Exhibit 10.73
Execution Copy
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TeleTech Holdings, Inc.
$60,000,000 7.00% Senior Notes, Series A, due October 31, 2008
$15,000,000 7.40% Senior Notes, Series B, due October 31, 2011
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Note Purchase Agreement
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Dated as of October 1, 2001
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Table of Contents
(Not a part of the Agreement)
Section Heading Page
Section 1. Authorization of Notes...............................................1
Section 2. Sale and Purchase of Notes...........................................1
Section 2.1. Sale and Purchase of Notes...........................................1
Section 2.2. Guaranty of Notes....................................................2
Section 3. Closing..............................................................2
Section 4. Conditions to Closing................................................2
Section 4.1. Representations and Warranties.......................................2
Section 4.2. Performance; No Default..............................................2
Section 4.3. Compliance Certificates..............................................3
Section 4.4. Opinions of Counsel..................................................3
Section 4.5. Subsidiary Guaranty Agreement........................................3
Section 4.6. Purchase Permitted by Applicable Law, Etc............................3
Section 4.7. Related Transactions.................................................4
Section 4.8. Payment of Special Counsel Fees......................................4
Section 4.9. Private Placement Number.............................................4
Section 4.10. Funding Instructions.................................................4
Section 4.11. Changes in Corporate Structure.......................................4
Section 4.12. Proceedings and Documents............................................4
Section 5. Representations and Warranties of the Company........................5
Section 5.1. Organization; Power and Authority....................................5
Section 5.2. Authorization, Etc...................................................5
Section 5.3. Disclosure...........................................................5
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.....6
Section 5.5. Financial Statements.................................................6
Section 5.6. Compliance with Laws, Other Instruments, Etc.........................7
Section 5.7. Governmental Authorizations, Etc.....................................7
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders............7
Section 5.9. Taxes................................................................7
Section 5.10. Title to Property; Leases............................................8
Section 5.11. Licenses, Permits, Etc...............................................8
Section 5.12. Compliance with ERISA................................................8
Section 5.13. Private Offering by the Company......................................9
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Section 5.14. Use of Proceeds; Margin Regulations..................................9
Section 5.15. Existing Debt; Future Liens.........................................10
Section 5.16. Foreign Assets Control Regulations, Etc.............................10
Section 5.17. Status under Certain Statutes.......................................10
Section 5.18. Environmental Matters...............................................10
Section 5.19. Existing Investments................................................11
Section 5.20. Notes Rank Pari Passu...............................................11
Section 6. Representations of the Purchasers...................................11
Section 6.1. Purchase for Investment.............................................11
Section 6.2. Source of Funds.....................................................12
Section 7. Information as to Company...........................................13
Section 7.1. Financial and Business Information..................................13
Section 7.2. Officer's Certificate...............................................15
Section 7.3. Inspection..........................................................16
Section 8. Prepayment of the Notes.............................................17
Section 8.1. Required Prepayments................................................17
Section 8.2. Optional Prepayments with Make-Whole Amount.........................18
Section 8.3. Allocation of Partial Prepayments...................................18
Section 8.4. Maturity; Surrender, Etc............................................18
Section 8.5. Purchase of Notes...................................................18
Section 8.6. Make-Whole Amount...................................................19
Section 9. Affirmative Covenants...............................................20
Section 9.1. Compliance with Law.................................................20
Section 9.2. Insurance...........................................................20
Section 9.3. Maintenance of Properties...........................................21
Section 9.4. Payment of Taxes and Claims.........................................21
Section 9.5. Corporate Existence, Etc............................................21
Section 9.6. Subsidiary Guaranty Agreement.......................................21
Section 10. Negative Covenants..................................................23
Section 10.1. Adjusted Consolidated Debt to Adjusted Consolidated EBITDA Ratio....23
Section 10.2. Limitation on Priority Debt.........................................23
Section 10.3. Fixed Charges Coverage Ratio........................................23
Section 10.4. Consolidated Adjusted Net Worth.....................................23
Section 10.5. Limitation on Liens.................................................23
Section 10.6. Merger, Consolidation, Etc..........................................26
Section 10.7. Sale of Assets, Etc.................................................27
Section 10.8. Disposal of Ownership of a Restricted Subsidiary....................27
Section 10.9. Nature of Business..................................................28
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Section 10.10. Transactions with Affiliates........................................28
Section 10.11. Redesignation of Restricted and Unrestricted Subsidiaries...........28
Section 11. Events of Default...................................................29
Section 12. Remedies On Default, Etc............................................31
Section 12.1. Acceleration........................................................31
Section 12.2. Other Remedies......................................................32
Section 12.3. Rescission..........................................................32
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc...................33
Section 13. Registration; Exchange; Substitution of Notes.......................33
Section 13.1. Registration of Notes...............................................33
Section 13.2. Transfer and Exchange of Notes......................................33
Section 13.3. Replacement of Notes................................................34
Section 14. Payments On Notes...................................................34
Section 14.1. Place of Payment....................................................34
Section 14.2. Home Office Payment.................................................34
Section 15. Expenses, Etc.......................................................35
Section 15.1. Transaction Expenses................................................35
Section 15.2. Survival............................................................35
Section 16. Survival of Representations and Warranties; Entire Agreement........35
Section 17. Amendment and Waiver................................................36
Section 17.1. Requirements........................................................36
Section 17.2. Solicitation of Holders of Notes....................................36
Section 17.3. Binding Effect, Etc.................................................36
Section 17.4. Notes Held by Company, Etc..........................................37
Section 18. Notices.............................................................37
Section 19. Reproduction of Documents...........................................37
Section 20. Confidential Information............................................38
Section 21. Substitution of Purchaser...........................................39
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Section 22. Miscellaneous.......................................................39
Section 22.1. Successors and Assigns..............................................39
Section 22.2. Payments Due on Non-Business Days...................................39
Section 22.3. Severability........................................................39
Section 22.4. Construction........................................................40
Section 22.5. Counterparts........................................................40
Section 22.6. Governing Law.......................................................40
Signature...................................................................................42
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Attachments to the Note Purchase Agreement:
Schedule A -- Information Relating to Purchasers
Schedule B -- Defined Terms
Schedule 4.11 -- Changes in Corporate Structure
Schedule 5.3 -- Disclosure Materials
Schedule 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
Schedule 5.5 -- Financial Statements
Schedule 5.8 -- Certain Litigation
Schedule 5.11 -- Patents, Etc.
Schedule 5.14 -- Use of Proceeds
Schedule 5.15 -- Existing Debt
Schedule 5.19 -- Existing Investments
Exhibit 1(a) -- Form of 7.00% Senior Note, Series A, Due October 31, 2008
Exhibit 1(b) -- Form of 7.40% Senior Note, Series B, Due October 31, 2011
Exhibit 4.4(a) -- Form of Opinion of Independent Counsel for the Company and the
Subsidiary Guarantors
Exhibit 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
Exhibit SGA -- Form of Subsidiary Guaranty Agreement
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TeleTech Holdings, Inc.
9197 South Peoria Street
Englewood, Colorado 80112
7.00% Senior Notes, Series A, due October 31, 2008
7.40% Senior Notes, Series B, due October 31, 2011
Dated as of October 1, 2001
To the Purchasers Listed in
The Attached Schedule A:
Ladies and Gentlemen:
TeleTech Holdings, Inc., a Delaware corporation (the "Company"), agrees
with the Purchasers (the "Purchasers") listed in the attached Schedule A as
follows:
Section 1. Authorization of Notes.
The Company will authorize the issue and sale of (a) $60,000,000 aggregate
principal amount of its 7.00% Senior Notes, Series A, due October 31, 2008 (the
"Series A Notes") and (b) $15,000,000 aggregate principal amount of its 7.40%
Senior Notes, Series B, due October 31, 2011 (the "Series B Notes"; said Series
B Notes together with the Series A Notes are hereinafter collectively referred
to as the "Notes," such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement). The Series A Notes and the
Series B Notes shall be substantially in the forms set out in Exhibits 1(a) and
1(b), respectively, with such changes therefrom, if any, as may be approved by
the Purchasers and the Company. Certain capitalized terms used in this Agreement
are defined in Schedule B; references to a "Schedule" or an "Exhibit" are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
Section 2. Sale and Purchase of Notes; Guaranty.
Section 2.1. Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to each Purchaser
and each Purchaser will purchase from the Company, at the Closing provided for
in Section 3, Notes of the series and in the principal amount specified opposite
such Purchaser's name in Schedule A at the purchase price of 100% of the
principal amount thereof. Each Purchaser's obligations hereunder are several and
not joint, and no Purchaser shall have any obligation or any liability to any
Person for the performance or nonperformance by any other Purchaser hereunder.
Section 2.2. Guaranty of Notes. The payment by the Company of all amounts
due with respect to the Notes and the performance by the Company of its
obligations under this Agreement are fully and unconditionally guaranteed by the
Subsidiary Guarantors pursuant to that certain Subsidiary Guaranty Agreement
dated as of October 1, 2001 (as the same may be amended, supplemented, restated
or otherwise modified from time to time, the "Subsidiary Guaranty Agreement")
from the Subsidiary Guarantors in favor of the Purchasers and each other from
time to time holder of the Notes, substantially in the form attached hereto as
Exhibit SGA.
Section 3. Closing.
The sale and purchase of the Notes to be purchased by the Purchasers shall
occur at the offices of Schiff Hardin & Waite, 6600 Sears Tower, Chicago,
Illinois 60606, at 10:00 a.m., Chicago time, at a closing (the "Closing") on
October 30, 2001 or on such other Business Day thereafter on or prior to October
31, 2001 as may be agreed upon by the Company and the Purchasers. At the
Closing, the Company will deliver to each Purchaser Notes of the series to be
purchased by such Purchaser in the form of a single Note of such series (or such
greater number of Notes of such series in denominations of at least $250,000 as
such Purchaser may request) dated the date of the Closing and registered in such
Purchaser's name (or in the name of its nominee), against delivery by such
Purchaser to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately available
funds. If at the Closing the Company shall fail to tender such Notes to any
Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to any Purchaser's
satisfaction, such Purchaser shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights such
Purchaser may have by reason of such failure or such nonfulfillment.
Section 4. Conditions to Closing.
Each Purchaser's obligation to purchase and pay for the Notes to be sold to
such Purchaser at the Closing is subject to the fulfillment to such Purchaser's
satisfaction, prior to or at the Closing, of the following conditions:
Section 4.1. Representations and Warranties. (a) The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
(b) The representations and warranties of each Subsidiary Guarantor in the
Subsidiary Guaranty Agreement shall be correct when made and at the time of the
Closing.
Section 4.2. Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing, and after
giving effect to the
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issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Schedule 5.14), no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since the date of the Memorandum that would have
been prohibited by Section 10 hereof had such Section applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. (1) The Company shall have delivered to such
Purchaser an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1(a), 4.2 and 4.11 have been
fulfilled.
(2) Each Subsidiary Guarantor shall have delivered to such Purchaser
an Officer's Certificate, dated the date of the Closing, certifying that
the conditions specified in Sections 4.1(b) have been fulfilled.
(b) Secretary's Certificate. (1) The Company shall have delivered to such
Purchaser a certificate of its corporate secretary certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and this Agreement.
(2) Each Subsidiary Guarantor shall have delivered to such Purchaser a
certificate of its corporate secretary certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Subsidiary Guaranty Agreement.
Section 4.4. Opinions of Counsel. Each Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Hogan & Hartson L.L.P., independent counsel for the Company
and the Subsidiary Guarantors, covering the matters set forth in Exhibit 4.4(a)
and covering such other matters incident to the transactions contemplated hereby
as such Purchaser or such Purchaser's special counsel may reasonably request
(and the Company hereby instructs its counsel to deliver such opinion to such
Purchaser) and (b) from Schiff Hardin & Waite, special counsel to the Purchasers
in connection with such transactions, substantially in the form set forth in
Exhibit 4.4(b) and covering such other matters incident to such transactions as
such Purchaser may reasonably request.
Section 4.5. Subsidiary Guaranty Agreement. The Subsidiary Guaranty
Agreement shall have been duly authorized, executed and delivered by the
Subsidiary Guarantors and shall be in full force and effect.
Section 4.6. Purchase Permitted by Applicable Law, Etc. On the date of the
Closing, each Purchaser's purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the
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particular investment, (b) not violate any applicable law or regulation
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System) and (c) not subject any Purchaser to any tax,
penalty or liability under or pursuant to any applicable law or regulation. If
requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.7. Related Transactions. The Company shall have consummated the
sale of the entire principal amount of the Notes scheduled to be sold on the
date of the Closing pursuant to this Agreement.
Section 4.8. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of such Purchaser's special counsel referred
to in Section 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least two Business Days prior to the Closing.
Section 4.9. Private Placement Numbers. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for each series of Notes.
Section 4.10. Funding Instructions. At least three Business Days prior to
the date of the Closing, such Purchaser shall have received written instructions
executed by an authorized financial officer of the Company directing the manner
of the payment of funds and setting forth (1) the name of the transferee bank,
(2) such transferee bank's ABA number, (3) the account name and number into
which the purchase price for the Notes is to be deposited and (4) the name and
telephone number of the account representative responsible for verifying receipt
of such funds.
Section 4.11. Changes in Corporate Structure. Except as specified in
Schedule 4.11, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.5.
Section 4.12. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and special counsel to the Purchasers, and such
Purchaser and special counsel to the Purchasers shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or special counsel to the Purchasers may reasonably request.
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Section 5. Representations and Warranties of the Company.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Private Placement Memorandum, dated September
2001 (the "Memorandum"), relating to the transactions contemplated hereby fairly
describes, in all material respects, the general nature of the business and
principal properties of the Company and its Subsidiaries. Except as disclosed in
Schedule 5.3, this Agreement, the Memorandum, the documents, certificates or
other writings delivered to the Purchasers by or on behalf of the Company in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Except as disclosed in the Memorandum or as expressly
described in Schedule 5.3 or in one of the documents, certificates or other
writings identified therein, or in the financial statements listed in Schedule
5.5, since December 31, 2000, there has been no change in the financial
condition, operations, business or properties of the Company or any Subsidiary
except changes that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. There is no fact known to the
Company (other than matters of a general economic nature) that could reasonably
be expected to have a Material Adverse Effect that has not been set forth herein
or in the Memorandum or in the other documents, certificates and other writings
delivered to the Purchasers by or on behalf of the Company specifically for use
in connection with the transactions contemplated hereby.
