECTION 5.8(C), and
execution and delivery of any required indemnification, this Agreement shall be
terminated and the Administrative Agent, the Co-Agents, the Lenders and the
Borrowers shall have no further obligations to any other party hereto, except
for the obligations to the
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Administrative Agent and the Lenders pursuant to SECTION 16.14 hereof, which
shall survive any termination of this Agreement.
SECTION 5.9 Making of Loans.
(a) Nature of Obligations of Lenders to Make Loans. The
obligations of the Lenders under this Agreement to make the Loans are several
and are not joint or joint and several.
(b) Assumption by Administrative Agent. Notwithstanding the
occurrence or continuance of a Default or Event of Default or other failure of
any condition to the making of Loans under the Revolving Credit Facility or the
Acquisition Facility hereunder subsequent to the Initial Loans, unless the
Administrative Agent shall have received notice from a Lender in accordance
with the provisions of SECTION 5.9(C) prior to a proposed Borrowing date that
such Lender will not make available to the Administrative Agent such Lender's
Proportionate Share of the Revolving Credit Loan or the Acquisition Loan to be
borrowed on such date, the Administrative Agent may assume that such Lender
will make such Proportionate Share available to the Administrative Agent in
accordance with SECTION 2.2(A) and SECTION 4A.2(A), and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrowers on
such date a corresponding amount. If and to the extent such Lender shall not
make such Proportionate Share available to the Administrative Agent, such
Lender and the Borrowers severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount (the "Make-Whole Amount"),
together with interest thereon for each day from the date such amount is made
available to the Borrowers until the date such amount is repaid to the
Administrative Agent at the Effective Interest Rate or, if lower, subject to
SECTION 5.1(F), the Maximum Rate; PROVIDED, HOWEVER, if on the Interest Payment
Date next following the date on which any Lender pays interest to the
Administrative Agent at the Effective Rate or the Maximum Rate on a Make-Whole
Amount as aforesaid, the Borrower defaults in making the interest payment due
on such Interest Payment Date, then the Administrative Agent shall reimburse
such Lender for the excess, if any, of the amount of interest so paid by such
Lender on the Make-Whole Amount over the amount of interest that such Lender
would have paid had the Lender been required to pay interest on the Make-Whole
Amount at the Federal Funds Effective Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, the amount so repaid shall
constitute such Lender's Proportionate Share of the Loan made on such Borrowing
date for purposes of this Agreement. The failure of any Lender to make its
Proportionate Share of any Loan available shall not (without regard to whether
a Borrower shall have returned the amount thereof to the Administrative Agent
in accordance with this SECTION 5.9) relieve it or any other Lender of its
obligation, if any, hereunder to make its Proportionate Share of the Loan
available on such Borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Proportionate Share of a Loan available
on the Borrowing date.
(c) Delegation of Authority to Administrative Agent. Without
limiting the generality of SECTION 15.1, each Lender expressly authorizes the
Administrative Agent to determine on behalf of such Lender (i) any reduction or
increase of advance rates applicable to the Borrowing
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Base, so long as such advance rates do not at any time exceed the rates set
forth in the Borrowing Base definition, (ii) the creation or elimination of any
Reserves (other than the Letter of Credit Reserve) against the Revolving Credit
Facility and the Borrowing Base and (iii) whether or not Inventory or
Receivables shall be deemed to constitute Eligible Inventory or Eligible
Receivables. Such authorization may be withdrawn by the Required Lenders by
giving the Administrative Agent written notice of such withdrawal signed by the
Required Lenders; PROVIDED, HOWEVER, that unless otherwise agreed by the
Administrative Agent such withdrawal of authorization shall not become
effective until the thirtieth Business Day after receipt of such notice by the
Administrative Agent. Thereafter, the Required Lenders shall jointly instruct
the Administrative Agent in writing regarding such matters with such frequency
as the Required Lenders shall jointly determine. Unless and until the
Administrative Agent shall have received written notice from the Required
Lenders as to the existence of a Default, an Event of Default or some other
circumstance which would relieve the Lenders of their respective obligations to
make Loans hereunder, which notice shall be in writing and shall be signed by
the Required Lenders and shall expressly state that the Required Lenders do not
intend to make available to the Administrative Agent such Lenders' Ratable
Share of Loans made after the effective date of such notice, the Administrative
Agent shall be entitled to continue to make Loans to the Borrowers based upon
the assumptions described in SECTION 5.9(B) and all Lenders agree to make such
Loans. After receipt of the notice described in the preceding sentence, which
shall become effective on the third Business Day after receipt of such notice
by the Administrative Agent unless otherwise agreed by the Administrative
Agent, the Administrative Agent shall be entitled to make the assumptions
described in SECTION 5.9(B) as to any Loans as to which it has not received a
written notice to the contrary prior to 11:00 a.m. on the Business Day next
preceding the day on which the Loan is to be made. The Administrative Agent
shall not be required to make any Loan as to which it shall have received
notice by a Lender of such Lender's intention not to make its Ratable Share of
such Loan available to the Administrative Agent. Any withdrawal of
authorization under this SECTION 5.9(C) shall not affect the validity of any
Loans made prior to the effectiveness thereof.
(d) Replacement of Certain Lenders. If a Lender (the "Affected
Lender") shall have failed to fund its Proportionate Share of any Loan
requested by the Borrowers which such Lender is obligated to fund under the
terms of this Agreement and which such failure has not been cured, then, in any
such case and in addition to any other rights and remedies that the
Administrative Agent, any other Lender or the Borrowers may have against such
Affected Lender, the Borrowers or the Administrative Agent may make written
demand on such Affected Lender (with a copy to the Administrative Agent in the
case of a demand by the Borrowers and a copy to the Borrowers in the case of a
demand by the Administrative Agent) for the Affected Lender to assign, and such
Affected Lender shall assign pursuant to one or more duly executed Assignment
and Acceptances within five Business Days after the date of such demand, to one
or more Lenders willing to accept such assignment or assignments, or to one or
more Eligible Assignees designated by the Administrative Agent, and reasonably
acceptable to the Borrowers, all of such Affected Lender's rights and
obligations under this Agreement (including its Commitments and all Loans owing
to it) in accordance with ARTICLE 14. The Administrative Agent is hereby
irrevocably authorized to
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execute one or more Assignment and Acceptances as attorney-in-fact for any
Affected Lender which fails or refuses to execute and deliver the same within
five Business Days after the date of such demand. The Affected Lender shall be
entitled to receive, in cash and concurrently with execution and delivery of
each such Assignment and Acceptance, all amounts owed to the Affected Lender
hereunder or under any other Loan Document, including the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment. Upon the replacement of
any Affected Lender pursuant to this SECTION 5.9(D), such Affected Lender shall
cease to have any participation in, entitlement to, or other right to share in
the Security Interest or any other Lien of the Administrative Agent in any
Collateral and such Affected Lender shall have no further liability to the
Administrative Agent, any Lender or any other Person under any of the Loan
Documents (except as provided in SECTION 15.7 and elsewhere in this Agreement
as to events or transactions which occur prior to the replacement of such
Affected Lender).
(e) Overadvances. Notwithstanding anything to the contrary
contained elsewhere in this SECTION 5.9 or this Agreement or the other Loan
Documents and whether or not a Default or Event of Default exists at the time,
unless otherwise notified by the Required Lenders in accordance with SECTION
5.9(C), the Administrative Agent may in its discretion require all Lenders to
honor requests or deemed requests by the Borrowers for Revolving Credit Loans
at a time that an Overadvance Condition exists or which would result in an
Overadvance Condition and each Lender shall be obligated to continue to make
its Proportionate Share of Revolving Credit Loans up to a maximum amount
outstanding equal to its Commitment, so long as the total amount of such
Overadvance is not known by the Administrative Agent to exceed $3,000,000. The
Borrowers shall repay any such Overadvance on the earlier of (i) demand by the
Administrative Agent or (ii) 30 days following the day on which such
Overadvance Condition first exists.
SECTION 5.10 Settlement Among Lenders.
(a) Term Loans. The Administrative Agent shall pay to each Lender
on each Interest Payment Date or Installment Payment Date, as the case may be,
its Ratable Share (or, if different, a proportionate amount based on the
principal amount of the Term Loans owing to such Lender), of all payments
received by the Administrative Agent hereunder in immediately available funds
in respect of the principal of, or interest on, the Term Loans, net of any
amounts payable by such Lender to the Administrative Agent, by wire transfer of
same day funds.
(b) Acquisition Loans. The Administrative Agent shall pay to each
Lender on each Interest Payment Date or Installment Payment Date, as the case
may be, its Ratable Share (or, if different, a proportionate amount based on
the principal amount of the Acquisition Loans owing to such Lender), of all
payments received by the Administrative Agent hereunder in immediately
available funds in respect of the principal of, or interest on, the Acquisition
Loans, net of any amounts payable by such Lender to the Administrative Agent,
by wire transfer of same day funds.
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(c) Revolving Credit Loans. The Administrative Agent shall pay to
each Lender on each Interest Payment Date its Ratable Share (or, if different,
a proportionate amount based on the principal amount of Revolving Credit Loans
owing to such Lender), of all payments received by the Administrative Agent
hereunder in immediately available funds, in respect of the principal of or
interest on, the Revolving Credit Loans, net of any amounts payable by such
Lender to the Administrative Agent, by wire transfer of same day funds.
(d) Return of Payments. If any amounts received by BankBoston in
respect of the Secured Obligations are later required to be returned or repaid
by BankBoston to the Borrowers or any other obligor or their respective
representatives or successors in interest, whether by court order, settlement
or otherwise, in excess of the BankBoston's Proportionate Share of all such
amounts required to be returned by all Lenders, each other Lender shall, upon
demand by BankBoston with notice to the Administrative Agent, pay to the
Administrative Agent for the account of BankBoston, an amount equal to the
excess of such Lender's Proportionate Share of all such amounts required to be
returned by all Lenders over the amount, if any, returned directly by such
Lender.
(e) Payments to Administrative Agent, Lenders.
(i) Payment by any Lender to the Administrative Agent
shall be made not later than 1:00 p.m. on the Business Day such
payment is due, PROVIDED that if such payment is due on demand by the
Swingline Lender, such demand is made on the paying Lender not later
than 11:30 a.m. on such Business Day. Payment by the Administrative
Agent to any Lender shall be made by wire transfer, promptly following
the Administrative Agent's receipt of funds for the account of such
Lender and in the type of funds received by the Administrative Agent,
PROVIDED that if the Administrative Agent receives such funds (A) at
or prior to 1:00 p.m., the Administrative Agent shall pay such funds
to such Lender by 2:00 p.m. on such Business Day or (B) after 1:00
p.m., the Administrative Agent shall pay such funds to such Lender
prior to 2:00 p.m. on the following Business Day. If a demand for
payment is made after the applicable time set forth above, the payment
due may be made by 2:00 p.m. on the first Business Day following the
date of such demand.
(ii) If a Lender shall, at any time, fail to make any
payment to the Administrative Agent required hereunder, the
Administrative Agent may, but shall not be required to, retain
payments that would otherwise be made to such Lender hereunder and
apply such payments to such Lender's defaulted obligations hereunder,
at such time, and in such order, as the Administrative Agent may elect
in its sole discretion.
(iii) With respect to the payment of any funds under this
SECTION 5.10(E), whether from the Administrative Agent to a Lender or
from a Lender to the Administrative Agent, the party failing to make
full payment when due pursuant to the terms hereof shall, upon demand
by the other party, pay such amount together with
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interest on such amount at the Federal Funds Effective Rate.
(f) Settlement of Other Secured Obligations. All other amounts
received by the Administrative Agent on account of, or applied by the
Administrative Agent to the payment of, any Secured Obligation owed to the
Lenders (including, without limitation, fees payable to the Lenders pursuant to
SECTIONS 5.2(C) and (D) and proceeds from the sale of, or other realization
upon, all or any part of the Collateral following an Event of Default) that are
received by the Administrative Agent on or prior to 1:00 p.m. on a Business Day
will be paid by the Administrative Agent to each Lender on the same Business
Day, and any such amounts that are received by the Administrative Agent after
1:00 p.m. will be paid by the Administrative Agent to each Lender on the
following Business Day. Unless otherwise stated herein, the Administrative
Agent shall distribute to each Lender such Lender's Proportionate Share of fees
payable to the Lenders pursuant to SECTIONS 5.2(C) and (D) and shall distribute
to each Lender such Lender's Proportionate Share (or if different, such
Lender's share based upon the amount of the Secured Obligations then owing to
each Lender) of the proceeds from the sale of, or other realization upon, all
or any part of the Collateral following an Event of Default.
(g) Allocation of Payments from Borrowers. All monies to be
applied to the Secured Obligations, whether such monies represent voluntary
payments by the Borrowers or are received pursuant to demand for payment or
realized from any disposition of Collateral, shall be allocated among the
Administrative Agent and such of the Lenders and other holders of the Secured
Obligations as are entitled thereto (and, with respect to monies allocated to
the Lenders, on a Ratable basis unless otherwise provided in this
SECTION 5.10(G)): (i) first, to the Administrative Agent to pay the amount of
expenses that have not been reimbursed to the Administrative Agent by the
Borrowers or the Lenders, together with interest accrued thereon; (ii) second,
to the Administrative Agent to pay any indemnified amount that has not been paid
to the Administrative Agent by the Borrowers or the Lenders, together with
interest accrued thereon; (iii) third, to the Administrative Agent to pay any
fees due and payable to the Administrative Agent under this Agreement; (iv)
fourth, to the Lenders for any indemnified amount that they have paid to the
Administrative Agent and for any expenses that they have reimbursed to the
Administrative Agent; (v) fifth, to the Lenders in payment of the unpaid
principal and accrued interest in respect of the Loans and any other Secured
Obligations then outstanding and held by any Lender to be shared among Lenders
on the basis of their respective Facility Percentages as to any payments made
for application to specified Facilities and otherwise a Ratable basis, or on
such other basis as may be agreed upon in writing by all of the Lenders (which
agreement or agreements may be entered into without notice to or the consent or
approval of the Borrowers), and (vi) sixth, to the holders of the other Secured
Obligations who are not Lenders on a pro rata basis. The allocations set forth
in this SECTION 5.10(G) are solely to determine the rights and priorities of the
Administrative Agent and the Lenders as among themselves and may be changed by
the Administrative Agent and the Lenders without notice or the consent of
approval of the Borrowers or any other Person. Whenever allocation is made
pursuant to this SECTION 5.10(G) to the holder
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of Secured Obligations in which another Lender acquires a participation, the
monies received by such holder shall be shared Ratably as between such holder
and such participants.
SECTION 5.11 Prepayments of Loans.
(a) Voluntary Prepayment of Term Loans and Acquisition Loans. The
Borrowers shall have the right at any time and from time to time, upon at least
two Business Days' prior written notice by the Borrowers to the Administrative
Agent, to prepay, without premium or penalty, the Term Loans and the
Acquisition Loans in whole or in part on any Business Day. Each partial
prepayment shall be in a principal amount of not less than $200,000. On the
prepayment date, the Borrowers shall pay interest on the amount prepaid,
accrued to the prepayment date. Any notice of prepayment given by the
Borrowers' Representative hereunder shall be irrevocable, and the amount to be
prepaid (including accrued interest and any amount payable pursuant to SECTION
5.12) shall be due and payable on the date designated in the notice.
(b) Mandatory Prepayments.
(i) Disposition Proceeds; Securities Issues. Unless the
Total Funded Debt to EBITDA Ratio is less than 3.0 to 1 after giving
pro forma effect to the event that would otherwise trigger a
prepayment, as if such event had occurred on the first day of the
latest period of four consecutive Fiscal Quarters ended prior to the
date of determination, the Borrowers shall prepay the Loans from time
to time as follows:
(A) Asset Dispositions. Immediately upon
receipt by the Borrowers or any Subsidiary of the Net
Proceeds of any Asset Disposition, the Borrowers shall apply
such Net Proceeds in prepayment of the Loans as provided in
SECTION 5.11(C); PROVIDED, HOWEVER, that the Borrowers shall
be required to make such prepayment only to the extent that
the Net Proceeds from Asset Dispositions during any Fiscal
Year exceed, in the aggregate, $300,000 and the Borrowers do
not expect such proceeds to be reinvested within 180 days in
productive assets of a kind then used or useable in the
business of the Borrowers and that are not subject to any
Lien other than in favor of the Administrative Agent, for the
benefit of the Lenders; and, PROVIDED FURTHER, that Net
Proceeds of the sale of the assets constituting the Southern
Wood business up to $4,000,000 shall be applied to repay the
Loans in accordance with SECTION 5.11(C) and any such Net
Proceeds in excess of $4,000,000 may be so applied or
reinvested as contemplated in this SECTION 5.11(B)(I)(A). If
the Borrowers anticipate reinvestment of Net Proceeds then
the Borrowers shall deposit such Net Proceeds with the
Administrative Agent to be held as Cash Collateral. Upon the
Borrowers' reinvestment of such proceeds as described above,
the Administrative Agent shall release its Security Interest
in such Cash Collateral in respect of the reinvested funds.
To the extent that the Borrowers fail to reinvest such
proceeds within 180 days as provided above, the Borrowers
authorize and direct the Administrative Agent to apply the
amount of
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the Cash Collateral (in excess of $300,000 in any Fiscal
Year) in respect of the unreinvested amount to the prepayment
of the Loans as provided in SECTION 5.11(C).
(B) Debt or Equity Offerings. In the event that
at any time after the Effective Date, a Borrower or any
Subsidiary issues capital stock or other equity securities or
receives any additional capital contribution in respect of
existing capital stock or other securities or issues Debt
securities or otherwise incurs Debt (in each case other than
from another Loan Party, in connection with the exercise of
stock options held by employees or independent sales
representatives, or as part of the consideration paid to any
seller of an Acquisition Target), the proceeds of which, when
added to all such proceeds received by WinsLoew and its
Subsidiaries since the Effective Date is greater than
$5,000,000 then no later than the third Business Day
following the date of receipt of such proceeds, 100% of such
proceeds, net of underwriting discounts and commissions and
other reasonable costs associated therewith shall be applied
to the prepayment of the Loans as provided in SECTION
5.11(C), provided, that if such net proceeds result from an
IPO, then only 50% thereof is required to be so applied.
(ii) Excess Cash Flow. The Borrowers shall prepay the Loans as
provided in SECTION 5.11(C) annually on or before 120 days after the end of
each Fiscal Year commencing with the Fiscal Year ending December 31, 2000, in
an amount equal to 50% of the Excess Cash Flow for the Fiscal Year most
recently ended, PROVIDED, that, if, after giving pro forma effect to the
proposed payment, the Total Funded Debt to EBITDA Ratio determined as of the
last day of such Fiscal Year is less than 3.0 to 1, then the amount of the
prepayment under this SECTION 5.11(B)(II) shall be 25% of the Excess Cash Flow
for such Fiscal Year.
(iii) Other Prepayments. The Borrowers shall prepay the Loans (and
permanently reduce the Facilities) as provided in SECTION 5.11(C) in an amount
equal to any amount that would otherwise be required to be applied to the
purchase, repayment or prepayment of any Subordinated Debt, including, without
being limited to, pursuant to Section 4.10 of the Senior Note Indenture.
(c) Application of Prepayments. Prepayments pursuant to SECTION
5.11(B) shall be applied first to the outstanding principal of the Term Loan A
and Term Loan B and, if the Acquisition Facility Termination Date has occurred,
the Acquisition Loans, on a pro rata basis and ratably as to the remaining
installments thereof to the extent of such Loans, and then to the outstanding
principal of Term Loan C, EXCEPT that Net Proceeds of (i) Asset Dispositions of
property acquired with the proceeds of Acquisition Loans, will be applied,
whether before or after the Acquisition Facility Termination Date, first to
repay the outstanding principal of the Acquisition Loans ratably as to the
remaining installments (if the Acquisition Facility Termination Date has
occurred) to the extent of such Loans and then pro rata to Term Loan A and Term
Loan B, and after such application, to the outstanding principal of Term Loan C
to the extent thereof
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and (ii) the Borrowers may direct the application of the Net Proceeds of the
disposition of the Southern Woods business to repay such Term Loans and
Acquisition Loans as it may specify, ratably as to remaining installments of
such selected Loans. Payments shall be first applied to Base Rate Loans to the
extent thereof and then to Eurodollar Rate Loans within each Facility and any
payments received which would otherwise result in prepayment of such Eurodollar
Rate Loans prior to the end of the Interest Period applicable thereto may, upon
the request of the Borrowers, in the absence of an Event of Default, be
deposited to the Cash Collateral Account or any Investment Account, with any
excess after prepayment in full of the Loans to be deposited with the
Administrative Agent to be held as Cash Collateral for the Secured Obligations
and after the Termination Date, to be applied to any of the Secured Obligations
in such manner as the Administrative Agent shall determine in its sole
discretion. Any Net Proceeds received after all Term Loans and all Acquisition
Loans have been repaid, shall be applied to repay outstanding Swingline Loans
and then to outstanding Revolving Credit Loans, but without any reduction in
Commitments.
(d) Prepayments from Acquisition Agreement Proceeds. Immediately
upon receipt by a Borrower of any amounts payable as purchase price adjustments
or in payment of claims for indemnification after the Effective Date in
connection with the Acquisition of Pompeii or any other Acquisition, but
excluding amounts applied by such Borrower to the replacement, repair or
restoration of any assets or properties of such BORROWER, or satisfying the
claims made against such Borrower in respect of which it was indemnified, or
otherwise remedying or correcting the condition that gave rise to the
adjustment or claim for indemnification or paying any fees or expenses incurred
by such Borrower to obtain such adjustment or indemnification payment, such
Borrower shall apply such amounts (net of any tax liability attributable
thereto) to the ratable prepayment of Term Loan A, Term Loan B and the
Acquisition Loans, ratably as to the remaining installments thereof, then to
the prepayment of Term Loan C or, if the applicable Acquisition was made with
proceeds of an Acquisition Loan, to the repayment of the Acquisition Loans,
ratably as to the remaining installments thereof, then to the ratable
prepayment of Term Loan A and Term Loan B, ratably as to the remaining
installments thereof, then to the prepayment of Term Loan C.
(e) Certificate. Together with each prepayment pursuant to
SECTION 5.11(B) or (D), the Borrowers shall deliver to the Administrative Agent
a certificate of a Financial Officer setting forth the amount of such
prepayment and certifying that such amount was computed in accordance with the
provisions of this Agreement, and having attached thereto the supporting
calculations, in reasonable detail.
SECTION 5.12 Payments Not at End of Interest Period; Failure to
Borrow. If for any reason any payment of principal with respect to any
Eurodollar Rate Loan is made on any day prior to the last day of the Interest
Period applicable to such Eurodollar Rate Loan or, after having given a Notice
of Borrowing with respect to any Eurodollar Rate Revolving Credit Loan or a
Notice of Conversion or Continuation with respect to any Loan to be continued
as or converted into a Eurodollar Rate Loan, such Loan is not made or is not
continued as or converted into a Eurodollar Rate Loan due to the Borrowers'
failure to borrow or to fulfill the applicable
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conditions set forth in ARTICLE 6, the Borrowers shall pay to each Lender an
amount (if a positive number) computed pursuant to the following formula:
<TABLE>
<S> <C> <C>
L = (R - T) x P x D
----------------
360
L = amount payable
R = the Eurodollar Rate applicable to the
Eurodollar Rate Loan unborrowed or prepaid
T = effective interest rate per annum at
which any readily marketable
bonds or other obligations of the United
States, selected at the Administrative
Agent's sole discretion, maturing on or
near the last day of the then applicable or
requested Interest Period for such Loan and
in approximately the same amount as such
Loan, can be purchased by such Lender on
the day of such payment of principal or
failure to borrow
P = the amount of principal paid or the
amount of the requested Loan
D = the number of days remaining in the
Interest Period as of the date
of such payment or the number of days in
the requested Interest Period
</TABLE>
The Borrowers shall pay such amount upon presentation by the Administrative
Agent of a statement setting forth the amount and the Administrative Agent's
calculation thereof pursuant hereto, which statement shall be deemed true and
correct absent manifest error.
SECTION 5.13 Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to the Lenders under this ARTICLE 5 shall be
made as though each Lender had actually funded or committed to fund its
Eurodollar Rate Loans through the purchase of an underlying deposit in an
amount equal to the amount of such Ratable share and having a maturity
comparable to the relevant Interest Period for such Eurodollar Rate Loan;
PROVIDED, HOWEVER, each Lender may fund its Eurodollar Rate Loans in any manner
it deems fit and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this ARTICLE 5.
SECTION 5.14 Duration of Interest Periods; Maximum Number of
Eurodollar Rate Loans; Minimum Increments.
(a) Subject to the provisions of the definition "Interest
Period", the duration of each Interest Period applicable to a Eurodollar Rate
Loan shall be as specified in the applicable Notice of Borrowing or Notice of
Conversion or Continuation. The Borrowers may elect a subsequent Interest
Period to be applicable to any Eurodollar Rate Loan by giving a Notice of
Conversion or Continuation with respect to such Loan in accordance with SECTION
5.13.
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(b) If the Administrative Agent does not receive a notice of
election in accordance with SECTION 5.13 with respect to the continuation of a
Eurodollar Rate Loan within the applicable time limits specified in said
SECTION 5.13, or if, when such notice must be given, an Event of Default exists
or Eurodollar Rate Loans are not available, the Borrowers shall be deemed to
have elected to convert such Eurodollar Rate Loan in whole into a Base Rate
Loan on the last day of the Interest Period therefor.
(c) Notwithstanding the foregoing, the Borrowers may not select
an Interest Period that would end, but for the provisions of the definition
"Interest Period", after the Termination Date.
(d) In no event shall there be more than ten Eurodollar Rate Term
Loans, three Eurodollar Rate Acquisition Loans and four Eurodollar Rate
Revolving Credit Loans outstanding hereunder at any time. For the purpose of
this SUBSECTION (D), each Eurodollar Rate Revolving Credit Loan, each
Eurodollar Rate Acquisition Loan and each Eurodollar Rate Term Loan having a
distinct Interest Period shall be deemed to be a separate Loan hereunder.
(e) Each Eurodollar Rate Loan shall be in a minimum amount of
$1,000,000.
SECTION 5.15 Changed Circumstances.
(a) If the introduction of or any change in or in the
interpretation of (in each case, after the date hereof) any law or regulation
makes it unlawful, or any Governmental Authority asserts, after the date
hereof, that it is unlawful, for any Lender to perform its obligations
hereunder to make Eurodollar Rate Loan or to fund or maintain Eurodollar Rate
Loans hereunder, such Lender shall notify the Administrative Agent of such
event and the Administrative Agent shall notify the Borrowers of such event,
and the right of the Borrowers to select a Eurodollar Rate Loan for any
subsequent Interest Period or in connection with any subsequent conversion of
any Loan shall be suspended until the Administrative Agent shall notify the
Borrowers that the circumstances causing such suspension no longer exist, and
the Borrowers shall forthwith prepay in full all Eurodollar Rate Revolving
Credit Loans and, if on or prior to the Acquisition Facility Termination Date,
each Eurodollar Rate Acquisition Loan then outstanding and shall convert each
Eurodollar Rate Term Loan into a Base Rate Term Loan and, if after the
Acquisition Facility Termination Date, shall convert each Eurodollar Rate
Acquisition Loan into a Base Rate Acquisition Loan, and shall pay all interest
accrued thereon through the date of such prepayment or conversion, unless the
Borrowers, within three Business Days after such notice from the Administrative
Agent, request the conversion of all Eurodollar Rate Loans then outstanding
into Base Rate Loans; PROVIDED, that if the date of such repayment or proposed
conversion is not the last day of the Interest Period applicable to such
Eurodollar Rate Loan, the Borrowers shall also pay any amount due pursuant to
SECTION 5.12.
(b) If the Administrative Agent shall, at least one Business Day
before the date of any requested Loan or the effective date of any conversion
or continuation of an existing Loan to be
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made or continued as or converted into a Eurodollar Rate Loan (each such
requested Loan and Loan to be converted or continued, a "Pending Loan"), notify
the Borrowers that the Eurodollar Rate will not adequately reflect the cost to
the Lenders of making or funding such Pending Loan as a Eurodollar Rate Loan or
that the Interbank Offered Rate is not determinable from any interest rate
reporting service of recognized standing, then the right of the Borrowers to
select a Eurodollar Rate Loan for such Pending Loan, any subsequent requested
Loan or in connection with any subsequent conversion or continuation of any
Loan shall be suspended until the Administrative Agent shall notify the
Borrowers that the circumstances causing such suspension no longer exist, and
each Pending Loan and each such subsequent Loan requested to be made, continued
or converted shall be made or continued as or converted into a Base Rate Loan.
(c) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve requirements
included in the Eurodollar Reserve Percentage) in or in the interpretation of,
in each case after the date hereof, any law or regulation (except to the extent
such introduction, change or interpretation affects taxes measured by net
income), or (ii) the compliance with any guideline or request (except to the
extent such guideline or request affects taxes measured by net income) from any
central bank or other governmental authority (whether or not having the force
of law) made after the date hereof, there shall be any increase in the cost to
any Lender of agreeing to make or making, funding or maintaining Eurodollar
Rate Loans (other than as separately provided for in SECTION 5.15(D)), then the
Borrowers shall from time to time, within 30 days after demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost or convert the
Borrowing to which such Eurodollar Rate Loan is a part to Applicable Base Rate
Loans and pay to the Administrative Agent, for the account of such Lender, the
amount due pursuant to SECTION 5.12.
(d) If (i) the adoption of or change in, after the date hereof,
any law, rule, regulation or guideline regarding capital requirements for banks
or bank holding companies, or any change, after the date hereof, in the
interpretation or application thereof by any governmental authority charged
with the interpretation or administration thereof, or (ii) compliance by such
Lender with any guideline, request or directive, made or promulgated after the
date hereof, of any such entity regarding capital adequacy (whether or not
having the force of law), has the effect of reducing the return on a Lender's
capital as a consequence of its maintaining its Loans or commitment to make
Revolving Credit Loans hereunder to a level below that which such Lender could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy
immediately before such adoption, change or compliance and assuming the full
utilization of such Lender's capital immediately before such adoption, change
or compliance) or if any change in law, regulation, treaty or official
directive or the interpretation or application thereof by any court or by any
governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law) subjects a
Lender to any tax with respect to
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payments of principal or interest or any other amounts payable hereunder by the
Borrowers or otherwise with respect to the transactions contemplated hereby
(except for taxes on the overall net income of such Lender imposed by the
United States of America or any political subdivision thereof), in each case by
any amount deemed by such Lender to be material, then such Lender shall
promptly after its determination of such occurrence notify the Borrowers and
the Administrative Agent thereof. The Borrowers agree to pay to the
Administrative Agent, for the account of such Lender, as an additional fee from
time to time, within 30 days after demand by such Lender, such amount as such
Lender certifies to be the amount that will compensate it for such reduction.
(e) Before giving any notice pursuant to SECTION 5.15(A) or
making any demand pursuant to SECTION 5.15(C) or (D), each Lender agrees to use
its best efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different lending office if the making of such a
designation would avoid the need for such notice or demand, or reduce the
amount of such increased cost or reduction in return and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
(f) A certificate of the Lender claiming compensation and
accompanying or constituting the "demand" as contemplated by SECTIONS 5.15(c)
and (D) shall be conclusive in the absence of manifest error. Each such
certificate shall set forth the nature of the occurrence giving rise to such
claim for compensation, the additional amount or amounts to be paid to the
Lender hereunder and the method by which such amounts were determined. In
determining such amounts, a Lender may use any reasonable averaging and
attribution methods.
(g) In no event shall a Lender claim or the Borrowers be liable
to pay any amounts pursuant to SECTION 5.15(C) or (D) attributable to periods
more than 90 days prior to the date of the first demand for such amount,
delivered in accordance with the provisions hereof.
SECTION 5.16 Cash Collateral Account; Investment Accounts.
(a) Cash Collateral Account. The Borrowers shall establish a Cash
Collateral Account in which to deposit Collateral consisting of cash or Cash
Equivalents from time to time
(i) representing payments received pursuant to SECTION
5.11 in excess of then outstanding Revolving Credit Loans or on
account of Eurodollar Rate Loans which would otherwise result in
repayment of such Loans prior to the end of the Interest Period
applicable thereto,
(ii) with respect to Letter of Credit Obligations (x) at
the request of the Administrative Agent upon the occurrence of an
Event of Default, or (y) for the purposes set forth in SECTION 5.8 in
the event of termination of this Agreement, or
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(iii) for any other purpose appropriate under this
Agreement to provide security for the Secured Obligations.
