(a) The following definitions are defined in this Agreement in the following Sections:
(c) “Affiliate” means, with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, 10% or more of the Capital Stock having ordinary voting power in the election of directors of such Person, (b) each Person that controls, is controlled by or is under common control with such Person and (c) each of such Person’s officers, directors, joint venturers and partners. For the purposes of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise. In no event shall the UCC Holder, in its capacity as a holder of a Note or in its capacity as the Collateral Agent, be deemed an Affiliate of the Company or any of its Subsidiaries.
(d) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.
(e) “Calendar Quarter” means each of: the period beginning on and including January 1 and ending on and including March 31; the period beginning on and including April 1 and ending on and including June 30; the period beginning on and including July 1 and ending on and including September 30; and the period beginning on and including October 1 and ending on and including December 31.
(f) “Capital Expenditures” shall mean, for any period and for any Person(s), the sum, without duplication, of all expenditures (whether paid in cash or accrued as liabilities) that are or are required to be treated as capital expenditures under GAAP.
(g) “Capital Lease” means, as to any Person, any lease of any interest in any kind of property or asset by that Person as lessee that is, should be or should have been recorded as a “capital lease” in accordance with GAAP.
(h) “Capitalized Lease Obligations” means all obligations of any Person under Capital Leases, in each case taken at the amount thereof accounted for as a liability in accordance with GAAP.
(i) “Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, and (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.
(j) “Cash Equivalents” means: (a) securities issued or fully guaranteed or insured by the government of the United States or any agency thereof having maturities of not more than six (6) months from the date of acquisition, (b) certificates of deposit, time deposits, repurchase agreements, reverse repurchase agreements, or bankers’ acceptances, having in each case a tenor of not more than six (6) months, issued by any United States commercial bank or any branch or agency of a non-United States bank licensed to conduct business in the United States having combined capital and surplus of not less than $250,000,000, (c) commercial paper of an issuer rated at least A-1 by Standard & Poor’s Corporation or P-1 by Moody’s Investors Service Inc. and in either case having a tenor of not more than three (3) months and (d) money market funds provided that substantially all of the assets of such fund are comprised of securities of the type described in clauses (a) through (c).
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(k) “Change of Control” means any Fundamental Transaction other than any reorganization, recapitalization or reclassification of the Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold securities and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities.
(l) “Closing Date” shall have the meaning set forth in the Purchase Agreement, which date is the date the Company initially issued the Notes pursuant to the terms of the Purchase Agreement.
(m) “Collateral Agent” means UCC-mktg Investment, LLC, a Delaware limited liability company, in its capacity as collateral agent for the Holders of the Notes or any successor thereto appointed pursuant to the terms ofSection 4(t) of the Purchase Agreement.
(n) “Common Stock” shall have the meaning set forth in the Purchase Agreement.
(o) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
(p) “Diageo Contract” means that certain Marketing and Promotion Agreement dated as of July 1, 2006 between the Spirits Division of Diageo North America, Inc., the DC&E Division of Diageo North America, Inc., Diageo-Guinness USA, Inc. and U.S. Concepts, Inc., as amended, restated supplemented or otherwise modified from time to time.
(q) “EBITDA” means, as of any given date, the Net Income (Loss) of the Company and its Subsidiaries on a consolidated basis for the most recent twelve month period ending on such given date (the “EBITDA Period”), plus without duplication, the sum of the following amounts of the Company and its Subsidiaries for such period and to the extent deducted in determining Net Income of the Company and its Subsidiaries on a consolidated basis for such period: (i) Net Interest Expense, (ii) income tax expense, (iii) depreciation expense and (iv) amortization expense.
(r) “Eligible Market” means The New York Stock Exchange, Inc., The NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ Capital Market.
(s) “Financial Tests” means the financial tests set forth inSections 9(m) through and including(p).
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(t) “Fiscal Month” means each of the fiscal months adopted by the Company for financial reporting purposes that correspond to the Company’s fiscal year as of the date hereof that ends on March 31.
(u) “Fiscal Quarter” means each of the fiscal quarters adopted by the Company for financial reporting purposes that correspond to the Company’s fiscal year as of the date hereof that ends on March 31.
(v) “Fiscal Year” means the fiscal year adopted by the Company for financial reporting purposes that ends on March 31.