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Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and correct
lists (1) of the Company's Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity interests
outstanding owned by the Company and each other Subsidiary, and if such
Subsidiary is, on the date of Closing, a Restricted Subsidiary, (2) of the
Company's Affiliates, other than Subsidiaries, known to the Company and (3) of
the Company's directors and officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except for Liens permitted by Section 10.5 or as otherwise disclosed in
Schedule 5.4).
(c) Each Restricted Subsidiary identified in Schedule 5.4 is a corporation
or other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Restricted Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it purports
to own or hold under lease and to transact the business it transacts and
proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes or other statutes governing the organization of legal entities)
restricting the ability of such Restricted Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Restricted Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the consolidated financial statements of the Company listed
on Schedule 5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material respects the
consolidated financial condition of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).
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Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(a) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other Material
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened in writing
against or affecting the Company or any Subsidiary or any property of the
Company or any Subsidiary in any court or before any arbitrator of any kind or
before or by any Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term of
any agreement or instrument to which it is a party or by which it is bound, or
any order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including, without limitation, Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not, individually or in the aggregate, Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The
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charges, accruals and reserves on the books of the Company and its Subsidiaries
in respect of Federal, state or other taxes for all fiscal periods are adequate
in accordance with GAAP. The Federal income tax liabilities of the Company and
its Subsidiaries have been determined by the Internal Revenue Service and paid
for all fiscal years up to and including the fiscal year ended 1996.
Section 5.10. Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties that
individually, or in the aggregate, are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Restricted Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this Agreement.
All leases that, individually or in the aggregate, are Material are valid and
subsisting and are in full force and effect in all material respects.
Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule 5.11.
(a) the Company and its Restricted Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks, trade names and domain names, or rights thereto, that,
individually or in the aggregate, are Material, without known material conflict
with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise, authorization,
patent, copyright, service mark, trademark, trade name, domain name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material violation by
any Person of any right of the Company or any of its Restricted Subsidiaries
with respect to any patent, copyright, service mark, trademark, trade name,
domain name or other right owned or used by the Company or any of its Restricted
Subsidiaries.
Section 5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be, individually or in the aggregate,
Material.
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(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in Section 4001 of ERISA and the terms "current value" and
"present value" have the meanings specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that,
individually or in the aggregate, are Material.
(d) The expected post-retirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its ERISA Affiliates is not Material.
(e) The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of each Purchaser's representation in Section
6.2 as to the sources of the funds used to pay the purchase price of the Notes
to be purchased by such Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Purchasers and not more than 16 other Institutional Investors of the types
described in clause (c) of the definition thereof, each of which has been
offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of
the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock
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does not constitute any of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 15% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a complete and
correct list of all outstanding Debt of the Company and its Restricted
Subsidiaries as of September 30, 2001, other than any capital lease for
equipment or other property entered into in the ordinary course of business and
not exceeding $250,000 in principal or lease balance, since which date there has
been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Debt of the Company or its Restricted
Subsidiaries. Except as disclosed in Schedule 5.15, neither the Company nor any
Restricted Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Debt of the Company
or such Restricted Subsidiary and no event or condition exists with respect to
any Debt of the Company or any Restricted Subsidiary that would permit (or that
with notice or the lapse of time, or both, would permit) one or more Persons to
cause such Debt to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.5.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Anti-Terrorism Order, the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is subject to regulation under the Investment Company Act
of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 5.18. Environmental Matters. Neither the Company nor any Restricted
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted alleging any claim against (a) the Company
or any of its Restricted Subsidiaries or any of their respective real properties
now owned, leased or operated by any of them or other assets or (b) against the
Company or any of its Restricted Subsidiaries with respect to any of their
respective real properties formerly
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owned, leased or operated by any of them or other assets, in either case
alleging any damage to the environment or violation of any Environmental Laws,
except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as otherwise disclosed to the Purchasers in
writing:
(a) neither the Company nor any Restricted Subsidiary has knowledge of
any facts that give rise to any claim, public or private, arising from the
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be expected to result in
a Material Adverse Effect;
(b) neither the Company nor any of its Restricted Subsidiaries has
stored any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them or has disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case in
any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated
by the Company or any of its Restricted Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
Section 5.19. Existing Investments. Schedule 5.19 sets forth a complete
list of all outstanding Investments of the Company and its Restricted
Subsidiaries as of September 30, 2001, since which date there has been no
Material change in the aggregate amount of such Investments.
Section 5.20. Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank at least pari passu in right of payment with
all other unsecured Senior Debt (actual or contingent) of the Company,
including, without limitation, all Senior Debt of the Company described in
Schedule 5.15.
Section 6. Representations of the purchasers.
Section 6.1. Purchase for Investment. Each Purchaser represents that it is
purchasing the Notes for its own account or for one or more separate accounts
maintained by it or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
such Purchaser's or such pension or trust funds' property shall at all times be
within such Purchaser's or such pension or trust funds' control. Each Purchaser
understands that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
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Section 6.2. Source of Funds. Each Purchaser represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by it to pay the purchase price of the Notes to be
purchased by it hereunder:
(a) the Source is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan all plans maintained by the same employer or
employee organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or on behalf of
such plan, exceeds 10% of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus surplus,
as set forth in the NAIC Annual Statement filed with such Purchaser's state
of domicile; or
(b) the Source is either (1) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990) or (2) a
bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as such Purchaser has disclosed to the
Company in writing pursuant to this paragraph (b), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a Person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (1) the identity
of such QPAM and (2) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (e); or
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(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan,"
"governmental plan," "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
Section 7. Information as to Company.
Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of,
(1) an unaudited consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and
(2) unaudited consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the consolidated financial position
of the companies being reported on and their results of operations and cash
flows, subject to changes resulting from year-end adjustments, provided
that delivery within the time period specified above of copies of the
Company's Quarterly Report on Form 10-Q prepared in compliance with the
requirements therefor and filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days after the end of each fiscal
year of the Company, duplicate copies of,
(1) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(2) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries, for such
year,
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setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state that
such financial statements present fairly, in all material respects, the
consolidated financial position of the companies being reported upon and
their results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the circumstances, provided that the
delivery within the time period specified above of the Company's Annual
Report on Form 10-K for such fiscal year prepared in accordance with the
requirements therefor and filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of this Section 7.1(b);
(c) Unrestricted Subsidiaries -- at such time as either (1) the
aggregate amount of the total assets of all Unrestricted Subsidiaries
exceeds 10% of the consolidated total assets of the Company and its
Subsidiaries determined in accordance with GAAP or (2) one or more
Unrestricted Subsidiaries account for more than 10% of the consolidated
revenues of the Company and its Subsidiaries determined in accordance with
GAAP, within the respective periods provided in paragraphs (a) and (b)
above, then each set of financial statements delivered pursuant to
paragraphs (a) and (b) above shall be accompanied by unaudited financial
statements of the character and for the dates and periods as in said
paragraphs (a) and (b) covering the Unrestricted Subsidiaries on a
consolidated basis together with unaudited consolidating statements
reflecting eliminations or adjustments required in order to reconcile such
financial statements to the corresponding consolidated financial statements
of the Company and its Subsidiaries delivered pursuant to paragraphs (a)
and (b) above;
(d) SEC and Other Reports -- promptly upon their becoming available,
one copy of each filing or registration with, or report to or from, the
Securities and Exchange Commission containing information of a financial
nature, of the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act and of all press releases and
other statements made available generally by the Company or any Subsidiary
to the public concerning developments that are Material;
(e) Notice of Default or Event of Default -- promptly, and in any
event within five Business Days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person has
given any notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(h), a
written notice specifying the nature and
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period of existence thereof and what action the Company is taking or
proposes to take with respect thereto;
(f) ERISA Matters -- promptly, and in any event within five Business
Days after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(1) with respect to any Plan, any reportable event, as defined in
Section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date of the Closing; or
(2) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(3) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse Effect;
(g) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any Federal or state Governmental Authority relating to
any order, ruling, statute or other law or regulation that could reasonably
be expected to have a Material Adverse Effect; and
(h) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes that is not a Competitor.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
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(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 7.1(c) and Section 10.1 through
Section 10.8, inclusive, during the quarterly or annual period covered by
the statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and
its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor but not a Competitor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
but no more frequently than four times in any calendar year, to visit the
principal executive office of the Company, to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with the Company's
officers, and (with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Restricted
Subsidiary, in each case, on Business Days and between the hours of 9:00
a.m. and 5:00 p.m. (local time); and
(b)Default -- if a Default or Event of Default then exists, at the
expense of the Company to visit and inspect any of the offices or
properties of the Company or any Restricted Subsidiary, to examine all
their respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts
of the Company and its Restricted Subsidiaries), all at such times and as
often as may be requested.
-16-
Notwithstanding the foregoing, in no event shall any holder of the Notes be
permitted to examine (1) any information contained in databases of the Company's
or any Restricted Subsidiary's customers maintained on the property of the
Company or such Restricted Subsidiary which information constitutes the property
of such customer, or (2) any books of account, records, reports or other papers
of the Company or any Restricted Subsidiary if, in the reasonable opinion of
counsel to the Company or such Restricted Subsidiary, the disclosure of such
information would cause the Company or such Restricted Subsidiary to be in
violation of applicable law taking into account the obligations of such holder
pursuant to Section 20 or (3) any written contract between the Company or any
Restricted Subsidiary and a customer if, in the reasonable opinion of counsel to
the Company or such Restricted Subsidiary, such contract expressly prohibits the
Company or such Restricted Subsidiary from disclosing the terms of such contract
taking into account the obligations of such holder pursuant to Section 20;
provided, however, that, upon the reasonable request of any holder of the Notes,
the Company or such Restricted Subsidiary shall provide such holder with a
summary of the general nature of such contract to the extent not prohibited by
the express terms of such contract.
Section 8. Prepayment of the Notes.
Section 8.1. Required Prepayments.
(a) On October 31, 2004 and on each October 31 thereafter to and including
October 31, 2007 the Company will prepay $12,000,000 of the aggregate principal
amount (or such lesser principal amount as shall then be outstanding) of the
Series A Notes then outstanding at par and without payment of the Make-Whole
Amount or any premium, together with interest accrued thereon.
(b) On October 31, 2005 and on each October 31 thereafter to and including
October 31, 2010 the Company will prepay $2,142,857 of the aggregate principal
amount (or such lesser principal amount as shall then be outstanding) of the
Series B Notes then outstanding at par and without payment of the Make-Whole
Amount or any premium, together with interest accrued thereon.
(c) On the maturity date of each series of Notes, the Company will pay the
then outstanding principal amount of such series of Notes, together with
interest accrued thereon.
(d) In the case of each required prepayment of the Notes pursuant to
paragraph (a) or (b) of this Section 8.1, the principal amount of the Notes to
be prepaid shall be allocated among all of the Notes of the series of Notes to
be prepaid at the time outstanding in proportion, as nearly as practical, to the
respective unpaid principal amounts thereof.
(e) Any partial prepayment of the Notes pursuant to Section 8.2 shall be
applied in accordance with Section 8.3 to reduce the principal amount of each
required
-17-
prepayment of the Notes of each series becoming due under this Section 8.1 on
and after the date of such prepayment in the same proportion as the aggregate
unpaid principal amount of the Notes of such series is reduced as a result of
such prepayment.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the Notes, in an amount not less than $5,000,000 of
the aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to Section 8.2, the principal amount of the
Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not, and will not permit
any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment or
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prepayment of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" shall mean,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2 or has become or
is declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on
such Note is payable) equal to the Reinvestment Yield with respect to such
Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (a) the yields
reported, as of 10:00 a.m. (New York, New York time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal, on
the display designated as "Page PX1" on the Bloomberg Financial Markets
Services Screen (or such other display as may replace Page PX1 on the
Bloomberg Financial Markets Services Screen) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date or (b) if such yields
are not reported as of such time or the yields reported as of such time are
not ascertainable, the Treasury Constant Maturity Series Yields reported,
for the latest day for which such yields have been so reported as of the
second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (1) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (2) interpolating linearly between (i) the actively traded
U.S. Treasury security with the maturity closest to and greater than the
Remaining Average Life and (ii) the actively traded U.S. Treasury security
with the maturity closest to and less than the Remaining Average Life.
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"Remaining Average Life" shall mean, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (a) such Called Principal into (b) the sum of the
products obtained by multiplying (1) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (2)
the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of such Note,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
Section 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each of
its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation, the
Anti-Terrorism Order and Environmental Laws, and will obtain and maintain in
effect all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other Persons; provided that the Company and its
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Restricted Subsidiaries may self-insure against liabilities in respect of
medical and workers' compensation coverage.
Section 9.3. Maintenance of Properties. The Company will, and will cause
each of its Restricted Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
this Section 9.3 shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will cause
each of its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company or any
Subsidiary, provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (a) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (b) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
Section 9.5. Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.6, 10.7 and 10.8, the Company will at all times preserve and keep in
full force and effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or another Restricted Subsidiary)
and all rights and franchises of the Company and its Restricted Subsidiaries
unless, in the good faith judgment of the Company, the termination of or failure
to preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
Section 9.6. Subsidiary Guaranty Agreement.