On the last day of the applicable Interest Period as to any amounts deposited
to the Cash Collateral Account pursuant to CLAUSE (I) above or if a drawing
under a Letter of Credit occurs with respect to any amounts deposited to the
Cash Collateral Account pursuant to CLAUSE (II) above, the Borrowers hereby
authorize the Administrative Agent to use the monies deposited in the Cash
Collateral Account to make payment to the payee(s) with respect to such Loan or
drawing. The Cash Collateral Account shall be in the name of the Administrative
Agent and the Administrative Agent shall have sole dominion and control over,
and sole access to, the Cash Collateral Account. Neither the Borrowers nor any
Person claiming on behalf of or through the Borrowers shall have any right to
withdraw any of the funds held in the Cash Collateral Account. The Borrowers
agree that they will not at any time (x) sell or otherwise dispose of any
interest in the Cash Collateral Account or any funds held therein or (y) create
or permit to exist any Lien upon or with respect to the Cash Collateral Account
or any funds held therein, except as provided in or contemplated by this
Agreement. The Administrative Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Administrative Agent
accords other funds deposited with the Administrative Agent, it being
understood that the Administrative Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any funds held in the Cash Collateral Account. Subject to the right of the
Administrative Agent to withdraw funds from the Cash Collateral Account as
provided herein, the Administrative Agent will, so long as no Event of Default
shall have occurred and be continuing, from time to time invest funds on
deposit in the Cash Collateral Account, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from any such investments, in each case, in Cash Equivalents, as the
Borrowers may direct prior to the occurrence of an Event of Default and as the
Administrative Agent may select after the occurrence and during the continuance
of any Event of Default. Such proceeds, interest and income which are not so
invested or reinvested in Cash Equivalents shall be deposited and held by the
Administrative Agent in the Cash Collateral Account. The Administrative Agent
makes no representation or warranty as to, and shall not be responsible for,
the rate of return, if any, earned on any Cash Collateral. Any earnings on Cash
Collateral shall be held as additional Cash Collateral on the terms set forth
in this SECTION 5.16.
(b) Investment Accounts. The Borrowers may from time to time
establish one or more Investment Accounts with the Administrative Agent, any
Lender or any Affiliate of a Lender, for the purpose of investing solely in
cash or Cash Equivalents any Cash Collateral representing payments received
pursuant to SECTION 5.11 in excess of then outstanding Revolving Credit Loans
or on account of Eurodollar Rate Loans which would otherwise result in
repayment of such Loans prior to the end of the Interest Period applicable
thereto. The Borrowers hereby acknowledge and agree that each such Investment
Account shall constitute Collateral hereunder and shall be maintained with the
Administrative Agent, a Lender or an Affiliate of a Lender as
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security for the Secured Obligations. Notwithstanding the foregoing, until such
time as the Administrative Agent shall otherwise instruct the Lender or
Affiliate of a Lender maintaining such account, the Borrowers shall be entitled
to direct the investment of the funds deposited therein. The Borrowers agree
that they will not at any time (x) sell or otherwise dispose of any interest in
any Investment Account or any funds held therein other than by application
thereof to any Secured Obligation, or (y) create or permit to exist any Lien
upon or with respect to any Investment Account or any funds held therein,
except as provided in or contemplated by this Agreement. The Borrowers agree
that at any time, and from time to time, at the expense of the Borrowers, the
Borrowers will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that the Administrative Agent or any Lender may request, in order to perfect
and protect any security interest in any Investment Account granted or
purported to be granted hereby or to enable the Administrative Agent, for its
benefit and the benefit of the Lenders, to exercise and enforce its rights and
remedies hereunder with respect to such Investment Account.
SECTION 5.17 Borrowers' Representative. Each other Borrower hereby
irrevocably appoints WinsLoew as its representative, and WinsLoew shall act
under this Agreement as the representative of each Borrower for all purposes,
including, without being limited to, requesting borrowings and receiving
account statements and other notices and communications to the Borrowers (or
any of them) from the Administrative Agent or any Lender. The Administrative
Agent and the Lenders may rely, and shall be fully protected in relying, on any
request for borrowing, disbursement instruction, report, information or any
other notice or communication made or given by WinsLoew, whether in its own
name, on behalf of any other Borrower or on behalf of "the Borrowers," and
neither the Administrative Agent nor any Lender shall have any obligation to
make any inquiry or request any confirmation from or on behalf of any other
Borrower as to the binding effect on it of any such request, instruction,
report, information, notice or communication, nor shall the joint and several
character of the Borrowers' liability for the Secured Obligations be affected.
The Administrative Agent and each Lender intend to maintain a single Loan
Account in the name of "WinsLoew Furniture, Inc." hereunder and each Borrower
expressly agrees to such arrangement and confirms that such arrangement shall
have no effect on the joint and several character of its liability for the
Secured Obligations.
SECTION 5.18 Joint and Several Liability, No Modification or
Release of Obligations.
(a) Joint and Several Liability. The Secured Obligations shall
constitute one joint and several direct and general obligation of all of the
Borrowers. Notwithstanding anything to the contrary contained herein, each of
the Borrowers shall be jointly and severally, with each other Borrower,
directly and unconditionally liable to the Administrative Agent and the Lenders
for all Secured Obligations and shall have the obligations of co-maker with
respect to the Revolving Credit Loans, the Revolving Credit Notes, the Term
Loans, the Term Notes, the Acquisition Loans, the Acquisition Notes and the
Secured Obligations, it being agreed that the advances to each Borrower inure
to the benefit of all Borrowers, and that the Administrative Agent and the
Lenders are relying on the joint and several liability of the Borrowers as
co-makers in extending
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the Loans hereunder. Each Borrower hereby unconditionally and irrevocably
agrees that upon default in the payment when due (whether at stated maturity,
by acceleration or otherwise) of any principal of, or interest on, any
Revolving Credit Loan, Term Loan, Acquisition Loan or other Secured Obligation
payable to the Administrative Agent or any Lender, it will forthwith pay the
same, without notice or demand.
(b) No Modification or Release of Obligations. No payment or
payments made by any of the Borrowers or any other Person or received or
collected by the Administrative Agent or any Lender from any of the Borrowers
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 Secured Obligations shall be deemed to modify, release or
otherwise affect the liability of each Borrower under this Agreement, which
shall remain liable for the Secured Obligations until the Secured Obligations
are paid in full and the Revolving Credit Facility is terminated.
SECTION 5.19 Obligations Absolute. Each Borrower agrees that the
Secured Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any Lender with respect thereto. All Secured
Obligations shall be conclusively presumed to have been created in reliance
hereon. The liabilities under this Agreement shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan Documents
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payments of, or in
any other term of, all or any part of the Secured Obligations, or any other
amendment or waiver thereof or any consent to departure therefrom, including,
but not limited to, any increase in the Secured Obligations resulting from the
extension of additional credit to any Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Secured Obligations;
(d) any change, restructuring or termination of the corporate
structure or existence of any Borrower; or
(e) any other circumstance (other than payment) which might
otherwise constitute a defense available to, or a discharge of, any Borrower or
a guarantor.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded
or must otherwise be returned by the
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Administrative Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any Borrower or otherwise, all as though such payment had not
been made.
SECTION 5.20 Waiver of Suretyship Defenses. Each Borrower agrees that
the joint and several liability of the Borrowers provided for in SECTION 5.18
shall not be impaired or affected by any modification, supplement, extension or
amendment or any contract or agreement to which the other Borrowers may
hereafter agree (other than an agreement signed by the Administrative Agent and
the Lenders specifically releasing such liability), nor by any delay, extension
of time, renewal, compromise or other indulgence granted by the Administrative
Agent or any Lender with respect to any of the Secured Obligations, nor by any
other agreements or arrangements whatever with the other Borrowers or with
anyone else, each Borrower hereby waiving all notice of such delay, extension,
release, substitution, renewal, compromise or other indulgence, and hereby
consenting to be bound thereby as fully and effectually as if it had expressly
agreed thereto in advance. The liability of each Borrower is direct and
unconditional as to all of the Secured Obligations, and may be enforced without
requiring the Administrative Agent or any Lender first to resort to any other
right, remedy or security. Each Borrower hereby expressly waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations, the Revolving Credit Notes, the Term Notes, the
Acquisition Notes, this Agreement or any other Loan Document (other than as
expressly required in this Agreement or by any of the Loan Documents) and any
requirement that the Administrative Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against any Borrower or any other Person or any collateral,
including any rights any Borrower may otherwise have under O.C.G.A. ss.
10-7-24.
SECTION 5.21 Defaulting Lender's Status. Notwithstanding anything
contained herein to the contrary, but in addition to provisions regarding the
failure of a Lender to perform its obligations hereunder set forth elsewhere in
this Agreement, so long as any Lender shall be in default of its obligation to
fund its Proportionate Share of any Borrowing or shall have rejected its
Commitment or shall have failed to perform its reimbursement obligations in
favor of the Administrative Agent as set forth in ARTICLE 5 hereof, then such
Lender shall not be entitled to receive any payments of principal of, or
interest on, the Loans or its share of any Commitment, Letter of Credit or
other fees payable hereunder, and for purposes of voting or consenting to
matters with respect to the Loan Documents, such Lender shall be deemed not to
be a "Lender" hereunder and such Lender's Commitment shall be deemed to be zero
($0), unless and until the earlier to occur of (a) all other Secured
Obligations have been paid in full, (b) such failure to fulfill its obligation
to fund is cured and such Lender shall have paid, as and to the extent provided
in this Agreement, to the applicable Person, such amount then owing together
with interest on the amount that such Lender failed to timely fund or (c) the
Secured Obligations under this Agreement shall have been declared or shall have
become immediately due and payable and/or the Revolving Credit Facility and the
Acquisition Facility (if applicable) have been terminated. No Commitment of any
Lender shall be increased or otherwise affected by any such failure or
rejection by any other Lender. Unless such defaulting Lender cures any such
default prior to the
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making of any payment by the Borrowers of any principal or interest hereunder,
any such payment which would, but for this subsection, be paid to such
defaulting Lender, shall (to the fullest extent permitted by Applicable Law) be
paid to the Lenders who shall not be in default under their respective
Commitments and who shall not have rejected any Commitment, for application to
the Loans or to provide cash collateral in such manner and order as shall be
determined by the Administrative Agent; PROVIDED, HOWEVER, that the
Administrative Agent may, but shall not be obligated to, effect a cure of the
defaulting Lender's failure to pay money by retaining payments that would
otherwise be made to such defaulting Lender hereunder and applying such
payments to such defaulting Lender's obligations hereunder, at such time, and
in such order as the Administrative Agent may elect in its sole discretion.
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ARTICLE 6
CONDITIONS PRECEDENT
SECTION 6.1 Conditions Precedent to Initial Loans. Notwithstanding any
other provision of this Agreement, the respective obligations of the Lenders to
make the Initial Loans are subject to the conditions precedent that (a) no
action, proceeding, investigation, regulation or legislation, shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain substantial
damages in respect of, or which are related to or arise out of, this Agreement,
or the consummation of the transactions contemplated hereby, (b) there shall
not have occurred any event or series of events or group of circumstances which
individually or in the aggregate, in the sole judgment of the Administrative
Agent or the Arranger, would have a Materially Adverse Effect (with reference
to the financial statements referred to in SECTION 7.1(N)), and (c) the
Administrative Agent shall have received on or before the Effective Date the
following, each dated as of such day, in form and substance reasonably
satisfactory to the Administrative Agent, its special counsel and the Arranger
and (except for the Notes) and, at the Administrative Agent's request, in
sufficient copies for each Lender:
(1) Agreement. This Agreement, duly executed and
delivered by the Borrower.
(2) Notes. The Notes, each dated the Effective Date and
duly executed and delivered by the Borrowers.
(3) Articles, Bylaws and Resolutions. Certified copies
of the articles or certificate of incorporation and by-laws or other
constituent documents of each Loan Party as in effect on the Effective
Date and all action, including shareholder approval, if necessary,
taken by each Loan Party and/or their respective shareholders or other
interest holders to authorize the execution, delivery and performance
of this Agreement and the other Loan Documents to which each is a
party and the Borrowings under this Agreement and the execution,
delivery and performance of the Senior Subordinated Note Documents.
(4) Incumbency Certificates. Certificates of incumbency
and specimen signatures with respect to each of the officers of each
Loan Party who is authorized to execute and deliver this Agreement or
any other Loan Document on behalf of such Loan Party or any document,
certificate or instrument to be delivered in connection with this
Agreement or the other Loan Documents and to request Borrowings under
this Agreement.
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(5) Good Standing Certificates. A certificate evidencing
the good standing of each Loan Party in the jurisdiction of its
incorporation and in each other jurisdiction in which it is qualified
as a foreign corporation to transact business.
(6) Financing Statements. The Financing Statements duly
executed and delivered by the Loan Parties.
(7) Notice of Security Interest in Deposit Accounts.
Such notices of Security Interest in Deposit Accounts as shall be
required by the Administrative Agent duly executed by the applicable
Loan Party and the applicable depositary institution where such
accounts are held.
(8) Landlord's and Warehouseman's Waivers. Waiver and
consent agreements duly executed on behalf of each landlord of real
property on which Collateral is located and each warehouseman having
possession of Collateral.
(9) Mortgages. The Mortgages duly executed and delivered
by the applicable Borrower, in proper form for recording in each
appropriate jurisdiction.
(10) Title Insurance. One or more unconditional
commitments for the issuance of mortgagee title insurance policies
with all requirements and conditions to the issuance of the final
policy deleted or marked satisfied, issued by a title insurance
company satisfactory to the Administrative Agent, each in an amount
equal to not less than the fair market value of the Real Estate
subject to the Mortgage insured thereby, insuring that such Mortgage
creates a valid first lien on, and security title to, all Real Estate
described therein, with no survey or other exceptions which the
Administrative Agent shall not have approved in writing.
(11) Real Estate Surveys. Such materials and information
concerning the Real Estate subject to a Mortgage as the Administrative
Agent may require, including, without limitation, (i) true and
accurate surveys satisfactory to the Administrative Agent of all of
the Real Estate, certified to the Administrative Agent and showing the
location of any special flood hazard areas thereon in compliance with
FEMA requirements, (ii) certificates of occupancy covering all of the
Real Estate, and (iii) owner's affidavits or indemnities acceptable to
the title insurance company as to such matters relating to the Real
Estate as the Administrative Agent or title insurance company may
request.
(12) Environmental Reports. A copy of each report listed
on SCHEDULE 6.1(C)(12).
(13) Pledge Agreements. The WinsLoew Pledge Agreement and
the Winston Pledge Agreement duly executed and delivered by WinsLoew
and Winston, respectively, together with all certificates and stock
powers, undated and in blank, constituting Pledged
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Shares (as defined therein) required to be delivered by WinsLoew and
Winston to the Administrative Agent in connection with the execution
and delivery of such agreements.
(14) Trademark Agreement. A Trademark Security Agreement
duly executed and delivered by each of Loewenstein, Pompeii, Winston
and Tropic Craft.
(15) Patent Agreement. A Patent Security Agreement duly
executed and delivered by each of Loewenstein, Pompeii and Winston.
(16) Schedule of Inventory/Receivables. A Schedule of
Inventory and a Schedule of Receivables, each prepared as of August
20, 1999 or a later date.
(17) Evidence of Insurance. Certificates or binders of
insurance relating to (i) each of the policies of insurance covering
any of the Collateral together with loss payable clauses which comply
with the terms of SECTION 9.7(B) and SECTION 10.5, (ii) each of the
policies of insurance required by the Mortgages, as modified by the
modifications, together with mortgagee clauses satisfactory to the
Administrative Agent and (iii) flood insurance with respect to any
improvements to Real Estate located in designated special flood hazard
areas.
(18) Borrowing Base Certificate. A Borrowing Base
Certificate prepared as of August 20, 1999 or a later date duly
executed and delivered by the Financial Officer.
(19) Initial Notice of Borrowing. An Initial Notice of
Borrowing from the Borrowers' Representative to the Administrative
Agent requesting the Initial Loans and specifying the method of
disbursement.
(20) Financial Statements. Copies of all the financial
statements referred to in SECTION 7.1(N) and meeting the requirements
thereof.
(21) Officer's Certificate. A certificate of the
Financial Officer, stating that, to the best of his knowledge and
based on an examination sufficient to enable him to make an informed
statement, (a) all of the representations and warranties made or
deemed to be made under this Agreement are true and correct as of the
Effective Date, both with and without giving effect to the Loans to be
made at such time and the application of the proceeds thereof, and (b)
no Default or Event of Default exists.
(22) Release of Liens. Evidence satisfactory to the
Administrative Agent of the release and termination of (or agreement
to release and terminate) all Liens other than Permitted Liens.
(23) Legal Opinion. A signed opinion of Greenberg
Traurig, P.A. counsel for the Borrowers, and such local counsel as the
Administrative Agent shall deem necessary
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or desirable, opining as to such matters in connection with this
Agreement as any Lender or its counsel may reasonably request.
(24) Other Loan Documents. Copies of each of the other
Loan Documents duly executed by the parties thereto with evidence
satisfactory to the Administrative Agent and its counsel of the due
authorization, binding effect and enforceability of each such Loan
Document on each such party and such other documents and instruments
as the Administrative Agent may reasonably request.
(25) Solvency. The Borrowers shall have delivered to the
Administrative Agent a certificate executed by the Financial Officer,
in form and substance satisfactory to the Administrative Agent,
certifying that after giving effect to the Indebtedness represented by
the Loans outstanding and to be incurred, the transactions
contemplated by this Agreement, the WinsLoew Merger Agreement and the
WinsLoew Merger Documents, and the Senior Subordinated Note Documents,
each Borrower and each of its Subsidiaries is solvent, having assets
of a fair salable value which exceeds the amount required to pay its
debts as they become absolute and matured (including contingent,
subordinated, unmatured and unliquidated liabilities), and such
Borrower and each of its Subsidiaries is able to and anticipates that
it will be able to meet its debts as they mature and has adequate
capital to conduct the business in which it is or proposes to be
engaged.
(26) Funded Debt to EBITDA. On or before the Effective
Date, the Administrative Agent shall have received evidence
satisfactory to it that the ratio of (i) Funded Debt of WinsLoew and
its Consolidated Subsidiaries (determined on a consolidated pro forma
basis giving effect to the transactions contemplated hereby to be
consummated on the Effective Date and adjusted to reflect the average
working capital of WinsLoew and its Consolidated Subsidiaries) to (ii)
pro forma EBITDA of WinsLoew and its Consolidated Subsidiaries
(determined on a consolidated basis) for the twelve month period ended
June 25, 1999, does not exceed 5.5 to 1.
(27) Capitalization. After giving effect to the
transactions contemplated by the WinsLoew Merger Documents, the Senior
Subordinated Note Documents and this Agreement, (i) the Borrowers
shall have received the funds and applied the funds as set forth in
SCHEDULE 6.1(C)(27) hereto, and (ii) except as expressly contemplated
by this Agreement, no Restricted Payments or Restricted Distributions
shall have been made or committed to be made as of the Effective Date
and the Administrative Agent shall have received a certificate from
the Financial Officer to such effect.
(28) Fees. The Borrowers shall have paid all of the fees
payable on the Effective Date provided for or referred to herein.
(29) Security Interests. The Administrative Agent shall
have received satisfactory evidence that the Administrative Agent (for
the benefit of Lenders) has a valid
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and perfected first priority security interest as of such date in all
of the Collateral, subject only to Permitted Liens.
(30) WinsLoew Merger. On the Effective Date, (i) the
Administrative Agent shall have received true and complete executed or
conformed copies of the WinsLoew Merger Documents and any amendments
thereto; (ii) the WinsLoew Merger Documents shall be in full force and
effect and no material term or condition thereof shall have been
amended, modified or waived after the execution thereof (other than
solely to extend the date by which the WinsLoew Merger is required to
occur) except with the prior written consent of the Administrative
Agent; (iii) none of the parties to any of the WinsLoew Merger
Documents shall have failed to perform any material obligation or
covenant required by such WinsLoew Merger Document to be performed or
complied with by it on or before the Effective Date; (iv) all
representations and warranties of the parties thereto contained in the
WinsLoew Merger Agreement and the other WinsLoew Merger Documents
shall be true and correct in all material respects with the same
effect as though made on and as of the Effective Date; (v) all
requisite approvals by governmental authorities and regulatory bodies
having jurisdiction over the parties to the WinsLoew Merger Agreement
in respect of the WinsLoew Merger shall have been obtained and be in
full force and effect (other than any such approvals failure to obtain
which could not reasonably be expected, in the Administrative Agent's
sole judgment, to have a Materially Adverse Effect), and no such
approvals shall impose any conditions to the consummation of the
WinsLoew Merger; (vi) the WinsLoew Merger Contribution shall have been
made (but for up to $500,000 to be contributed within 10 days after
the Effective Date) and the WinsLoew Merger shall have been
consummated in accordance with the terms and provisions of the
WinsLoew Merger Agreement and the other WinsLoew Merger Documents,
without any amendment or waiver of any material provision thereof; and
(vii) the Administrative Agent shall have received a certificate from
the Financial Officer or other evidence satisfactory to it that each
of the conditions set forth in CLAUSES (I) through (VI) above have
been satisfied. In addition, all opinion letters delivered in
connection with the WinsLoew Merger Documents and the transactions
contemplated thereby shall be addressed to the Administrative Agent,
for the benefit of the Lenders, or accompanied by a written
authorization from the firm delivering such opinion letter stating
that the Administrative Agent, for the benefit of the Lenders, may
rely on such opinion letter as though it were addressed to it.
(31) Senior Subordinated Note Transaction. On the
Effective Date, the Administrative Agent shall have received a fully
executed copy of each of the Senior Subordinated Note Documents
certified by the Financial Officer as being in the same form as the
final drafts thereof furnished to the Administrative Agent prior to
the Effective Date and approved by it. The Administrative Agent shall
also have received evidence satisfactory to it that the transactions
contemplated by the Senior Subordinated Note Documents to be
consummated on or prior to the Effective Date have been consummated
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in accordance with the terms thereof without any waiver of any
condition precedent to any party's obligations thereunder or waiver of
any material provisions thereof other than such waivers to which the
Administrative Agent has consented.
SECTION 6.2 Additional Conditions to Acquisition Loans. The
obligations of the Lenders to honor the Borrowers' request for any Acquisition
Loan after the Effective Date and on or prior to the Acquisition Facility
Termination Date is subject to Administrative Agent's receipt, at least two
Business Days prior to the date such Acquisition Loan is requested to be made,
of a Notice of Borrowing substantially in the form of EXHIBIT E-3, properly
completed, and to the satisfaction (or waiver by the Administrative Agent and
the Required Lenders) of the following conditions with respect to each
Acquisition Loan:
(a) at least 14 days prior to the closing date for a proposed
Acquisition, the Borrowers shall provide to the Administrative Agent and the
Lenders notice of such proposed Acquisition together with an information
package containing the following documents and confirmation that the other
conditions set forth in this SECTION 6.2 have been or will on the closing date
for such proposed Acquisition be satisfied:
(i) the purchase agreement and all other material
documents and agreements relating to such proposed Acquisition in
substantially final form,
(ii) all such information as may be necessary to enable
the Administrative Agent, for the benefit of the Lenders, to obtain a
first priority, perfected security interest (subject only to Permitted
Liens) in all of the assets to be acquired from or owned by the
Acquisition Target immediately upon consummation of the proposed
Acquisition, and
(iii) copies of lien search results for each jurisdiction
in which the Acquisition Target is located, in which the chief
executive office of the Acquisition Target is located, or in which the
Acquisition Target has assets;
(b) the purchase price for the Acquisition Target (including
without limitation all Indebtedness assumed by any Borrower and all obligations
associated with consulting and non-compete agreements entered into by any
Borrower), after taking into account reasonably anticipated purchase price
adjustments, is less than or equal to $25,000,000;
(c) the proposed Acquisition is an arm's length transaction
whereby a Borrower will (i) own directly or indirectly all of the equity
interest in such Acquisition Target and will control a majority of any voting
securities, or will otherwise control the governance of such Acquisition Target
or (ii) acquire a Business Unit;
(d) at the time of the proposed Acquisition, the Acquisition
Target shall be in the business of designing, manufacturing or distributing
furniture and a majority of the board of
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directors or managers or owners of a majority of the equity interests in the
Acquisition Target shall have approved the transaction;
(e) at least 14 days prior to the consummation of the proposed
Acquisition, the Borrowers shall have demonstrated, in a manner satisfactory to
the Administrative Agent in its reasonable judgment, (i) positive trailing
four-quarter pro forma net income before provision for income taxes, interest
expense, depreciation, or amortization of the Acquisition Target ("Target
EBITDA") and (ii) compliance by WinsLoew and its Consolidated Subsidiaries with
the terms and provisions of this Agreement on a pro forma basis after giving
effect to the proposed Acquisition as if it had been consummated on the first
day of the four-Fiscal Quarter period then most recently ended, PROVIDED that
any pro forma adjustments to historical Target EBITDA shall be acceptable to
the Administrative Agent in its reasonable credit judgment, EXCEPT that
contractual and adequately documented reductions in former owners' compensation
or rental expense of the Acquisition Target, which will be effective as of the
closing date of the proposed Acquisition, shall be acceptable;
(f) at least 14 days prior to the consummation of such
Acquisition, the Administrative Agent shall have received such appraisals of
assets to be acquired as the Administrative Agent in the exercise of its
reasonable credit judgment deems material and environmental site assessments,
in form and substance satisfactory to the Administrative Agent and the Lenders,
with respect to any real property is owned by the Acquisition Target or
operated by the Acquisition Target as a manufacturing facility;
(g) no Debt shall be incurred or assumed by any Borrower or the
Acquisition Target in connection with or as a result of such proposed
Acquisition unless such Debt is unsecured, the interest rate thereon does not
exceed the interest rate on the Senior Subordinated Notes, any agreements
governing such Debt contain no financial covenants, the first scheduled
principal repayment thereunder (under all circumstances) is later than June 30,
2006 (or any later date to which the Termination Date may have been extended),
and repayment thereof is subordinated, at least to the same extent as the
Senior Subordinated Notes, to the prior repayment in full in cash of the
Secured Obligations;
(h) the conditions set forth in SECTIONS 6.1(A) and (B), and
SECTIONS 6.1(C)(2), (3), (4), (5), and (6) as to Acquisition Target and the
applicable Borrower(s), and such other conditions set forth in SECTION 6.1(c)
as the Administrative Agent may determine are applicable, shall have been
satisfied on and as of the closing date of the proposed Acquisition and the
Administrative Agent shall have received such additional instruments,
certificates and other documents, including opinions of counsel, as may be
usual or customary in connection with similar acquisitions and as the
Administrative Agent may reasonably request;
(i) in the case of an Acquisition of stock or other equity
interests, the Acquisition Target shall be merged with and into a Borrower or
the Acquisition Target shall have executed and delivered the Subsidiaries
Guaranty (or an effective joinder agreement with respect thereto)
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and a Guarantor Security Agreement unless the Borrowers and the Administrative
Agent have agreed that the Acquisition Target is to become an additional
Borrower, in which case the Acquisition Target and the other Borrowers shall
have duly executed and delivered such acknowledgment or amendment to this
Agreement and such additions to or replacements of outstanding Notes as the
Administrative Agent may require evidencing the Acquisition Target's joint and
several liability for the Secured Obligations as a Borrower under this
Agreement;
(j) the Administrative Agent, for itself and on behalf of the
Lenders, shall have a first priority Lien (subject only to Permitted Liens) on
the assets of the Acquisition Target or otherwise acquired in connection with
such Acquisition (other than any such Lien as to which the Administrative Agent
determines in writing that the benefit thereof is not sufficient to justify the
cost of obtaining and perfecting such Lien); and
(k) at the time of and after giving effect to the proposed
Acquisition, no Default or Event of Default shall exist.
SECTION 6.3 All Loans and Letters of Credit. At the time of making of
each Loan, including the Initial Loans and all subsequent Loans, and the
issuance of each Letter of Credit:
(a) all of the representations and warranties made or deemed to
be made under this Agreement shall be true and correct in all material respects
at such time both with and without giving effect to the Loans to be made at
such time and the application of the proceeds thereof (except to the extent any
such representation or warranty is made exclusively with reference to an
earlier date), and
(b) the corporate actions of the Borrowers referred to in SECTION
6.1(C)(3) shall remain in full force and effect and the incumbency of officers
shall be as stated in the certificates of incumbency delivered pursuant to
SECTION 6.1(C)(4) or as subsequently modified and reflected in a certificate of
incumbency delivered to the Administrative Agent.
Each request or deemed request for any Borrowing hereunder shall be deemed to
be a certification by the Borrowers to the Administrative Agent and the Lenders
as to the matters set forth in SECTION 6.3(A) and (B) and the Administrative
Agent may, without waiving either condition, consider the conditions specified
in SECTIONS 6.3(A) and (B) fulfilled and a representation by the Borrowers to
such effect made, if no written notice to the contrary is received by the
Administrative Agent prior to the making of the Loan then to be made.
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ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 7.1 Representations and Warranties. Each Borrower represents
and warrants to the Administrative Agent and to the Lenders as follows:
(a) Organization; Power; Qualification. Such Borrower and each of
its Subsidiaries is a corporation, duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, having the power
and authority to own its properties and to carry on its business as now being
and hereafter proposed to be conducted and is duly qualified and authorized to
do business in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification or authorization except
to the extent its failure to be so qualified could not reasonably be expected
to have a Materially Adverse Effect. The jurisdictions in which each Borrower
and each of its Subsidiaries is qualified to do business as a foreign
corporation are listed on SCHEDULE 7.1(A).
(b) Capitalization; Shareholder Agreements. The outstanding
capital stock of such Borrower has been duly and validly issued and is fully
paid and nonassessable, and the number and owners of such shares of capital
stock of such Borrower are set forth on SCHEDULE 7.1(B). The issuance and sale
of such Borrower's capital stock have been registered or qualified under
applicable federal and state securities laws or are exempt therefrom. Except as
set forth on SCHEDULE 7.1(B), there are no shareholders agreements, options,
subscription agreements or other agreements or understandings to which such
Borrower is a party in effect with respect to the capital stock of such
Borrower, including, without limitation, agreements providing for special
voting requirements or arrangements for approval of corporate actions or other
matters relating to corporate governance or restrictions on share transfer or
providing for the issuance of any securities convertible into shares of the
capital stock of such Borrower, any warrants or other rights to acquire any
shares or securities convertible into such shares, or any agreement that
obligates such Borrower, either by its terms or at the election of any other
Person, to repurchase such shares under any circumstances.
(c) Subsidiaries. SCHEDULE 7.1(C) correctly sets forth the name
of each Subsidiary of such Borrower, its jurisdiction of incorporation, the
name of its immediate parent or parents, and the percentage of its issued and
outstanding securities owned by such Borrower or any other Subsidiary of such
Borrower and indicating whether such Subsidiary is a Consolidated Subsidiary.
Except as set forth on SCHEDULE 7.1(C),
(i) no Subsidiary of such Borrower has issued any
securities convertible into shares of such Subsidiary's capital stock
or any options, warrants or other rights to acquire any shares or
securities convertible into such shares,
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(ii) the outstanding stock and securities of each
Subsidiary of such Borrower are owned by such Borrower or a Wholly
Owned Subsidiary of such Borrower, or by such Borrower and one or more
of its Wholly Owned Subsidiaries, free and clear of all Liens,
warrants, options and rights of others of any kind whatsoever, and
(iii) such Borrower has no Subsidiaries.
The outstanding capital stock of each Subsidiary of such Borrower has been duly
and validly issued and is fully paid and nonassessable by the issuer, and the
number and owners of the shares of such capital stock are set forth on SCHEDULE
7.1(C).
(d) Authorization of Agreement, Notes, Loan Documents and
Borrowing. Such Borrower has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform this Agreement and each
of the Loan Documents, to which it is a party, in accordance with their
respective terms. This Agreement and each of the Loan Documents, to which it is
a party, have been duly executed and delivered by the duly authorized officers
of such Borrower and each is, or each when executed and delivered in accordance
with this Agreement will be, a legal, valid and binding obligation of such
Borrower, enforceable in accordance with its terms.
(e) Compliance of Agreement, Notes, Loan Documents and Borrowing
with Laws, Etc. Except as set forth on SCHEDULE 7.1(E), the execution, delivery
and performance of this Agreement and each of the Loan Documents in accordance
with their respective terms and the borrowings hereunder do not and will not,
by the passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval or violate any
Applicable Law relating to such Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a
default under the articles or certificate of incorporation, articles
of organization, by-laws, operating agreement or any shareholders'
agreement or other constituent documents of such Borrower or any of
its Subsidiaries,
(iii) conflict with, result in a breach of or constitute a
default under any material provisions of any indenture, agreement or
other instrument to which such Borrower or any of its Subsidiaries is
a party or by which such Borrower, any of its Subsidiaries or any of
such Borrower's or such Subsidiaries' property may be bound or any
material Governmental Approval relating to such Borrower or any of its
Subsidiaries, or
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(iv) result in or require the creation or imposition of
any Lien upon or with respect to any property now owned or hereafter
acquired by such Borrower other than the Security Interest.
(f) Business. The Borrowers are engaged principally in the
business of designing, manufacturing and distributing furniture.
(g) Compliance with Law; Governmental Approvals.
(i) Except as set forth in SCHEDULE 7.1(G), such
Borrower and each of its Subsidiaries
(A) has all Governmental Approvals, including
permits relating to federal, state and local Environmental
Laws, ordinances and regulations, required by any Applicable
Law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on
appeal and is not the subject of any pending or, to the
knowledge of such Borrower, threatened attack by direct or
collateral proceeding, and
(B) is in compliance with each Governmental
Approval applicable to it and in compliance with all other
Applicable Laws relating to it, including, without being
limited to, all Environmental Laws and all occupational
health and safety laws applicable to such Borrower, any of
its Subsidiaries or their respective properties,
except for instances of noncompliance which would not, singly or in
the aggregate, cause a Default or Event of Default or have a
Materially Adverse Effect and in respect of which reserves in respect
of such Borrower's or such Subsidiary's reasonably anticipated
liability have been established on the books of such Borrower or such
Subsidiary, as applicable.