(w) “Fixed Charge Coverage Ratio” means, for the Company and its Subsidiaries on a consolidated basis, for any period of determination, the ratio of (a) Adjusted EBITDA of the Company and its Subsidiaries on a consolidated basis for such periodminus (i) non-financed Capital Expenditures for such period and (ii) income taxes actually paid in cash during such period to (b) Fixed Charges for such period.
(x) “Fixed Charges” means, for any period of determination, for the Company and its Subsidiaries on a consolidated basis, the sum, without duplication, of the following for such period (all as determined in accordance with GAAP): (i) (a) all scheduled payments of principal on Indebtedness for such period, (b) all cash fees due or payable with respect to such Indebtedness for such period and (c) all Net Interest Expense for such period, (ii) Capital Lease Obligations for such period, (iii) dividends and/or distributions paid in cash by the Company or any of its Subsidiaries (other than dividends and/or distributions made by a Subsidiary of the Company to the Company or another Subsidiary of the Company) for such period, (iv) cash paid for equity repurchases and/or redemptions for such period and (v) any UCC Management Fees paid during such period.
(y) “Fundamental Transaction” means that (i) the Company shall, directly or indirectly, in one or more related transactions, (A) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person or Persons, or (B) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (C) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock (not including any shares of Voting Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (D) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock (not including any shares of Voting Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), (E) reorganize, recapitalize or reclassify its Common Stock or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) other than the UCC Holder is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the aggregate Voting Stock of the Company.
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(z) “GAAP” means United States generally accepted accounting principles, consistently applied.
(aa) “Guaranty” means that certain Guaranty dated as of the date hereof among the Collateral Agent and each Subsidiary of the Company party thereto from time to time, as amended, restated, supplemented, replaced, modified or otherwise changed from time to time.
(bb) “Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services, including (without limitation) Capital Leases (other than trade payables entered into in the ordinary course of business and not outstanding for more than 120 days after the date such payable is due in accordance with its terms unless such trade payables are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement, whether or not classified as a Capital Lease, (vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii) above.
(cc) “Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature, including, without limitation, any conditional sale or title retention arrangement, any lease required under GAAP to be capitalized on the balance sheet of such Person and any assignment, deposit arrangement or financing lease intended as, or having the effect of, security.
(dd) “Martiz Contract” means that certain Agreement dated as of May 27, 2009 between the Company and Martiz LLC, a Missouri limited liability company, as amended, restated supplemented or otherwise modified from time to time.
(ee) “Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, or on the transactions contemplated hereby and in the other Secured Notes Documents and by the agreements and instruments to be entered into in connection herewith or therewith, or on the authority or ability of the Company or its Subsidiaries to perform its obligations under the Secured Notes Documents.
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(ff) “Net Income” means, with respect to any applicable period, the net income of the Company and its Subsidiaries for such period, determined on a consolidated basis and in accordance with GAAP.
(gg) “Net Interest Expense” means, with respect to any applicable period, net interest expense of the Company and its Subsidiaries for such period determined on a consolidated basis and in accordance with GAAP.
(hh) “Net Proceeds” shall mean the aggregate cash payments received by the Company or any Subsidiary from any issuance of Capital Stock, issuance of Indebtedness, asset disposition, insurance event or condemnation event, as the case may be, net of the ordinary and customary direct costs incurred in connection with such issuance, such as legal, accounting and investment banking fees, sales commissions, and other third party charges paid to non-Affiliates in connection therewith, and net of property taxes, transfer taxes and other taxes paid or payable by the Company or any of its Subsidiaries in respect of any such issuance or disposition.
(ii) “Permitted Indebtedness” means (i) the Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness secured by Permitted Liens described in sub-clause (iv) of the definition thereof;provided, that the aggregate amount of such Indebtedness does not exceed $250,000 in the aggregate at any time outstanding, plus any payables outstanding for more than 90 days after the date such payable is due in accordance with its term and which the Company is contesting in good faith by appropriate court proceeding and for which adequate reserves have been established in accordance with GAAP, (iii) Indebtedness under Capital Leases in an amount not to exceed $100,000 in any Fiscal Year, (iv) [reserved], (v) the fees payable to Union Capital Corporation provided for inSection 4(c) of the UCC Management Agreement earned on the date hereof and payable at the times provided for therein and (vi) extensions, refinancings and renewals of any items of Permitted Indebtedness,provided, that the principal amount is not increased or the terms modified to impose more burdensome terms upon the Company or its Subsidiary, as the case may be.