(a) Additional Subsidiary Guarantors. If, at any time, any existing or
newly acquired or formed Subsidiary becomes obligated as a co-obligor or
guarantor under the Bank Credit Agreement, the Company shall, at its sole cost
and expense, cause such Subsidiary to concurrently become a guarantor in respect
of this Agreement and
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the Notes and, within 10 Business Days thereafter, deliver to each holder of
Notes the following items:
(1) an executed Supplement to the Subsidiary Guaranty Agreement in the
form of Exhibit A thereto (a "Guaranty Supplement");
(2) such documents and evidence with respect to such Subsidiary as any
holder of Notes may reasonably request in order to establish the existence
and good standing of such Subsidiary and the authorization of the
transactions contemplated by such Guaranty Supplement;
(3) an opinion of counsel to such Subsidiary satisfactory to the
Required Holders to the effect that such Guaranty Supplement has been duly
authorized, executed and delivered and the Subsidiary Guaranty Agreement,
as supplemented by such Guaranty Supplement, constitutes the legal, valid
and binding contract and agreement of such Subsidiary, enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles; provided, however, that such opinion of
counsel will not be required with respect to such Subsidiary if no
corresponding legal opinion is delivered to the financial institutions
party to the Bank Credit Agreement; and
(4) a certificate from a Responsible Officer of the Company, dated the
date of the Guaranty Supplement, certifying that, except as otherwise
provided in such certificate, each of the representations and warranties of
the Company set forth in Section 5 are correct as of the date of the
Guaranty Supplement.
(b) Intercreditor Agreement. Concurrently with or prior to any existing or
newly acquired or formed Subsidiary becoming obligated as a co-borrower under
the Bank Credit Agreement, in addition to satisfying the requirements of Section
9.6(a), the Company shall, at its sole cost and expense, cause an intercreditor
agreement in scope, form and substance (including, without limitation, as to the
sharing of recoveries and setoffs) reasonably satisfactory to the holders of
Notes (as the same may be amended, supplemented, restated or otherwise modified
from time to time, the "Intercreditor Agreement") to be entered into by the
Company, the Subsidiary Guarantors, the banks party to the Bank Credit Agreement
and the holders of Notes. The Company shall cause an executed copy of such
Intercreditor Agreement to be delivered to each holder of Notes within 10
Business Days of the execution thereof.
(c) Release of Subsidiary Guarantors. If at any time, pursuant to the terms
and conditions of the Bank Credit Agreement, any Subsidiary Guarantor is
released from its liability under the Bank Guaranty and (1) such Subsidiary
Guarantor is not a co-borrower under the Bank Credit Agreement, (2) such release
is not part of a plan of financing that contemplates such Subsidiary Guarantor
guaranteeing any other Debt of the Company and (3) the Company shall have
delivered to each holder of Notes an
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Officer's Certificate (the "Subsidiary Guarantor Release Certificate")
certifying that (i) the conditions specified in clauses (1) and (2) above have
been satisfied and (ii) immediately preceding the release of such Subsidiary
Guarantor from the Subsidiary Guaranty Agreement and after giving effect
thereto, no Default or Event of Default shall have existed or would exist, then,
upon receipt by the holders of Notes of the Subsidiary Guarantor Release
Certificate, such Subsidiary Guarantor shall be discharged from its obligations
under the Subsidiary Guaranty Agreement and such Subsidiary shall cease to be
considered a "Subsidiary Guarantor" for all purposes under this Agreement.
Section 10. Negative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Adjusted Consolidated Debt to Adjusted Consolidated EBITDA
Ratio. The Company will not at any time permit the Adjusted Consolidated Debt to
Adjusted Consolidated EBITDA Ratio to exceed 3.0 to 1.0.
Section 10.2. Limitation on Priority Debt. The Company will not at any time
permit Priority Debt to exceed:
- --------------------------------------------------------------------------------
PERIOD AMOUNT
- --------------------------------------------------------------------------------
From the date of the Closing to and 15% of Consolidated Adjusted Net Worth
including December 31, 2001
- --------------------------------------------------------------------------------
After December 31, 2001 0% of Consolidated Adjusted Net Worth
- --------------------------------------------------------------------------------
Section 10.3. Fixed Charges Coverage Ratio. The Company will not at any
time permit the Fixed Charges Coverage Ratio to be less than 2.50 to 1.00.
Section 10.4. Consolidated Adjusted Net Worth. The Company will not at any
time permit Consolidated Adjusted Net Worth to be less than the sum of (a)
$270,000,000, plus (b) an aggregate amount equal to 50% of its Consolidated Net
Income (but, in each case, only if a positive number) for each completed fiscal
quarter beginning with the fiscal quarter ended September 30, 2001.
Section 10.5. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned
or held or hereafter acquired, or any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits, except:
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(a) Liens for taxes, assessments or governmental charges which are not
yet due and payable or the payment of which is not at the time required by
Section 9.4;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred in
the ordinary course of business for sums not yet due and payable or the
payment of which is not at the time required by Section 9.4;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (1) in connection with workers'
compensation, unemployment insurance and other types of social security or
retirement benefits or (2) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety bonds,
appeal bonds, bids, leases (other than Capital Leases), performance bonds,
purchase, construction or sales contracts and other similar obligations, in
each case not incurred or made in connection with the borrowing of money,
the obtaining of advances or credit or the payment of the deferred purchase
price of property;
(d) any attachment or judgment Lien, unless the judgment it secures
shall not, within 30 days after the entry thereof (or such longer period of
time, if any, before a judgment creditor in the applicable jurisdiction
would first be permitted by applicable law to execute on such judgment)
have been discharged or execution thereof stayed pending appeal, or shall
not have been discharged within 30 days after the expiration of any such
stay (or such longer period of time, if any, before a judgment creditor in
the applicable jurisdiction would first be permitted by applicable law to
execute on such judgment);
(e) Liens on property or assets of a Restricted Subsidiary securing
Debt owing to the Company or to a Wholly-Owned Restricted Subsidiary;
(f) Liens existing on the date of the Closing and securing the Debt of
the Company and its Restricted Subsidiaries referred to in Schedule 5.15;
(g) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances on, or other minor
survey exceptions affecting, the properties of the Company and its
Restricted Subsidiaries, in each case incidental to, and not interfering
with, the ordinary conduct of the business of the Company or such
Restricted Subsidiary, provided that such Liens do not, in the aggregate,
materially detract from the value of such properties;
(h) any Lien created to secure all or any part of the purchase price,
or to secure Debt incurred or assumed to pay all or any part of the
purchase price or cost of construction, of property (or any improvement
thereon) acquired or
-24-
constructed by the Company or a Restricted Subsidiary after the date of the
Closing, provided that
(1) any such Lien shall extend solely to the item or items of
such property (or improvement thereon) so acquired or constructed and,
if required by the terms of the instrument originally creating such
Lien, other property (or improvement thereon) which is an improvement
to or is acquired for specific use in connection with such acquired or
constructed property (or improvement thereon) or which is real
property being improved by such acquired or constructed property (or
improvement thereon),
(2) the principal amount of the Debt secured by any such Lien
shall at no time exceed an amount equal to the lesser of (i) the cost
to the Company or such Restricted Subsidiary of the property (or
improvement thereon) so acquired or constructed and (ii) the Fair
Market Value (as determined in good faith by one or more officers of
the Company to whom the board of directors of the Company has
delegated authority to enter into the related transaction) of such
property (or improvement thereon) at the time of such acquisition or
construction, and
(3)any such Lien shall be created contemporaneously with, or
within 180 days after, the acquisition or construction of such
property;
(i) any Lien existing on property of a Person (other than an
Unrestricted Subsidiary) immediately prior to its being consolidated with
or merged into the Company or a Restricted Subsidiary or its becoming a
Restricted Subsidiary, or any Lien existing on any property acquired by the
Company or any Restricted Subsidiary at the time such property is so
acquired (whether or not the Debt secured thereby shall have been assumed),
provided that (1) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person's becoming a
Restricted Subsidiary or such acquisition of property and (2) each such
Lien shall extend solely to the item or items of property so acquired and,
if required by the terms of the instrument originally creating such Lien,
other property which is an improvement to or is acquired for specific use
in connection with such acquired property;
(j) any Lien renewing, extending or replacing any Lien permitted by
paragraphs (f), (h) or (i) of this Section 10.5, provided that (1) the
principal amount of Debt secured by such Lien immediately prior to such
extension, renewal or replacement is not increased or the maturity thereof
reduced, (2) such Lien is not extended to any other property and (3)
immediately after such extension, renewal or replacement no Default or
Event of Default would exist;
(k) Liens securing amounts not in excess of $38,678,000 held in
deposit accounts as cash collateral in accordance with Section 9.5 of the
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Participation Agreement, provided that all Priority Debt secured by such
Liens shall be permitted by the limitations contained in Section 10.2; and
(l) in addition to the Liens permitted by the preceding subparagraphs
(a) through (k), inclusive, of this Section 10.5, Liens securing Debt of
the Company or any Restricted Subsidiary, provided that all Debt secured by
such Liens shall be permitted by the limitations contained in Sections 10.1
and 10.2.
Any Person that becomes a Restricted Subsidiary after the date of the
Closing shall, for all purposes of this Section 10.5, be deemed to have created
or incurred, at the time it becomes a Restricted Subsidiary, all outstanding
Liens of such Person immediately after it becomes a Restricted Subsidiary, and
any Person extending, renewing or refinancing any Debt secured by any Lien
shall, without duplication, be deemed to have incurred such Lien at the time of
such extension, renewal or refinancing.
Section 10.6. Merger, Consolidation, Etc. The Company will not, and will
not permit any of its Restricted Subsidiaries to, consolidate with or merge with
any other Person or convey, transfer or lease substantially all of its assets in
a single transaction or series of transactions to any Person (except that a
Restricted Subsidiary of the Company may (x) consolidate with or merge with, or
convey, transfer or lease substantially all of its assets in a single
transaction or series of transactions to, the Company or a Wholly-Owned
Restricted Subsidiary and (y) convey, transfer or lease all of its assets in
compliance with the provisions of Section 10.7), provided that the foregoing
restriction does not apply to the consolidation or merger of the Company with,
or the conveyance, transfer or lease of substantially all of the assets of the
Company in a single transaction or series of transactions to, any Person so long
as:
(a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the case
may be (the "Successor Corporation"), shall be a solvent corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia;
(b) if the Company is not the Successor Corporation, (1) such
corporation shall have executed and delivered to each holder of Notes its
assumption of the due and punctual performance and observance of each
covenant and condition of this Agreement and the Notes (pursuant to such
agreements and instruments as shall be reasonably satisfactory to the
Required Holders), (2) the Company shall have caused to be delivered to
each holder of Notes an opinion of nationally recognized independent
counsel, or other counsel reasonably satisfactory to the Required Holders,
to the effect that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and (3) each Subsidiary
Guarantor shall have reaffirmed in writing its obligations under the
Subsidiary Guaranty Agreement; and
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(c) immediately after giving effect to such transaction no Default or
Event of Default would exist.
No such conveyance, transfer or lease of substantially all of the assets of
the Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
Section 10.7. Sale of Assets, Etc. The Company will not, and will not
permit any Restricted Subsidiary to, sell, lease or otherwise dispose of any
substantial part (as defined below) of the assets of the Company and its
Restricted Subsidiaries; provided, however, that the Company or any Restricted
Subsidiary may sell, lease or otherwise dispose of assets constituting a
substantial part of the assets of the Company and its Restricted Subsidiaries if
such assets are sold for Fair Market Value and, at the time of such sale, lease
or other disposition and after giving effect thereto, no Default or Event of
Default shall exist, and an amount equal to the net proceeds received from such
sale, lease or other disposition, shall be used within 270 days of such
disposition:
(a) to acquire productive assets used or useful in engaging in the
business of the Company and its Restricted Subsidiaries and having a Fair
Market Value at least equal to the Fair Market Value of such assets sold,
leased or otherwise disposed of; or
(b) to prepay or retire Senior Debt of the Company and/or its
Restricted Subsidiaries, provided that if any Notes are prepaid pursuant to
the terms of this Section 10.7, such Notes shall be prepaid in accordance
with Section 8.2.
As used in this Section 10.7, a sale, lease or other disposition of assets
during any period of 365 consecutive days shall be deemed to be a "substantial
part" of the assets of the Company and its Restricted Subsidiaries if the book
value of such assets (exclusive of any amounts concurrently applied as provided
in the foregoing clauses (a) or (b)), when added to the book value of all other
assets sold, leased or otherwise disposed of by the Company and its Restricted
Subsidiaries (other than (1) pursuant to (i) transactions in the ordinary course
of business, (ii) transfers from the Company to a Wholly-Owned Restricted
Subsidiary or from a Restricted Subsidiary to the Company or a Wholly-Owned
Restricted Subsidiary and (iii) Excluded Sale and Leaseback Transactions or (2)
such other assets the proceeds of which were applied within 270 days of the
related disposition as provided in the foregoing clauses (a) or (b)) during such
period of 365 consecutive days, exceeds 15% of the book value of Consolidated
Total Assets, determined as of the end of the fiscal quarter immediately
preceding such sale, lease or other disposition.
Section 10.8. Disposal of Ownership of a Restricted Subsidiary. The Company
will not, and will not permit any Restricted Subsidiary to, sell or otherwise
dispose of any shares of Restricted Subsidiary Stock, nor will the Company
permit any such Restricted Subsidiary to issue, sell or otherwise dispose of any
shares of its own Restricted Subsidiary Stock, provided that the foregoing
restrictions do not apply to:
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(a) the issue of directors' qualifying shares by any such Restricted
Subsidiary;
(b) any such sale or other disposition of Restricted Subsidiary Stock
to the Company or a Wholly-Owned Restricted Subsidiary; and
(c) any sale or other disposition of Restricted Subsidiary Stock,
provided such sale or other disposition is permitted by the limitations
contained in Section 10.7.
Section 10.9. Nature of Business. The Company will not, and will not permit
any Restricted Subsidiary to, engage in any business if, as a result, the
general nature of the business in which the Company and its Restricted
Subsidiaries, taken as a whole, would then be engaged would be substantially
changed from the general nature of the business in which the Company and its
Restricted Subsidiaries, taken as a whole, are engaged on the date of the
Closing.
Section 10.10. Transactions with Affiliates. The Company will not, and will
not permit any Restricted Subsidiary to, enter into directly or indirectly any
Material transaction or Material group of related transactions (including,
without limitation, the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Company
or a Restricted Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
Section 10.11. Redesignation of Restricted and Unrestricted Subsidiaries.
The Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary and may designate any Restricted Subsidiary to be an Unrestricted
Subsidiary by giving written notice to each holder of Notes that the Board of
Directors of the Company has made such designation, provided, however, that no
Unrestricted Subsidiary may be designated a Restricted Subsidiary and no
Restricted Subsidiary may be designated an Unrestricted Subsidiary unless, at
the time of such action and after giving effect thereto, no Default or Event of
Default shall exist. Any Restricted Subsidiary which has been designated an
Unrestricted Subsidiary and which has then been redesignated a Restricted
Subsidiary, in each case in accordance with the provisions of the first sentence
of this Section 10.11, shall not at any time thereafter be redesignated an
Unrestricted Subsidiary without the prior written consent of the Required
Holders. Any Unrestricted Subsidiary which has been designated a Restricted
Subsidiary and which has then been redesignated an Unrestricted Subsidiary, in
each case in accordance with the provisions of the first sentence of this
Section 10.11, shall not at any time thereafter be redesignated a Restricted
Subsidiary without the prior written consent of the Required Holders.
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Section 11. Events of Default.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in Section 10.1 through Section 10.4, inclusive, or Section
10.6 through Section 10.9, inclusive, or Section 10.11; or
(d) the Company defaults in the performance of or compliance with any
term contained in Section 10.5 or Section 10.10 and such default is not
remedied within 10 Business Days after the earlier of (1) a Responsible
Officer obtaining actual knowledge of such default and (2) the Company
receiving written notice of such default from any holder of a Note (any
such notice to be identified as a "notice of default" and to refer
specifically to this paragraph (d) of Section 11);
(e) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b),
(c) and (d) of this Section 11) and such default is not remedied within 30
days after the earlier of (1) a Responsible Officer obtaining actual
knowledge of such default and (2) the Company receiving written notice of
such default from any holder of a Note (any such written notice to be
identified as a "notice of default" and to refer specifically to this
paragraph (e) of Section 11); or
(f) the Subsidiary Guaranty Agreement shall cease to be in full force
and effect for any reason whatsoever (other than the indefeasible payment
in full of all obligations under this Agreement, the Notes and the
Subsidiary Guaranty Agreement) as a result of acts taken by the Company or
a Subsidiary, including, without limitation, a determination by any
governmental body or court that such agreement is invalid, void or
unenforceable against a Subsidiary Guarantor or such Subsidiary Guarantor
shall contest or deny in writing the validity or enforceability of any of
its obligations under the Subsidiary Guaranty Agreement; or
(g) any representation or warranty made in writing by or on behalf of
the Company or any Subsidiary Guarantor or by any officer of the Company or
any Subsidiary Guarantor in this Agreement, in the Subsidiary Guaranty
Agreement or in any writing furnished in connection with the transactions
-29-
contemplated hereby or thereby proves to have been false or incorrect in
any material respect on the date as of which made; or
(h) (1) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Debt that is
outstanding in an aggregate principal amount of at least $5,000,000 beyond
any period of grace provided with respect thereto, or (2) the Company or
any Restricted Subsidiary is in default in the performance of or compliance
with any term of any evidence of any Debt in an aggregate outstanding
principal amount of at least $5,000,000 or of any mortgage, indenture or
other agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Debt has become, or has been
declared (or one or more Persons are entitled to declare such Debt to be),
due and payable before its stated maturity or before its regularly
scheduled dates of payment or (3) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time or
the right of the holder of Debt to convert such Debt into equity
interests), (i) the Company or any Restricted Subsidiary has become
obligated to purchase or repay Debt before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000 or (ii) one or more Persons have
the right to require the Company or any Restricted Subsidiary so to
purchase or repay such Debt; or
(i) the Company or any Significant Subsidiary (1) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (2) files, or consents by answer or otherwise to the filing against it
of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (3) makes an assignment for the benefit of its creditors,
(4) consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, (5) is adjudicated as insolvent or to be
liquidated or (6) takes corporate action for the purpose of any of the
foregoing; or
(j) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its
Significant Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any of its Significant Subsidiaries, or any such petition
shall be filed against the Company or any of its Significant Subsidiaries
and such petition shall not be dismissed within 60 days; or
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(k) a final judgment or judgments for the payment of money aggregating
in excess of $5,000,000 are rendered against one or more of the Company and
its Significant Subsidiaries and which judgments are not, within 30 days
after entry thereof (or such longer period of time, if any, before a
judgment creditor in the applicable jurisdiction would first be permitted
by applicable law to execute on such judgment), bonded, discharged or
stayed pending appeal, or are not discharged within 30 days after the
expiration of such stay (or such longer period of time, if any, before a
judgment creditor in the applicable jurisdiction would first be permitted
by applicable law to execute on such judgment); or
(l) if (1) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under Section 412 of the Code, (2) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under Section
4042 of ERISA to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (3) the aggregate "amount of
unfunded benefit liabilities" (within the meaning of Section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (4) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (5) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan or (6) the Company or any ERISA
Affiliate establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase
the liability of the Company or any ERISA Affiliate thereunder; and any
such event or events described in clauses (1) through (6) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(l), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
Section 12. Remedies On Default, Etc.
Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in paragraph (i) or (j) of Section 11 (other than an Event of
Default described in clause (1) of paragraph (i) or described in clause (6) of
paragraph (i) by virtue of the fact that such clause encompasses clause (1) of
paragraph (i)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
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(b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of Section 11
has occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.
Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (1) all accrued and unpaid interest
thereon and (2) the Make-Whole Amount, if any, determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the Required
Holders by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17 and (c) no judgment or decree has been entered for the payment of any
monies due pursuant hereto or to the Notes. No rescission and annulment under
this Section 12.3 will extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.
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Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys'
fees, expenses and disbursements.
Section 13. Registration; Exchange; Substitution of Notes.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes of the same series (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1(a) or Exhibit 1(b), as applicable. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $250,000, provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes of a series, one Note of such series may be in a denomination of less than
$250,000. Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee), shall be deemed to have made the representation set
forth in Section 6.2.
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Section 13.3. Replacement of Notes. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
nominee for, an original Purchaser or another holder of a Note that is an
Institutional Investor (other than of the type described in the clause (b)
of the definition thereof) with a minimum net worth of at least
$100,000,000, such Person's own unsecured agreement of indemnity shall be
deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
Section 14. Payments on Notes.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of Bank of
America in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or its nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose below such
Purchaser's name in Schedule A, or by such other method or at such other address
as such Purchaser shall have from time to time specified to the Company in
writing for such purpose, without the presentation or surrender of such Note or
the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by a Purchaser or its nominee such Purchaser will, at its
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note
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or Notes pursuant to Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by a Purchaser under this Agreement and that
has made the same agreement relating to such Note as such Purchaser has made in
this Section 14.2.
Section 15. Expenses, Etc.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by the Purchasers or other holders of
Notes in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement, the
Subsidiary Guaranty Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), including, without limitation: (a) the
costs and expenses incurred in enforcing or defending (or determining whether or
how to enforce or defend) any rights under this Agreement, the Subsidiary
Guaranty Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement, the Subsidiary Guaranty Agreement or the Notes, or by reason of being
a holder of any Note and (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Notes. The Company will pay, and
will save each Purchaser and each other holder of a Note harmless from, all
claims in respect of any fees, costs or expenses, if any, of brokers and finders
(other than those retained by the Purchasers).
Section 15.2. Survival. The obligations of the Company under this Section
15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, the Subsidiary Guaranty Agreement
or the Notes, and the termination of this Agreement and the Subsidiary Guaranty
Agreement.
Section 16. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of any
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between the
Purchasers and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
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Section 17. Amendment and Waiver.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21, or any defined term (as it
is used therein), will be effective as to any holder of Notes unless consented
to by such holder in writing, (b) no amendment or waiver of any of the
provisions of Section 9.6 will be effective unless consented to in writing by
the holders of at least 66-2/3% in principal amount of the Notes at the time
outstanding (exclusive of the Notes then owned by the Company, any Subsidiary or
any of its other Affiliates) and (c) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (1) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (2) change the percentage of
the principal amount of the Notes the holders of which are required to consent
to any such amendment or waiver or (3) amend any of the provisions of Sections
8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not, directly or indirectly, pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes or any
waiver or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right
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consequent thereon. No course of dealing between the Company and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note
shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company, any Subsidiary or any other Affiliate shall be
deemed not to be outstanding.
Section 18. Notices.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid) or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(1) if to a Purchaser or its nominee, to such Purchaser or its nominee
at the address specified for such communications in Schedule A, or at such
other address as such Purchaser or its nominee shall have specified to the
Company in writing,
(2) if to any other holder of any Note, to such holder at such address
as such other holder shall have specified to the Company in writing, or
(3) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Chief Financial Officer, or at such
other address as the Company shall have specified to the holder of each
Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
Section 19. Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any holder of the Notes, may be
reproduced by such holder by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar
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process and such holder may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such holder in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
Section 20. Confidential Information.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was either (x)
clearly marked or labeled or otherwise adequately identified when received by
such Purchaser as being confidential information of the Company or such
Subsidiary or (y) received in connection with an inspection pursuant to Section
7.3, provided that such term does not include information that (a) was publicly
known or otherwise known to such Purchaser prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by such
Purchaser or any Person acting on such Purchaser's behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to such Purchaser
under Section 7.1 that are otherwise publicly available. Each Purchaser will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such
Purchaser may deliver or disclose Confidential Information to (1) such
Purchaser's directors, officers, trustees, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Purchaser's Notes), (2)
such Purchaser's financial advisors and other professional advisors who agree to
hold confidential the Confidential Information substantially in accordance with
the terms of this Section 20, (3) any other holder of any Note, (4) any
Institutional Investor to which such Purchaser sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (5) any Person from which such Purchaser offers
to purchase any security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (6) any Federal or state regulatory authority
having jurisdiction over such Purchaser, (7) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser's investment portfolio or (8) any other Person to which such delivery
or disclosure may be necessary or appropriate (i) to effect compliance with any
law, rule, regulation or order applicable
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to such Purchaser, (ii) in response to any subpoena or other legal process,
(iii) in connection with any litigation to which such Purchaser is a party or
(iv) if an Event of Default has occurred and is continuing, to the extent such
Purchaser may reasonably determine such delivery and disclosure to be necessary
or appropriate in the enforcement or for the protection of the rights and
remedies under such Purchaser's Notes and this Agreement. Each holder of a Note,
by its acceptance of a Note, will be deemed to have agreed to be bound by and to
be entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.
Section 21. Substitution of Purchaser.
Each Purchaser shall have the right to substitute any one of its Affiliates
as the purchaser of the Notes that such Purchaser has agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both such Purchaser and such Purchaser's Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, wherever
the word "Purchaser" is used in this Agreement (other than in this Section 21),
such word shall be deemed to refer to such Affiliate in lieu of such Purchaser.
In the event that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to such Purchaser all of the Notes then held
by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "Purchaser" is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to such Purchaser, and such Purchaser shall have all the rights of
an original holder of the Notes under this Agreement.
Section 22. Miscellaneous.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and permitted assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent
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of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction.
(a) Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
(b) Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made by the Company for the purposes of
this Agreement, the same shall be done by the Company in accordance with GAAP,
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section 22.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
Section 22.6. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
Section 22.7. Submission to Jurisdiction. Any legal action or proceeding
with respect to this Agreement or any Note may be brought in the courts of the
State of New York in the Borough of Manhattan, State of New York, or of the
United States for the Southern District of New York and, by execution and
delivery of this Agreement, the Company hereby irrevocably accepts,
unconditionally, the jurisdiction of the aforesaid courts with respect to any
such action or proceeding. The Company further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Company at the address specified from time to time
pursuant to Section 18, such service to become effective upon receipt. Nothing
herein shall affect the right of any holder of any Note to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Company in any other jurisdiction. The Company hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or
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proceedings arising out of or in connection with this agreement brought in any
of the aforesaid courts and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
* * * * *
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The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set forth.
Very truly yours,
Teletech Holdings, Inc.
By
-----------------------------
Its
The foregoing is hereby agreed
to as of the date first written above.
[Add Purchaser Signature Blocks]
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Defined Terms
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"Adjusted Consolidated Debt" shall mean, as of any date of determination,
(a) the total of all Debt of the Company and its Restricted Subsidiaries
outstanding on such date, after eliminating all offsetting debits and credits
between the Company and its Restricted Subsidiaries and all other items required
to be eliminated in the course of the preparation of consolidated financial
statements of the Company and its Restricted Subsidiaries in accordance with
GAAP, plus (b) five times the rental expense under operating leases (other than
Synthetic Leases) of the Company and its Restricted Subsidiaries for the period
consisting of the immediately preceding four consecutive fiscal quarters of the
Company ending on, or most recently ended prior to, such date.
"Adjusted Consolidated Debt to Adjusted Consolidated EBITDA Ratio" shall
mean, as of the date of any determination thereof, the ratio of (a) Adjusted
Consolidated Debt as of the end of the then most recently completed fiscal
quarter to (b) Adjusted Consolidated EBITDA for the period consisting of the
immediately preceding four consecutive fiscal quarters of the Company ending on,
or most recently ended prior to, such date.
"Adjusted Consolidated EBITDA" shall mean, without duplication and with
respect to any period, the sum of (a) Consolidated EBITDA for such period and
(b) all rental expense of the Company and its Restricted Subsidiaries under
operating leases (other than Synthetic Leases) for such period, in each case,
determined as if (1) any Person that became a Restricted Subsidiary during such
period was a Restricted Subsidiary on the first day of such period, (2) any
Restricted Subsidiary that was disposed of or designated an Unrestricted
Subsidiary pursuant to Section 10.11 during such period was disposed of or
designated an Unrestricted Subsidiary on the first day of such period, (3) any
Person all or substantially all of whose assets were acquired by the Company or
a Restricted Subsidiary during such period were acquired on the first day of
such period and (4) any Restricted Subsidiary all or substantially all of whose
assets were disposed of during such period were disposed of on the first day of
such period.
"Anti-Terrorism Order" shall mean Executive Order No. 13,224 66 Fed. Reg.
49,079 (2001) issued by the President of the United States of America (Executive
Order Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism).
"Affiliate" shall mean, at any time, and with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person,
Schedule B
(to Note Purchase Agreement)
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Bank Credit Agreement" shall mean that certain Amended and Restated
Revolving Credit Agreement dated as of March 24, 2000 among the Company, Bank of
America, National Association, as Administrative Agent, the Co-Agents and other
financial institutions party thereto, as such agreement may be amended,
restated, refinanced, replaced or otherwise modified and any successor thereto.