(ii) Without limiting the generality of the above, except
as disclosed on a report delivered pursuant to SECTION 6.1(C)(12) or
with respect to matters which could not reasonably be expected to
have, singly or in the aggregate, a Materially Adverse Effect:
(A) the operations of such Borrower and each of
its Subsidiaries comply in all material respects with all
applicable environmental, health and safety requirements of
Applicable Law;
(B) such Borrower and each of its Subsidiaries
has obtained all environmental, health and safety permits
necessary for its operation, and all such permits are in good
standing and such Borrower and each of its Subsidiaries is in
compliance in all material respects with all terms and
conditions of such permits;
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(C) neither such Borrower nor any of its
Subsidiaries nor any of their respective present or past
property or operations are subject to any order from or
agreement with any public authority or private party
respecting (x) any environmental, health or safety
requirements of Applicable Law, (y) any Remedial Action, or
(z) any liabilities and costs arising from the Release or
threatened Release of a Contaminant into the environment;
(D) none of the operations of such Borrower or
of any of its Subsidiaries is subject to any judicial or
administrative proceeding alleging a violation of any
environmental, health or safety requirement of Applicable
Law;
(E) none of the present or past operations of
such Borrower or any of its Subsidiaries is the subject of
any investigation by any public authority evaluating whether
any Remedial Action is needed to respond to a Release or
threatened Release of a Contaminant into the environment;
(F) neither such Borrower nor any of its
Subsidiaries has filed any notice under any requirement of
Applicable Law indicating past or present treatment, storage
or disposal of a hazardous waste, as that term is defined
under 40 CFR Part 261 or any state equivalent;
(G) neither such Borrower nor any of its
Subsidiaries has filed any notice under any requirement of
Applicable Law reporting a Release of a Contaminant into the
environment;
(H) except in compliance in all material
respects with applicable Environmental Laws, during the
course of such Borrower's or any of its Subsidiaries'
ownership of or operations on the Real Estate, there has been
no (1) generation, treatment, recycling, storage or disposal
of hazardous waste, as that term is defined under 40 CFR Part
261 or any state equivalent, (2) use of underground storage
tanks or surface impoundments, (3) use of asbestos-containing
materials, or (4) use of polychlorinated biphenyls (PCBs)
used in hydraulic oils, electrical transformers or other
equipment;
(I) neither such Borrower nor any of its
Subsidiaries has entered into any negotiations or agreements
with any Person (including, without limitation, any prior
owner of any of the Real Estate or other property of such
Borrower or any of its Subsidiaries) relating to any Remedial
Action or environment-related claim;
(J) neither such Borrower nor any of its
Subsidiaries has received any notice or claim to the effect
that it is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant into the
environment;
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(K) neither such Borrower nor any of its
Subsidiaries has any material contingent liability in
connection with any Release or threatened Release of any
Contaminant into the environment;
(L) no Environmental Lien has attached to any
of the Real Estate or other property of such Borrower or of
any of its Subsidiaries;
(M) the presence and condition of all
asbestos-containing material which is on or part of the Real
Estate (excluding any raw materials used in the manufacture
of products or products themselves) do not violate in any
material respect any currently applicable requirement of
Applicable Law; and
(N) neither such Borrower nor any of its
Subsidiaries manufactures, distributes or sells, and has
never manufactured, distributed or sold, products which
contain asbestos-containing material.
(iii) Such Borrower has notified the Lenders and the
Administrative Agent of the receipt by such Borrower or by any of its
Subsidiaries of any written notice of a material violation of any
Environmental Laws and occupational health and safety laws applicable
to such Borrower, any of its Subsidiaries or any of their respective
properties.
(h) Title to Properties. Except as set forth in SCHEDULE 7.1(H),
such Borrower and each of its Subsidiaries has valid and legal title to or
leasehold interest in all material personal property, Real Estate and other
assets used in its business, including, but not limited to, those reflected on
the most recent balance sheet of such Borrower delivered pursuant to SECTION
7.1(N).
(i) Liens. Except as set forth in SCHEDULE 7.1(I), none of the
properties and assets of such Borrower or any Subsidiary of such Borrower is
subject to any Lien, except Permitted Liens. Other than the Financing
Statements, to the best knowledge of such Borrower (after due investigation) no
financing statement under the Uniform Commercial Code of any State or other
instrument evidencing a Lien which names such Borrower or any Subsidiary of
such Borrower as debtor has been filed (and has not been terminated or will not
be terminated as a result of the transactions to occur on the Effective Date)
in any state or other jurisdiction, and neither such Borrower nor any
Subsidiary of such Borrower has signed any such financing statement or other
instrument or any security agreement authorizing any secured party thereunder
to file any such financing statement or instrument, except to perfect those
Liens listed on SCHEDULE 7.1(I).
(j) Debt and Guaranties. SCHEDULE 7.1(J) is a complete and
correct listing of all (i) Debt and (ii) Guaranties of each of such Borrower
and each of its Subsidiaries. Each of such Borrower and its Subsidiaries has
performed and is in compliance with all of the terms of such Debt and
Guaranties and all instruments and agreements relating thereto, and no default
or event
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of default, or event or condition which with notice or lapse of time, or both,
would constitute such a default or event of default, exists with respect to any
such Indebtedness or Guaranty.
(k) Litigation. Except as set forth on SCHEDULE 7.1(K), there are
no actions, suits or proceedings pending (nor, to the knowledge of such
Borrower, are there any actions, suits or proceedings threatened, or any
reasonable basis therefor) against or in any other way relating to or affecting
such Borrower or such Subsidiaries or any of such Borrower's or any of its
Subsidiaries' properties in any court or before any arbitrator of any kind or
before or by any governmental body, except actions, suits or proceedings of the
character normally incident to the kind of business conducted by such Borrower
or any of its Subsidiaries which, if adversely determined, would not singly or
in the aggregate have a Materially Adverse Effect, and there are no strikes or
walkouts in progress, pending or to the Borrowers' knowledge contemplated
relating to any labor contracts to which such Borrower or any of its
Subsidiaries is a party, relating to any labor contracts being negotiated, or
otherwise.
(l) Tax Returns and Payments. Except as set forth on SCHEDULE
7.1(L), all federal, state and local as well as foreign national, provincial
and local and other tax returns of such Borrower and each of its Subsidiaries
required by Applicable Law to be filed have been duly filed, and all federal,
state and local and foreign national, provincial and local and other taxes,
assessments and other governmental charges or levies upon such Borrower and
each of its Subsidiaries and such Borrower's and any of its Subsidiaries'
property, income, profits and assets which are due and payable have been paid,
except any such nonpayment which is at the time permitted under Section 10.6.
The charges, accruals and reserves on the books of such Borrower and each of
its Subsidiaries in respect of federal, state and local and foreign national,
provincial and local taxes for all Fiscal Years and portions thereof since the
organization of such Borrower are in the judgment of such Borrower adequate,
and such Borrower knows of no reason to anticipate any additional assessments
for any of such years which, singly or in the aggregate, might have a
Materially Adverse Effect on such Borrower.
(m) Burdensome Provisions. Neither such Borrower nor any of its
Subsidiaries is a party to any indenture, agreement, lease or other instrument,
or subject to any charter or corporate restriction, Governmental Approval or
Applicable Law compliance with the terms of which could reasonably be expected
to have a Materially Adverse Effect.
(n) Financial Statements.
(i) WinsLoew has furnished to the Administrative Agent
and the Lenders copies of the audited consolidated financial
statements of WinsLoew and its Consolidated Subsidiaries as of
December 31, 1998 and of the unaudited consolidated balance sheet of
WinsLoew and its Consolidated Subsidiaries as at June 25, 1999 and the
related statements of income for the two-Fiscal Quarter period then
ended, which financial statements present fairly in all material
respects in accordance with GAAP consistently applied (except, in the
case of the interim statements, for the absence of notes and subject
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to year end audit adjustments), the financial position of the
Borrowers as at their respective dates, and the results of operations
of the Borrowers for the periods then ended.
(ii) WinsLoew has furnished to the Administrative Agent
and the Lenders copies of the Pro Forma. The Pro Forma presents
fairly, on a pro forma basis, the financial position of the Borrowers
as at the Effective Date.
(iii) WinsLoew has furnished to the Administrative Agent
and the Lenders copies of the Projections. The Projections have been
prepared by WinsLoew in light of the past operations of the business
of WinsLoew and its Consolidated Subsidiaries and represent as of the
respective dates thereof the good faith opinion of WinsLoew and its
senior management concerning the most probable course of business of
WinsLoew and its Consolidated Subsidiaries.
(iv) Except as disclosed or reflected in the financial
statements described in CLAUSES (I) and (II) above, the Borrowers do
not have any material liabilities, contingent or otherwise, and there
were no material unrealized or anticipated losses of the Borrowers.
(o) Adverse Change. Since the date of the last audited financial
statements of the Borrowers delivered to the Administrative Agent pursuant to
SECTION 7.1(N)(I), after giving effect to the transactions reflected in the Pro
Forma, no event has occurred or failed to occur which has had, or may have,
singly or in the aggregate, a Materially Adverse Effect.
(p) ERISA. Neither such Borrower nor any Related Company
maintains or contributes to any Benefit Plan other than those listed on
SCHEDULE 7.1(P). Except as set forth on SCHEDULE 7.1(P), each Benefit Plan is
in substantial compliance with ERISA and the Code, including but not limited to
those provisions thereof relating to reporting and disclosure, and neither the
Borrower nor any Related Company has received any notice asserting that a
Benefit Plan is not in compliance with ERISA. No material liability to the PBGC
or to any Multiemployer Plan has been, or is expected to be, incurred by such
Borrower or any Related Company. Except as set forth on SCHEDULE 7.1(p), each
Benefit Plan intended to qualify under Section 401(a) of the Code so qualifies
and any related trust is exempt from federal income tax under Section 501(a) of
the Code, a favorable determination letter from the IRS has been issued or
applied for with respect to each such Benefit Plan and related trust and
nothing that has occurred since the date of such determination letter that
would adversely affect such qualification or tax-exempt status. No Benefit Plan
subject to the minimum funding standards of the Code has failed to meet such
standards. Neither such Borrower nor any Related Company has transferred any
pension plan liability in a transaction that could be subject to Sections 4069
or 4212(C) of ERISA. Except as set forth on SCHEDULE 7.1(P), neither such
Borrower nor any Related Company has any liability, actual or contingent, with
respect to any Benefit Plan in accordance with its terms, and there are no
pending or threatened claims against a Benefit Plan other than claims for
benefits. No non-exempt prohibited transaction within the meaning of Section
4975 of the Code or Section 406 of
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ERISA has occurred with respect to a Benefit Plan. Except as set forth on
SCHEDULE 7.1(P), no employee or former employee of such Borrower or any Related
Company is or may become entitled to any benefit under a Benefit Plan that is a
"welfare plan" within the meaning of Section 3(1) of ERISA following such
employee's termination of employment other than continuation of group health
coverage in accordance with Section 4980B of the Code and Sections 601 through
609 of ERISA. Except as set forth on SCHEDULE 7.1(P), each such welfare plan
that is a group health plan has been operated in compliance with the provisions
of Section 4980B of the Code and Sections 601-609 of ERISA and any applicable
provisions of state law that are similar.
(q) Absence of Defaults. Neither such Borrower nor any of its
Subsidiaries is in default under its articles or certificate of incorporation
or by-laws or other constituent document and no event has occurred, which has
not been remedied, cured or waived,
(i) which constitutes a Default or an Event of Default,
or
(ii) which constitutes, or which with the passage of time
or giving of notice, or both, would constitute, a default or event of
default by such Borrower or any of its Subsidiaries under any material
agreement (other than this Agreement) or judgment, decree or order to
which such Borrower or any of its Subsidiaries is a party or by which
such Borrower, any of its Subsidiaries or any of such Borrower's or
any of its Subsidiaries' properties may be bound or which would
require such Borrower or any of its Subsidiaries to pay any Debt under
any such material agreement or judgment, decree or order prior to the
scheduled maturity date therefor, except, in the case only of any such
agreement, for alleged defaults which are being contested in good
faith by appropriate proceedings and with respect to which reserves in
respect of such Borrower's or such Subsidiary's reasonably anticipated
liability have been established on the books of such Borrower or such
Subsidiary.
(r) Accuracy and Completeness of Information.
(i) All written information, reports and other papers
and data produced by or on behalf of a Borrower and furnished to the
Administrative Agent or any Lender were, at the time the same were so
furnished, complete and correct in all material respects, to the
extent necessary to give the recipient a true and accurate knowledge
of the subject matter. No fact is known to any Borrower which has had,
or in the future reasonably could be expected to have (so far as such
Borrower can foresee), a Materially Adverse Effect, which has not been
set forth in the financial statements or disclosure delivered prior to
the Effective Date, in each case referred to in SECTION 7.1(N), or in
such written information, reports or other papers or data or otherwise
disclosed in writing to the Administrative Agent and the Lenders prior
to the Agreement Date.
(ii) No Borrower has any actual knowledge that any
document furnished or written statement made to the Administrative
Agent or any Lender by any Person other
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than a Borrower (a copy of which has been furnished to WinsLoew) in
connection with the negotiation, preparation or execution of this
Agreement or any of the Loan Documents contained any incorrect
statement of a material fact or omitted to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
(s) Solvency. In each case after giving effect to the Debt
represented by the Loans outstanding and to be incurred, the transactions
contemplated by this Agreement, the Senior Note Indenture and the WinsLoew
Merger Agreement, such Borrower and each of its Subsidiaries is solvent, having
assets of a fair salable value which exceeds the amount required to pay its
debts as they become absolute and matured (including contingent, subordinated,
unmatured and unliquidated liabilities), and such Borrower and each of its
Subsidiaries is able to and anticipates that it will be able to meet its debts
as they mature and has adequate capital to conduct the business in which it is
or proposes to be engaged.
(t) Receivables.
(i) Status.
(A) Each Receivable reflected in the
computations included in any Borrowing Base Certificate meets
the criteria enumerated in CLAUSES (A) through (P) of the
definition of Eligible Receivables, except as disclosed in
such Borrowing Base Certificate or as disclosed in a timely
manner in a subsequent Borrowing Base Certificate or
otherwise in writing to the Administrative Agent.
(B) Such Borrower has no knowledge of any fact
or circumstance not disclosed to the Administrative Agent in
a Borrowing Base Certificate or otherwise in writing which
would impair the validity or collectibility of any Eligible
Receivable of $250,000 or more or of Eligible Receivables
which (regardless of the individual amount thereof) aggregate
$500,000 or more.
(ii) Chief Executive Office. The chief executive office
of such Borrower and the books and records relating to the Receivables
are located at the address or addresses set forth on SCHEDULE 7.1(T);
such Borrower has not maintained its chief executive office or books
and records relating to any Receivables at any other address at any
time during the five years immediately preceding the Agreement Date
except as disclosed on SCHEDULE 7.1(T).
(u) Inventory.
(i) Schedule of Inventory. All Inventory included in any
Schedule of Inventory or Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section 9.11 meets the criteria
enumerated in clauses (A) through (H) of the definition
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of Eligible Inventory, except as disclosed in such Schedule of
Inventory or Borrowing Base Certificate or in a subsequent Schedule of
Inventory or Borrowing Base Certificate, or as otherwise specifically
disclosed in writing to the Administrative Agent.
(ii) Condition. All Inventory is in good condition, meets
in all material respects the standards imposed by any governmental
agency, or department or division thereof, having regulatory authority
over such goods, their use or sale, and is currently either usable or
salable in the normal course of such Borrower's business, except to
the extent reserved against in the financial statements referred to in
SECTION 7.1(N) or delivered pursuant to ARTICLE 11 or as disclosed on
a Schedule of Inventory delivered to the Administrative Agent pursuant
to SECTION 9.11(B).
(iii) Location. All Inventory is located on the premises
set forth on SCHEDULE 7.1(U) or is Inventory in transit to one of such
locations, except as otherwise disclosed in writing to the
Administrative Agent and such Borrower has not, in the last year,
located such Inventory at premises other than those set forth on
SCHEDULE 7.1(U).
(v) Equipment. All Equipment is in good order and repair in all
material respects and is located on the premises set forth on SCHEDULE 7.1(V)
and has been so located at all times during the last year.
(w) Bank Accounts. SCHEDULE 7.1(W) is a complete and correct
listing of all lockbox, demand deposit and other bank accounts maintained by
such Borrower or any Subsidiary, specifying the depositary, type and number of
each such account.
(x) Intellectual Property. SCHEDULE 7.1(X) sets forth a correct
and complete list of all of the Intellectual Property. None of the Intellectual
Property is subject to any licensing agreement or similar arrangement except as
set forth on SCHEDULE 7.1(X) or as entered into in the sale or distribution of
such Borrower's Inventory in the ordinary course of business. To the best of
such Borrower's knowledge, none of the Intellectual Property infringes on or
conflicts with any other Person's property, and no other Person's property
infringes on or conflicts with the Intellectual Property. The Intellectual
Property described on SCHEDULE 7.1(X) constitute all of the property of such
type necessary to the current and anticipated future conduct of such Borrower's
business.
(y) Real Property. Such Borrower owns no Real Estate and leases
no Real Estate other than that described on SCHEDULE 7.1(Y) and other than Real
Estate acquired or leased after the Effective Date for which such Borrower has
complied with the requirements of SECTION 9.14.
(z) Corporate and Fictitious Names. Except as otherwise disclosed
on SCHEDULE 7.1(Z), during the five-year period preceding the Agreement Date,
neither such Borrower nor any
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predecessor thereof has been known as or used any corporate or fictitious name
other than the corporate name of the Borrower on the Effective Date.
(aa) Federal Reserve Regulations. Neither such Borrower nor any of
its Subsidiaries is engaged and none will engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" (as each of the quoted terms is
defined or used in Regulation U of the Board of Governors of the Federal
Reserve System). No part of the proceeds of any of the Loans will be used for
so purchasing or carrying margin stock or, in any event, for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation T,
U or X of such Board of Governors. If requested by the Administrative Agent or
any Lender, such Borrower will furnish to the Administrative Agent and the
Lenders a statement or statements in conformity with the requirements of said
Regulation T, U or X to the foregoing effect.
(bb) Investment Company Act. Such Borrower is not an "investment
company" or a company "controlled" by an "investment company" (as each of the
quoted terms is defined or used in the Investment Company Act of 1940, as
amended).
(cc) Employee Relations. Such Borrower and each of its
Subsidiaries has an adequate work force in place and is not, except as set
forth on SCHEDULE 7.1(cc), party to any collective bargaining agreement nor has
any labor union been recognized as the representative of such Borrower's or any
of its Subsidiaries' employees, and such Borrower knows of no pending,
threatened or contemplated strikes, work stoppage or other labor disputes
involving such Borrower's or any of its Subsidiaries' employees.
(dd) Trade Names. All trade names or styles under which such
Borrower sells Inventory or Equipment or creates Receivables, or to which
instruments in payment of Receivables are made payable, are listed on SCHEDULE
7.1(DD).
(ee) Year 2000 Compliance. Such Borrower has (i) initiated a
review and assessment of all areas within such Borrower's and each of its
Subsidiaries' business and operations (including those affected by suppliers,
vendors and customers) that could be adversely affected by the Year 2000
Problem, (ii) developed a plan and timeline for addressing the Year 2000
Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Based on the foregoing, such Borrower believes
that all of its and its Subsidiaries' material computer applications are Year
2000 Compliant, and such Borrower is not aware that any of its material
suppliers, vendors or customers is likely to be materially adversely affected
by Year 2000 Problems.
(ff) Merger Agreement. Old WinsLoew has heretofore furnished to
the Administrative Agent true, complete and correct copies of the WinsLoew
Merger Agreement (including any schedules, exhibits and annexes thereto) and
each other WinsLoew Merger Document. The WinsLoew Merger Agreement has not been
amended, supplemented or modified except as
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previously disclosed in writing to the Administrative Agent and, together with
the other WinsLoew Merger Documents copies of which have been delivered to the
Administrative Agent, constitute the complete understanding between Old
WinsLoew and TFC in respect of the Merger and the other matters and
transactions covered thereby. To such Borrower's knowledge, the WinsLoew Merger
Agreement has been duly executed and delivered by Old WinsLoew and TFC and is a
valid, legal and binding obligation of such parties. The representations and
warranties of Old WinsLoew and TFC contained in the WinsLoew Merger Agreement
are (or will be) true and correct in all material respects on the Effective
Date as if made on and as of such date, and the Administrative Agent and the
Lenders are entitled to rely on such representations and warranties with the
same force and effect as though they were incorporated in this Agreement and
made to the Administrative Agent and the Lenders directly. On and as of the
Effective Date, such Borrower knows of no reason to believe that the
representations and warranties of, and information concerning, Old WinsLoew and
TFC contained in the WinsLoew Merger Agreement are not true and correct in all
material respects.
(gg) Subordinated Indebtedness. WinsLoew has the corporate power
and authority to issue the Senior Subordinated Notes. The issuance and sale of
the Senior Subordinated Notes have been registered or qualified under
applicable federal and state securities laws or are exempt therefrom. The
Senior Subordinated Notes are the legal valid and binding obligations of
WinsLoew enforceable against WinsLoew in accordance with their terms (including
those pertaining to subordination). WinsLoew has delivered to the
Administrative Agent a complete and correct copy of all documents evidencing or
relating to the Senior Subordinated Notes including the Senior Note Documents,
and each of the representations and warranties made by WinsLoew therein is true
and correct in all material respects as of the date of such Documents. The
subordination provisions of the Senior Subordinated Notes will be enforceable
against the respective holders thereof by the holder of any Note which has not
effectively waived the benefits thereof. All of the Secured Obligations
constitute senior Debt entitled to the benefits of subordination created with
respect to the Senior Subordinated Notes.
SECTION 7.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this ARTICLE 7 and all statements
contained in any certificate, financial statement, or other instrument,
delivered by or on behalf of the Borrowers pursuant to or in connection with
this Agreement or any of the Loan Documents (including, but not limited to, any
such representation, warranty or statement made in or in connection with any
amendment thereto) shall constitute representations and warranties made under
this Agreement. All representations and warranties made under this Agreement
shall be made or deemed to be made at and as of the Agreement Date, at and as
of the Effective Date and at and as of the date of each Loan, except that
representations and warranties which, by their terms are applicable only to one
such date shall be deemed to be made only at and as of such date. All
representations and warranties made or deemed to be made under this Agreement
shall survive and not be waived by the execution and delivery of this
Agreement, any investigation made by or on behalf of the Lender or any
borrowing hereunder.
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ARTICLE 8
SECURITY INTEREST
SECTION 8.1 Security Interest.
(a) To secure the payment, observance and performance of the
Secured Obligations, each Borrower hereby mortgages, pledges and assigns all of
the Collateral to the Administrative Agent, for the benefit of itself as
Administrative Agent and the Lenders and Affiliates of the Lenders, and grants
to the Administrative Agent, for the benefit of itself as Administrative Agent
and the Lenders and Affiliates of the Lenders, a continuing security interest
in, and a continuing Lien upon, all of the Collateral.
(b) As additional security for all of the Secured Obligations,
each Borrower grants to the Administrative Agent, for the benefit of itself as
Administrative Agent and the Lenders and Affiliates of the Lenders, a security
interest in, and assigns to the Administrative Agent, for the benefit of itself
as Administrative Agent and the Lenders and Affiliates of the Lenders, all of
such Borrower's right, title and interest in and to, any deposits or other sums
at any time credited by or due from each Lender and each Affiliate of a Lender
to such Borrower, or credited by or due from any participant of any Lender to
the Borrower, with the same rights therein as if the deposits or other sums
were credited by or due from such Lender. Each Borrower hereby authorizes each
Lender and each Affiliate of such Lender and each participant to pay or deliver
to the Administrative Agent, for the account of the Lenders, without any
necessity on the Administrative Agent's or any Lender's part to resort to other
security or sources of reimbursement for the Secured Obligations, at any time
during the continuation of any Event of Default of the aforesaid deposits
(general or special, time or demand, provisional or final) or other sums for
application to any Secured Obligation, irrespective of whether any demand has
been made or whether such Secured Obligation is mature, and the rights given
the Administrative Agent, the Lenders, their Affiliates and participants
hereunder are cumulative with such Person's other rights and remedies,
including other rights of set-off. The Administrative Agent will promptly
notify a Borrower of its receipt of any such funds for application to the
Secured Obligations, but failure to do so will not affect the validity or
enforceability thereof. The Administrative Agent may give notice of the above
grant of a security interest in and assignment of the aforesaid deposits and
other sums, and authorization, to, and make any suitable arrangements with, any
Lender, any such Affiliate of any Lender or participant for effectuation
thereof upon the occurrence and during the continuance of an Event of Default,
and each Borrower hereby irrevocably appoints the Administrative Agent as its
attorney to collect any and all such deposits or other sums to the extent any
such payment is not made to the Administrative Agent or any Lender by such
Lender, Affiliate or participant.
SECTION 8.2 Continued Priority of Security Interest.
(a) The Security Interest granted by each Borrower shall at all
times be valid, perfected and enforceable against such Borrower and all third
parties in accordance with the terms
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of this Agreement, as security for the Secured Obligations, and the Collateral
shall not at any time be subject to any Liens that are prior to, on a parity
with or junior to the Security Interest, other than Permitted Liens.
(b) Each Borrower shall, at its sole cost and expense, take all
action that may be necessary, or that the Administrative Agent may reasonably
request, so as at all times to maintain the validity, perfection,
enforceability and rank of the Security Interest in the Collateral in
conformity with the requirements of SECTION 8.2(A), or to enable the
Administrative Agent and the Lenders to exercise or enforce their rights
hereunder (subject to Permitted Liens), including, but not limited to:
(i) paying all taxes, assessments and other claims
lawfully levied or assessed on any of the Collateral, except to the
extent that such taxes, assessments and other claims constitute
Permitted Liens,
(ii) obtaining, after the Agreement Date, landlords',
mortgagees', bailees', warehousemen's or processors' releases,
subordinations or waivers, and using all reasonable efforts to obtain
mechanics' releases, subordinations or waivers,
(iii) delivering to the Administrative Agent, for the
benefit of the Lenders, endorsed or accompanied by such instruments of
assignment as the Administrative Agent may reasonably specify, and
stamping or marking, in such manner as the Administrative Agent may
reasonably specify, any and all chattel paper, instruments, letters
and advices of guaranty and documents evidencing or forming a part of
the Collateral, and
(iv) executing and delivering financing statements,
pledges, designations, hypothecations, notices and assignments in each
case in form and substance satisfactory to the Administrative Agent in
its reasonable judgment relating to the creation, validity,
perfection, maintenance or continuation of the Security Interest under
the Uniform Commercial Code or other Applicable Law.
(c) The Administrative Agent is hereby authorized to file one or
more financing or continuation statements or amendments thereto without the
signature of or in the name of a Borrower for any purpose described in SECTION
8.2(B). The Administrative Agent will give the relevant Borrower notice of the
filing of any such statements or amendments, which notice shall specify the
locations where such statements or amendments were filed. A carbon,
photographic, xerographic or other reproduction of this Agreement or of any of
the Security Documents or of any financing statement filed in connection with
this Agreement is sufficient as a financing statement.
(d) Each Borrower shall mark its books and records as directed by
the Administrative Agent and as may be necessary or appropriate to evidence,
protect and perfect the Security Interest and shall cause its financial
statements to reflect the Security Interest.
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ARTICLE 9
COLLATERAL COVENANTS
Each Borrower covenants and agrees that such Borrower will duly and
punctually pay the principal of, and interest on, and all other amounts payable
with respect to, the Loans and all other Secured Obligations and until the
Revolving Credit Facility and Acquisition Facility have been terminated and all
the Secured Obligations have been paid in full, unless the Required Lenders
shall otherwise consent in the manner provided in SECTION 16.11:
SECTION 9.1 Verification and Notification.
(a) The Administrative Agent shall have the right at any time
when an Event of Default exists, with or without notice, (i) in the name of the
Administrative Agent, the Lenders or in the name of a Borrower, to verify the
validity, amount or any other matter relating to any Receivables by mail,
telephone, telegraph or otherwise and (ii) during customary business hours, to
review, audit and make extracts from all records and files related to any of
the Receivables.
(b) At any time when an Event of Default exists, the
Administrative Agent shall have the right, from time to time, with or without
notice, to notify the Account Debtors or other obligors under any Receivables
of the assignment of such Receivables to the Administrative Agent, for the
benefit of the Lenders, and to direct such Account Debtor or obligor to make
payment of all amounts due or to become due thereunder directly to the
Administrative Agent, and, upon such notification and at the expense of the
Borrowers, to enforce collection of any such Receivables and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same
extent as the relevant Borrower might have done.
SECTION 9.2 Disputes, Returns and Adjustments.
(a) In the event any amounts due and owing under any Receivable
for an amount in excess of $200,000 are in dispute between the Account Debtor
and a Borrower, such Borrower shall provide the Administrative Agent with
prompt written notice thereof.
(b) Each Borrower shall notify the Administrative Agent promptly
of all returns and credits in excess of $200,000 in respect of any Receivable
(except Receivables temporarily credited in the ordinary course of business and
reissued in a corrected amount), which notice shall specify the Receivable
affected.
(c) Each Borrower may, in the ordinary course of business unless
a Default or an Event of Default has occurred and is continuing, grant any
extension of time for payment of any Receivable or compromise, compound or
settle the same for less than the full amount thereof, or release wholly or
partly any Person liable for the payment thereof, or allow any credit or
discount whatsoever therein; PROVIDED that (i) no such action results in the
reduction of more than
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$100,000 in the amount payable with respect to any Receivable or of more than
$400,000 with respect to all Receivables in any Fiscal Year (in each case,
excluding the allowance of credits or discounts generally available to Account
Debtors in the ordinary course of the relevant Borrower's business), and (ii)
the Administrative Agent is promptly notified of the amount of such adjustments
and the Receivable(s) affected thereby.
SECTION 9.3 Invoices.
(a) No Borrower will use any invoices other than invoices in the
names of the Borrowers or names used by the Borrowers and listed on SCHEDULE
7.1(DD) without giving the Administrative Agent 30 days prior notice of the
intended use of a different form of invoice together with a copy of such
different form.
(b) Upon the request of the Administrative Agent made at any time
when a Default or Event of Default exists, each Borrower shall deliver to the
Administrative Agent, at the Borrowers' expense, copies of customers' invoices
or the equivalent, original shipping and delivery receipts or other proof of
delivery, customers' statements, customer address lists, the original copy of
all documents, including, without limitation, repayment histories and present
status reports, relating to Receivables and such other documents and
information relating to the Receivables as the Administrative Agent shall
specify.
SECTION 9.4 Delivery of Instruments. In the event any Receivable is at
any time evidenced by a promissory note, trade acceptance or any other
instrument for the payment of money, the relevant Borrower will promptly upon
request of the Administrative Agent deliver such instrument to the
Administrative Agent.
SECTION 9.5 Sales of Inventory. All sales of Inventory will be made in
compliance in all material respects with all requirements of Applicable Law.
SECTION 9.6 Ownership and Defense of Title.
(a) Except for Permitted Liens, a Borrower shall at all times be
the sole owner or lessee of each and every item of Collateral and shall not
create any lien on, or sell, lease, exchange, assign, transfer, pledge,
hypothecate, grant a security interest or security title in or to or otherwise
dispose of, any of the Collateral or any interest therein, except for sales of
Inventory in the ordinary course of business, for cash or on open account or on
terms of payment ordinarily extended to its customers, sales of property that
is obsolete, worn out or no longer useful in the Borrowers' businesses, and
except for dispositions contemplated pursuant to SECTION 12.7 or that are
otherwise expressly permitted under this Agreement. The inclusion of "proceeds"
of the Collateral under the Security Interest shall not be deemed a consent by
the Administrative Agent or the Lenders to any other sale or other disposition
of any Collateral.
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(b) Each Borrower shall defend its title or leasehold interest in
and to, and the Security Interest in, the Collateral against the claims and
demands of all Persons.
SECTION 9.7 Insurance.
(a) The Borrowers shall at all times maintain insurance on the
Inventory and Equipment against loss or damage by fire, theft (excluding theft
by employees), burglary, pilferage, loss in transit and such other hazards as a
prudent Person similarly situated would maintain coverage against, in amounts
not to exceed those obtainable at commercially reasonable rates and under
policies issued by insurers acceptable to the Administrative Agent in the
exercise of its reasonable judgment. All premiums on such insurance shall be
paid by the Borrowers and copies of the policies delivered to the
Administrative Agent at its request. The Borrowers will not use or permit the
Inventory or Equipment to be used in any manner which might render inapplicable
any insurance coverage.
(b) All insurance policies required under SECTION 9.7(A) shall
name the Administrative Agent, for the benefit of the Lenders, as an additional
insured and shall contain loss payable clauses in the form submitted to the
Borrowers by the Administrative Agent, or otherwise in form and substance
satisfactory to the Administrative Agent, naming the Administrative Agent, for
the benefit of the Lenders, as loss payee, as its interests may appear, and
providing that
(i) all proceeds thereunder shall be payable to the
Administrative Agent, for the benefit of the Lenders,
(ii) no such insurance shall be affected by any act or
neglect of the insurer or owner of the property described in such
policy, and
(iii) such policy and loss payable clauses may be
cancelled, amended or terminated only upon at least 10 days' prior
written notice given to the Administrative Agent.
(c) Any proceeds of insurance referred to in this SECTION 9.7
which are paid to the Administrative Agent, for the account of the Lenders,
shall be, at the option of the Required Lenders in their sole discretion,
either (i) applied to replace the damaged or destroyed property, or (ii)
applied to the payment or prepayment of the Secured Obligations, PROVIDED that
if no Default or Event of Default exists, insurance proceeds in respect of any
loss having a value, as adjusted, not greater than $100,000 shall be released
to the applicable Borrower to be applied to the repair, restoration or
replacement of the damaged property, subject to such reasonable conditions or
controls as the Administrative Agent may specify.