(jj) “Permitted Investments” means (i) investments contemplated by and pursuant to the terms of the Transaction Documents (as defined in the Purchase Agreement), (ii) trade credit extended by the Company and its Subsidiaries in the ordinary course of business, (iii) loans to employees and advances by the Company or any of its Subsidiaries for business travel and similar temporary advances made in the ordinary course of business to officers, directors and employees to the extent permitted bySection 9(d), (iv) investments in Cash Equivalents, (v) investments by the Company in its Subsidiaries which are party to the Guaranty, (vi) investments by any Subsidiary to the Company or any other Subsidiary party to the Guaranty, (vii) the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (viii) upon not less than five (5) Business Days’ prior written notice to Holder any Subsidiary of the Company may merge with, or dissolve or liquidate into, or transfer its assets to, the Company or a Subsidiary of the Company which is a guarantor of the Obligations;provided, that with respect to any such merger, the Company or such guarantor Subsidiary of the Company shall be the continuing or surviving entity.
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(kk) “Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, (B) existing on such equipment at the time of its acquisition,provided, that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, or (C) Liens securing indebtedness incurred by the Company to finance any capital improvement or addition to its owned real property or the improvements located thereon, (v) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clause (iv) above,provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) leases or subleases and licenses and sublicenses granted to others in the ordinary course of the Company’s business, not interfering in any material respect with the business of the Company and its Subsidiaries taken as a whole, (vii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods and (viii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default underSection 4(a)(vi).
(ll) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof
(mm) “Pledge Agreement” means that certain Pledge Agreement dated as of the date hereof among the Collateral Agent and the parties signatory thereto as pledgors, as amended, restated, supplemented, replaced, modified or otherwise changed from time to time.
(nn) “Principal Market” means Nasdaq, or if the Common Stock is not traded on the Principal Market, an Eligible Market.
(oo) “Purchase Agreement” means that certain Securities Purchase Agreement, dated as of the date hereof, among the Company and each of the Buyers (as defined in the Purchase Agreement) party thereto, as amended, restated, supplemented, replaced, modified or otherwise changed from time to time.
(pp) “Registration Rights Agreement” means that certain Registration Rights Agreement dated as of the date hereof by and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common Stock issuable upon conversion of the Series A Preferred Stock.
(qq) “Required Holders” means the holders of Notes representing at least 50.1% of the aggregate Principal amount of the Notes then outstanding.
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(rr) “SEC” means the United States Securities and Exchange Commission.
(ss) “Secured Notes Documents” shall mean the Notes, the Security Agreement, the Guaranty, the Purchase Agreement, the Pledge Agreement and each other document, instrument, agreement or certificate executed in connection therewith (other than the Registration Rights Agreement, the Transfer Agent Instructions Agreement, the Certificate of Designation, the Warrant to Purchase Common Stock (in each case, each as defined in the Purchase Agreement) and each other document executed solely in connection with such documents).
(tt) “Security Agreement” means that certain Security Agreement dated as of the date hereof among the Collateral Agent and the parties signatory thereto as grantors, as amended, restated, supplemented, replaced, modified or otherwise changed from time to time.
(uu) “Subsidiary” means with respect to any Person, (a) any corporation of which an aggregate of more than 50% of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of 50% or more of such Capital Stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than 50% or of which any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of the Company.
(vv) “UCC Holder” means UCC-mktg Investment, LLC, a Delaware limited liability company.
(ww) “UCC Management Agreement” means that certain Management Consulting Agreement dated as of the date hereof between the Company and Union Capital Corporation, a Nevada corporation.
(xx) “UCC Management Fees” are the management fees and expenses owed to Union Capital Corporation, a Nevada corporation in the amounts and at the times provided for in the UCC Management Agreement.
(yy) “Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
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23. THIRD PARTY BENEFICIARIES. This Note is intended for the benefit of the Holder and the Company and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person;provided, that the Collateral Agent is a third party beneficiary hereof and may enforce the provisions hereof.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.
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