"Bank Guaranty" shall mean the Guaranty dated as of March 24, 2000 from
certain subsidiaries of the Company in favor of the financial institutions party
to the Bank Credit Agreement, as such agreement may be amended, restated or
otherwise modified and any successor thereto.
"Business Day" shall mean (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York,
New York are required or authorized to be closed and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Denver, Colorado or New York, New York are
required or authorized to be closed.
"Capital Lease" shall mean, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" shall mean, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Closing" is defined in Section 3.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
"Company" shall mean TeleTech Holdings, Inc., a Delaware corporation or any
Successor Corporation.
"Competitor" shall mean any Person, directly or indirectly through one or
more of its Subsidiaries, providing customer care and support services, on an
outsourcing basis or under a facilities management agreement, which services
include, without limitation, technical help desk support, pre- and post- sale
education and support, sales and order taking, order provisioning and/or
tracking, activating product or service upgrades, responding to customer
requests for information and Customer-Relationship Management (CRM) or e-CRM
services delivered telephonically or over the internet;
B-2
provided, however, that "Competitor" shall not include any Institutional
Investor the predominant portion of whose business involves banking, insurance,
investment banking, broker dealer, investment or similar activities (including,
without limitation, any entity involved in the investment activities of or
contributions to pension, retirement, medical or similar plans or interests) if
such Person is a Holder by virtue of its normal sales, trading or investment
activities.
"Confidential Information" is defined in Section 20.
"Consolidated Adjusted Net Worth" shall mean, as of any date of
determination, Consolidated Net Worth, less the aggregate amount of all
Restricted Investments in excess of 10% of such Consolidated Net Worth.
"Consolidated EBITDA" shall mean, with respect to any period, (a)
Consolidated Net Income for such period plus (b) all amounts deducted in the
computation of such Consolidated Net Income on account of (1) Interest Charges
during such period, (2) taxes imposed on or measured by income or excess profits
of the Company and its Restricted Subsidiaries during such period and (3) all
provisions for depreciation and amortization made by the Company and its
Restricted Subsidiaries during such period.
For purposes of determining "Consolidated EBITDA," there shall be added
back to Consolidated Net Income (a) for the fiscal quarter ended March 31, 2001,
non-cash charges in the amount of $7,700,000 arising from the closure of a
customer interaction center in Thornton, Colorado and (b) for the fiscal quarter
ended June 30, 2001, non-cash charges in the amount of $16,500,000 and
$7,000,000 arising from the Company's write-down of its investment in EHI and
the property at 9201 Dry Creek Road, Englewood, Colorado, respectively.
"Consolidated Income Available for Fixed Charges" shall mean, with respect
to any period, the sum of (a) Consolidated EBITDA for such period and (b) rental
expense under operating leases (other than Synthetic Leases) for such period.
"Consolidated Net Income" shall mean, with reference to any period, the net
income (or loss) of the Company and its Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and its Restricted Subsidiaries in accordance with GAAP, but excluding, in any
event, any extraordinary gains or losses determined in accordance with GAAP.
"Consolidated Net Worth" shall mean, as of any date of determination,
(a) the sum of (1) the par value (or value stated on the books of the
corporation) of the capital stock (but excluding treasury stock and capital
stock subscribed and unissued) of the Company and its Restricted
Subsidiaries plus
B-3
(2) the amount of the paid-in capital and retained earnings of the Company
and its Restricted Subsidiaries, in each case as such amounts would be
shown on a consolidated balance sheet of the Company and its Restricted
Subsidiaries as of such time prepared in accordance with GAAP, minus
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Restricted Subsidiaries.
"Consolidated Total Assets" shall mean, as of any date of determination,
the total assets of the Company and its Restricted Subsidiaries which would be
shown as assets on a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of such time prepared in accordance with GAAP, after
eliminating all amounts properly attributable to minority interests, if any, in
the stock and surplus of Restricted Subsidiaries.
"Debt" shall mean, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) accrued liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including, without limitation, all accrued
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) the lease balance outstanding under the Company's headquarters
Synthetic Lease and the principal or lease balance under all other
Synthetic Leases; and
(f) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (e) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
B-4
"Default" shall mean an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" shall mean, with respect to a series of Notes, that rate of
interest that is the greater of (a) 2% per annum above the rate of interest
stated in clause (a) of the first paragraph of the Notes of such series or (b)
2% over the rate of interest publicly announced by Bank of America in New York,
New York as its "reference rate."
"Environmental Laws" shall mean any and all applicable Federal, state,
local, and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under Section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Excluded Sale and Leaseback Transactions" shall mean any sale or other
disposition of property acquired or constructed by the Company or any Restricted
Subsidiary after the date of the Closing to any Person within 180 days following
the acquisition or construction of such property by the Company or any
Restricted Subsidiary; provided that the Company or a Restricted Subsidiary
shall concurrently with such sale or other disposition, lease such property, as
lessee.
"Fair Market Value" shall mean, as of any date of determination thereof and
with respect to any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an informed and willing
buyer and an informed and willing seller (neither being under a compulsion to
buy or sell).
"Fixed Charges" shall mean, with respect to any period, the sum of (a)
Interest Charges for such period and (b) rental expense under operating leases
(other than Synthetic Leases) for such period.
"Fixed Charges Coverage Ratio" shall mean, as of any date of determination
thereof, the ratio of (a) Consolidated Income Available for Fixed Charges for
the period
B-5
of four consecutive fiscal quarters ending on, or most recently ended prior to,
such date to (b) Fixed Charges for such period.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" shall mean
(a) the government of
(1) the United States of America or any State or other political
subdivision thereof, or
(2) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"Guaranty" shall mean, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including, without limitation, obligations incurred
through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Debt or obligation or any property constituting
security therefor;
(b) to advance or supply funds (1) for the purchase or payment of such
Debt or obligation or (2) to maintain any working capital or other balance
sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of
such Debt or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Debt or obligation
of the ability of any other Person to make payment of the Debt or
obligation; or
(d) otherwise to assure the owner of such Debt or obligation against
loss in respect thereof.
In any computation of the Debt or other liabilities of the obligor under any
Guaranty, the Debt or other obligations that are the subject of such Guaranty
shall be assumed to be direct obligations of such obligor.
B-6
"Guaranty Supplement" is defined in Section 9.6(a)(1).
"Hazardous Material" shall mean any and all pollutants, toxic or hazardous
wastes or any other substances that pose a hazard to human health or safety, the
removal of which may be required by, or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
restricted, prohibited or penalized by any Environmental Law (including, without
limitation, asbestos, urea formaldehyde foam insulation and polychlorinated
biphenyls).
"holder" shall mean, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"Institutional Investor" shall mean (a) any original purchaser of a Note,
(b) any holder of a Note holding more than $2,000,000 in aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"Intercreditor Agreement" is defined in Section 9.6(b).
"Interest Charges" shall mean, with respect to any period, the sum, without
duplication, of the following (in each case, eliminating all offsetting debits
and credits between the Company and its Restricted Subsidiaries and all other
items required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted Subsidiaries in
accordance with GAAP): (a) all interest in respect of Debt of the Company and
its Restricted Subsidiaries (including imputed interest on Capital Lease
Obligations and the interest component in respect of rentals under Synthetic
Leases) deducted in determining Consolidated Net Income for such period and (b)
all debt discount and expense amortized or required to be amortized in the
determination of Consolidated Net Income for such period.
"Investment" shall mean any investment, made in cash or by delivery of
property, by the Company or any of its Restricted Subsidiaries (a) in any
Person, whether by acquisition of stock, Debt or other obligation or security,
or by loan, Guaranty, advance, capital contribution or otherwise or (b) in any
property.
"Joint Venture" shall mean a single-purpose corporation, partnership,
limited liability company, joint venture or other similar legal arrangement
(whether created by contract or through a separate legal entity) now or
hereafter formed by the Company or any of its Restricted Subsidiaries with
another Person in order to conduct a common venture or enterprise in the
ordinary course of business with such Person.
"Lien" shall mean, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor,
B-7
lessor, lender or other secured party to or of such Person under any conditional
sale or other title retention agreement or Capital Lease, upon or with respect
to any property or asset of such Person (including in the case of stock,
stockholder agreements, voting trust agreements and all similar arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" shall mean material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries, taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries, taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the ability of any Subsidiary Guarantor that is a Significant Subsidiary to
perform its obligations under the Subsidiary Guaranty Agreement or (d) the
validity or enforceability of this Agreement, the Subsidiary Guaranty Agreement
or the Notes.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" shall mean any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.
"Officer's Certificate" shall mean a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"Participation Agreement" shall mean that certain Participation Agreement
dated as of December 27, 2000 among TeleTech Services Corporation, as lessee,
the Company, as guarantor, State Street Bank and Trust Company of Connecticut,
National Association, as certificate trustee, First Security Bank, National
Association, as administrative agent, and the Financial Institutions named on
Schedule I thereto, as certificateholders, and the Financial Institutions named
on Schedule II thereto, as lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Swap Obligations" shall mean all obligations (contingent or
otherwise) of the Company or any Restricted Subsidiary existing or arising under
Swap Contracts, provided that each of the following criteria is satisfied: (a)
such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly mitigating risks associated with
liabilities, commitments or assets held or
B-8
reasonably anticipated by such Person, or changes in the value of securities
issued by such Person in conjunction with a securities repurchase program not
otherwise prohibited hereunder, and not for purposes of speculation or taking a
"market view" and (b) such Swap Contracts do not contain any provision
("walk-away" provisions) exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party.
"Person" shall mean an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" shall mean an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" shall mean any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" shall mean, without duplication, the sum of (a) all Debt of
the Company secured by any Lien with respect to any property owned by the
Company other than Liens permitted by paragraphs (a) through (k) of Section
10.5, (b) all Debt of Restricted Subsidiaries other than (1) Debt owed to the
Company or a Wholly-Owned Restricted Subsidiary, (2) Debt outstanding at the
time such Person became a Subsidiary, provided, that (i) such Debt shall not
have been incurred in contemplation of such Subsidiary becoming a Subsidiary and
(ii) immediately after such Subsidiary became a Subsidiary, no Default or Event
of Default shall exist, and provided further, that such Debt may not be
extended, renewed or refunded except as otherwise permitted by this Agreement,
(3) Debt outstanding on the date of the Closing related to the headquarters
Synthetic Lease (including any refinancing of such Debt up to an amount equal to
the amount of such Debt outstanding on the date of the Closing) and disclosed in
Schedule 5.15 and (4) Debt of Subsidiary Guarantors (i) evidenced by the
Subsidiary Guaranty Agreement and the Bank Guaranty or (ii) incurred as a
co-obligor under the Bank Credit Agreement, provided that, in the case of clause
(ii), an Intercreditor Agreement has been executed and delivered pursuant to
Section 9.6(b) and (c) the amount of any cash held in deposit accounts described
in Section 10.5(k).
"property" or "properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"PTE" is defined in Section 6.2(a).
"Purchasers" is defined in the preamble to this Agreement.
B-9
"QPAM Exemption" shall mean Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Required Holders" shall mean, at any time, the holders of at least 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company, any Subsidiary or any of its other Affiliates).
"Responsible Officer" shall mean any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Investments" shall mean all Investments except the following:
(a) property to be used in the ordinary course of business of the
Company and its Restricted Subsidiaries;
(b) current assets arising from the sale of goods and services in the
ordinary course of business of the Company and its Restricted Subsidiaries;
(c) Investments in one or more Restricted Subsidiaries or any Person
that concurrently with such Investment becomes a Restricted Subsidiary;
(d) Investments in Joint Ventures not constituting Subsidiaries in an
aggregate amount not to exceed, at any time, 15% of Consolidated Net Worth;
(e) Investments existing on the date of the Closing and disclosed in
Schedule 5.19;
(f) Investments in United States Governmental Securities, provided
that such obligations mature within 365 days from the date of acquisition
thereof;
(g) Investments in certificates of deposit or banker's acceptances
issued by an Acceptable Bank, provided that such obligations mature within
365 days from the date of acquisition thereof;
(h) Investments in commercial paper rated one of the two highest
ratings classifications by at least one credit rating agency of recognized
national standing and maturing not more than 270 days from the date of
creation thereof;
(i) Investments in Repurchase Agreements;
(j) Investments in tax-exempt obligations of any state of the United
States of America, or any municipality of any such state, in each case
rated one of the two highest ratings classifications by at least one credit
rating agency of recognized national standing, provided that such
obligations mature within 365 days from the date of acquisition thereof;
B-10
(k) Investments in money market instrument programs which are
classified as current assets in accordance with GAAP, which money market
instrument programs are administered by an "investment company" regulated
under the Investment Company Act of 1940, as amended, and which money
market instrument programs hold only Investments satisfying the criteria
set forth in clauses (f), (g), (h) or (j) above; provided, that such
Investments are classified as current assets in accordance with GAAP;
(l) Investments of the Company or any Restricted Subsidiary consisting
of capital stock or other equity interests held in the treasury account of
the Company or such Restricted Subsidiary;
(m) advances to employees of the Company or any Restricted Subsidiary
made in the ordinary course of business of the Company or such Restricted
Subsidiary in an aggregate amount not to exceed $3,000,000 at any one time
outstanding;
(n) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations;
(o) Investments in common stock of enhansiv holdings, inc. ("EHI")
received by the Company upon conversion of 100 shares of Series A Preferred
Stock of EHI owned by the Company on the date of the Closing;
(p) loans by the Company to EHI in an aggregate amount not to exceed
$7,000,000 at any one time outstanding;
(q) the Company's option to repurchase approximately 95% of the common
stock of EHI sold to a group of investors in 2000; and
(r) Investments in direct obligations of, or unconditionally
guaranteed by, the government of Australia, Canada, Japan, New Zealand or
any country in the European Union (other than Greece) which obligations are
rated in one of the two highest ratings classifications by at least one
credit rating agency of recognized international standing.