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SECTION 9.8 Location of Offices and Collateral.
(a) No Borrower will change the location of its chief executive
office or the place where it keeps its books and records relating to the
Collateral or change its name, its identity or corporate structure without
giving the Administrative Agent 60 days' prior written notice thereof.
(b) All Inventory, other than Inventory in transit to any such
location, will at all times be kept by a Borrower at the locations set forth in
SCHEDULE 7.1(U), and shall not, without the prior written consent of the
Administrative Agent, be removed therefrom except pursuant to sales of
Inventory permitted under SECTION 9.7(A).
(c) If any Inventory is in the possession or control of any of a
Borrower's agents or processors, such Borrower shall notify such agents or
processors of the Security Interest (and shall promptly provide copies of any
such notice to the Administrative Agent and the Lenders) and, upon the
occurrence of an Event of Default, shall instruct them (and cause them to
acknowledge such instruction) to hold all such Inventory for the account of the
account of the Lenders, subject to the instructions of the Administrative
Agent.
(d) After the Effective Date, the Borrowers will not store or
otherwise locate any Collateral (other than Inventory) having an aggregate fair
market value of more than [$700,000] at the leased facility located at 255 N.W.
25th Street, Miami, Florida 33127, unless and until a new landlord waiver has
been executed and delivered by the lessor of such facility, in form and
substance satisfactory to the Administrative Agent.
SECTION 9.9 Records Relating to Collateral.
(a) Each Borrower will at all times
(i) keep complete and accurate records of Inventory on a
basis consistent with past practices of such Borrower so as to permit
comparison of Inventory records relating to different time periods,
itemizing and describing the kind, type and quantity of Inventory and
the Borrower's cost thereof and a current price list for such
Inventory, and
(ii) keep complete and accurate records of all other
Collateral.
(b) Each Borrower will prepare a physical listing of all
Inventory, wherever located, at least annually.
SECTION 9.10 Inspection. The Administrative Agent and each Lender (by
any of their officers, employees or agents) shall have the right, to the extent
that the exercise of such right shall be within the control of a Borrower, at
any time or times to:
(a) (i) Visit the properties of any Borrower or Subsidiary,
inspect the Collateral and the other assets of each Borrower and its
Subsidiaries and inspect and make extracts from the
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books and records of each Borrower and its Subsidiaries, and (ii) verify the
amount, quantity, value and condition of, or any other matter relating to, any
of the Collateral (other than Receivables) and in this connection to review,
audit and make extracts from all records and files related to any of the
Collateral, including but not limited to management letters prepared by
independent accountants, all during customary business hours at such premises
and after reasonable efforts to notify the Borrowers' Representative in advance
of such visit. The Lenders shall to the extent reasonably practicable
coordinate their visits and inspections with those of the Administrative Agent
so as to minimize the number of separate visits to Borrowers' premises.
(b) Discuss each Borrower's and its Subsidiaries' business,
assets, liabilities, financial condition, results of operations and business
prospects, insofar as the same are reasonably related to the rights of the
Administrative Agent or the Lenders hereunder or under any of the Loan
Documents, with each Borrower's and its Subsidiaries' principal officers and
independent accountants, and, at any time when a Default or Event of Default
exists, with any other Person (provided that the Borrowers' acknowledgment of
such right is not intended to and does not constitute a waiver or release by
the Borrowers (or any of them) of the Administrative Agent or any Lender of or
from any liability such Person may have to a Borrower arising out of improper
disclosure of confidential information).
Each Borrower will deliver to the Administrative Agent, for the benefit of the
Lenders, any instrument necessary for it to obtain records from any service
bureau maintaining records on behalf of such Borrower.
SECTION 9.11 Information and Reports.
(a) Schedule of Receivables. The Borrowers shall deliver to the
Administrative Agent on or before the Effective Date and from time to time
thereafter as requested by the Administrative Agent a Schedule of Receivables
which
(i) shall be as of the last Business Day of the
immediately preceding accounting month,
(ii) shall be reconciled to the Borrowing Base
Certificate as of such last Business Day, and
(iii) shall set forth a detailed aged trial balance of all
its then existing Receivables, specifying the names, addresses and
balance due for each Account Debtor obligated on a Receivable so
listed.
(b) Schedule of Inventory. The Borrowers shall deliver to the
Administrative Agent on or before the Effective Date and from time to time
thereafter as requested by the Administrative Agent a Schedule of Inventory as
of the last Business Day of the immediately
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preceding accounting month of the Borrowers, itemizing and describing the kind,
type and quantity of Inventory, the Borrowers' cost thereof and the location
thereof.
(c) Borrowing Base Certificate. The Borrowers shall deliver to
the Administrative Agent not later than the 15th day of each calendar month (or
at such other intervals as the Administrative Agent may reasonably specify) a
Borrowing Base Certificate prepared as of the close of the last Business Day of
the immediately preceding accounting month (or other specified date).
(d) Notice of Diminution of Value. Each Borrower shall give
prompt notice to the Administrative Agent of any matter or event which has
resulted in, or may result in, the diminution in excess of $500,000 in the
value of any of its Collateral, except for any such diminution in the value of
any Receivables or Inventory in the ordinary course of business which has been
appropriately reserved against, as reflected in financial statements previously
delivered to the Administrative Agent and the Lenders pursuant to ARTICLE 11.
(e) Additional Information. The Borrowers will also furnish to
the Administrative Agent and each Lender such other information with respect to
the Collateral as the Administrative Agent or any Lender may from time to time
reasonably request and that the Borrowers can obtain without unreasonable
expense.
SECTION 9.12 Power of Attorney. Each Borrower hereby appoints the
Administrative Agent as its attorney in fact, with the power if and when an
Event of Default exists, to endorse the name of such Borrower on any checks,
notes, acceptances, money orders, drafts or other forms of payment or security
that may come into the Administrative Agent's or any Lender's possession, and
if and when an Event of Default exists, to sign the name of such Borrower on
any invoice or bill of lading relating to any Receivable, Inventory or other
Collateral, on any drafts against customers related to letters of credit, on
schedules and assignments of Receivables furnished to the Administrative Agent
or any Lender by the Borrower, on notices of assignment, financing statements
and other public records relating to the perfection or priority of the Security
Interest, verifications of account and notices to or from customers.
SECTION 9.13 Additional Real Estate and Leases.
(a) Promptly upon a Borrower's acquisition after the Effective
Date of any fee interest or material leasehold interest in any Real Estate,
such Borrower shall deliver to the Administrative Agent, at the Administrative
Agent's request, for the benefit of itself as Administrative Agent and the
Lenders, an executed Mortgage in form and substance satisfactory to the
Administrative Agent, conveying to the Administrative Agent, for the benefit of
itself and the Lenders, a first priority Lien on such Real Estate, subject only
to such prior Liens as the Administrative Agent shall consent to in writing. If
requested by the Administrative Agent, such Borrower shall also deliver to the
Administrative Agent at the Borrowers' expense a mortgagee title insurance
policy in favor of the Administrative Agent and the Lenders insuring such
Mortgage to create and
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convey such Lien, subject only to such exceptions as are consented to by the
Administrative Agent (such consent not be unreasonably withheld) and shall
deliver to the Administrative Agent, at the Administrative Agent's request, the
other items set forth in SECTION 6.1(C) (10) through (13) with respect to such
Real Estate, all in form and substance satisfactory to the Administrative
Agent.
(b) In addition to the Borrowers' obligations pursuant to SECTION
8.2, promptly upon a Borrower's entry into any lease of Real Estate (other than
a material lease conveying an interest in Real Estate, which shall be subject
to the provisions of subsection (a) above), such Borrower shall, at the request
of the Administrative Agent, collaterally assign to the Administrative Agent,
for the benefit of itself and the Lenders, such Borrower's interest in such
lease, in form and substance satisfactory to the Administrative Agent in its
reasonable judgment.
SECTION 9.14 Assignment of Claims Act. Upon the request of the
Administrative Agent made at any time when government contracts are material to
a Borrower's business, such Borrower shall execute any documents or instruments
and shall take such steps or actions reasonably required by the Administrative
Agent so that all monies due or to become due under any contract with the
United States of America, the District of Columbia or any state, county,
municipality or other domestic or foreign governmental entity, or any
department, agency or instrumentality thereof, will be assigned to the
Administrative Agent, for the benefit of itself and the Lenders, and notice
given thereof in accordance with the requirements of the Assignment of Claims
Act of 1940, as amended, or any other laws, rules or regulations relating to
the assignment of any such contract and monies due to or to become due.
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ARTICLE 10
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that the Borrowers will jointly and
severally, duly and punctually pay the principal of, and interest on, and all
other amounts payable with respect to, the Loans and all other Secured
Obligations in accordance with the terms of the Loan Documents and that until
the Revolving Credit Facility and the Acquisition Facility have been terminated
and all the Secured Obligations have been paid in full, unless the Required
Lenders shall otherwise consent in the manner provided for in SECTION 16.11,
each Borrower will, and will cause each of its Subsidiaries to:
SECTION 10.1 Preservation of Corporate Existence and Similar Matters.
Preserve and maintain its corporate or other legal existence, rights,
franchises, licenses and privileges in the jurisdiction of its incorporation or
organization and qualify and, except to the extent its failure to do so could
not reasonably be expected to have a Materially Adverse Effect, remain
qualified as a foreign corporation or other entity and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization.
SECTION 10.2 Compliance with Applicable Law. Comply in all material
respects with Applicable Law relating to such Borrower or such Subsidiary,
except to the extent being contested in good faith by appropriate proceedings
and for which reserves in respect of such Borrower's or such Subsidiary's
reasonably anticipated liability have been appropriately established.
SECTION 10.3 Maintenance of Property. In addition to, and not in
derogation of, the requirements of Section 9.6 and of the Security Documents,
(a) protect and preserve all properties material to its business,
including Copyrights, Patents, and Trademarks, and maintain in good repair,
working order and condition in all material respects, with reasonable allowance
for wear and tear, all tangible properties, and
(b) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such properties
necessary for the conduct of its business, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
SECTION 10.4 Conduct of Business. At all times carry on its business
in an appropriate manner and engage only in the business described in SECTION
7.1(F).
SECTION 10.5 Insurance. Maintain, in addition to the coverage required
by SECTION 9.7 and the Security Documents, insurance with responsible insurance
companies against such risks and in such amounts as is customarily maintained
by similar businesses or as may be required by
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Applicable Law, and from time to time (but not more often than semi-annually
and whenever an Event of Default exists) deliver to the Administrative Agent or
any Lender upon its request a detailed list of the insurance then in effect,
stating the names of the insurance companies, the amounts and rates of the
insurance, the dates of the expiration thereof and the properties and risks
covered thereby.
SECTION 10.6 Payment of Taxes and Claims. Pay or discharge when due
(a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any properties belonging
to it, except that real property ad valorem taxes shall be deemed to have been
so paid or discharged if the same are paid before they become delinquent, and
(b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and rentals which, if
unpaid, might become a Lien on any properties of such Borrower;
Except that this SECTION 10.6 shall not require the payment or
discharge of any such tax, assessment, charge, levy or claim which is being
contested in good faith by appropriate proceedings and for which reserves in
respect of reasonably anticipated liability have been appropriately
established.
SECTION 10.7 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete), as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP.
SECTION 10.8 Use of Proceeds.
(a) Use the proceeds of
(i) the initial Revolving Credit Loan and the Term Loans
to pay amounts indicated on SCHEDULE 10.8 to the Persons indicated
thereon,
(ii) the Acquisition Loans to pay in part the purchase
price of the related Permitted Acquisitions, and
(iii) all Swingline Loans and all Revolving Credit Loans
made after the Effective Date only for working capital and general
business purposes; and
(b) not use any part of such proceeds to purchase or, to carry or
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) or, in any event, for any purpose which would
involve a violation of such Regulation U or of Regulation T or X of such
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Board of Governors, or for any purpose prohibited by law or by the terms and
conditions of this Agreement.
SECTION 10.9 Hazardous Waste and Substances; Environmental
Requirements.
(a) In addition to, and not in derogation of, the requirements of
SECTION 10.2 and of the Security Documents, comply in all material respects
with Environmental Laws and Applicable Laws relating to occupational health and
safety (except for instances of noncompliance that are being contested in good
faith by appropriate proceedings if reserves in respect of such Borrower's or
such Subsidiary's reasonably anticipated liability therefor have been
appropriately established), promptly notify the Administrative Agent of its
receipt of any written notice of a violation of any such Environmental Laws or
other such Applicable Laws and indemnify and hold the Administrative Agent and
the Lenders harmless from all loss, cost, damage, liability, claim and expense
incurred by or imposed upon the Administrative Agent or any Lender on account
of such Borrower's failure to perform its obligations under this SECTION 10.9.
(b) Whenever a Borrower gives notice to the Administrative Agent
pursuant to this SECTION 10.9 or otherwise with respect to a matter that
reasonably could be expected to result in material liability to such Borrower
or any Subsidiary under any Environmental Law, the Borrowers shall, at the
Administrative Agent's request and the Borrowers' expense (i) cause an
independent environmental engineer acceptable to the Administrative Agent in
its reasonable judgment to conduct an assessment, including tests where
necessary, of the site where the noncompliance or alleged noncompliance with
Environmental Laws has occurred and prepare and deliver to the Administrative
Agent a report setting forth the results of such assessment, a proposed plan to
bring such Borrower (or such Subsidiary) into compliance with such
Environmental Laws (if such assessment indicates noncompliance) and an estimate
of the costs thereof, and (ii) provide to the Administrative Agent a
supplemental report of such engineer whenever the scope of the noncompliance,
or the response thereto or the estimated costs thereof, shall materially
adversely change.
SECTION 10.10 Year 2000. Promptly notify the Administrative Agent in
the event such Borrower discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
Compliant.
SECTION 10.11 Execution of Subsidiary Guaranties; Additional
Borrowers. Upon the request of the Administrative Agent or any Lender, cause
any domestic (United States) Subsidiary which is not a Borrower and has not
entered into a Guaranty and a Guarantor Security Agreement to execute and
deliver to the Administrative Agent such joinder agreement with respect to this
Agreement or such a Guaranty and a Guarantor Security Agreement and, in either
case, appropriate Financing Statements all in form and substance satisfactory
to the Administrative Agent and the Required Lenders in their reasonable
judgment.
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ARTICLE 11
INFORMATION
Until the Revolving Credit Facility and the Acquisition Facility have
been terminated and all the Secured Obligations have been paid in full, unless
the Required Lenders shall otherwise consent in the manner set forth in SECTION
16.11, the Borrowers will furnish to the Administrative Agent and to each
Lender at its offices then designated for notices pursuant to SECTION 16.1, the
statements, reports, certificates, and other information provided for in this
ARTICLE 11. All written information, reports, statements and other papers and
data furnished to the Administrative Agent or any Lender by or at the request
of a Borrower, whether pursuant to this ARTICLE 11 or any other provision of
this Agreement or of any other Loan Document, shall be, at the time the same is
so furnished, complete and correct in all material respects to the extent
necessary to give the Administrative Agent and the Lenders true and accurate
knowledge of the subject matter. Specifically, the Borrowers will so furnish:
SECTION 11.1 Financial Statements.
(a) Audited Year-End Statements. As soon as available, but in any
event within 105 days after the end of each Fiscal Year, copies of the
consolidating and consolidated balance sheets of WinsLoew and its Consolidated
Subsidiaries as at the end of such Fiscal Year and the related consolidating
and consolidated statements of income, shareholders' equity and cash flows for
such Fiscal Year, in each case setting forth in comparative form the figures
for the previous Fiscal Year, reported on, as to such consolidated statements,
without qualification, by independent certified public accountants of
nationally recognized standing selected by WinsLoew; and
(b) Monthly Financial Statements. As soon as available after the
end of each month, but in any event within 30 days after the end of each
accounting month (or within 45 days after the end of each accounting month that
is the last month in a Fiscal Quarter), copies of the unaudited consolidating
and consolidated balance sheets of WinsLoew and its Consolidated Subsidiaries
as at the end of such month and the related unaudited consolidating and
consolidated statements of income and cash flows for WinsLoew and its
Consolidated Subsidiaries for such month, for the Fiscal Quarter then ended (if
such month is the last month of a Fiscal Quarter) and for the portion of the
Fiscal Year through such month, certified by the Financial Officer as
presenting fairly the financial condition and results of operations of WinsLoew
and its Consolidated Subsidiaries (subject to normal year-end audit
adjustments) for the applicable period(s);
all such financial statements to be complete and correct in all material
respects and prepared in accordance with GAAP (except, with respect to interim
financial statements, for the omission of notes) applied consistently
throughout the periods reflected therein.
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SECTION 11.2 [Reserved]
SECTION 11.3 Officer's Certificate. At the time that the Borrowers
furnish the financial statements pursuant to Section 11.1(b) for any accounting
month that is the last month of a Fiscal Quarter, a certificate of the
Financial Officer in the form attached hereto as Exhibit G
(a) setting forth as at the end of such Fiscal Quarter or Fiscal
Year, as the case may be, the calculations required to establish whether or not
the Borrowers were in compliance with the requirements of Sections 12.1, 12.2,
12.5, 12.10 and 12.11, as at the end of each respective period and the
calculations necessary to determine the Applicable Margin,
(b) stating that the information on the schedules to this
Agreement (other than those that refer specifically to a single date on or
prior to the Effective Date) is complete and accurate as of the date of such
certificate or, if such is not the case, attaching to such certificate updated
schedules in accordance with the provisions of Section 11.7, and
(c) stating that, based on a reasonably diligent examination, no
Default or Event of Default exists, or, if such is not the case, specifying
such Default or Event of Default and its nature, when it occurred, whether it
is continuing and the steps being taken by the Borrowers with respect to such
Default or Event of Default.
SECTION 11.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to a Borrower or its Board of Directors by its independent public
accountants, including, without limitation, any management report.
(b) As soon as practicable and, in any event, when made available
to the holders of the Senior Subordinated Notes, copies of all financial
statements and reports that a Borrower shall send to its shareholders generally
and of all registration statements and all regular or periodic reports which a
Borrower shall file with the Securities and Exchange Commission or any
successor commission.
(c) From time to time and as soon as reasonably practicable
following each request, such forecasts, data, certificates, reports,
statements, opinions of counsel, documents or further information regarding the
business, assets, liabilities, financial condition, results of operations or
business prospects of any Borrower or Subsidiary as the Administrative Agent or
any Lender may reasonably request and that a Borrower has or (except in the
case of legal opinions relating to the perfection or priority of the Security
Interest) without unreasonable expense can obtain. The rights of the
Administrative Agent and the Lenders under this Section 11.4 are in addition to
and not in derogation of their rights under any other provision of this
Agreement or of any other Loan Document.
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(d) If requested by the Administrative Agent or any Lender, the
Borrowers will furnish to the Administrative Agent and the Lenders statements
in conformity with the requirements of Federal Reserve Form U-1 or G-3 referred
to in Regulation U of the Board of Governors of the Federal Reserve System.
SECTION 11.5 Notice of Litigation and Other Matters. Prompt notice of:
(a) the commencement, to the extent a Borrower is aware of the
same, of all proceedings and investigations by or before any governmental or
nongovernmental body and all actions and proceedings in any court or before any
arbitrator against or in any other way relating to or affecting the Borrowers,
any of their respective Subsidiaries or any of the Borrowers' or any of their
respective Subsidiaries' properties, assets or businesses, which might, singly
or in the aggregate, result in the occurrence of a Default or an Event of
Default, or have a Materially Adverse Effect,
(b) any amendment of the articles of incorporation or by-laws or
other constituent documents of a Borrower or any of its Subsidiaries and any
change in the executive officers of WinsLoew,
(c) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of a Borrower or any of
its Subsidiaries which has had or could reasonably be expected to have, singly
or in the aggregate, a Materially Adverse Effect, and
(d) any Default or Event of Default or any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default by a Borrower or any of its
Subsidiaries under any material agreement (other than this Agreement) to which
such Borrower or any of its Subsidiaries is a party or by which such Borrower,
any of its Subsidiaries or any of such Borrower's or any of its Subsidiaries'
properties may be bound.
SECTION 11.6 ERISA. As soon as possible and in any event within 30
days after a Borrower knows, or has reason to know, that:
(a) any ERISA Event with respect to a Benefit Plan has occurred
or will occur, or
(b) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Benefit Plans is equal to an amount in excess of $0, or
(c) a Borrower or any Subsidiary is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Benefit Plan required by reason of the Borrower's or such Subsidiary's complete
or partial withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan, a certificate of the Financial Officer setting forth the
details of such event and the action which is proposed to be taken with respect
thereto,
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together with any notice or filing which may be required by the PBGC or other
agency of the United States government with respect to such event.
SECTION 11.7 Revisions or Updates to Schedules. Should any of the
information or disclosures provided on any of the Schedules originally attached
hereto become outdated or incorrect in any material respect, as part of the
quarterly officer's certificate required pursuant to Section 11.3(b), such
revisions or updates to such Schedule(s) as may be necessary or appropriate to
update or correct such Schedule(s), PROVIDED that no such revisions or updates
to any Schedule(s) shall be deemed to have amended, modified or superseded such
Schedule(s) as attached hereto immediately prior to the submission of such
revised or updated Schedule(s), or to have cured any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule(s), unless and until the Required Lenders in their sole and absolute
discretion, shall have accepted in writing such revisions or updates to such
Schedule(s).
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ARTICLE 12
NEGATIVE COVENANTS
Until the Revolving Credit Facility and the Acquisition Facility have
been terminated and all the Secured Obligations have been paid in full, unless
the Required Lenders shall otherwise consent in the manner set forth in SECTION
16.11, the Borrowers will not directly or indirectly and, in the case of
SECTIONS 12.2 through 12.13, will not permit Subsidiaries to:
SECTION 12.1 Financial Ratios.
(a) Minimum Fixed Charge Coverage. Permit the Fixed Charge
Coverage Ratio for each period of four consecutive Fiscal Quarters ending on
and after December 31, 1999, to be less than 1.20 to 1.
(b) Consolidated Maximum Total Funded Debt to EBITDA Ratio.
Permit the Total Funded Debt to EBITDA Ratio for each period of four
consecutive Fiscal Quarters ending on and after December 31, 1999 and during a
Fiscal Year listed below to be greater than the ratio indicated below opposite
such Fiscal Year:
<TABLE>
<CAPTION>
Fiscal Year Total Funded Debt to EBITDA Ratio
----------- ---------------------------------
<S> <C>
1999 5.75 to 1
2000 5.50 to 1
2001 5.25 to 1
2002 4.75 to 1
2003 4.25 to 1
2004 and thereafter 4.00 to 1
</TABLE>
PROVIDED, that such Ratio for the four-quarter period ending with the first
Fiscal Quarter of Fiscal Year 2001 shall not be greater than 5.75 to 1 and for
the four-quarter period ending with the first Fiscal Quarter of Fiscal Year
2002 shall not be greater than 5.50 to 1.
(c) Minimum Interest Coverage Ratio. Permit the Interest Coverage
Ratio for each period of four consecutive Fiscal Quarters ending on and after
December 31, 1999 and during a Fiscal Year listed below to be less than the
ratio indicated below opposite such Fiscal Year:
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<TABLE>
<CAPTION>
Fiscal Year Interest Coverage Ratio
----------- -----------------------
<S> <C>
December 31, 1999 1.40 to 1
2000 1.60 to 1
2001 1.75 to 1
2002 1.95 to 1
2003 and thereafter 2.00 to 1
</TABLE>
SECTION 12.2 Debt. Create, assume, or otherwise become or remain
obligated in respect of, or permit or suffer to exist or to be created, assumed
or incurred or to be outstanding any Debt, except that this SECTION 12.2 shall
not apply to:
(a) Debt of the Loan Parties represented by the Loans and the
Notes,
(b) Debt reflected on SCHEDULE 7.1(j), excluding any such Debt
that is to be paid in full on the Effective Date,
(c) Permitted Purchase Money Debt,
(d) Subordinated Debt,
(e) Interest Rate Protection Agreements,
(f) unsecured Debt of any Loan Party owing to another Loan Party,
provided the repayment thereof is subordinated to the prior payment in full of
the Secured Obligations and such Debt is evidenced by a promissory note that is
delivered to the Administrative Agent, at it request, as Collateral;
(g) Permitted Investments; and
(h) other unsecured Debt in an aggregate amount as to WinsLoew
and its Subsidiaries outstanding at any time in an amount not to exceed
$5,000,000.
SECTION 12.3 Guaranties. Become or remain liable with respect to any
Guaranty of any obligation of any other Person, except that this SECTION 12.3
shall not apply to any Borrower's or Subsidiary's obligation to indemnify its
officers and directors to the fullest extent permitted by the corporation law
of the jurisdiction of such Person's organization.
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SECTION 12.4 Investments. Other than in connection with a Permitted
Acquisition, acquire, after the Agreement Date, any Business Unit or Investment
or, after such date, maintain any Investment other than Permitted Investments.
SECTION 12.5 Capital Expenditures. Make or incur any Capital
Expenditures (other than Financed Capex) in any Fiscal Year in an amount
greater than that set forth below opposite such Fiscal Year:
<TABLE>
<CAPTION>
Fiscal Year Amount
----------- ------
<S> <C>
1999 $2,000,000
2000 and thereafter $3,000,000
</TABLE>
, plus additional Capital Expenditures in Fiscal Years 1999 and 2000 in an
aggregate amount not greater than $4,000,000 made by WPI to purchase the
manufacturing facility leased by Texacraft on the Agreement Date and an
additional facility in Haleyville, Alabama located across the street from
Winston's existing Haleyville facility (such real property purchases, the "WPI
Purchases").
SECTION 12.6 Restricted Distributions and Payments, Etc. Declare or
make any Restricted Distribution or Restricted Payment, except that this
SECTION 12.6 shall not apply to (1) repurchases of WinsLoew Capital Stock from
former employees of WinsLoew or its Subsidiaries or independent sales
representatives in an aggregate amount not to exceed $1,000,000 in any 12-month
period, (2) provided that both immediately before and after making any such
payment no Default or Event of Default exists, regularly scheduled payments of
principal and interest on the Senior Subordinated Notes made in accordance with
the provisions (including the subordination provisions) of the Senior Note
Indenture, (3) fees paid to outside directors of WinsLoew and (4) provided that
both immediately before and after making any such payment no Default or Event
of Default exists, fees paid to Trivest II, Inc. in accordance with the
provisions of SECTION 12.8.
SECTION 12.7 Merger, Consolidation and Sale of Assets. Other than in
connection with a Permitted Acquisition, merge or consolidate with any other
Person or sell, lease or transfer or otherwise dispose of any material assets
to any Person other than sales of Inventory in the ordinary course of business,
except that this SECTION 12.7 shall not apply to (i) the sale by WinsLoew of
substantially all the assets (subject to substantially all the liabilities) of
the Southern Wood business, provided that the Net Proceeds of such Asset
Disposition are applied in accordance with the provisions of SECTION 5.11, (ii)
sales and discounting of accounts for collection in the ordinary course of the
Borrowers' business, consistent with their past practices, (iii) leases of Real
Estate entered into by a Borrower or Subsidiary as lessor that do not interfere
with such Borrower's or Subsidiary's operations, or (iv) any Asset Disposition
otherwise permitted hereunder.
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SECTION 12.8 Transactions with Affiliates. Effect any transaction with
any Affiliate on a basis less favorable to the Borrowers than would be the case
if such transaction had been effected with a Person not an Affiliate, except
that this SECTION 12.8 shall not apply to (i) (w) reimbursement of fees and
expenses of the law department of Trivest II, Inc., (x) management fees paid to
Trivest II, Inc. in an amount not greater than $350,000 per annum (subject to
annual adjustment to reflect any increase in the Consumer Price Index for all
Urban Consumers or to reflect additional Acquisitions, in each case in
accordance with the provisions of the Trivest Management Agreement), (y)
transaction fees (including reimbursement of legal fees incurred by Trivest II,
Inc. and certain of its Affiliates in connection with such transactions) in
connection with the WinsLoew Merger and the Acquisition of Pompeii and
Pompeii-Mexico which do not exceed in the aggregate $3,400,000 or (z)
transaction or "incentive" fees payable in accordance with the terms of the
Trivest Management Agreement; (ii) other payments expressly permitted pursuant
to SECTION 12.6; and (iii) any transaction between Borrowers or between a
Borrower and a Subsidiary (whether or not a Loan Party) that is in the ordinary
course of business of such Borrower and consistent with its past business
practices.
SECTION 12.9 Liens. Create, assume or permit or suffer to exist or to
be created or assumed any Lien on any of the Collateral or its other assets,
other than Permitted Liens.
SECTION 12.10 Real Estate Leases. Enter into any real property lease
(other than leases by WPI, as lessor, to WinsLoew or any Subsidiary), including
a lease relating to the Real Estate occupied by a Borrower on the Effective
Date, if the aggregate annual rental expense under all such leases entered into
since the effective date would exceed $500,000, without the prior written
consent of the Administrative Agent, on behalf of the Lenders, which consent
shall not be unreasonably withheld.
SECTION 12.11 Benefit Plans. Permit any condition to exist in
connection with any Benefit Plan which might constitute grounds for the PBGC to
institute proceedings to have such Benefit Plan terminated or a trustee
appointed to administer such Benefit Plan, or any other condition, event or
transaction with respect to any Benefit Plan which could result in the
incurrence by a Borrower of any material liability, fine or penalty.
SECTION 12.12 Sales and Leasebacks. Enter into any arrangement with
any Person providing for a Borrower's leasing from such Person any real or
personal property which has been or is to be sold or transferred, directly or
indirectly, by such Borrower to such Person.
SECTION 12.13 Amendments of Other Agreements. Amend in any way (a) the
interest rate or principal amount or schedule of payments of principal and
interest with respect to any Debt (other than the Secured Obligations) other
than to reduce the interest rate or extend the schedule of payments with
respect thereto, provided that the Debt secured by the Permitted Liens
encumbering the Real Estate located in Liberty, North Carolina shall not be
amended, or (b) the Senior Note Indenture or (other than to reduce the interest
rate or extend the Schedule of payments with respect thereto) any other
documents governing Subordinated Debt outstanding in
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a principal amount as to any obligation of more than $1,000,000 or which, when
added to other outstanding Subordinated Debt (other than the Senior
Subordinated Notes) exceeds $2,500,000 in principal amount or (c) the
compensation provisions (other than to decrease the Borrowers' obligations
thereunder) of the Trivest Management Agreement.
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ARTICLE 13
DEFAULT
SECTION 13.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
(a) Default in Payment. The Borrowers shall default in any
payment of principal of or interest on any Loan or any Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrowers shall default in the
payment, as and when due of any Secured Obligation (other than as provided in
clause (a) above), and such default shall continue for a period of 10 days
after written notice thereof has been given to the Borrower by the
Administrative Agent.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by a Borrower under this Agreement or any Loan Document, or
any amendment hereto or thereto, shall at any time prove to have been incorrect
or misleading in any material respect when made.
(d) Default in Performance. The Borrowers shall default in the
performance or observance of any term, covenant, condition or agreement to be
performed by any Borrower, contained in
(i) ARTICLES 11 or 12, or SECTION 9.6, 9.7, 9.9, 9.10,
9.11, 10.1 (insofar as it requires the preservation of the corporate
existence of each Borrower), or 10.8, and the Administrative Agent
shall have delivered to the Borrowers written notice of such default,
or
(ii) this Agreement (other than as specifically provided
for otherwise in this SECTION 13.1) and such default shall continue
for a period of 30 days after written notice thereof has been given to
the Borrower by the Administrative Agent.
(e) Debt Cross-Default. (i) Failure of a Borrower or any of its
Subsidiaries to pay when due or within any applicable grace period any
principal or interest on any Debt (other than the Loans), or (ii) breach or
default of a Borrower or any of its Subsidiaries with respect to any Debt
(other than the Loans), if the effect of such failure to pay, default or breach
is to cause or to permit the holder or holders then to cause any Debt having an
individual principal amount in excess of $1,000,000 or having an aggregate
principal amount in excess of $2,500,000 to become or be declared due prior to
their stated maturity, whether or not such failure to pay, default or
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breach is waived by such holder or holders.
(f) Other Cross-Defaults. A Borrower or any of its Subsidiaries
shall default in the payment when due, or in the performance or observance, of
any obligation or condition of any agreement, contract or lease (other than
this Agreement, the other Loan Documents or any such agreement, contract or
lease relating to Indebtedness for money borrowed) if the existence of any such
defaults, singly or in the aggregate, could in the reasonable judgment of the
Required Lenders have a Materially Adverse Effect; PROVIDED, HOWEVER, that for
the purposes of this provision where such a default could result only in a
monetary loss, a Material Adverse Effect shall not be deemed to have occurred
unless the aggregate of such losses would exceed $2,000,000.
(g) Voluntary Bankruptcy Proceeding. A Borrower or any of its
Significant Subsidiaries shall
(i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect),
(ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a timely
and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself
or of a substantial part of its property, domestic or foreign,
(v) admit in writing its inability to pay its debts as
they become due,
(vi) make a general assignment for the benefit of
creditors, or
(vii) take any corporate action for the purpose of
authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against a Borrower or any of its Significant Subsidiaries in
any court of competent jurisdiction seeking
(i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts,
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(ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of a Borrower, any of its Significant
Subsidiaries or of all or any substantial part of the assets, domestic
or foreign, of a Borrower or any of its Significant Subsidiaries,
and such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive calendar days, or an order granting the relief requested in
such case or proceeding against a Borrower or any of its Significant
Subsidiaries (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(i) Loan Documents. Any event of default or "Event of Default"
under any other Loan Document shall occur.
(j) Failure of Agreements. A Borrower shall challenge the
validity and binding effect of any provision of any Loan
Document after delivery thereof hereunder or shall state in writing its
intention to make such a challenge, or this Agreement or any Security Document
after delivery thereof hereunder, shall for any reason (except to the extent
permitted by the terms hereof or thereof) cease to create a valid and perfected
first priority Lien (except for Permitted Liens) on, or security interest in,
any of the Collateral purported to be covered thereby in favor of the
Administrative Agent.
(k) Judgment. A final, unappealable judgment or order for the
payment of money in an amount that exceeds the uncontested insurance available
therefor by $100,000 or more shall be entered against a Borrower by any court
and such judgment or order shall continue undischarged or unstayed for 30 days.
(l) Attachment. A warrant or writ of attachment or execution or
similar process which exceeds $100,000 in value shall be issued against any
property of a Borrower and such warrant or process shall continue undischarged
or unstayed for 30 days.
(m) ERISA. Any ERISA Event shall occur.
(n) Qualified Audits. The independent certified public
accountants retained by the Borrowers shall refuse to deliver an opinion in
accordance with SECTION 11.1(a) with respect to the annual financial statements
of the Borrowers.
(o) Change of Control. Other than by reason of an IPO, Trivest
Investors shall cease to own, beneficially and of record, 51% of the
outstanding capital stock of WinsLoew or such ownership shall cease to vest in
it/them voting control of WinsLoew, or WinsLoew shall cease to own,
beneficially and of record, directly or indirectly, 100% of the outstanding
capital stock of each of the other Loan Parties, or such ownership shall cease
to vest in it voting control of each such Loan Party or a "Change of Control"
under and as defined in the Senior Note Indenture shall occur.
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SECTION 13.2 Remedies.
(a) Automatic Acceleration and Termination of Facilities. Upon
the occurrence of an Event of Default specified in SECTION 13.1(g) or (h), (i)
the principal of and the interest on the Loans and any Note at the time
outstanding, and all other amounts owed to the Administrative Agent or the
Lenders under this Agreement or any of the other Loan Documents and all other
Secured Obligations, shall thereupon become due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived, anything in this Agreement or any of the Loan Documents to
the contrary notwithstanding, and (ii) each Facility and the right of the
Borrowers to request Borrowings under this Agreement shall immediately
terminate.
(b) Other Remedies. If any Event of Default shall have occurred,
and during the continuance of any Event of Default, the Administrative Agent
may, and at the direction of the Required Lenders in their sole and absolute
discretion shall, do any of the following:
(i) declare the principal of and interest on the Loans
and any Note at the time outstanding, and all other amounts owed to
the Administrative Agent or the Lenders under this Agreement or any of
the other Loan Documents and all other Secured Obligations, to be
forthwith due and payable, whereupon the same shall immediately become
due and payable without presentment, demand, protest or other notice
of any kind, all of which are expressly waived, anything in this
Agreement or the Loan Documents to the contrary notwithstanding;
(ii) terminate any Facility and any other right of the
Borrowers to request Borrowings hereunder;
(iii) subject to the provisions of SECTION 9.2, notify, or
request the relevant Borrower to notify, in writing or otherwise, any
Account Debtor or obligor with respect to any one or more of the
Receivables to make payment to the Administrative Agent, for the
benefit of the Lenders, or any agent or designee of the Administrative
Agent, at such address as may be specified by the Administrative Agent
and if, notwithstanding the giving of any notice, any Account Debtor
or other such obligor shall make payments to a Borrower, such Borrower
shall hold all such payments it receives in trust for the
Administrative Agent, for the account of the Lenders, without
commingling the same with other funds or property of, or held by, such
Borrower, and shall deliver the same to the Administrative Agent or
any such agent or designee of the Administrative Agent immediately
upon receipt by such Borrower in the identical form received, together
with any necessary endorsements;
(iv) settle or adjust disputes and claims directly with
Account Debtors and other obligors on Receivables for amounts and on
terms which the Administrative Agent considers advisable and in all
such cases only the net amounts received by the Administrative Agent,
for the account of the Lenders, in payment of such amounts, after
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deductions of costs and attorneys' fees, shall constitute Collateral
and no Borrower shall have no further right to make any such
settlements or adjustments or to accept any returns of merchandise;
(v) enter upon any premises in which Inventory or
Equipment may be located and, without resistance or interference by
any Borrower, take physical possession of any or all thereof and
maintain such possession on such premises or move the same or any part
thereof to such other place or places as the Administrative Agent
shall choose, without being liable to any Borrower on account of any
loss, damage or depreciation that may occur as a result thereof, so
long as the Administrative Agent shall act reasonably and in good
faith;
(vi) require each Borrower to and each Borrower shall,
without charge to the Administrative Agent or any Lender, assemble the
Inventory and Equipment and maintain or deliver it into the possession
of the Administrative Agent or any agent or representative of the
Administrative Agent at such place or places as the Administrative
Agent may designate and as are reasonably convenient to both the
Administrative Agent and the Borrowers;
(vii) at the expense of the Borrowers, cause any of the
Inventory and Equipment to be placed in a public or field warehouse,
and the Administrative Agent shall not be liable to any Borrower on
account of any loss, damage or depreciation that may occur as a result
thereof, so long as the Administrative Agent shall act reasonably and
in good faith;
(viii) without notice, demand or other process, and without
payment of any rent or any other charge, enter any premises of any
Borrower and, without breach of the peace, until the Administrative
Agent, on behalf of the Lenders, completes the enforcement of its
rights in the Collateral, take possession of such premises or place
custodians in exclusive control thereof, remain on such premises and
use the same and any of such Borrower's Equipment, for the purpose of
(A) completing any work in process, preparing any Inventory for
disposition and disposing thereof, and (B) collecting any Receivable,
and the Administrative Agent for the benefit of the Lenders is hereby
granted a license or sublicense and all other rights as may be
necessary, appropriate or desirable to use the Intellectual Property
in connection with the foregoing (including, without limitation, the
right to utilize any logo or other distinctive symbol associated with
the Borrowers in connection with any advertising, promotion or
marketing undertaken by the Administrative Agent or any Lender, and
the rights of such Borrower under all licenses, sublicenses and
franchise agreements shall inure to the Administrative Agent for the
benefit of the Lenders (PROVIDED, HOWEVER, that any use of any
federally registered trademarks as to any goods shall be subject to
the control as to the quality of such goods of the owner of such
trademarks and the goodwill of the business symbolized thereby), and
PROVIDED FURTHER, that such grant of license, sublicense and other
rights in the
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Intellectual Property is not prohibited by any contractual
restrictions other than such as may have been entered into for the
purpose of evading this provision;
(ix) exercise any and all of its rights under any and all
of the Security Documents;
(x) apply any Collateral consisting of cash to the
payment of the Secured Obligations in any order in which the
Administrative Agent, on behalf of the Lenders, may elect or use such
cash in connection with the exercise of any of its other rights
hereunder or under any of the Security Documents; and
(xi) exercise all of the rights and remedies of a secured
party under the Uniform Commercial Code and under any other Applicable
Law, including, without limitation, the right, without notice except
as specified below and with or without taking possession thereof, to
sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any location chosen by the Administrative
Agent, for cash, on credit or for future delivery, and at such price
or prices and upon such other terms as the Administrative Agent may
deem commercially reasonable. Each Borrower agrees that, to the extent
notice of sale shall be required by law, at least 10 days' notice to
the Borrowers of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification, but notice given in any other reasonable manner or at
any other reasonable time shall constitute reasonable notification.
The Administrative Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
SECTION 13.3 Application of Proceeds. All proceeds from each sale of,
or other realization upon, all or any part of the Collateral following an Event
of Default shall be applied or paid over as provided in Section 5.10(g).
THE BORROWERS SHALL REMAIN LIABLE JOINTLY AND SEVERALLY AND WILL PAY, ON
DEMAND, ANY DEFICIENCY REMAINING IN RESPECT OF THE SECURED OBLIGATIONS,
TOGETHER WITH INTEREST THEREON AT A RATE PER ANNUM EQUAL TO THE HIGHEST RATE
THEN PAYABLE HEREUNDER ON SUCH SECURED OBLIGATIONS, WHICH INTEREST SHALL
CONSTITUTE PART OF THE SECURED OBLIGATIONS.
SECTION 13.4 Power of Attorney. In addition to the authorizations
granted to the Administrative Agent under SECTION 9.13 or under any other
provision of this Agreement or of any other Loan Document, during the
continuance of an Event of Default, each Borrower hereby irrevocably
designates, makes, constitutes and appoints the Administrative Agent (and all
Persons designated by the Administrative Agent from time to time) as such
Borrower's true and lawful attorney, and agent in fact, and the Administrative
Agent, or any agent of the Administrative Agent, may, without notice to any
Borrower, and at such time or times as the Administrative
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Agent or any such agent in its sole discretion may determine, in the
name of a Borrower, the Administrative Agent or the Lenders,
(a) demand payment of the Receivables,
(b) enforce payment of the Receivables by legal proceedings or
otherwise,
(c) exercise all of the relevant Borrower's rights and remedies
with respect to the collection of Receivables,
(d) settle, adjust, compromise, extend or renew any or all of the
Receivables,
(e) settle, adjust or compromise any legal proceedings brought to
collect the Receivables,
(f) discharge and release the Receivables or any of them,
(g) prepare, file and sign the name of the relevant Borrower on
any proof of claim in bankruptcy or any similar document against any Account
Debtor,
(h) prepare, file and sign the name of the relevant Borrower on
any notice of Lien, assignment or satisfaction of Lien, or similar document in
connection with any of the Collateral,
(i) endorse the name of the relevant Borrower upon any chattel
paper, document, instrument, notice, freight bill, bill of lading or similar
document or agreement relating to the Receivables, the Inventory or any other
Collateral,
(j) use the stationery of any Borrower and sign the name of the
relevant Borrower to verifications of the Receivables and on any notice to the
Account Debtors,
(k) open the Borrowers' mail,
(l) notify the post office authorities to change the address for
delivery of the Borrowers' mail to an address designated by the Administrative
Agent, and
(m) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Receivables, Inventory or other Collateral to which any Borrower has access.
SECTION 13.5 Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the
Administrative Agent and the Lenders under this Agreement, the Notes and each
of the Loan Documents shall be cumulative and not exclusive of any rights or
remedies which it or they would otherwise have. In exercising
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such rights and remedies the Administrative Agent and the Lenders may be
selective and no failure or delay by the Administrative Agent or any Lender in
exercising any right shall operate as a waiver of it, nor shall any single or
partial exercise of any power or right preclude its other or further exercise
or the exercise of any other power or right.
(b) Waiver of Marshalling. Each Borrower hereby waives any right
to require any marshalling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this ARTICLE 13
or elsewhere in this Agreement or in any of the Loan Documents shall be
construed as requiring or obligating the Administrative Agent, any Lender or
any agent or designee of the Administrative Agent or any Lender to make any
demand, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice or take any action,
with respect to any Receivable or any other Collateral or the monies due or to
become due thereunder or in connection therewith, or to take any steps
necessary to preserve any rights against prior parties, and the Administrative
Agent, the Lenders and their agents or designees shall have no liability to any
Borrower for actions taken pursuant to this ARTICLE 13, any other provision of
this Agreement or any of the Loan Documents so long as the Administrative Agent
or such Lender shall act in good faith and in a commercially reasonable manner.
(d) Appointment of Receiver. In any action under this ARTICLE 13,
the Administrative Agent shall be entitled during the continuance of an Event
of Default, to the fullest extent permitted by Applicable Law, to the
appointment of a receiver, without notice of any kind whatsoever, to take
possession of all or any portion of the Collateral and to exercise such power
as the court shall confer upon such receiver.
SECTION 13.6 Trademark License. Each Borrower hereby grants to the
Administrative Agent for its benefit as Administrative Agent and for the
benefit of the Lenders, the nonexclusive right and license to use the
Trademarks described in the Trademark Security Agreement for the purposes (and
subject to the restrictions) set forth in SECTION 13.2(B)(viii) and for the
purposes of enabling the Administrative Agent to realize on the Collateral and
to permit any purchaser of any portion of the Collateral through a foreclosure
sale or any other exercise of the Administrative Agent's rights and remedies
under this Agreement and the other Security Documents to use, sell or otherwise
dispose of finished goods Collateral bearing any such Trademark. Such right and
license is granted free of charge, without the requirement that any monetary
payment whatsoever be made to the relevant Borrower or any other Person by the
Lenders or the Administrative Agent or any purchaser or purchasers of the
Collateral. Each Borrower hereby represents, warrants, covenants and agrees
that it presently has, and shall continue to have, the right, without the
approval of consent of others, to grant the license set forth in this SECTION
13.6.
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ARTICLE 14
ASSIGNMENTS
SECTION 14.1 Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the benefit
of the Borrowers, the Lenders, the Administrative Agent, all future holders of
the Notes, and their respective successors and assigns, except that the
Borrowers may not assign or transfer any of their rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Each Lender may assign to one or more Eligible Assignees all
or a portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Loans at the time owing
to it and the Notes held by it); PROVIDED, HOWEVER, that (i) such Lender shall
first obtain the written consent of (x) the Administrative Agent, which consent
shall not be unreasonably withheld or delayed and (y) except in the case of an
assignment to a Lender or an Affiliate of a Lender, provided no Default or
Event of Default has occurred and is continuing, WinsLoew, which consent shall
not be unreasonably withheld or delayed, (ii) the amount of the Commitment of
the assigning Lender that is subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall in no event be less than
$5,000,000 or less than 100% of the assigning Lender's Commitment if (x) such
assigning Lender's remaining Commitment is less than $5,000,000 or (y) such
assignment is being made at the request of the Borrowers as contemplated
herein, PROVIDED that lesser amounts may be assigned to Lenders and their
Affiliates, (iii) in the case of a partial assignment, the amount of the
Commitment that is retained by the assigning Lender and its Affiliates
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall in no event be less
than the $5,000,000, (iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register an Assignment and Acceptance, together with any Note or Notes subject
to such assignment, (v) such assignment shall not, without the consent of the
Borrowers, require the Borrowers to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the
Notes under the blue sky laws of any state, (vi) the representation contained
in SECTION 14.2 hereof shall be true with respect to any such proposed
assignee, and (vii) in the event the Eligible Assignee is a new Lender, the
assigning Lender shall, on the "Effective Date" as defined in the Assignment
and Acceptance, pay to the Administrative Agent solely for its own account an
assignment fee in the amount of $5,000. The assignment fee shall be fully
earned on the "Effective Date" as defined in such Assignment and Acceptance and
shall not be subject to refund or rebate. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date, unless otherwise agreed among
all parties to such Assignment and Acceptance, shall be at least five (5)
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and,
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to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (B) the Lender assignor thereunder
shall, to the extent provided in such assignment, be released from its
obligations under this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
Lender assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower or the performance or
observance by any Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in SECTION 7.1(N) and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the Administrative Agent, such
Lender assignor 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 decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the Commitment and Proportionate
Share of, and principal amount of the Loans and owing to, each Lender from time
to time (the "Register"). The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrowers, the Administrative Agent and
the Lenders may treat each person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers 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 Eligible Assignee together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance complies with this SECTION 14.1 and has been completed and is in
the form of EXHIBIT D, (i) accept such Assignment and
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Acceptance, (ii) record the information contained therein in the Register,
(iii) give prompt notice thereof to the Lenders and the Borrowers, and (iv)
promptly deliver a copy of such Acceptance and Assignment to the Borrowers.
Within five Business Days after receipt of notice, the Borrowers shall execute
and deliver to the Administrative Agent in exchange for the surrendered Note or
Notes a new Note or Notes to the order of such Eligible Assignee in amounts
equal to the Commitment assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and a new Note or Notes to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned Notes. Each surrendered Note or Notes
shall be cancelled and returned to the Borrowers.
(f) Each Lender may sell participations to one or more banks or
other entities in all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment
hereunder and the Loans owing to it and the Notes held by it); PROVIDED,
HOWEVER, that (i) each such participation (other than to a Lender or an
Affiliate of a Lender) shall be in an amount not less than $5,000,000, (ii)
such Lender's obligations under this Agreement (including, without limitation,
its Commitment hereunder) shall remain unchanged, (iii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement, (v) the Borrowers, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement; PROVIDED, that such Lender may agree with any participant that such
Lender will not, without such participant's consent, agree to or approve any
waivers or amendments which would reduce the principal of or the interest rate
on any Loans, extend the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such participant is
entitled, extend any scheduled payment date for principal or release Collateral
securing the Loans (other than Collateral disposed of pursuant to Section 9.7
hereof or otherwise in accordance with the terms of this Agreement or the
Security Documents), and (vi) any such disposition shall not, without the
consent of the Borrowers, require any Borrowers to file a registration
statement with the Securities and Exchange Commission to apply to qualify the
Loans or the Notes under the blue sky law of any state. The Lender selling a
participation to any Person that is not a Lender or an Affiliate of a Lender
shall use all reasonable efforts to give notice thereof to the Borrowers
PROVIDED that failure to give such notice shall not result in liability to such
Lender. Any purchaser of a participation in any Commitment or Loan shall be
entitled to compensation pursuant to SECTIONS 5.15(C) and (D) to the same
extent as if it were a "Lender" but not in any amount greater than that to
which the Lender from which it purchased such participation is entitled. As
used in this SECTION 14.1(F), "Affiliates" shall include any trust,
partnership, limited liability company or other entity that (x) is organized
under the laws of the United States or any state thereof, (y) is engaged in
making, purchasing or otherwise
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investing in commercial loans in the ordinary course of its business and (z) is
organized, managed or sponsored by any Lender.
(g) Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this SECTION
14.1, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to any Borrower furnished to such Lender
by or on behalf of the Borrowers, PROVIDED that, prior to any such disclosure,
each such assignee, proposed assignee, participant or proposed participant
shall agree with the Borrowers or such Lender (which in the case of an
agreement with only such Lender, the Borrowers shall be recognized as a third
party beneficiary thereof) to preserve the confidentiality of any confidential
information relating to any Borrower received from such Lender.
(h) Notwithstanding any provision of the foregoing to the
contrary, any Lender may pledge its interest in any Loan or Note to a Federal
Reserve Bank.
SECTION 14.2 Representation of Lenders. Each Lender hereby represents
that it will make each Loan hereunder as a commercial loan for its own account
in the ordinary course of its business; PROVIDED, HOWEVER, that subject to
SECTION 14.1 hereof, the disposition of the Notes or other evidence of the
Secured Obligations held by any Lender shall at all times be within its
exclusive control.
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ARTICLE 15
ADMINISTRATIVE AGENT
SECTION 15.1 Appointment of Administrative Agent. Each of the Lenders
hereby irrevocably designates and appoints BankBoston as the Administrative
Agent of such Lender under this Agreement and the other Loan Documents, and
each Lender irrevocably authorizes the Administrative Agent, 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 such other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement or the other Loan Documents, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or the other Loan Documents or otherwise
exist against the Administrative Agent.
SECTION 15.2 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.
SECTION 15.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its trustees, officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable to any Lender (or any
Lender's participants) 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 Lender (or any Lender's
participants) for any recitals, statements, representations or warranties made
by a Borrower or any officer thereof contained in this Agreement or the other
Loan Documents 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 the other Loan Documents or for the
existence, value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or any Collateral or
Lien or other interest therein or for any failure of any 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 to inspect the properties, books or records of any
Borrower.
SECTION 15.4 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,
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consent, certificate, affidavit, letter, cablegram, telegram, 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 Borrowers), 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 such Note shall have been transferred in
accordance with SECTION 14.1. The Administrative Agent shall be fully justified
in failing or refusing to take any action under this Agreement and the other
Loan Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and shall 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 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 and all
future holders of the Notes.
SECTION 15.5 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 a 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 promptly 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 Required Lenders; PROVIDED that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) continue making
Revolving Credit Loans and Acquisition Loans to the Borrowers on behalf of the
Lenders in reliance on the provisions of SECTION 5.7 and take such other
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.
SECTION 15.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor
any of its officers, directors, counsel, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereafter taken, including any review of the
affairs of any 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 each 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
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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
each Borrower. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder
or under the other Loan Documents, 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, financial (and
other) condition or creditworthiness of any Borrower which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
SECTION 15.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent and the Co-Agents in their capacities as such (to the
extent not reimbursed by the Borrowers and without limiting the obligation of
the Borrowers to do so), Ratably, 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 and the
Co-Agents in any way relating to or arising out of this Agreement or 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 and the Co-Agents 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 and/or the Co-Agents' gross
negligence or willful misconduct or resulting solely from transactions or
occurrences that occur at a time after such Lender has assigned all of its
interests, rights and obligations under this Agreement pursuant to SECTION 14.1
or, in the case of a Lender to which an assignment is made hereunder pursuant
to SECTION 14.1, at a time before such assignment. The agreements in this
subsection shall survive the payment of the Notes, the Secured Obligations and
all other amounts payable hereunder and the termination of this Agreement.
SECTION 15.8 Administrative Agent in Its Individual Capacity. The
institution at the time acting as the Administrative Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrowers and their respective Subsidiaries as if it were not
the Administrative Agent hereunder. With respect to its Commitment, the Loans
made or renewed by it and any Note issued to it and any Letter of Credit issued
by it, such institution shall have and may exercise the same rights and powers
under this Agreement and the other Loan Documents and shall be subject to the
same obligations and liabilities as and to the extent set forth herein and in
the other Loan Documents for any other Lender. The terms "Lenders" and
"Required Lenders" or any other term shall, unless the context clearly
otherwise
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indicates, include such institution in its individual capacity as a Lender or
one of the Required Lenders.
SECTION 15.9 Successor Administrative Agent.
(a) The Required Lenders may remove the Administrative Agent at
any time when BankBoston's (or any Lender's which is a successor Administrative
Agent) Proportionate Share is equal to less than 7 1/2%. The Administrative
Agent may resign as Administrative Agent upon thirty (30) days' notice to the
Lenders; PROVIDED, HOWEVER that such resignation shall not take effect until a
successor agent has been appointed. If the Administrative Agent shall be
removed or resign as Administrative Agent under this Agreement, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders which successor agent shall be approved by the Borrowers, so long as no
Default or Event of Default has occurred and is continuing (which approval
shall not be unreasonably withheld), 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 its
appointment, 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. If the Required Lenders have failed
to appoint a successor Administrative Agent within 30 days of the resignation
notice given by the Administrative Agent as provided above, then the
Administrative Agent shall be entitled to appoint a successor agent from among
the Lenders. After any Administrative Agent's removal or resignation hereunder
as Administrative Agent, it shall continue to be responsible for (in accordance
with the terms hereof), and the provisions of Section 15.7 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.
(b) It is intended that there shall be no violation of any
Applicable Law denying or restricting the right of financial institutions to
transact business as agent in any jurisdiction. It is recognized that, in case
of litigation under any of the Loan Documents, or in case the Administrative
Agent deems that by reason of present or future laws of any jurisdiction the
Administrative Agent might be prohibited from or restricted in exercising any
of the powers, rights or remedies granted to the Administrative Agent or the
Lenders hereunder or under any of the Loan Documents or from holding title to
or a Lien upon any Collateral or from taking any other action which may be
necessary or desirable hereunder or under any of the Loan Documents, the
Administrative Agent may appoint an additional individual or institution as a
separate collateral agent or co-collateral agent which is not so prohibited
from or restricted in taking any of such actions or exercising any of such
powers, rights or remedies. If the Administrative Agent shall appoint an
additional individual or institution as a separate collateral agent or
co-collateral agent as provided above, each and every remedy, power, right,
claim, demand or cause of action intended by any of the Loan Documents to be
exercised by or vested in or conveyed to the Administrative Agent with respect
thereto shall be exercisable by and vested in such separate collateral agent or
co-collateral agent, but only to the extent necessary to enable such separate
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collateral agent or co-collateral agent to exercise such powers, rights and
remedies, and every covenant and obligation necessary to the exercise thereof
by such separate collateral agent or co-collateral agent shall run to and be
enforceable by either of them. Should any instrument from the Lenders be
required by the separate collateral agent or co-collateral agent so appointed
by Administrative Agent in order more fully and certainly to vest in and
confirm to him or it such rights, powers, duties and obligations, including
without limitation indemnification of such collateral agent or co-collateral
agent, any and all of such instruments shall, on request, be executed,
acknowledged and delivered by the Lenders. In case any separate collateral
agent or co-collateral agent, or a successor to either, shall die, become
incapable of acting, resign or be removed, all the estates, properties, rights,
powers, duties and obligations of such separate collateral agent or
co-collateral agent, so far as permitted by Applicable Law, shall vest in and
be exercised by the Administrative Agent until the appointment of a new
collateral agent or successor to such separate collateral agent or
co-collateral agent.
SECTION 15.10 Co-Agents. For avoidance of doubt, it is expressly
acknowledged and agreed by the Administrative Agent and each Lender for the
benefit of the Co-Agents that no Co-Agent, in such capacity, has any
obligations hereunder.
SECTION 15.11 Documents to be Forwarded. The Administrative Agent
shall deliver to each Lender a copy of the Borrowing Base Certificate delivered
to it pursuant to SECTION 4.11(C) promptly following its receipt thereof.
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ARTICLE 16
MISCELLANEOUS
SECTION 16.1 Notices.
(a) Method of Communication. Except as specifically provided in
this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by telephone,
subsequently confirmed in writing. Notices in writing shall be delivered
personally or sent by certified or registered mail, postage pre-paid, or by
overnight courier, telex or facsimile transmission and shall be deemed received
in the case of personal delivery, when delivered, in the case of mailing, when
receipted for, in the case of overnight delivery, on the next Business Day
after delivery to the courier, and in the case of telex and facsimile
transmission, upon transmittal, provided that in the case of notices to the
Administrative Agent, notice shall be deemed to have been given only when such
notice is actually received by the Administrative Agent. A telephonic notice to
the Administrative Agent, as understood by the Administrative Agent, will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to
it at the following addresses, or any other address of which all the other
parties are notified in writing by such first party:
<TABLE>
<S> <C>
If to the Borrower: c/o WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Attn: Chief Executive Officer
Facsimile No.: (205) 408-7028
with a copy to: Trivest, Inc.
2665 South Bayshore Drive, Suite 800
Miami, Florida 33133-5462
Attn: General Counsel
Facsimile No.: (305) 285-0102
with a copy to: Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attn: Michael W. Hein, Esq.
Facsimile No.: (305) 579-0717
</TABLE>
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<TABLE>
<S> <C>
If to the
Administrative Agent: BankBoston, N.A.
115 Perimeter Center Place
Suite 500
Atlanta, Georgia 30346
Attn: Lauren P. Carrigan, Vice President
Facsimile No.: (770) 393-4166
with a copy to: Hunton & Williams
600 Peachtree Street, N.E., Suite 4100
Atlanta, Georgia 30308
Attn: Dana Kull, Esq.
Facsimile No.: (404) 888-4190
If to a Lender: At the address of such Lender set forth on
the signature pages hereof.
</TABLE>
(c) Administrative Agent's Office. The Administrative Agent
hereby designates its office located at 100 Federal Street, Boston,
Massachusetts 02110, or any subsequent office which shall have been specified
for such purpose by written notice to the Borrowers, as the office to which
payments due are to be made and at which Loans will be disbursed.
SECTION 16.2 Expenses. The Borrowers jointly and severally agree to
pay or reimburse on demand all costs and expenses (1) incurred by the
Administrative Agent, including, without limitation, the reasonable fees and
disbursements of counsel, in connection with:
(a) the negotiation, preparation, execution, delivery,
administration, enforcement and termination of this Agreement and each of the
other Loan Documents, whenever the same shall be executed and delivered,
including, without limitation
(i) reasonable out-of-pocket costs and expenses incurred
in connection with the administration and interpretation of this
Agreement and the other Loan Documents;
(ii) the costs and expenses of appraisals of the
Collateral;
(iii) the costs and expenses of lien and title searches
and title insurance;
(iv) the costs and expenses of environmental reports with
respect to the Real Estate; and
(v) taxes, fees and other charges for recording the
Mortgages, filing the Financing Statements and continuations and the
costs and expenses of taking other actions to perfect, protect, and
continue the Security Interests;
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(b) filing continuations with respect to Financing Statements and
the costs and expenses of taking other reasonable actions to perfect, protect,
and continue the Security Interests that the Borrowers do not take, after
demand by the Administrative Agent;
(c) the preparation, execution and delivery of any waiver,
amendment, supplement or consent by the Administrative Agent and the Lenders
relating to this Agreement or any of the Loan Documents;
(d) sums paid or incurred to pay any amount or take any action
required of the Borrowers under the Loan Documents that the Borrowers fail to
pay or take;
(e) costs of inspections and verifications of the Collateral,
including, without limitation, standard per diem fees charged by the
Administrative Agent and charges for travel, lodging, and meals for inspections
of the Collateral and of the Borrowers' operations and books and records not
more often than quarterly and at any time when an Event of Default exists;
(f) standard costs and expenses of forwarding loan proceeds and
collecting checks and other items of payment; and
(g) costs and expenses of preserving and protecting the
Collateral;
(2) incurred by the Administrative Agent or any Lender after an
Event of Default has occurred and is continuing, in connection with:
(a) consulting, after the occurrence of a Default, with one or
more Persons, including appraisers, accountants and lawyers, concerning the
value of any Collateral for the Secured Obligations or related to the nature,
scope or value of any right or remedy of the Administrative Agent or any Lender
hereunder or under any of the Loan Documents, including any review of factual
matters in connection therewith, which expenses shall include the fees and
disbursements of such Persons; and
(b) costs and expenses paid or incurred to obtain payment of the
Secured Obligations, enforce the Security Interests, sell or otherwise realize
upon the Collateral, and otherwise enforce the provisions of the Loan
Documents, or to prosecute or defend any claim in any way arising out of,
related to or connected with, this Agreement or any of the Loan Documents,
which expenses shall include the reasonable fees and disbursements of counsel
and of experts and other consultants retained by the Administrative Agent or
any Lender.
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrowers. Each
Borrower hereby authorizes the Administrative Agent and the Lenders to debit
such Borrower's Loan Account (by increasing the principal amount of the
Revolving Credit Loans) in the amount of any such costs and expenses owed by
such Borrower when due.
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SECTION 16.3 Stamp and Other Taxes. The Borrowers will pay any and all
stamp, registration, recordation and similar taxes, fees or charges and shall
indemnify the Administrative Agent and the Lenders against any and all
liabilities with respect to or resulting from any delay in the payment or
omission to pay any such taxes, fees or charges, which may be payable or
determined to be payable in connection with the execution, delivery,
performance or enforcement of this Agreement and any of the Loan Documents or
the perfection of any rights or security interest thereunder, including,
without limitation, the Security Interest.
SECTION 16.4 Setoff. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
during the continuance of any Event of Default, each Lender, any participant
with such Lender in the Loans and each Affiliate of each Lender are hereby
authorized by each Borrower at any time or from time to time, without notice to
any Borrower 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) and any other
indebtedness at any time held or owing by any Lender or any Affiliate of any
Lender or any participant to or for the credit or the account of any Borrower
against and on account of the Secured Obligations irrespective or whether or
not
(a) the Administrative Agent or such Lender shall have made any
demand under this Agreement or any of the Loan Documents, or
(b) the Administrative Agent or such Lender shall have declared
any or all of the Secured Obligations to be due and payable as permitted by
SECTION 13.2 and although such Secured Obligations shall be contingent or
unmatured.
SECTION 16.5 Litigation. EACH BORROWER, THE ADMINISTRATIVE AGENT, EACH
CO-AGENT AND EACH LENDER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVE
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN
WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST A BORROWER, THE ADMINISTRATIVE
AGENT, SUCH CO-AGENT OR SUCH LENDER ARISING OUT OF THIS AGREEMENT, THE
COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE
WHATSOEVER BETWEEN A BORROWER AND THE ADMINISTRATIVE AGENT, ANY CO-AGENT OR ANY
LENDER OF ANY KIND OR NATURE. EACH BORROWER, THE ADMINISTRATIVE AGENT, EACH
CO-AGENT AND EACH LENDER HEREBY AGREES THAT THE FEDERAL COURT OF THE NORTHERN
DISTRICT OF GEORGIA OR, AT THE OPTION OF THE ADMINISTRATIVE AGENT, ANY CO-AGENT
OR ANY LENDER, ANY COURT IN WHICH THE ADMINISTRATIVE AGENT, SUCH CO-AGENT OR
SUCH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY, SHALL HAVE NONEXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
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DISPUTES BETWEEN ANY BORROWER AND THE ADMINISTRATIVE AGENT, SUCH CO-AGENT OR
SUCH LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE LOAN
DOCUMENTS OR TO ANY MATTER ARISING THEREFROM. EACH BORROWER EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN AND AGREEING THAT SERVICE
OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT THE ADDRESS OF SUCH
BORROWER SET FORTH IN SECTION 16.1. SHOULD SUCH BORROWER FAIL TO APPEAR OR
ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30)
DAYS AFTER THE MAILING THEREOF, IT SHALL BE DEEMED IN DEFAULT AND AN ORDER
AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH
SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE NONEXCLUSIVE CHOICE OF FORUM SET
FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY
JUDGMENT OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS
AGREEMENT TO ENFORCE SAME IN ANY APPROPRIATE JURISDICTION.