As of any date of determination, each Restricted Investment shall be valued
at the greater of:
(1) the amount at which such Restricted Investment is shown on the
books of the Company or any of its Restricted Subsidiaries (or zero if such
Restricted Investment is not shown on any such books); and
(2) either
B-11
(i) in the case of any Guaranty of the obligation of any Person,
the amount which the Company or any of its Restricted Subsidiaries has
paid on account of such obligation less any recoupment by the Company
or such Restricted Subsidiary of any such payments, or
(ii) in the case of any other Restricted Investment, the excess
of (A) the greater of (I) the amount originally entered on the books
of the Company or any of its Restricted Subsidiaries with respect
thereto and (II) the cost thereof to the Company or its Restricted
Subsidiary over (B) any return of capital (after income taxes
applicable thereto) upon such Restricted Investment through the sale
or other liquidation thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"Acceptable Bank" shall mean (a) Bank of America or (b) any other
bank or trust company (1) which is organized under the laws of the
United States of America or any State thereof, (2) which has capital,
surplus and undivided profits aggregating at least $500,000,000 and
(3) whose long-term unsecured debt obligations (or the long-term
unsecured debt obligations of the bank holding company owning all of
the capital stock of such bank or trust company) shall have been given
one of the two highest ratings by at least one credit rating agency of
recognized national standing.
"Acceptable Broker-Dealer" shall mean any Person other than a
natural person (a) which is registered as a broker or dealer pursuant
to the Exchange Act and (b) whose long-term unsecured debt obligations
shall have been given one of two highest ratings by at least one
credit rating agency of recognized national standing.
"Repurchase Agreement" shall mean any written agreement
(a) that provides for (1) the transfer of one or more United
States Governmental Securities in an aggregate principal amount at
least equal to the amount of the Transfer Price (defined below) to the
Company or any of its Restricted Subsidiaries from an Acceptable Bank
or an Acceptable Broker-Dealer against a transfer of funds (the
"Transfer Price") by the Company or such Restricted Subsidiary to such
Acceptable Bank or Acceptable Broker-Dealer, and (2) a simultaneous
agreement by the Company or such Restricted Subsidiary, in connection
with such transfer of funds, to transfer to such Acceptable Bank or
Acceptable Broker-Dealer the same or substantially similar United
States Governmental Securities for a price not less than the Transfer
Price plus a reasonable return thereon at a date certain not later
than 365 days after such transfer of funds,
B-12
(b) in respect of which the Company or such Restricted Subsidiary
shall have the right, whether by contract or pursuant to applicable
law, to liquidate such agreement upon the occurrence of any default
thereunder, and
(c) in connection with which the Company or such Restricted
Subsidiary, or an agent thereof, shall have taken all action required
by applicable law or regulations to perfect a Lien in such United
States Governmental Securities.
"United States Governmental Security" shall mean any direct
obligation of, or obligation guaranteed by, the United States of
America, or any agency controlled or supervised by or acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America, so long as
such obligation or guarantee shall have the benefit of the full faith
and credit of the United States of America which shall have been
pledged pursuant to authority granted by the Congress of the United
States of America.
"Restricted Subsidiary" shall mean (a) any Subsidiary Guarantor and (b) any
other Subsidiary (1) of which at least a majority of the voting securities are
owned by the Company and/or one or more Wholly-Owned Restricted Subsidiaries and
(2) that the Company has designated as a Restricted Subsidiary on the date of
Closing or in accordance with the provisions of Section 10.11.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Senior Debt" shall mean any Debt that is not in any manner subordinated in
right of payment or security in any respect to the Debt evidenced by the Notes.
"Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Series A Notes" is defined in Section 1.
"Series B Notes" is defined in Section 1.
"Significant Subsidiary" shall mean any Restricted Subsidiary that would at
such time constitute a "significant subsidiary" (as such term is defined in
Regulation S-X of the Securities and Exchange Commission) as in effect on the
date of the Closing.
"Source" is defined in Section 6.2.
"Subsidiary" shall mean, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person
B-13
and one or more of its Subsidiaries owns sufficient equity or voting interests
to enable it or them (as a group) ordinarily, in the absence of contingencies,
to elect a majority of the directors (or Persons performing similar functions)
of such entity, and any partnership or Joint Venture if more than a 50% interest
in the profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such
partnership or Joint Venture can and does ordinarily take major business actions
without the prior approval of such Person or one or more of its Subsidiaries).
Unless the context otherwise clearly requires, any reference to a "Subsidiary"
is a reference to a Subsidiary of the Company.
"Subsidiary Guarantor Release Certificate" is defined in Section 9.6(c).
"Subsidiary Guarantors" shall mean, as of the date of the Closing, all of
the Subsidiaries of the Company party to the Subsidiary Guaranty Agreement, such
Subsidiaries being: TeleTech Services Corporation, a Colorado corporation,
TeleTech Customer Care Management (West Virginia), Inc., a West Virginia
corporation, TeleTech Customer Care Management (Colorado), Inc., a Colorado
corporation, TeleTech Customer Care Management (New York), Inc., a New York
corporation, TeleTech Facilities Management (Parcel Customer Support), Inc., a
Delaware corporation, TeleTech Facilities Management (Postal Customer Support),
Inc., a Delaware corporation, T-TEC LABS, INC., a Delaware corporation, TeleTech
Customer Care Management (Telecommunications), Inc., a Delaware corporation,
TeleTech Health Services Management, Inc., a Delaware corporation, Digital
Creators, Inc., a Colorado corporation, TeleTech Customer Care Management, Inc.,
a Delaware corporation, TeleTech Customer Care Management (South America), Inc.,
a Delaware corporation, TeleTech Customer Care Management (General), Inc., a
Delaware corporation, TeleTech Customer Care Management (GS), Inc., a Delaware
corporation, TeleTech Customer Care Solutions (Japan), Inc., a Delaware
corporation, TeleTech South America Holdings, Inc., a Delaware corporation,
Pamet River, Inc., a Delaware corporation, Newgen Results Corp., a Delaware
corporation, TeleTech International Holdings, Inc., a Delaware corporation,
TeleTech Financial Services Management, LLC, a Delaware limited liability
company, TeleTech Customer Care Management (California), Inc., a California
corporation, TeleTech Customer Care Management (Texas), Inc., a Texas
corporation, TTEC Nevada, Inc., a Nevada corporation, TeleTech Customer
Services, Inc., a Nevada corporation, TeleTech Customer Care Management
(Pennsylvania), LLC, a Pennsylvania limited liability company, Carabunga.com,
Inc., a Delaware corporation, Newgen Management Services, Inc., a Delaware
corporation, Newgen Dealer Pricing Center, Inc., a California corporation, and
EDM International, Inc., a Nevada corporation, and each other Subsidiary of the
Company that executes and delivers a Guaranty Supplement pursuant to Section
9.6(a); provided, however, that Subsidiary Guarantors shall not include any
Subsidiary of the Company for which a Subsidiary Guarantor Release Certificate
has been executed and delivered pursuant to Section 9.6(c) unless after the
delivery of such Subsidiary Guarantor Release Certificate such Subsidiary shall
have executed a Guaranty Supplement.
"Subsidiary Guaranty Agreement" is defined in Section 2.2.
B-14
"Successor Corporation" is defined in Section 10.6(a).
"Swap Contract" shall mean any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Synthetic Lease" shall mean any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product,
where such transaction is considered debt for borrowed money for tax purposes
but is classified as an operating lease in accordance with GAAP.
"Unrestricted Subsidiary" shall mean any Subsidiary that is not designated
as a Restricted Subsidiary by the Company.
"Wholly-Owned Restricted Subsidiary" shall mean, at any time, any
Restricted Subsidiary one hundred percent (100%) of all of the equity interests
(except directors' qualifying shares) and voting interests of which are owned by
any one or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.
B-15
Form of Series a Note
Teletech Holdings, Inc.
7.00% Senior Note, Series A, Due October 31, 2008
No. RA-
--------- , 20
$ ---------- ----
--------------- PPN 879939 A*7
FOR VALUE RECEIVED, the undersigned, TELETECH HOLDINGS, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to , or registered assigns, the
-------------
principal sum of DOLLARS on October 31, 2008, with interest (computed
-----------
on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance thereof at the rate of 7.00% per annum from the date hereof, payable
semiannually, on the last day of April and October in each year, commencing on
April 30, 2002, until the principal hereof shall have become due and payable and
(b) to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (1) 9.00% or (2) 2% over the rate of interest publicly
announced by Bank of America from time to time in New York, New York as its
"reference rate."
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in New York, New York or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.
This Note is one of the Senior Notes, Series A (the "Notes") issued
pursuant to the Note Purchase Agreement, dated as of October 1, 2001 (as from
time to time amended, the "Note Purchase Agreement"), between the Company and
the Purchasers named therein and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed
to the confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) to have made the representation set forth in Section 6.2 of
the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose
Exhibit 1(a)
(to Note Purchase Agreement)
name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any
notice to the contrary.
The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Purchase Agreement. This Note is also subject
to optional prepayment, in whole or from time to time in part, at the times and
on the terms specified in the Note Purchase Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price, including any applicable
Make-Whole Amount, and with the effect provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
Teletech Holdings, Inc.
By
---------------------------
Name:
Title:
Exhibit 1(a)-2
(to Note Purchase Agreement)
Form of Series B Note
TeleTech Holdings, Inc.
7.40% Senior Note, Series B, due October 31, 2011
No. RB- , 20
------ ---------- ----
$ PPN 879939 A@ 5
------------
FOR VALUE RECEIVED, the undersigned, TELETECH HOLDINGS, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to , or registered assigns,
----------------
the principal sum of DOLLARS on October 31, 2011, with interest
----------------
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 7.40% per annum from the date hereof,
payable semiannually, on the last day of April and October in each year,
commencing on April 30, 2002, until the principal hereof shall have become due
and payable and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable semiannually as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (1) 9.40% or (2) 2% over the rate of
interest publicly announced by Bank of America from time to time in New York,
New York as its "reference rate."
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in New York, New York or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.
This Note is one of the Senior Notes, Series B (the "Notes") issued
pursuant to the Note Purchase Agreement, dated as of October 1, 2001 (as from
time to time amended, the "Note Purchase Agreement"), between the Company and
the Purchasers named therein and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed
to the confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) to have made the representation set forth in Section 6.2 of
the Note Purchase Agreement.
Exhibit 1(b)
(to Note Purchase Agreement)
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Purchase Agreement. This Note is also subject
to optional prepayment, in whole or from time to time in part, at the times and
on the terms specified in the Note Purchase Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price, including any applicable
Make-Whole Amount, and with the effect provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
TeleTech Holdings, Inc.
By
-----------------------------
Name:
Title:
Exhibit 1(b)-2
(to Note Purchase Agreement)
Form of Subsidiary Guaranty Agreement
Execution Copy
================================================================================
Subsidiary Guaranty Agreement
Dated as of October 1, 2001
Re: $60,000,000 7.00% Senior Notes, Series A, due October 31, 2008
$15,000,000 7.40% Senior Notes, Series B, due October 31, 2011
of
TeleTech Holdings, Inc.
EXHIBIT SGA
(to Note Purchase Agreement)
================================================================================
Table of Contents
(Not a part of the Agreement)
Section Heading Page
Section 1. Definitions .....................................................2
Section 2. Guaranty of Notes and Note Purchase Agreement....................2
Section 3. Guaranty of Payment and Performance..............................3
Section 4. General Provisions Relating to the Guaranty......................3
Section 5. Representations and Warranties of the Guarantors.................9
Section 6. Amendments, Waivers and Consents................................11
Section 7. Notices ........................................................11
Attachments to Subsidiary Guaranty Agreement:
Exhibit A -- Subsidiary Guaranty Supplement
Subsidiary Guaranty Agreement
Re: $60,000,000 7.00% Senior Notes, Series A, due October 31, 2008
$15,000,000 7.40% Senior Notes, Series B, due October 31, 2011
of
TeleTech Holdings, Inc.
--------------------------------------
This Guaranty Agreement dated as of October 1, 2001 (the or this
"Guaranty") is entered into on a joint and several basis by each of the
undersigned, together with any entity which may become a party hereto by
execution and delivery of a Subsidiary Guaranty Supplement in substantially the
form set forth as Exhibit A hereto (a "Guaranty Supplement") (which parties are
hereinafter referred to individually as a "Guarantor" and collectively as the
"Guarantors").
Recitals
A. Each Guarantor is a subsidiary of TeleTech Holdings, Inc., a corporation
organized under the laws of the State of Delaware (the "Company").
B. In order to refinance existing indebtedness of the Company and its
Subsidiaries and for general corporate purposes, the Company has entered into
that certain Note Purchase Agreement dated as of October 1, 2001 (as the same
may be amended, supplemented, restated or otherwise modified from time to time,
the "Note Purchase Agreement") between the Company and each of the institutional
investors named on Schedule A attached to said Note Purchase Agreement (the
"Note Purchasers"), providing for, among other things, the issue and sale by the
Company to the Note Purchasers of (a) $60,000,000 aggregate principal amount of
its 7.00% Senior Notes, Series A, due October 31, 2008 (the "Series A Notes")
and (b) $15,000,000 aggregate principal amount of its 7.40% Senior Notes, Series
B, due October 31, 2011 (the "Series B Notes," and together with the Series A
Notes, the "Notes"). The Note Purchasers together with their respective
successors and assigns are collectively referred to herein as the "Holders."
C. The Note Purchasers have required as a condition of their purchase of
the Notes that the Company cause each of the undersigned to enter into this
Guaranty and to cause each Subsidiary (as defined in the Note Purchase
Agreement) which from time to time becomes obligated as a guarantor or
co-borrower under the Bank Credit Agreement (as defined in the Note Purchase
Agreement) to enter into a Guaranty Supplement, in each case as security for the
Notes, and the Company has agreed to cause each of the undersigned to execute
this Guaranty and to cause each Subsidiary which from time to time becomes
obligated as a guarantor or co-borrower under the Bank Credit Agreement to
execute a Guaranty Supplement, in each case in order to induce the Note
Purchasers to purchase the Notes and thereby benefit the Company and its
Subsidiaries by providing funds to enable the Company to refinance existing
indebtedness of the Company and its Subsidiaries and to enable the Company and
its Subsidiaries to have funds available for general corporate purposes.