SECTION 16.6 Waiver of Rights. EACH BORROWER HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS WHICH THE BORROWER HAS UNDER
CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR
PROVISION OF APPLICABLE LAW TO NOTICE AND TO A JUDICIAL HEARING PRIOR TO THE
ISSUANCE OF A WRIT OF POSSESSION ENTITLING THE ADMINISTRATIVE AGENT, ANY
CO-AGENT OR ANY LENDER, OR THE SUCCESSORS AND ASSIGNS OF THE ADMINISTRATIVE
AGENT, SUCH CO-AGENT OR SUCH LENDER TO POSSESSION OF THE COLLATERAL UPON EVENT
OF DEFAULT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING AND WITHOUT
LIMITING ANY OTHER RIGHT WHICH THE ADMINISTRATIVE AGENT, THE CO-AGENTS OR THE
LENDERS MAY HAVE, EACH BORROWER CONSENTS THAT IF THE ADMINISTRATIVE AGENT, ANY
CO-AGENT OR ANY LENDER FILES A PETITION FOR AN IMMEDIATE WRIT OF POSSESSION IN
COMPLIANCE WITH SECTIONS 44-14-261 AND 44-14-262 OF THE OFFICIAL CODE OF
GEORGIA OR UNDER ANY SIMILAR PROVISION OF APPLICABLE LAW, AND THIS WAIVER OR A
COPY HEREOF IS ALLEGED IN SUCH PETITION AND ATTACHED THERETO, THE COURT BEFORE
WHICH SUCH PETITION IS FILED MAY DISPENSE WITH ALL RIGHTS AND PROCEDURES HEREIN
WAIVED AND MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF POSSESSION IN ACCORDANCE
WITH CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE
WITH ANY SIMILAR PROVISION OF APPLICABLE LAW, WITHOUT THE NECESSITY OF AN
ACCOMPANYING BOND AS OTHERWISE REQUIRED BY
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SECTION 44-14-263 OF THE OFFICIAL CODE OF GEORGIA OR BY ANY SIMILAR PROVISION
UNDER APPLICABLE LAW. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS READ AND
FULLY UNDERSTANDS THE TERMS OF THIS WAIVER AND THE EFFECT HEREOF.
SECTION 16.7 Consent to Advertising and Publicity. With the prior
written consent of the Borrowers, which consents shall not be unreasonably
withheld, the Administrative Agent, on behalf of the Lenders, may issue and
disseminate to the public information describing the credit accommodation
entered into pursuant to this Agreement, including the name and address of the
Borrowers, the amount, interest rate, maturity, collateral for and a general
description of the credit facilities provided hereunder and of the Borrowers'
business.
SECTION 16.8 Reversal of Payments. The Administrative Agent and each
Lender shall have the continuing and exclusive right to apply, reverse and
re-apply any and all payments to any portion of the Secured Obligations in a
manner consistent with the terms of this Agreement. To the extent a Borrower
makes a payment or payments to the Administrative Agent, for the account of the
Lenders, or any Lender receives any payment or proceeds of the Collateral for
the Borrowers' benefit, which payment(s) or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds received, the Secured Obligations or
part thereof intended to be satisfied shall be revived and continued in full
force and effect, as if such payment or proceeds had not been received by the
Administrative Agent or such Lender.
SECTION 16.9 Injunctive Relief. Each Borrower recognizes that, in the
event the Borrowers fail to perform, observe or discharge any of its
obligations or liabilities under this Agreement, any remedy at law may prove to
be inadequate relief to the Administrative Agent and the Lenders; therefore,
each Borrower agrees that if any Event of Default shall have occurred and be
continuing, the Administrative Agent and the Lenders, if the Administrative
Agent or any Lender so requests, shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damages.
SECTION 16.10 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrowers to determine whether it is in compliance with any covenant contained
herein, shall, unless this Agreement otherwise provides or unless Required
Lenders shall otherwise consent in writing, be performed in accordance with
GAAP.
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SECTION 16.11 Amendments.
(a) Except as set forth in SUBSECTION (B) below, any term,
covenant, agreement or condition of this Agreement or any of the other Loan
Documents may be amended or waived, and any departure therefrom may be
consented to by the Required Lenders, if, but only if, such amendment, waiver
or consent is in writing signed by the Required Lenders and, in the case of an
amendment (other than an amendment described in SECTION 16.11(D)), by the
Borrowers, provided that no such amendment, unless consented to by the
Administrative Agent, shall alter or affect the rights or responsibilities of
the Administrative Agent, and in any such event, the failure to observe,
perform or discharge any such term, covenant, agreement or condition (whether
such amendment is executed or such waiver or consent is given before or after
such failure) shall not be construed as a breach of such term, covenant,
agreement or condition or as a Default or an Event of Default. Unless otherwise
specified in such waiver or consent, a waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given. In the event that any such waiver or amendment is requested by a
Borrower, the Administrative Agent and the Lenders may require and charge a fee
in connection therewith and consideration thereof in such amount as shall be
determined by the Administrative Agent and the Required Lenders in their
discretion.
(b) Without the prior unanimous written consent of the Lenders,
(i) no amendment, consent or waiver shall (A) increase
the amount or extend the time of the obligation of any Lender to make
Loans or (B) extend the originally scheduled time or times of payment
of the principal of any Loan or (C) alter the time or times of payment
of interest on any Loan or of any fees payable for the account of the
Lenders or (D) alter the amount of the principal of any Loan or
decrease the rate of interest thereon or (E) decrease the amount of
any commitment fee or other fee payable hereunder for the account of
the Lenders or (F) permit any subordination of the principal of or
interest on any Loan or (G) permit the subordination of the Security
Interests in any Collateral,
(ii) no Collateral having an aggregate value greater than
$1,000,000 shall be released by the Administrative Agent in any
12-month period other than in connection with a permitted Asset
Disposition or as otherwise specifically permitted in this Agreement
or the Security Documents nor shall any Collateral be released at a
time when the Administrative Agent is entitled to exercise remedies
hereunder upon Default, nor shall any Borrower or Guarantor be
released from its liability for the Secured Obligations,
(iii) except to the extent expressly provided in SECTION
5.9, the definition "Borrowing Base" shall not be amended,
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(iv) none of the provisions of this Section 16.11, the
definitions "Lenders" or "Required Lenders", or the provisions of
Article 13 shall be amended, and
(v) neither the Administrative Agent nor any Lender
shall consent to any amendment to or waiver of the amortization,
deferral or subordination provisions of the Senior Note Indenture or
any other instrument or agreement evidencing or relating to
obligations of a Borrower that are expressly subordinate to any of the
Secured Obligations if such amendment or waiver would be adverse to
the Lenders in their capacities as Lenders hereunder;
provided, however, that anything herein to the contrary notwithstanding, the
Required Lenders shall have the right to waive any Default or Event of Default
and the consequences hereunder of such Default or Event of Default provided
only that such Default or Event of Default does not arise under Section 13.1(g)
or (h) or out of a breach of or failure to perform or observe any term,
covenant or condition of this Agreement or any other Loan Document (other than
the provisions of Article 13 of this Agreement) the amendment of which requires
the unanimous consent of the Lenders. The Required Lenders shall have the
right, with respect to any Default or Event of Default that may be waived by
them, to enter into an agreement with the Borrower or the Guarantor providing
for the forbearance from the exercise of any remedies provided hereunder or
under the other Loan Documents without thereby waiving any such Default or
Event of Default.
(c) The making of Loans hereunder by the Lenders during the
existence of a Default or Event of Default shall not be deemed to constitute a
waiver of such Default or Event of Default.
(d) Notwithstanding any provision of this Agreement or the other
Loan Documents to the contrary, no consent, written or otherwise, of any
Borrower shall be necessary or required in connection with any amendment to
Article 15 or Section 5.10, and any amendment to such provisions may be
effected solely by and among the Administrative Agent and the Lenders, provided
that no such amendment shall impose any obligation on the Borrowers.
SECTION 16.12 Assignment. All the provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights under this Agreement.
SECTION 16.13 Performance of Borrowers' Duties.
(a) Each Borrower's obligations under this Agreement and each of
the Loan Documents shall be performed by the Borrowers at their sole cost and
expense.
(b) If a Borrower shall fail to do any act or thing which it has
covenanted to do under this Agreement or any of the Loan Documents, the
Administrative Agent, on behalf of the Lenders, may (but shall not be obligated
to) do the same or cause it to be done either in the name
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of the Administrative Agent or the Lenders or in the name and on behalf of the
Borrowers, and each Borrower hereby irrevocably authorizes the Administrative
Agent so to act.
SECTION 16.14 Indemnification. Each Borrower agrees, jointly and
severally, to reimburse the Administrative Agent and the Lenders for all costs
and expenses, including reasonable counsel fees and disbursements, incurred,
and to indemnify and hold the Administrative Agent and the Lenders harmless
from and against all losses suffered by, the Administrative Agent or any Lender
in connection with
(a) the exercise by the Administrative Agent or any Lender of any
right or remedy granted to it under this Agreement or any of the Loan
Documents,
(b) any claim, and the prosecution or defense thereof, arising
out of or in any way connected with this Agreement or any of the Loan
Documents, and
(c) the collection or enforcement of the Secured Obligations or
any of them,
other than such costs, expenses and liabilities arising out of the
Administrative Agent's or any Lender's gross negligence or willful misconduct.
SECTION 16.15 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Administrative Agent and the Lenders
and any Persons designated by the Administrative Agent or the Lenders pursuant
to any provisions of this Agreement or any of the Loan Documents shall be
deemed coupled with an interest and shall be irrevocable so long as any of the
Secured Obligations remain unpaid or unsatisfied.
SECTION 16.16 Survival. Notwithstanding any termination of this
Agreement,
(a) until all Secured Obligations have been irrevocably paid in
full or otherwise satisfied, the Administrative Agent, for the benefit of the
Lenders, shall retain its Security Interest and shall retain all rights under
this Agreement and each of the Security Documents with respect to such
Collateral as fully as though this Agreement had not been terminated,
(b) the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this ARTICLE 16 and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Administrative Agent and the Lenders against
events arising after such termination as well as before, and
(c) in connection with the termination of this Agreement and the
release and termination of the Security Interests, the Administrative Agent, on
behalf of itself as agent and the Lenders, may require such assurances and
indemnities as it shall reasonably deem necessary or appropriate to protect the
Administrative Agent and the Lenders against loss on account of such
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release and termination, including, without limitation, with respect to credits
previously applied to the Secured Obligations that may subsequently be reversed
or revoked.
SECTION 16.17 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
SECTION 16.18 Severability of Provisions. Any provision of this
Agreement or any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 16.19 Governing Law. This Agreement, the Notes and the
Security Documents (except to the extent otherwise expressly set forth therein)
shall be deemed to have been made in the State of Georgia and the validity,
construction, interpretation and enforcement hereof and thereof and the rights
of the parties hereto and thereto shall be determined under, governed by and
construed in accordance with the internal laws of the State of Georgia, without
regard to principles of conflicts of law, except that the waiver contained in
the first sentence of Section 16.5 shall be construed in accordance with and
governed by the internal laws of the jurisdiction in which any such action or
proceeding is commenced.
SECTION 16.20 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.
SECTION 16.21 Reproduction of Documents. This Agreement, each of the
Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Administrative Agent or any Lender, and
(c) financial statements, certificates and other information previously or
hereafter furnished to the Administrative Agent or any Lender, may be
reproduced by the Administrative Agent or such Lender by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process and such Person may destroy any original document so produced. Each
party hereto stipulates that, to the extent permitted by Applicable Law, any
such reproduction shall be as admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original shall be
in existence and whether or not such reproduction was made by the
Administrative Agent or such Lender in the regular course of business), and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 16.22 Term of Agreement. This Agreement shall remain in effect
from the Agreement Date through the Termination Date and thereafter until all
Secured Obligations shall
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have been irrevocably paid and satisfied in full. No termination of this
Agreement shall affect the rights and obligations of the parties hereto arising
prior to such termination.
SECTION 16.23 Pro-Rata Participation.
(a) Each Lender agrees that if, as a result of the exercise of a
right of setoff, banker's lien or counterclaim or other similar right or the
receipt of a secured claim it receives any payment in respect of the Secured
Obligations, it shall promptly notify the Administrative Agent thereof (and the
Administrative Agent shall promptly notify the other Lenders). If, as a result
of such payment, such Lender receives a greater percentage of the Secured
Obligations owed to it under this Agreement than the percentage received by any
other Lender, such Lender shall purchase a participation (which it shall be
deemed to have purchased simultaneously upon the receipt of such payment) in
the Secured Obligations then held by such other Lenders so that all such
recoveries of principal and interest with respect to all Secured Obligations
owed to each Lender shall be pro rata on the basis of its respective amount of
the Secured Obligations owed to all Lenders, PROVIDED that if all or part of
such proportionately greater payment received by such purchasing Lender is
thereafter recovered by or on behalf of any Borrower from such Lender, such
purchase shall be rescinded and the purchase price paid for such participation
shall be returned to such Lender to the extent of such recovery, but without
interest.
(b) Each Lender which receives such a secured claim shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this SECTION
16.23 to share in the benefits of any recovery on such secured claim.
(c) Each Borrower expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any Secured
Obligation so purchased or otherwise acquired of which a Borrower has received
notice may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by the Borrowers to such
holder as fully as if such holder were a holder of such Secured Obligation in
the amount of the participation held by such holder.
SECTION 16.24 Interest and Charges. The Borrowers, the Administrative
Agent and the Lenders hereby agree that (a) the only charge imposed by the
Lenders upon the Borrowers for the use of money in connection with the Loans is
and shall be the interest expressed herein (including but not limited to
interest calculated at the Default Rate under the circumstances provided in
this Agreement), as provided in ARTICLE 2 and in the Notes, and (b) all other
charges imposed by the Administrative Agent or the Lenders upon the Borrowers
in connection with the Loans, including without limitation any origination fee,
Administrative Agent's fee, unused facility fee and letter of credit fee, are
and shall be deemed to be charges made to compensate the Administrative Agent
or the Lenders, as the case may be, for administrative services and costs, and
other services and costs performed and incurred, and to be performed and
incurred, by them
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in connection with the credit facilities implemented pursuant to this
Agreement, and shall under no circumstances be deemed to be charges for the use
of money.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers in several counterparts all as of
the day and year first written above.
<TABLE>
<S> <C>
[Corporate Seal] BORROWERS:
Attest: WINSLOEW FURNITURE, INC.
By: By: /s/ Vincent A. Tortorici, Jr.
--------------------------------- ---------------------------------------
Name: Name: Vincent A. Tortorici, Jr.
-------------------------- ---------------------------------
Title: Title: Vice President & Chief Financial
------------------------- Officer
---------------------------------
[Corporate Seal] WINSTON FURNITURE COMPANY OF ALABAMA, INC.
Attest:
By: By: /s/ Vincent A. Tortorici, Jr.
--------------------------------- ---------------------------------------
Name: Name: Vincent A. Tortorici, Jr.
-------------------------- ---------------------------------
Title: Title: Vice President & Chief Financial
------------------------- Officer
---------------------------------
[Corporate Seal] LOEWENSTEIN, INC.
Attest:
By: By: /s/ Vincent A. Tortorici, Jr.
--------------------------------- ---------------------------------------
Name: Name: Vincent A. Tortorici, Jr.
-------------------------- ---------------------------------
Title: Title: Vice President & Treasurer
------------------------- ---------------------------------
[Corporate Seal]
Attest: TEXACRAFT, INC.
By: By: /s/ Vincent A. Tortorici, Jr.
--------------------------------- ---------------------------------------
Name: Name: Vincent A. Tortorici, Jr.
-------------------------- ---------------------------------
Title: Title: Vice President & Treasurer
------------------------- ---------------------------------
</TABLE>
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<PAGE> 160
<TABLE>
<S> <C>
[Corporate Seal]
TROPIC CRAFT, INC.
Attest:
By: By: /s/ Vincent A. Tortorici, Jr.
--------------------------------- ---------------------------------------
Name: Name: Vincent A. Tortorici, Jr.
-------------------------- ---------------------------------
Title: Title: Vice President & Treasurer
------------------------- ---------------------------------
[Corporate Seal]
WINSTON PROPERTIES, INC..
Attest:
By: By: /s/ Vincent A. Tortorici, Jr.
--------------------------------- ---------------------------------------
Name: Name: Vincent A. Tortorici, Jr.
-------------------------- ---------------------------------
Title: Title: Vice President & Treasurer
------------------------- ---------------------------------
[Corporate Seal]
POMPEII FURNITURE CO., INC.
Attest:
By: By: /s/ Vincent A. Tortorici, Jr.
--------------------------------- ---------------------------------------
Name: Name: Vincent A. Tortorici, Jr.
-------------------------- ---------------------------------
Title: Title: Vice President & Chief Financial
------------------------- Officer
---------------------------------
</TABLE>
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ADMINISTRATIVE AGENT:
BANKBOSTON, N.A.
By: /s/ Lauren P. Carrigan
------------------------------------
Name: Lauren P. Carrigan
Title: Vice President
Address: 115 Perimeter Center Place
Suite 500
Atlanta, Georgia 30346
Attn: Lauren P. Carrigan
Facsimile No.: (770) 393-4166
<PAGE> 162
CO-AGENTS:
HELLER FINANCIAL, INC.
By: /s/ Scott E. Gast
------------------------------------
Name: Scott E. Gast
Title: Assistant Vice President
Address: 500 West Monroe Street
Chicago, Illinois 60661
Attn: Scott E. Gast
Facsimile No.: (312) 441-6158
<PAGE> 163
CIBC INC.
By: /s/ Katherine Bass
------------------------------------
Name: Katherine Bass
Title: Executive Director
Address: 425 Lexington Avenue
New York, New York 10017
Attn: Katherine Bass
Facsimile No.: (212) 856-3761
<PAGE> 164
LENDERS:
BANKBOSTON, N.A.
By: /s/ Lauren P. Carrigan
------------------------------------
Name: Lauren P. Carrigan
Title: Vice President
Address: 115 Perimeter Center Place
Suite 500
Atlanta, Georgia 30346
Attn: Lauren P. Carrigan
Facsimile No.: (770) 393-4166
<PAGE> 165
HELLER FINANCIAL, INC.
By: /s/ Scott E. Gast
------------------------------------
Name: Scott E. Gast
Title: Assistant Vice President
Address: 500 West Monroe Street
Chicago, Illinois 60661
Attn: Scott E. Gast
Facsimile No.: (312) 441-6158
<PAGE> 166
CIBC INC.
By: /s/ Katherine Bass
------------------------------------
Name: Katherine Bass
Title: Executive Director
Address: 425 Lexington Avenue
New York, New York 10017
Attn: Katherine Bass
Facsimile No.: (212) 856-3761
<PAGE> 167
ANTARES CAPITAL CORP.
By: /s/ John G. Martin
------------------------------------
Name: John G. Martin
Title: Managing Director
Address: 311 S. Wacker Dr., Suite 2725
Chicago, Illinois 60606
Attn: John G. Martin
Facsimile No.: (312) 697-3998
<PAGE> 168
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ Robert M. Biringer
------------------------------------
Name: Robert M. Biringer
Title: Executive Vice President
By: /s/ Gary W. Andresen
------------------------------------
Name: Gary W. Andresen
Title: Associate
Address: Two Ravinia Dr., Suite 1680
Atlanta, Georgia 30346
Attn: Robert M. Biringer
Facsimile No.: (770) 390-1851
<PAGE> 169
GMAC BUSINESS CREDIT, LLC
By: /s/ Richard E. Peller
------------------------------------
Name: Richard E. Peller
Title: Director
Address: 630 Fifth Avenue, 30th Floor
New York, New York 10111
Attn: Richard E. Peller
Facsimile No.: (212) 489-3980
<PAGE> 170
SUNTRUST BANK, ATLANTA
By: /s/ Katherine A. Boozer
------------------------------------
Name: Katherine A. Boozer
Title: Assistant Vice President
Address: 25 Park Place, 26th Floor
Atlanta, Georgia 30303
Attn: Katherine A. Boozer
Facsimile No.: (404) 575-2693
<PAGE> 171
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Erin L. Murphy
------------------------------------
Name: Erin L. Murphy
Title: Duly Authorized Signatory
Address: 10 S. LaSalle, Suite 2700
Chicago, Illinois 60603
Attn: WinsLoew Account Manager
Facsimile No.: (312) 419-5992
With copies (other than borrowing requests) to:
201 High Ridge Road
Stamford, Connecticut 06927
Attn: Region Counsel-WinsLoew
Facsimile No.: (203) 316-7822
<PAGE> 172
BANK LEUMI LE ISRAEL BM MIAMI
By: /s/ Joseph Realini
------------------------------------
Name: Joseph Realini
Title: Vice President
Address: 800 Brickell Avenue, Suite 1400
Miami, Florida 33131
Attn: Joseph Realini
Facsimile No.: (305) 377-6544
<PAGE> 173
COMERICA BANK
By: /s/ Kristine L. Andersen
------------------------------------
Name: Kristine L. Andersen
Title: Assistant Vice President
Address: One Detroit Center
500 Woodward Avenue
Mail Code 3280
Detroit, Michigan 48226
Attn: Kristine L. Andersen
Facsimile No.: (313) 222-3330
<PAGE> 174
WACHOVIA BANK, N.A.
By: /s/ Julia F. Frick
------------------------------------
Name: Julia F. Frick
Title: Vice President
Address: 191 Peachtree Street, NE
GA-212
Atlanta, Georgia 30303
Attn: Julia F. Frick
Facsimile No.: (404) 332-6920
<PAGE> 175
ANNEX B
PRICING MATRIX
<TABLE>
<CAPTION>
BASE RATE REVOLVING EURODOLLAR RATE
CREDIT, TERM LOAN REVOLVING CREDIT,
A, AND ACQUISITION TERM LOAN A AND
TOTAL FUNDED DEBT TO FACILITIES ACQUISITION
TIER EBITDA RATIO FACILITIES
<S> <C> <C> <C>
Tier V > 5.25:1 1.00% 3.00%
=> 4.50:1 and
Tier IV <= 5.25:1 0.75% 2.75%
=> 3.75:1 and
Tier III < 4.50:1 0.50% 2.50%
=> 3.00:1 and
Tier II < 3.75:1 0.25% 2.25%
Tier I < 3.00:1 0 2.00%
</TABLE>
<TABLE>
<CAPTION>
EURODOLLAR RATE
BASE RATE TERM LOAN TERM LOAN B AND
B AND TERM LOAN C TERM LOAN C
TIER FACILITIES FACILITIES COMMITMENT FEE
<S> <C> <C> <C>
Tier V 1.50% 3.50% .50%
Tier IV 1.25% 3.25% .50%
Tier III 1.25% 3.25% .375%
Tier II 1.25% 3.25% .375%
Tier I 1.00% 3.00% .375%
</TABLE>
<PAGE> 1
Exhibit (c)(3)
INVESTORS' AGREEMENT
THIS INVESTORS' AGREEMENT (this "Agreement"), dated the 27th day of
August 1999, is by and among (i) Trivest Furniture Corporation, a Florida
corporation (the "Company," which term shall refer to WinsLoew Furniture, Inc.
upon the consummation of the Merger), (ii) Trivest Furniture Partners, Ltd.
(the "Institutional Investor"), (iii) Trivest Fund II Group, Ltd. (the "Lead
Trivest Investor" and, together with the Institutional Investor, the "Trivest
Investors") and (iv) Bobby Tesney, R. Craig Watts, Stephen C. Hess, Vincent A.
Tortorici, Jr. (both in his individual capacity and as the beneficiary of the
Vincent A. Tortorici, Jr. Individual Retirement Account, Account #1238SD,
Community Bank (Blountsville, Alabama), Custodian (the "Tortorici IRA"), Rick
J. Stevens, Jerry C. Camp, Earl W. Powell, Phillip T. George, M.D., Troy D.
Templeton, Brevator J. Creech, M.D. and James J. Pinto (collectively, the
"Individual Investors"). The Trivest Investors and the Individual Investors are
collectively referred to herein as the "Investors". Certain other terms are
defined in section 1.
The Investors have agreed to acquire certain securities from the
Company. In consideration of the premises and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged by the
parties hereto, and in order to induce the Investors to purchase such
securities from the Company, the parties hereby agree as follows:
1. Certain Definitions. Capitalized terms used in this Agreement
without definition have the respective meanings ascribed hereto in the
Subscription Agreement (it being agreed that, for purposes of this Agreement,
no amendment to any of such terms shall be effective without the consent of the
requisite parties to this Agreement specified in section 11). In addition, the
following terms have the following respective meanings:
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Applicable Percentage" as applied to any holder of Restricted
Securities on any date shall mean a fraction (expressed as a percentage), the
numerator of which is the aggregate number of Restricted Securities to be
transferred by the Lead Trivest Investor and the denominator of which is the
aggregate number of Restricted Securities owned by (and/or purchasable by) the
Lead Trivest Investor; all such calculations shall be on a fully-diluted basis
and carried out to one hundredth of a share and then rounded to the nearest
share.
"Buyer" shall have the meaning specified in section 3.
"Company Common Stock" shall mean the Company's common stock, par
value $.01 per share.
"Company Registration Statement" shall have the meaning specified in
section 5.6.
"Drag Along Notice" shall have the meaning specified in section 3.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
<PAGE> 2
"Exempt Transfer" shall mean:
(a) any pro rata distribution of Restricted Securities by either
Trivest Investor to its partners (in accordance with their
respective agreements of limited partnership); provided, that
the restrictions contained in this Agreement shall continue
to be applicable to Restricted Securities after any such
transfer; provided, further, that the transferees of such
Restricted Securities have agreed in writing to be bound by
the provisions of this Agreement relating to Restricted
Securities; provided, further, that any such distribution of
Restricted Securities by the Lead Trivest Investor shall
require the consent of a majority in interest of the limited
partners of the Institutional Investor;
(b) any transfer of Restricted Securities by an Individual
Investor to or among such Individual Investor's Family Group
or by will or pursuant to applicable laws of descent and
distribution to an Individual Investor's Family Group;
provided, that the restrictions contained in this Agreement
shall continue to be applicable to Restricted Securities
after any such transfer; provided, further, that the
transferees of such Restricted Securities have agreed in
writing to be bound by the provisions of this Agreement
relating to Restricted Securities;
(c) any transfer to the public pursuant to a registration
effected in accordance with section 5 of this Agreement; or
(d) any transfer made in compliance with sections 3, 4 or 6 of
this Agreement.
"Family Group" shall mean an individual's spouse and lineal
descendants, parents, grandparents and any family limited partnership or trust
or other fiduciary relationship solely for the benefit of such individual
and/or such individual's spouse, parents, grandparents and/or lineal
descendants.
"Indemnified Person" shall have the meaning specified in section 5.
"Merger" shall mean the merger of Trivest Furniture Corporation with
and into WinsLoew Furniture, Inc., which shall be the surviving corporation.
"Notice of Sale" shall have the meaning specified in section 6.
"Notice of Transfer" shall have the meaning specified in section 4.
"Person" shall mean any individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"qualification" or "compliance" shall mean the qualification or
compliance of all Registrable Shares included in any registration pursuant to
section 5 under all applicable blue sky or other applicable securities laws.
2
<PAGE> 3
"Qualified Public Offering" shall mean a firm commitment underwritten
public offering of the Company's Common Stock underwritten by a nationally
recognized full-service investment bank pursuant to which the aggregate gross
proceeds received by the Company is at least $20,000,000 at a price per share
of not less than $10.00 (following appropriate adjustment in the event of any
stock dividends, stock split, combination or other similar recapitalization
affecting such shares).
"register", "registered" and "registration" as used in section 5 refer
to a registration effected by filing a registration statement in compliance
with the Securities Act to permit the sale and disposition of the Registrable
Shares and any amendment filed or required to be filed to permit any such
disposition.
"Registrable Shares" shall mean any shares of Company Common Stock
held by the Investors, except that, as to any particular Registrable Shares,
such securities, once issued, shall cease to be Registrable Shares when (a) a
registration statement covering such securities has been declared effective and
such securities have been disposed of pursuant to an effective registration
statement, or (b) such securities have been sold to the public without
registration in accordance with Rule 144 (or any similar provision then in
force) under the Securities Act.
"Registration Expenses" shall mean all fees, expenses and
disbursements related to any registration, qualification or compliance pursuant
to section 5, including, without limitation, all registration, filing, rating
and listing fees, blue sky fees and expenses, printing expenses, reasonable
fees and disbursements of counsel (including, without limitation, the
reasonable fees, expenses and disbursements of one counsel for the holder or
holders of the Registrable Shares), and reasonable expenses of any special
audits incidental to or required by any registration, qualification or
compliance, except that Registration Expenses shall not include any Selling
Expenses.
"Remaining Holders" shall have the meaning specified in section 3.
"Restricted Securities" shall mean all shares of Company Common Stock
and all securities convertible into or exercisable or exchangeable for Company
Common Stock.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subscription Agreement" shall mean the Exchange and Subscription
Agreement dated the date hereof by and among the Company and each of the
Investors named therein, in the form attached hereto as Exhibit A, as amended,
modified or supplemented from time to time.
"Selling Expenses" shall mean all underwriters' discounts, selling
commissions, transfer taxes and other similar expenses (except to the extent
included in Registration Expenses) attributable to the Registrable Shares.
"Subject Securities" shall have the meaning specified in section 6.
"transfer" shall mean any issue, sale, pledge, gift, assignment or
other transfer.
3
<PAGE> 4
"Trivest Affiliates" shall mean each of the Trivest Investors and each
other Person that is controlled directly or indirectly by the Persons now or
hereafter controlling directly or indirectly the Trivest Investors.
2. General Restriction on Transfers of Restricted Securities. Any
transfer of Restricted Securities by or to any Investor which is not
consummated in accordance with this Agreement shall be void. The Investors
shall not directly or indirectly transfer (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in or any beneficial interest in any Restricted Securities except
pursuant to an Exempt Transfer; provided, that the Lead Trivest Investor may
not so transfer any Restricted Securities or any interest therein (except
pursuant to clause (a) of the definition of "Exempt Transfer") unless the
Institutional Investor contemporaneously transfers an Applicable Percentage of
the Restricted Securities owned by (and/or purchasable by) the Institutional
Investor at the same per share price and on the same terms and conditions,
subject to the provisions of sections 3 and 4 hereof, as applicable.
3. Drag Along Rights.
(a) If, at any time following the date hereof, the Lead
Trivest Investor shall enter into an agreement to sell, in a single transaction
or a series of transactions, any of the Restricted Securities at the time owned
by (and/or purchasable by) the Lead Trivest Investor to any Person or group of
Persons who are not Affiliates of the Company or any of the Trivest Investors
(the "Buyer") (including, without limitation, a sale of the Company by merger,
consolidation, sale of all or substantially all of its assets, sale of all of
the outstanding Company Common Stock or otherwise), then the Lead Trivest
Investor may require each holder of Restricted Securities (the "Remaining
Holders") to sell all of the Restricted Securities owned by (and/or purchasable
by) such Remaining Holders to the Buyer contemporaneously with the sale by the
Lead Trivest Investor and at the same price per share and on the same terms and
conditions as are applicable to the Restricted Securities to be sold by the
Lead Trivest Investor; provided, that if the Lead Trivest Investor is selling
less than all of Restricted Securities owned by (and/or purchasable by) it,
each Remaining Holder shall sell an Applicable Percentage of the Restricted
Securities owned by (and/or purchasable by) such Remaining Holder; provided,
further, that, notwithstanding anything to the contrary herein, the
Institutional Investor shall not be required in connection with any such
transaction to make any representation or warranty other than those relating to
the Institutional Investor's power and authority to effect such transfer
without contravention of any of its organizational documents or any agreement,
document, instrument, judgment, decree, order, law, statute, rule or regulation
applicable to it or to any of its properties and as to the Institutional
Investor's title to the Restricted Securities to be transferred by it being
free and clear of liens (other than liens created hereby or liens of general
applicability arising under applicable Securities laws); provided, further,
that, notwithstanding anything to the contrary herein, the Institutional
Investor shall be obligated to indemnify the proposed transferee or transferees
upon the same terms and conditions as are applicable to the indemnification
given by the Lead Trivest Investor in connection with such proposed transfer so
long as (i) all indemnification obligations are several, and not joint and
several, among all transferors in proportion to the consideration paid to each
transferor and (ii) the maximum obligation of the Institutional Investor shall
not exceed the net cash proceeds actually received by it as a result of such
transfer. Without limitation as to the foregoing, the Remaining Holders shall
4
<PAGE> 5
consent to and raise no objections against such a sale. If such sale is
structured as a merger or consolidation, each Remaining Holder shall waive any
dissenters rights, appraisal rights or similar rights in connection with such
merger or consolidation.
(b) If the Lead Trivest Investor wishes to exercise the right
granted pursuant to section 3(a), the Lead Trivest Investor must give written
notice to such effect to each of the Remaining Holders (a "Drag-Along Notice")
not less than 20 nor more than 60 days prior to the date upon which such sale
is scheduled to close. Each Drag-Along Notice shall (i) specify in reasonable
detail all of the terms and conditions upon which such sale is to occur
(including a description of all consideration payable in connection with the
sale) and (ii) make explicit reference to this section 3 and state that each of
the Remaining Holders is obligated to sell its Restricted Securities pursuant
to such sale. Upon request by any Remaining Holder, the Lead Trivest Investor
and the Company shall provide to each Remaining Holder copies of all
documentation relating to the proposed sale as any such holder may from time to
time reasonably request.
(c) If the Lead Trivest Investor exercises the right granted
pursuant to section 3(a), subject to the consummation of the sale of all
Restricted Securities to the Buyer and subject to compliance with the other
applicable terms of this Agreement and the Subscription Agreements, each of the
Remaining Holders shall promptly take such actions and shall promptly execute
such documents and instruments as shall be necessary and desirable to
consummate the proposed sale.