Now, Therefore, as required by Section 4.5 of the Note Purchase Agreement
and in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency whereof are hereby acknowledged, each Guarantor does
hereby covenant and agree, jointly and severally, as follows:
Section 1. Definitions.
Capitalized terms used herein shall have the meanings set forth in the Note
Purchase Agreement unless herein defined or the context shall otherwise require.
Section 2. Guaranty of Notes and Note Purchase Agreement.
(a) Subject to the release of such Guarantor from this Guaranty in
accordance with the provisions of Section 9.6 of the Note Purchase Agreement,
each Guarantor jointly and severally does hereby irrevocably, absolutely and
unconditionally guarantee unto the Holders: (1) the full and prompt payment of
the principal of, premium, if any, and interest on the Notes from time to time
outstanding, as and when such payments shall become due and payable whether by
lapse of time, upon redemption or prepayment, by extension or by acceleration or
declaration or otherwise (including (to the extent legally enforceable) interest
due on overdue payments of principal, premium, if any, or interest at the rate
set forth in the Notes) in Federal or other immediately available funds of the
United States of America which at the time of payment or demand therefor shall
be legal tender for the payment of public and private debts, (2) the full and
prompt performance and observance by the Company of each and all of the
obligations, covenants and agreements required to be performed or owed by the
Company under the terms of the Notes and the Note Purchase Agreement and (3) the
full and prompt payment, upon demand by any Holder of all costs and expenses,
legal or otherwise (including reasonable attorneys' fees), if any, as shall have
been expended or incurred in the protection or enforcement of any rights,
privileges or liabilities in favor of the Holders under or in respect of the
Notes, the Note Purchase Agreement or under this Guaranty or in any consultation
or action in connection therewith or herewith.
(b) To the extent that any Guarantor shall make a payment hereunder (a
"Payment") which, taking into account all other Payments then previously or
concurrently made by any of the other Guarantors, exceeds the amount which such
Guarantor would otherwise have paid if each Guarantor had paid the aggregate
obligations satisfied by such Payment in the same proportion as such Guarantor's
"Allocable Amount" (as hereinafter defined) in effect immediately prior to such
Payment bore to the Aggregate Allocable Amount (as hereinafter defined) of all
of the Guarantors in effect immediately prior to the making of such Payment,
then such Guarantor shall be entitled to contribution and indemnification from,
and be reimbursed by, each of the other Guarantors for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Payment.
As of any date of determination, (1) the "Allocable Amount" of any Guarantor
shall be
-2-
equal to the maximum amount which could then be claimed by the Holders under
this Guaranty without rendering such claim voidable or avoidable under Section
548 of Chapter 11 of the United States Federal Bankruptcy Code (11 U.S.C. Sec.
101 et. seq.) or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law; and (2) the
"Aggregate Allocable Amount" shall be equal to the sum of each Guarantor's
Allocable Amount.
This clause (b) is intended only to define the relative rights of the
Guarantors, and nothing set forth in this clause (b) is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts to the Holders as and when the same shall become due and payable in
accordance herewith.
Each Guarantor acknowledges that the rights of contribution and indemnification
hereunder shall constitute an asset in favor of any Guarantor to which such
contribution and indemnification is owing.
Section 3. Guaranty of Payment and Performance.
Subject to the release provisions of Section 9.6 of the Note Purchase
Agreement, this is an irrevocable, absolute and unconditional guarantee of
payment and performance and each Guarantor hereby waives, to the fullest extent
permitted by law, any right to require that any action on or in respect of any
Note or the Note Purchase Agreement be brought against the Company or any other
Person or that resort be had to any direct or indirect security for the Notes or
for this Guaranty or any other remedy. Any Holder may, at its option, proceed
hereunder against any Guarantor in the first instance to collect monies when
due, the payment of which is guaranteed hereby, without first proceeding against
the Company or any other Person and without first resorting to any direct or
indirect security for the Notes or for this Guaranty or any other remedy. The
liability of each Guarantor hereunder shall in no way be affected or impaired by
any acceptance by any Holder of any direct or indirect security for, or other
guaranties of, any Debt, liability or obligation of the Company or any other
Person to any Holder or by any failure, delay, neglect or omission by any Holder
to realize upon or protect any such guarantees, Debt, liability or obligation or
any notes or other instruments evidencing the same or any direct or indirect
security therefor or by any approval, consent, waiver, or other action taken, or
omitted to be taken by any such Holder.
The covenants and agreements on the part of the Guarantors herein contained
shall take effect as joint and several covenants and agreements, and references
to the Guarantors shall take effect as references to each of them and none of
them shall be released from liability hereunder by reason of the guarantee
ceasing to be binding as a continuing security on any other of them.
Section 4. General Provisions Relating to the Guaranty.
(a) Each Guarantor hereby consents and agrees that any Holder or Holders
may from time to time, with or without any further notice to or assent from any
other Guarantor, and without in any manner affecting the liability of any
Guarantor under this
-3-
Guaranty, and upon such terms and conditions as any such Holder or Holders may
deem advisable:
(1) extend in whole or in part (by renewal or otherwise), modify,
change, compromise, release or extend the duration of the time for the
performance or payment of any Debt, liability or obligation of the Company
or of any other Person (including, without limitation, any other Guarantor)
secondarily or otherwise liable for any Debt, liability or obligations of
the Company on the Notes, or waive any Default or Event of Default with
respect thereto, or waive, modify, amend or change any provision of the
Note Purchase Agreement or any other agreement or waive this Guaranty; or
(2) sell, release, surrender, modify, impair, exchange or substitute
any and all property, of any nature and from whomsoever received, held by,
or for the benefit of, any such Holder as direct or indirect security for
the payment or performance of any Debt, liability or obligation of the
Company or of any other Person secondarily or otherwise liable for any
Debt, liability or obligation of the Company on the Notes; or
(3) settle, adjust or compromise any claim of the Company against any
other Person secondarily or otherwise liable for any Debt, liability or
obligation of the Company on the Notes.
Each Guarantor hereby ratifies and confirms any such extension, renewal,
change, sale, release, waiver, surrender, exchange, modification, amendment,
impairment, substitution, settlement, adjustment or compromise and that the same
shall be binding upon it, and hereby waives, to the fullest extent permitted by
law, any and all defenses, counterclaims or offsets which it might or could have
by reason thereof, it being understood that such Guarantor shall at all times be
bound by this Guaranty and remain liable hereunder.
(b) Each Guarantor hereby waives, to the fullest extent permitted by law:
(1) notice of acceptance of this Guaranty by the Holders or of the
creation, renewal or accrual of any liability of the Company, present or
future, or of the reliance of such Holders upon this Guaranty (it being
understood that every Debt, liability and obligation described in Section 2
hereof shall conclusively be presumed to have been created, contracted or
incurred in reliance upon the execution of this Guaranty);
(2) demand of payment by any Holder from the Company or any other
Person (including, without limitation, any other Guarantor) indebted in any
manner on or for any of the Debt, liabilities or obligations hereby
guaranteed; and
-4-
(3) presentment for the payment by any Holder or any other Person of
the Notes or any other instrument, protest thereof and notice of its
dishonor to any party thereto and to such Guarantor.
The obligations of each Guarantor under this Guaranty and the rights of any
Holder to enforce such obligations by any proceedings, whether by action at law,
suit in equity or otherwise, shall not be subject to any reduction, limitation,
impairment or termination, whether by reason of any claim of any character
whatsoever or otherwise and shall not be subject to any defense, set-off,
counterclaim (other than any compulsory counterclaim), recoupment or termination
whatsoever.
(c) The obligations of the Guarantors hereunder shall be binding upon the
Guarantors and their successors and assigns, and shall remain in full force and
effect irrespective of:
(1) the genuineness, validity, regularity or enforceability of the
Notes, the Note Purchase Agreement or any other agreement or any of the
terms of any thereof, the continuance of any obligation on the part of the
Company or any other Person on or in respect of the Notes or under the Note
Purchase Agreement or any other agreement or the power or authority or the
lack of power or authority of the Company to issue the Notes or the Company
to execute and deliver the Note Purchase Agreement or any other agreement
or of any Guarantor to execute and deliver this Guaranty or to perform any
of its obligations hereunder or the existence or continuance of the Company
or any other Person as a legal entity; or
(2) any default, failure or delay, willful or otherwise, in the
performance by the Company, any Guarantor or any other Person of any
obligations of any kind or character whatsoever under the Notes, the Note
Purchase Agreement, this Guaranty or any other agreement; or
(3) any creditors' rights, bankruptcy, receivership or other
insolvency proceeding of the Company, any Guarantor or any other Person or
in respect of the property of the Company, any Guarantor or any other
Person or any merger, consolidation, reorganization, dissolution,
liquidation, the sale of all or substantially all of the assets of or
winding up of the Company, any Guarantor or any other Person; or
(4) impossibility or illegality of performance on the part of the
Company, any Guarantor or any other Person of its obligations under the
Notes, the Note Purchase Agreement, this Guaranty or any other agreements;
or
(5) in respect of the Company or any other Person, any change of
circumstances, whether or not foreseen or foreseeable, whether or not
imputable to the Company or any other Person, or other impossibility of
performance through fire, explosion, accident, labor disturbance, floods,
droughts, embargoes,
-5-
wars (whether or not declared), civil commotion, acts of God or the public
enemy, delays or failure of suppliers or carriers, inability to obtain
materials, action of any Federal or state regulatory body or agency, change
of law or any other causes affecting performance, or any other force
majeure, whether or not beyond the control of the Company or any other
Person and whether or not of the kind hereinbefore specified; or
(6) any attachment, claim, demand, charge, Lien, order, process,
encumbrance or any other happening or event or reason, similar or
dissimilar to the foregoing, or any withholding or diminution at the
source, by reason of any taxes, assessments, expenses, Debt, obligations or
liabilities of any character, foreseen or unforeseen, and whether or not
valid, incurred by or against the Company, any Guarantor or any other
Person or any claims, demands, charges or Liens of any nature, foreseen or
unforeseen, incurred by the Company, any Guarantor or any other Person, or
against any sums payable in respect of the Notes or under the Note Purchase
Agreement or this Guaranty, so that such sums would be rendered inadequate
or would be unavailable to make the payments herein provided; or
(7) any order, judgment, decree, ruling or regulation (whether or not
valid) of any court of any nation or of any political subdivision thereof
or any body, agency, department, official or administrative or regulatory
agency of any thereof or any other action, happening, event or reason
whatsoever which shall delay, interfere with, hinder or prevent, or in any
way adversely affect, the performance by the Company, any Guarantor or any
other Person of its respective obligations under or in respect of the
Notes, the Note Purchase Agreement, this Guaranty or any other agreement;
or
(8) the failure of any Guarantor to receive any benefit from or as a
result of its execution, delivery and performance of this Guaranty; or
(9) any failure or lack of diligence in collection or protection,
failure in presentment or demand for payment, protest, notice of protest,
notice of default and of nonpayment, any failure to give notice to any
Guarantor of failure of the Company, any Guarantor or any other Person to
keep and perform any obligation, covenant or agreement under the terms of
the Notes, the Note Purchase Agreement, this Guaranty or any other
agreement or failure to resort for payment to the Company, any Guarantor or
to any other Person or to any other guaranty or to any property, security,
Liens or other rights or remedies; or
(10) the acceptance of any additional security or other guaranty, the
advance of additional money to the Company or any other Person, the renewal
or extension of the Notes or amendments, modifications, consents or waivers
with respect to the Notes, the Note Purchase Agreement or any other
agreement, or the sale, release, substitution or exchange of any security
for the Notes; or
-6-
(11) any merger or consolidation of the Company, any Guarantor or any
other Person into or with any other Person or any sale, lease, transfer or
other disposition of any of the assets of the Company, any Guarantor or any
other Person to any other Person, or any change in the ownership of any
shares or other equity interests of the Company, any Guarantor or any other
Person; or
(12) any defense whatsoever that: (i) the Company or any other Person
might have to the payment of the Notes (principal, premium, if any, or
interest), other than payment thereof in Federal or other immediately
available funds or (ii) the Company or any other Person might have to the
performance or observance of any of the provisions of the Notes, the Note
Purchase Agreement or any other agreement, whether through the satisfaction
or purported satisfaction by the Company or any other Person of its debts
due to any cause such as bankruptcy, insolvency, receivership, merger,
consolidation, reorganization, dissolution, liquidation, winding-up or
otherwise; or
(13) any act or failure to act with regard to the Notes, the Note
Purchase Agreement, this Guaranty or any other agreement or anything which
might vary the risk of any Guarantor or any other Person; or
(14) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Guarantor or any other Person in
respect of the obligations of any Guarantor or other Person under this
Guaranty or any other agreement;
provided that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
Guaranty and the parties hereto that, subject to the release provisions of
Section 9.6 of the Note Purchase Agreement, the obligations of each Guarantor
shall be absolute and unconditional and shall not be discharged, impaired or
varied except by the payment of the principal of, premium, if any, and interest
on the Notes in accordance with their respective terms whenever the same shall
become due and payable as in the Notes provided, at the place specified in and
all in the manner and with the effect provided in the Notes and the Note
Purchase Agreement, as each may be amended or modified from time to time.
Without limiting the foregoing, it is understood that repeated and successive
demands may be made and recoveries may be had hereunder as and when, from time
to time, the Company shall default under or in respect of the terms of the Notes
or the Note Purchase Agreement and that notwithstanding recovery hereunder for
or in respect of any given default or defaults by the Company under the Notes or
the Note Purchase Agreement, this Guaranty shall remain in full force and effect
and shall apply to each and every subsequent default.
(d) All rights of any Holder under this Guaranty shall be considered to be
transferred or assigned at any time or from time to time upon the transfer of
any Note
-7-
held by such Holder whether with or without the consent of or notice to the
Guarantors under this Guaranty or to the Company.