(d) At the closing of any such sale, each of the Remaining
Holders shall deliver a certificate or certificates, registered in such
holder's name, properly endorsed and with all required transfer stamps, if any,
representing the securities being sold by such holder against delivery of the
applicable consideration from the Buyer.
4. Co-Sale Rights of the Institutional Investor and Individual
Investors with Respects to Transfers by the Lead Trivest Investor.
(a) Subject to section 3, if the Lead Trivest Investor at any
time proposes to transfer any Restricted Securities (other than pursuant to any
other Exempt Transfer by the Lead Trivest Investor), then, as a condition
precedent thereto, the Lead Trivest Investor shall afford the Institutional
Investor and each Individual Investor the right to participate in such transfer
in accordance with this section 4.
(b) The Lead Trivest Investor shall give written notice to
the Institutional Investor and each Individual Investor (a "Notice of
Transfer") not less than twenty (20) nor more than sixty (60) days prior to any
proposed transfer of any such Restricted Securities. Each such Notice of
Transfer shall:
(i) specify in reasonable detail (A) the number and
type of Restricted Securities which the Lead Trivest Investor proposes
to transfer, (B) the identity of the proposed transferee or
transferees of such Restricted Securities, (C) the time within which,
the price per share at which and all other terms and conditions upon
which the Lead Trivest Investor proposes to transfer such Restricted
Securities, (including a description of all consideration payable in
connection with the transfer) and (D) the percentage of the Restricted
5
<PAGE> 6
Securities then owned by the Lead Trivest Investor which the Lead
Trivest Investor proposes to transfer to such proposed transferee or
transferees; and
(ii) make explicit reference to this section 4 and
state that the right of the Institutional Investor and each Individual
Investor to participate in such transfer under this section 4 shall
expire unless exercised within fifteen (15) days after receipt of such
Notice of Transfer.
(c) The Institutional Investor and each Individual Investor
shall have the right to transfer to the proposed transferee or transferees that
number of Restricted Securities which is equal to the Applicable Percentage of
the Restricted Securities owned by (and/or purchasable by) such Investor, at
the same price per share and on the same terms and conditions as are applicable
to the proposed transfer by the Lead Trivest Investor; provided, that,
notwithstanding anything to the contrary herein, the Institutional Investor
shall not be required in connection with any such transaction to make any
representation or warranty other than those relating to the Institutional
Investor's power and authority to effect such transfer without contravention of
any of its organizational documents or any agreement, document, instrument,
judgment, decree, order, law, statute, rule or regulation applicable to it or
to any of its properties and as to the Institutional Investor's title to the
Restricted Securities to be transferred by it being free and clear of liens
(other than liens created hereby or liens of general applicability arising
under applicable Securities laws); provided, further, that, notwithstanding
anything to the contrary herein, the Institutional Investor shall be obligated
to indemnify the proposed transferee or transferees upon the same terms and
conditions as are applicable to the indemnification given by the Lead Trivest
Investor in connection with such proposed transfer so long as (i) all
indemnification obligations are several, and not joint and several, among all
transferors in proportion to the consideration paid to each transferor and (ii)
the maximum obligation of the Institutional Investor shall not exceed the net
cash proceeds actually received by it as a result of such transfer.
(d) The Institutional Investor and each Individual Investor
must notify the Lead Trivest Investor, within fifteen (15) days after receipt
of the Notice of Transfer, if such Investor desires to accept such offer and to
transfer any of its Restricted Securities in accordance with this section 4.
The failure of any such Investor to provide such notice within such 15-day
period shall, for the purposes of this section 4, be deemed to constitute a
waiver by such Investor of its right to transfer any of its Restricted
Securities in connection with the proposed transfer described in such Notice of
Transfer. The Lead Trivest Investor shall use all commercially reasonable
efforts to obtain the agreement of the prospective transferee or transferees to
the participation of each Investor electing to participate in such proposed
transfer and shall not consummate any such proposed transfer unless each such
electing Investor is permitted to participate in accordance with the provisions
of this section 4. Neither the Institutional Investor nor any Individual
Investor shall be obligated to transfer any Restricted Securities pursuant to
this section 4. Any and all transfers of Restricted Securities by any such
Investor pursuant to this section 4 shall be made concurrently with the
transfer of Restricted Securities by the Lead Trivest Investor.
(e) Subject to the consummation of the transfer contemplated
by the Notice of Transfer and subject to compliance with the other applicable
terms of this Agreement and the Subscription Agreements, each Investor that
exercises its right granted pursuant to section 4(a) shall promptly take such
6
<PAGE> 7
actions and shall promptly execute such documents and instruments as shall be
necessary and desirable to consummate the proposed sale.
(f) At the closing of any such transfer, each Investor which
exercises the right granted pursuant to section 4(a) shall deliver a
certificate or certificates, registered in such Investor's name, properly
endorsed and with all required transfer stamps, if any, representing the
securities being sold by such Investor against delivery of the applicable
consideration by the proposed transferee.
(g) Notwithstanding anything to the contrary contained in
this section 4, no Individual Investor shall have any rights pursuant to this
section 4 to participate in any other Exempt Transfer by either Trivest
Investor.
5. Registration Rights.
5.1 Incidental Registration.
(a) If, after a Qualified Public Offering, the Company at any
time or from time to time shall determine to effect the registration,
qualification and/or compliance of any of its equity securities (otherwise than
pursuant to a registration on a form inappropriate for an underwritten public
offering or relating solely to securities to be issued in a merger, acquisition
of the stock or assets of another entity or in a similar transaction or
relating solely to securities issued or to be issued under any employee stock
option or purchase plan), then, in each such case, the Company shall:
(i) promptly give written notice of the proposed
registration, qualification and/or compliance (which shall include a
list of the jurisdictions in which the Company intends to register or
qualify such securities under the applicable blue sky or other
securities laws) to each holder of any Registrable Shares; and
(ii) use all commercially reasonable efforts to
include among the securities which it then registers or qualifies all
Registrable Shares specified by any holder thereof in a written
request or requests, made within 30 days after receipt of such written
notice from the Company; provided, however, that the Company shall not
include the Registrable Shares of the Lead Trivest Investor unless it
includes Registrable Shares of both Trivest Investors, pro rata based
upon the number of Registrable Shares owned by such holders.
(b) The obligations of the Company under this section 5.1 are
subject to the following qualifications:
(i) subject to section 5.8, the Company shall pay
all Registration Expenses related to any registration, qualification
and/or compliance requested pursuant to this section 5.1 and the
holders of the Registrable Shares shall pay their respective Selling
Expenses pro rata on the basis of the Registrable Shares so registered
and sold; and
7
<PAGE> 8
(ii) in the event that any registration pursuant to
this section 5.1 shall be, in whole or in part, an underwritten public
offering of Company Common Stock, the number of Registrable Shares to
be included in such an underwriting may be reduced (pro rata among the
requesting holders based upon the number of Registrable Shares owned
by such holders) if and to the extent that the managing underwriter
shall be of the opinion that the inclusion of some or all of the
Registrable Shares would adversely affect the marketing of the
securities to be sold by the Company therein; provided, that any such
limitation shall be imposed in such manner so as to avoid any
diminution in the number of shares the Company may register for sale
by (i) giving first priority for the shares to be registered for
issuance and sale by the Company, (ii) giving second priority for the
shares to be registered pursuant to this section 5.1 and (iii) giving
third priority for other securities requested to be in such
registration not covered by clauses (i) or (ii) above.
5.2 S-3 Registration. In addition to the rights under section
5.1, so long as the Company is then eligible to file a registration statement
on Form S-3 (or any successor form) under the Securities Act, then, upon the
written request by the holder or holders of at least 20% of the Registrable
Shares, the Company shall use all commercially reasonable efforts to effect the
registration (on such Form S-3 (or any successor form)), qualification and
compliance of all of the Registrable Shares of the holder or holders making
such request; provided, that the Company shall not be obligated to effect any
such registration unless the reasonably anticipated price to the public of the
Registrable Shares to be registered and sold pursuant thereto exceeds
$2,000,000; provided, however, that the Company shall not include the
Registrable Shares of the Lead Trivest Investor unless it includes Registrable
Shares of both Trivest Investors, pro rata based upon the number of Registrable
Shares owned by such holders. The Company shall not be obligated to effect more
than three (3) registrations pursuant to this section 5.2, nor shall it be
obligated to effect any registration requested pursuant to this section 5.2
within one hundred eighty (180) days after the effective date of any
registration in which the holders of Registrable Shares shall have been
permitted to fully participate under section 5.1. Subject to section 5.8, the
Company shall pay all Registration Expenses related to each such registration,
qualification and compliance contemplated by this section 5.2, and the holders
of the Registrable Shares shall pay their respective Selling Expenses pro rata
on the basis of the Registrable Shares so registered and sold.
5.3 Registration Procedures. In the case of each
registration, qualification and/or compliance contemplated by this section 5,
the Company shall keep the holder or holders of Registrable Shares advised in
writing as to the initiation of proceedings for such registration,
qualification and compliance and as to the completion thereof, and shall advise
each such holder, upon request, of the progress of such proceedings. In
addition, the Company shall follow procedures customarily observed by issuers
in public offerings, and accord to the holder or holders of Registrable Shares
all rights (including, without limitation, the right to perform appropriate
"due diligence") customarily accorded to selling shareholders in secondary
distributions and accord such rights to the managing underwriters if the
transaction in question is an underwritten public offering. At the expense of
the Company or of the party or parties bearing the expenses of such
registration, qualification and compliance, the Company shall (a) use all
commercially reasonable efforts to keep such registration, qualification and
compliance current and effective by such action as may be necessary or
appropriate, including, without limitation, the filing of post-effective
8
<PAGE> 9
amendments and supplements to any registration statement or prospectus, for
such period (not to exceed one hundred eighty (180) days in the case of section
5.1 and ninety (90) days in the case of section 5.2) as is necessary to permit
the sale and distribution of the Registrable Shares pursuant thereto, (b) use
all commercially reasonable efforts to take all necessary action under any
applicable blue sky or other applicable securities law to permit such sale
and/or distribution, all as reasonably requested by the holder or holders of
Registrable Shares included therein, and comply with applicable requirements of
all regulatory entities, provided, that the Company shall not be required to so
register or qualify the Registrable Shares in any jurisdiction if, solely as a
result thereof, the Company must qualify generally to do business therein,
consent to general service of process therein, or submit to liability for state
or local taxes, (c) furnish each holder of Registrable Shares included therein
such number of registration statements, prospectuses, supplements, amendments,
and offering circulars as such holder from time to tie may reasonably request,
(d) use all commercially reasonable efforts to list all Registrable Shares on
each securities exchange on which securities of the same class are then listed
and (e) use all commercially reasonable efforts to furnish (or cause to be
furnished) to the managing underwriters all undertakings, agreements,
certificates, opinions, financial statements and "comfort letters" of the sort
customarily provided to managing underwriters, if the transaction in question
is an underwritten public offering. In connection with and as a condition to
each registration hereunder, the sellers of Registrable Shares shall (a)
provide such information and execute such documents as may reasonably be
required in connection with such registration, (b) agree to sell Registrable
Shares on the basis provided in any underwriting arrangements, and (c) complete
and execute all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required or requested under the terms
of such underwriting arrangements. In connection with each registration
pursuant to section 5.1 covering an underwritten public offering, the Company
and each seller agree to enter into a written agreement with the managing
underwriter in such form and containing such provisions as are customary in the
securities business for such an arrangement between such underwriter and
companies of the Company's size and investment stature.
5.4 Indemnification.
(a) The Company shall indemnify, defend and hold harmless
each holder of Registrable Shares included in any registration, qualification
or compliance contemplated by this section 5 and each Person, if any, who
controls each such holder within the meaning of applicable securities laws, and
their respective directors, officers, employees, agents, advisors and
Affiliates (each, an "Indemnified Person"), to the fullest extent enforceable
under applicable law against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, supplement, amendment or offering circular related to
any registration, qualification or compliance or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation (or
alleged violation) of applicable securities laws in connection with any such
registration, qualification or compliance, and shall reimburse each such
Indemnified Person for any legal or any other expenses reasonably incurred in
connection with investigating and/or defending (and/or preparing for any
investigation or defense of) any such claim, loss, damage, liability, action or
violation; provided, that the Company shall not be liable in any such case to
any such Indemnified Person if, but only to the extent that, any such claim,
loss, damage, liability, action, violation or expense arises out of or is based
upon any untrue statement or alleged untrue statement in or omission or alleged
9
<PAGE> 10
omission if so made in reliance upon and in conformity with written information
furnished to the Company by such Indemnified Person specifically for use
therein; provided, further, however, that the Company shall not be liable to an
Indemnified Person in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue or alleged
untrue statement or omission or an alleged omission made in any preliminary
prospectus or final prospectus if (1) such Indemnified Person failed to send or
deliver a copy of the final prospectus or prospectus supplement with or prior
to the delivery of written confirmation of the sale of the Registrable Shares,
and (2) the final prospectus or prospectus supplement would have corrected such
untrue statement or omission.
(b) Each holder of Registrable Shares shall, if securities
held by such holder are included in a registration, qualification or compliance
contemplated pursuant to this section 5, indemnify, defend and hold harmless
the Company, each of its directors and officers and each Person, if any, who
controls the Company or such underwriter within the meaning of applicable
securities laws, and their respective directors, officers, employees, agents,
advisors and Affiliates, to the fullest extent enforceable under applicable law
against all claims, losses, damages and liabilities (or actions in respect
thereto) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, supplement, amendment or offering circular related to any such
registration, qualification or compliance, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
the Company and such directors, officers or other Persons for any legal or any
other expenses reasonably incurred in connection with investigating or
defending (and/or preparing for any investigation or defense of') any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) was made in (or omitted from) such registration
statement, prospectus, supplement, amendment or offering circular in reliance
upon and in conformity with written information furnished to the Company by
such holder specifically for use therein; provided, that the aggregate
liability of any such holder under this section 5.4 shall be limited to the net
sales proceeds actually received by such holder as a result of the sale by it
of securities in such registration, qualification or compliance.
(c) Promptly after receipt by an indemnified party under this
section 5.4 of notice of the commencement of any action, such party shall, if a
claim in respect thereof is to be made against the indemnifying party under
this section 5.4, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve the indemnifying
party from any liability which it may have to such indemnified party except to
the extent the indemnifying party is prejudiced by such omission. In case any
such action shall be brought against any indemnified party and such indemnified
party shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
part, under this section 5.4 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof, provided, that,
if the defendants in any such action include both the indemnified party and the
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<PAGE> 11
indemnifying party and the indemnified party shall have reasonably concluded
(based upon the advice of counsel) that there may be reasonable defenses
available to it that are different from or additional to those available to the
indemnifying party or if the interests of the indemnified party reasonably may
be deemed to conflict with the interests of the indemnifying party, then the
indemnified party shall have the right to select one separate counsel and to
assume such legal defenses and otherwise to participate in the defense of such
action, with the expenses and fees of such one separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred, it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions 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 as required by the local rules of such jurisdiction) at any time for
all such indemnified parties.
(d) To provide for just and equitable, contribution to joint
liability under the Securities Act in any case in which (i) an indemnified
party makes a claim for indemnification pursuant to this section 5.4 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this section 5.4 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of the Company, any selling holder of Registrable
Securities, any director or officer of the Company or any controlling person
(within the meaning of applicable securities laws) of any of the foregoing
Persons in circumstances for which indemnification is provided under this
section 5.4, then, and in each such case, the Company and such selling holder
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) as is appropriate to
reflect the relative fault of the Company and such holder in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as the relative benefit received by the Company and such
holder as a result of the offering in question, it being understood that the
parties acknowledge that the overriding equitable consideration to be given
effect in connection with this provision is the ability of one party or the
other to correct the statement or omission which resulted in such losses,
claims, damages or liabilities, and that it would not be just and equitable if
contribution pursuant thereto were to be determined by pro rata allocation or
by any other method of allocation which does not take into consideration the
foregoing equitable considerations; provided, that (x) in any such case 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, and (y) in no event
shall any, holder of Registrable Shares be obligated to make any contribution
in excess of the amount specified in section 5.4(b).
5.5 Restrictions on Other Agreements. The Company shall not
grant any right relating to the registration, qualification or compliance of
its securities if the exercise thereof violates or is inconsistent with any of
the rights granted under this section 5, without the written consent of each
Trivest Investor, which consent may be given or withheld in the sole discretion
of such holders. The Company shall not permit any of its Subsidiaries to
effect, or to grant any right relating to, the registration of its securities.
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<PAGE> 12
5.6 Limitations on Registration Rights.
(a) Notwithstanding anything to the contrary contained in
this Agreement, the Company may delay the filing or effectiveness of a
registration statement under section 5.2 for such time as may reasonably be
required by the Company (i) to obtain such audited and unaudited financial
statements as may be required by law to be included in the registration
statement; provided, that the Company shall use all commercially reasonable
efforts to obtain such financial statements as promptly as practicable, or (ii)
if the Company's board of directors believes that the offering of Registrable
Shares pursuant thereto would have a material adverse effect upon the Company;
provided, further, however, that the Company's ability to delay such
registration shall be limited to durations of no longer than one hundred eighty
(180) days and the Company shall not delay more than once during any twelve
(12) month period.
(b) Notwithstanding anything to the contrary contained in
this Agreement, the Company may delay the filing or effectiveness of, or may
terminate or withdraw, any registration statement referred under section 5.1 at
any time for any reason whatsoever without incurring any liability to the
holders of Registrable Shares, but the Company shall be and remain obligated to
pay all Registration Expenses, if any, incurred in connection therewith.
(c) If during any period when a registration statement
covering Registrable Shares filed pursuant to section 5.2 is effective, Company
proposes to file a registration statement on Forms S-1 or S-4 (or any of their
respective successor forms), then the Company shall have the right to terminate
the effectiveness of the registration statement covering such Registrable
Shares; provided, that the Company shall, within ninety (90) days thereof,
prepare and file a registration statement (the "Company Registration
Statement") covering the Registrable Shares sought to be registered by the
Company and the Registrable Shares for which such effective registration
statement was filed. In any such event, the participating holders shall include
such Registrable Shares in or with the Company Registration Statement. If the
Company does not file a Company Registration Statement within such ninety (90)
day period, then the holders shall have one additional right to require a
registration under section 5.2.
5.7 Holdback Agreement.
(a) In addition to any other restrictions on transfer of the
Registrable Shares contained in this Agreement, if the Company shall at any
time register securities under the Securities Act (including, without
limitation, any registration relating to a Qualified Public Offering or any
registration pursuant to this section 5) for offer or sale to the public, then
none of the holders of Registrable Shares shall make any short sale of, grant
an option for the transfer of, or otherwise transfer, any Registrable Shares
(other than (i) for the public sale of those Registrable Shares included in and
sold pursuant to such registration in accordance with this section 5 or (ii) in
a private sale complying with this Agreement to transferee who agrees to the
restrictions in this section 5.7(a)) without the prior written consent of the
Company for such reasonable period (but in no event longer than 180 days
following the effective date of the related registration statement) as may be
designated in writing to the holders of Registrable Shares by the Company, or,
if the registration shall be, in whole or in part, an underwritten offering, by
the managing underwriter; provided, that, in each case (except as set forth in
the following proviso), all of the Investors are subject to the same
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<PAGE> 13
restrictions; provided, further, that, after the Company's initial public
offering, the foregoing provisions of this section 5.7(a) shall only apply to a
holder of Registrable Shares that (A) is offering Registrable Shares for sale
to the public in connection with such registration or (B) beneficially owns (as
that term is used in Rule 13d-3 promulgated under the Exchange Act) five
percent or more of the outstanding shares of Company Common Stock.
(b) In addition to the restriction contained in section
5.7(a), each holder of Registrable Shares shall execute any restrictive
agreement or "lock-up" agreement that any underwriter engaged by the Company in
connection with any underwritten public offering shall request; provided, that
(i) the restrictive or "lock-up" period thereunder is not more than one hundred
eighty (180) days after the effective date of the registration statement for
which such restrictive agreement or "lock-up" agreement is sought and (ii),
except as set forth in the following proviso, all of the Investors are subject
to the same restrictions; provided, further, that, after the Company's initial
public offering, the foregoing provisions of this section 5.7(b) shall only
apply to a holder of Registrable Shares that (A) is offering Registrable Shares
for sale to the public in the offering or (B) beneficially owns (as that term
is used in Rule 13d-3 promulgated under the Exchange Act) five percent or more
of the outstanding shares of Company Common Stock.
(c) The Company may impose stop-transfer instructions with
respect to the Registrable Shares until the end of any restrictive period
provided for pursuant to this section 5.7.
5.8 Registration Expenses and Selling Expenses. The Company
shall pay all Registration Expenses related to any registration, qualification
and/or compliance contemplated by this Agreement, except (i) to the extent that
such Registration Expenses relate to any Registrable Shares requested to be
included in any registration proceeding pursuant to section 5.1, the request of
which has been withdrawn by the holders of a majority of the Registrable Shares
requested to be so registered, or (ii) for those related exclusively to a
registration proceeding begun pursuant to section 5.2, the request of which has
been subsequently withdrawn by the holders of a majority of the Registrable
Shares requested to be registered, in either of which cases, such Registration
Expenses shall be borne by the holders of Registrable Shares requesting or
causing such withdrawal, and, in any such case, such holders shall reimburse
the Company for all Registration Expenses paid or incurred by the Company in
connection with such withdrawn registration proceeding prior to such
withdrawal.
5.9 Changes in Company Common Stock. If, and as often as,
there is any change in the Company Common Stock by way of a stock split, stock
dividend, combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Company Common
Stock as so changed.
5.10 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Securities and Exchange
Commission that may at any time permit the resale of the Registrable Shares
without registration, the Company will at all times after 90 days after the
first registration statement covering a public offering of securities of the
Company under the Securities Act shall have become effective or following
registration under Section 12 of the Exchange Act, use its commercially
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<PAGE> 14
reasonable efforts to: (i) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act; (ii)
file with the Securities and Exchange Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and (iii) furnish to each holder of Registrable Shares forthwith
upon request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing such holder to sell any Registrable Shares without
registration.
6. Right of First Offer.
(a) At least sixty (60) days prior to making any transfer
(other than pursuant to another Exempt Transfer), each Individual Investor
shall deliver a written notice (the "Notice of Sale") to the Company and the
other Investors. The Notice of Sale shall disclose in reasonable detail the
identity of the prospective transferees) and the terms and conditions of the
proposed transfer. The Company shall use all commercially reasonable efforts to
purchase all (but not less than all) of the Restricted Securities to be
transferred (the "Subject Securities") upon the same terms and conditions as
those set forth in the Notice of Sale within sixty (60) days after the
Company's receipt of the Notice of Sale. If, after all commercially reasonable
efforts, the Company is unable to effect such purchase during such sixty (60)
day period, then the Company shall deliver a written notice thereof to each
Investor within seventy (70) days after the Company's receipt of the Notice of
Sale. Upon receipt of such notice from the Company, the Lead Trivest Investor
and the other Individual Investors may elect to purchase all (but not less than
all) of the Subject Securities upon the same terms and conditions as those set
forth in the Notice of Sale by delivering a written notice of such election to
the Investor within sixty (60) days after their receipt of the Company's
notice. If more than one of such Investors elects to purchase all of the
offered shares, such shares shall be purchased by such Investors so electing
pro rata based upon the number of shares of Common Stock owned by each such
Investor. Each such Investor shall be given up to sixty (60) days (after it has
been determined that such Investor has such right) to consummate the purchase
and sale of Subject Securities (the "Authorization Period"). If neither any
Individual Investor nor the Lead Trivest Investor has elected to purchase all
of the Subject Securities, then the selling Investor may transfer the Subject
Securities at a price and on terms no more favorable to the transferee(s)
thereof than specified in the Notice of Sale during the sixty (60) day period
immediately following the Authorization Period. Any Subject Securities not
transferred within such sixty (60) day period shall be subject to the
provisions of this section 6(a) upon subsequent transfer.
(b) The restrictions on the transfer set forth in this
section 6 shall continue with respect to each share of Restricted Securities
until the date on which such share has been transferred in a transaction
permitted by this section 6; provided, however, that each such share shall
continue to be subject to all other provisions of this Agreement.
7. Board Observation Rights. The Company shall permit all individuals
designated by the Trivest Investors, including pursuant to Section 5.4J of the
Institutional Investor's agreement of limited partnership, to have the
following rights: (i) to attend (without voting rights, unless such party is
14
<PAGE> 15
otherwise a director) all meetings of the Company's Board of Directors; and
(ii) to receive copies of all meeting minutes and all materials distributed at
or prior to meetings or otherwise distributed to the directors of the Company,
subject to the obligation to maintain the confidentiality of the discussions
and resolutions of such meetings and all materials circulated thereat or in
connection therewith, provided, however, that such individuals shall be
permitted to share such information with the Trivest Investors, their limited
partners and their respective authorized representatives and with other holders
of Company Common Stock.
8. Stock Option Plans. The Company shall not create or adopt any
employee stock option or stock appreciation rights plan or arrangement prior to
a Qualified Public Offering; provided, however, that this section 8 shall
terminate effective upon the consummation of a Qualified Public Offering and
shall not be deemed to prohibit any such plan or arrangement from becoming
effective upon the consummation of a Qualified Public Offering; provided,
further, that nothing herein shall be deemed to prohibit the Company from (i)
issuing Company Common Stock to employees and independent sales representatives
of the Company and its subsidiaries under the 1999 WinsLoew Key Employee Equity
Plan or (ii) issuing Company Common Stock in any other transaction for fair
market value as determined by the Company's board of directors from time to
time; provided, further, that the consideration for the issuance of the Common
in both (i) and (ii) shall consist solely of cash and/or promissory notes of
the purchaser thereof.
9. Affiliated Transactions; Limitation on Fees Payable to Trivest.
(a) Subject to the provisions of Section 9(b), below, the
Company will not, and will not permit any of its subsidiaries to, engage in any
transaction (including, without limitation, the purchase, sale or exchange of
any properties and assets or the rendering of any services or the payment of
compensation) with an Affiliate of the Company or of any of its subsidiaries on
terms less favorable to the Company or any of its subsidiaries in any material
respect than would be obtainable at the time in comparable transactions with a
Person that is not such an Affiliate.
(b) The Company shall not, and shall not permit any of its
subsidiaries to, make any payment of any directors fee, management fee or
similar amount to the Lead Trivest Investor or any of its Affiliates; provided,
however, that:
(i) the Company may pay to Trivest II, Inc.
management fees, transaction fees and other amounts (including the
reimbursement of reasonable out-of-pocket expenses) required or
permitted to be paid pursuant to the Management Agreement, dated as of
the date hereof, between the Company and Trivest II, Inc. (as in
effect on the date of this Agreement), a copy of which is attached to
this Agreement as Exhibit B;
(ii) the Company or any of its subsidiaries may
reimburse Trivest II, Inc. for the allocable charges (including the
reimbursement of reasonable out-of-pocket expenses) of the Trivest
Legal Department for services actually rendered to the Company and its
subsidiaries, provided that such charges are at rates no less
favorable to the Company than rates which would be charged for similar
services rendered by persons who are not Affiliates of the Company or
the Lead Trivest Investor; and
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<PAGE> 16
(iii) the Company may pay to Trivest II, Inc., at or
promptly following the effective time of the Merger, a transaction fee
of no more than $3.0 million and may reimburse Trivest II, Inc. and
its Affiliates for (i) reasonable out-of-pocket expenses incurred by
them in connection with the Merger (including, without limitation, the
financing thereof) and (ii) allocable charges (including the
reimbursement of reasonable out-of-pocket expenses) of the Trivest
Legal Department for services actually rendered in connection with the
Merger (including, without limitation, the financing thereof and any
litigation arising in connection therewith), provided that such
charges are at rates no less favorable to the Company than rates which
would be charged for similar services rendered by persons who are not
Affiliates of the Company or the Lead Trivest Investor.
10. Termination. Notwithstanding anything to the contrary contained in
this Agreement, sections 2, 3, 4, 6, 7 and 9 of this Agreement shall terminate
after a Qualified Public Offering upon the liquidation of the Institutional
Investor in accordance with its agreement of limited partnership.
11. Notices. All communications provided for herein shall be in
writing and sent (a) by telecopy or electronic mail if the sender on the same
day sends a confirming copy of such communication by a recognized overnight
delivery service (charges prepaid), (b) by a recognized overnight delivery
service (charges prepaid), or (c) by messenger. The respective addresses of the
parties hereto for the purposes of this Agreement are set forth on the
signature pages or Exhibit C attached hereto. Any party may change its address
(or telecopy number) by notice to each of the other parties in accordance with
this section 11. Communications under this Agreement shall be deemed given only
when actually received.
12. Binding Agreement. This Agreement shall be binding on and shall
inure to the benefit of each of the parties hereto and their respective
successors and assigns.
13. Amendments and Waivers. This Agreement may not be amended except
by a written instrument signed by the Company and each Trivest Investor;
provided, that no amendment or waiver may adversely affect an Individual
Investor in a manner different from any other Trivest Investor without the
written consent of such Individual Investor. No course of dealing between any
parties hereto and no delay by any party in exercising its rights hereunder
shall operate as a waiver of any, rights of any party. No waiver shall be
deemed to be made by any party of its rights hereunder unless the same shall be
in writing signed on behalf of such party, and each waiver, if any, shall be a
waiver only with respect to the specific instance involved and shall in no way
impair the rights or obligations of any other party in any other respect at any
other time.
14. Specific Performance. The parties hereto stipulate that the
remedies at law of any party hereto in the event of any default or threatened
default by any other party hereto in the performance of or compliance with the
terms hereof are not and shall not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance thereof, whether by an injunction against violation
thereof or otherwise.
15. Legends. No Restricted Securities held by the parties hereto may
be transferred except pursuant to a registration under applicable securities
16
<PAGE> 17
laws or pursuant to an exemption from such registration. Until the date on
which such Restricted Securities are so registered, each certificate evidencing
the same shall bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER
APPLICABLE SECURITIES LAW AND MAY NOT BE TRANSFERRED IN THE
ABSENCE OF REGISTRATION THEREUNDER OR AN EXEMPTION
THEREFROM."
So long as any Restricted Securities held by the parties hereto shall be
subject to the terms of this Agreement, all certificates evidencing the same
shall bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS
OF THE INVESTORS' AGREEMENT DATED AUGUST 27, 1999 AMONG THE
ISSUER HEREOF AND CERTAIN OTHER PERSONS, AS AMENDED, MODIFIED
AND SUPPLEMENTED FROM TIME TO TIME. COPIES OF SUCH AGREEMENT
ARE ON FILE AT THE ISSUER'S PRINCIPAL OFFICES AND, UPON
WRITTEN REQUEST, COPIES THEREOF SHALL BE MAILED WITHOUT
CHARGE WITHIN TEN DAYS OF RECEIPT OF SUCH REQUEST TO
APPROPRIATELY INTERESTED PERSONS."
Upon receipt from any holder of any Restricted Securities by the Company of an
opinion of counsel reasonably satisfactory to it to the effect that any of the
foregoing legends are no longer required or applicable, the Company shall
reissue the certificates evidencing the applicable Restricted Securities
without such legends.
16. Governing Law: Jurisdiction; Waiver of Jury Trial. This Agreement,
including the validity hereof and the rights and obligations of the parties
hereunder, and all amendments and supplements hereof and all waivers and
consents hereunder, shall be construed in accordance with and governed by the
domestic substantive laws of the State of Florida without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of the domestic substantive laws of any other jurisdiction. Each of
the parties hereto, to the extent that it may lawfully do so, hereby consents
to service of process, and to be sued, in the State of Florida and consents to
the jurisdiction of the courts of the State of Florida and the United States
District Court sitting in the County of Miami-Dade, as well as to the
jurisdiction of all courts to which an appeal may be taken from such courts,
for the purpose of any suit, action or other proceeding arising out of any of
its obligations hereunder or with respect to the transactions contemplated
hereby, and expressly waives any and all objections it may have as to venue in
any such courts. Each of the parties hereto further agrees that a summons and
complaint commencing an action or proceeding in any of such courts shall be
properly served and shall confer personal jurisdiction if served personally or
by certified mail to it at its address referred to in section 11 or as
otherwise provided under the laws of the State of Florida. Notwithstanding the
foregoing, each of the parties hereto agrees that nothing contained in this
section 16 shall preclude the institution of any such suit, action or other
17
<PAGE> 18
proceeding in any jurisdiction other than the State of Florida. EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT,
ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST IT IN RESPECT OF ITS
OBLIGATIONS HEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY.
17. Miscellaneous. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. This
Agreement embodies the entire agreement and understanding among the parties
hereto relating to the subject matter hereof and supersedes all prior
agreements and understandings relating to the subject matter hereof. Each
covenant contained herein shall be construed (absent an express provision to
the contrary) as being independent of each other covenant contained herein, so
that compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other covenant. If
any provision in this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be applicable, whether such action is taken directly or indirectly by
such Person. In case any provision in this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired hereby. This Agreement
may be executed in any number of counterparts and by the parties hereto or
thereto, as the case may be, on separate counterparts but all such counterparts
shall together constitute but one and the same instrument.
[The remainder of this page is intentionally left blank.]
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<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
TRIVEST FURNITURE CORPORATION
By: /s/ William F. Kaczynski, Jr.
-----------------------------------------------
William F. Kaczynski, Jr., Vice President
TRIVEST FUND II GROUP, LTD.
By: Trivest Equities, Inc.
By: /s/ William F. Kaczynski, Jr.
------------------------------------------
William F. Kaczynski, Jr., Managing Director
TRIVEST FURNITURE PARTNERS, LTD.
By: TFP, Ltd.
By: Trivest II, Inc.
By: /s/ William F. Kaczynski, Jr.
-------------------------------------------
William F. Kaczynski, Jr., Managing Director
/s/ Bobby Tesney
---------------------------------------------------
Bobby Tesney
/s/ R. Craig Watts
---------------------------------------------------
R. Craig Watts
/s/ Stephen C. Hess
---------------------------------------------------
Stephen C. Hess
/s/ Vincent A. Tortorici, Jr.
---------------------------------------------------
Vincent A. Tortorici, Jr. (individually and as
beneficial owner of the Tortorici IRA)
/s/ Rick J. Stephens
---------------------------------------------------
Rick J. Stephens
/s/ Jerry C. Camp
---------------------------------------------------
Jerry C. Camp
/s/ Earl W. Powell
---------------------------------------------------
Earl W. Powell
/s/ Phillip T. George, M.D.
---------------------------------------------------
Phillip T. George, M.D
/s/ Brevator J. Creech, M.D.
---------------------------------------------------
Brevator J. Creech, M.D.
/s/ James Pinto
---------------------------------------------------
James Pinto
/s/ Troy D. Templeton
---------------------------------------------------
Troy D. Templeton
<PAGE> 20
EXHIBIT A
SUBSCRIPTION AGREEMENT
See attached
<PAGE> 21
EXCHANGE AND SUBSCRIPTION AGREEMENT
THIS EXCHANGE AND SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of August 27, 1999, by and among Trivest Furniture Corporation, a Florida
corporation (the "Company," which term shall refer to WinsLoew Furniture, Inc.,
a Florida corporation ("WinsLoew"), upon the consummation of the merger of
Trivest Furniture Corporation with and into WinsLoew), and the investors
identified on the schedule attached hereto (collectively, the "Investors," and
each individually, an "Investor").
PRELIMINARY STATEMENTS:
A. Certain of the Investors desire to exchange certain shares of
WinsLoew's common stock, $.01 par value per share ("WinsLoew Common Stock"),
held by them for shares of the Company's common stock, $.01 par value per share
("Company Common Stock"), on the terms and subject to the conditions set forth
in this Agreement.
B. Certain of the Investors desire to purchase shares of Company
Common Stock in exchange for cash in the amount of $100 per share on the terms
and subject to the conditions set forth in this Agreement.
C. The Company desires to issue the Company Common Stock to the
Investors.
D. The Company and the Investors desire to enter into this Agreement
setting forth the terms and conditions relating to the acquisition of Company
Common Stock by the Investors.
E. Contemporaneously with the execution and delivery of this
Agreement, the Company and each Investor are executing and delivering an
Investors' Agreement that will restrict the Investors' ability to transfer the
Company Common Stock acquired hereunder and create certain other rights and
obligations in respect thereof.
F. The transactions contemplated hereby are intended to qualify as a
transaction described in Section 351 of the Internal Revenue Code of 1986, as
amended.
AGREEMENT:
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Exchange of WinsLoew Common Stock. Each Investor whose name appears
on Schedule A hereto hereby sells, transfers, conveys, assigns and contributes
to the Company that number of shares of WinsLoew Common Stock set forth beside
such Investor's name on Schedule A hereto, free and clear of all encumbrances.
Each such Investor has heretofore delivered or shall deliver to the Company a
certificate or certificates representing the shares of WinsLoew Common Stock
transferred by such Investor to the Company hereunder, duly endorsed in blank
or accompanied by stock powers duly executed in blank, in form and substance
satisfactory to the Company to effect such transfer. In exchange for the shares
of WinsLoew Common Stock transferred to the Company hereunder, the Company
shall issue and deliver to each such Investor a certificate or certificates for
-1-
<PAGE> 22
the number of shares of Company Common Stock set forth beside such Investor's
name on Schedule A hereto, which shares shall be validly issued, fully paid and
nonassessable.
2. Purchase of Company Common Stock. Each Investor whose name appears
on Schedule B hereto hereby subscribes for and agrees to purchase, concurrently
with the execution and delivery of this Agreement by such Investor, and the
Company hereby agrees to issue and sell to such Investor, the number of shares
of Company Common Stock set forth beside such Investor's name on Schedule B
hereto, for the aggregate purchase price set forth on Schedule B (the
"Subscription Price"). Each such Investor has heretofore delivered or shall
deliver to the Company immediately available funds in an amount equal to the
Subscription Price for such shares. In exchange for payment of the Subscription
Price hereunder, the Company shall issue and deliver to each such Investor a
certificate or certificates for the number of shares of Company Common Stock
set forth beside such Investor's name on Schedule B hereto, which shares shall
be validly issued, fully paid and nonassessable.
3. Representations and Warranties.
(a) Representations and Warranties of the Company. The
Company hereby represents and warrants to the Investors as follows:
(i) Organization, Power and Authority. The Company
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Florida. The Company has full corporate power and
authority to carry on the business in which it is engaged and to own and use
the property owned and used by it.
(ii) Authorization of Transaction. The Company has
full corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of the Company, enforceable in accordance with its
terms.
(iii) Capitalization. The authorized capital stock
of the Company consists of 1,000,000 shares of Company Common Stock, none of
which are outstanding prior to the exchange, purchase and sale of the shares of
Company Common Stock provided for herein. Upon the consummation of the
transactions contemplated by Sections 1 and 2 above, the shares of Company
Common Stock acquired by each Investor pursuant to the provisions of this
Agreement will be duly authorized, validly issued, fully paid and
nonassessable.
(b) Representations and Warranties of Investors. Each
Investor, severally and not jointly, hereby represents and warrants to the
Company with respect to such Investor and its exchange or purchase of shares of
Company Common Stock as follows:
(i) Residence. If the Investor is a natural person,
the Investor a resident of, and received this Agreement and first learned of
the offer and sale of the shares of Company Common Stock contemplated hereby
in, the State set forth opposite the name of such Investor under the heading
"State" on Schedule A or Schedule B attached hereto, as the case may be. The
Investor intends that the laws of such State govern the acquisition of such
shares by the Investor. If the Investor is a limited partnership, the Investor
is organized under and governed by the laws of, and it's principal place of
-2-
<PAGE> 23
business is located in, the State set forth opposite the name of such Investor
under the heading "State" on Schedule A or Schedule B attached hereto, as the
case may be.
(ii) Capacity; Authorization; Valid and Binding
Obligation. If the Investor is a natural person, the Investor has full capacity
to execute and deliver this Agreement and to perform the Investor's obligations
hereunder. If the Investor is a limited partnership, the Investor has full
partnership or other power and authority to enter into and perform this
Agreement in accordance with its terms. This Agreement constitutes the valid
and legally binding obligation of the Investor enforceable against the Investor
in accordance with its terms.
(iii) Ownership of WinsLoew Common Stock. If the
Investor is exchanging WinsLoew Common Stock for Company Common Stock, such
Investor is the lawful owner, of record and beneficially, of the shares of
WinsLoew Common Stock owned by such Investor (which are those shares of
WinsLoew Common Stock listed beside such Investor's name on Schedule A hereto)
and has good title to such shares, free and clear of any and all encumbrances.
Such Investor has transferred and conveyed, and the Company has acquired, good
title to those shares of WinsLoew Common Stock listed beside such Investor's
name on Schedule A hereto, free and clear of any and all encumbrances.
(iv) Acquisition for Investment; Accredited Investor
Status; Sophistication. It is the present intention of the Investor that the
shares of Company Common Stock being acquired by such Investor are being
acquired for such Investor's own account for the purpose of investment and not
with a present view to or for sale in connection with any distribution thereof;
provided, however, that the disposition of the property of each Investor shall
at all times be within its control. The Investor is an "accredited investor"
within the meaning of Rule 501 of Regulation D under the Securities Act of
1933, as amended ("Rule 501"), and, if such Investor is not an individual
person, either (A) it was not organized for the specific purpose of acquiring
the shares of Company Common Stock, or (B) each person who has invested in the
Investor is an "accredited investor" within the meaning of Rule 501. The
Investor is sophisticated in financial matters and has sufficient knowledge and
experience so as to be able to evaluate the risks and merits of the Investor's
investment in the Company and is able financially to bear the risks thereof.
(v) Certain Risk Factors; Opportunity to Ask
Questions; Reliance. The Investor understands the speculative nature of and
risks involved in the proposed investment in the Company and that the
investment is suitable only for persons of adequate financial means who have no
need for liquidity in the investment in that the Investor may not be able to
liquidate the investment in the event of an emergency, transferability is
limited and, in the event of a disposition, the Investor could sustain a
complete loss of the entire investment. The Investor is familiar with and has
had an opportunity to ask questions and receive answers concerning the
financial condition and operations of the Company and its subsidiaries and has
had full access to such other information concerning the Company and its
subsidiaries as the Investor has requested. The Investor is acquiring the
shares of Company Common Stock without having been furnished any
representations or warranties of any kind whatsoever with respect to the
business and financial condition of the Company and its subsidiaries, other
than the representations contained herein.
-3-
<PAGE> 24
4. Florida Rescission Right. ANY SALE MADE PURSUANT TO FLORIDA
STATUTES SECTION 517.061 IS VOIDABLE BY THE PURCHASER WITHIN THREE DAYS AFTER
THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN
AGENT OF THE ISSUER, OR AN ESCROW AGENT.
5. Miscellaneous. If any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
This Agreement constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way. This Agreement may be executed in counterparts and any
telecopied signature shall be deemed a manually executed and delivered
original. This Agreement is intended to bind and inure to the benefit of and be
enforceable by the Investors, the Company and their respective successors and
assigns and, where applicable, heirs and personal representatives. Except as
otherwise provided herein, this Agreement shall be governed and construed in
accordance with the laws of the State of Florida without regard to conflicts of
laws principles. Each party hereby irrevocably submits to the exclusive
jurisdiction of any state or federal court sitting in Miami-Dade County,
Florida in any action or proceeding arising out of or relating to this
Agreement and hereby irrevocably waives any objection such person may now or
hereafter have as to the venue of any such suit, action or proceeding brought
in such a court or that such court is an inconvenient forum. No provision of
this Agreement may be amended or waived without the prior written consent of
the Company and the particular Investor whose Agreement is sought to be amended
or waived.
-4-
<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
TRIVEST FURNITURE CORPORATION
By: /s/ William F. Kaczynski, Jr.
-----------------------------------------
William F. Kaczynski, Jr., Vice President
INVESTORS:
TRIVEST FURNITURE PARTNERS, LTD.
By: TFP, Ltd., its General Partner
By: Trivest II, Inc., its General Partner
By: /s/ B. Jay Anderson
-----------------------------------
B. Jay Anderson, Director
Address:
c/o Trivest, Inc.
2665 South Bayshore Drive
Miami, Florida 33133
Taxpayer Identification Number: 65-0926562
TRIVEST FUND II GROUP, LTD.
By: Trivest Equities, Inc.,
its General Partner
By: /s/ B. Jay Anderson
-----------------------------------
B. Jay Anderson, Director
Address:
c/o Trivest, Inc.
2665 South Bayshore Drive
Miami, Florida 33133
Taxpayer Identification Number: 65-0930039
-5-
<PAGE> 26
/s/ EARL W. POWELL
--------------------------------------------
EARL W. POWELL
Address:
c/o Trivest, Inc.
2665 South Bayshore Drive
Miami, Florida 33133
Taxpayer Identification Number: ###-##-####
/s/ PHILLIP T. GEORGE, M.D.
--------------------------------------------
PHILLIP T. GEORGE, M.D.
Address:
c/o Trivest, Inc.
2665 South Bayshore Drive
Miami, Florida 33133
Taxpayer Identification Number: ###-##-####
/s/ TROY D. TEMPLETON
--------------------------------------------
TROY D. TEMPLETON
Address:
c/o Trivest, Inc.
2665 South Bayshore Drive
Miami, Florida 33133
Taxpayer Identification Number: ###-##-####
/s/ BREVATOR J. CREECH, M.D.
--------------------------------------------
BREVATOR J. CREECH, M.D.
Address:
101 West Chico Avenue, Suite C
Chico, California 95926
Taxpayer Identification Number: ###-##-####
-6-
<PAGE> 27
/s/ JAMES J. PINTO
--------------------------------------------
JAMES J. PINTO
Address:
c/o Resource Holdings, Ltd.
520 Madison Avenue, 40th Floor
New York, New York 10022
Taxpayer Identification Number: ###-##-####
/s/ BOBBY TESNEY
--------------------------------------------
BOBBY TESNEY
Address:
c/o WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Taxpayer Identification Number: ###-##-####
/s/ STEPHEN C. HESS
--------------------------------------------
STEPHEN C. HESS
Address:
c/o WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Taxpayer Identification Number: ###-##-####
/s/ R. CRAIG WATTS
--------------------------------------------
R. CRAIG WATTS
Address:
c/o Loewenstein Furniture Group, Inc.
1801 North Andrews Extension
Pompano Beach, Florida 33061
Taxpayer Identification Number: ###-##-####
-7-
<PAGE> 28
/s/ VINCENT A. TORTORICI
--------------------------------------------
VINCENT A. TORTORICI
Address:
c/o WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Taxpayer Identification Number: ###-##-####
/s/ RICK J. STEPHENS
--------------------------------------------
RICK J. STEPHENS
Address:
c/o WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Taxpayer Identification Number: ###-##-####
/s/ JERRY C. CAMP
--------------------------------------------
JERRY C. CAMP
Address:
c/o WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Taxpayer Identification Number: ###-##-####
-8-
<PAGE> 29
SCHEDULE A
TO EXCHANGE AND SUBSCRIPTION AGREEMENT
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
INVESTOR WINSLOEW SHARES COMPANY SHARES STATE
- -------------------------------------- --------------- -------------- ---------
<S> <C> <C> <C> <C>
1. Trivest Furniture Partners, Ltd. 117,500 40,831.2500 Florida
2. Earl W. Powell 86,331 30,000.0225 Florida
3. Phillip T. George, M.D. 28,187 9,794.9825 Florida
4. Troy D. Templeton 1,050 364.8750 Florida
5. James J. Pinto 4,798 1,667.3050 Florida
6. Brevator J. Creech, M.D. 2,399 833.6525 California
7. Bobby Tesney 33,323 11,579.7425 Alabama
8. Stephen C. Hess 10,000 3,475.0000 Alabama
9. R. Craig Watts 25,900 9,000.2500 Florida
10. Rick J. Stephens 14,978 5,204.8550 Alabama
11. Vincent A. Tortorici IRA(1) 10,072 3,500.0200 Alabama
12. Jerry C. Camp 1,762 612.2950 Alabama
TOTAL 336,300 116,864.2500
</TABLE>
- --------
(1) Vincent A. Tortorici, Jr. Individual Retirement Account, Account #1238SD,
Community Bank (Blountsville, Alabama), Custodian
<PAGE> 30
SCHEDULE B
TO EXCHANGE AND SUBSCRIPTION AGREEMENT
<TABLE>
<CAPTION>
AGGREGATE
PURCHASE NUMBER OF
INVESTOR PRICE COMPANY SHARES STATE
- -------------------------------------- --------------- -------------- ---------
<S> <C> <C> <C> <C>
1. Trivest Furniture Partners, Ltd. $33,625,000.00 336,250.0000 Florida
2. Trivest Fund II Group, Ltd. $31,164,799.25 311,647.9925 Florida
3. Vincent A. Tortorici $349,998 3,499.9800 Alabama
4. Rick J. Stephens $179,514.50 1,795.1450 Alabama
5. Jerry C. Camp $138,770.50 1,387.7050 Alabama
TOTAL $65,458,082.25 654,580.8225
</TABLE>
<PAGE> 31
EXHIBIT B
MANAGEMENT AGREEMENT
See attached.
<PAGE> 32
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made and entered into as of
the 27th day of August, 1999, by and between WinsLoew Furniture, Inc., a
Florida corporation (the "Company"), and Trivest II, Inc., a Florida
corporation ("Trivest").
1. Appointment of Trivest. On the terms and subject to the conditions
set forth in this Agreement, the Company appoints Trivest and Trivest accepts
appointment as the sole and exclusive manager of, and consultant to, the
Company's business, including without limitation any subsidiaries of the
Company and any other corporations hereafter formed or acquired by the Company
to engage in any business.
2. Board of Directors Supervision; Certain Actions Subject to Approval
of Disinterested Directors or Board Observers.
(a) The activities of Trivest to be performed under this Agreement
shall be subject to the supervision of the Board of Directors of the Company
(the "Board") to the extent required by applicable law or regulation and
subject to reasonable policies not inconsistent with the terms of this
Agreement adopted by the Board and in effect from time to time. Where not
required by applicable law or regulation, Trivest shall not require the prior
approval of the Board to perform its duties under this Agreement.
(b) Any determination of the amount of any increase in Base
Compensation in connection with the acquisition of an Additional Business
pursuant to clause (ii) of Section 6(b) below and any compensation arrangement
approved by the Board pursuant to clause (ii) of Section 6(c) below shall, in
order to be effective, require the affirmative approval of a majority of the
Disinterested Directors and, if Trivest Furniture Partners, Ltd., a Florida
limited partnership ("Trivest Furniture Partners"), is at such time a holder of
any equity securities of the Company, a majority in interest of the holders of
limited partnership interests of Trivest Furniture Partners. For purposes of
this Agreement the term "Disinterested Directors" shall mean those members of
the Board (if any) who, at the time of such approval, are neither employees of
the Company nor directors, officers or stockholders of Trivest or (subject to
the last sentence of this Section 2(b), any of its affiliates. Nothing herein
shall be deemed to prevent any individual who owns less than five percent in
the aggregate of the equity securities of any class of any issuer whose shares
are registered under 12(b) or 12(g) of the Securities Exchange Act of 1933, as
amended, and are listed or admitted for trading on any United States national
securities exchange or are quoted on the National Association of Securities
Dealers Automated Quotations System, or any similar system of automated
dissemination of quotations of securities prices in common use, from being
deemed to be a Disinterested Director so long as such individual is not a
member of any "control group" (within the meaning of the rules and regulations
of the United States Securities and Exchange Commission) of any such issuer.
<PAGE> 33
3. Authority of Trivest. Subject to any limitations imposed by
applicable law or regulation, Trivest shall render management, consulting and
financial services to the Company, which services shall include advice and
assistance concerning any and all aspects of the operations, strategic and
capital planning and financing of the Company and its subsidiaries as needed
from time to time, including conducting relations on behalf of the Company with
accountants, attorneys, financial advisors and other professionals. Trivest
will also make periodic reports to the Company with respect to the services
provided hereunder. Trivest will use its best efforts to cause its employees
and agents to give the Company the benefit of their special knowledge, skill
and business expertise to the extent relevant to the Company's business and
affairs. In addition, Trivest shall render advice and expertise in connection
with any acquisitions or dispositions undertaken by the Company.
4. Reimbursement of Expenses; Independent Contractor. All obligations
or expenses incurred by Trivest in the performance of its duties under this
Agreement shall be for the account of, on behalf of, and at the expense of the
Company. Trivest shall not be obligated to make any advance to or for the
account of the Company or to pay any sums, except out of funds held in accounts
maintained by the Company nor shall Trivest be obligated to incur any liability
or obligation for the account of the Company without assurance that the
necessary funds for the discharge of such liability or obligation will be
provided. In the event the Company utilizes the services of Trivest's legal
department, then the Company shall promptly reimburse Trivest for such expenses
at prevailing rates. Trivest shall be an independent contractor, and nothing
obtained in this Agreement shall be deemed or construed (i) to create a
partnership or joint venture between the Company and Trivest, or (ii) to cause
Trivest to be responsible in any way for the debts, liabilities or obligations
of the Company or any other party, or (iii) to constitute Trivest or any of its
employees as employees, officers or agents of the Company.
5. Other Activities of Trivest. The Company acknowledges and agrees
that neither Trivest nor any of Trivest's employees, officers, directors,
affiliates or associates shall be required to devote full time and business
efforts to the duties of Trivest specified in this Agreement, but instead shall
devote only so much of such time and efforts as Trivest reasonably deems
necessary. The Company further acknowledges and agrees that Trivest and its
affiliates are engaged in the business of investing in, acquiring and/or
managing businesses for Trivest's own account, for the account of Trivest's
affiliates and associates and for the account of unaffiliated parties, and
understands that Trivest plans to continue to be engaged in such businesses
(and other business or investment activities) during the term of this
Agreement. No aspect or element of such activities shall be deemed to be
engaged in for the benefit of the Company or any of its subsidiaries nor to
constitute a conflict of interest.
6. Compensation of Trivest.
(a) Base Compensation. During the term of this Agreement, Trivest
shall receive annually with respect to the management of the business
operations of the Company and its subsidiaries (including subsidiaries of
-2-
<PAGE> 34
subsidiaries), a base cash consulting and management fee equal to $350,000,
payable in advance in equal quarterly installments (the "Base Compensation").
The Base Compensation shall be adjusted annually to reflect any increase from
the previous year in the Consumer Price Index. For purposes of this Agreement,
the term "Consumer Price Index" shall mean the "Consumer Price Index For All
Urban Consumers" base year 1982-1984 = 100 for the Southern region, published
by the United States Department of Labor, Bureau of Labor Statistics. The
Company acknowledges that the determination of the amount of the initial Base
Compensation payable to Trivest hereunder is based upon the Company's present
business activities.
(b) Additional Business Operations. In the event that any additional
business operations are acquired by the Company or its subsidiaries after the
date of this Agreement (each an "Additional Business"), then, with respect to
each such Additional Business which has EBITA of $2,000,000 or more, the Base
Compensation shall be increased (as of the date such Additional Business is
acquired) by an amount equal to the greater of (i) $50,000 and (ii) subject to
Section 2(b), above, an amount determined in good faith by Trivest and the
Board prior to the date such Additional Business is acquired. For purposes of
this Agreement, the term "EBITA" shall mean the projected annual earnings
before income taxes, interest expense and amortization of goodwill for each
Additional Business for the fiscal year in which the acquisition of such
Additional Business occurs, as computed in accordance with generally accepted
accounting principles consistently applied with prior years (but excluding from
such computation any purchase adjustments and compensation payable to Trivest
as a result of the terms of this Agreement).
(c) Additional Incentive Compensation.
(i) As additional compensation, Trivest shall be entitled
to a one-time fee (the "Additional Incentive Compensation") with
respect to (A) any acquisition of a business operation by the Company
or its subsidiaries introduced or negotiated by Trivest or its
affiliates, and (B) any disposition of a business operation by the
Company or its subsidiaries negotiated by Trivest or its affiliates.
The Additional Incentive Compensation shall be paid at the closing of
the acquisition or disposition of any such business operation. The
Additional Incentive Compensation shall be a cash sum equal to the
following percentages of the purchase price (which on acquisitions or
dispositions of assets shall also include the book value of the
assumed liabilities, and on acquisitions or dispositions of stock
shall also include liabilities of the acquired entity that are
required to be paid with funds provided by the Company or any of its
subsidiaries in connection with such acquisition) for the acquisition
or disposition:
PURCHASE PRICE PERCENTAGE
-------------- ----------
$1 to $10,000,000 3.00%
$10,000,001 to $50,000,000 1.25%
$50,000,001 and over 0.75%
-3-
<PAGE> 35
By way of illustration, an acquisition or disposition with a purchase
price of $60,000,000 would generate Additional Incentive Compensation
of $875,000 (3.00% of the first $10,000,000, 1.25% of the next
$40,000,000 and 0.75% of the remaining $10,000,000). This Section
6(c)(i) shall not apply to any transaction (a "Sale of the Company")
which is (x) the sale of all, or substantially all, of the Company's
consolidated assets in any single transaction or series of related
transactions; (y) the sale or issuance, or series of related sales or
issuances, of equity securities of the Company in any single
transaction or series of related transactions which results in any
person or group of affiliated persons (other than affiliates of
Trivest) owning (on a fully-diluted basis) more than 50% of the
Company's securities having ordinary voting power to elect directors
outstanding at the time of such sale or issuance or such series of
sales and/or issuances; or (z) any merger or consolidation of the
Company with or into another corporation (regardless of which entity
is the surviving corporation) if, after giving effect to such merger
or consolidation, the holders of the Company's securities having
ordinary voting power to elect directors (on a fully-diluted basis)
immediately prior to the merger or consolidation own securities of the
surviving or resulting corporation representing 50% or less of the
ordinary voting power to elect directors of the surviving or resulting
corporation (on a fully-diluted basis). The amount of any fee payable
to Trivest in connection with a Sale of the Company shall be
determined pursuant to the provisions of Section 6(c)(ii) below.
(ii) In the event of any other transaction not in the
ordinary course of business, including a Sale of the Company and any
public or private debt or equity financing or unusual efforts extended
or results obtained by Trivest on behalf or for the benefit of the
Company or its subsidiaries, the Board shall in good faith negotiate
with Trivest to determine a fair compensation arrangement to
compensate Trivest for such matters.
7. Term. Notwithstanding anything herein to the contrary, this
Agreement shall become effective only upon the consummation of the proposed
merger of Trivest Furniture Corporation with and into the Company, and shall
thereafter remain in effect for a period of 10 years unless terminated earlier
in accordance with the provisions of this Agreement.
8. Early Termination.
(a) Termination Upon Breach. Either the Company or Trivest
may terminate this Agreement in the event of the breach of any of the material
terms or provisions of this Agreement by the other party, which breach is not
cured within 10 business days after notice of the same is given to the party
alleged to be in breach by the other party. In the event this Agreement is
terminated by Trivest because of the breach of any of the material terms or
provisions hereof by the Company, Trivest shall be entitled to recover damages
from the Company and shall not be required to mitigate or reduce damages by
seeking or undertaking other management arrangements or business opportunities.
-4-
<PAGE> 36
(b) Termination Upon Consummation of a Sale of the Company.
Trivest's engagement under this Agreement may be terminated by a majority of
the Disinterested Directors (or, if Trivest Furniture Partners is then a holder
of any equity securities of the Company, by a majority in interest of the
holders of limited partnership interests of Trivest Furniture Partners)
effective upon the occurrence of a Sale of the Company. Any such termination
shall be communicated by written notice of Termination to Trivest, which notice
shall be given no sooner than 20 business days prior to and no later than five
business days after the consummation of a Sale of the Company.
9. Standard of Care. Trivest (including any person or entity acting
for or on behalf of Trivest) shall not be liable for any mistakes of fact,
errors of judgment, for losses sustained by the Company or for any acts or
omissions of any kind (including acts or omissions of Trivest), unless the
Company's losses (including expenses, costs and attorneys' fees) are finally
and judicially determined to have resulted from the gross negligence or willful
misconduct of Trivest.
10. Indemnification of Trivest. The Company hereby agrees to indemnify
and hold harmless Trivest and its present and future officers, directors,
affiliates, employees and agents ("Indemnified Parties") to the fullest extent
not prohibited by law as if any of the Indemnified Parties were an officer or
director of the Company and/or its subsidiaries. The Company further agrees to
reimburse the Indemnified Parties on a monthly basis for any cost of defending
any action or investigation (including attorneys' fees and expenses), subject
to an undertaking from such Indemnified Party to repay the Company if such
party is determined not to be entitled to such indemnity.
11. No Assignment. Without the consent of Trivest, the Company shall
not assign, transfer or convey any of its rights, duties or interest under this
Agreement, nor shall it delegate any of the obligations or duties required to
be kept or performed by it hereunder. Without the prior written consent of the
Company, Trivest shall not assign, transfer or convey any of its rights, duties
or interests under this Agreement, nor shall it delegate any of the obligations
or duties required to be kept or performed by it under this Agreement.
12. Notices. All notices, demands, consents, approvals and requests
given by either party to the other hereunder shall be in writing and shall be
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses:
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<PAGE> 37
If to the Company: WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Attention: President
If to Trivest: Trivest II, Inc.
2665 South Bayshore Drive
Eighth Floor
Miami, Florida 33133
Attention: General Counsel
Any party may at any time change its respective address by sending written
notice to the other party of the change in the manner hereinabove prescribed.
13. Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or enforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
14. No Waiver. The failure of the Company or Trivest to seek redress
for any violation of, or to insist upon the strict performance of, any term or
condition of this Agreement shall not prevent a subsequent act by the Company
or Trivest, which would have originally constituted a violation of this
Agreement by the Company or Trivest, from having all the force and effect of
any original violation. The failure by the Company or Trivest to insist upon
the strict performance of any one of the terms or conditions of the Agreement
or to exercise any right, remedy or elections herein contained or permitted by
law shall not constitute or be construed as a waiver or relinquishment for the
future of such term, condition, right, remedy or election, but the same shall
continue and remain in full force and effect. Except as the Company's rights of
termination are limited herein, all rights and remedies that the Company or
Trivest may have at law, in equity or otherwise upon breach of any term or
condition of this Agreement, shall be distinct, separate and cumulative rights
and remedies and no one of them, whether exercised by the Company or Trivest or
not, shall be deemed to be in exclusion of any other right or remedy of the
Company or Trivest.
15. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the matters herein contained and any
agreement hereafter made shall be ineffective to effect any change or
modification, in whole or in part, unless such agreement is in writing and
signed by the party against whom enforcement of the change or modification is
sought.
16. Governing Laws. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida without reference to the
laws of any other state.
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<PAGE> 38
17. No Third Party Beneficiary. Except for the parties to this
Agreement and their respective successors and assigns, nothing expressed or
implied in this Agreement is intended, or will be construed, to confer upon or
give any person other than the parties hereto and their respective successors
and assigns any rights or remedies under or by reason of this Agreement;
provided, however, that the provisions of Sections 2(b), 6(b)(ii), 6(c)(ii) and
8(b), above, to the extent that they provide rights which may be exercised by a
majority in interest of the limited partners of Trivest Furniture Partners,
shall be deemed to be for the benefit of Trivest Furniture Partners and its
partners and may be enforced by Trivest Furniture Partners or its partners.
SIGNATURES APPEAR ON FOLLOWING PAGE
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<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly exercised by their authorized representatives as of the date first
above written.
WINSLOEW FURNITURE, INC.
By: /s/ Bobby Tesney
-------------------------------
Bobby Tesney, President
TRIVEST II, INC.
By: /s/ Earl W. Powell
-------------------------------
Earl W. Powell, President
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<PAGE> 40
EXHIBIT C
ADDRESSES FOR NOTICES
To the Company, Trivest, Inc.
either Trivest Investor, 2665 South Bayshore Drive, Suite 800
Mr. Powell, Dr. George or Miami, Florida 33133
Mr. Templeton: Attn: General Counsel
Fax: (305) 858-1629
To Messrs. Tesney, Hess, WinsLoew Furniture, Inc.
Tortorici (and the Tortorici IRA), 160 Village Street
Stephens or Camp: Birmingham, Alabama 35242
Attn: such Individual Investor
Fax: (285) 408-7028
To Mr. Watts: Loewenstein, Inc.
1801 North Andrews Extension
Pompano Beach, Florida 33061
Attn: R. Craig Watts
Fax: (954) 960-0409
To. Dr. Creech: 101 West Chico Avenue, Suite C
Chico, California 95926
Fax: (530) 891-4348
To Mr. Pinto: c/o Resource Holdings, Ltd.
520 Madison Avenue, 40th Floor
New York, New York 10022
Fax: (212) 935-3851
<PAGE> 1
Exhibit (d)(10)
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION:
Vincent A. Tortorici, Jr.
Chief Financial Officer
(205) 408-7600
TRIVEST FURNITURE CORPORATION COMPLETES
$105,000,000 OFFERING OF 12 3/4% SENIOR SUBORDINATED NOTES AND
WARRANTS TO PURCHASE 24,129 SHARES OF COMMON STOCK
BIRMINGHAM, AL - (August 24, 1999) WinsLoew Furniture, Inc. (NASDAQ/NM:WLFI)
today announced that Trivest Furniture Corporation has completed the offering
of 105,000 units consisting of $105,000,000 aggregate principal amount at
maturity 12 3/4% Senior Subordinated Notes due 2007 and Warrants to Purchase
24,129 Shares of Common Stock to finance a portion of the consideration to be
paid to our shareholders in connection with our merger with Trivest Furniture
Corporation.
On May 4, 1999, the Company and Trivest Furniture Corporation entered
into a Second Amended and Restated Agreement and Plan of Merger pursuant to
which the Company's public shareholders would receive $34.75 per share in cash.
The Special Meeting of Shareholders of the Company to consider and vote upon
the merger is scheduled to be held on Friday, August 27, 1999.
WinsLoew Furniture, Inc. designs, manufactures, and distributes
aluminum casual (porch and patio) furniture and contract seating for the
hospitality and office furniture markets.
Additional information is available on the Internet at
HTTP://WWW.CFONEWS.COM/WLFI.
###
<PAGE> 1
Exhibit (d)(11)
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION:
Vincent A. Tortorici, Jr.
Chief Financial Officer
(205) 408-7600
WINSLOEW FURNITURE, INC. COMPLETES
GOING PRIVATE TRANSACTION
BIRMINGHAM, AL - (August 27, 1999) WinsLoew Furniture, Inc. (NASDAQ/NM:WLFI)
today announced that it has completed its merger with Trivest Furniture
Corporation. The merger was approved this morning at a special meeting of
shareholders. Pursuant to the merger, the Company's public shareholders will be
entitled to receive $34.75 per share in cash.
WinsLoew Furniture, Inc. designs, manufactures, and distributes
aluminum casual (porch and patio) furniture and contract seating for the
hospitality and office furniture markets.
Additional information is available on the Internet at
http://www.cfonews.com/wlfi.
###