(e) To the extent of any payments made under this Guaranty, the Guarantors
shall be subrogated to the rights of the Holder or Holders upon whose Notes such
payment was made, but each Guarantor covenants and agrees that such right of
subrogation and any and all claims of such Guarantor against the Company, any
endorser or other Guarantor or against any of their respective properties shall
be junior and subordinate in right of payment to the prior indefeasible final
payment in cash in full of all of the Notes and satisfaction by the Company of
its obligations under the Note Purchase Agreement and by the Guarantors of their
obligations under this Guaranty, and the Guarantors shall not take any action to
enforce such right of subrogation, and the Guarantors shall not accept any
payment in respect of such right of subrogation, until all of the Notes and all
amounts payable by the Guarantors hereunder have indefeasibly been finally paid
in cash in full and all of the obligations of the Company under the Note
Purchase Agreement and of the Guarantors under this Guaranty have been
satisfied. Notwithstanding any right of any Guarantor to ask, demand, sue for,
take or receive any payment from the Company, all rights, Liens and security
interests of each Guarantor, whether now or hereafter arising and howsoever
existing, in any assets of the Company shall be and hereby are subordinated to
the rights, if any, of the Holders in those assets. No Guarantor shall have any
right to possession of any such asset or to foreclose upon any such asset,
whether by judicial action or otherwise, unless and until all of the Notes and
the obligations of the Company under the Note Purchase Agreement shall have been
paid in cash in full and satisfied. If all or any part of the assets of the
Company, or the proceeds thereof, are subject to any distribution, division or
application to the creditors of the Company, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, or if the business of the Company is dissolved or if
substantially all of the assets of the Company are sold, then, and in any such
event, any payment or distribution of any kind or character, either in cash,
securities, or other property, which shall be payable or deliverable upon or
with respect to any indebtedness of the Company to any Guarantor shall be paid
or delivered directly to the Holders, until the Notes and the obligations of the
Company under the Note Purchase Agreement shall have first been paid in cash in
full and satisfied. If any amount shall be paid to any Guarantor in violation of
the preceding sentences at any time prior to the indefeasible payment in cash in
full of the Notes and all amounts payable by the Guarantors hereunder and
satisfaction by the Company of its obligations under the Note Purchase Agreement
and by the Guarantors of their obligations hereunder such amount shall be held
in trust for the benefit of the Holders and shall forthwith be paid to the
Holders to be credited and applied to the amounts due or to become due with
respect to the Notes and all other amounts payable under the Note Purchase
Agreement and this Guaranty, whether matured or unmatured.
(f) Each Guarantor agrees that to the extent the Company or any other
Person makes any payment on any Note, which payment or any part thereof is
-8-
subsequently invalidated, voided, declared to be fraudulent or preferential, set
aside, recovered, rescinded or is required to be retained by or repaid to a
trustee, receiver, or any other Person under any bankruptcy code, common law, or
equitable cause, then and to the extent of such payment, the obligation or the
part thereof intended to be satisfied shall be revived and continued in full
force and effect with respect to the Guarantors' obligations hereunder, as if
said payment had not been made. The liability of the Guarantors hereunder shall
not be reduced or discharged, in whole or in part, by any payment to any Holder
from any source that is thereafter paid, returned or refunded in whole or in
part by reason of the assertion of a claim of any kind relating thereto,
including, but not limited to, any claim for breach of contract, breach of
warranty, preference, illegality, invalidity or fraud asserted by any account
debtor or by any other Person.
(g) No Holder shall be under any obligation: (1) to marshall any assets in
favor of the Guarantors or in payment of any or all of the liabilities of the
Company under or in respect of the Notes and the Note Purchase Agreement or the
obligations of the Guarantors hereunder or (2) to pursue any other remedy that
the Guarantors may or may not be able to pursue themselves and that may lighten
the Guarantors' burden, any right to which each Guarantor hereby expressly
waives.
Section 5. Representations and Warranties of the Guarantors
Each Guarantor represents and warrants to each Holder that:
(a) Such Guarantor is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on (1) the business,
operations, affairs, financial condition, assets or properties of such Guarantor
and its subsidiaries, taken as a whole, or (2) the ability of such Guarantor to
perform its obligations under this Guaranty or (3) the validity or
enforceability of this Guaranty (herein in this Section 5, a "Material Adverse
Effect"). Such Guarantor has the power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Guaranty and
to perform the provisions hereof.
(b) Each subsidiary of such Guarantor is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is duly qualified as a foreign corporation
or other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each
subsidiary of such Guarantor has the power and authority to own
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or hold under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact.
(c) This Guaranty has been duly authorized by all necessary action on the
part of such Guarantor, and this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms, except as such enforceability may be limited by (1) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (2) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(d) The execution, delivery and performance by such Guarantor of this
Guaranty will not (1) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of such Guarantor or any of its subsidiaries under any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, corporate charter, by-laws
or other organizational documents, or any other agreement or instrument that is
material to the business, operations, affairs, financial condition, assets or
properties of such Guarantor and its Subsidiaries, taken as a whole, to which
such Guarantor or any of its subsidiaries is bound or by which such Guarantor or
any of its subsidiaries or any of their respective properties may be bound or
affected, (2) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to such Guarantor or any of its
subsidiaries or (3) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to such Guarantor or any of
its subsidiaries.
(e) No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by such Guarantor of this Guaranty.
(f) Such Guarantor, when taking into account the requirements of Section
2(b) of this Guaranty, is solvent, has capital not unreasonably small in
relation to its business or any contemplated or undertaken transaction and has
assets having a value both at fair valuation and at present fair salable value
greater than the amount required to pay its debts as they become due and greater
than the amount that will be required to pay its probable liability on its
existing debts as they become absolute and matured. Such Guarantor does not
intend to incur, or believe or should have believed that it will incur, debts
beyond its ability to pay such debts as they become due. Such Guarantor, when
taking into account the requirements of Section 2(b) of this Guaranty, will not
be rendered insolvent by the execution and delivery of, and performance of its
obligations under, this Guaranty. Such Guarantor does not intend to hinder,
delay or defraud its creditors by or through the execution and delivery of, or
performance of its obligations under, this Guaranty.
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Section 6. Amendments, Waivers and Consents.
(a) This Guaranty may be amended, and the observance of any term hereof may
be waived (either retroactively or prospectively), with (and only with) the
written consent of each Guarantor and the holders of at least 66-2/3% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by any Guarantor, the Company, any of their respective Subsidiaries or
Affiliates).
(b) The Guarantors will provide each Holder (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such Holder to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof. The Guarantors will deliver
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 6 to each Holder promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite Holders.
(c) No Guarantor will directly or indirectly pay or cause to be paid any
remuneration, whether by way of fee or otherwise, or grant any security, to any
Holder as consideration for or as an inducement to the entering into by such
Holder of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each Holder even if such Holder did not
consent to such waiver or amendment.
(d) Any amendment or waiver consented to as provided in this Section 6
applies equally to all Holders of Notes affected thereby and is binding upon
them and upon each future holder and upon the Guarantors. No such amendment or
waiver will extend to or affect any obligation, covenant or agreement not
expressly amended or waived or impair any right consequent thereon. No course of
dealing between the Guarantors and any Holder nor any delay in exercising any
rights hereunder shall operate as a waiver of any rights of any Holder. As used
herein, the term "this Guaranty" and references thereto shall mean this Guaranty
as it may from time to time be amended or supplemented.
(e) Solely for the purpose of determining whether the Holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Guaranty, Notes directly or indirectly owned by any Guarantor, the Company or
any of their respective subsidiaries or Affiliates shall be deemed not to be
outstanding.
Section 7. Notices.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered
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or certified mail with return receipt requested (postage prepaid) or (c) by a
recognized overnight delivery service (charges prepaid). Any such notice must be
sent:
(1) if to a Note Purchaser or its nominee, to such Note Purchaser or
its nominee at the address specified for such communications in Schedule A
to the Note Purchase Agreement, or at such other address as such Note
Purchaser or its nominee shall have specified to the Company on behalf of
the Guarantors in writing,
(2) if to any other Holder, to such Holder at such address as such
Holder shall have specified to the Company on behalf of he Guarantors in
writing, or
(3) if to any Guarantor, to such Guarantor c/o the Company at its
address set forth at the beginning of the Note Purchase Agreement to the
attention of Chief Financial Officer, or at such other address as such
Guarantor shall have specified to the Holders in writing.
Notices under this Section 7 will be deemed given only when actually received.
Section 8. Miscellaneous.
(a) No remedy herein conferred upon or reserved to any Holder is intended
to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given under this Guaranty now or hereafter existing at law or in equity. No
delay or omission to exercise any right or power accruing upon any default,
omission or failure of performance hereunder shall impair any such right or
power or shall be construed to be a waiver thereof but any such right or power
may be exercised from time to time and as often as may be deemed expedient. In
order to entitle any Holder to exercise any remedy reserved to it under this
Guaranty, it shall not be necessary for such Holder to physically produce its
Note in any proceedings instituted by it or to give any notice, other than such
notice as may be herein expressly required.
(b) The Guarantors will pay all sums becoming due under this Guaranty by
the method and at the address specified for such purpose for such Holder, in the
case of a Holder that is a Note Purchaser, on Schedule A to the Note Purchase
Agreement or by such other method or at such other address as any Holder shall
have from time to time specified to the Guarantors or the Company on behalf of
the Guarantors in writing for such purpose, without the presentation or
surrender of this Guaranty or any Note.
(c) Any provision of this Guaranty that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
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(d) If the whole or any part of this Guaranty shall be now or hereafter
become unenforceable against any one or more of the Guarantors for any reason
whatsoever or if it is not executed by any one or more of the Guarantors, this
Guaranty shall nevertheless be and remain fully binding upon and enforceable
against each other Guarantor as if it had been made and delivered only by such
other Guarantors.
(e) This Guaranty shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of each Holder and its successors and
assigns so long as its Notes remain outstanding and unpaid.
(f) This Guaranty may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
(g) This Guaranty shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
(h) Any legal action or proceeding with respect to this Guaranty may be
brought in the courts of the State of New York in the Borough of Manhattan,
State of New York, or of the United States for the Southern District of New York
and, by execution and delivery of this Guaranty or a Guaranty Supplement, each
Guarantor hereby irrevocably accepts, unconditionally, the jurisdiction of the
aforesaid courts with respect to any such action or proceeding. Each Guarantor
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Company on
behalf of such Guarantor at its address set forth above, such service to become
effective upon receipt. Nothing herein shall affect the right of any Holder to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Guarantor in any other
jurisdiction. Each Guarantor hereby irrevocably appoints the Company as such
Guarantor's agent for the purpose of accepting service of process. Each
Guarantor hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this agreement brought in any of the
aforesaid courts and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
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In Witness Whereof, the undersigned has caused this Guaranty to be duly
executed by an authorized representative as of this day of October, 2001.
------
[Guarantors]
By
-------------------------------
Its
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Subsidiary Guaranty Supplement
To the Holders (as defined in the hereinafter
defined Guaranty Agreement)
Ladies and Gentlemen:
Whereas, in order to refinance existing indebtedness of TeleTech Holdings,
Inc., a corporation organized under the laws of the State of Delaware (the
"Company"), and its Subsidiaries and for general corporate purposes, the Company
issued (a) $60,000,000 aggregate principal amount of its 7.00% Senior Notes,
Series A, due October 31, 2008 (the "Series A Notes") and (b) $15,000,000
aggregate principal amount of its 7.40% Senior Notes, Series B, due October 31,
2011 (the "Series B Notes," and together with the Series A Notes, the "Notes")
pursuant to that certain Note Purchase Agreement dated as of October 1, 2001 (as
amended, supplemented, restated or otherwise modified from time to time, the
"Note Purchase Agreement") between the Company and each of the purchasers named
on Schedule A attached to said Note Purchase Agreement (the "Note Purchasers").
Capitalized terms used herein shall have the meanings set forth in the
hereinafter defined Guaranty Agreement unless herein defined or the context
shall otherwise require.
Whereas, as a condition precedent to their purchase of the Notes, the Note
Purchasers required that from time to time certain subsidiaries of the Company
enter into that certain Subsidiary Guaranty Agreement dated as of October 1,
2001 as security for the Notes (as amended, supplemented, restated or otherwise
modified from time to time, the "Guaranty Agreement").
Pursuant to Section 9.6(a) of the Note Purchase Agreement, the Company has
agreed to cause the undersigned, , a [corporation] organized under
------------
the laws of (the "Additional Guarantor"), to join in the Guaranty
--------------
Agreement. In accordance with the requirements of the Guaranty Agreement, the
Additional Guarantor desires to amend the definition of Guarantor (as the same
may have been heretofore amended) set forth in the Guaranty Agreement attached
hereto so that at all times from and after the date hereof, the Additional
Guarantor shall be jointly and severally liable as set forth in the Guaranty
Agreement for the obligations of the Company under the Note Purchase Agreement
and Notes to the extent and in the manner set forth in the Guaranty Agreement.
The undersigned is the duly elected of the Additional
------------
Guarantor, a subsidiary of the Company, and is duly authorized to execute and
deliver this Guaranty Supplement to each of you. The execution by the
undersigned
EXHIBIT SGA
(to Note Purchase Agreement)
of this Guaranty Supplement shall evidence such Additional Guarantor's consent
to and acknowledgment and approval of the terms set forth herein and in the
Guaranty Agreement and its agreement to be bound by the covenants, terms and
provisions of the Guaranty Agreement as a Guarantor thereunder and by such
execution such Additional Guarantor shall be deemed to have made in favor of the
Holders the representations and warranties set forth in Section 5 of the
Guaranty Agreement.
Upon execution of this Guaranty Supplement, the Guaranty Agreement shall be
deemed to be amended as set forth above. Except as amended herein, the terms and
provisions of the Guaranty Agreement are hereby ratified, confirmed and approved
in all respects.
Any and all notices, requests, certificates and other instruments
(including the Notes) may refer to the Guaranty Agreement without making
specific reference to this Guaranty Supplement, but nevertheless all such
references shall be deemed to include this Guaranty Supplement unless the
context shall otherwise require.
Dated: , 20 .
----------------- ----
[Name of Additional Guarantor]*
By
-------------------------------
Its
- ----------
* To the extent that any Additional Guarantor is not a United States entity,
such Guaranty Supplement will include provisions reasonably satisfactory to
the Required Holders relating to (a) a gross-up for withholding taxes and
(b) conversion of payments made in currency other than United States
dollars.
16